A complete value analysis of a company requires the analysis of macro-economy, industry and the company itself.
The industry analysis tries to evaluate company and identify investment values & opportunities from the analysis of:
(a) Industry environment / General conditions of the industry;
(b) Supply & demand within the industry;
(c) Competitions within the industry and;
(d) Profitability of companies in the industry;
China automobile industry prospered due to continued growth of national economy and the increase of per-capital income. All automobile manufacturers (especially car-makers) have experienced a rapid growth in both sales and output. The auto-industry has entered an important growth stage. Domestic manufacturers, led by three major groups, have increased their output to meet the market demand. The rapid market growth in demand for automobiles also provided an opportunity for the manufactures to restructure & optimize their production facilities and management systems. The improvement will ensure their success in the near future.
However, these domestic manufacturers are still weak in overall competitiveness compared with foreign players in terms of:
(a) Incomplete product range & parts supplies;
(b) Unit cost of production higher than international average;
(c) Lack of independent R & D capability;
(d) Unregulated market environment;
(e) Problems in corporate structure;
The corporate structure of the three groups needs to be improved, despite their recent profitability. The threat has become real for the international competitors, both in automobile production & services, to enter China market sooner than expected.
The government has announced its latest directive for the national auto-industry. It is our point of view that successful manufacturers are those who can seize market opportunities, take advantage of the capital market to fund their growth, optimize their corporate structure, re-make themselves from the old and outdated system. And that is the basis of our investment value analysis for the national auto-industry.
The industry analysis tries to evaluate company and identify investment values & opportunities from the analysis of:
(a) Industry environment / General conditions of the industry;
(b) Supply & demand within the industry;
(c) Competitions within the industry and;
(d) Profitability of companies in the industry;
China automobile industry prospered due to continued growth of national economy and the increase of per-capital income. All automobile manufacturers (especially car-makers) have experienced a rapid growth in both sales and output. The auto-industry has entered an important growth stage. Domestic manufacturers, led by three major groups, have increased their output to meet the market demand. The rapid market growth in demand for automobiles also provided an opportunity for the manufactures to restructure & optimize their production facilities and management systems. The improvement will ensure their success in the near future.
However, these domestic manufacturers are still weak in overall competitiveness compared with foreign players in terms of:
(a) Incomplete product range & parts supplies;
(b) Unit cost of production higher than international average;
(c) Lack of independent R & D capability;
(d) Unregulated market environment;
(e) Problems in corporate structure;
The corporate structure of the three groups needs to be improved, despite their recent profitability. The threat has become real for the international competitors, both in automobile production & services, to enter China market sooner than expected.
The government has announced its latest directive for the national auto-industry. It is our point of view that successful manufacturers are those who can seize market opportunities, take advantage of the capital market to fund their growth, optimize their corporate structure, re-make themselves from the old and outdated system. And that is the basis of our investment value analysis for the national auto-industry.