Construction machinery plate once again attacked

Infrastructure provides a broad market for foreign investment and welcomes mergers and acquisitions opportunities

Recently, the construction machinery sector has suddenly exerted strength. Hebei Xuangong (000923), G Sanyi (600031), G Xiagong (600815), G Liugong (000528), and Xugong Technology (000425) have become stronger. The author believes that there are more obvious investment opportunities in this sector.

Industry boom is still picking up

Undoubtedly, due to macroeconomic regulation and control, the performance of major domestic construction machinery listed companies declined last year. However, macro-control has little effect on the production of loaders, road rollers and excavators, because most of these products are used in large-scale transportation and port projects under construction and proposed, such as the West-East Gas Pipeline, the Qinghai-Tibet Railway, and the South-to-North Water Transfer. It is a national key project and the construction speed is not affected. As a result, the industry is less affected than other industries.

In 2006, the construction machinery industry will benefit from the construction of new countryside and face new development opportunities. During the "Eleventh Five-Year Plan" period, China will speed up the construction of the "Tongda" project and the "unobstructed" project, and basically realize all the qualified townships and villages in the country, 95% of townships and 80% of the villages through the asphalt road or cement road. The Ministry of Communications proposed that during the "11th Five-Year Plan" period, the state will invest 100 billion yuan to build rural roads within five years. This is undoubtedly good for engineering machinery companies that produce loaders and road presses.

At the same time, the railway construction will be supernormal development, and the construction machinery industry will also benefit. During the "11th Five-Year Plan" period, 17,000 kilometers of new lines will be built, including 7,000 kilometers of passenger dedicated lines, 8000 kilometers of second line of existing lines, and 15,000 kilometers of electrified electric lines. In 2010, the national railway operating mileage will reach 90,000 kilometers, and the double line and electrification ratio will reach more than 45%. Large-scale railway construction will enter a climax. This year, the railway construction plan will invest 160 billion yuan. From 2006 to 2010, railway construction investment is expected to reach 1.25 trillion yuan.

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