In-depth report of the conveyor belt industry: The rubber conveyor belt industry usher in the best profit period

First, the price of rubber, the main raw material for conveyor belts, has fallen sharply, and the industry's best profit period has come.

Rubber accounts for more than 35% of the cost of the conveyor belt. The conveyor belt is set for the full year guidance price at the beginning of the year. The pricing mechanism determines that rubber price fluctuations have an important impact on the profitability of the conveyor belt industry. This year, rubber prices have fallen sharply year-on-year. As of mid-May, the average daily commodity price of natural rubber this year was about 27,200 yuan/ton, which was a year-on-year increase of RMB 36,500/ton, down by RMB 93,300/ton, and the daily average price of synthetic rubber fell. More than 0.4 yuan/ton. The double-stranded joint stock used nearly 20,000 tons of rubber every year, and the Baotong belt industry used more than 8,000 tons of glue every year, benefiting significantly.

Second, the downstream industry output growth to ensure that the conveyor belt industry demand Conveyor belts are consumables, downstream industry output growth, demand will be guaranteed. As of April this year, the growth rate of investment in fixed assets nationwide is about 20%, and this year is expected to maintain a growth rate of over 15%. Under this background, the output of power, coal, steel, cement and other industries will continue to grow, which will in turn promote the healthy development of the conveyor belt industry.

Third, the degree of concentration in the conveyor belt industry has improved, and healthy competition has formed.

The growth rate of the conveyor belt industry has exceeded 13% in recent years. The market share of the top 10 companies in the industry has exceeded 50%. Large enterprises have acquired relatively stable sales channels, and their technological advantages and scale advantages have been outstanding. The market share has gradually increased, with market concentration. Ascension, a healthy competition in the industry has taken shape.

Fourth, investment advice

Rubber prices are currently at a low level, and Baotong Strip and Double Arrow Shares will benefit significantly from the depressed rubber prices in the near future. In this context, the performance flexibility of Shuangjian shares is better than that of Baotong. In the long run, the gross profit of Baotong's belt products is higher than that of Shuangjian. It is suggested that investors pay more attention to the outbreak growth of the Double Arrow stock in the short term, and pay attention to the growth investment opportunities in the Baotong belt industry for a long time. We give the "recommended" rating for the conveyor belt industry.

Risk Warning: Natural rubber prices have exceeded expectations; macroeconomic growth has exceeded expectations; sharp declines; crude oil prices have exceeded expectations; related listed companies have raised their investment projects or market development is less than expected.