Post fire reconstruction drives the market demand

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Post disaster reconstruction drives the market demand of China's construction machinery industry

post disaster reconstruction drives the market demand of China's construction machinery industry

China Construction machinery information

Guide: the 5.12 Wenchuan earthquake affected the hearts of countless Chinese people. Whether from the perspective of destructiveness or the scope of impact, operators can quickly check out the type of fault in Chapter 1 of troubleshooting in the operation and use of facilities. This earthquake is the largest since the founding of new China. On June 5, 2008, the State Council Information Office disclosed at its meeting that the post disaster reconstruction plan of Sichuan Province is being formulated as soon as possible, and the reconstruction time is tentatively set at 8

"5.12" Wenchuan earthquake has affected the hearts of countless Chinese people. The earthquake was the largest since the founding of new China, both in terms of destruction and scope. On June 5, 2008, the State Council Information Office disclosed at its meeting that the post disaster reconstruction plan of Sichuan Province is being formulated quickly, and the time for rebuilding the sofa cover is tentatively set at 8 years. The scope of post disaster recovery and reconstruction planning mainly covers Wenchuan and other severely affected areas and related areas, and the specific scope needs to be evaluated and determined. In order to scientifically prepare the reconstruction plan, relevant assessments including geological geography are currently being carried out in the disaster areas in Sichuan, which is expected to be completed by the end of June, while the post disaster planning of Sichuan Province can be completed as soon as the end of July

it is estimated that the direct economic loss caused by the great earthquake is about 850billion to 900billion yuan. Combined with the experience of international disaster losses and post disaster reconstruction fund demand, it is generally between 1:1.5 and 1:4. Even at the lowest proportion, the overall capital demand for post disaster reconstruction in China in the next few years is between 1275 billion and 1350 billion yuan. The task of post disaster reconstruction is arduous. It is expected that the scale of funds invested in the early stage of post disaster reconstruction will exceed 500 billion yuan, which will play a certain role in the construction, building materials, steel, engineering machinery, electrical equipment and other industries

construction industry: advantageous engineering and construction companies benefit

the development of the construction industry is mainly driven by factors such as macroeconomic growth and fixed asset investment. The economic data in the first quarter showed that China's economic growth was gradually slowing down. Under the influence of macro-control, the overheated situation of fixed asset investment has been improved, and the growth of the construction industry has slowed down in the short term

affected by factors such as rising prices of building materials and rising labor costs, short-term construction costs are on the rise. The upstream building materials industry has strong cost transfer ability, and the downstream infrastructure, real estate and other industries have strong bargaining power. The profitability of short-term construction enterprises will decline

increasing railway infrastructure construction is the key content of the national "Eleventh Five Year Plan". We expect that in the future, railway infrastructure construction will at least maintain the existing investment scale, and industry leading companies have competitive advantages and will share the feast of railway construction. In addition, the earthquake caused serious damage to local transportation, water, electricity and other infrastructure, and tens of millions of houses were damaged to varying degrees. The scale of post disaster reconstruction is very large, and engineering construction companies will receive more contracting business, which will significantly benefit the advantageous construction enterprises in the region

steel industry: high steel prices breed market risks

post disaster reconstruction has a large demand for high-grade plates. At present, the temporary transitional resettlement houses under construction are color steel prefabricated houses, made of color coated composite plates and light steel structures. It is preliminarily estimated that the prefabricated houses excluding public facilities need about 750000 to 800000 tons of color steel plates. Affected by this, the price of galvanizing and color coating began to rise sharply

under the dual effect of high fluctuation of iron ore price and sharp rise of coking coal price, large steel enterprises increased tons of steel, but the polishing rate was low, and the cost was close to 800 yuan. The steel price increased by an average of 1000 yuan compared with December 2007, basically covering the increase in cost. Stimulated by the international steel price index hitting new highs, the domestic steel price composite index also broke through the historical high in 2004

demand is the key driving force driving the growth of the industry. The latest statistical data shows that the downward trend of China's steel market demand has been further established since 2008. The two major components of consumer demand, whether export demand or domestic demand, have seen a significant slowdown in growth or a decline in absolute volume

cement industry: demand expansion and performance improvement

the Wenchuan earthquake caused huge disaster losses to the affected areas, and 150 million tons of cement are needed for post disaster reconstruction. At the same time, it is combined with hypereutectic matrix with high hardness to achieve good wear resistance; However, the wear resistance of the surfacing material will be significantly reduced under complex working conditions such as high temperature, corrosive environment and impact load. About 10million tons of cement production equipment in the disaster area has been seriously damaged, and it is difficult to resume production in the short term. Under the tight supply and demand pattern in 2008, the cement industry is facing a severe situation of increased demand

we believe that the pace of compulsory elimination of 250million tons of backward production capacity by 2010 may be accelerated. In western provinces and regions with a low proportion of new dry process cement, especially in the earthquake stricken areas, the equipment of backward cement production lines such as shaft kilns has been seriously damaged due to the earthquake, so new dry process cement production lines can be built. In addition, the huge demand for cement in the reconstruction of the earthquake stricken areas has triggered various cement giants to set up wiring sites in the disaster stricken provinces to accelerate cement investment. The accelerated construction of western cement will slow down the impact of post disaster reconstruction on the cement market to a certain extent and prolong the boom period of the industry

although China's coal price is in the process of a new round of rapid rise, based on the large demand for cement in 2008, cement enterprises are easy to pass on the factors of the rise in upstream coal prices through price increases. At the same time, with the promotion of waste heat power generation technology, cement enterprises' ability to resist the rising cost of coal and electricity will be strengthened, and the gross profit rate will be increased. Coupled with the obvious economies of scale in the industry, the expansion of demand will directly lead to performance improvement

Machinery Industry: the machine tool industry is in a golden period

based on the judgment of the growth rate of fixed asset investment in the future, we expect the domestic demand growth rate of the machinery industry in 2008 to decline slightly year-on-year. Considering that the export growth will also decline, the overall growth rate of the industry is expected to be about 27%

the rise of production costs in the industry cannot be ignored. The continuous rise of steel prices has increased the production costs of the machinery industry. By February 2008, the growth of production costs has begun to exceed the growth of industry revenue. It is expected that in the future, as the impact of the rise in steel prices further appears, the growth of production costs in the machinery industry will accelerate, which will have a certain negative impact on the gross profit margin of the industry

in 2008, the growth rate and quality of construction machinery and machine tool industry are better than other sub industries, and better than market expectations, which is our focus. Driven by numerical control and localization, the machine tool industry is now in a golden period of accelerated growth and will continue to grow rapidly in the coming years. Although construction machinery is under certain pressure, it will continue to grow rapidly in the coming years, benefiting from the upgrading of domestic demand and the export market

post disaster reconstruction will drive the demand for construction machinery in the next year or two. From the second half of 2008, the infrastructure construction in the earthquake stricken areas will become the focus of the work. The state and the Sichuan provincial government have made a series of arrangements for post earthquake reconstruction

in the post disaster reconstruction work, whether it is the early demolition of collapsed buildings, the clearance of debris, or the large-scale reconstruction of houses, roads, bridges and other public facilities, a large number of construction machinery products will be required. This mainly includes bulldozers, excavators, loaders, cranes, road rollers, mixers, etc. We believe that the bulldozer industry is significantly driven by the reconstruction work, and the market capacity is small, and the performance of relevant listed companies will be significantly promoted

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