Net profit or drop of listed companies in machinery industry

Since the beginning of this year, the economic performance of the machinery industry has shown a great contrast with the same period of last year, and the difficult situation has not occurred in China's machinery industry for many years. The production and sales volume of major products have dropped sharply in the case of a higher base in the same period of last year. With the arrival of the traditional construction season in the second half of the year, the construction machinery market is expected to show a certain rebound. Despite sufficient reserves of downstream engineering projects, the sources of funding for project construction are tense. It remains to be seen whether the start-up situation can significantly improve in the fourth quarter. In addition, machinery manufacturers generally have high receivables, tight cash flow, and low capacity utilization. According to the prediction of the 2012 Shanghai-Shenzhen 300 listed company's performance recently released by Yingze Consultancy, the total operating income and net profit of listed companies in the Shanghai-Shenzhen 300 Group will fall by 2.61% and 8.05%, respectively, with listed companies of the same group in 2011. The annual operating income and net profit growth rate were 27.13% and 30.58%.

As the trend of China's manufacturing market is still uncertain, and the decline in profitability leads to a lower willingness of manufacturing companies to upgrade their production equipment and expand investment, the demand for China's machine tool market will pick up in the next 2-3 quarters. The possibility of a turnaround in the rate of production and profitability of the machine tool manufacturing industry is still greater than the school's need to maintain a certain level of capacity utilization and delay in customer pick-up. The machine tool manufacturers have not yet effectively consumed the finished product inventory.

This year, the shipbuilding industry remains sluggish. First of all, the booming downstream shipping market of the shipbuilding industry is still very sluggish. The Baltic Dry Index and the Crude Oil Freight Index both hovered at historical lows, showing no sign of improvement. Although the container freight index (SCFI) rebounded from that of 2011, the driving force is that shipowners increase idle capacity and limit supply, and their sustainability is not strong. On the whole, the shipowners’ funds are tight and there is no large amount of incentive to place orders. In the shipbuilding market, the situation in the fourth quarter is expected to be worse than the first three quarters.

In September, the National Development and Reform Commission intensively disclosed information on the approval of 25 urban rail transit and intercity railway projects, reflecting the government’s desire to ensure a certain growth rate of the economy through infrastructure investment; in addition, the Ministry of Railways announced four times during the year that it will increase the national fixed railways. Investment in assets (as of October 10, the national investment in fixed assets of railways has increased to 630 billion, an increase of 26% from the beginning of the year), and the pace of construction has been ensured through measures such as strengthening assessments to ensure the completion of investment plans. In September, the investment in railway fixed assets across the country totaled 72.7 billion yuan, an increase of 93% year-on-year and an increase of 59% compared with the previous period, and the investment rate has been significantly accelerated. It can thus be seen that the investment in railway fixed assets in the fourth quarter is expected to complete beyond expectations, and bidding for complete vehicle parts is expected to pick up.

For all subcomponents of general parts and components, the demand side in the third quarter has stabilized at the bottom, and the year-on-year growth in sales output value and industrial added value have remained at the bottom of the regional fluctuations, but there is no clear sign of recovery. The supply side went to inventory and inventory growth continued to decline since March. Cost-end steel and non-ferrous metals such as copper and aluminum declined significantly in the third quarter. Since late September, however, with government investment in railways and other countries expected to heat up, raw material prices have rebounded rapidly. In terms of sales receipts, the year-on-year growth of accounts receivable in the third quarter rebounded. For the fourth quarter, due to factors such as the adjustment of the country’s macroeconomic policies and investment holdings, market demand continues to fluctuate at the bottom or has a relatively small chance of recovery.