Typical characteristics: the market size is large, cyclical

3500/33 Machine tool industry has two typical characteristics of large market size and strong cycle attributes. According to Gardner Intelligence data, in 2022, China’s machine tool consumption is 27.4 billion US dollars (about 180 billion yuan), the global machine tool consumption is about 79.5 billion US dollars (about 530 billion yuan), and China’s consumption accounts for about 34% of the world’s. It is the world’s largest machine tool producer and consumer. Machine tool industry is a typical cyclical industry, the current large cycle (renewal cycle) upward, small cycle (inventory cycle) gradually bottomed out. The general product life of machine tools is about 10 years, so the industry is about every 7-10 years for a business cycle, and the historical global consumption scale in 1983, 1993, 2003, 2013 was a stage low. From the perspective of the 10-year cycle, the total global machine tool 3500/33 consumption in 2020 is 66.817 billion US dollars, and China’s machine tool consumption is 21.316 billion US dollars, which is at the lowest level in nearly 10 years. China and the global market began to recover from 2021, and machine tool consumption increased significantly in 2021. Year-on-year growth of 19.73% and 31.46%, respectively. In 2022, affected by the macroeconomic situation, the epidemic and other factors, the amount of machine tool consumption has fallen, and the amount of consumption in China and the world is $27.4 billion and $79.5 billion, respectively. The machine tool industry is still in the bottom recovery stage. After falling to a low of 27.16% in 2019, China’s machine tool consumption accounted for a steady increase in the past three years, reaching 34% in 2022.

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3500/33 From the perspective of small cycle dimension, it is consistent with the general automation industry such as injection molding machine, robot, laser, industrial control, and general reducer, behind which is the small cycle of investment in the manufacturing industry. The small cycle dimension has a cycle of 3-4 years, and 2019, 2015, 2012 and 2009 are the low points of the small cycle. Since 2022, China’s industrial enterprises have continued to be in a state of destocking, and PPI and inventory have shown an overall downward trend. Since August this year, China’s industrial enterprise inventory growth rate picked up, PPI decline narrowed, industrial enterprise profit growth significantly back to positive, various data show that China’s inventory cycle turning point has initially emerged. From the perspective of machine tool production, the cumulative output of metal cutting machine tools in China from January to November 2023 was 600,000 units, an increase of 7.3%, of which 60,000 units were produced in October, an increase of 21.3%, maintaining rapid growth.

At present, China’s machine tool industry is in the interweaving stage of the bottom recovery of large and small cycles. Looking forward to the next 3-5 years, on the one hand, relying on the national 145th plan, the domestic machine tool consumer market is 3500/33 expected to continue to improve under the trend of high-end manufacturing manufacturing-oriented manufacturing upgrading, and on the other hand, the technological progress of domestic machine tool enterprises will further open the export market. In recent years, a new round of scientific and technological revolution has flourished, China’s economy is facing the pressure of transformation, the global industrial chain is facing structural reshaping and re-layout, China’s industrial chain is facing difficulties such as “bottlenecks”, “breakpoints” and “blocking points”, and supply chain security issues have become increasingly prominent. CNC machine tools high technical barriers, slow technology iteration speed, scale effect is not obvious, there are typical market failure and industrial policy failure, the high-end market is basically monopolized by foreign enterprises, domestic substitution space is broad, independent and controllable trend.