Construction businesses expect rosier stock performance in H2
Construction businesses expect rosier stock performance in H2
Looking towards the year's end, construction businesses are expected to benefit from the government’s programme on economic rebound and development in 2022-2023 and accelerated public investment, heralding rosier performance.
In the recent report to the government, Minister of Transport Nguyen Van The noted that four component projects under North-South Highway network’s first phase with a total length stretching 361km would be put into use by the end of this year.
As scheduled, the six remaining projects are slated for completion in 2023. For the 12 component projects under the North-South Highway network’s second phase, the National Assembly has approved to forge ahead following the public investment format.
The government is swiftly expediting relevant procedures for the projects to be able to kick off construction right this year and trending towards completion by 2026.
This lays the bedrock for growth expectations of building tickers in the upcoming time.
In the construction sector, downward building material price is conducive to facilitating public investmentprojects
Major infrastructure projects all require foundation treatment, requiring the engagement of local contractors with expertise in foundation treatment, particularly with regards to weak foundations and underground works.
This heralds opportunities for experienced contractors like CIENCO4 Corporation, Vinaconex Corporation, Fecon JSC, Cuong Thuan IDICO Development Investment Corporation, and Tasco JSC, among others.
In addition, in the face of accelerated smart transporting, the growing pipeline of infrastructure projects is entailing benefits to tech firms like Elcom Technology Communications Corporation and Innovative Technology Development Corporation.
Notably, with accelerated public investment and the government’s efforts to remove the bottleneck with site clearance procedures, construction companies enjoy ample space for price upsurges.
Robust transport, in turn, prompts associated auxiliary sectors like bitumen to boost output which will create advantages for businesses in this sector.
According to Phung Trung Kien, director of the Research Centre at AIS Securities, two policy highlights in 2022's government stimulus package are a big part of capital heads to major infrastructure projects promoting infrastructure links between localities and regions, and monetary policy to support growth.
Kien expects a more positive stock market situation later this year, bringing a price upsurge for the tickers of firms that is beneficial for the government’s accelerated public investment.
With another stance, Do Bao Ngoc, deputy CEO at Vietnam Construction Securities JSC, assumed that in the short term the profit margin of many firms might be under pressure amid escalating input material prices. But in the long term, these firms would still have upbeat prospects due to huge demands for infrastructure investment.
Notably, with accelerated public investment and the government’s efforts to remove the bottleneck with site clearance procedures, construction companies enjoy ample space for price upsurges.
Ngoc, however, warned investors to keep tabs on business growth, saying that those that satisfy the criteria on capital sources and liquidity, with distinction and the representation of specific building segments, would be most beneficial.
