On September 29, Huatie Emergency, the second-largest high-speed machine leasing company in China and the fourth largest in the world, issued a notice on the increase in the rental price of high-speed machines, firing the first shot of high-speed machine leasing price increase in 2024!
Once upon a time, high-speed machinery was the most promising category in the construction machinery subdivision industry, and high-speed machine leasing also had huge development space and development potential. According to incomplete statistics, in less than ten years, the number of high-speed machine leasing companies in Chinese mainland has grown from about 200 in 2015 to nearly 3,000 in 2023, with a compound annual growth rate of 38.1%; By the end of 2023, the market will have more than 530,000 units, with a compound annual growth rate of 76%, and the development speed is amazing!
In the past two years, with the rapid expansion of scale, China's high-speed machine leasing market has already become oversupply, serious involution, occupancy rate and rent are declining, and even deviate in the direction of "most small and medium-sized high-speed machine lessors have difficulty making profits, and large high-speed machine leasing companies have greatly compressed their profits".
During this period, countless people in the industry called for benign and healthy development, and even some voices blamed the current predicament of high-speed machine leasing on several major leasing companies, and called on manufacturers to stop supplying high-speed machines to them. From the perspective of small and medium-sized lessors, large lessors seize the market at low prices by virtue of their cost advantages and scale advantages, which greatly damages the industry ecology; However, from a commercial point of view, the behavior of the head lessors is understandable, because from the financial report data, their revenue, profit, and asset-liability ratio are normal, and they have not reached the level of "losing money and grabbing the market".
Coincidentally or not, now the top lessors are finally responding.
Price increase notification
On September 29, the business management center of Zhejiang Bumblebee Construction Machinery Equipment Co., Ltd. issued a message to the company's regions and service centers: from 0:00 on October 1, 2024, the company's aerial work platform will increase by 10% on the basis of ensuring the high quality of equipment services and ensuring that the quality of equipment services is in place.
Recently, the economic environment has picked up, and the overall occupancy rate of Huatie Bumblebee and aerial work platform markets has continued to improve, resulting in tight supply and demand of equipment. In order to continue to provide high-quality products and services to the market and ensure the sustainability of the company's operations, Huatie Bumblebee has made certain price adjustments.
Huatie Bumblebee attributed the price increase to the equipment shortage caused by the market recovery, which seems to be inconsistent with industry data and the perception of most practitioners. According to the statistics of the Construction Machinery Leasing Branch, from January to August, the average occupancy rate index of all models of high-speed machinery decreased by 15% year-on-year, a decline of more than that from January to June; The rental price index fluctuated by 2.4% month-on-month, and fell by 19% month-on-month compared to the end of '23.
According to the semi-annual report of Huatie Emergency: in the first half of the year, Huatie Emergency achieved a total operating income of 2.359 billion yuan, a year-on-year increase of 21.68%; net profit attributable to the parent company was 335 million yuan, a year-on-year increase of 3.03%; The average occupancy rate of Huatie's emergency aerial work platform equipment was 75.89%, a decrease of 5.97% over the same period last year. From the perspective of operation, the scale of aerial work platform equipment management reached 151,300 units, an increase of more than 30,000 units from the end of the previous year, an increase of 24.92%
In general, in the case of large-scale purchase of equipment, the occupancy rate of Huatie Emergency is declining; Compared with the growth of revenue, the growth of profit is relatively weak.
In the case of declining industry demand and serious involution, Huatie, as a leading enterprise, chose to take the initiative to raise prices, which will inevitably mean that part of the occupancy rate will be sacrificed in the short term, but it also reflects the pattern of its industry leader. If the price can really be increased as scheduled, will it be able to drive other leading leasing companies to follow suit? Will it alleviate the current situation of price involution in the domestic high-speed machine leasing market? What do you think about this?