Huaxin Cement (06655) saw its stock price skyrocket by 35.13% in pre-market trading on Monday, as China announced the commencement of construction on a colossal dam project in Tibet. The surge in Huaxin Cement's stock price reflects investor optimism about the potential demand for building materials in light of this mega infrastructure project.
The rally came after Chinese Premier Li Qiang attended the groundbreaking ceremony for what is set to become the world's largest hydroelectric facility. Located in the lower reaches of the Yarlung Tsangpo River, the project is estimated to have an annual capacity of 300 billion kilowatt-hours of electricity, tripling the output of the Three Gorges Dam. With a total investment of approximately 1.2 trillion yuan (US$167 billion), the mega-dam is expected to significantly boost demand for cement and other construction materials.
Huaxin Cement was not alone in its stellar performance. Other companies in the building materials and electrical equipment sectors also experienced substantial gains. Dongfang Electric led the pack with a remarkable 72% increase, while Shanshui Cement and West China Cement rose by 10% and 5% respectively. This widespread rally underscores the far-reaching impact of the Tibet dam project on various sectors of the Chinese economy, particularly those involved in large-scale infrastructure development.
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