[Click eStock] "Sectors Benefiting from China's Economic Stimulus Are Construction Machinery, Petrochemicals, and Consumer Goods"

Expectations for Consumption Boost and Increased Manufacturing Investment
Focus on HD Hyundai Construction Equipment, Orion, and Cosmax

Growth Research analyzed promising sectors and companies related to China's large-scale economic stimulus measures on the 17th. Researchers Kim Juhyung and Lee Jaemo of Growth Research stated, "According to the main contents announced so far in the economic stimulus measures, the key points are to promote consumption and investment through basic infrastructure such as railroads, energy, and water resources, as well as urbanization projects," adding, "Sectors that can benefit from the stimulus include construction machinery, petrochemicals, and consumer goods-related sectors."

According to the Growth Research Center, the beneficiary sectors include construction machinery (HD Hyundai Infracore, HD Hyundai Construction Equipment), petrochemicals (LG Chem, Kumho Petrochemical, Lotte Chemical), cosmetics original design manufacturing (ODM) companies (Cosmax, Korea Kolmar), food and beverages (Orion), and apparel (F&F, Brand X Corporation). Researchers Kim Juhyung and Lee Jaemo analyzed, "Construction machinery and petrochemicals can benefit from infrastructure construction promotion and increased manufacturing investment, while consumer goods can benefit from domestic demand stimulation."

Specifically, looking at individual companies, HD Hyundai Construction Equipment previously had a significant portion (20%) of sales directed to China and maintains a dealer network within China. Lotte Chemical is also expected to benefit due to the high correlation between the petrochemical industry and the Chinese economy. Cosmax holds 1,000 client companies in China through its localization strategy, and with economic recovery, the demand for cosmetics is expected to increase, leading to growth in the performance of its Chinese subsidiary. Orion accounts for about 40% of its sales by region in China and is expanding new production lines there. Brand X Corporation has an exclusive contract with YY Sports, the largest sports distribution company in China, and plans to open a total of seven stores in China by October.