I. Industry Overview
It is understood that 2017 is a rare good year in the history of the tool industry. For four consecutive quarters, it has maintained a strong momentum of production and sales, sales revenue increased by more than 20% year-on-year, and exports also hit a new high in recent years. In 2018, the tool industry first continued its rapid growth in 2017 and continued to maintain rapid growth. However, with the gradual decline of 3C and the automotive industry, from the second half of 2018, the growth of the tool industry (mainly the small tool industry) has slowed. By the first half of 2019, the performance of the tool industry has been consolidating at a high level and has declined steadily. From the relevant data of the 40 member companies participating in the monthly report of the tool branch, the sales revenue in the four months of 4, 5, 6, 7, and 8 increased by -3.3%, -3.4%, -4.4%, -6.7%, -6.7%, -8.1%, sales revenues increased by -5.2%, -10.4%, -4.6%, -19.3%, and 2.7%, respectively, and profits increased by -9.9%, -14.4%, -6.5%, -8.8%, and- 10%, downward pressure is increasing month by month. At the same time, the export of tool products in the first quarter of 2019 also fell sharply, a year-on-year increase of -15.2%. Looking at the overall situation of the machine tool industry, the decline of the tool industry, especially the small tool industry, is strongly related to the general environment and lags behind, and is more affected by the apparent decline in the user fields such as automobiles and 3C. Specific to the enterprise level, the situation is different.
In the first half of 2019, tool companies were more or less affected by the Sino-US trade friction. First, a 25% increase in tariffs has increased the export and promotion costs of knives, which has weakened the competitiveness of the US market. Secondly, the current taxation list includes a large number of tool application industries such as engines and electric motors, which will indirectly cause a significant decline in exports of related products. In addition, some user companies may consider shifting production lines from domestic to Vietnam, ASEAN and other countries, which will lead to shrinking tool demand. If the United States further implements a 25% increase in tariffs on 3C industries such as mobile phones and tablets, it will cause a sharper decline in the demand for related industries. Sino-U.S. Trade friction has caused a large indirect impact on Guanglu Company. As a result of the impact of its service areas, tool orders have generally declined.
According to the feedback from enterprises, the demand for tools in different fields and the market performance of different tool varieties vary widely, which fully reflects the specific and segmented characteristics of the tool industry. At present, the fields with better demand for cutting tool products are mainly aerospace, military industry, energy, engineering machinery, rail transportation, heavy machinery industry and so on. Valin Superhard stated that with the country's emphasis on the national defense and aerospace industry, the aerospace field will become another vigorous development area after the automotive field. Especially in the field of aviation parts processing, it has become the focus of various tool manufacturers at home and abroad, and successively introduced a series of special tools for aviation. Although the overall scale effect of aviation is not enough at present, since each tool manufacturer has not entered the formal application system, the market still needs a cultivation process, but the development potential is huge. At the same time, in the past two years, the general machinery sectors such as construction machinery and rail transit have developed relatively well. The heavy machinery industry has ushered in a new cycle of economic rise, and the demand-side new kinetic energy conversion has continued to accelerate. Among them, the metallurgical industry and mining, etc., have continued to increase in the first half of 2019 after continuing to rise in 2018.
In terms of the types of tools, in general, the market demand for high-end products with high technological content that can replace imported products is relatively strong, and orders are better.
Second, the main problems and difficulties
Small weight and insufficient attention. Due to the small size of the tool industry, the market size is only a few tens of billions, or even less than the annual marketing income of a single company in some fields. The intensity needs to be enhanced. Industry basic research and product research and development investment are insufficient. The mid-to-high-end market has long been occupied by European, American, Japanese, and Korean brands. It is difficult for domestic products to make major breakthroughs. In fact, as an important part of cutting processing, the tool directly affects the level of cutting processing and is one of the important factors to measure a country's manufacturing level.
Talent issues are outstanding. The problem of talents is a very common problem in China's machine tool industry and even the entire machinery manufacturing industry. It has been severe enough to restrict the overall progress and development of the industry. Hualing Superhard believes that the domestic tool industry started late and has a weak foundation. The development course in the past few decades is far from sufficient in terms of technology precipitation or talent reserve. The main problem facing enterprises is the shortage and loss of high-end technical talents. The tool industry has a large demand for professional and technical personnel and management personnel, but it is currently difficult to recruit.
Some companies report limited funding. Valin Superhard reflects that as the raw material prices of upstream products continue to rise, the production costs of products continue to increase, and product exports are affected. At the same time, due to the slowing of capital turnover, market demand has dropped, customer inventory has continued to rise, and the overall market situation is not optimistic. Guanglu also encountered financial problems, mainly due to fierce competition from its peers, low product profits, and the small size of the measuring tool market, its slow growth rate, lack of policies and financial support, and its limited investment by its own funds, which could not speed up technology. The pace of innovation and product innovation.
Third, strive to transform to meet the needs of the high-end market
Similar to the entire machine tool industry, most of the high-end market in China's tool industry is occupied by imported brands. According to the tool branch secretariat of the Machine Tool Association, the imported tool (including overseas brands produced and sold in China) accounted for 14.8 billion of China's total tool consumption of 42.1 billion in 2018, accounting for 35%. In the face of increasing operating pressure in 2019 and beyond, cutting tool companies are trying to explore the path of transformation and upgrading.
Achieve breakthroughs in key areas: For the current economic situation, Hualing Superhard believes that the macro economy may still be subject to downward pressure. Under the influence of many factors such as Sino-US trade friction, the cutting tool industry may continue to fall in the second half of the year. Valin Superhard will continue to take proactive measures to respond to changes in the market situation. On the one hand, it will continue to strengthen market promotion efforts in the second half of the year, deepen the cultivation of key application markets, and increase market share; on the other hand, it will continue to provide support for aerospace, military, automotive, Special research and development of medium and high-end cutting tools in key industries such as energy has been carried out to further expand the market, strive to break more foreign technical barriers, and occupy a larger share in the high-end cutting tool market.
Valin Superhard has conducted a lot of research on China's aviation manufacturing industry, which is in a period of rapid development. It is pointed out that the development of new aircraft and large aircraft poses challenges to aviation manufacturing and processing, and puts forward higher requirements for the overall application of cutting tools. From the processed parts of the aircraft, the required tools can be subdivided into processing tools such as engines, wings, fuselage, and landing gear. Among them, the processing of the engine can also be divided into brakes, blades, blades, diffusers, and bearing shells.体 等。 Body and so on. From the perspective of different processed materials, it can be subdivided into special tools for different materials such as HRSA high temperature heat resistant alloys, aluminum alloys, titanium alloys, carbon fiber reinforced plastics, and high alloy steels. From the perspective of tool types, it can be subdivided into overall high-speed steel tools, solid carbide tools, indexable tools, and PCD welding tools.
Widen the field of users. Regarding the development strategy and outlook forecast for the second half of 2019, Sentai Inge said that the decline in the automobile manufacturing industry in the first half of the year affected the growth forecast to a certain extent. In the second half of the year, it will increase its efforts to broaden the user field, targeting the energy and power industry, construction machinery , Key industries such as electronics, aerospace, etc .; meanwhile, we must meet the requirements of more automobile manufacturing companies to reduce costs and increase efficiency, and improve product quality and stability; in the next few years, we will work hard to enhance our own strength and consolidate Foundation, seize opportunities, and stand out in the wave of transformation and upgrading.
Regarding the industry's future development prospects, the interviewed companies can rationally view the current situation and future trends, and are full of confidence and expectation on the state's support for entities, tax and fee reduction policies. At the same time, he said that according to its own characteristics and the industry situation, it will actively take practicable and important measures to improve product technology and quality, strengthen management, promote the integration of the two industries, participate in the construction of informatization, and respond to the impact of Sino-US trade frictions. Take the initiative to better develop domestic tools, strive to achieve import substitution, and make greater contributions to the revitalization of the machine tool industry.
