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13 Jun 2013
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18 October 2012
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Stabilisation – part IIThe Big Call
Credit drives car sales
Plentiful auto loans help underpin the resilience of car demand in spite of a big hit to Japanese brand sales.
Consumer China
Menswear – holding up half the sky
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.
Youngor – property risks for menswear market leader
China’s leading menswear manufacturer by revenue appears increasingly focused on property development, while its own-brand clothing sales growth is lagging rivals.
Joeone – mounting inventory could erode margin advantage
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.
Lilang – a tough year ahead
Declining orders and slowing expansion suggest that 2013 will be a challenging year for the Chinese menswear manufacturer.
Septwolves – marginal improvement
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.
Metersbonwe – inventory headache
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.
Fast Retailing – Uniqlo’s China success
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.
Rural China
Rural activity picks up again in September
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
Financial China
Bond financing: throwing a lifeline to corporate China
Bonds are replacing bank loans as the main source of financing for companies in China, in a trend that encompasses both corporates and LGFVs
Selected financial charts
A selection of key financial data over the past fortnight
Capital Intensive China
Bigger cities lead real estate recovery
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
False dawn for Chinese steel industry?
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.
Best of Chinese Commentators
US probes Huawei and ZTE’s expansion plans
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.
Is CPI representative?
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?
RENMINBI COMPASS
Renminbi Compass reflects key changes in the renminbi-denominated investment environment.
Providing research coverage on asset classes as diverse as chengtou bonds, dim sum bonds, real estate, trust products, underground banking, art and antiques, as well as its traditional equity fund research.
Renminbi Compass provides orientation for investors navigating the expanding universe of renminbi asset classes.
