SMM: thanks to the demand for infrastructure investment, sales of heavy trucks and excavators grew rapidly in August. Sales of heavy trucks increased by 75% over the same period last year, and sales of excavators increased by about 50% year-on-year.

According to the first Commercial vehicle Network, China's heavy truck market is expected to sell 128000 models in August, an increase of 75 percent over the same period last year, setting a new high for the heavy truck industry in August, 34000 more than the previous record of 93700 vehicles in August 2017. Citic Securities said that with the tightening of environmental protection and safety policies and the high-end demand of users, the rising trend of unit price of heavy trucks will continue to be maintained and will be accelerated.

Yesterday, heavy truck leader A-share Sinotruk rose sharply, closing at an all-time high, with a total purchase of nearly 100 million by three institutions, and northbound funds also increased their holdings by 7.29 million yuan. The turnover of the stock accounted for 23.56% of the total daily turnover.

Sinotruk sold about 20, 000 vehicles in august, up 80% from a year earlier. Its share price has risen nearly 160% from its low this year.

In August, some industry analysts pointed out that the sales of related construction machinery products to achieve the annual high growth target has become a foregone conclusion. Zhongtai Securities pointed out that by the end of 2018, the number of triple trucks in China was 1.556 million, of which nearly 85 per cent were heavy trucks of five years or more, and there was a strong demand for renewal of the vehicles themselves. The six-a phase standard of heavy vehicles will be fully implemented on July 1, 2021, and the policy of triple card elimination in superimposed countries will dominate the demand of the industry in the next two years.

With the marginal loosening of the policy tone, it is expected that the pick-up in infrastructure will boost the demand for engineering heavy trucks, and the prosperity of the industry will continue.

The downstream demand of heavy trucks is mainly divided into two categories: freight demand and engineering demand. Sino-Thai Securities said that the growth mainly comes from economic growth and demand brought about by engineering construction. therefore, highway freight turnover and infrastructure investment growth are important research indicators. The energy level of this cycle of infrastructure construction is weaker than that of previous rounds, and the impact on the growth rate of current year's holdings is expected to be about 2%. Assuming that the high point of the cycle lasts for two years, the impact on total holdings is expected to be about 4%.

Citic Securities recommends to focus on China heavy truck, which benefits from the volume of high-end models and strong sales of natural gas models, and focuses on Weichai Power, which benefits from optimized competition and long-term undervaluation. Recommend the (H) of CIMC, which benefits from the upgrading of semi-trailer and upper product structure and is expected to optimize the pattern.

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