Doosan Infracore foresees sales from Chinese stimulus

Doosan Infracore, Korea’s leading construction equipment maker, will likely benefit from China’s recent approval of infrastructure spending, a report said yesterday.

Last week, China’s National Development and Reform Commission, the economic planning body, approved 60 infrastructure projects worth more than 1 trillion yuan ($157.5 billion) in the areas of highways, ports, railways, sewage networks and waste treatment plants across the country.

“As China takes steps to stimulate the economy through infrastructure investment, this will be a boon to excavator sales,” Jung Dong-ik, an analyst at Hanwha Investment & Securities, said in a report.

Jung added that Doosan Infracore shares outperformed the benchmark Kospi by 30 percent for a month when China ramped up infrastructure spending in late 2008.

“This year’s spending is just one quarter of what was spent in 2008, but China’s excavator market is likely to bottom out,” he said.

Yonhap