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Simck01,
The purpose of using China & India workers is to reduce and not to increase cost of construction. The fact that Citadel, Lehman, ..etc particiapted in our Construction Industry is clearly evidence that the margins are high (hundreds od millions at least) otherwise they would waste time on it. This is definitely not 5/10 cents business but $billion concerns.
It is obvious that the construction companies have found a way to "hide" their profits. This is bad for the industry as well as the construction companies. Although many construction companies have grown into property developers but if they continue this way, they will perpetually be insignificant today and in the future.
Well, based on sales report, the prospect was good. However, it depended a lot on the successful completion of construction and subsequent rectification of defects.
Some construction co. employed the cheap workers (from China or India) who were unhappy with the lousy pays sabotaged the co. by damaging the property and facility. It resulted the construction company having less benefits or even negative earnings.
So it might not be a good idea to go into the construction stocks.
jmho.
It has been reported in our Newspapers that the Construction Industry has been booming for the last 3 years and expected to continue for at least the next 2 years. The orders for FY2007 was $27 billion and projected for another $24 billion in FY 2008. However when these Construction Companies reported their quarterly & yearly financial statements, their profits were extremely small (mostly ranging from $1million to less than $20 million). Worst still, most did not even give dividends. A mere 1% profitability would have reap $.27billion for FY 2007.
Could anyone advise if there is any ways to make them account for their "reporting".