While April US auto sales have disappointed across the board, with declines in all major automakers, China has yet to release numbers for April, with the exception of GAC, 2238 HK. If March offers a clue as to performance, it will be a mixed bag. For those with declines in the first quarter, the increase in the sales tax on the majority 1.6 liter or less vehicles was blamed; Ford and GM. Despite the change in tax, some auto makers saw sales growth in China. Hyundai, however, saw a dramatic decline as a result of stoppages related to discontent over the US THAAD missile in South Korea. VW Audi, took a dive at least partly due to dealer discontent over its planned 2nd jv with SAIC. Thanks to company specific issues, the outlook for overall China growth, projected at 5%, is cloudy. (The data is primarily from Reuters except for Chinese makers Geely, GAC, Ford and Daimler which were based on SEC and HKEX filings).
Skies are sunny for GAC, however, which just reported 36% growth ytd in April over 2016. If revenues and costs stay on track from the first quarter as reported here, it bodes well for the GAC’s stock.
Honda and Toyota have shown significant growth, but the proprietary Guangzhou has been an out sized contributor to growth as has Fiat Chrysler.
While recent performance is no indicator of the future, at least in the short term GAC is conservatively valued with a trailing p/e of 9.