HD Truck Market to See Rebound

www.chinatrucks.com: Regarding the investment strategy in auto industry in the second half of 2013, researcher Feng Chong from auto and part industry of Huatai Securities makes analysis on the commercial vehicle sector that the growth rate in Q1 is higher over last year, in Q2 the growth rate declines but still maintain double-digital growth, in Q3 it climbs up month by month and is expected to be 20% in September, and in Q4, the monthly growth rate is going to maintain 15-17%. It is estimated 15.5 million commercial vehicles in a narrow sense (including car, MVP and SUV) will be sold in 2013, up by 16.5% year on year.

In the first half year, in the capital market, the value of assessment reflects the growth rate of profits of auto industry in 2013 is between 15%-20%. The value of assessment is rational. Under such a background, companies that have breakthroughs could win in this market. Combined with features and characteristics of the market, the following companies are recommended to invest stocks: FAW, JAC, Changan and Great Wall Motor.

In terms to medium and heavy duty trucks, the market underwent deepening adjustment in 2012 with a sales volume of 630,000 units, far less than normal demands. The sales volume of heavy trucks in 2013 is expected to be 750,000 units, more than 15% year on year. In June, the sales volume of heavy trucks is 75,000 units, up by 50.8% year on year. In Q2, the sales volume of heavy duty truck is 234,000 units, up by 39.1% year on year. The whole trend of heavy truck industry in Q2 is beyond expectation.

With respect to buses, the sales volume is stable but a little weak in 2013. In the first five months of 2013, the growth rate of sales volume only increases by 2.0%, lower than that in the past two years. The growth rate in the whole year is estimated to be less than 5%, and the growth remains from public city buses, exports, school buses and tour coaches.

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