20140411-大华银行-Automobile_–_China_16页_645kb

报告摘要

Document Summary: Greater China Market Insights (April 11, 2014)

Core Content Overview

This document provides an analysis of the Chinese and Hong Kong markets, focusing on the automobile, cement, and commodity sectors. It includes key market insights, sector updates, investment recommendations, and risk factors for each sector.

Automobile Sector - China

Main Points

Passenger Vehicle Sales: Sales growth slowed to 8% yoy in March 2014 from 12% yoy in January-February 2014. Sedan sales growth dropped to 4% yoy, while SUV sales remained strong at 35% yoy.
JV Brands Outperform: Joint venture (JV) brands like BMW Brilliance, Dongfeng Motor, and Guangzhou Auto saw 40%, 22%, and 21% yoy sales growth in Q1 2014, respectively. In contrast, domestic brands like Geely, BYD, and Great Wall Motor experienced sales declines or underperformance.
Investment Recommendations: Maintain MARKET WEIGHT for the sector. Top picks are Brilliance (1114 HK), Dongfeng Motor (489 HK), and Guangzhou Auto (2238 HK), with SELL recommendations for Geely (175 HK), BYD (1211 HK), and Great Wall Motor (2333 HK).
Market Catalysts:
- Reporting of Q1 2014 results by end-April to early-May.
- Release of April sales data by early-May.
- Precautionary car buying due to Hangzhou's car licence restrictions.
- New model launches at the Beijing Auto Show (April 20-27, 2014).
Assumptions:
- Maintain 10% yoy PV sales growth for 2014.
- Cut GAC's sales assumption by 2% to 1.5m units (+21% yoy).
- Cut Geely's sales assumption by 10% from 580,000 units (+6% yoy) to 530,000 units (-4% yoy).

Cement Sector - China

Main Points

Share Price Weakness: Offers buying opportunities. The sector has seen strong share price performance over the past 1-3 months.
M&A Activity: M&A is a key theme in the cement industry. Leading players like Anhui Conch (914 HK), Asia Cement (743 HK), and CNBM (3323 HK) are expected to be more active in M&A.
Investment Recommendations: Maintain BUY for Anhui Conch, Asia Cement, and CNBM. Maintain MARKET WEIGHT for the sector.
Cement Prices: Prices rose due to the peak season, with Jilin, Shanghai, Jiangsu, and Yunnan leading the increase. However, demand in the Pearl Delta was affected by continued rain.
Supply-Side Controls: Environmental regulations are driving the closure of smaller, non-compliant cement production lines, improving supply/demand dynamics.

Commodity Sector - China

Main Points

Weak Demand Recovery: Despite strong March commodity imports, the lack of a strong demand recovery poses a risk to prices, especially for iron ore and copper.
Import Trends:
- Iron Ore: Import increased by 15% yoy and 21% mom.
- Copper: Import increased by 31% yoy and 11% mom.
- Coal: Import declined by 3.3% yoy, supporting coal price stability.
Investment Recommendations:
- Continue to prefer coal over metals.
- Top pick: Shenhua (1088 HK/BUY).
- Maintain UNDERWEIGHT for the commodity sector.

Key Indices Performance

Index	Prev Close	1D %	1W %	1M %	YTD %
DJIA	16170.2	-1.6	-2.4	-1.5	-2.5
S&P 500	1833.1	-2.1	-2.9	-2.3	-0.8
FTSE 100	6642.0	+0.1	-0.1	-0.7	-1.6
AS30	5477.5	+0.3	+1.1	+0.9	+2.3
CSI 300	2273.8	+1.6	+4.3	+7.8	-2.4
FSSTI	3203.6	-0.2	-0.5	+2.4	+1.1
HSI	23187.0	+1.5	+2.8	+4.1	-0.5
HSCEI	4765.7	-3.2	-2.1	+1.3	+11.5
HSCCI	1859.5	+0.2	+0.2	+1.7	-0.4
Shanghai A	2008.6	+0.5	+1.0	+2.3	-0.1
Shanghai B	14300.1	+0.0	-5.1	-6.1	-12.2
Shenzhen A	1389.6	+0.5	-0.5	+1.9	+7.0
Shenzhen B	8948.1	+0.2	+0.5	+2.8	+3.9
JCI	4765.7	-3.2	-2.1	+1.3	+11.5
KLCI	1859.5	+0.2	+0.2	+1.7	-0.4
KOSPI	2008.6	+0.5	+1.0	+2.3	-0.1
Nikkei 225	14300.1	+0.0	-5.1	-6.1	-12.2
SET	1389.6	+0.5	-0.5	+1.9	+7.0
TWSE	8948.1	+0.2	+0.5	+2.8	+3.9
BDI	1029	-3.0	-16.7	-34.1	-54.8
CPO (RM/ml)	2650	-0.3	-3.3	-8.5	+3.0
Nymex Crude (US$/bbl)	103	-0.1	+2.1	+3.3	+4.9

Top Volume and Gainers/Losers in Hong Kong

Top Volume (000 units)

Bank of China-H (3.51 HK$)
Industrial & Commercial Bank-H (4.89 HK$)
China Construction Bank-H (5.55 HK$)
Agricultural-H (3.42 HK$)
China Petroleum-H (7.34 HK$)

Top Gainers (HK$)

ZJIN Mining-H (1.89 HK$)
CITIC Securities-H (18.84 HK$)
CGS-H (5.52 HK$)
Tencent Holdings (563.00 HK$)
Haitong Securities-H (12.04 HK$)

Top Losers (HK$)

China Resources Land (17.90 HK$)
Ping An Insurance-H (64.60 HK$)
Anhui Conch-H (32.50 HK$)
China Overseas (21.00 HK$)
Agricultural-H (3.42 HK$)

Key Assumptions

Country/Region	2013 GDP %	2014F GDP %	2015F GDP %
US	2.8	2.0	3.0
Euro Zone	-0.7	-0.4	1.0
Japan	2.0	1.5	2.5
Singapore	1.9	4.1*	4.3
Malaysia	5.6	4.7*	5.2
Thailand	6.4	2.9*	3.0
Indonesia	6.2	5.8*	6.0
Hong Kong	1.5	3.0	3.5
China	7.8	7.7*	6.9

Commodity Prices and Trade Data

Commodity	Mar-13 (mt)	Feb-14 (mt)	Mar-14 (mt)	% yoy	% mom	% mom (daily)
Iron Ore	64.55	61.24	73.96	14.6	20.8	9.1
Coal	26.15	22.82	25.29	-3.3	10.8	0.1
Copper	0.320	0.380	0.420	31.4	10.5	-0.2
Cu Concentrates	0.780	0.760	0.940	20.5	23.7	11.7
Steel (Export)	5.28	4.80	6.760	28.0	40.8	27.2
Aluminum (Export)	0.300	0.160	0.370	23.3	131.3	108.9

Analysts and Contact Information

Automobile Sector

Ken Lee: +852 2236 6760, ken.lee@uobkayhian.com.hk
Renee Tai: +852 2826 1324, renee.tai@uobkayhian.com.hk

Cement Sector

Mark Po, CFA: +852 2236 6794, mark.po@uobkayhian.com.hk

Commodity Sector

Helen Lau: +852 2236 6749, helen.lau@uobkayhian.com.hk

Risks

Macro Risk: Severe credit tightening could hurt automobile sales.
Geopolitical Risk: Deterioration in Sino-Japan relations may trigger anti-Japanese riots, affecting Japanese car sales in China.
Infrastructure & Property Risk: A slowdown in infrastructure and property investment, and tighter real estate controls, may further dampen demand.

Conclusion

The document highlights a moderate slowdown in the Chinese automobile sector, with JV brands outperforming domestic players. In the cement sector, M&A activity and supply-side controls are key drivers, with Anhui Conch, Asia Cement, and CNBM recommended as top picks. The commodity sector faces inventory risks due to weak demand, with coal preferred over metals. Overall, the market is advised to maintain MARKET WEIGHT for the automobile and cement sectors, and UNDERWEIGHT for commodities.