China’s machinery manufacturers’ profits surge in Q1
Top producers such as Sany Heavy Industry and Zoomlion Heavy Industry Science & Technology Co, both with listed arms on China’s stocks exchanges, posted their net profit up 114% and 166% on year respectively over the period, and the others’ rises in net profit ranged 40%-320% for the first quarter of 2019 as of May 10.
Sany, China’s leading construction equipment manufacturer headquartered in Beijing, recorded the net profit at Yuan 3.2 billion ($469 million) for the first quarter, as “sales of excavators, cranes, concrete pumps and reach stackers were all outstanding,” a Sany official told Mysteel Global on May 10.
“This is mainly because of the more booming infrastructure construction than last year and the robust demand from China’s BRI projects,” he added, disclosing that the company has been supplying machinery to BRI projects in Russia and Southeast Asia region.
In the first quarter, China’s enterprises inked new investment deals in 49 BRI countries at the total value of $3.8 billion, or up 4.2% on year, and new overseas engineering and construction contracts added up to $30.5 billion, or 60.2% of the country’s total contracting value, according to official statistics from China’s Ministry of Commerce (MOC).
Domestically, investment in the infrastructure construction is expected to grow steadily as part of Beijing’s core efforts to achieve a 6-6.5% GDP growth for 2019 amid the uncertainties in the global economy and China’s economy, market sources shared the understanding.
“This year, there will be a lot more infrastructure projects to be launched in succession, so I believe we will maintain the growth (in sales and profits) throughout the year,” a second Sany official commented, adding, “supply is really short of the demand, (and) now many of our departments (responsible of different equipment manufacturing and sales) are trying hard to deliver the orders on time.”
China’s official statistics showed that infrastructure construction investment grew 4.4% on year for this year’s first three months, up 0.1 percentage point from January-February, and sales of excavators and other heavy equipment recorded by China’s 25 leading excavator makers totalled 74,779 units in total, up 24.5% on year, as reported.
The price of the 20mm low-alloy medium plate, mainly used in machinery manufacturing, thus, gained Yuan 288/tonne or 7.1% since the beginning of 2019 to Yuan 4,311/t including the 13% VAT as of May 10, according to Mysteel’s data.
Written by Olivia Zhang, zhangwd@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com
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