Construction Machinery: Excellent Adventure Far Eastern Leading Company Performance

{flickr|100|campaign} November 2 Shenzhen and Shanghai stock market volatility increased, and in the broader market adjustment process in construction machinery industry leading companies in Liugong, Zoomlion, Hudong Heavy contrarian rally, which rose Liugong become the first in Shenzhen . From the valuation, industry development, performance and other aspects of analysis, they have a strong recent support of multiple factors.

Leading company performance excellence

Leading companies from the construction machinery industry point of view, its beautiful strong quarterly is an important factor in stock prices. To Liugong, for example, its 2006 Third Quarterly Display: Main business revenue grew 24.63%, net profit rose 69.05%, while the company expects net profit for 2006 compared with 2005 growth of 50% -100%. Leading company in another 7-9 months Zoomlion main business revenue 1.074 billion yuan, up 46.92 percent; net profit of 125 million yuan, up 65.63%, while the first three quarters, earnings per share rose to 0.7478 yuan. The share reform Sany the first unit is expected in 2006 than the cumulative net profit growth of 100% over same period last year, its third quarter 2006 earnings per share rose to 0.8631 yuan, 5.18 yuan per share, net assets, return on equity 16.59% . The three leading companies on average EPS for the first three quarters of 0.7303 yuan. From this we can see, construction machinery industry in the leading reason why the strong performance of the company, as reflected in its quarterly operating results improve significantly associated.

Industry warming benefit the company

From the construction machinery industry is based on the fundamentals of view, the new rural construction, urban infrastructure construction for construction machinery driving the demand, so that some of the company, “order full.” From the entire industry, second only to China as U.S., Europe’s third largest construction machinery market, market sales of 1,300 billion yuan, industry has entered a steady development and maturity. In recent years, China’s construction machinery has been kept declining import and export situation of high growth, from the current trends, China may soon become a net exporter of construction machinery, and the future may become the most important international market, the supply of business, we should have to maintain sufficient attention.

I predict: “Eleventh Five-Year” period excavators, concrete machinery, bulldozers, graders, paving machines and other domestic capacity will increase by more than 50%, while exports will have more breakthroughs, with exports to more than 4 billion U.S. dollars. At the same time as the national economy still maintained rapid development of robust, so the domestic fixed asset investment will remain at a high position. From the National Bureau of Statistics released the first three quarters situation, the first three quarters, China’s total fixed asset investment 7.1942 trillion yuan, up 27.3% over the previous year by 1.2 percentage points over the same period accelerated, indicating that construction machinery industry is still in demand increase, the fundamentals continue to improve in the background. However. Industry warming can not pick all the construction machinery company, the leading company in the industry of warming in more revenue.

Lead agency valuation advantage holdings

Leading companies from the engineering machinery and the potential of the company point of view, the valuation of both strong advantages, domestic sea links, Societe Generale, Guotai Junan Securities and other research institutions are on the plate of the leading companies to long-term “overweight” rating, indicating agencies long-term bullish on the future of the industry a more consistent basis. Leading companies from the recent performance, the steel plate in there other steel stocks holdings, Department of Baosteel, the “31 Line” recently bought by big machinery stocks caused the market concerned. According to the three companies to disclose quarterly and circumstances, “31 Line” related enterprises, including listed companies involved in Zoomlion, Hill pushed shares and shares of building work, and a number of engineering machinery Liugong stocks. This pre-construction machinery industry, Xu workers, often from the acquisition of forest and other multi-link analysis, the pace of industry consolidation is leading the recent construction machinery industry is another important factor in company performance. The national funding agencies and foreign institutions QFII machine Zoomlion, Sany, Liugong, Hill pushed shares of stock in mechanical engineering positions gathered, it also shows that agencies of the plate leading the company’s optimistic.