- Engineering & Construction Industry Megaprojects and Technological Advancements 2026
Feb 4, 2026
Precedence Research
According to Precedence Research, the global Engineering & Construction (E&C) market continues to grow, with some companies dominating the sector by generating billions in annual revenue. Leading players such as China State Construction Engineering Corp., China Railway Group, and ACS Group are at the forefront of infrastructure and construction projects worldwide. This article provides an in-depth analysis of the top engineering and construction companies, their revenue, and their primary focuses in the industry.
Ottawa, Feb. 04, 2026 (GLOBE NEWSWIRE) -- The Engineering & Construction (E&C) industry is experiencing a period of substantial growth, fueled by infrastructure development, megaprojects, and industrial advancements. In 2026, the top companies in the E&C sector are leading the charge, generating billions of dollars in revenue and contributing to some of the world’s most complex and essential projects.
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Key Growth Drivers and Industry Trends
Several key trends are shaping the future of the E&C industry, propelling growth and creating new opportunities across the global construction landscape:
1. Infrastructure Megaprojects
Large-scale infrastructure projects are fueling demand for construction services worldwide. These initiatives, such as transportation networks, urban development, and renewable energy projects, are critical to modernizing outdated infrastructure and meeting the growing needs of cities and countries. From high-speed rail systems and bridges to sustainable power grids and smart cities, these megaprojects are set to play a major role in global economic development. Governments around the world are ramping up investments to revamp aging infrastructure, ensuring a steady pipeline of work for construction companies.
2. Technological Innovation
The E&C industry is embracing cutting-edge technologies, including Artificial Intelligence (AI), automation, robotics, and 3D printing. These innovations are revolutionizing construction practices by increasing productivity, reducing costs, and enhancing safety on construction sites. The integration of digital tools and AI-driven solutions is accelerating project timelines and driving more sustainable, cost-efficient practices. The adoption of such technologies is expected to be a game-changer, improving environmental and economic outcomes for construction projects.
3. Sustainability and Green Construction
Environmental responsibility has become a priority in construction projects globally. As concerns about climate change and environmental degradation grow, the demand for green building materials, energy-efficient designs, and sustainable construction practices is on the rise. The construction industry is now prioritizing eco-friendly initiatives, from renewable energy-powered infrastructure to the construction of energy-efficient residential buildings. This trend towards sustainability is shaping a new era of construction focused on reducing environmental impact while improving the quality of life for communities.
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4. Urbanization and Smart Cities
Urbanization continues to rise, leading to increased demand for innovative infrastructure solutions. Smart cities, which integrate Internet of Things (IoT) technology, AI, and data analytics into urban planning, are becoming increasingly prominent. These cities focus on optimizing resource use, minimizing environmental footprints, and improving residents' quality of life. The development of smart cities represents a tremendous opportunity for innovation in the E&C industry, as companies work to build sustainable, connected infrastructure solutions that support future urban populations.
5. Emerging Markets and Global Expansion
While established markets in the US, Europe, and other developed regions are focusing on infrastructure renewal, emerging markets in Asia, Africa, and Latin America are experiencing rapid construction growth. Population growth, industrialization, and the rising standard of living are driving the need for new infrastructure in these regions. E&C companies are expanding their focus to these rapidly developing areas, where the need for modern infrastructure is critical to sustaining economic growth and accommodating growing urban populations.
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Key Sectors Driving Growth in the E&C Industry
The E&C industry spans various sectors, each contributing to economic development in unique ways. Some of the key sectors experiencing significant growth and shaping the industry’s future include:
1. Transportation Infrastructure
The demand for transportation infrastructure, including roads, railways, airports, and seaports, continues to rise as urbanization and cross-border connectivity increase. Megaprojects, such as high-speed rail systems and airport expansions, are playing a crucial role in improving mobility and enhancing economic opportunities. The transportation sector is expected to dominate the focus of the industry in the coming years as governments invest heavily in modernizing and expanding transportation networks.
2. Energy and Utilities
As global energy demand continues to grow, investments in power generation, transmission, and distribution infrastructure are essential. The E&C industry is heavily involved in expanding renewable energy infrastructure, including solar, wind, and hydropower projects, which are crucial to the global transition to cleaner energy sources. Renewable energy projects not only support global energy needs but also contribute to sustainability goals and environmental responsibility.
3. Residential and Commercial Construction
The rise in global populations and improvements in living standards are driving increased demand for residential and commercial properties. As cities expand and new urban centers emerge, there is a growing need for housing, office buildings, and retail spaces. Smart buildings, modular construction, and energy-efficient designs are reshaping the way these projects are developed, making them more sustainable and cost-effective. The residential and commercial construction sector continues to evolve to meet the needs of urbanized populations.
4. Industrial Construction
The need for industrial facilities is expanding, particularly in sectors like manufacturing, logistics, biotechnology, and clean energy. Industrial construction projects, such as factories, warehouses, and specialized facilities, are essential to supporting the global supply chain and the growth of emerging industries. As new industries like biotechnology and clean energy continue to rise, industrial construction will play a critical role in accommodating these changes and contributing to the global economy.
The Path Forward: Opportunities and Strategic Solutions
The E&C industry’s future is being shaped by ongoing trends that drive growth and innovation. With substantial investments in infrastructure, technology, and sustainability, the industry is poised for substantial growth. Companies that leverage these trends to improve operational efficiency, embrace technology, and tap into emerging markets will position themselves to lead in this rapidly changing landscape.
For businesses looking to stay ahead of the curve, tailored market research and strategic insights are crucial. At Precedence Research, we specialize in delivering actionable intelligence to help clients navigate the complexities of the E&C industry. Whether you're looking to explore emerging market opportunities or make data-driven decisions on investment, our comprehensive research solutions are designed to support your goals and fuel growth.
To explore how we can assist in shaping your E&C strategies, reach out for a consultation today: Request Consultation.
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- Overseas Event of the Hungary-Serbia Railway Cultural Integration Midsummer Annual Meeting Successfully Held in Budapest
Jul 10, 2025
BUDAPEST, Hungary, July 10, 2025 /PRNewswire/ -- On July 8, Hungary, the China Railway Group Limited (CREC) Overseas Event of the Hungary-Serbia Railway Cultural Integration Midsummer Annual Meeting was successfully held at the Liszt Ferenc Academy of Music in Budapest.Premiere Performance of "Álmainkat Együtt Valósítjuk Meg" (PRNewsfoto/CREC)
This event, jointly organized by CREC, the Liszt Ferenc Academy of Music, Eötvös Loránd University, and other institutions, used music as a medium and the railway as a link to bring together government officials, business leaders, academics, and cultural figures from China and Hungary. Through diverse formats such as report releases, cooperation signings, artistic performances, and youth dialogues, the event comprehensively showcased the fruitful achievements of the Hungary-Serbia Railway construction and played a harmonious symphony of people-to-people connectivity between China and Hungary.
Vice-President Fekete Gyula of the Liszt Ferenc Academy of Music delivered the welcome address on behalf of the organizers. He highlighted that the Academy has established stable collaborations with prominent Chinese music institutions such as the Central Conservatory of Music and the Shanghai Conservatory of Music. Thanks to the successful construction of the Hungary-Serbia Railway, places once taking weeks by horse-drawn carriage for Liszt to reach are now accessible within hours. He hoped that the special composition created by the Academy's students for this railway would serve as a bond resonating with both Chinese and Hungarian people.
Ambassador Gong Tao of China to Hungary noted that practical cooperation between the two countries has brought tangible benefits to their people. He encouraged more Hungarian friends to experience the unique charm of Chinese culture firsthand and hoped that more Hungarian enterprises in China and Hungarian universities would become envoys of Sino-Hungarian friendship and cultural exchange, ensuring the ship of friendship sails steadily along the "golden channel".
At the event, "Álmainkat Együtt Valósítjuk Meg", co-created by CREC and the Liszt Ferenc Academy of Music, was performed in both Chinese and Hungarian at the Academy's concert hall. The bilingual Chinese-Hungarian performance, enriched by the melodious tones of the pentatonic scale, harmonized with the Danube River's shimmering waters outside, painting a cultural picture of the "Iron Silk Road".
Additionally, the "CREC – Eötvös Loránd University Summer Internship Program for Hungarian Students Studying in China" was officially launched, providing Hungarian students an opportunity to gain firsthand experience and understanding of China.
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SOURCE CREC
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- Thailand Probes Collapse of Only Skyscraper to Crumble in Quake
Mar 31, 2025
(Bloomberg) -- The collapse of a skyscraper under construction in Bangkok — the lone building to crash during the massive earthquake last week — has become the center of Thai investigations as questions swirl around the construction and quality of the materials used by a joint venture of Thai-Chinese contractors.
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The 30-story building, which was set to be a new location for Thailand’s State Audit Office, crumbled within minutes of the 7.7-magnitude earthquake, killing 11 workers and trapping nearly 80 people. Last-ditch efforts are ongoing to find survivors, with the massive piles of concrete rubble making the task difficult even after 72 hours of the quake.
Thailand’s Interior Minister Anutin Charnvirakul on Sunday set up a panel of experts to probe the collapse and report its findings to the government within seven days. Separately, the Ministry of Industry has collected samples of steel bars found at the site to test the quality of the material.
Two companies in particular have drawn public scrutiny. The building was being constructed by ITD-CREC, a joint venture between Italian-Thai Development Pcl and China Railway Number 10 Thailand Co. The venture was awarded the 2.14 billion baht ($63 million) contract through competitive bidding in 2020, with construction starting later that year, according to the State Audit Office.
The top of the building, which was about 45% complete, was seen crumbling first, before the entire structure came down, sending rubble and debris flying everywhere. Bystanders were heard screaming in disbelief in the videos that went viral on social media.
“We’ve never seen anything like this in Thailand,” said Suchatvee Suwansawat, a civil engineer who ran for Bangkok governor during the 2022 election, at the site of the collapse on Sunday. “The way it collapsed, like there was an explosion, isn’t normal. The question is how do we identify the abnormality to find the cause?”
While the contractors haven’t offered any explanation yet for the collapse, Italian-Thai said it was committed to “taking corrective actions to restore normalcy as soon as possible.” The company, one of the biggest Thai contractors, was in the news last year as it faced a cash crunch and frequent accidents at some of its project sites. It was also under fire earlier this month for the collapse of an under-construction highway in Bangkok which killed six people.
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China Railway Number 10 couldn’t immediately be reached for comment. The firm is a subsidiary of state-owned China Railway Group Ltd.. The joint venture with Italian-Thai was also listed as a contractor for one part of the Thailand-China high-speed railway project, according to a government website.
Chinese Support
As the companies drew heat, China’s ambassador to Thailand Han Zhiqiang met with minister Anutin and pledged to support the government in its investigation, the minister said.
The probe will focus on the designer, construction supervisor and contractor, Anutin said. “If it’s proven that the builder strayed from the design plan and used other material than what was specified, they will be punished under the law,” he told reporters.
Although Myanmar was hit much worse, with the death toll set to climb from more than 1,700, the incident in Bangkok stood out in a city that withstood much of the impact of the temblor. About 13,000 buildings have reported some form of damage to Bangkok authorities, according to Thanes Weerasiri, president of the Council of Engineers Thailand. Only two of them were categorized as critical, while about 2,000 others still needed pection, Thanes said on Monday.
Shares of Italian-Thai tumbled as much as 27% in Bangkok trading, the most in a year. The collapsed building has insurance coverage for the full contract value, the company said, adding that it will provide compensation and relief for the families of those killed and medical care for injured survivors.
Shares of several condominium builders were hit on speculation that buyers may prefer landed houses to high-rise residential towers in Bangkok, among the world’s top tourist destinations. The Thai property development index tumbled as much as 4.3%, with Everland Pcl, AP Thailand Pcl and Origin Property Pcl among the biggest losers.
--With assistance from Lucille Liu.
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- American Vloggers Explore China's Infrastructure under China-U.S. Youth Exchange
Jul 11, 2024
American Vloggers Explore China's Infrastructure under China-U.S. Youth Exchange (Photo: Business Wire)
BEIJING, July 11, 2024--(BUSINESS WIRE)--Two American vloggers visited and filmed the assembly and experimental unit of China’s infrastructure for the first time in June 2024 respectively in Zhengzhou, Henan, and Chengdu, Sichuan.
The visit is part of the Bridge of the Future: China-US Youth Exchange Program. Joining a group of American youth in Zhengzhou, Jack, an American vlogger with around 150,000 followers on Facebook, visited the CRHIC TBM Assembly Workshop and the State Key Laboratory of Tunnel Boring Machine and Intelligent Operations of China Railway Tunnel Group. They took a closer look at how intelligent technology assists in tunnel construction.
With guidance from Chinese Railway engineers, Jack got to understand the TBM's structure, operational methods, applications, and supporting technology.
"The Tunnel Boring Machine is all designed, produced, and assembled in China, using proprietary technology, with over a hundred units exported internationally," said Han Bo, a chief Engineer from the railway construction company.
In Chengdu, Alysa, an American Internet influencer, visited the construction site of the first phase of the Chengdu Metro Line 13, part of the civil engineering project by China Railway No. 5 Engineering Group Co., Ltd.. The American vlogger and its group partners learned about the project's details and tunnel boring construction processes at the construction site, and interacted with the construction workers. At the China Railway Intelligent Construction Research and Development Center and the Digital Laboratory of China Railway Academy, Alysa also experienced the implementation of intelligent and digital technologies in infrastructure development and management. Alysa said she was excited to see the mutual benefits and collaborative spirit of the exchange between the U.S. and China.
Students from the Colorado School of Mines, through a talk with Alysa, were impressed by China's application of artificial intelligence in infrastructure construction, and called for increased collaboration between China and the U.S. in this field.
In the videos by Jack and Alysa, they shared opinions on China's approach to infrastructure innovation. They documented the modernization of China's infrastructure and the ingenuity of its people, showcasing the dedication to construction and the potential of the youth. Their content has attracted nearly a million views across various social platforms.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240711400718/en/
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- 15 Biggest Construction Companies in the World
Dec 21, 2022
In this piece, we will take a look at the 15 biggest construction companies in the world. For more companies, head on over to 5 Biggest Construction Companies in the World.
The construction industry is a pivotal sector of any economy, and it is also one that is often used by governments to stimulate economic growth. This sector employs millions of people, and government spending leads to more employment and spending in the economy as houses, apartment complexes, road works, and other buildings are built. This in turn also ends up supporting a variety of different industries involving building materials such as wood, cement, and steel.
Therefore, it's no surprise that the construction industry is also one of the largest in the world - deemed more valuable than lucrative sectors such as crude oil and automotive. For instance, a research report from Exactitude Consultancy outlines that this sector was worth $11 trillion last year and it will grow at a compounded annual growth rate (CAGR) of 7.3% between then and 2029 to sit at an estimated worth of $17 trillion. The research firm attributes this growth to rising global populations and more people heading to the cities to earn and live.
However, simply due to its scale, the construction sector also carries large risks that can disrupt even the global economy. For instance, the hottest topic in the industry these days is China's Evergrande Group. Evergrande is the second largest property developer in the world's largest economy in terms of purchasing power parity. The Chinese government heavily stimulated the real estate sector in the wake of the 2008 financial crisis, so much so that there is now an oversupply of housing units and other buildings - leading to what are called 'ghost cities' made up of large apartment buildings and other complexes that are simply sitting vacant. Evergrande, like other real estate firms, relied heavily on debt to fund its construction.
But it was declared a defaulter by S&P Global in December last year after it missed bond payments. The liquidity crisis at Chinese firms started when the government introduced a new policy that limited the debt that they could take to fund new projects. The only problem was that the companies, with massive capital tied in illiquid assets, had relied on raising more debt to pay off earlier debt, relying on the age-old mantra of being 'too big to fail'. A failure at Evergrande threatened to disrupt Western financial markets as well, as large firms such as BlackRock had bought millions of dollars of its debt.
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Like other industries, the construction sector is also relying on new technologies to boost its operations. For instance, companies now use LiDAR sensors to survey land, detect if there are any construction flaws, and map out the terrain on which they plan to build their buildings. Additionally, firms such as Shimabun are selling equipment that makes hardhats connect to the cloud to report on worker health to improve safety.
Today's piece will focus on the largest construction companies in the world, with the top players being China State Construction Engineering Corporation Limited (SHA:601668.SS), D.R. Horton, Inc. (NYSE:DHI), and Vinci SA (EPA:DG.PA). 15 Biggest Construction Companies in the World
Photo by Scott Blake on Unsplash
Our Methodology:
We took a look at the construction industry to identify the top players, which are then ranked according to their market capitalization.
Biggest Construction Companies in the World
15. Eiffage SA (EPA:FGR.PA)
Market Capitalization as of December 20, 2022: $9.55 billion (1EUR = 1.06USD)
Eiffage SA (EPA:FGR.PA) is a French construction firm that is headquartered in Vélizy Villacoublay, France. The firm was set up in 1992 and it is one of the top ten largest construction companies in Europe. However, Eiffage SA (EPA:FGR.PA) traces its roots back to 1844, as one of its constituent firms was set up in the 19th century. The company primarily focuses on urban construction projects such as railroads, stadiums, roads, metros, and solar parks.
Along with D.R. Horton, Inc. (NYSE:DHI), China State Construction Engineering Corporation Limited (SHA:601668.SS), and Vinci SA (EPA:DG.PA), Eiffage SA (EPA:FGR.PA) is one of the biggest construction companies in the world.
14. Acciona, S.A. (BME:ANA.MC)
Market Capitalization as of December 20, 2022: $10 billion (1EUR = 1.06USD)
Acciona, S.A. (BME:ANA.MC) is a Spanish construction company that was set up in 1916 and is headquartered in Alcobendas, Spain. The firm is involved in the construction of a wide variety of projects such as roads, power plants, airports, water channels, data centers, and transportation systems. Additionally, the firm has a global presence, and it also generates solar electricity through its power plants. Acciona, S.A. (BME:ANA.MC) generated 11.4 Gigawatts of renewable energy as of September 2022.
13. Bouygues SA (EPA:EN.PA)
Market Capitalization as of December 20, 2022: $11.28 billion (1EUR = 1.06USD)
Bouygues SA (EPA:EN.PA) is a French conglomerate that has a presence in the construction, telecommunications, and media industries. It was set up and is currently led by the Bouygues family. The firm's construction businesses include Bouygues Construction, Colas Group, and Bouygues Immobilier. These build a variety of different facilities and buildings such as hotels, railways, roadworks, residential complexes, and power generation plants.
12. Sekisui House, Ltd. (TYO:1928.T)
Market Capitalization as of December 20, 2022: $11.6 billion (1Yen = 0.0076USD)
Sekisui House, Ltd. (TYO:1928.T) is a Japanese firm based in Osaka and set up in 1929. The firm primarily builds residential properties such as houses, alongside dabbling in hotel construction as well. It also offers home remodeling services. Additionally, Sekisui House, Ltd. (TYO:1928.T) also has an Australian division. It claims to have built more than two million homes since being formed, and alongside Australia, it also has a presence in the U.S., China, Canada, and the U.K.
11. China Railway Construction Corporation Limited (SHA:601186.SS)
Market Capitalization as of December 20, 2022: $14.28 billion (1Yuan = 0.14USD)
China Railway Construction Corporation Limited (SHA:601186.SS) is one of the largest construction companies in the world when it comes to revenue. It is a diversified construction company that not only builds projects but also provides other services such as surveying, buying and selling properties, and designing, making, and selling equipment for railway construction. China Railway Construction Corporation Limited (SHA:601186.SS) has built projects all over the world, including China, Pakistan, Bangladesh, Egypt, Turkey, and Russia.
10. NVR, Inc. (NYSE:NVR)
Market Capitalization as of December 20, 2022: $15 billion
NVR, Inc. (NYSE:NVR) is an American firm that targets the home building industry. It builds condos, detached single family homes, and town homes. Additionally, the firm also provides mortgage title insurance and other mortgage related services. NVR, Inc. (NYSE:NVR) is the fourth largest American construction firm in terms of houses sold, and its latest share price of a whopping $4,697 per share makes it the second most expensive stock on the U.S. markets after Berkshire Hathaway.
Insider Monkey's Q3 2022 survey of 920 hedge funds revealed that 34 had invested in NVR, Inc. (NYSE:NVR).
NVR, Inc. (NYSE:NVR)'s largest shareholder in our database is Ric Dillon's Diamond Hill Capital which owns 124,155 shares that are worth $495 million.
9. Daiwa House Industry Co., Ltd. (TYO:1925.T)
Market Capitalization as of December 20, 2022: $15 billion (1Yen = 0.0076USD)
Daiwa House Industry Co., Ltd. (TYO:1925.T) is a Japanese real estate development firm that builds houses, transport facilities, condos, and other buildings. The firm also provides surveying facilities alongside operating hotels. Daiwa House Industry Co., Ltd. (TYO:1925.T) has also been characterized as Japan's largest home builder, and its logistics business is also one of the largest in the country. It also provides home renovation services, alongside putting up houses for rent.
8. China Communications Construction Company Limited (SHA:601800.SS)
Market Capitalization as of December 20, 2022: $15.9 billion (1Yuan = 0.14USD)
China Communications Construction Company Limited (SHA:601800.SS) is a Chinese infrastructure builder that is headquartered in Beijing, the People's Republic of China. Some of the company's projects include railways, rail transit, bridges, roads, and city infrastructure. It also claims to be the world's largest port, highway, dredging, and container crane manufacturing company. Additionally, the China Communications Construction Company Limited (SHA:601800.SS) has dozens of subsidiaries that operate all over the globe.
7. China Railway Group Limited (HKG:0390.HK)
Market Capitalization as of December 20, 2022: $18.86 billion (1HKD = 0.13USD)
China Railway Group Limited (HKG:0390.HK) is a diversified Chinese infrastructure construction company. The firm builds railways, airports, highways, tunnels, and power generation projects. Additionally, it also provides surveying services and makes and sells construction machinery. China Railway Group Limited (HKG:0390.HK) has also been ranked as the world's largest construction company in terms of revenue in the past, and it has dozens of subsidiaries under its belt.
6. Ferrovial, S.A. (BME:FER.MC)
Market Capitalization as of December 20, 2022: $18.89 billion (1 EUR = 1.06USD)
Ferrovial, S.A. (BME:FER.MC) is a Spanish construction company that is headquartered in Madrid. The firm operates in Europe, Canada, the U.S., and other countries through different subsidiaries. Its different business divisions oversee the construction of projects such as roads and airports. Additionally, Ferrovial, S.A. (BME:FER.MC) is also one of the U.K.'s largest airport operators, with seven airports under its belt including Heathrow.
Ferrovial, S.A. (BME:FER.MC) is one of the world's largest construction companies, joining others such as China State Construction Engineering Corporation Limited (SHA:601668.SS), D.R. Horton, Inc. (NYSE:DHI), and Vinci SA (EPA:DG.PA).
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Disclosure: None. 15 Biggest Construction Companies in the World is originally published on Insider Monkey.
- RPT-FOCUS-Zero-COVID, big money: China's anti-virus spending boosts medical, tech, construction
May 30, 2022
(Repeats story published earlier on Monday as FOCUS)
By Eduardo Baptista
BEIJING, May 30 (Reuters) - China's 'zero-COVID' policy of constantly monitoring, testing and isolating its citizens to prevent the spread of the coronavirus has battered much of the country's economy, but it has created bubbles of growth in the medical, technology and construction sectors.
The Chinese government, alone among major countries in vowing to eradicate the coronavirus within its borders, is on track to spend more than $52 billion (350 billion yuan) this year on testing, new medical facilities, monitoring equipment and other anti-COVID measures, which will benefit as many as 3,000 companies, according to analysts.
"In China, the companies that provide testing services and other related industries are making big money because of the government's focus on a containment-based approach in fighting COVID," said Yanzhong Huang, a global health specialist at the Council on Foreign Relations (CFR), a U.S. think tank.
China aims to have COVID testing facilities within 15-minutes' walk of everyone in its big cities and continues to impose mass testing at the slightest sign of an outbreak. Hong Kong-based Pacific Securities estimates this has created a market worth more than $15 billion a year for test makers and providers.
The government is footing the bill for the vast majority of this, either by buying test kits or paying companies to do tests. Although prices of tests have dropped since the outbreak of the coronavirus in early 2020 – to as little as 50 cents per test - this continuing demand has helped a number of companies.
First-quarter profit more than doubled for Hangzhou-based Dian Diagnostics Group Co Ltd, one of China's biggest medical test makers. Its revenue jumped more than 60% to $690 million, just less than half of which was for its COVID testing services, almost entirely paid for by the government.
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Rival Adicon Holdings Ltd, which received about $300 million of mostly government money for its COVID tests over 2020 and 2021, according to the company's financial statements, has applied for an initial public offering on the Hong Kong stock exchange.
Shanghai Runda Medical Technology Co Ltd said it was processing up to 400,000 COVID tests per day in April, during the almost two-month-long lockdown of Shanghai, generating more than $30 million a month, according to an article by the state-run Securities Times.
China defends its 'zero-COVID' policy as crucial to saving lives and preventing its healthcare system from being overrun. It shows little sign of pulling back even as the economic toll mounts.
The latest indicators show the country's economy has weakened sharply since March, as employment, consumer spending, exports and home sales have been hit by stringent lockdown measures that clogged highways and ports, stranded workers and shut factories.
Many private-sector economists expect the economy to shrink in the April to June quarter from a year earlier, compared with the first quarter's 4.8% growth. The blue-chip CSI 300 Index is down 19% this year.
Investors are uncertain how long the boom will last for companies like Dian, Adicon and Shanghai Runda, whose fortunes are closely tied to government spending. Analysts, on average, expect Dian's revenue to dip slightly next year, while they see Shanghai Runda's continuing to grow. Stocks of both are down from the start of this year.
"The development of the epidemic is uncertain due to the large number of mutated strains of the new coronavirus and the complexity of infectiousness," said a recent research note by Shenzhen-based Essence Securities. "If the spread of the epidemic is well controlled and the epidemic prevention policy is adjusted, it may have a negative impact on the market demand for COVID nucleic acid testing."
Huang at the CFR said that China's massive programme of lockdowns, tracing and isolating could prevent a worst-case scenario but was not a permanent solution. "Epidemiologically and economically, it is unsustainable," he said.
Dian Diagnostics, Adicon and Shanghai Runda did not respond to requests for comment. Health authorities in Beijing and Shanghai did not respond to requests for comment.
MASS SURVEILLANCE, QUICK BUILDINGS
Dozens of surveillance and thermal imaging camera manufacturers, such as Wuhan Guide Infrared Co Ltd and Hangzhou Hikvision Digital Technology Co Ltd, have benefited from the Chinese government's demand for gadgets that can help it keep track of the COVID status of its 1.4 billion citizens.
Wuhan Guide, one of the world's leading manufacturers of thermal imaging equipment, doubled its revenue in 2020 as it worked overtime to supply fever-detecting cameras across China and overseas. Growth flattened out last year, but analysts expect it to pick up again this year and next. The company did not respond to a request for comment.
Disease has been the mother of invention. Since March, Chinese companies and research institutes have filed at least 50 COVID-related patents, according to a Reuters review of international and domestic databases. The inventions are mostly related to adapting existing surveillance cameras and platforms in order to track close contacts and identify potential positive cases.
The urgent need for hundreds of new hospitals, to take the strain off China's already-stretched medical infrastructure, has created a boom for some construction companies.
Beijing-based China Railway Group Ltd, a conglomerate spanning construction, manufacturing and real estate, has built makeshift hospitals all over China this year, and has been particularly active in areas hit hard by COVID such as Shanghai and the northeastern city of Changchun. Its profit has grown steadily over the past two years, at least partly helped by COVID-related projects, and analysts expect that to continue over the next few years. Its stock hit a three-year high in May. China Railway Group did not respond to a request for comment.
One analyst has estimated that about 300 makeshift hospitals were built around China during a 35-day span between March and April, as infections surged, at a cost of more than $4 billion.
One third of those were built in and around Shanghai. There is no sign of waning demand from the government. On May 15, China's National Health Commission head Ma Xiaowei called for the construction of what he called "permanent makeshift hospitals" in leading Chinese Communist Party publication Qiushi, suggesting that there will be a long-term need for such buildings.
A Reuters review of tenders for such projects suggest the government will spend about $15 billion this year on new hospitals. (Reporting by Eduardo Baptista in Beijing Editing by Bill Rigby)
- Zero-COVID, big money: China's anti-virus spending boosts medical, tech, construction
May 29, 2022
By Eduardo Baptista
BEIJING, May 30 (Reuters) - China's 'zero-COVID' policy of constantly monitoring, testing and isolating its citizens to prevent the spread of the coronavirus has battered much of the country's economy, but it has created bubbles of growth in the medical, technology and construction sectors.
The Chinese government, alone among major countries in vowing to eradicate the coronavirus within its borders, is on track to spend more than $52 billion (350 billion yuan) this year on testing, new medical facilities, monitoring equipment and other anti-COVID measures, which will benefit as many as 3,000 companies, according to analysts.
"In China, the companies that provide testing services and other related industries are making big money because of the government's focus on a containment-based approach in fighting COVID," said Yanzhong Huang, a global health specialist at the Council on Foreign Relations (CFR), a U.S. think tank.
China aims to have COVID testing facilities within 15-minutes' walk of everyone in its big cities and continues to impose mass testing at the slightest sign of an outbreak. Hong Kong-based Pacific Securities estimates this has created a market worth more than $15 billion a year for test makers and providers.
The government is footing the bill for the vast majority of this, either by buying test kits or paying companies to do tests. Although prices of tests have dropped since the outbreak of the coronavirus in early 2020 – to as little as 50 cents per test - this continuing demand has helped a number of companies.
First-quarter profit more than doubled for Hangzhou-based Dian Diagnostics Group Co Ltd, one of China's biggest medical test makers. Its revenue jumped more than 60% to $690 million, just less than half of which was for its COVID testing services, almost entirely paid for by the government.
Rival Adicon Holdings Ltd, which received about $300 million of mostly government money for its COVID tests over 2020 and 2021, according to the company's financial statements, has applied for an initial public offering on the Hong Kong stock exchange.
Story continues
Shanghai Runda Medical Technology Co Ltd said it was processing up to 400,000 COVID tests per day in April, during the almost two-month-long lockdown of Shanghai, generating more than $30 million a month, according to an article by the state-run Securities Times.
China defends its 'zero-COVID' policy as crucial to saving lives and preventing its healthcare system from being overrun. It shows little sign of pulling back even as the economic toll mounts.
The latest indicators show the country's economy has weakened sharply since March, as employment, consumer spending, exports and home sales have been hit by stringent lockdown measures that clogged highways and ports, stranded workers and shut factories.
Many private-sector economists expect the economy to shrink in the April to June quarter from a year earlier, compared with the first quarter's 4.8% growth. The blue-chip CSI 300 Index is down 19% this year.
Investors are uncertain how long the boom will last for companies like Dian, Adicon and Shanghai Runda, whose fortunes are closely tied to government spending. Analysts, on average, expect Dian's revenue to dip slightly next year, while they see Shanghai Runda's continuing to grow. Stocks of both are down from the start of this year.
"The development of the epidemic is uncertain due to the large number of mutated strains of the new coronavirus and the complexity of infectiousness," said a recent research note by Shenzhen-based Essence Securities. "If the spread of the epidemic is well controlled and the epidemic prevention policy is adjusted, it may have a negative impact on the market demand for COVID nucleic acid testing."
Huang at the CFR said that China's massive programme of lockdowns, tracing and isolating could prevent a worst-case scenario but was not a permanent solution. "Epidemiologically and economically, it is unsustainable," he said.
Dian Diagnostics, Adicon and Shanghai Runda did not respond to requests for comment. Health authorities in Beijing and Shanghai did not respond to requests for comment.
MASS SURVEILLANCE, QUICK BUILDINGS
Dozens of surveillance and thermal imaging camera manufacturers, such as Wuhan Guide Infrared Co Ltd and Hangzhou Hikvision Digital Technology Co Ltd, have benefited from the Chinese government's demand for gadgets that can help it keep track of the COVID status of its 1.4 billion citizens.
Wuhan Guide, one of the world's leading manufacturers of thermal imaging equipment, doubled its revenue in 2020 as it worked overtime to supply fever-detecting cameras across China and overseas. Growth flattened out last year, but analysts expect it to pick up again this year and next. The company did not respond to a request for comment.
Disease has been the mother of invention. Since March, Chinese companies and research institutes have filed at least 50 COVID-related patents, according to a Reuters review of international and domestic databases. The inventions are mostly related to adapting existing surveillance cameras and platforms in order to track close contacts and identify potential positive cases.
The urgent need for hundreds of new hospitals, to take the strain off China's already-stretched medical infrastructure, has created a boom for some construction companies.
Beijing-based China Railway Group Ltd, a conglomerate spanning construction, manufacturing and real estate, has built makeshift hospitals all over China this year, and has been particularly active in areas hit hard by COVID such as Shanghai and the northeastern city of Changchun. Its profit has grown steadily over the past two years, at least partly helped by COVID-related projects, and analysts expect that to continue over the next few years. Its stock hit a three-year high in May. China Railway Group did not respond to a request for comment.
One analyst has estimated that about 300 makeshift hospitals were built around China during a 35-day span between March and April, as infections surged, at a cost of more than $4 billion.
One third of those were built in and around Shanghai. There is no sign of waning demand from the government. On May 15, China's National Health Commission head Ma Xiaowei called for the construction of what he called "permanent makeshift hospitals" in leading Chinese Communist Party publication Qiushi, suggesting that there will be a long-term need for such buildings.
A Reuters review of tenders for such projects suggest the government will spend about $15 billion this year on new hospitals. (Reporting by Eduardo Baptista in Beijing Editing by Bill Rigby)
- Hainan State Farms Investment Hldg Grp Co Ltd -- Moody's announces completion of a periodic review for a group of Construction, Gaming, Natural Products Processor and Other issuers in Asia
Mar 22, 2022
Announcement of Periodic Review: Moody's announces completion of a periodic review for a group of Construction, Gaming, Natural Products Processor and Other issuers in AsiaGlobal Credit Research - 22 Mar 2022New York, March 22, 2022 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings -and other ratings that are associated with the same analytical units for the rated (entities) listed below.The review was conducted through a portfolio review discussion held on 15 March 2022 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. A possible outcome from periodic reviews is a referral of a rating to a rating committee."IMPORTANT NOTICE: MOODY'S RATINGS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS. SUCH USE WOULD BE RECKLESS AND INAPPROPRIATE. SEE FULL DISCLAIMERS BELOW."This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.Key Rating ConsiderationsThe principal methodology used for these rated entities was Construction published in September 2021. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.ConstructionScale: Scale is an indicator of a company's market strength, importance to markets served and ability to weather the vagaries of capital and economic cycles. Scale can also provide a broader platform for sustainable earnings and cash flow generation and typically enhances a construction company's operating and financial flexibility and its ability to bid, finance and profitably execute large, long-term, and complex projects. Large construction companies can accommodate a broad range of construction needs since they typically maintain a sizeable network of subcontractors and obtain various sources of financing, including bonding lines, which are key competitive advantages in the industry. In addition, scale in the construction industry often has a bearing on other key considerations such as geographic and segment diversity. Total revenue and EBITA are indicators of scale.Business Profile: The business profile of a construction company influences its ability to generate sustainable earnings and operating cash flows. Diversification across several continents or economic regions and exposure to a number of uncorrelated segments can mitigate earnings volatility, which can be affected by cyclical swings, changing levels of competition and project performance. Consideration is given to operational and geographic diversity, technical capabilities, track record of project execution, and stability of revenues and margins.Leverage and Coverage: Leverage and coverage measures are indicators of a company's financial flexibility and long-term viability. These measures can serve as an indicator of a greater ability to make new investments, weather the vagaries of the business cycle and respond to unexpected challenges, which often occur in the construction industry given the periodic performance issues that arise. Some measures of leverage and coverage include: EBITA / Interest Expense, Debt / EBITDA, and Funds from Operations / Debt.Financial Policy: Management and board tolerance for financial risk is considered because it directly affects debt levels, credit quality, and the risk of adverse changes in financing and capital structure. Our assessment of financial policies includes the perceived tolerance of a company's governing board and management for financial risk and the future direction for the company's capital structure. Considerations can include a company's public commitments in this area, its track record for adhering to commitments, and our views on the ability for the company to achieve its targets.Other Considerations: Some other considerations may include: financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends can also be considered. China Communications Construction Co., Ltd. China Energy Engineering Corporation Limited China Gezhouba Group Company Limited China Gezhouba Group Corporation China Metallurgical Group Corporation China Railway Construction Corp Ltd China Railway Group Limited China State Construction Engineering Corp Ltd China State Construction Int'l Holdings Ltd CIMIC Group Limited KEPCO Engineering & Construction Co, Inc. Metallurgical Corporation of China Ltd. Power Construction Corporation of China Shanghai Construction Group Co., Ltd. SINOPEC Engineering (Group) Co., Ltd. Ventia Services Group LimitedThe principal methodology used for these rated entities was Government-Related Issuers Methodology published in February 2020. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.Government-Related Issuers MethodologyAssigning a Baseline Credit Assessment (BCA): The majority of Government-Related Issuers (GRIs) begin with an assessment of the GRI's standalone strength (i.e. BCA) its ability to service and repay outstanding debt without recourse to extraordinary support from the supporting government - using the published sector-specific methodology that is most suitable for the predominant activities of the GRI. Our assessment of standalone strength includes any day-to-day support received from the government that can be clearly distinguished from extraordinary support. Support mechanisms, such as an obligation of the government to ensure the GRI's solvency and liquidity, are reflected in the BCA when they are legally or contractually documented.Government uplift: The GRI's ratings include any uplift due to systemic support and typically focus on three structural factors and three factors explaining the level of the government's willingness to provide support. Structural factors address the legal and quasi-legal aspects of the government's relationship with the GRI and include: (1) guarantees, (2) ownership level and (3) barriers to support. The factors underlying willingness consider the softer connections between the two entities and include (4) the likelihood of government intervention, (5) political linkages and (6) economic importance. Support is determined using a joint default analysis framework which considers an estimate of the likelihood of extraordinary support, an assessment of the credit quality of the supporting government, and default correlation between the two entities.GRIs without a BCA: In limited instances, it is not possible or meaningful to assign a BCA. The GRI is so inextricably linked to the government that a meaningful standalone BCA cannot be derived. In such cases, a top-down analytical approach is used that chiefly considers the ability and willingness of the government to provide timely support, instead of the usual bottom-up approach of starting with the BCA and then considering uplift towards the government's rating. Bright Food (Group) Co., Ltd. Hainan State Farms Investment Hldg Grp Co Ltd Korea Land and Housing Corporation Power Construction Corporation of China Shanghai Lingang Economic Dev. (Grp) Co., LtdThe principal methodology used for these rated entities was Homebuilding and Property Development Industry published in January 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.Homebuilding and Property Development IndustryScale: Scale reflects size, market position and brand name. Being among the largest and leading players in numerous markets can provide better access to skilled subcontractors and bank financing, first choice among land deals, greater purchasing, and pricing power, while at the same time offering stronger staying power and better financial and operational flexibility during a downturn. Furthermore, large companies tend to have broad geographic coverage, which also offers them the benefits of geographic diversification. In high growth markets, large residential property developers tend to have apparent benefits over smaller players including easier access to bank financing and strong financial power to bid for land in good locations. Total Revenue is an indicator of scale.Business Profile: Business profile is considered, typically including an assessment of operating position, business and acquisition strategies, product mix, geographic diversity, execution ability, area of operation and product mix. Considerations may include business strategy; market position; product, price-point, and geographic diversity; inventory management; land strategy, including the percentage of owned vs. optioned land; degree of speculative construction vs. under contract; as well as use of off-balance sheet structures.Profitability and Efficiency: Profitability is an indicator of the success of the business and effectiveness of management as well as the company's ability to support operations and business growth. Profitability is estimated by gross margins that include interest charged to cost of goods sold and exclude land impairment charges so as to focus on current profitability and efficiency.Leverage and Coverage: Leverage and coverage is considered, as is sufficient financial flexibility to deal with market or regulatory developments which lead to shocks to their business and finances. Measures of leverage and coverage can include: EBIT-to-Interest, Revenue-to-Debt, and Debt-to-Total Capitalization.Financial Policy: Management and board tolerance for financial risk is considered, as it may affect debt levels and credit quality as well as the risk of adverse debt leverage movements. Financial policies provide a guide to the appetite of a company's governing board and management for risk and the likely future direction for the company's capital structure. Key issues include debt leverage, coverage and return targets, liquidity management, cash distributions to shareholders, and acquisition strategies.Other Considerations: Other considerations can include: regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies, and macroeconomic trends. Korea Land and Housing Corporation Lendlease Group Shanghai Lingang Economic Dev. (Grp) Co., Ltd Sinochem Hong Kong (Group) Company LimitedThe principal methodology used for these rated entities was Gaming published in June 2021. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.GamingScale: Scale is considered because it is an indicator of the overall depth of a company's business and its success in attracting a variety of customers, as well as its resilience to shocks, such as sudden shifts in demand or rapid cost increases. Large-scale gaming companies tend to have greater market share and better access to capital compared with smaller-scale companies. Large companies may also benefit from economies of scale with respect to research and development expenses and corporate overhead. Companies with greater scale generally have lower earnings volatility relative to smaller companies because of the lower risk that a single customer can "take the house" for a large sum with a few significant bets. A larger scope of operations can reduce a company's reliance on a particular jurisdiction or market. In markets with high barriers to entry, scale may provide a competitive advantage. However, in many regional and local gaming markets, the competitive advantage gained by scale may not be as important because of already low competition. Revenue is an indicator of scale.Business Profile: The business profile of a gaming company is considered because it greatly influences its ability to generate sustainable earnings and operating cash flows. Core aspects of a gaming company's business profile are the characteristics of the markets in which it operates, including the regulatory environment; its market position; and its geographic and revenue diversification.Profitability and Efficiency: Profits are considered because they are needed to generate sustainable cash flow and maintain a competitive position, which includes investing in gaming facilities, technology, and marketing and rewards programs to attract customers. The ability to sustain high profitability is generally a strong indicator of operating efficiency and substantial competitive advantages. The gaming industry generally has had very high profitability relative to other sectors. EBIT Margin is an indicator of profitability.Leverage and Coverage: Leverage and cash flow coverage measures provide important indications of a gaming company's financial flexibility and long-term viability, as well as its ability to sustain its competitive position, invest in growth and meet debt service obligations. Indicators of leverage and coverage include ratios such as: Debt/EBITDA, EBIT/Interest Expense, and Retained Cash Flow/Net Debt.Financial Policy: Financial policy encompasses management and board tolerance for financial risk and commitment to a strong credit profile. It is an important rating determinant, because it directly affects debt levels, credit quality, the future direction for the company and the risk of adverse changes in financing and capital structure. Financial risk tolerance serves as a guidepost to investment and capital allocation. Liquidity management is an important aspect of overall risk management and can provide insight into risk tolerance.Other Rating Considerations: Other considerations may include but are not limited to: financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends are also considered. Crown Resorts Limited Genting Berhad Genting Overseas Holdings Limited Genting Singapore Limited Melco Resorts Finance Limited NagaCorp Ltd. SJM Holdings Limited Studio City Finance LimitedThe principal methodology used for these rated entities was Protein and Agriculture published in November 2021. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.Protein and AgricultureScale: Scale is an indicator of a company's revenue-generating capability and its resilience to shocks, such as sudden shifts in demand or rapid cost increases. Companies that are large in scale tend to have lower marginal costs, including those associated with manufacturing, sales force, distribution, and research and development. Larger companies also tend to have more bargaining power with purchasing organizations, customers, and suppliers. Revenue is an indicator of scale.Business Profile: The business profile of a protein or agriculture company greatly influences its ability to generate sustainable earnings and operating cash flows. We assess geographic diversification, segment diversification, market share, product portfolio profile and earnings stability.Leverage and Coverage: Leverage and cash flow coverage measures provide important indications of a protein or agriculture company's financial flexibility and long-term viability. Financial flexibility is critical to protein and agriculture companies because it indicates an ability to withstand commodity price volatility or product oversupply conditions. Relevant metrics for leverage and coverage include Debt/ EBITDA, Cash from Operations/ Debt, Debt/ Book Capitalization and EBITA/ Interest Expense.Financial Policy: Financial policy encompasses management and board tolerance for financial risk and commitment to a strong credit profile. It is an important rating determinant, because it directly affects debt levels, credit quality, the future direction for the company and the risk of adverse changes in financing and capital structure. Financial risk tolerance serves as a guidepost for investment and capital allocation. Liquidity management is an important aspect of overall risk management and can provide insight into risk tolerance.Other Rating Considerations: Other considerations include but are not limited to: financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends also affect ratings. Bright Food (Group) Co., Ltd. Hainan State Farms Investment Hldg Grp Co Ltd IOI Corporation Berhad Sawit Sumbermas Sarana Tbk (P.T.) Sime Darby Plantation Berhad Tunas Baru Lampung Tbk (P.T.)This announcement applies only to Rated Entities with EU rated, UK rated, EU endorsed and UK endorsed ratings. Rated Entities, with Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced herein to the extent necessary, if they are part of the same analytical unit.Please see the Issuer page on www.moodys.com, for each of the ratings covered, most updated credit rating action, rating history, and Credit Rating action Press Release including the rating rationale and factors that could lead to a rating upgrade or downgrade.This publication does not announce a credit rating action. 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