The hottest Sany Heavy Industry recovers, and its

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Sany recovery: this year's sales target is set at 27.8 billion yuan

Sany recovery: this year's sales target is set at 27.8 billion yuan

China Construction machinery information

according to standard & Poor's estimates, with the recovery of China's construction machinery industry, the sales of construction machinery will increase by 5% to 10% in the next 24 months compared with 2016, but this figure is still only half of the peak in 2011

since last August, Zhong Wenming, a construction machinery dealer, suddenly found that the excavator he represented had become in short supply. "The quantity of infrastructure and other projects has increased a lot since then, which is not the case in the past few years." Zhong Wenming tried to find the reason for this change

ZHONG Wenming is the chairman of Hunan Zhongwang Engineering Machinery Equipment Co., Ltd. (hereinafter referred to as Zhongwang Engineering), which acts as an agent for Sany in the sales of excavators in Hunan and Jiangxi provinces. Zhongwang engineering sells about 1500 new excavators every year, accounting for about 8% of the total sales of Sany excavator

as a world-renowned construction machinery manufacturer, Sany Heavy Industries' concrete machinery is second to none in the world, and the sales volume of excavators also ranks first in the country

Zhong Wenming complained about the shortage, which made Sany Heavy Industry start to re-examine the changes in the construction machinery market. "In the internal meeting, we predicted that downstream demand would pick up, but the actual situation was better than previously predicted, exceeding expectations." In mid April this year, Chen Jing, assistant to the president of Sany Heavy Industry, said

"now all product lines are in short supply, and many customers are out of stock. Our factory has adopted the methods of 24-hour full operation and small-scale recruitment." He said

Sany's main plant is located in Changsha Economic and Technological Development Zone, where Zoomlion, Shanhe intelligent and other construction machinery leaders also have production bases. Public information shows that the annual output value of the construction machinery industry in this region accounts for about 23% of the national total

in mid April, when the interface went to interview, a row of newly produced engineering pump trucks were neatly arranged in the main plant area of Sany Heavy Industry. Ou Sheng, the manufacturing director of the pumping division, said that more than 60% of the pump truck equipment had been booked by customers. As the previous inventory has been basically digested, the company is preparing some new inventory according to market demand

according to the annual report disclosed by Sany Heavy Industry on April 28, the company sold 36000 construction machinery in 2016, with a year-on-year increase of about 39%. The sales volume of the company rebounded for the first time in the past five years

while the sales of new machines have recovered, the working hours of excavators in the market have also continued to rise. Sany Heavy Industry had seven months of positive year-on-year growth in operating rate last year, and its cumulative year-on-year growth rate also exceeded 50% in February this year

the overall increase in operating rate means that the bottom demand of the industry begins to pick up. The report released by standard & Poor's on April 24 believes that after several years of downturn, the market demand of China's construction machinery industry is expected to recover. Chen Zequan, a credit analyst at standard & Poor's global rating, pointed out that strong sales and the continuous recovery of construction machinery utilization hours mean that the demand of China's construction machinery industry has improved

affected by the recovery of the industry, the performance of Sany Heavy Industry has also returned to the growth track. According to the company's latest annual report, although the company's revenue fell slightly last year, in the second half of 2016, the sales revenue of Sany Heavy Industry increased by 24.7% year-on-year, reaching 12billion yuan

this momentum was continued in the first quarter of this year. The sales revenue of the company in the first three months was 9.38 billion yuan, with a year-on-year increase of more than 79%; The net profit was about 750million yuan, an increase of 727% over the same period last year

after the improvement of enterprise efficiency, the treatment of front-line workers in Sany Heavy Industry has also increased. "Front line workers calculate their wages by piece work. With the increase of orders, full-load workers can earn about 9000 yuan a month," lulifai, workshop director of Sany pumping division, told the interface. "However, compared with 2011, now is not the busiest time for workers, and the salary is not the highest."

the year 2011 mentioned by Lu lifeI is the inflection point for China's construction machinery manufacturing industry to end its golden period. In the previous few years, with the "four trillion" stimulus policy, real estate and infrastructure construction entered a climax of investment, and the construction machinery industry ushered in a period of rapid development

according to the data of China Construction Machinery Association, in the five years from 2006 to 2011, the total sales of construction machinery increased significantly from 180000 units in 2006 to 440000 units in 2011, thanks to a large amount of infrastructure investment driving the development of the industry

around 2011, China's construction machinery industry ushered in the peak of development. Both enterprises and downstream users were optimistic: enterprises took advantage of the momentum to rapidly expand production capacity, build factories, and expand the size of employees. The revenue of the whole industry also crossed the 500 billion yuan mark, and the sales situation was very good

this year was also the peak of Sany's performance. In 2011, the company's operating revenue reached 50.77 billion yuan, and its net profit was 8.64 billion yuan, both of which increased by about 50% year-on-year. Lu lifeI recalled that at that time, the staff size of Sany Heavy Industry was much larger than now, and the monthly wages of some workers had exceeded 10000 yuan

at this time, the glorious days of the construction machinery industry suddenly came to an end

after the 7.23 bullet train accident that caused a nationwide sensation occurred in 2011, domestic infrastructure construction stagnated, coupled with the contraction of real estate investment and the impact of a new round of macro policies that remind everyone to strictly follow the standard of commodity use instructions in the case of installation, utilization and actual operation. 1 the market demand for China's construction machinery plummeted, and this decline continued in the next five years

at the end of 2015, the annual sales volume of China's construction machinery has fallen back to 120000 units, less than 1/3 of the peak. According to the research report data of GF Securities, the proportion of construction machinery in fixed asset investment fell from 1.66% in 2011 to 0.67% in 2015

the industry suffered a precipitous decline, which was like a disaster for the enterprises in it, and Sany Heavy Industry was not spared. In 2015, Sany Heavy Industry's revenue halved to 23.36 billion yuan, while its net profit fell to 139 million yuan

hefaliang, general manager of traditional business marketing of Sany Heavy Industry, recalled that during that time, even in the peak sales season, the company's sales volume also showed a precipitous decline, with the decline of some products reaching 80% - 90%. This change makes Sany Heavy Industry have to face high inventory and accounts receivable risks. As the traditional chemical fiber materials in the construction machinery industry are far from meeting the needs of these fields, the industry mostly adopts the way of mortgage sales, and when the industry is developing rapidly, enterprises have adopted a radical credit sales mode to seize the market

Zhong Wenming, chairman of Zhongwang engineering, told the interface that the decline in the industry had led to a sharp rise in the default rate of customers, and many equipment payments could not be recovered, which could only be enforced by the court. For example, he said, "a machine with a price of 500000 yuan can only be sold for 300000 yuan after implementation, which puts great pressure on bad debts."

"since the market downturn in August 2011, we have had a relatively painful time", Zhong Wenming recalled, "tens of millions of equipment are placed in the parking lot, how can we not be in a hurry!" These "legal mechanisms" returned by the court due to customer default still need him to sell to the market, which puts great pressure on the agent of Sany Heavy Industry

around 2011, Zhongwang engineering had more than 1200 employees. With the rapid decline of the industry, the company cut 60% of its staff to reduce costs. "Looking back on the five-year low tide of the industry with the theme of" innovation driven "in the past, many manufacturing enterprises and dealers withdrew from the market, and those who did not die were heroes." Zhong Wenming sighed

Under the plight of the industry, Sany Heavy Industry also began to implement transformation. "Internally, we regard this in-depth adjustment as a period of 'pain and happiness' for the company," Chen Jing said. "On the one hand, due to poor market conditions, enterprises are in pain; on the other hand, the depressed market environment is also a great opportunity for enterprises to strengthen cost and risk control, optimize and adjust product structure, and solve remaining problems."

for this reason, the management of Sany Heavy Industry carried out painful reflection. "Our growth in the past was extensive. At that time, there was a saying within the company that 'buy without equipment, build without plant, and recruit without workers'." Chen Jing said that in the process of the industry falling back, the biggest gain and lesson of Sany is that the economy has cycles and the operation has risks

in the past few years, Sany Heavy Industry has drastically reduced production capacity, controlled inventory and reduced redundant personnel. Taking the number of employees as an example, at the end of 2011, the number of employees of Sany Heavy Industry was about 52000, and by the end of 2016, it had fallen to less than 14000, a decrease of nearly 70%

in the three years from 2013 to 2015, Sany also continuously reduced its branches in Tianjin and other regions. In 2016, the company priced 4.521 billion yuan and 4.077 billion yuan and transferred wholly-owned subsidiaries Sany technology and Beijing Sany Heavy machinery to its parent company Sany group, respectively, realizing the slimming and asset optimization of the enterprise

in addition to internal reform and innovation, Sany also continues to promote its internationalization strategy, hoping to actively expand overseas markets and hedge against the decline in sales in the domestic market through the strategic opportunity of the "one road one belt". The proportion of overseas revenue in the company's main business revenue increased from less than 10% in 2011 to about 40% in 2016. Last year, Sany Heavy industry achieved an international sales revenue of 9.28 billion yuan. In addition, Sany Heavy Industry is also involved in military industry, housing industrialization, and finance, trying to diversify

in order to improve product quality, Sany also promoted intelligent manufacturing and technological innovation. As the first batch of intelligent manufacturing pilot demonstration enterprises in China, Sany's "plant 18" located in Changsha, known as the largest intelligent manufacturing workshop in Asia, has achieved automation and informatization in all links

according to the data, Sany Heavy Industry's "No. 18 plant" has many assembly lines, such as concrete machinery and pavement machinery. It is the company's general assembly workshop, which began preparation in 2008 and was fully put into operation in 2012. The "flexible production line" of the plant can not only produce a variety of products at the same time, but also ensure that one pump truck can be offline as soon as one hour

the "brain" of "plant 18" is the intelligent manufacturing core MES (manufacturing enterprise production process execution management system). Through this system, customers' orders can be decomposed to each station level by level, quickly and accurately, so as to realize the informatization and automation of the whole process of logistics, assembly and quality inspection

in the second half of 2016, after surviving a long market downturn, Sany Heavy Industry finally waited for the spring of the construction machinery industry

in the view of Chen Jing, assistant to the president of Sany Heavy Industry, the industry's recovery mainly benefited from the impact of the increase in market operating rates and the increase in new projects. The downstream fields of construction machinery mainly include infrastructure construction, real estate, manufacturing and energy and mineral exploitation. These industries are closely related to the macroeconomic cycle and are positively related to the policy orientation of fixed asset investment. They are often regarded by economists as important indicators to reflect the macroeconomic operation

hefaliang, general manager of traditional business marketing of Sany Heavy Industry, believes that the increased government investment and the release of pent up (dare not consume) demand in the past few years have finally led to the blowout development of the industry

of China Merchants Securities

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