Hong Kong Stock Concept Tracking | Western Development Promotes Construction of Sichuan and Chongqing University Projects, Construction Machinery Sector Market Demand Is Expected to Recover

According to the official WeChat account of the Sichuan Bureau of Statistics, in the first half of the year, the Chengdu and Chongqing Shuangcheng Economic Zone achieved a gross domestic product of 4036.57 billion yuan, accounting for 6.5% of the country and 30.7% of the western region, which was 0.1 and 0.2 percentage points higher than the same period last year, respectively; the year-on-year increase was 5.8%, and the growth rate was 0.8 percentage points higher than that of the whole country and western regions. Among them, the Sichuan portion was 2626.75 billion yuan, an increase of 5.6%, and the Chongqing portion was 149.82 billion yuan, an increase of 6.1%. The growth rate was higher than the national and western regional average.

Implementing the Western Development Strategy is a major decision made by the Party Central Committee to oversee the overall situation and face the new century. In May 2019, the Central Committee of the Communist Party of China and the State Council issued the “Guiding Opinions on Promoting Western Development and Forming a New Pattern in the New Era”, which clearly states that a new pattern of great protection, great openness, and high-quality development should be formed.

On October 8, the Sichuan Provincial Department of Transportation issued a tender notice. The Jinkouhe-Xichang Expressway Project and the Zhaojue to Puge Expressway Project initiated investor tenders. This tender is a bundled tender for the two projects. The total mileage is about 287.83 kilometers, and the total investment is estimated at about 67.323 billion yuan. The tenderer was the Liangshan Prefecture People's Government, and the implementing agency was the Liangshan Prefecture Transportation Bureau.

China Merchants Securities pointed out that at the recent press conference of the State Information Office, the Central Bank, the General Administration of Financial Supervision, and the Development and Reform Commission have successively expressed support for localized debt, and it is expected that various ministries and departments will continue to step up their efforts to support debt conversion efforts. After the chemical debt is strengthened, infrastructure projects that were originally suspended or terminated due to the chemical debt are expected to be restarted, and infrastructure construction is expected to be repaired.

According to statistics from the China Construction Machinery Industry Association on major excavator manufacturers, 14,647 excavators of various types were sold in August 2024, an increase of 11.8% over the previous year. Among them, 6,694 units were domestic, up 18.1% year on year; 7,953 units were exported, up 6.95% year on year. “After a lapse of 14 months, the year-on-year growth rate of excavator export sales once again 'corrected', and the actual sales data performance was superior to the previous forecast data.” A researcher related to Fangzheng Securities said.

The agency predicts that domestic downstream infrastructure investment will continue to improve. As large-scale equipment updates continue to advance, the excavator market is expected to gradually break out of the bottom of the cycle.

Construction machinery-related enterprises include:

Zhonglian Heavy Industries (01157), China Longgong (03339), First Tractor Co., Ltd. (00038), Sany International (00631), Zheng Meiji (00564), Sinotruk (03808), Weichai Power (02338), etc.