Looking at the sub-sectors, the sales output of construction machinery in the first two months of 2013 was RMB 63.696 billion, a year-on-year decrease of 12.59%, with the growth rate declining by about 14 percentage points compared to 2012; the sales output of the domestic machine tool industry was RMB 110.723 billion, a year-on-year increase of 11.34%, with the growth rate declining by about 1 percentage point compared to 2012; the sales output of the domestic heavy mining machinery industry was RMB 135.176 billion, a year-on-year increase of 9.73% .
Compared with our forecast in the fourth quarter of 2012, it can be said that the recovery of the cyclical industries in the first two months was far below expectations, and the recovery of the cyclical industries is expected to remain difficult in the next 3 to 6 months. The sales output of electrical appliances in the first two months of 2013 was RMB 0.61 trillion, a year-on-year increase of 11.79%; the investment completed in domestic power supply construction in the first two months was RMB 38.5 billion, a year-on-year decrease of 14.5%, with fewer highlights in power equipment. The rapid recovery in railway investment since the second half of 2012 has been one of the factors driving the weak economic recovery, but the abolition of the Ministry of Railways will have a negative impact on railway investment in the short term.
Although the degree and duration of economic transformation over the past two years have far exceeded our expectations, we will continue to strive to identify dynamic new sectors and companies with sustainable growth capabilities and potential amidst this challenging transformation. We maintain our positive rating on the sector, with the risk being that the economic adjustment will last longer than expected.
