China Goes Green, Dumps Hummer

by The Investment U Research Team

In what may be one of the sickest cases of irony we’ve seen this year, China has decided to block Sichuan Tengzhong Heavy Industrial Machinery Co from buying General Motor’s (OTC: GMGMQ) Hummer brand for – wait for it – environmental concerns.

We’ll give you time to stop laughing.

We know. It’s pretty much what we thought. China has a well-deserved reputation for being one of the most polluted nations in the world. It’s cities round out the worst of the worst lists.

But apparently there is a strong push inside the great wall to at least appear like they’re doing something. They’ve cut back the construction on a number of projects like the Xiaonanhai dam and the Yunnan dam.

Hmm. Sounds like a lot of Chinese infrastructure construction to us. And where there’s construction, there’s profit. And apparently that’s exactly what’s happening at Komatsu Ltd. ADR (OTC: KMTUY).

Taking on U.S. based Caterpillar (NYSE: CAT) Komatsu has been enjoying the benefits of China’s stimulus package and the ever-growing Chinese economy. They’re producing 30% more heavy machinery based on June sales, and are seeing jumps across the board in demand.

Our construction hat is off to the green governors of China, though it is a pity they won’t be able to drive Hummers to their worksites.

Symbols mentioned in this article: GMGMQ, KMTUY and CAT.

Comments

By submitting your comment you agree to adhere to our Comment Policy and Privacy Policy.

Check out our selection of daily investment research: