Green manufacturing is the main direction for the future

R&D companies will benefit from an upgrade in the equipment manufacturing industry. We believe that the comparative advantage of labor cost in China's machinery industry is disappearing, and the upgrading of equipment manufacturing industry is the only path. At present, the R&D investment of 204 listed companies in China's machinery industry accounts for only about 2% of the income. According to the US 245 listed companies in the machinery industry, the proportion of research and development expenses reached 6%. China's machinery industry R & D investment is relatively inadequate. From the development experience of the United States, in the next 5-10 years, the company's business performance and profitability have been greatly improved. At the same time, the excess returns of these listed companies are higher than those of companies with insufficient R&D investment. a lot of.

The layout is in 2012, grasping the development opportunities of green manufacturing in the next 20 years. China's existing equipment manufacturing industry has low per capita output, large resource consumption, insufficient sustainability, and the industry must be upgraded. We believe that the main direction of future upgrades is green manufacturing. Among them, the short-term focus is on energy-saving and emission reduction of smart equipment and machinery.

Energy equipment: We are more optimistic about natural gas equipment. At present, coal accounts for 70% of China's energy consumption. Coal power has a huge impact on China's air pollution. Relevant data show that end-discharge treatment, including electrostatic precipitator, has limited filtration of large quantities of fine particles. From the perspective of the use of natural gas in the United States, Japan and South Korea, natural gas power generation accounts for a relatively large proportion. We are optimistic about the future application of natural gas in China, and there is huge room for development of natural gas equipment in China.

Agricultural machinery: The potential for water saving in agriculture is much greater than that in industrial water saving. We believe that the future investment opportunities of agricultural machinery are mainly concentrated in the related applications of water conservancy construction and water saving irrigation. According to the data of the National Bureau of Statistics in 2009, China's total water consumption is about 600 billion cubic meters, of which agricultural water consumption accounts for 62.4%, far greater than the total industrial water use. The uneven distribution of water resources has restricted the development of the local economy to some extent. From the perspective of water use, agricultural water conservation is promising.

Defence military industry: the transformation of scientific and technological achievements and government spending are beneficial to the long-term development of the economy. We compared the contribution of US defense expenditure to GDP from 1960 to 2010. We found that after 1980, the contribution of US defense spending to GDP was inversely related to the US economic cycle. For example, in 2008, the US GDP growth rate was only 0.44%, and the contribution of defense expenditure to GDP was 0.36%. In 2009, US GDP growth was -2.44%, and defense spending contributed 0.3% of GDP. In addition, we are optimistic about the role of national defense technology transformation in promoting the country's scientific and technological strength. Especially since the 1990s, the transformation of national defense science and technology achievements has accelerated gradually, which has promoted the progress of the national science and technology level to a certain extent.

General machinery: Gas compressors have far-reaching energy savings. According to the International Energy Conservation and Environmental Protection Association, 96% of the energy consumption of compressed air systems is the power consumption of industrial compressors. The power consumption of industrial compressors in China was 214 billion kWh in 2008, accounting for 6-10% of the total electricity consumption in the country. In the life cycle cost of air compressors, energy costs account for 70%. The industrial compressors in Japan consume only 40 billion kWh, less than 4% of Japan's total electricity consumption. This shows that while we adjust the industrial economic structure, we also need to greatly improve the energy efficiency of the compressed air system. The energy efficiency of gas compressors is far-reaching.

Construction machinery: Inventory pressure is gradually increasing, but the decline has stabilized, and future growth depends on policy-driven and internationalization. We believe that the main drivers of construction machinery in 2012 are driven by export growth and policy. At the same time, we believe that from 2012 to 2013, infrastructure investment will not slow down significantly, including affordable housing, transportation and investment in water conservancy construction are potential catalysts.