Bleak Winter for Construction Materials Makers      

Battered by the weak domestic property market and global economic volatility, the 2008 earnings results for listed Chinese construction materials makers appeared unpromising.
   Many companies have issued prediction of loss or declines in earnings growth, mostly blaming the sluggish domestic real estate sector and global economic downturn.
   The fourth quarter 2008 proved to be a tough period for many of them, despite the fact that the Chinese government announced its RMB4 trillion fiscal stimulus package to support economic growth in November 2008.
   Xinjiang Qingsong Cement (Group) Co., Ltd. (SH: 600425) expected its net profit to fall 53% for 2008 from 2007 along with a sharp drop in sales, according to the company's preliminary earnings statement.
   China TONY & HASU Co., Ltd. (SZ: 000509) forecasted it incurred a loss of RMB115 million to RMB135 million in 2008, a decline of 1 048% to 1 212%, mainly blaming the surging raw material prices which added to production costs.
   Hunan Ginde Development Co., Ltd. (SZ: 000639) expected 2008 earnings to fall 70% to 100%, citing the same reason.
   Jiangsu Jiuding New Material Co., Ltd. (SZ: 002201), which generated more than 55% of its sales from overseas markers, expected earnings to decline by smaller than 45% in 2008. The company attributed the decline to the appreciating RMB, lower rebate for the value-added tax for exports and higher costs, as well as the shrinking European and US markets because of the financial crisis and economic recession.
   Many export-oriented construction materials companies started to invest and explore businesses in those neighboring emerging markets, after sales in the Europe and the US were affected. This strategy helps sustain a growth in 2008 for companies including Norinco International Corporation Ltd.(SZ: 000065), China CAMC Engineering Co., Ltd. (SZ: 002051), Sinoma International Co., Ltd. (SZ: 600970).
   Suzhou Gold Mantis Construction Decoration Co., Ltd.'s (SZ: 002081) preliminary results showed that net profit increased by a big margin in 2008 despite a small drop in sales.
   Beijing Oriental Yuhong Waterproof Technology Co., Ltd. (SZ: 002271) also expected earnings to grow by up to 30% in 2008 thanks to expanded marketing efforts which also boosted sales.