China Macroeconomics & Academia

Christopher Balding

Macroeconomics

July Pre PMI ReportAfter a hot start this year the Chinese economy has plateaued and appeared to enter a slow downward trend with no sign of returning to strong growth. The start of the third quarter can be termed as disappointing as the key industries have also stated to show the effects of broader slowdown.  Key industries linked to real estate that showed a bullish trend in previous months seem to be reverting to uncertainty or non-existent growth. The steel industry of China, which also…

July Pre PMI ReportAfter a hot start this year the Chinese economy has plateaued and appeared to enter a slow downward trend with no sign of returning to strong growth. The start of the third quarter can be termed as disappointing as the key industries have also stated to show the effects of broader slowdown.  Key industries linked to real estate that showed a bullish trend in previous months seem to be reverting to uncertainty or non-existent growth. The steel industry of China, which also…

Early Chinese July Data Shows Economic Activity Slowdown

Thematic (Sector/Industry)

Due to its enormous importance to the Chinese economy and the drivers of the 2008 global financial crisis, many analysts focus on the real estate sector as a potential harbinger of the overall economy.  Like many other sectors of the Chinese economy real estate is heavily government regulated by the state acting as a major source of revenue for local governments which thrive from land sales to builders. Real estate supports local government finances and large number of upstream industries like…

Due to its enormous importance to the Chinese economy and the drivers of the 2008 global financial crisis, many analysts focus on the real estate sector as a potential harbinger of the overall economy.  Like many other sectors of the Chinese economy real estate is heavily government regulated by the state acting as a major source of revenue for local governments which thrive from land sales to builders. Real estate supports local government finances and large number of upstream industries like…

Chinese Real Estate Pricing in 21% Price Increase

Outlook on China’s PMI  The month of June furthered the case that the Chinese economy has plateaued and potentially started declining again. With last month’s PMI at 50.1, there was reason to believe we would see real economy expansion but this failed to materialize. Throughout June, most industries showed a downward trend in production output generating a PMI of 50.0, .1 lower than the last month. The slowdown in output and manager expectation does not provide a positive outlook on a leverage…

Outlook on China’s PMI  The month of June furthered the case that the Chinese economy has plateaued and potentially started declining again. With last month’s PMI at 50.1, there was reason to believe we would see real economy expansion but this failed to materialize. Throughout June, most industries showed a downward trend in production output generating a PMI of 50.0, .1 lower than the last month. The slowdown in output and manager expectation does not provide a positive outlook on a leverage…

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.

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

China

Zhejiang Expressway Co., Ltd., through its subsidiaries, designs, constructs, operates, and manages high grade roads, as well as develops and operates certain ancillary services, such as technical consultation, advertising, automobile servicing, and fuel facilities.

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Zhejiang Expressway Co H (576 HK)

Early Chinese July Data Shows Economic Activity Slowdown

July Pre PMI ReportAfter a hot start this year the Chinese economy has plateaued and appeared to enter a slow downward trend with no sign of...

Christopher Balding

Chinese Real Estate Pricing in 21% Price Increase

Due to its enormous importance to the Chinese economy and the drivers of the 2008 global financial crisis, many analysts focus on the real estate...

Christopher Balding

China Economic Recap for June

Outlook on China’s PMI The month of June furthered the case that the Chinese economy has plateaued and potentially started declining again. With...

Christopher Balding

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

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52-week Range

Market Cap (USDm)

P/E

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