The gains in the mechanical index were weaker than the broader market index and were still in the valuation and digestion stage. From the beginning of the year to December 15, 2017, Shenwan Machinery Index fell by 10.74%, and underperformed the CSI 300 Index by 31 pct. The increase in construction machinery, lithium battery equipment, and 3C automation equipment in the sub-sector was relatively good, mainly due to the high investment demand for downstream investment in the sector. The main reason for the mechanical sector underperforming the market is the high valuation level. The sector is still in the valuation and digestion stage: based on the median statistical industry P/E ratio, the median price-earnings ratio of the machinery industry has fallen from 98.7 times at the beginning of the year to 54.1 times now, and the valuation level The convergence is close to 46 times the median of the 10-year history and is in the middle of history.
The turning point of the machinery industry in 2017 is clear and the cyclical recovery is expected to continue. After a six-year decline after the 2011 cyclical high, the machinery industry achieved bottoming out this year. The overall revenue growth in the industry was 24.3%, and the net profit growth was 80.7%. Based on the industry's growth rate, revenue The median growth rate was 25.6%, and the median growth rate of net profit was 24.0%. 229 companies achieved positive growth, accounting for 72.5%, and the growth trend of the industry performance in 2018 is expected to maintain.
We will firmly look to the advanced manufacturing industry in 2018. From the quantitative expansion to the qualitative development, the foundation will be more solid. The main reason for the recovery of machinery performance is that the supply-side reform promotes the improvement of overall industrial profits, capital expenditures of downstream equipment have increased significantly, and the periodical equipment upgrade needs have been superimposed. We believe that in 2018, the manufacturing industry will continue to maintain a high degree of prosperity. The upgrading of equipment and technology, the need for cyclical updates, and the demand for emerging growth industries will support the growth of the performance of the machinery and equipment industry.
Periodic industry, focusing on industry leaders. Economic growth has entered the gear shift stage, and the extensive development model for quantity has ended. The development of the traditional equipment industry has been transformed into the logic of stocks updating the dominant demand and product competitiveness determining market discourse rights. After industry in-depth adjustments, the leading market share of enterprises has increased significantly, and the balance sheet risk has been gradually released. In 2018, it is expected to be lightly loaded and the performance elasticity is worth looking forward to. At this point in time, the global economy is recovering, overseas demand is expected to be released, domestic construction and construction companies are full of orders, and railway investment plans are expected to recover after crossing the low point. The peak of equipment investment is coming soon. It is recommended to pay attention to construction machinery and rail transportation.
Emerging growth industry, selected companies with high certainty of performance. The report of the 19th National Congress clearly pointed out that speeding up the building of a powerful manufacturing nation, accelerating the development of advanced manufacturing industries, and promoting China's industries to the mid-to-high end of the global value chain. The demand in the domestic market is huge, and the import substitution logic for high-end equipment will promote the upgrading of the equipment manufacturing industry. It is recommended to look for sub-sectors that are in line with the country's key areas of advancement and represent advanced productivity. From the bottom up, we will select emerging growth industries with high demand and high development space. Recommended attention to lithium battery equipment, aerial work platforms, precision instruments and equipment.
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