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More on trends and industries 再述趋势和行业

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Last issue we mentioned about the capturing trends in fast growing industries with the example on mobile telecommunication industry. We are continuing with more on trends and industries this time and will give a real life example on selecting stocks among the auto industry through the top-down approach.

The top-down approach means to select companies by looking at the economy and industry first and then to screen out which companies worth to invest our money in. China is a healthy growing economy in the world with increasing disposal income. Such that the consumption power keeps growing and many of the family could afford a car given there are lots of choices among different market segments.

Among the market players, which companies worth to look at? We suggest you to look at car makers as information can be easily gathered in our daily life. However, in the China market, policies keep affecting the operating environment. For example, the subsidy in car purchasing in 2009 propelled the growth of domestic makers. Purchase limits in Beijing and high license bidding price for license plates in Shanghai would affect some regional auto dealers. Hence we also suggest you to pay attention to the news.

2-3 year after the large scale subsidy, the luxury vehicles entered the booming stage due to the consumption upgrades. Many of the buyers were buying their 2nd car and also with higher consumption power to a better car. In the meantime, consumers wanted something different from others and to be more functional and better off- road ability to tackle with poor road conditions and flooding caused by heavy rains. So the SUV had been the hot picks among car buyers.

Sales figures in recent years showed that Audi and BMW have been outpacing Mercedes. The related JV makers in China, namely FAW and Brilliance were the beneficiaries. However, FAW includes other brands with large profit contributions and hence the growth from FAW-Audi would become less significant. In comparison, profit contribution from BMW is so significant to Brilliance up till this moment and hence the financials were better reflected the growth of BMW in China. Moreover, the growth story of luxury cars continued by increasing localization and car makers are also lowering the entry levels.

Among SUV makers, most of the buyers know Great Wall Motor since it is the earliest domestic maker whom specialized in SUVs. Its quality is well accepted by the market and also the products are well known by value- for-the-money. Hence it enjoyed the full trend in SUV boom and outperformed the market for years.

We just simply illustrate the top-down approach above. However, you need to have the enough information and market data before making your investment decision. Again, we suggest you to invest more time to enrich the knowledge and get a well understanding on industries before investing the in the real market. Knowledge and information keeps you sail further in this wild sea.



市场里有哪些公司值得观察呢?我们建议汽车制造商,因为相关信息可以很容易在日常生活中得到。不 过,在中国市场,政策一直影响经着营环境。例如,在2009年购车补贴推动了自主品牌厂商的增长。而 北京的限购和上海买昂的牌照的价格便影响一些地区性的汽车经销商。因此,我们也建议大家常常留 意新闻。

在大规模补贴后的2-3年,由于消费升级,豪华车进入爆发式增长的阶段。许多买家是购买他第二辆车,具有较高的消费能力去买更好的车。同时,消费者也希望与别众不同,同时希望车子有更多的功能 性和更好的越野能力以应付较差的路况和因暴雨造成的洪水。所以SUV也成为了热卖产品。

在近几年的销售数字显示奥迪和宝马已经超越奔驰。相关的合资车商,一汽和华晨便成了消费升级的受益者。然而,一汽包含了许多其他有较大的利润贡献的品牌,因此一汽奥迪的增长便没有那么明显的影响。相比之下,宝马对华晨的利润贡献直到显示为止还是十分显着,因此财务报表也较好地反映了宝马在中国的增长。此外,通过增加本地化和降低了入门门槛,豪华车的增长故事仍然在继续。在SUV车商中,大部分的车主都知道长城汽车,因为它是国内最早专注生产SUV的车厂。它的质量广为 市场所接受,高性价比更是人所共知。因此,公司完全捕捉了整个SUV热潮,并跑赢市场多年。


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