China Automobile Sector Monthly Report

Transcription

1 EQUITY RESEARCH China Automobile Sector Monthly Report Maintain market perform rating 22 December 2014 HONG KONG AUTOMOBILE SECTOR Review REPORT Growth Rate of Auto Market Continues to Slow Under the background of high base of the same period and continuous slump macroeconomy of this year, the growth rate of auto sales volume in November continued to slow. In accordance with data of China Association of Automobile Manufacturers (CAAM), the overall sales volume of China auto market in November increased by 2.3% yoy and reached to 2,090,000 units, of which, the sales volume of passenger vehicles was 1,775,000 units, with an increase of 4.7% yoy, and the growth ratio hit the new lowest level in 2014, decreasing to below 5%. The commercial vehicles remained negative growth and were 316,000 units, decreased by 9.2% yoy and the decrease rate is slightly smaller. Market Perform (Maintain) ZhangJing ( ) SUV and MPV is leading the passenger vehicle segments The sales volume of MPV and SUV in November was still high, increasing by 42.9% and 37.6% yoy respectively. Sedans decreased by 4.7% yoy, and minivans decreased by 32.5% yoy. Self-owned brand slightly picks up From the perspective of countries, the decrease rate of Japanese passenger vehicles was relatively big, comparing with the same period of last year, the growth rate of French passenger vehicles was the highest, the yoy growth rates of German and South Korean passenger vehicles remained relatively sound growth and that of the USA passenger vehicles remained stable. Benefiting from the launching of medium- and small-sized new SUV models as well as re-publishing of energy-saving subsidy policies, part of self-owned brand manufacturers saw rapid growth and the overall market share of self-owned brands slightly rose. Comparing with last month, the sales volume of passenger vehicles of other brands all slightly increased except that of German passenger vehicles. Sales volume of commercial vehicles continues to fall yoy Overall sales volume of commercial vehicles continued to decline in November yoy but rose mom and the yoy decline rate was relatively smaller than that of October. It showed not good performance in sales volume of heavy trucks and light trucks. Light buses were relatively high. Driven by the demand of logistics vehicle, the share of Dongfeng commercial vehicles picked up. Under the influence of the intense enforcement of emission regulations upgrading, the wait-and-see emotion of consumers is continuing. But in our view, with the successive commencement of newly approved infrastructure construction projects of the state, the sales volume of commercial vehicles in 2015 is predicted to show signs of recovery. New energy vehicles grew rapidly According to CAAM, the sales volume of new energy vehicles from January to November was 52,944 units, up 950% yoy, of which, the sales volumes of pure electric-vehicles and plug-in hybrid electric vehicles reached to 29,060 units and 23,884 units respectively. Decline of international oil price recently is not conducive to the promotion of new energy vehicles. However, we predict that the state will promulgate a new round of subsidy and support policies of the period from 2016 to 2020 before the end of this year in accordance with the development situation of new energy vehicles, which will be conducive to the rise of sales volume of new energy vehicles. Page 1 PHILLIPCAPITAL Hong KONG RESEARCH

2 Investment Thesis: maintain the rating of Market Perform We predict that the growth rate of sales volume of China automobiles market in 2014 will be above 6% yoy, the auto market in 2015 will continue to be in a recondition period and the growth rate yoy will show the tendency of first high and then low. But partly segment markets still have structural opportunities, so we suggest the investors pay main attention to upgrading of automobile consumption, breakthrough of core technology of new energy vehicles, rise of after-market and the investment opportunities brought by the reform of state-owned enterprises, etc. Growth Rate of Auto Market Continues to Slow Under the background of high base of the same period and continuous slump macroeconomy of this year, the growth rate of auto sales volume in November continued to slow. In accordance with data of China Association of Automobile Manufacturers (CAAM), the overall sales volume of China auto market in November increased by 2.3% yoy and reached to 2,090,000 units, of which, the sales volume of passenger vehicles was 1,775,000 units, with an increase of 4.7% yoy, and the growth ratio hit the new lowest level in 2014, decreasing to below 5%. The commercial vehicles remained negative growth and were 316,000 units, decreased by 9.2% yoy and the decrease rate is slightly smaller. China monthly auto sales (units, left) and growth (right) % 120% 100% 80% 60% % 20% 0% 0 Jan-08 Mar-08 Jul-08 May-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14-20% The accumulative sales volume in the first eleven months was 21,080,000 units, with an increase of 6.1% yoy, of which, the accumulative sales volumes of passenger vehicles and commercial vehicles increased by 9.2% to 17,640,000 units and decreased by 7.3% to 3,440,000 units respectively. The overall growth ratio of the industry shows the tendency of "first high and then low" and the tendency of fall of growth ratio is obvious. Page 2 PHILLIPCAPITAL Hong KONG RESEARCH

3 Monthly sales and growth of China s Passenger vehicle 2,000,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000, , , , , % 120% 100% 80% 60% 40% 20% 0% -20% -40% Jan-06 Jun-06 Nov-06 Apr-07 Sep-07 Feb-08 Jul-08 Dec-08 May-09 Oct-09 Mar-10 Aug-10 Jun-11 Nov-11 Apr-12 Sep-12 Feb-13 Jul-13 Dec-13 May-14 Oct-14 Monthly sales and growth of China s commercial vehicle % 150% 100% 50% 0% -50% Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 SUV and MPV is leading the passenger vehicle segments and self-owned brand slightly picks up The sales volume of MPV and SUV in November was still high, increasing by 42.9% and 37.6% yoy respectively. Sedans decreased by 4.7% yoy, and minivans decreased by 32.5% yoy. From the perspective of countries, the decrease rate of Japanese passenger vehicles was relatively big, comparing with the same period of last year, the growth rate of French passenger vehicles was the highest, the yoy growth rates of German and South Korean passenger vehicles remained relatively sound growth and that of the USA passenger vehicles remained stable. Benefiting from the launching of mediumand small-sized new SUV models as well as re-publishing of energy-saving subsidy policies, part of self-owned brand manufacturers saw rapid growth and the overall market share of self-owned brands slightly rose. Comparing with last month, the sales volume of passenger vehicles of other brands all slightly increased except that of German passenger vehicles. Page 3 PHILLIPCAPITAL Hong KONG RESEARCH

4 Growth of sub-sector of Passenger vehicle 235% 215% 195% 175% 155% 135% 115% 95% 75% 55% 35% 15% -25% -5% -45% Sedan MPV SUV Minivan Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Sales volume of commercial vehicles continues to fall yoy Overall sales volume of commercial vehicles continued to decline in November yoy but rose mom and the yoy decline rate was relatively smaller than that of October. It showed not good performance in sales volume of heavy trucks and light trucks. Light buses were relatively high. Driven by the demand of logistics vehicle, the share of Dongfeng commercial vehicles picked up. Under the influence of the intense enforcement of emission regulations upgrading, the wait-and-see emotion of consumers is continuing. But in our view, with the successive commencement of newly approved infrastructure construction projects of the state, the sales volume of commercial vehicles in 2015 is predicted to show signs of recovery. Growth of sub-sector of Passenger vehicle 50% 30% 10% -10% -30% -50% -70% Heavy Truck Light Truck Medium Truck Mini Truck Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 New energy vehicles grew rapidly According to CAAM, the sales volume of new energy vehicles from January to November was 52,944 units, up 950% yoy, of which, the sales volumes of pure electric-vehicles and plug-in hybrid electric vehicles reached to 29,060 units and 23,884 units respectively. Decline of international oil price recently is not conducive to the promotion of new energy vehicles. However, we predict that the state will promulgate a new round of subsidy and support policies of the period from 2016 to 2020 before the end of this year in accordance with the development situation of Page 4 PHILLIPCAPITAL Hong KONG RESEARCH

5 new energy vehicles, which will be conducive to the rise of sales volume of new energy vehicles. Investment Thesis: maintain the rating of Market Perform We predict that the growth rate of sales volume of China automobiles market in 2014 will be above 6% yoy, the auto market in 2015 will continue to be in a recondition period and the growth rate yoy will show the tendency of first high and then low. But partly segment markets still have structural opportunities, so we suggest the investors pay main attention to upgrading of automobile consumption, breakthrough of core technology of new energy vehicles, rise of after-market and the investment opportunities brought by the reform of state-owned enterprises, etc. Page 5 PHILLIPCAPITAL Hong KONG RESEARCH

6 Page 6 PHILLIPCAPITAL Hong KONG RESEARCH

7 Page 7 PHILLIPCAPITAL Hong KONG RESEARCH

8 PHILLIP RESEARCH STOCK SELECTION SYSTEMS Total Return Recommendation Rating Remarks >+20% Buy 1 >20% upside from the current price +5% to +20% Accumulate 2 +5% to +20%upside from the current price -5% to +5% Neutral 3 Trade within ± 5% from the current price -5% to -20% Reduce 4-5% to -20% downside from the current price <-20% Sell 5 >20%downside from the current price We do not base our recommendations entirely on the above quantitative return bands. We consider qualitative factors like (but not limited to) a stock's risk reward profile, market sentiment, recent rate of share price appreciation, presence or absence of stock price catalysts, and speculative undertones surrounding the stock, before making our final recommendation GENERAL DISCLAIMER This publication is prepared by Phillip Securities (Hong Kong) Ltd ( Phillip Securities ). By receiving or reading this publication, you agree to be bound by the terms and limitations set out below. This publication shall not be reproduced in whole or in part, distributed or published by you for any purpose. Phillip Securities shall not be liable for any direct or consequential loss arising from any use of material contained in this publication. The information contained in this publication has been obtained from public sources which Phillip Securities has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the Research ) contained in this publication are based on such information and are expressions of belief only. Phillip Securities has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in this publication is subject to change, and Phillip Securities shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will Phillip Securities be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. Any opinions, forecasts, assumptions, estimates, valuations and prices contained in this material are as of the date indicated and are subject to change at any time without prior notice. This material is intended for general circulation only and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. The products mentioned in this material may not be suitable for all investors and a person receiving or reading this material should seek advice from a financial adviser regarding the suitability of such products, taking into account the specific investment objectives, financial situation or particular needs of that person, before making a commitment to invest in any of such products. This publication should not be relied upon as authoritative without further being subject to the recipient s own independent verification and exercise of judgment. The fact that this publication has been made available constitutes neither a recommendation to enter into a particular transaction nor a representation that any product described in this material is suitable or appropriate for the recipient. Recipients should be aware that many of the products which may be described in this publication involve significant risks and may not be suitable for all investors, and that any decision to enter into transactions involving such products should not be made unless all such risks are understood and an independent determination has been made that such transactions would be appropriate. Any discussion of the risks contained herein with respect to any product should not be considered to be a disclosure of all risks or a complete discussion of such risks. Nothing in this report shall be construed to be an offer or solicitation for the purchase or sale of a security. Any decision to purchase securities mentioned in this research should take into account existing public information, including any registered prospectus in respect of such security. Disclosure of Interest Analyst Disclosure: Neither the analyst(s) preparing this report nor his associate has any financial interest in or serves as an officer of the listed corporation covered in this report. Firm s Disclosure: Phillip Securities does not have any investment banking relationship with the listed corporation covered in this report nor any financial interest of 1% or more of the market capitalization in the listed corporation. In addition, no executive staff of Phillip Securities serves as an officer of the listed corporation. Availability The information, tools and material presented herein are not directed, intended for distribution to or use by, any person or entity in any jurisdiction or country where such distribution, publication, availability or use would be contrary to the applicable law or regulation or which would subject Phillip Securities to any registration or licensing or other requirement, or penalty for contravention of such requirements within such jurisdiction. Information contained herein is based on sources that Phillip Securities (Hong Kong) Limited ( PSHK ) believed to be accurate. PSHK does not bear responsibility for any loss occasioned by reliance placed upon the contents hereof. PSHK (or its affiliates or employees) may have positions in relevant investment products. For details of different product's risks, please visit the Risk Disclosures Statement on Phillip Securities (Hong Kong) Limited Page 8 PHILLIPCAPITAL Hong KONG RESEARCH

9 Contact Information (Regional Member Companies) SINGAPORE Phillip Securities Pte Ltd 250 North Bridge Road, #06-00 Raffles City Tower, Singapore Tel : (65) Fax: (65) INDONESIA PT Phillip Securities Indonesia ANZ Tower Level 23B, Jl Jend Sudirman Kav 33A, Jakarta 10220, Indonesia Tel (62) Fax: (62) THAILAND Phillip Securities (Thailand) Public Co. Ltd. 15th Floor, Vorawat Building, 849 Silom Road, Silom, Bangrak, Bangkok Thailand Tel (66) Fax: (66) UNITED STATES Phillip Futures Inc. 141 W Jackson Blvd Ste 3050 The Chicago Board of Trade Building Chicago, IL USA Tel (1) Fax: (1) MALAYSIA Phillip Capital Management Sdn Bhd B-3-6 Block B Level 3, Megan Avenue II, No. 12, Jalan Yap Kwan Seng, Kuala Lumpur Tel (60) Fax (60) CHINA Phillip Financial Advisory (Shanghai) Co. Ltd. No 436 Heng Feng Road, Green Tech Tower Unit 604 Shanghai Tel (86) Fax: (86) FRANCE King & Shaxson Capital Ltd. 3rd Floor, 35 Rue de la Bienfaisance Paris France Tel (33) Fax : (33) AUSTRALIA PhillipCapital Australia Level 12, 15 William Street, Melbourne, Victoria 3000, Australia Tel: (61) Fax: (61) HONG KONG Phillip Securities (HK) Ltd 11/F United Centre 95 Queensway Hong Kong Tel (852) Fax: (852) JAPAN Phillip Securities Japan, Ltd 4-2 Nihonbashi Kabutocho, Chuo-ku Tokyo Tel: (81) Fax: (81) INDIA PhillipCapital (India) Private Limited No. 1, 18th Floor, Urmi Estate, 95 Ganpatrao Kadam Marg, Lower Parel West, Mumbai Tel: (9122) Fax: (9122) UNITED KINGDOM King & Shaxson Ltd. 6th Floor, Candlewick House, 120 Cannon Street London, EC4N 6AS Tel (44) Fax: (44) SRI LANKA Asha Phillip Securities Limited Level 4, Millennium House, 46/58 Navam Mawatha, Colombo 2, Sri Lanka Tel: (94) Fax: (94) Page 9 PHILLIPCAPITAL Hong KONG RESEARCH