South Korea’s excavator makers Doosan Infracore Co. and Hyundai Heavy Industries Co. are expected to fare well until next year on the recovery of construction market in China.
According to media outlet China Business News, sales of excavators in September jumped 79.6 percent to 4,856 units, compared with the average of 5.3 percent growth from January through August.
The turnaround in the market is helping two Korean manufacturers in the third quarter, said Lee Sang-woo, an analyst at Eugene Investment & Securities Co.
As of the end of September, Doosan Infracore occupied 9.7 percent and Hyundai Heavy Industries 2.6 percent of the Chinese excavator market, gaining 1.0 percentage point and 0.6 percentage point, respectively, from the previous month.
Given the market conditions in China, the trend will likely stretch to next year with sales reaching 70,000 units in 2017 from estimated 58,000 units this year and 53,000 units in 2015.
Demand for the next five years is estimated 490,000 units, which could translate into that much of potential workload for the two makers.
Pulse News notes, the uplift in Chinese market prospects have aided Doosan Infracore share prices that had been hurt by the delay in initial public offering of its subsidiary Doosan Bobcat Inc, said Yoo Jae-hoon, an analyst at NH Investment & Securities Co.
The public-private partnership project worth 200 trillion won ($177.9 billion) that the Chinese government recently announced is also expected to act favorably for the Korean construction equipment makers. Twenty Chinese ministries including finance ministry and transport ministry together on Monday announced the third round of public-private partnership project with a focus on urban planning, transportation and environmental protection.
By Kim Dae-gi
