20150520-工银国际-VIEWPOINTS_EXPRESS_11页_350kb

Market Report Summary - 20 May 2015

China Passenger Vehicle Sector

Core Content

• Sales Growth Moderation: China's passenger vehicle (PV) sales growth in Jan-Apr 2015 slowed to 7.7% YoY, primarily due to declining sedan sales.
• SUV and MPV Performance: SUV and MPV sales continued to grow rapidly at 48.5% and 22.1% YoY respectively, contributing to the overall PV growth.
• Consumer Confidence and Market Dynamics: The slowdown in macroeconomic growth and a stock market rally influenced consumer confidence, indirectly affecting auto purchase demand.
• JV OEMs' Response: Major joint venture (JV) original equipment manufacturers (OEMs) are implementing aggressive market promotions and reducing MSRP to ease inventory and sales pressure.
• Local Brand Recovery: Local brands showed a solid rebound in PV sales, with 41.1% market share in April, up from 38.3% in the previous year.
• Sales Forecast: The report expects better sales in May and June due to the launch of new models and official price reductions by major JV producers.
• Investor Recommendation: Investors are advised to focus on high-growth market segments and companies with significant sales rebound potential, such as GAC (2238.HK) and GWM (2333.HK).

Key Points

• Sedan sales declined by 9.6% YoY in April, the worst performance in two years.
• The report anticipates low single-digit YoY growth for sedans in 2015.
• SUV and MPV sales are expected to grow several times faster than the industry average.
• Local brands are expected to continue their recovery, especially with new SUV models.
• JV brands face challenges with moderate sales growth and shrinking market share, with some experiencing declines.

TMT Sector

Core Content

• Alibaba and Visualead Partnership: Alibaba partnered with Visualead to introduce dotless visual codes to combat counterfeit products.
• Xiaomi and Smart Home: Xiaomi and a real estate developer launched smart home trials in Suzhou.
• Baidu and Taboola: Baidu invested in content discovery startup Taboola.
• Xiaomi's US Store: Xiaomi opened its US and European online store.
• Xiu Funding: Luxury fashion startup Xiu raised $30M in funding.

Key Points

• The partnership with Visualead aims to improve anti-counterfeit measures.
• Xiaomi's collaboration with Zhenro Group focuses on smart home development.
• Baidu's investment in Taboola is a move to diversify revenue streams.
• Xiaomi's US store offers flash sales for accessories.
• Xiu's $30M funding highlights the potential in the luxury fashion market.

Stock Market Performance

Core Content

• HK Equities: Hang Seng Index (HSI) rose by 0.4% to 27,694, while the H-share Index increased by 1.9% to 14,192.
• China Equities: CSI 300 Index rose by 3.4% to 4,731, and the Shanghai Composite Index and Shenzhen Composite Index also showed growth.
• Asian Equities: Nikkei 225 and Korea KOSPI showed modest gains, while India Sensex 30 slightly declined.
• US/European Equities: DJIA, S&P 500, and NASDAQ had minimal changes, while the UK FTSE 100 and Germany DAX showed positive trends.

Key Points

• HSI had a 0.4% increase with 10.6% turnover.
• H-share Index increased by 1.9%.
• Shanghai Composite Index grew by 3.1%, while the Shenzhen Composite Index increased by 2.6%.
• Nikkei 225 rose by 0.7%, and Korea KOSPI increased by 0.3%.
• India Sensex 30 declined by 0.2%.
• DJIA increased by 0.1%, while S&P 500 and NASDAQ showed minor fluctuations.
• UK FTSE 100 and Germany DAX had notable increases of 0.4% and 2.2% respectively.

Other Indicators

Core Content

• Commodity Prices: WTI oil and gold prices showed declines, while copper and aluminum prices also dropped.
• Interest Rates: HIBOR and USD LIBOR remained stable with minor fluctuations.
• Bond Yields: US and China treasury yields showed varying trends, with some increases and decreases.

Key Points

• WTI oil dropped by 3.7% to $58.0.
• Gold fell by 1.6% to $1,208.4.
• Copper decreased by 2.5% to $6,220.0.
• Aluminum dropped by 1.8% to $1,789.0.
• Reuters/Jefferies CRB futures fell by 1.9% to 226.2.
• Baltic Dry Index declined by 1.6% to 620.0.
• Interest Rates: HIBOR 3m decreased slightly to 0.39%, and USD LIBOR 3m remained at 0.28%.
• Bond Yields: US 3m treasury yield was 0.01%, and US 10y treasury yield was 2.29%.

Key Risks

• Economic Slowdown: China's economic growth slowdown could impact the PV sector.
• Auto Sales Restrictions: Stricter-than-expected auto sales regulations pose a risk.

Summary of Key Companies

Conclusion

The report highlights a moderate growth trend in the China PV sector, with sedan sales lagging behind while SUV and MPV sales continue to grow rapidly. The TMT sector shows innovation and investment activity, with notable partnerships and product launches. Stock market performance is mixed, with HK and China equities showing positive trends, while Asian and US/European markets exhibit varied results. Commodity prices and interest rates are stable with minor fluctuations, and bond yields show a range of changes. The report advises investors to focus on high-growth segments and companies with rebound potential, and warns of economic slowdown and auto sales restrictions as key risks.