【出版时间及名称】：2010年中国基建行业展望
        【作者】：瑞士信贷
        【文件格式】：PDF
        【页数】：43
        【目录或简介】：
The sector is an underperformer year to date, mainly due to demanding
valuations at an early stage followed by a change in investor risk appetite
and margin disappointment. In this report, we analyse the key dynamics that
drive the sector’s performance.
■ New order growth will decelerate, with backlog peaking in 2010.
Backlog growth usually drives E&C industry P/E multiples. Infrastructure
spending has been a key theme in 2009 in China, with railway and highway
investment growing overwhelmingly. Such growth momentum seems
unsustainable in 2010, given the high base effect and increasing funding
pressure. We expect China’s railway and highway investment growth to
decelerate sharply to 21.9% and -7.3% in 2010. Construction companies are
likely to see new order growth drop, with the backlog peaking in 2010.
■ Margin improvement is consensus; positive surprises will be tough.
Consensus expects margins to bottom out by growing at 10-20 bp p.a. in
2010-11. Any positive surprise would be tough to achieve, as we believe
customers will become more stringent on project budgets given the increasing
funding/financial pressure and the risk of a rise in raw material prices.
■ CRGL looks relatively attractive. We do not see industry fundamentals
supporting outperformance over the next six to 12 months. Relatively, we
still like CRGL (OUTPERFORM), mainly due to its more attractive riskreward
profile with the most attractive PEG and better business mix. We
expect CCCC to deliver the lowest growth. We downgrade CRCC to
NEUTRAL and CCCC to UNDERPERFORM.