JPM-China Heavy Truck Sector：Slower fall in demand likely due to FAI bottoming-100825
作者：摩根大通
格式：pdf
页数：22
摘要：
• China’s heavy-truck demand to slow down as of 3Q10E before
achieving a soft landing in FY11E: We expect China’s fixed-asset
investment (FAI) growth to slow down from 25.5% YoY in 1H10 to
20.5% in 2H10 and 18% in 1H11, which should mark the trough. Given
the strong correlation with FAI growth, we expect China’s heavy-truck
demand to also slow down in 3Q10 before achieving a soft landing in
1H11. We now expect China’s heavy-truck demand to decline by 5%
YoY in FY10, versus our previous forecast of a 10% drop.
• Earnings, rating, and PT upgrade: We raise our FY10 and FY11
China heavy-truck demand forecasts by 23% and 30% to 995,000 and
945,000 respectively, to reflect stronger-than-expected demand in the
first seven months of 2010, and the above “soft landing” view of China’s
heavy-truck demand in FY11. We raise our FY10/FY11 earnings
forecasts for Weichai Power by 10%/23% to reflect higher sales volume,
lower income tax rate, but lower gross margin assumptions. Rolling over
to FY11E earnings, we raise our Dec-10 PT for Weichai from HK$70 to
HK$83, based on 2.6x FY11 P/B ratio, representing a 16% discount to its
historical average prospective P/BV of 3.1x since April 2007 – when it
acquired Torch to become a vertically integrated engine and heavy-truck
producer – and translating into 10x FY11E PER. Meanwhile, we raise
our FY10/FY11 earnings forecasts for Sinotruk by 3%/33% to mainly
reflect higher sales volume, lower selling and administrative expenses/
revenue ratio assumptions, and the estimated exceptional loss of Rmb380
million in FY10 from its euro position from Man’s investment. Factoring
in the earnings forecast revision