A quarter of the industry to pick up the cost began to decline. According to the statistics show that 1-2 months, boom machinery industry rebounded in the first quarter. A quarter of the actual growth rate of fixed asset investment continued to rise, PMI and other leading indicators also indicates that the industry fundamentals have signs of warming. 

A quarter of companies basically digested high inventory, production costs began to decline in 2009 industry gross margin will be improved. 

Construction machinery: the expected pick up in the chain of negative growth, waiting for infrastructure investment stimulating effects. 

According to sales data in January and February, the industry appeared to pick up and up the chain of negative growth, sluggish exports, the domestic market is better than overseas markets. One, two quarters of negative growth, positive growth in the second half, which has become a consistent market expectations. Stimulating effect of infrastructure investment is likely to be the end of the second quarter or second half was able to show. We need to be patient in the second quarter show the pulling effect of infrastructure investment. Besides the real estate market continued to pick up in the second half to give the industry may bring new demands. 

Concerned about the construction machinery enterprises. Investment strategy, we recommend Sany, Zoomlion, XCMG three leading enterprises. Leading product line more complete, single-product sales less affected. More importantly, is the leading enterprise product complete, comprehensive powerful, in the original product sales decline, but also through the adjustment of product structure, adding new products, extend the industrial chain, and other methods to achieve revenue growth. 

Machine Tool Industry: Focus on industrial upgrading and import substitution. February has been the recovery of the machine tool industry, machine tool industry's largest customers in the automotive industry, in many policies to promote clear signs of recovery. 

Overall, we believe that 2009 is difficult to get rid of the machine tool industry downturn trend in the manufacturing sector as a whole. Price and value in China's machine tool NC rate continues to improve, the machine tool industry product mix driven by market demand, there have been constantly upgrading and optimization, and electric power, railway equipment, aerospace, construction machinery and other high-end machines for large industry is still have a lot of needs. Industrial upgrading and import substitution will be our focus areas. Thus, the machinery manufacturing industry is reliable and stable. 

Focus on the production of large, high-end machine tools leading enterprises. It is our view, a large, high-end machine tools consistent with the trend of import substitution industry development direction of industrial upgrading and, in addition to leading enterprises can enjoy more national policies. We recommend Kunming Machine Tool, Devt two special machine enterprises.