Eileen Gu's  Instablog

www.shcri.com - In the mid November, 2009, State Grid Corporation of China released the centralized bidding plan for the first group of intelligent ammeters. In the past, the bidding of ammeters is the independent bidding by provincial grid companies. This is the first centralized bidding for ammeters by State Grid Corporation of China. The bidding is uniformly organized by State Grid Corporation of China and implemented by provincial grid companies.

The bidding consists of 2.94 million ammeters, including 2.68 million single-phase ammeters (91%) and 260,000 three-phase ammeters (9%). The bidding value of these ammeters totals about RMB 700 million (USD 102.6 million). 12 provinces are engaged in the centralized bidding. Zhejiang and Shandong are the two leading provinces with the bidding proportion of 33% and 30% separately.

The centralized bidding result of ammeters of State Grid Corporation of China was released on December 22nd, 2009. There are 23 successful bidding enterprises – 16 are single-phase ammeter ones and 11 are three-phase ammeter ones. In the past, there were nearly 2,000 ammeter manufacturers in China, leading to the low ammeter market concentration. However, according to the number of successful bidding enterprises, the concentration is improved significantly. Moreover, only a small number of enterprises win the bidding because of the small bidding scale.

There are 16 successful bidding enterprises of single-phase ammeters. The market concentration is higher than the expectation. Jiangsu Linyang Electronics Co., Ltd. still ranks the first among these enterprises with the successful bidding number of 380,000, accounting for 14.6%. In recent years, Jiangsu Linyang Electronics Co., Ltd. takes a leading position in the single-phase ammeter industry. Besides, Hangzhou PAX Electronic Technology Co., Ltd, Wasion Group and Hangzhou Xili Watthour Meter Manufacture Co., Ltd also occupy over 10% of market shares respectively.

There are 11 successful bidding enterprises of three-phase ammeters. The number is lower than that of single-phase ammeters but the concentration is higher. In the ammeter industry, the threshold of the three-phase ammeter sector is higher than that of the single-phase ammeter sector, so there are less three-phase ammeter enterprises. All the market shares of the Top 4 enterprises in the bidding are more than 10%. They are Yantai Dongfang Weisidun Electric Co., Ltd, Hangzhou PAX Electronic Technology Co., Ltd, Ningbo Sanxing Electric Co., Ltd and Shenzhen Haoningda Electronic Meters Manufacturing Co., Ltd. In 2010, the number of ammeters in the centralized bidding by State Grid Corporation of China will be raised greatly, leading to the considerable increase in the total bidding value. In 2010, the investment in ammeters by State Grid Corporation of China will exceed RMB 10 billion, more than RMB 5 billion of which will be used for the centralized bidding.

The development of Chinese intelligent grid will also greatly stimulate the growth in the ammeter industry. 

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http://www.shcri.com/reportdetail.asp?id=287

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Eileen Gu
Sales Manager
China Research and Intelligence
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Email: eileen@shcri.com
TEL: 86-21-6852-1029 ext.601
86-21-6150-9706
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www.shcri.com - Chinese demand for excavators sees continuous increase since 1995. The apparent consumption of Chinese excavators was increased from 8,753 in 1998 to over 110,000 in 2008. The main reasons for the high-speed growth of Chinese excavator sales volumes in recent years are: firstly, the demand from construction projects. The implementation of large quantities of construction projects in China objectively expands the excavator market capacity; secondly, the user structure characteristics and the high investment return rate of excavators. Over 70% of excavator purchasers in China are individuals, stimulated by the low capital threshold of small and middle excavators and the high investment return rate; thirdly, the control on imported second hand excavators is enhanced.

Though the sales volume in Chinese construction machinery industry of the peak season in 2009H1 was lower than that in the same period of 2008, the sales volume in the off season 2009Q3 remained optimistic thanks to the RMB 4 trillion stimulus package by Chinese government; the sales volume in 2009Q4 received significant YOY growth because of the hysteresis effect of the important investment projects and the low sales volume in the same period of the last year.

Foreign brands still dominate Chinese excavator industry. In 2008, Doosan of South Korea and Komatsu and Hitachi of Japan occupied about 59% shares on Chinese excavator market. Since 2005, Chinese domestic excavator brands begin to increase the market shares based on small excavators and expand the product line to large and medium excavators, improving the market shares. In 2010, Chinese excavator sales volume is predicted to achieve the growth rate of 15% while Chinese local excavator enterprises will realize the high growth rate of 30%.

The following 3-5 years are regarded as the critical period for Chinese local excavator brands to greatly expand their market shares. Presently, Chinese domestic excavator brands have expanded to large and medium excavators and many large enterprises possess the complete series of excavator products; the core spare parts of Chinese local hydraulic excavators are mainly acquired from international famous manufacturers; Chinese local excavator enterprises invest a lot of resources to build and perfect distribution and service channels, gradually taking effects. The strategic positioning on excavator products and large resource investment of Chinese local enterprises will definitely enhance their competence.   

The continuous construction of infrastructure projects by Chinese government and the sustaining improvement in the real estate investment significantly promote the growth in Chinese construction machinery industry. However, the excessive productivity operations after several years and the impacts of invested capitals on the profitability of enterprises in the marketing channel construction are the main risks for enterprises.

Since 2008H2, with the expansion of the global financial crisis, foreign building markets fall into recession. Meanwhile, Chinese construction machinery enterprises make vigorous efforts to establish strategic cooperation relationship with foreign core spare part manufacturers, making progress in the supply volume, supply clauses and delivery time of core spare parts.

Currently, the sales volume of Chinese domestic excavator enterprises is still lower than that of foreign brands. Provided that foreign brands have their own core spare part subsidiaries is not considered (domestic and foreign enterprises acquire spare parts from the same independent supplier), Chinese domestic excavator enterprises still cannot enjoy the same favorable supply clauses as foreign ones. Fortunately, as foreign spare part manufacturers pay more attention to Chinese market and increase the construction investment in China, the supply period will be improved. In conclusion, with the development of Chinese excavator enterprises, their competence in the supply chain management will be enhanced greatly.

For more information please visit:

http://www.shcri.com/reportdetail.asp?id=216

Contacts:
Eileen Gu
Sales Manager
China Research and Intelligence
www.shcri.com
Email: eileen@shcri.com
TEL: 86-21-6852-1029 ext.601
86-21-6150-9706
FAX: 86-21-6852-1029 ext.604