China Macroeconomics & Academia

Christopher Balding

Macroeconomics

Recent data of the excessively leveraged economy in China yielded few positive results. While data from previous months hinted that the Chinese economy might be heading towards growth, the post PMI of 50.1 defied those predictions.Most sectors in June either witnessed stagnant output or a decline except for steel which has witnessed output growth of 14% since January 31. Though in the beginning of June the daily steel output slightly declined, it is anticipated that with the start of the…

Recent data of the excessively leveraged economy in China yielded few positive results. While data from previous months hinted that the Chinese economy might be heading towards growth, the post PMI of 50.1 defied those predictions.Most sectors in June either witnessed stagnant output or a decline except for steel which has witnessed output growth of 14% since January 31. Though in the beginning of June the daily steel output slightly declined, it is anticipated that with the start of the…

Equity Research Analyst, Maritime sector, Drewry Maritime Financial Research

Ankush Kathuria CFA, FRM

Equity Research Analyst, Maritime sector

Maritime Sector, Equity & Credit Research

Drewry Maritime Financial Research

With no ties to other players in the shipping, finance or banking world, we provide a uniquely impartial view of the markets and companies we cover. Our parent organization, Drewry is a leading independent provider of research services to the maritime and shipping industry, employing over 100 professionals across an international network of offices in London, Delhi, Singapore and Shanghai. Combining our market-leading resources with seasoned sector expertise DFRS offers a highly differentiated and comprehensive range of investment and financial research services to lenders and prospective investors in publicly listed maritime and shipping companies. The full service of reports, supporting resources and sector orientated webinars provides our clients with the most complete picture of the organisations under coverage as is possible. We have been charting and analysing the world’s maritime markets for more than 40 years. This unrivalled intelligence and understanding provides the foundation of our research service. Our analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.

Thematic (Sector/Industry)

Since the GFC, the global port operators have been under-performing the MSCI world index. The divergence has increased in the last 18 months and is now reaching an extreme. Does this make the sector a buy? We believe the industry dynamics are changing and the sector is pricing in  a structural slowdown in global trade. The growth industry has matured and is now more akin to valuations given to a utilities business i.e. P/E compression is in play despite still strong margins and earnings. We believe that ports sector on a macro basis is moving from a growth stock to a value stock which commands stable but lower P/E.  Wider implications for this would be the investor profile for the ports will change as more value investors get in and growth investors move away. We expect Chinese operators to get aggressive on M&amp;A and cheapest valuation in the sector in years on account of structural weakness to drive M&amp;A.

Since the GFC, the global port operators have been under-performing the MSCI world index. The divergence has increased in the last 18 months and is now reaching an extreme. Does this make the sector a buy? We believe the industry dynamics are changing and the sector is pricing in  a structural slowdown in global trade. The growth industry has matured and is now more akin to valuations given to a utilities business i.e. P/E compression is in play despite still strong margins and earnings. We believe that ports sector on a macro basis is moving from a growth stock to a value stock which commands stable but lower P/E.  Wider implications for this would be the investor profile for the ports will change as more value investors get in and growth investors move away. We expect Chinese operators to get aggressive on M&amp;A and cheapest valuation in the sector in years on account of structural weakness to drive M&amp;A. 

Port Operators - Valuations Downshift on Structural Changes

Bespoke Research on China and neighbouring regions, Bixmoor

Bixmoor

Bespoke Research on China and neighbouring regions

Bixmoor specialises in providing bespoke research to business, governments and the financial community on China and neighbouring regions. We seek to build long-term relationships with our clients, based on our expertise, our reliability and our determination to find the right solution.

In order to advance, Chinese industry needs to become innovative. The track record to date is poor, with few examples of genuine innovation and rather too many instances of attempts to deceive and straightforward fraud.

In order to advance, Chinese industry needs to become innovative. The track record to date is poor, with few examples of genuine innovation and rather too many instances of attempts to deceive and straightforward fraud. 

With what we see as the stabilization of the Chinese real economy, though credit driven as noted, and growth in steel production among other products, it is naturally anticipated that the inventory level may have increased. This would be due to a lack of real demand absorbing the additional production.Nearly all important metal ore inventories have declined. A look at the important metal ore inventories like nickel, chromium and manganese have experienced a steady decline since December 2015…

 With what we see as the stabilization of the Chinese real economy, though credit driven as noted, and growth in steel production among other products, it is naturally anticipated that the inventory level may have increased. This would be due to a lack of real demand absorbing the additional production.Nearly all important metal ore inventories have declined. A look at the important metal ore inventories like nickel, chromium and manganese have experienced a steady decline since December 2015…

Is Increased Chinese Output Leading to Higher Inventories?

We had predicted that official China PMI would increase and were forecasting 50.5.  We were not even close as PMI remain unchanged at 50.1 for May. Though the Chinese economy is built upon leverage, it seems clear that the real economy in China is stabilizing even if credit driven. What is interesting about our forecast is that even though official PMI remained unchanged, virtually all sectors reporting data throughout the month showed further increase in output from April. We are retooling our…

We had predicted that official China PMI would increase and were forecasting 50.5.  We were not even close as PMI remain unchanged at 50.1 for May. Though the Chinese economy is built upon leverage, it seems clear that the real economy in China is stabilizing even if credit driven. What is interesting about our forecast is that even though official PMI remained unchanged, virtually all sectors reporting data throughout the month showed further increase in output from April. We are retooling our…

China

Shenzhen Inovance Technology Co., Ltd. develops, manufactures and sells automate control products.  The Company's products include low frequency converter, servo drive, and programmable logic controller (PLC).

Shenzhen Inovance Technology Co., (300124 CH)

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Shenzhen Inovance Technology Co., (300124 CH)

Early Look June Economic Activity

Recent data of the excessively leveraged economy in China yielded few positive results. While data from previous months hinted that the Chinese...

Christopher Balding

Port Operators - Valuations Downshift on Structural Changes

Since the GFC, the global port operators have been under-performing the MSCI world index. The divergence has increased in the last 18 months and is...

Drewry Maritime Financial Research

Innovation - A Sorry Tale in China

In order to advance, Chinese industry needs to become innovative. The track record to date is poor, with few examples of genuine innovation and...

Bixmoor

Is Increased Chinese Output Leading to Higher Inventories?

With what we see as the stabilization of the Chinese real economy, though credit driven as noted, and growth in steel production among other...

Christopher Balding

Post-PMI Data Release Analysis

We had predicted that official China PMI would increase and were forecasting 50.5. We were not even close as PMI remain unchanged at 50.1 for May....

Christopher Balding

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