XXXX0519-Goldman Sachs-China Automobiles高盛中国汽车行业深度

May19,2010China:AutomobilesChinaAutos:InitiatecoverageonSAIC(Buy,CL),Changan(A)(Buy),andBYD(Sell,CL)IndustrycontextWeestimatethatChina’scarmarketwillmaintaindouble-digitgrowthoverthenext3years,despitethegovernmentphasingoutitsstimuluspackage.By2020EweestimatethatChina’slightvehiclemarketwilltotal30mnunitsperyear,i.e.,28%ofglobaldemand*SourceofopportunityByaddressingtheneedforurgentconsolidationwithintheindustry–drivenbythegovernment–localbrandsarelookingtosecurealargershareofthemarketbyrampingupcapacityandlaunchingnewmodels.Internationalexpansionandcooperationactivitiesaregainingpacetoimprovecorecompetencesquickly.CatalystNewpoliciestoboostfurthermarketgrowth;morenew(andupgraded)modelstobelaunchedbylocalfirms;constantnewsflowonindustryconsolidation.BestBuyideaWeinitiatecoverageonSAICwithaBuyrating(addtoBuy,CL)asitoffers20%upsidepotential:Ranked#1inourGSScorecardexercise,SAICdifferentiatesitselfintermsofscaleandstrategictransformationfromitscompetitors.SAIC’sstrongproductportfolio,well-balancedJVandlocalbrandbusiness,andrapidEPSgrowth(27%CAGRbetween2009and2012E)areunderappreciatedbythemarket,inourview.BestSellideaWeinitiatecoverageonBYDwithaSellrating(addtoSell,CL)asitoffers26%downsidepotential:Webelieveitscurrentvaluationistoorich.WeexpectBYDcargrowthtoslowdown(162%/32%/18%in2009/2010E/2011E)asthefirmexpandsintothehigher-pricedsegments.TheEV/Li-ionbatterymarketsharemaynotexceed20%overthelongrunduetoadependenceongovernmentsubsidiesandthenatureofitsbusinessmodel(verticalintegration).Risks(1)Slowdowninmarketgrowth;(2)priceerosionduetocapacityincreases;and(3)commoditypricesurge.RELATEDRESEARCHIdentifyinggloballong-termwinners:Toyota,VolkswagenandFiat,November27,2009.STOCKVALUATIONSUMMARY*DenotesthestockisonourRegionalConvictionList.Source:GaoHuaSecuritiesResearchestimates.GSSCORECARDRESULTSource:GaoHuaSecuritiesResearchestimates.YipengYang+86(10)[e-mail]sCompanyLimitedTheGoldmanSachsGroup,Inc.doesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ForRegACcertification,seetheendofthetext.OtherimportantdisclosuresfollowtheRegACcertification,orgotowww.gs.com/research/hedge.html.Analystsemployedbynon-USaffiliatesarenotregistered/qualifiedasresearchanalystswithFINRAintheU.S.RajeevDas+81(3)[e-mail].,Ltd.TheGoldmanSachsGroup,Inc.GlobalInvestmentResearch14-May12-monthPotentialTickerCompanynameCurrencyRatingCloseTPupside/downside600104.SSSAICMotorRMBBuy*17.4120.9020%000625.SZChongqingChanganAuto(A)RMBBuy10.5411.6511%0489.HKDongfengMotorHKDNeutral9.9910.455%200625.SZChongqingChanganAuto(B)HKDNeutral5.856.094%0175.HKGeelyAutomobileHoldingsHKDNeutral3.113.00-4%000800.SZFAWCarRMBNeutral17.6916.08-9%1211.HKBYDCompanyHKDSell*65.2548.05-26%GSScorecardtoidentifythelong-termwinnerRanks#1#2#3#4#5#6companiesSAICBYDFAWCarChanganGeelyDongfengscores665756545144May19,2010China:AutomobilesGoldmanSachsGlobalInvestmentResearch2TableofcontentsExecutivesummary3 Industryanalysis:ThesixtrendsofChina’spassengercarmarket6 Industryanalysis:Chinaautopoliciesoverview20 Industryanalysis:GSAutoScorecardforChina28 Companyvaluation44 SAICMotor(600104.SS,Buy,onCL):Stronggrowthunderappreciated47 BYDCompany(1211.HK,Sell,onCL):Growthslowing,valuationrich49 ChongqingChanganAuto(A)(000625.SZ,Buy):Buyonattractivevaluation55 ChongqingChanganAuto(B)(200625.SZ,Neutral):Valuationfair58 FAWCar(000800.SZ,Neutral):TogrowbeyondMazda’splatform61 DongfengMotor(0489.HK,Neutral):Capacityconstraintsandtoofewnewmodels63 GeelyAutomobileHoldings(0175.HK,Neutral):Canproductleadershipleadtosalesup?65 ThepricesinthebodyofthisreportarebasedonthemarketcloseofMay14,2010.May19,2010China:AutomobilesGoldmanSachsGlobalInvestmentResearch3ExecutivesummaryInthisreportwehighlightsixtrendswithinChina’sautoindustryandfourautopolicythemes.Weidentifythelong-termwinnersintheindustrybyevaluatingeachcompanyinaccordancewiththeGSscorecard.TheexerciserevealedthatSAICandBYDaretheindustryleaders,althoughnoonecompanyexcelsinallcriteria.Ourbestideasare:(1)SAIC–weinitiatecoverageonSAICwithaBuyrating(andaddittoourConvictionBuyList)giventhatitoffers20%upsidepotential.Itsstrongproductportfolio,well-balancedJVandlocalbrandbusiness,andrapidEPSgrowth(27%between2009and2012E)areunderappreciatedbythemarket,inourview.(2)BYD–weinitiatecoverageonBYDwithaSellrating(andaddittoourConvictionSellList)asitoffers26%downsidepotential.WeexpectBYD’scarsalesvolumegrowthtoslowdownasthecompanyexpandsintothehigher-pricedsegmentsofthemarket.TheEV/Li-ionbatterymarketsharemaynotexceed20%overthelongrunduetoadependenceongovernmentsubsidiesandaverticalintegrationbusinessmodel.(3)Changan(A)–weinitiatecoverageonChangan(A)withaBuyratingasitoffers11%upsidepotential,asaresultofitsattractivevaluation.SixtrendswithinChina’sautoindustryWeestimatethatthegrowthofC