The high-altitude work platform industry is expected to enter a period of rapid growth

Experts point out that the domestic high-altitude work platform industry is still in its infancy. With the improvement of construction efficiency and safety awareness, the application field of high-altitude work platforms will gradually expand, and the domestic high-altitude work platform market will enter a high-speed growth stage, with the potential to leverage a market size of hundreds of billions.

Franktek Accelerates Layout

Franck, a crane and material handling product service supplier, recently announced that it is expected to achieve a net profit attributable to shareholders of the listed company of 154 million to 174 million yuan in 2020, a year-on-year increase of 50% to 70%.

The company stated that benefiting from the high reputation of the construction machinery industry, the crane business has grown rapidly. At the same time, the company's high-altitude work platform layout has accelerated, and has successfully developed differentiated products such as tracked shear forklifts. Market development has achieved results. In 2019, Flantek entered the field of high-altitude work platforms with a "differentiated" competitive strategy and built a new intelligent high-altitude work platform production base in Changzhou. In order to comply with the development of the industry, the company issued convertible bonds in 2020 to accelerate its layout in this field.

According to Frank Tek, the global market size of high-altitude work platforms is about 80 billion yuan. In 2019, the Chinese high-altitude vehicle market had a total of approximately 160000 units, which is in a stage of rapid growth. Compared to over 600000 high-altitude work platforms in the United States and over 280000 in Europe, the number of high-altitude work platforms in China is far from saturation.

Industry insiders believe that high-altitude work platforms have formed a "four strong" situation led by Hongxin, Zhongneng, Huatie, and XCMG Guanglian. Top renters have financial and scale advantages, and manufacturers that bind high-quality renter customers will be the first to benefit.

Stable growth of Huatie's emergency leasing business

According to the announcement, Huatie Emergency expects a net profit attributable to the parent company of approximately 325 million yuan in 2020, a year-on-year increase of approximately 18%.

The company's net profit attributable to the parent company from January to September 2020 was approximately 158 million yuan, with a net profit attributable to non parent companies of approximately 135 million yuan. It is expected that the net profit attributable to the parent company in the fourth quarter will reach 167 million yuan, a year-on-year increase of 380%, and a net profit attributable to non parent companies of approximately 133 million yuan, a year-on-year increase of approximately 340%. After the company divested of related businesses such as financing leasing and mining machinery leasing in 2019 and refocused on the main business of building turnover materials and engineering equipment leasing, its equipment asset scale rapidly increased, and its sales channels and management system significantly improved.

Sun Weifeng, an analyst in the Everbright Securities industry, believes that due to the impact of the epidemic, the rental duration of related assets of Huatie Emergency significantly decreased in the first quarter of last year, affecting revenue and profitability; However, after the completion of the fixed increase in the second quarter, the asset size increased, and the rental rate of related equipment and turnover materials remained high, combined with the phased recognition of underground maintenance business revenue by Jitong, resulting in rapid performance growth in the fourth quarter of 2020. Sun Weifeng believes that the number of Huatie emergency high-altitude operation platforms continues to increase, with an expected scale of 23000 units by the end of 2020, ranking third in the industry.

The company stated that it will continue to improve its offline network, implement the concept of digital management, and enhance its operational capabilities through technologies such as the Internet of Things. According to the announcement, the operating lease revenue of the high-altitude operation platform in 2020 was approximately 520 million yuan, with a net profit attributable to the parent company of approximately 87 million yuan, equivalent to a net profit margin of approximately 17%. The concentration of top tenants of high-altitude work platforms is high, and they have a strong voice; In 2020, the long-term rental prices slightly decreased, but the rent of the scattered rental projects in the long tail has bottomed out.

The industry is showing a steady growth trend

With the gradual improvement of safety requirements for work, safe and efficient high-altitude work platforms are gradually replacing traditional high-altitude work methods.

Tianfeng Securities believes that the compound growth rate of ownership in the past five years has reached 50%. With the increase of ownership, it is reasonable to slow down to around 35% in the next five years. It is expected that the industry's ownership will reach a stage high from 2024 to 2025. Afterwards, the demand for updates will increase, and the industry will continue to maintain a stable and upward trend.

Pan Helin, Executive Dean of the Digital Economy Research Institute at Zhongnan University of Finance and Law, stated that high-altitude work platforms belong to high-altitude work machinery and have functions such as emergency rescue, rescue, fire protection, and cleaning. The market demand is constantly growing and the prospects are promising.

According to relevant research reports, the rental market size of high-altitude work platforms in the United States was 76.6 billion yuan in 2019, while the market size in China is about 5.4 billion yuan, which is relatively small and in a period of rapid expansion. As of October 2020, Hongxin Equipment, the largest leasing company for high-altitude work platforms in China, has exceeded 50000 high-altitude vehicles, an increase of 278% compared to 2019. As the application field of high-altitude work platforms expands, the demand for large arm type high-altitude work platforms by leasing companies will also increase.

Hu Danfeng, Chairman of Huatie Emergency, stated in an interview with China Securities News that the global high-altitude operation platform market is showing a steady growth trend. Among them, the European and American regions are the most important markets. The popularization rate of high-altitude work platforms in other regions is low, and the market potential is large. Especially in the Chinese market, it is expected to become a global production center for high-altitude work platforms in the future.

According to the "2020 China High Altitude Work Platform Rental Market Research Report" released by Elite Zhihui Marketing Consulting Company, factory building, warehousing and logistics, and venue construction are the application scenarios with the highest demand for high altitude work platforms. In the market environment of a significant decrease in rent, the rental level of renters has also decreased, but the gross profit level is still good.