Memtech International - OCBC Investment 2016-11-23: Oct passenger vehicle production in China up 20% YoY

Memtech International - OCBC Investment 2016-11-23: Oct passenger vehicle production in China up 20% YoY MEMTECH INTERNATIONAL LTD BOL.SI

Memtech International - Oct passenger vehicle production in China up 20% YoY

  • Car production and sales statistics in Oct show continued growth in China, a third-month of decline in the US, and a flat performance in Europe. 
  • Passenger vehicle production in China increased 19.8% YoY to 2.3m in Oct and jumped 15.3% YoY to 19.1m for the Jan-Oct period, according to the China Association of Automobile Manufacturers. Passenger vehicles sales in China showed similar growth rates. 
  • Meanwhile, US and European car sales fell 5.8% YoY to 1.4m and 0.02% YoY to 1.1m in Oct, according to Autodata and the European Automobile Manufacturers Association respectively. 
  • We currently estimate that out of the parts Memtech produces for the auto industry, ~50% end up in cars sold in China, while ~25% each end up in cars sold in the US and Europe. 
  • We remain positive on Memtech's auto segment, given that Chinese passenger car sales continue to post strong gains relative to the high base last year, which is already after the implementation of the tax cut. 
  • We maintain our BUY rating with a fair value of S$0.76.




Deborah Ong OCBC Investment | http://www.ocbcresearch.com/ 2016-11-23
OCBC Investment SGX Stock Analyst Report BUY Maintain BUY 0.760 Same 0.760




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