11 Sep 2014
Plentiful auto loans help underpin the resilience of car demand in spite of a big hit to Japanese brand sales.
While women are the primary clothes buyers in most markets, men account for 50% of China’s apparel sales revenue. But lower orders and rising inventories suggest slower revenue and profit growth for menswear companies in 1H13.
China’s leading menswear manufacturer by revenue appears increasingly focused on property development, while its own-brand clothing sales growth is lagging rivals.
Declining order growth at its recent trade fair will add to the menswear manufacturer’s already-swollen inventory levels and could weigh on revenue and profit growth in 2013.
Declining orders and slowing expansion suggest that 2013 will be a challenging year for the Chinese menswear manufacturer.
The Chinese menswear manufacturer’s margins have long lagged rivals, but an increasing shift towards direct distribution and higher-end products mean that it is closing the gap.
Even if recent allegations that it fraudulently understated its inventory levels prove unfounded, Chinese casualwear company Metersbonwe is under pressure given rapid expansion and slowing sales growth.
Japanese fast-fashion brand Uniqlo’s strong popularity among male clothes buyers has been a major reason behind its rapid growth in China, which looks set to continue despite recent anti-Japanese protests.
The China Confidential Rural Wealth Creation Index returned to an upward trajectory in September, with the index rising by 2.5pp from August to 52.7
Bonds are replacing bank loans as the main source of financing for companies in China, in a trend that encompasses both corporates and LGFVs
A selection of key financial data over the past fortnight
In a stark reversal of previous trends, first-tier cities are leading the recovery in the residential real estate market, with sales and prices both growing faster than in smaller cities
Steel mills appear to be stepping back from much-needed production cuts, as steel prices rebound. This could spell bad news for the market going forward.
Efforts by Huawei and ZTE (000063:SZ), two Chinese telecommunication equipment manufacturers, to break into the American market have hit an obstacle in the form of a draft report from a US congressional committee labelling the companies as threats to US security, who should be restricted from doing business in the country. The report also recommends that any mergers or acquisitions involving the companies be probed. Given the impending US presidential election, the move has been viewed with suspicion in China as being less to do with Chinese companies conforming to specific American legislation and more to do with the universally opportunistic nature of politicians.
China’s consumer price index (CPI) registered 1.9% YoY growth in September, the third time that the CPI has come in at below 2% since January 2010. But does the CPI really reflect the cost of living?