Quote | Super Quote
Super Quote   |   Detail Quote   |   Interactive Chart   |   Transaction   |   Related News   |   Related Securities   |   Company Information   |   Dividend Records   |   Short Sell
00175 GEELY AUTO
RTNominal up9.110 +0.200 (+2.245%)
Research Report

23/09/2020 15:23

China auto's recovery path accelerating - S&P

[ET Net News Agency, 23 September 2020] S&P Global Ratings said today that it has
revised up its assumptions on China auto sales, incorporating better-than-expected
performance year to date and gradually improving consumer sentiment.
The credit rating agency now foresees 4%-6% auto sales growth in 2021, up from its
earlier assumption of 2%-4%. In absolute terms, S&P does not expect sales to return to
2019 levels until 2022.
China's auto sales growth turned positive from April and continued through August,
narrowing the year-to-date sales decline to 9.5% from the same period in 2019. Commercial
vehicles are leading the recovery and outperformed passenger vehicles on robust logistics
and construction demand.
Given that some pent-up demand has already been met, we expect the recent momentum to
soften in the rest of the year. Overall, S&P assumed auto sales will fall by 6%-9% this
year, compared with our previous expectation of 8%-10%.
New energy vehicle (NEV) sales are likely to pace up in the second half of the year,
after lagging behind traditional-engine vehicles in the first six months. NEV sales and
battery installation jumped more than 20% year over year on average in July and August.
S&P believes consumer acceptance of NEVs will trend up, with Tesla entering the market
and joint venture brands more aggressively launching new models. In China, the government
targets an NEV penetration rate of 25% by 2025, up from just about 4% now.
The agency believes China's proprietary brands will continue to lose ground amid the
COVID-related drag on passenger-vehicle sales. It thinks German and Japanese brands will
further gain market share, due to better functionality and technology, and higher residual
value. Premium brands will take a larger slice of the market on consumption upgrades and
launches of more compact models.
S&P's rated automakers, which are among the market leaders, are outperforming the
market. This is especially the case for China FAW Group Co. Ltd. (A/Negative/--), which
has higher exposure to commercial vehicles.
However, S&P has mostly negative rating outlooks on China auto original equipment
manufacturers (OEMs) and suppliers despite sequentially improving sales. It still sees
considerable pressure on rated names' financial performances due to intense competition.
Softer sales momentum, weakening margins, or higher leverage in the coming quarters could
lead to rating downgrades. (KL)

Remark: Real time quote last updated: 24/04/2024 13:42
  Real-time basic market prices of Hong Kong securities are provided by HKEx; a Designated Website authorized by the HKEx Group to provide the Service
A Member of HKET Holdings
Customer Service Hotline:(852) 2880 7004     Customer Service Email:cs@etnet.com.hk
Copyright 2024 ET Net Limited. http://www.etnet.com.hk ET Net Limited, HKEx Information Services Limited, its Holding Companies and/or any Subsidiaries of such holding companies, and Third Party Information Providers endeavour to ensure the availability, completeness, timeliness, accuracy and reliability of the information provided but do not guarantee its availability, completeness, timeliness, accuracy or reliability and accept no liability (whether in tort or contract or otherwise) any loss or damage arising directly or indirectly from any inaccuracies, interruption, incompleteness, delay, omissions, or any decision made or action taken by you or any third party in reliance upon the information provided. The quotes, charts, commentaries and buy/sell ratings on this website should be used as references only with your own discretion. ET Net Limited is not soliciting any subscriber or site visitor to execute any trade. Any trades executed following the commentaries and buy/sell ratings on this website are taken at your own risk for your own account.