[Machinery] Downstream Demand Continues to Boom, Electrification and Internationalization Open Up Growth Space--In-depth Report on Forklift Industry

In 2013-2022, global forklift sales increased from 989,000 units to 2,006,000 units, with a CAGR of 8.2%; in 2013-2023, China's forklift sales increased from 329,000 units to 1,174,000 units, with a CAGR of 13.6%, a leading growth rate in the world.

In 2013-2022, global forklift sales increased from 989,000 units to 2,006,000 units, with a CAGR of 8.2%; in 2013-2023, China's forklift sales increased from 329,000 units to 1,174,000 units, with a CAGR of 13.6%, a leading growth rate in the world.

Growth Logic 1: Downstream transportation, warehousing and logistics industries have strong demand, and the recovery of manufacturing industry is expected to drive the demand of forklift industry.

Forklift industry downstream to the manufacturing industry and logistics transit industry, 2022 downstream demand accounted for 52% / 16%. With the rapid growth of transportation, warehousing, logistics and other industries in the future, the forklift market capacity still has room for further improvement. Forklift industry demand and manufacturing boom correlation is high. 2024 May manufacturing PMI is 49.5%, with large-scale equipment renewal and consumer goods replacement, ultra-long-term special bonds and other policy effects are gradually apparent, is expected to gradually pick up production and operation, China's forklift leader is expected to benefit.

Growth logic 2: electrification is expected to drive forklift manufacturers revenue and profitability double rise

Electric forklift compared to internal combustion forklift has significant advantages in terms of cost, environmental protection, the future will quickly form a replacement for internal combustion forklift. According to our calculation, when the service life is 8 years, the cumulative cost of 3 tons of electric forklift is 57% of diesel forklift. 2013-2022 global and China's electric forklift sales CAGR is 11.4%/25.3% respectively. According to our estimation, China's forklift renewal demand in 2024-2026 will be 352,000/39,800/488,000 units respectively, with a year-on-year growth of 4.1%/13.0%/22.6%. China's forklift industry will enter a period of high-speed growth in demand for renewal, and promote China's forklift electrification to further increase.

Growth Logic 3: Broad internationalization growth space, rapid increase in export revenue.

China's forklift export has the advantages of cost performance and delivery time, and the future growth space is broad. 2018-2022 China's forklift export sales grew from 167,000 units to 362,000 units, with a CAGR of 21.3%; China's export forklift sales accounted for the proportion of the total sales of forklift overseas grew from 18.7% to 37.7%. 2020 China's export forklift electrification rate had already reached 70%, but it is still in the form of Class III forklift with lower value, the future product structure still has more room for optimization. According to our estimation, China's forklift export market size in 2024-2026 will be 23.77/27.86/32.42 billion yuan, with a year-on-year growth of 18.8%/17.2%/16.4% respectively. We believe that in the next few years China's forklift export market size will remain high growth trend, so China's leading forklift companies overseas revenue is expected to maintain high growth.

Growth Logic 4: “Forklift for people” demand is urgent, forklift penetration rate is expected to continue to rise.

With the gradual decline of the working population, labor costs gradually increased, forklift penetration rate is expected to continue to increase. We calculate that in 2022, China, Japan, Europe, forklift ownership per 100 million people were 38.0/74.0/529,000 units, which shows that China's forklift penetration rate compared with Japan, Europe and other developed regions there is still much room for improvement. In the future, with the rapid development of artificial intelligence, Internet of Things and other technologies, “forklift for people” the ultimate goal is to realize the forklift unmanned, intelligent, industry leaders with technology research and development advantages, is expected to enhance the penetration rate and share.

Risk warning: downstream demand decline risk, overseas export expansion risk, the risk of increased competition in the industry.