时间:2018年01月12日 14:00:22 中财网
December sales stayed flat. According to the China Association of Automobile Manufacturers (“CAAM”),China vehicle sales in Dec. 2017 stayed flat at 0.1% yoy growth, with passenger vehicle (“PV”) sales decreasingslightly by 0.7% yoy, while commercial vehicles (“CV”) increased 5.7% yoy. In the year of 2017, overall vehiclesales, PV sales and CV sales increased yoy by 3.0%, 1.4% and 14.0%, respectively. In terms of vehicle type,only SUVs recorded growth in Dec. 2017, increasing 8.4% yoy but growth continued to slow down, while othervehicle types showed yoy decline (See table-1)。 The growth rate of new energy vehicle (“NEV”) sales continuedbe strong, both production and sales volume was up 68.5% yoy and 56.8% yoy, respectively, in Dec. 2017. Pureelectric vehicles and plug-in electric vehicles increased 82.1% yoy and 39.4% yoy, respectively.
The slowdown is expected to continue in 2018. We believe sales for the overall vehicle market will continueto slow down after the purchase tax cut policy recently expired on 31 Dec. 2017. As a historical reference (2009to 2011 period), the vehicle market will suffer a significant slowdown after the policy recently expired as somevehicle purchase should move forward to 2017. Without any stimulus, the China vehicle market should record avery low growth rate. Recapping the key trends in 2017, we saw the obvious deviation trends in terms of vehiclesales, such that some OEMs experienced fast growth (Geely Auto / Trumpchi / Dongfeng Honda), while somesaw double-digit yoy decline (Beijing Hyundai / Dongfeng self-owned brand)。 We believe this will continue in2018 as competition is intensifying with the backdrop of growth slowdown. We expect that brands with lowresearch & development capacity will be crowded out.
Uncertainty emerges again in 2018. OEM recently announced their Dec. 2017 figures, with Geely Auto (00175HK, “Buy”) claiming the top spot in its segment, becoming the company with the highest sales of self-ownedbrand vehicles in Dec. 2017, thanks to strong demand of its key models. Geely Auto once again recorded ahistorical high of 153,625 units, up 41.9% yoy. GAC Trumpchi’s growth remained stable, up 20.9% yoy in Dec.2017. In contrast, Great Wall Motors (“GWM”) (02333 HK, “Neutral”) suffered yoy drop of 16.6% in Dec. 2017,and roughly stayed flat for the whole year. In terms of management guidance, Geely Auto and GWM announcedtheir 2018 sales target to be 1.58 million units and 1.16 million units, respectively. In our view, we think thesefigures are conservative and are below our 2018 expectations for both companies. We believe this shows thatthe companies’ management are also conservative on their 2018 outlook, especially uncertainty surrounding theafter-effects of purchase tax subsidy expiration.
Sector View: Stepping into 2018, sector performance has been fluctuating. One reason is mainly due to therather high valuation of certain stocks which sees an outflow of capital. Another fundamental reason is the gloomyoutlook of the sector, particularly the conservative outlook from the Geely Auto and GWM, which has really set thetone for 2018. Nonetheless, we believe that this is an opportunity to accumulate stocks with superiorfundamentals and growth outlook. Our top pick is Geely Auto (00175 HK) with “Buy” investment rating and TP ofHKD 34.54, with growth expected from Lynk & Co. brand in the next few years. We also favour Brilliance China(01114 HK) with “Buy” investment rating and TP of HKD 27.22, on a strong model cycle and benefitting from thefast growing premium segment.
□ .T.o.l.i.v.e.r. .M.a  .国.泰.君.安.国.际.控.股.有.限.公.司
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