For the construction machinery manufacturers "do the wedding dress," the high-pressure cylinder Jiangsu Hengli Co., Ltd. (hereinafter referred to as "Hengli cylinder") will be on August 12th on the Council,

    Hengli cylinder main products are excavator special cylinder, 2010, its sales growth up to 160%, but due to the current excavator serious overcapacity, fierce competition and market demand is inadequate, and thus as supporting vendors, the future of its sales growth slow likely.

    Excavator market is tired

    Hengli cylinder production of excavators dedicated cylinder (hereinafter referred to as "excavator cylinder"), including boom cylinder, bucket cylinder and bucket cylinder rod, etc., 2010 sales of 608 million yuan, net profit of 220 million dollars. At present the company's excavator special cylinder 23.18% market share.

    2008 to 2010, sales of its excavator cylinder, respectively 42,200, 50,600, 135,300, that is, excavator cylinder sales in 2010 increased by 160%, which is this year the domestic excavator kinds of hosts 75% of product sales increased significantly directly related. First half of 2011, Hengli cylinder sold 115,500 excavator cylinder, expects its full year 2011 sales will continue to rise year on year.

    However, you want to continue in the coming years similar to 2010 as 160% of the growth unsustainable.

    First, the excavator has been significant sales weakness. Although sales in the year when January and February of this year increased by 12.54% and 117.87%, but sales have been down since April, June, excavator sales in a single month more fall again, although sold 1.0277 million units, but up and down the chain were decreased by 12.47% and 28%. Host poor product sales, will lead directly to supporting manufacturers followed suit sales decline. Orient Securities, Zhou Fengwu, says that three quarters of the industry's traditional low season, with last year's sales base and higher excavator, excavator sales in the third quarter and therefore a lot of pressure, the entire sub-industry boom of the excavator began to decline.

    Second, the industry believes that the credit crunch, the protection of housing starts has not been fully rolled out and other reasons, resulting in excavator sales growth slowdown will likely last a long time, long-term substantial growth of excavator cylinder is also greatly reduced the possibility of .

    Excavator, who declined to be named told reporters that industry sales are now part of the real estate projects under construction and engineering projects due to the bank's credit limit and stay, so these projects on a decline in demand for excavators. But a large part of the security room to start the third quarter of this year, may boost the sales of excavators, but the impact is limited.

    China Construction Machinery Industry Association Secretary Suzi Meng long ago accepted the "Business News" interview that last year, China's excavator production capacity is very large, sales of 160,000 units, while production capacity of up to 30 million units. Some companies hard rock bottom price, promotion, or "zero down payment" sales, making this year 1 to 3 months of excavator sales look good, but "excavator limited demand," the fundamental factors still exist, and therefore, future similar Hengli cylinder such supporting manufacturers, want to maintain long-term sales growth, probably not easy.

    Challenges of high-margin

    If you can not achieve a breakthrough in terms of volume, then Hengli cylinder can hold their own high-margin this advantage?

    Currently, the company's products (including fuel tanks and heavy equipment, excavators with special non-standard fuel tanks, etc.) gross margin at 42%, while the general hydraulic and pneumatic components of gross margin of 18% to 25% (2000 to 2008 years), thus Hengli cylinder gross margin products in the construction machinery is relatively high. However, the high gross margins but also to withstand several challenges.