Industry core views:
In the second half of 2021, the investment in fixed assets in the manufacturing industry is expected to continue to improve under the influence of the sustained economic recovery at home and abroad, the profit recovery of the manufacturing industry, and the active replenishing-inventory of enterprises, driving the continuous strong demand for midstream machinery and equipment. The 14th Five-Year Plan calls for further implementation of the strategy of strengthening China's manufacturing industry, accelerating efforts to build China into a country of manufacturing and quality, adhering to the principle of independent, controllable, safe and efficient development, and constantly upgrading the manufacturing industry. In the future, special plans for key areas such as high-end equipment manufacturing are expected to be issued intensively, and related fields such as photovoltaic equipment, semiconductor equipment and industrial robots are expected to be boosted by policies. In the second half of the year, the prosperity of the machinery industry may be differentiated. It is suggested to pay attention to the fields of industrial technology iteration and optimization and upgrading, and recommend semiconductor equipment, photovoltaic equipment, industrial robots, construction machinery, service robots and other sectors.
Investment Highlights:
Semiconductor equipment: in the context of the global shortage of "core", the global semiconductor equipment production and sales in 2020 is booming, the market size increased by 19% year-on-year, reaching a record $71.2 billion; For the first time, China overtook Taiwan to become the world's largest market for semiconductor equipment, with a 26 per cent share. Considering that the United States has imposed restrictions on China's semiconductor industry, solving the "bottleneck" is the key to China's semiconductor development in the future, and the industry technology is in urgent need of breakthrough. At present, China has introduced a number of favorable policies to the semiconductor industry, the future of domestic equipment replacement space is broad, it is expected that the domestic semiconductor equipment market will maintain high prosperity in the second half of the year.
Pv equipment: In 2020, the pv market will grow against the trend, with 134GW of newly installed pv globally, up 23.38% year on year. China's pv capacity will continue to expand in the global market. In 2020, polycrystalline silicon, silicon chip, cell chip and module capacity will account for 75.2%, 97%, 80.7% and 76.3% of the world's capacity respectively. In 2021, the global photovoltaic installed capacity is expected to increase by 145GW, and China's installed capacity is expected to increase by 65GW. The strong demand of downstream terminals drives the growth of equipment sales. In addition, cost reduction and efficiency increase is the core of the photovoltaic industry, technology iteration will accelerate the promotion of photovoltaic equipment update: from the silicon link, the large size of silicon chip to accelerate the market penetration, it is expected that within two years 182mm and 210mm into the mainstream, 166mm and other industries will accelerate the elimination of backward capacity. From the aspect of the cell segment, the average efficiency of HJT mass production has exceeded 24%, and the cost reduction path is clear. Through the cost reduction of materials (wafer + large size, target material cost reduction, silver pulp consumption reduction and silver pulp domestication) and equipment cost reduction (large-scale and domestic replacement), the cost of HJT is expected to be reduced to the level of PERC in 2022, and the demand for HJT equipment is broad.
Industrial robots: In the first quarter of 2021, the output of industrial robots in China increased by 108% year-on-year to 78,700 sets, showing obvious signs of recovery in the industry. In the short term, downstream investment accelerated recovery to drive up production. In the medium term, industrial robots will penetrate into multiple application fields. It is expected that in 2021, the application rate of industrial robots in medical supplies, photovoltaic, metal products and other fields in China will increase by more than 50%. The growth rate of lithium batteries, food and beverage, warehousing and logistics, and household appliances will increase by about 40%. In the long run, the decline of demographic dividend and the rise of labor cost bring the demand for accelerated robot configuration, and the industry is expected to enter a period of rapid popularization.
Construction machinery: Excavator sales growth slowed, expected to maintain moderate growth for the full year. From the perspective of domestic demand: 1) The moderate prosperity of infrastructure supports the bottom demand. The lower than expected real estate construction rate from January to May affects the industry demand. However, considering the continuous high real estate investment boom and sales data, the real estate construction rate in 21 years is not pessimistic. 2) Natural renewal of equipment + promotion of environmental protection policies: It is expected that the stock renewal demand of excavators will reach 102,300 units in 21 years, and the National Iv standard will be fully implemented on December 1, 2022, to further promote the upgrading speed of construction machinery industry and smooth the periodicity of construction machinery. 3) The disappearance of demographic dividend, the increase of labor costs, the strong demand for infrastructure in rural areas and urbanization, and the continuous logic of machine replacement support the sales of medium and small enterprises. 4) The market share of the leading enterprises in the industry continues to increase, the operation efficiency is improved, and more attention is paid to the mastery of core technology and intelligent production. In the cycle of small fluctuations, the leading enterprises are expected to bring more performance flexibility than expected.
Risk factors: the risk of macroeconomic growth fluctuation, the risk of epidemic prevention and control falling short of expectations, the risk of downstream fixed asset investment slowing down, the risk of industry competition intensifying, the progress of localization falling short of expectations, etc.