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The structural bull market in rubber machinery that began in 2020 continued in the first half of 2023. Rubber machinery sales revenue increased by 9.6%, export delivery value increased by nearly 43.5%, and profit indicators continued to improve. However, in the first half of 2023 and July and August, most companies in the industry undertook orders, and it is expected that the overall bull market in the rubber machinery industry in 2023 will show obvious signs of weak growth, and sales revenue growth by several digits is a high probability event.
Sales revenue growth Industry concentration increased
According to the statistics of the main economic indicators of the 20 major rubber machinery manufacturers in the first half of 2023 by the Rubber Machinery Professional Committee of China Chemical Equipment Association, the sales revenue of rubber machinery was 4.15 billion yuan, a year-on-year increase of 9.6%, and it is estimated that the total sales revenue of China's rubber machinery in the first half of this year reached 6.154 billion yuan, a year-on-year increase of 9.5%.
In the first half of the year, most enterprises in the rubber machine industry had strong production and sales, and the operating rate remained at a high level. The enterprises with high sales revenue mainly include Softcontrol Shares, Dalian Rubber and Plastic Machinery, Sinochem Guilin Engineering, Tianjin Saixiang Technology, Guilin Rubber Machinery, Yiyang Rubber and Plastic Machinery, Wanxiang Xinyuan Technology, Qingdao Hailang Equipment, Fujian Tianhua Intelligent Equipment and Wuxi Double Elephant Rubber and Plastic Machinery.
The sales revenue of the top three was 2.813 billion yuan, accounting for 45.71% of the total sales revenue, and the concentration increased by 4.81 percent. The sales revenue of the top ten was 3.22 billion yuan, accounting for 62.91% of the total sales revenue, and the concentration increased by 3.81 percent. Orders are tilted towards the head enterprises, and the industry concentration is increased. Sales revenue increased more enterprises Inner Mongolia Fute, Dalian Rubber and Plastic Machinery, Tianjin Saixiang Technology, Guilin Rubber Machinery and Wuxi Double Elephant Rubber and Plastic Machinery, all with an increase of more than 20%. The main contribution to the increase in rubber machinery sales revenue was engineering tire equipment and exports.
China's engineering tire investment fever since the second half of 2021 is still continuing, which has given the rubber machinery industry greater market demand, and some engineering tire equipment-based enterprises have benefited greatly. Relatively speaking, the demand for passenger and heavy-duty tire equipment decreased significantly compared with previous years. At present, most enterprises in the industry are basically full of orders in the second half of this year, but due to the small number of orders undertaken by the rubber machine industry in the second half of the year, there is still a certain gap in the production of rubber machines in the second half of the year and the first quarter of next year. Combined with the above factors, it is expected that the sales revenue of the rubber machine industry will grow by single digits in 2023.
Industry profits continue to grow, and profit levels are expected to continue to improve
For the statistics of the participating reporting units, the profit increased by 25.8% year-on-year, and there were 2 loss-making enterprises. Among the four listed companies in the industry, the profits of Softcontrol and Saixiang Technology increased significantly year-on-year, but Singyuan Technology and Lanying Equipment declined. The increase in profit was mainly due to higher sales and a moderate decline in the price of raw materials such as steel.
In the first half of this year, the sales rate of rubber machine enterprises remained at a high level. The output value of new products of the applicant enterprises increased by 17.1% compared with the same period last year. The number of employees in the industry is basically flat. Now the price of raw materials such as steel continues to decline, and the gross profit margin of the rubber machine industry is expected to improve. This year's orders in the rubber machine industry are mainly concentrated in engineering tire equipment and export products, and the gross profit margin is relatively high. It is predicted that profits will increase by a certain amount year-on-year in 2023, and the industry's profit level is expected to continue to improve.
Sharp Growth in Export Earnings Exports continue to be promising
According to the statistics of the participating reporting units, the export delivery value was 1.666 billion yuan, a year-on-year increase of 43.5%, and it is estimated that the total export of China's rubber machinery industry in the first half of 2023 will be 280 million US dollars, a year-on-year increase of 40%.
The export delivery value is relatively high, such as Softcontrol Shares, Dalian Rubber and Plastic Machinery, Tianjin Saixiang Technology, Sinochem Guilin Engineering, Guilin Rubber Machinery, Yiyang Rubber and Plastic Machinery and Wuxi Shuangxiang.
The total export delivery value of participating enterprises accounted for 40.2% of the total sales revenue of the industry, an increase of 10.2 percentage points over the previous year. The main reason for the growth of exports is that China's tire industry has started more new / expanded tire projects abroad, especially in Southeast Asia, and there is more demand for rubber machinery, and China's rubber machinery enterprises have undertaken a large number of overseas tire investment orders. At the same time, foreign epidemic control has been relaxed, tire investment has rebounded, and the demand for rubber machinery in China has increased.
The depreciation of the RMB is also conducive to China's rubber machinery exports to earn foreign exchange. It is expected that the export of the rubber machine industry will continue to be optimistic in 2023, and maintaining double-digit growth throughout the year is a high probability event.