Packaging machinery and equipment industry: industry consolidation curtain opens

Why do you need a secondary packaging machine fusion? How to integrate.
From the physical properties, primary packaging and secondary packaging are not natural independent. In the actual process, there is no specific boundary between primary and secondary, and the distinction is obviously focused on the food and beverage industry. The reasons for industry convergence mainly include: (1) From the perspective of user demand, the supply of complete sets of equipment is better than physical assembly; (2) Changeable packaging, and industrial users are more likely to expect a joint production line. Therefore, user demand has forced the integration of the industry. In terms of industry integration, we believe that the integration between secondary packaging and secondary packaging has its own advantages and disadvantages. We are more concerned about companies with leading technologies and larger masses becoming industry integrators.

Combined with the experience of the international packaging machinery giant Krones: the integration of the front and back roads is the only way to go.

We found that in the current overseas market, the primary and secondary packaging machinery and equipment are integrated one after the other, with Krones as the representative. We can see from the growth history of Krones: (1) The co-production machine will blow bottle, cleaning, on-line inspection, filling, capping, labeling, hot film packaging, stacking, and packing. (2) The business system has broken through the hardware category and formed a full set of services for hardware + software + services; (3) Completed the integration of the previous and the next roads through mergers and acquisitions, from the early development of a single labeler business to a comprehensive one. Sexual equipment provider.

The road to domestic consolidation is quietly open. Who can break out? We are optimistic about Yongchuang Intelligence.

Judging from the current situation of listed companies in China, the road to integration has started. Tech-Long, Xinmeixing and Zhongya Machinery have already entered the secondary packaging field and started their intentions from primary packaging to secondary packaging. From the perspective of business composition, Xinmeixing's secondary packaging accounted for 32% of the business. In the industry integration process, we are still relatively optimistic about Yongchuang Intelligence because: (1) Yongchuang has complete product lines and strong self-supporting capabilities. Currently, other manufacturers in the industry do not have the ability to fully support themselves; (2) ChuangChuang is currently the leading enterprise in the secondary packaging field, and the scale body size is the largest in the industry; (3) YongChuang has an industry-leading position in technology accumulation and market expansion; (4) YongChuang Intelligence intends to acquire Ningbo XinCheng Machinery 100% Equity and 15% equity in Nanjing Light Machinery have already begun to take the lead in opening up industry consolidation.

Investment advice: The general trend of the packaging machinery industry is to complete the unification of packaging machinery before and after the road, and the trend of industry consolidation is irreversible. We recommend focusing on companies that have leadership capabilities in the process of industry consolidation and have the hope of growing into the industry leader in the future. The key recommendation of the target is Wing Chong Intelligence. The related companies also include Tech-Long, Praxam, Xinmei (unlisted, passed), Central Asia Machinery (unlisted, passed).

Risk Warning: Downstream demand continues to be sluggish; intelligent production line expansion does not meet expectations; front-to-back integration risks.

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