Endogenous growth in the road industry is worth the wait


In the first half of 2007, the highway cargo turnover was 532 billion ton-km, an increase of 16.9% year-on-year, and the growth rate was 5.5 percentage points higher. The turnover of road passengers was 568.5 billion person-km, an increase of 11.9% year-on-year, and the growth rate was 3.7 percentage points higher. The traffic volume of main highways increased by an average of 15-20% year-on-year, and the traffic volume of some key companies increased by more than 20% year-on-year. It is expected that the average annual net profit of these key companies will increase by more than 25% annually. At the same time, the rapid increase in the ownership of civilian vehicles and the possession of heavy trucks has become an important driving force for the sustained growth of the highway industry.

Since the beginning of this year, the rapid increase in residents’ income and the upgrading of the consumption structure have led to accelerated consumption growth, which has boosted travel demand. The acceleration of industrial growth, the increase in investment in fixed assets, and the continued high growth in imports and exports have stimulated the expansion of the transportation demand for major cargoes such as raw materials, which has greatly stimulated the rapid growth of highway freight transport.

In the integrated transport system, the proportions of road and water passenger transport, passenger turnover, freight, and freight turnover accounted for 93%, 53%, 85%, and 75%, respectively, slightly higher than the same period of last year. In the first place, more than 90% of the entire society's new traffic volume is completed through highway waterways, and the dominant position of highway waterway traffic is further consolidated, which guarantees economic and social development.

Road network traffic growth is strong

The traffic volume and traffic volume of the national road network continued to grow. In 2006, the national average daily traffic volume of the National Road Network reached 9,939 vehicles/day (converted to standard minibuses, the same below), an increase of 2.7% year-on-year; the average annual driving volume was 1,132.73 million vehicles km/day (converted to standard minibuses, The same below), a year-on-year increase of 3.5%. The areas with large traffic volume on the National Road Network are mainly concentrated in the Beijing-Tianjin region, Shanghai, Jiangsu, Zhejiang, and Guangdong, and their annual average daily traffic volume exceeds 20,000 vehicles.

In 2006, the average daily traffic volume of the national trunk road nationwide reached 15,203 vehicles per day, an increase of 9.1% year-on-year. The average annual driving volume was 48,969,000 vehicles km/day, an increase of 10.3% year-on-year; the average daily traffic volume of the national highways was 15,954 vehicles. / Day, an increase of 4.3% year-on-year, with an average annual driving volume of 72.438 million vehicles km/day, a year-on-year increase of 7.8%. According to the forecast of the Ministry of Communications, by 2010, the average traffic volume of China's national trunk lines will reach 30,000 vehicles/day, and by 2020 it will reach 56,000 vehicles/day, which is twice the current and 3.7 times respectively. The main traffic channel such as Beijing-Shanghai is expected to reach around 100,000 vehicles per day. The compound growth rate of the traffic volume of major highways in the next five years is 14.9%, and the compound growth rate from 2010 to 2020 will still reach 6.45%. Major highway companies will still enjoy high traffic growth.

According to the experience of the development of the US highway network, once the highway forms a network, it will bring about a period of rapid growth in traffic volume in the past nine years, and traffic volume growth after that will basically be synchronized with GDP growth. Based on this, we still maintain the high-speed growth of the highway industry in the next 3-5 years and the preliminary judgment of rapid growth in the next 15 years.

At the same time, the congestion on the National Road Network continues to decline. In 2006, the average national road network congestion rate was 0.40, a decrease of 7.8% from the previous year. The national highways in Beijing, Tianjin, Shanghai, Guangdong, Hainan, and Yunnan provinces are relatively crowded, and the annual average congestion degree exceeds 0.6. The average congestion in Beijing and Yunnan exceeds 0.8.

Car ownership supports growth in the industry

Car sales, especially heavy-duty truck sales, showed “blow-out” growth, forming a solid foundation for the industry's continued improvement. In the first half of 2007, China's commercial vehicle market increased by 26% year-on-year, and the market for high-end heavy trucks and semi-trailer tractors grew significantly. The cumulative sales of semi-trailer tractors were 94,000, an increase of 123% over the same period of last year. During the same period, the cumulative sales of heavy trucks were 44,000, a year-on-year increase of 58%, a “blowout” increase, much higher than the average year-on-year growth of trucks by 19%.

From the perspective of China’s economic development prospects, per capita income and consumption growth, and development of the automobile industry, China’s auto consumption will continue to grow. Some agencies predict that the annual growth rate of automobile sales before 2010 will be over 20%, 2010-2020. The annual growth rate is at least 12%. With the rapid growth of car ownership, there will be firm support for the increase in traffic volume on highways.

Based on the development experience of the United States, the introduction of minibuses into the family and initial popularization will lead to a significant increase in road transport demand. First, the number of people traveling has increased significantly. In 1977, the number of Americans traveled 2.5 times. Among them, the number of visiting relatives, friends, and recreation was 1.6 times, and in 1995, it reached 4.0 times, including visits, visits, friends, and recreation. Times have increased by 60%. Second, people will choose more personal vehicles such as family minibuses when they travel. For example, the average number of individual vehicles selected by Americans during travel in 1977 and 1995 was 2.0 and 3.1, respectively, and they also increased by nearly 60%. Third, the distance traveled by people is gradually extended. For example, the travel distances of Americans in the two years mentioned above were 2,795 km and 5,064 km, respectively, an increase of 81%. The travel distances were 1179 km and 1345 km respectively, an increase of 13%.

According to statistics, the number of China’s civilian vehicles increased from 5.51 million in 1990 to 35.86 million in 2006, an average annual increase of 12.4%; the average annual increase since 2000 was 14.3%. We expect that the number of car ownership will increase by 16%-20% in the next few years. By 2010, the number of China's civilian vehicles will double, reaching 70 million vehicles. By 2020, China’s civilian vehicle ownership will double from 2010, reaching about 140 million vehicles. By the middle and late 1930s, China’s car ownership will likely catch up with or surpass the US’s current car ownership of 240 million vehicles. The rapid growth in the number of car ownership is also bound to light up the investment expectations of the highway industry. (China Securities Network)

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