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Railway accessories industry advantages
Sep 22, 2017


Railway accessories industry in terms of revenue or gross margin growth are better than the vehicle industry. The Ministry of Railways vehicle purchase spending growth faster and sustained for the railway equipment industry to lay the foundation for annual revenue growth during the cost rate will continue to decline, the relative valuation of the advantages of reproduction, to maintain the industry-leading market-B rating, the Ministry of Railways Purchasing spending grew faster, laying the foundation for the annual growth of the railway equipment industry.

  Speed up the railway construction makes the first two months of this year, railway fixed asset investment growth rate was significantly accelerated, including locomotive purchase and renovation of the increase in spending more than 100%. Although this is not fully reflected in the income of the relevant enterprises, we believe that this year's railway investment in fixed assets can be maintained at least 60%, which will lay the foundation for the railway equipment industry's annual revenue growth.

  From the sub-sectors, the accessories industry revenue growth faster than the vehicle industry. From the sub-industry point of view, from January to February this year, the vehicle industry's revenue growth rate of only 6% (truck, locomotive output fell nearly 50% year on year, the bus is a substantial increase of 167%), and accessories and special equipment Maintained a rapid growth (more than 35%).

  This is mainly because: At present, although most of the vehicle demand decline, but the production enterprises are still optimistic about the long-term growth in demand, so the purchase of accessories still maintain a larger growth; accessories repair demand is relatively rigid; accessories export competitiveness is relatively Large, by the impact of declining overseas market demand is relatively small. We expect the bus to increase production over 50% of the year, the truck fell about 20%, the locomotive is basically flat, accessories revenue growth is still faster than the vehicle, but the gap will be reduced.

  Industry gross margin increased, which accessories industry gross margin also increased relatively more. At present, except for passenger cars (including EMUs), capacity utilization dropped to less than 50%, which has a negative impact on the industry's gross margin. But the second half of last year since the rapid decline in steel prices brought about by the gross margin greatly offset the negative impact, so the first two months of this year, industry gross margin continued to rise steadily (up 1 percentage point over the same period last year).

  From the breakdown of the industry point of view, the railway parts industry, the gross margin rose faster than the vehicle, this is because: spare parts industry capacity utilization rate is significantly less than the vehicle; parts industry exposure to steel to be higher; The production cycle is relatively short, the cost of the rate of decline is relatively fast.

  Which makes the price of accessories and vehicle prices are equally stable, the accessories industry, gross margin rose to be more obvious. Although the utilization rate will rise in the second quarter, steel prices will be relatively stable, but some of the product prices may decline, which makes the second quarter of the accessories industry, gross margin will decline slightly, and the vehicle industry gross margin is likely to basic Flat or slightly increased. In the long run, gross margin will remain steady.