One-year plan lies in spring expecting the coming of the mechanical season

1. Upgrade the construction machinery industry rating to "recommended." According to feedback from the grassroots survey of agents, downstream demand began to warm in the second half of February. Among them, the demand from customers in the municipal construction and rural water conservancy sector is the most obvious. The factors that caused the downstream demand of construction machinery to recover have mainly come from two aspects: First, because the Spring Festival earlier this year led to the early arrival of the sales season; second, with the fine-tuning of monetary policy, some downstream customer funds began to improve. We believe that the low point of the boom cycle of the construction machinery sector will be in the first quarter, and the industry will begin to recover after the second quarter. At present, the valuation of mainstream companies in the construction machinery sector is generally low, and there is plenty of room for future valuation restoration. We mainly recommend listed companies with high proportion of earth-moving machinery in the business: Shantui Stock, Liugong and Xugong Machinery.

2. The production and sales of heavy machinery industry reached new heights. In 2011, the sales value of the heavy machinery industry was RMB 846.1 billion, a year-on-year increase of 27.0%; of which the metallurgy and mining machinery industry was RMB 378.6 billion and the material handling industry was RMB 46.7 billion. Exports amounted to US$13.96 billion, a year-on-year increase of 20.37%; imports reached US$6.89 billion, a year-on-year increase of 15.74%. Among the heavy machinery: Taizhong Group's 11 years output value was 16.978 billion yuan, Yizhong Group was 13.59 billion yuan, Dalian Heavy Industry was 10.547 billion yuan, and that of the Second Group was 7.989 billion yuan; among crane companies: Runbang Heavy Machinery was 823 million yuan, and the overpass was 501 million. yuan.

3. The strategic upgrade of the giant wheel shares. At the beginning of the company's founding, the tire mold was the main product, and the hydraulic curing press painstakingly cultivated was successfully introduced to the market. In 11 years, it accounted for approximately 50% of the income. In the 11th year, the company announced the acquisition of the world-famous mold machine tool manufacturer OPS machine tool in Germany, and the intention to acquire the pilot NC, seeking to develop to the field of precision CNC machine tools. At the same time, the company has already reserved industrial robots and other related invention patents, and is expected to enter the field of automation industrial equipment in the future. It is expected that the company's 11-13 year EPS will be 0.36, 0.47, and 0.58 yuan respectively, and the PEs corresponding to the current stock price will be 18.4X, 13.8X, and 11.3X, respectively. According to the 2012 results, the company will give a valuation of 20 times. The company's reasonable price is 9.6. Yuan, raised to "strongly recommended" rating.

The key stocks of key machinery industry stock pools are recommended: Shantui Stock, Liugong, Xugong Machinery, Giant Wheels, South Pump, Zhengjiji, Tiandi Technology and Yawei.