Otis Electric Elevator - a unit of United Technologies Corp.UTX - was recently awarded a contract to provide its elevator and escalator services to Wuhan Metro Lines 11 and 21.
Per the contract, Otis Electric is likely to provide 230 elevators and escalators to Wuhan, bringing the total tally of Otis units on the Wuhan network to over 1,000. Wuhan Metro and Otis Electric have a long standing relationship dating back to 2004, when Line 1 went into operation. Since then, Otis Electric has been the primary supplier of elevators and escalators in the city.Wuhan is the capital of central China's Hubei province.
Line 11, expected to start operations in 2018, will be the longest metro line in Wuhan. Line 21, also known as Yangluo Line will stretch across Hubei's main port and the Yangluo Economic Development Zone. This is also expected to start operations in late 2018 and will be the city's second light rail line.
The company will offer customized service support to the Wuhan Metro. It will provide round-the-clock services by placing its mechanics on-site at metro stations, helping to ensure reliable elevator and escalator operations for customers. With superior products and services, Otis Electric is dedicated to support everyday operations and long-term development of Wuhan Metro.
Otis Electric offers its services to many key metro rail networks across China, including Beijing, Changsha, Chengdu, Dalian, Hangzhou, Kunming, Nanjing, Ningbo, Shanghai and Shenzhen.
Per a research conducted by Research and Markets, the global elevators and escalators market is highly consolidated with more than two-thirds of its revenues coming from the top five players in the industry, Otis being a key player. The global elevators and escalators market is expected to witness a CAGR of 4.1% by 2020, driven by urbanization, aging population, increasing safety needs and increasing demand for environment-friendly products. This report suggests that Otis can expect a boost in its top line in the near future.
Successive product wins have helped parent company, United Technologies outperform the Zacks categorized Diversified Operations industry with an average return of 7.3% compared with 2.6% gain for the latter, over the last 90 days.
Otis Electric is a brand of Otis, which was introduced to China in Jan 2016 to succeed the Xizi Otis brand. Otis Electric has over 255 branches and service depots across China. The company is dedicated to satisfying customer needs. This deal marks the company's dedication to provide best in class services to its customers. The ongoing relationship between Wuhan and Otis is a proof of the company's success in the city.
Otis offers its services to over 200 countries and territories. Alongside, it maintains more that 1.9 million elevators and escalators worldwide. With a constant focus on innovation and expansion, Otis is likely to procure more such prime contracts in the near future.
United Technologies presently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Barloworld Limited BRRAY , Bunzl plc BZLFY and Federal Signal Corporation FSS . All three carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Bunzl plc has a long-term earnings growth expectation of 3.20%.
Federal Signal surpassed estimates twice in the trailing four quarters with an average positive earnings surprise of 3.1%.
Barloworld has a long-term earnings growth expectation of 17.2%.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportUnited Technologies Corporation (UTX): Free Stock Analysis ReportFederal Signal Corporation (FSS): Free Stock Analysis ReportBunzl PLC (BZLFY): Free Stock Analysis ReportBarloworld Ltd. (BRRAY): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research