The industrial control industry has gone through three stages in the past two years. 1. In 2018, affected by trade friction, the end market demand shrank, the annual industrial control growth rate continued to decline, and Q4 fell to zero; 2. In April 2019, as the trade friction escalated again, downstream export-oriented manufacturing industry suffered, Q2 industrial control The growth rate suddenly turned negative; 3, 2019Q4, driven by the dual demand of consumption + 3C, Q4 Industrial Control showed signs of recovery. In 2019, China's industrial control industry fell by about 1%, and the project-based and OEM-based markets achieved small positive and negative growth, respectively.
Macro, policy and industry are jointly driving domestic demand. We predict the growth of the industrial control industry in the second quarter and the whole year.
1. Domestic demand: In the context of natural demand recovery and overweight investment, combined with the stimulation of active fiscal and industrial policies and loose monetary policies, Q2 domestic demand will gradually return to normal levels to a certain extent.
2. External demand: Domestic policies are being introduced to actively respond to weakening external demand. China ’s two largest export downstream 3C, the electrical industry chain benefit from new 5G infrastructure and increased investment in power grids. The prospect of domestic demand is good and is expected to hedge the decline in overseas demand. The country has recently continued to increase its support for smart manufacturing and automation technology transformation projects. Considering the growth industry's demand and base effect, we are relatively optimistic about Q2's industrial control OEM demand. The overseas epidemic situation will gradually be controlled in the second half of the year. The external demand will be greatly improved and domestic demand will return to normal. The industry presents "before low and then high".
In the medium and long term, the epidemic will have three positive effects on the automation industry.
1. Under the epidemic situation, more enterprises will realize the economic advantages of fewer people and unmanned people, and the industry is expected to usher in large-scale industrial upgrading needs.
2. Under the epidemic situation, China has obvious advantages over foreign countries in terms of industrial base, industrial supporting facilities and logistics supply chain, and investment in the future will be more attractive.
3. In view of the jamming of key parts and components encountered during the epidemic, China will further promote the development of high-tech industries such as high-end manufacturing and equipment industries.