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The three core businesses will still maintain their competitive advantages in the next 3-5 years. The company will have outstanding profitability and strong resistance to industry cycles.
The three core businesses of heavy-duty trucks, heavy-duty trucks and transmissions will remain competitive in the next 3-5 years
Unlike the market's pessimistic view of the company, we believe that in the next 3-5 years, the company will still maintain its competitive advantage in heavy-duty engines and heavy-duty transmissions, and the heavy-duty truck business will launch an impact on the first group's Sinotruk. .
The company has outstanding profitability and strong resistance to industry cycles
Thanks to its hegemonic status in heavy-duty engine and transmission industries, the company enjoyed a high level of gross profit margin and outstanding profitability. In 2005, heavy-duty truck industry adjustment and declining demand for construction machinery showed good cyclical resistance; The heavy-duty truck industry may experience negative growth, but since steel prices will drop by about 15%, according to our calculations, the gross profit margin should be higher this year than this year.
Annex 1: Proactive Fiscal Policy Reduces the Impact of Cycle Adjustment in the Heavy Truck Industry
Affected by various factors such as the country's emissions, economic downturn and other factors, the heavy truck industry may experience negative growth in 2009. The implementation of active fiscal policies will stimulate demand, the market may be better than expected, and the negative growth is expected to be within 20%; China will be in a period of rapid advancement of both heavy industrialization and urbanization. Investment will continue to grow at a rapid pace, and the transportation intensity will be high. The heavy truck industry will still have more room for growth.
Attachment 2: Benefit from Positive Fiscal Policy The loader industry will grow by more than 5% next year
Based on our neutral judgment on real estate and mining investment in 2009, which was basically the same as in 2008, and the 25% increase in infrastructure investment, the domestic loader load needs to increase by about 8.5%. According to our calculations, domestic loader ownership at the end of About 500,000 vehicles will be retired after 4 years. In 2009, about 165,000 units will need to be added.
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