Construction Field Profit Rebound Higher Than Expectation

Date: 2010-06-22

Construction machinery industry profits rise better than expected. Data show that the first 8 months of this year, construction machinery manufacturing industry total profit of 12.563 billion yuan, an increase of 17.83%, lower than the first 5 months increased 24.1 percentage points.The same time, industry-wide revenue growth this year 12% of total profit growth rate of about 25% next year, respectively 15%, 20%.In investment strategy, the CITIC building investment that the industry in next year''''s investment opportunities from investment-driven and export recovery, may be concerned about the Sany Heavy Industry , Zoomlion, Anhui Heli and the Hill pushed shares and other firms.
 


Industry-wide profits better than expected recovery


The first 10 months, excavators, loaders, bulldozers, cranes and forklifts car sales growth of 10.96%, respectively, -22.52%, -8.34%, 18.43% and -25.76%, respectively, compared with sales growth in the first half increased 17,10.1,8.4,16.2 and 10.8 percentage points. Real estate investment to accelerate and maintain a relatively high level of investment in infrastructure to bring domestic demand increased, but no significant recovery in exports of construction machinery, the association statistics, exports of 5.71 billion U.S. dollars in the first three quarters, down 44.6%, down sharply than in the first half, 3.8 percentage points.


We believe that industry-wide profits rise better than expected.Data show that the first 8 months of this year, construction machinery manufacturing industry total profit of 12.563 billion yuan, an increase of 17.83%, lower than the first 5 months increased 24.1 percentage points.First of all, in June ~ August industry sales growth increased growth in the first 8 months of 8.95% over the previous 5 months increased 7.64 percentage points; followed, steel prices fell, the first 8 months of industry gross margin of 17.51% over the previous5 months rose 0.92 percentage points; Finally, the stock of the progress of the industry to clear finished product growth fell to 8.29 percent from 26.56 percent to reduce the amount of funds used to reduce the level of fees during the period, during which the cost rate of 7.96%, down from 1.07 a year earlier points.


We expect that this year, excavators, loaders, bulldozers, cranes and forklifts car sales growth of 23.1%, respectively, -14.9%, 0.4%, 26.1% and -19.1%, respectively, 13.7% next year, 8%, 11.5%, 3.7% and 14%, industry-wide revenue growth this year 12% of total profit growth rate of about 25%; next year, respectively, 15%, 20%.


Concerned about the investment-driven and export recovery


We expect that next year, total fixed asset investment growth will maintain a relatively high level of real estate investment growth rate is faster than this year, while investment in infrastructure is still active.Concrete machinery, cranes, excavators, etc. continue to benefit.