Market Report Summary - 3 December 2014
Core Content Overview
This market report provides an analysis of the performance of major equity indices, commodity prices, currencies, interest rates, and bond yields as of 2 December 2014. It also includes a detailed analysis of Guangzhou Auto (2238.HK) and highlights from the TMT sector.
Guangzhou Auto (2238.HK)
Key Information
- Company Overview: Guangzhou Auto participated in the Guangzhou International Automobile Exhibition, showcasing over 29 models across different production series. The company announced its "3+e" strategy, which focuses on three brands (Japanese, European/US, and Domestic) and e-commerce.
- Growth Impetuses:
- Sales rebound of Japanese brands.
- Continued growth of Trumpchi.
- Local production of Jeep.
- Strategic Highlights:
- "3+e" strategy aims to concentrate brand resources and improve core competitiveness.
- GAC Trumpchi and Fiat are expected to contribute more to profitability.
- Jeep local production is expected to be completed by the end of FY2015/2016.
Financial Highlights
- Valuation: Trading at 10.3x/7.9x FY2014/2015 PE, similar to the industry average.
- Stock Performance: The stock has shown a positive 3.8% performance over the last month.
- Market Capitalization:
- HK$60,294 million (HK$)
- US$7,775 million (US$)
- Share Structure:
- Guangzhou Automobile Industry Group Co., Ltd. holds 57.6% of shares.
- Free float is 42.4%.
Revenue and Profitability
- Revenue:
- 2011: RMB 10,984 million
- 2012: RMB 12,964 million
- 2013: RMB 18,824 million
- Profit for the Year:
- 2011: RMB 4,167 million
- 2012: RMB 1,065 million
- 2013: RMB 2,529 million
Asset Overview
- Total Assets:
- 2011: RMB 44,612 million
- 2012: RMB 49,434 million
- 2013: RMB 57,843 million
- Liabilities and Equity:
- Total current liabilities increased from 2011 to 2013.
- Owner's equity rose from RMB 30,186 million to RMB 34,116 million.
TMT Sector Highlights
Key Developments
- Baidu Literature: Launched a new platform with sub-brands like Zongheng.com, 91 Panda Book, and Baidu Shucheng, supported by Baidu's internal resources.
- Moko: Secured $8 million in funding to expand its marketplace for models and fashion.
- Lenovo: Planning to build 50 cloud computing hubs in China and potentially overseas.
- Tuniu: Engaged in a competitive strategy with LY.com, pressuring travel agencies to choose one platform.
- OnePlus: Developing a self-produced Android-based OS for the Indian market.
Stock Market Performance
Hong Kong Equities
| Index |
Price (2 Dec) |
Abschg |
%chg |
| HSI |
23,654 |
287 |
1.2 |
| H-share Index |
11,126 |
308 |
2.8 |
China Equities
| Index |
Price (2 Dec) |
Abschg |
%chg |
| CSI 300 Index |
2,924 |
104 |
3.7 |
| Sh Composite Index |
9,367 |
271 |
3.0 |
| Sz Composite Index |
1,433 |
21 |
1.5 |
Asian Equities
| Index |
Price (2 Dec) |
Abschg |
%chg |
| Nikkei 225 |
17,663 |
73 |
0.4 |
| Korea KOSPI |
1,966 |
1 |
0.0 |
| Taiwan TWSE |
9,035 |
(83) |
(0.9) |
| India Sensex 30 |
28,444 |
(116) |
(0.4) |
US/European Equities
| Index |
Price (2 Dec) |
Abschg |
%chg |
| DJIA |
17,880 |
103 |
0.6 |
| S&P 500 |
2,067 |
13 |
0.6 |
| NASDAQ |
4,756 |
28 |
0.6 |
| UK FTSE 100 |
6,742 |
86 |
1.3 |
| Germany DAX |
9,934 |
(29) |
(0.3) |
| France CAC40 |
4,388 |
11 |
0.3 |
Commodity and Currency Prices
Commodity Prices
| Commodity |
Price (2 Dec) |
Abschg |
%chg |
| WTI oil |
$66.90/bl |
(2.1) |
(3.1) |
| Gold |
$1,199.30/troy oz |
(16.3) |
(1.3) |
| Copper |
$6,449.00/metric ton |
0.0 |
0.0 |
| Aluminium |
$2,026.00/metric ton |
0.0 |
0.0 |
| Reuters/Jefferies CRB |
253.30 |
(5.4) |
(2.1) |
Currencies
| Currency |
Price (2 Dec) |
Abschg |
%chg |
| CNY |
6.1500 |
- |
- |
| Rmb NDF 12-mth |
1296.16 |
- |
- |
| CNH |
6.1565 |
- |
- |
| HKD |
7.7548 |
- |
- |
| USD Trade Wgt Index |
83.4545 |
- |
- |
| Euro |
1.2383 |
- |
- |
| GBP |
1.5637 |
- |
- |
| Yen |
119.21 |
- |
- |
| AUD |
0.8445 |
- |
- |
| NZD |
0.7806 |
- |
- |
| CHF |
0.9721 |
- |
- |
| CAD |
1.1407 |
- |
- |
Interest Rates and Bond Yields
| Interest Rate |
Value (2 Dec) |
Abschg |
%chg |
| HIBOR 3m % |
0.38 |
0.001 |
- |
| USD LIBOR 3m % |
0.23 |
0.000 |
- |
| US treasury yield 3m % |
0.01 |
0.00 |
- |
| US treasury yield 10y % |
2.29 |
0.057 |
- |
Peer Comparison
| Company |
Ticker |
Price (2 Dec) |
EPS chg % |
PER (x) |
PBR (x) |
Dvd yield (%) |
ROE (%) |
| Guangzhou Auto Group-H |
2238.HK |
HK$7.17 |
10.3 |
10.96 |
1.33 |
3.1 |
10.4 |
| Great Wall Motor-H |
2333.HK |
HK$38.35 |
(17.1) |
11.4 |
2.7 |
2.7 |
26.0 |
| Geely Auto-H |
175.HK |
HK$3.24 |
(17.1) |
9.8 |
1.2 |
1.3 |
13.3 |
| Brilliance China Auto |
1114.HK |
HK$12.88 |
13.8 |
10.4 |
3.0 |
1.1 |
31.9 |
| Dongfeng Motor-H |
489.HK |
HK$11.50 |
20.6 |
6.2 |
1.1 |
2.5 |
18.2 |
| Qingling Motors-H |
1122.HK |
HK$2.62 |
20.0 |
11.5 |
0.7 |
6.3 |
5.8 |
Key Takeaways
- Guangzhou Auto is expected to see stable profit growth due to its "3+e" strategy, rebound in Japanese brand sales, and new model launches.
- The TMT sector showed significant activity, including new platform launches, funding rounds, and strategic moves by major players like Lenovo and Tuniu.
- Equity indices in both Hong Kong and China showed mixed performance, with some indices recording positive growth and others showing declines.
- Commodity prices were largely stable, with some notable declines in oil and gold.
- Interest rates and bond yields remained relatively low, indicating a cautious market environment.
