The most popular view of the market's investment s

2022-08-04
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Judging from the valuation of listed companies, the market sentiment for construction machinery investment has changed from a high growth miracle to a sharp decline in stock market value. Since 1999, China's land economy dominated by real estate and infrastructure construction has brought great development opportunities to the construction machinery industry. During this period, Sany Heavy Industry, Zoomlion Heavy Industry, XCMG machinery, Liugong, Xiagong, Shantui, Anhui Heli The operating income of 8 A-share listed companies such as Changlin Stock Co., Ltd. with continuous operation increased from 5.365 billion yuan in 2000 to 183.009 billion yuan in 2012, the operating income (including restructuring) increased by 30.87 times, and the net profit attributable to the parent company increased from 294million yuan in 2000 to 16.278 billion yuan in 2012, an increase of 55.29 times. During this period, the operating income of Sany Heavy Industry increased from 393million yuan in 2000 to 46.831 billion yuan in 2012, and Zoomlion increased from 245million yuan to 48.071 billion yuan. This growth rate of Chinese construction machinery enterprises is a miracle all over the world

listed construction machinery companies rely on the rapid development of the capital market and have also given rich returns to investors. From the end of 2000 to the end of 2010, the total market value of seven continuously operating A-share listed companies (the above eight companies except Sany Heavy Industry, which was listed only in 2003) increased by 4.26 times, of which Zoomlion increased by 22.12 times, and XCMG machinery (which injected crane business in 2009 to drive the share price up) increased by 18.44 times, Liugong increased by 8.86 times. Sany was listed in 2003, and its total market value increased by 18.44 times by 2010

however, by the end of 2011, the performance of construction machinery in the capital market had taken a sharp turn. By the end of 2010, the total market value of the eight sample companies had reached 310.614 billion yuan. By April 13, 2011, the highest point had reached 379.393 billion yuan. By the end of April 2013, the closing price had dropped to 179.299 billion yuan. The market value of the eight companies had evaporated by 52.74%

the domestic construction machinery industry is used to the relative valuation evaluation system

the stock price given by the capital market to listed companies is often evaluated through the analysis of the growth of enterprises. There are usually two evaluation systems: absolute valuation and relative valuation. Absolute valuation is the discounted cash flow method. Generally speaking, the stock price always fluctuates around the intrinsic value of the stock. If it is found that the stock price is undervalued, it will buy the stock when the stock price is far lower than its intrinsic value, and sell the stock when the stock price returns to or even higher than its intrinsic value to make a profit. Absolute valuation uses the valuation model to evaluate the internal value of the enterprise, which requires a very clear judgment on the enterprise and its industry. This valuation method is applicable to industries with relatively stable development. For industries with high growth or large performance fluctuations, relative valuation is generally used. Relative valuation uses price indicators such as P/E ratio (ratio of price per share to earnings per share), P/B ratio (ratio of market price per share to net assets per share), P/B ratio (ratio of market price to sales revenue), P/C ratio (ratio of stock price to cash flow per share) to compare with other stocks (comparison system). If it is lower than the average value of the corresponding indicators of the comparison system, the stock price is undervalued and the stock price is likely to rise, Make the index return to the average value of the comparison system

the domestic stock market basically adopts the relative valuation method for the manufacturing industry. For the enterprises with stable growth, average profitability of about 10% and stable profits, it is generally considered that the double market sales rate is reasonable. From the perspective of return on net assets, P/B ratio is also a reasonable evaluation index. However, for industries and enterprises with strong periodicity and unstable profitability, P/E ratio is the most commonly used evaluation index in the market, and it is basically used for construction machinery, that is to say, the most important thing for the market to observe the enterprise is its profit growth trend

according to the market experience, generally, the market thinks that the company's reasonable price can reach the P/E ratio according to the expected compound growth rate in the next 3~5 years. For example, if a company's compound growth rate in the next 3~5 years is expected to reach 30%, the valuation of the company's 30 times P/E ratio will be considered reasonable. However, in fact, the relative valuation of enterprises is closely related to historical experience and industry characteristics. For emerging industries, if explosive growth is expected in the future, the P/E index is meaningless. For enterprises with sustained growth and stable industry status, even if the future growth is not very high, considering sustainability, the market valuation will be higher than the percentage of sustained growth, For industries with large cyclical fluctuations and considered to be phased, the P/E ratio is often lower than the growth rate. Construction machinery is a typical cyclical industry, and its valuation also has obvious cyclical characteristics: when the industry is expected to rise, the industry P/E ratio is relatively high; When the industry is expected to decline, the industry P/E ratio will be relatively low. In the A-share market, the P/E ratio of the construction machinery industry usually fluctuates between 8 and 20 times

valuation fluctuation and investment sentiment

from a long-term perspective, the capital market is effective, but valuation can not solve all the problems. The P/E ratio, P/L ratio and P/B ratio of relative valuation are often more effective for evaluating enterprises in normal operation. They are not a fair indicator for enterprises with poor profits. They often have poor profits but high P/E ratio. In Figure 1, we selected the change trend of P/E ratio of 8 listed companies with continuous operation. Before 2001, the average p/E ratio of the industry was relatively high. On the one hand, the demand of the industry had started. However, due to the fierce price competition at that time, the profitability of enterprises was generally not high, the denominator was relatively small, and the P/E ratio had little significance; On the other hand, the market has certain expectations for the growth of the industry, so the valuation is also relatively high. After 2002, the construction machinery industry began to enter the vision of investors. However, the 10-year high growth of the industry has not been given a high P/E ratio like the IT industry, but its cyclical characteristics have led to the valuation being lower than the market average

over the past 10 years, construction machinery has experienced three rising cycles of, and corresponding to three adjustment periods of domestic macro-control in 2005, international financial crisis in 2009 and domestic over investment in 2011. Obviously, during the rising period of the industry, due to the rapid rise of the enterprise's profitability and the decline of the P/E ratio caused by the market's expected macro-control, the performance declined in 2005 due to the macro-control, and the adjustment cycle was relatively short, and the valuation increased. In 2006, the industry recovered its growth, the market confidence increased, and the valuation further improved; The annual growth of the industry exceeded the market expectation. By the end of 2008, affected by the international financial crisis, the industry was in a state of single quarter shutdown or semi shutdown, and the market sold off construction machinery stocks. The average valuation of 8 companies reached 15.18 times, of which Zoomlion, Shantui, Liugong and anhuiheli all had a P/E ratio of less than 13 times at the end of the year. XCMG's restructuring raised the average valuation of the industry; In 2009, the government launched the 4trillion yuan investment plan, and the construction machinery industry became the main beneficiary industry. Investors' confidence doubled, and the industry performance and valuation rose at the same time; In the second quarter of 2011, the demand of fixed asset investment for means of production began to show weakness, and the construction machinery industry entered a downward cycle. The market sold off the stocks of this industry on a large scale, resulting in a decline in enterprise performance and market confidence, and a sharp decline in the market value of construction machinery

if we only look at the valuation at the beginning of the year, the average p/E ratio at the end of 2012 was 12.65 times, up from 9.46 times at the end of 2011, but it was actually caused by the sharp decline in the performance of listed companies. The net profit of eight listed companies in 2011 was 23.021 billion yuan, down to 16.278 billion yuan in 2012. 2 per year Impact test method; At the beginning of the year, the market has expected the peak season sales of construction machinery, but the actual sales situation since the second quarter of 2011 has been lower than the market expectation. More importantly, the high growth mode of construction machinery in the past 10 years may have ended. The first quarter of 2013 showed that the profitability of the industry decreased significantly. By the end of April, the average p/E ratio of the eight listed construction machinery companies was 11 based on the 2012 profits. The energy used accounted for about 12% of the total energy consumption of the national economy The total profit of the eight listed companies in the first quarter was 2.792 billion yuan. If the performance in 2013 is simply predicted, the current P/E ratio will reach 16.06 times. After this adjustment, it began to enter a relatively stable growth period, and the valuation of this industry may be difficult to recover to more than 20 times. The market is expected to be low before 2013 and high after 2013. However, if the performance in the second quarter continues to be lower than expected, the share price will further decline. At present, according to the performance in 2012, the market sales ratio of 8 listed construction machinery companies is 1.08 times. When the profit of construction machinery reaches the average level of the machinery industry, the market sales ratio will drop to 1 times or less

in the past, the significance of market investment in the construction machinery industry was high growth. In this process, the enterprise focused on scale expansion, and the overall dividend rate was very low. The era of heavy industrialization in China is coming to an end, and the era of huge profits in real estate is becoming a thing of the past. The driving force for the rapid growth of construction machinery is weakening, and the process of capacity reduction in the industry is still long. Construction machinery will change from a period of rapid growth to a period of mature development. In the future, investors' attitude towards this industry can be adjusted from high growth investment to value investment, and they pay more attention to the dividend ability of enterprises rather than simple book profits, The valuation system may transition from relative valuation to absolute valuation

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