发帖
雷达卡
Unreasonably priced for
unlikely crisis
Vincent Ha, CFA
Research Analyst
(852) 2203 6247
vincent.ha@db.com
Auto names under coverage are unlikely to fall despite slowdown in growth
With a high base in 1H08, we expect China auto sales to decline YoY in 1H09,
stalling the growth momentum in 2009. That said, we believe potential
government measures to stimulate consumption would help revive auto sales,
particularly for the passenger vehicle (PV) segment, in the longer run. Given their
much better prospects than global peers, we remain Buyers of Dongfeng
(0489.HK), Denway (0203.HK) and Geely (0175.HK) when they are traded at unfair
discounts to peers who are in deeper trouble.
Deutsche Bank AG/Hong Kong
All prices are those current at the end of the previous trading session unless otherwise indicated. Prices are sourced from local
exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies. Deutsche
Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm
may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single
factor in making their investment decision. Independent, third-party research (IR) on certain companies covered by DBSI's research
is available to customers of DBSI in the United States at no cost. Customers can access IR at
http://gm.db.com/IndependentResearch or by calling 1-877-208-6300. DISCLOSURES AND ANALYST CERTIFICATIONS ARE
LOCATED IN APPENDIX 1.
Industry Update
Top picks
Dongfeng Motor (0489.HK),HKD1.56 Buy
Denway Motors (0203.HK),HKD1.73 Buy
Geely Auto (0175.HK),HKD0.41 Buy
Companies featured
Dongfeng Motor (0489.HK),HKD1.56 Buy
2007A 2008E 2009E
P/E (x) 12.6 3.1 3.1
EV/EBITDA (x) 7.2 1.9 1.8
Price/book (x) 2.6 0.6 0.5
Denway Motors (0203.HK),HKD1.73 Buy
2007A 2008E 2009E
P/E (x) 13.1 4.9 4.7
EV/EBITDA (x) – – –
Price/book (x) 3.2 0.9 0.8
Geely Auto (0175.HK),HKD0.41 Buy
2007A 2008E 2009E
P/E (x) 15.8 4.4 3.0
EV/EBITDA (x) – 2.1 0.9
Price/book (x) 1.9 0.9 0.7
China auto sales
0
2
4
6
8
10
12
1995
1997
1999
2001
2003
2005
2007
2009E
0%
10%
20%
30%
40%
(m units) (YoY)
Source: CAAM, Deutsche Bank
Price target changes (HKD)
Dongfeng Motor From 4.85 to 2.30 -52.6%
Denway Motors From 4.00 to 2.20 -45.0%
Geely Auto From 0.98 to 0.50 -49.0%
Global Markets Research Company
Chinese auto sector catches cold but not terminal flu
After maintaining a laudable 18.5% YoY increase in auto sales volume in 1H08
even with the natural disasters, the Chinese auto sector made a U-turn with a
0.6% YoY sales decline in July-October 2009 due to higher fuel costs,
implementation of new emission standards, a deteriorating macro outlook and
negative wealth effects. Since most of these factors are still hanging over, they
are likely to remain and drag down the sales outlook. Worse still, fiercer price
competition may emerge and hurt sector margins despite easing commodity price
pressure. We, therefore, expect 7-9% YoY decline in 1H08 auto sales volume.
We should see some positive signs emerging in 2H09
Judging from previous auto sales downturns in China, it appears that these
slowdowns (especially for the PV segment) usually last for only around a year. We
believe the underlying reasons for this one-year time frame are under-penetration
and timely government policy boosts. This time, we believe that such measures
could include fuel price cuts, purchase tax reduction and increasing government
spending on vehicle procurement. All of these are likely to help the country record
a higher proportion of sales in the more fuel-economic PV segment.
With unfair discount to global peers in trouble, we overweight the sector
With major Hong Kong-listed Chinese auto companies trading at around 3-8x
forward PE and less than 0.8x forward P/BV, we think that the correction has been
overshot. After all, Dongfeng, Denway and Geely are all in net cash positions with
limited loss-making risk. With considerably better prospects vs. other auto names
worldwide but priced at a discount, the Chinese auto names under our coverage
deserve Buy recommendations (target prices based on prudent 3.5-6.0x FY09E
PE). Moreover, we also believe that these companies can achieve above-average
growth in tough times through market share gain. Despite Dongfeng’s higher
potential upside, our top sector pick (on a near-term and risk-adjusted basis) is
Denway. This is based on Denway’s pure exposure to the PV segment with
popular model line-ups and its strong balance sheet position for a consistent
dividend payout. Key downside risks to our stance include further deterioration of
the macro environment deterring sales and the emergence of a cut-throat price
war, killing margins.Table of Contents
Things should get better, but later .................................................. 3
Key points ................................................................................................................................3
Making a U-turn in 2H08 ...........................................................................................................3
Near-term negatives outweigh the positives ............................................................................3
But we believe double-digit growth should return in 2H09.......................................................5
Limited crisis risk in China.............................................................. 10
China OEMs in general are more financially sound than peers...............................................10
PV companies under our coverage are not cash-strapped......................................................10
Sector consolidation to benefit major Chinese auto names....................................................11
Stick with quality names ................................................................ 12
Key points ...............................................................................................................................12
Achieving above-market growth by market share gain ...........................................................12
Trough valuation implies limited downside risks.....................................................................12
Near-term top pick is Denway; longer-term top pick is Dongfeng..........................................13
Risks.................................................................................................. 16
Demand could be even worse ................................................................................................16
Pricing could be prone to more downside risks......................................................................16
Company pages ............................................................................... 17
Dongfeng Motor .............................................................................. 18
Denway Motors ............................................................................... 21
Geely Auto........................................................................................ 24
282261.pdf
(658.09 KB, 需要: 500 个论坛币)
提升卡
置顶卡
沉默卡
变色卡
抢沙发
千斤顶
显身卡
京公网安备 11010802022788号
