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China numbers reaffirm case for liquidity easing

Official Chinese statistics showing a lower headline inflation number as well as slowing fixed-asset investment (FAI), industrial output and retail sales figures reaffirm the case for a further easing of liquidity policy. We think that two, perhaps three, cuts in the bank required reserve ratios (CC Feb 23 Macro View) are likely in 1H12, as well as further fiscal stimulus measures to drive consumer spending.

09 March 2012

Mendale – rapid expansion eroding its bottom line

A blistering store-opening programme is a big roll of the dice, but the company’s dominance in central China is a plus.

08 March 2012

Luolai – leading the pack

Celebrity endorsements allows Luolai to sell at a price premium.

08 March 2012

Fuanna – share price outperformance

A larger directly operated store network has enabled Fuanna to enjoy higher gross margins than Luolai and Mendale.

08 March 2012

Home textiles – emerging from its slumber

Home-textile demand has soared in recent years, yet the market remains under-developed and highly fragmented, presenting enormous growth opportunities for rapidly expanding domestic players.

08 March 2012

Cost of living growth eases in February, suggesting CPI slowdown

Cost of living growth slowed in February according to our latest consumer survey, strengthening our expectations that China’s consumer price index likely fell MoM and moderated YoY in February

06 March 2012

Spending strengthens in February as price growth moderates

Discretionary spending and consumer borrowing by Chinese urban consumers remained strong in February, while the spending outlook also improved, according to a China Confidential Survey of 600 consumers in 134 cities. China Confidential’s Discretionary Spending Index rose to 78.5 in February, from 78.0 in January, indicating robust consumer confidence.

06 March 2012

Shanghai raises minimum wage, boosting spending power

Shanghai announced today that it will raise the monthly minimum wage for workers by 13% to Rmb1,450 effective April 1. We think the move, which follows similar minimum wage hike announcements by other large cities such as Shenzhen, Guangzhou and Lanzhou, represents steps toward the implementation of a 12th Five Year Plan (2011-2015) priority to boost consumer spending (CC Dec 22 2011 Macro View).

28 February 2012

Supermarket chains embrace the rural market

Big chains move to small towns as rural spending power grows.

23 February 2012

Café De Coral – looking to Guangdong for growth

A new central kitchen in Guangzhou is set to boost operating margins but it could be a long haul out of the operating profit declines suffered in 2011.

23 February 2012
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