德银：中国汽车行业研究（英文版）

AsiaPacificChinaAuto/MotorVehicle17November2004Dealersurvey:notoutofthewoodsyetEugeneYeoh(852)[e-mail](852)[e-mail]2005Weareconcernedabouttheheadwindsfacingautomakersgoinginto2005.Issuesincludethepotentialforcontinuedlacklustredemand,pricingpressureandcompetition.Amidstthesetoughconditions,wefeeltherearesomeautomakersthatcanstillachieveearningsgrowth.Weemphasisestockpickingdespiteourcautioussectorstance.DeutscheBankAGDeutscheBankdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Thus,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.DISCLOSURESANDANALYSTCERTIFICATIONSARELOCATEDINAPPENDIX1ChinaAutoSectorChannelCheckToppicksChongqingChangan-ABuyKeychangesDenway(04FEPS)0.33to0.30È-11%BrillianceChina(04FEPS)0.20to0.19È-7%Geely(04FEPS)0.05to0.04È-36%CompaniesfeaturedDenway(0203.HK),HK$2.8Hold2003A2004F2005FP/E(x)8.78.28.4EV/EBITDA(x)NM240.1190.3Price/book(x)5.62.82.3BrillianceChina(1114.HK),HK$1.73Sell2003A2004F2005FP/E(x)10.28.99.1EV/EBITDA(x)4.73.93.5Price/book(x)2.41.01.0ChongqingChangan-A(000625.SZ),RMB6.13Buy2003A2004F2005FP/E(x)12.57.06.4EV/EBITDA(x)8.02.42.0Price/book(x)3.871.401.19GeelyAuto(0175.HK),HK$0.42Buy2003A2004F2005FP/E(x)41.17.34.9EV/EBITDA(x)NMNMNMPrice/book(x)5.792.141.57Monthlycarsales050,000100,000150,000200,000250,000Oct-02Dec-02Feb-03Apr-03Jun-03Aug-03Oct-03Dec-03Feb-04Apr-04Jun-04Aug-04Oct-040%30%60%90%120%150%180%salesvol.+/-%YoYPassengercargrowthforecast20032004F2005FVolume('000)1,9722,2772,573Growth(%)751513UpcomingeventsDateGuangzhouAutoShowGuangzhouNov2004CEIBSAutoConferenceShanghaiNov2004DBChinaConferenceBeijingMar2005RelatedrecentresearchDateChanganAutoEugeneYeohNov2004ChinaAutoSectorEugeneYeohOct2004GlobalAutoIndustryGlobalAutoTeamSept2004GlobalEquityResearchIndustryFocusSecondinstallmentofourquarterlydealersurveyThisisthesecondinstallmentofDB’squarterlyChinaautodealersurvey.Whilewethoughttheprevioussurveywasdownbeat,thesentimentthistimearoundisevenmorepessimistic.Astheanticipated4Qrebounddidnotmaterialise,mostdealersarelosingtheiroptimismforamarketrevival.Theynowexpecttheweaknesstopersistinto2005.Marketmaynotrecoverin2005Weforecastthepassengercarmarketwillgrowat10-13%for2005,following15%growthin2004(2003growthwas75%).Whileweanticipateaslowergrowthtrend,wemaynotbeaspessimisticcomparedtootherindustryparticipantsasthecombinationofeasiercomparativesandbetternewproductmomentumshouldhelp2005growth.Dealers’situationstilldireThefinancialperformanceofdealerscontinuestodeterioraterapidly.Dealersofmostbrandshaveexperiencedadramaticdeclineinprofits,andmostclaimedtheyaresellingcarsataloss.Inourview,whilethecurrentsituationisdesperate,theconsolidationoftheautodealersshouldbepositivefortheindustryoverallgoingforward.AutomakersnotpushingdealersashardOurprevioussurveysuggestedthatdealerswerebeingforcedtoacceptstock,butwenowbelievethattheautomakersarenolongerpushingashard.Thisislikelytobebecausetheautomakersthemselveshavereviseddowntheirproductiontargetsandloweredtheirowninventorylevels.Lower2005targetsshouldhopefullytranslatetolesspricingpressure.CautionstillwarrantedOursectorstanceisstillUnderweight,butwithanemphasisonstockpicking.Althoughcyclicalfearsinthesectorarestillprevalent,welikeChanganandGeelyaswebelievebotharecapableofachievingearningsgrowthandhavecompellingvaluations.Risksincludeamoredrasticslowdown,whichwouldhurtearningsandresultinafurtherde-rating.17November2004Auto/MotorVehicleChinaAutoSectorPage2DeutscheBankAGTableofContentsInvestmentthesis..............................................................................3Dealersurvey.....................................................................................4Sectorupdate....................................................................................9Autofinancingwillremaintough...............................................................................16Keysuccessfactors.........................................................................18Distribution................................................................................................................18Lowcostandhighlocalcontent................................................................................19Newproductrolloutmomentum...............................................................................20Thebottomline..........................................................................................................20CompanysectionDenway......................................................................................................................21BrillianceChina..........................................................................................................23GeelyAuto.................................................................................................................25AppendixA:Thebasics........................