Construction Machinery Industry: Improvement of Domestic Investment Structure

The China State Securities Research Institute held its annual investment strategy meeting in Zhuhai on November 18th to comprehensively analyze the macroeconomic development in 2010, the evolution of the A-share market, and the investment strategy of the industry. Sohu Securities has a full-length video with a live broadcast. The following are the securities of Guojin Securities. Dong Yaguang, a researcher in the construction machinery industry, released the investment strategy of the construction machinery industry in 2010.
Dong Yaguang: We believe that next year's steel is better than this year. Exports will surely have a clear recovery from this year. The recovery in 2009 is obviously higher. The most important driving force in 2009 was the government-led infrastructure investment, and the increase in investment. The contribution of volume is about 28%, which has exceeded the contribution of investment in manufacturing and real estate, resulting in a sharp decline in demand as the entire industry increases. In 2010, government-led investment in infrastructure continued to maintain a moderate increase. From the fourth quarter to next year, there may be a lot of investment space. This year's infrastructure construction is more prominent in railway construction. The number of new railway projects started this year will reach 1.1 trillion. We think that we must ensure that the demand for railways can still reach a comparison in 2010. The other situation is good real estate development, we see it is also relatively clear, real estate development is still relatively strong, from the real estate loan growth has reached a historically very good situation.

Thirdly, we must focus on investment in manufacturing. From this year, the growth rate of investment is very high. We also specifically scrutinized the investment expenditures of enterprises. We think that this year's economic decline means that companies do not have a good investment intention. However, the data released by the government is good. What is the actual situation? We have verified through the manufacturing industry. From the statistical data we can see that in 2005 and this year, it is actually very large with the strategic investment data released by the country. In 2005, macro regulation and control was also carried out. In that year, the demand for infrastructure construction was negative growth. Investment spending this year also fell. It is now picking up. We believe that the investment demand of the manufacturing industry is still just recovering. From this perspective, we believe that in 2010, Manufacturing investment demand is better than in 2009.

From the perspective of investment in three areas, we believe that investment will maintain rapid growth in 2010, and the structure will be better than this year. Real estate will be relatively stable, infrastructure will be maintained, and the actual situation of the manufacturing industry will be better than this year. We believe that the next year will be domestic The demand will be more optimistic. Let's look at exports, China's machinery exports are mainly developing countries, and the economic recovery in developing countries is recovering faster than in developed countries. We believe that overseas demand has basically bottomed out by Caterpillar's situation. We believe that overseas markets are stabilizing and growing. Exports of Chinese construction machinery should be faster than Carter's. The growth rate of exports is expected to be 30% next year. Even this value-added in 2010 is still 20% lower than the peak in 2009.

We believe that the profit growth of listed companies next year will not be as big as this year's. There will be an overall increase next year. There are three aspects of investment opportunities next year.

1, because the industry's demand continues to rise, related companies with relatively strong overall strength can still exceed the growth rate of the industry and will bring value expectations.

2. The improvement of the domestic investment structure and recovery led to a better demand structure.

3, if you get the industry recognition, the entire industry will have a relatively large growth rate.