China Content Hub China Quantitative Insight Reports

China Quantitative Insight Reports

Grassroots data driven intelligence content, leveraging our extensive HOLT data library and new alternative data sources to bring our clients a unique level of insight across several industry sector and macro trends.

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Report

May 18, 2020

CQi Materials - Recovery picking up pace

CQi's steel and cement panels saw negative demand YoY while aluminium and copper panels had flat or positive growth in April. Thanks to the boost from infrastructure and property completion, cement, copper and aluminium panels expect positive growth or only a marginal dip in May. Cement margins improve on weak coal prices a trend that may continue.

May 17, 2020

CQi Property - Continuous recovery; full-year completions to be positive YoY

CQi's latest survey shows due to price cuts by developers around the May holiday and rising new supply, sales recovery continued in early May. 'New' demand post-CNY played increasing role in the sales recovery. Our survey also shows that the pandemic's impact on property completions was mild and we expect completions to rise YoY for the full year.

May 14, 2020

CQi NEV Market Monitor - Lithium ore imports from Oz intact; Tesla's latest price cut could win more customers

Battery material producers CQi surveyed expect lithium ore imports from Australia to remain intact despite political tensions between Beijing and Canberra. They expect Australia to remain a key supplier to China's lithium-ion battery production and its NEV market boom. We believe Tesla's latest price cut to help it reclaim lost ground in May.

May 13, 2020

CQi Business Monitor - Private firms struggle with tumbling export orders and sluggish domestic demand

China's private enterprises continue to feel the pain from the economic fallout of the pandemic. CQI's panel's export orders fell 30% YoY in April. The domestic sector has shown a partial recovery so far, but companies' domestic orders still dropped by double-digits YoY. 37% of companies laid off workers in April and 29% planned to do so soon.

May 13, 2020

CQi Consumer - Snapshot of small home appliance purchases

CQi surveys in late April show consumer plans to buy small home appliances dominate over plans to buy big home appliances in the next 6 months. Kitchenware is a big part of China's small appliance consumption, its sales boosted by the "stay-at-home" life during the epidemic. Domestic brands dominate; Midea and Joyoung are leaders.

May 10, 2020

CQi Energy Bulletin - Poor timing for the resumption of US LNG imports

Lessons learned from the COVID-19 outbreak are set to make public health one of Beijing's top investment priorities in CQi's view. Leveraging on insights provided by senior doctors at top local hospitals, CQi outlines five key areas where new investment might be concentrated.

May 10, 2020

CQi Beauty Insights III - Medical cosmetology: wanted

A recent CQi survey of Chinese women's appetite for cosmetic procedures reveals their strong interest. The vast majority of the women we spoke with want cosmetic dental treatment. The most popular facial procedures are laser skin treatment, eye plastic surgery and skin booster injection. South Korea and public hospitals are most trusted providers.

May 10, 2020

CQi Consumer Monthly Watch - Income rebounds slightly, spending intentions remain weak

Our latest consumer survey shows households' income continued to improve in April, but their sluggish outlook dampens their spending intentions. More consumers on the panel have received consumption vouchers and the multiplier effect on their spending has improved. They dislike risky assets for investment and put more money into bank deposits.

May 4, 2020

CQi Strategy - Embracing a pickup in healthcare investment

Lessons learned from the COVID-19 outbreak are set to make public health one of Beijing's top investment priorities in CQi's view. Leveraging on insights provided by senior doctors at top local hospitals, CQi outlines five key areas where new investment might be concentrated.

April 28, 2020

CQi Ecommerce - Livestreaming boom; sluggish food delivery

CQi's quarterly ecommerce survey shows online sales were resilient during the virus outbreak and momentum will likely grow stronger in the coming quarters. Livestreaming sales are attracting more interest from both consumers and merchants. Fewer consumers ordered food delivery in 1Q, but Meituan holds onto its leading position.

April 27, 2020

CQi Strategy - COVID-19 stimulus: How it works

Recent CQi surveys show Beijing's credit and fiscal easing and tax and fee exemptions, as well as local government driven measures have helped ease cash flow stress among private enterprises but we see via our survey findings insufficient support in the current stimulus for service SMEs, exporting SMEs and low income households.

April 21, 2020

CQi Strategy - Pork price peak in 1Q good news for policymakers

Based on 'CQi Strategy – Pigs in 2020' published on 5 December 2019, the findings of our survey were that pork price in China would peak in 1Q20 and th't's come to fruition. National average pork price in 3W April dropped to Rmb53/kg from a peak of nearly Rmb60/kg in 3W February according to the Ministry of Agriculture.

April 16, 2020

CQi Lending Lens - Controlled liquidity easing

Cash flow stress among SMEs, which spiked in 1Q, is expected to ease substantially under the combined effects of credit expansion, local government intervention and business resumption, according to a recent CQi survey. Local governments are pushing lending to SMEs, part of an effort to stave off job losses.

April 15, 2020

CQi Business Monitor- Steep 1Q losses for SMEs, exporters to face bigger challenges in 2Q

We see deep damage to SME revenues, profitability and financial health in 1Q. The collapse in export orders received by the SMEs in March suggests that 2Q will be difficult for exporters, even as the domestic economy slowly recovers. Appetite for investment and labour on our SME panel is weak. SMEs have not felt the benefits of credit easing.

April 14, 2020

CQi NEV Market Monitor - Damage control; Tesla well-positioned; market may hit bottom in May

Battery makers and material suppliers CQi surveyed have tried to mitigate the pandemic's impact by suspending some production lines, cutting wages or stopping new plant construction. Feedback from NEV sales centres implies China's NEV market may hit bottom in May. Tesla could benefit from the recovery.

April 14, 2020

CQi Materials - Cautious 2Q demand outlook

All CQi-tracked materials panels saw negative YoY order growth amid the slow demand recovery in March, and expect another negative month in April. The panels have largely pushed back their estimated timing of demand normalization. Other than the cement panel, most of the other materials panels expect negative YoY demand growth in 2Q. 

April 13, 2020

CQi Consumer – Caution continues

CQi's latest consumer survey shows little improvement in their intention to consume. The panel's disposable income did improve in March vs February but YoY growth remained negative. Local governments have issued vouchers aiming to stimulate consumption, but the average leverage is only 1.2, based on feedback from the consumers who got them.

April 9, 2020

CQi Property – Weeks to normal; Wuhan update

As China's property market began to slowly recover, developers' pricing strategies diverged among city tiers, CQi's latest surveys reveal. Showroom managers expect it will take five weeks for their local markets to return to normal. A successful land auction on 31 March relaunched Wuhan's property market.

April 9, 2020

CQi Energy Bulletin - Solar hit by pandemic, but will shine again

Solar producers surveyed by CQi in early April cut their sales growth expectations for 2020 sharply as a result of the pandemic, with rising concerns about new orders. CQi believes Beijing's latest subsidy cuts could further motivate solar players to cut costs to achieve grid parity, and explore opportunities in the 5G and NEV sectors.

April 8, 2020

CQi Wine - TWE: snapshot suggests slow growth in China

CQi recently interviewed two tier 2 distributors and one retailer of Treasury Wine. TWE's Penfolds has strong brand awareness among Chinese consumers but is hurting from reduced demand for mid-to high-end wine. TWE does get credit for reducing counterfeits and parallel imports but the distributors are critical of its sales strategy.

April 7, 2020

CQi Beauty Insights - L'Oreal leads; Chinese brands make headway

The pandemic is hurting income growth in China, yet we expect the cosmetics market to return positive growth this year. L'Oreal Group's brands dominate both skincare and makeup, and remain high on our “Want-to-Buy” list in 2020. Domestic brands appeal to young consumers who are heavily influenced by social marketing and live-streaming ecommerce.

April 2, 2020

CQi Business Monitor-Beijing's two policy tools: Infrastructure and consumption

Beijing has stepped up efforts to stem the devastating impact of COVID-19. Infrastructure will again be front and centre of stimulus. CQi spoke to recruiters to see if the job market can hold up to boost consumption. We expect firms' hiring plans to freeze and wage growth to be static. 

April 1, 2020

CQi Strategy - Implications of a looming export crash

Having already plummeted 16% YoY in 2M20, China's exports look set to shrink further in the coming quarters as the pandemic worsens in China's major export markets. Exporting manufacturers surveyed by CQi expect sales to drop 30% YoY in 2020, echoing anecdotes we heard of massive export order cancellations across multiple sectors. 

April 1, 2020

CQi Property – Resumption accelerates

CQi's survey of 180 for-sale residential projects in 80 Tier 2-5 cities on 25-31 March indicates that the property market resumption has picked up into the end of March. Showroom managers reported increases in showrooms reopening, customer traffic, sales and property construction.

March 26, 2020

CQi Strategy - As China gets back to normal the pace of schools reopening is a key indicator

CQi flagged a good measure of a return to normalcy across China in an earlier Strategy note: local government plans to reopen schools. By 25 Mar, seven provinces had partially reopened schools, and eight other provinces have announced dates for school reopening. The remaining 16 provinces & municipalities have not specified the date for reopening.

March 26, 2020

CQi Business Monitor - How strong will a rebound in China's outbound tourism be? 

The two travel industry professionals CQi talked to are optimism about the longer-term development of outbound tourism which we are sympathetic. But we are concerned about the near-term implications of the virus: labour market uncertainty sees households in a more precarious financial position and more hesitant on consumption. 

March 19, 2020

CQi Strategy – Virus survey III: Faster resumption

This week CQi revisited the 343 enterprises we surveyed last month about the impact of the virus outbreak. Most of them are back to work and business has returned to 60-70% of normal levels. Cash flow stress seems to have eased slightly but firms are still bearish on the full year, expecting double-digit declines in revenue and profit.

March 17, 2020

CQi Infant formula- Recent A2M store visits amid COVID-19

CQi recently visited two maternal & infant stores in Shanghai and Jinjiang. Based on our interviews, we found the COVID-19 epidemic has had little impact on infant formula sales. A2 Milk has gained popularity on social marketing, but its future growth will rely on its innovation capability and investment in an on-the-ground sales force.

March 16, 2020

CQi Property – Conservative policies; market far from normal

Property prices on CQi panel fell across Tier 2-5 cities in response to the falling sales and weak buyer sentiment. Two Tier-3 cities' attempts to lower first down-payment ratio were cancelled quickly, a show of Beijing's resolve to curb speculation. The resumption of property construction was still slow and is likely to be slow in the near term. 

March 15, 2020

CQi Materials - Demand outlook cut

All CQi-tracked materials panels saw a big demand hit in February as downstream customers undertook a slow return to work. All materials panels expect negative YoY demand growth in 1H. We expect such a negative trend could last throughout 2020. Our examination of local governments' investment plans reveals that current plans are only up by 1% YoY. 

March 12, 2020

CQi NEV Market Monitor - Market reboot, government support

Domestic NEV players are slowly resuming operations. Battery producers on CQi panel are most pessimistic about their full-year performance. Growing output by Tesla's Shanghai plant contributes to a reshaping of China's NEV supply chain. We don't expect the revival of LFP battery to weaken NCM players' lead.

March 4, 2020

Asia Technology Strategy: Smartphones: Modest negative demand impact likely; 5G largely on track in China

Better-than-expected growth outside of China and for overall iPhone units in 2019 would have called for a positive revision to our global smartphone units estimates for 2020.

March 4, 2020

CQi Business Monitor- Foreign and domestic firms strategies amid the virus

A large share of SMEs on CQi panel plan to cut wages and staff to cope with the worsening financial health. An American Chamber of Commerce survey reveals similar measures being taken by firms. Most firms on CQi panel do not think that the virus will accelerate relocation out of China, a similar view to that reported by Amcham member companies.

March 3, 2020

CQi Consumer Credit - CMB leads; Tencent may rise to challenge Ant Financial in online lending

CQi's recent survey of Chinese households shows China Merchant Bank's lead in consumer credit. It also points to the surge of "community shopping" on Wechat, furthered by the COVID-19 virus outbreak, which gives Tencent the opportunity to develop its lending business.

February 25, 2020

CQi Strategy - Virus survey II: A slower return to work and less confident in a post-virus rebound

CQi's 2nd round of surveys across SMEs, property projects, auto dealers and cement plants indicate business is resuming more slowly than firms expected it would. Except for cement plants, most firms expect only a moderate rebound post the virus. In the struggle to survive many firms have cut jobs and wages, adding a negative drag on consumption. 

February 20, 2020

CQi Business Monitor-SMEs squeezed on falling demand and supply restrictions

Due to the epidemic and different timing of CNY this year versus last, manufacturing SMEs reported a YoY drop in orders. Service SMEs posted first YoY sales decline in five months. Logistics, tourism and food services were affected. We expect orders to fall further, transportation and labour costs to rise and margins to be squeezed for this month.

February 19, 2020

CQi Property – Virus hurts, policy supports

Property sales in 1-6 weeks of the year fell significantly YoY. Most showrooms are shut and half the projects on CQi panel have online showrooms. Sales managers expect 1H sales to fall sharply and prices to correct; those in the PRD&Fujian are less gloomy than others. Most policies from local governments aim to ease developers' liquidity pressure.

February 18, 2020

CQi Materials: Appliance and machinery sectors may recover first

CQi-tracked materials panels expect negative YoY demand this month due to the virus outbreak. The steel, aluminium and copper panels are less negative about demand from home appliance and machinery sectors. Demand for credit picked up only slightly thanks to receivables settlements before CNY, but may rise further if downstream liquidity worsens.

February 18, 2020

CQi Strategy - Tax cuts key to recovery

Eight CFOs on our SME panel reflected that large scale tax cuts in 2019 benefited consumers more than corporates, and manufacturers more than service enterprises. Given the growing risk due to the epidemic, more aggressive tax cuts, more flexible collection mechanisms, and faster tax refunds may be part of the government response.

February 14, 2020

CQi NEV Market Monitor - Virus outbreak puts sharp brake on NEV market

CQi's NEV panel tells us the ongoing virus outbreak has put a pause on the domestic NEV market. This black swan event will affect the whole industry chain and accelerate the wash out of underperformers, in particular Tier 2-3 battery producers and NEV makers face a severe challenge from an emerging liquidity crunch and rising default risks.

January 17, 2020

CQi Strategy: The deal, recovery and policy persistence

We expect China to take seriously its commitment under the Phase One trade deal leading to a surge in U.S. exports to China. CQi surveys saw more signs of recovery in big ticket consumption and manufacturing investment, led by 5G mobiles, auto upgrading, home appliances as well as manufacturing investment in automation and pollution control.

January 17, 2020

CQi Lending Lens: Loan rate falls and credit demand goes up

The CQi lending panel reports that the real borrowing cost of guaranteed loans dipped 4bps, and expectations of a relatively loose monetary environment in 1Q have risen. We think it will reduce local governments' special use bond issuance costs but continue to squeeze banks' NIM. Credit demand rose sharply, in particular for working capital loans.

January 15, 2020

CQi Materials: Sentiment improves

Demand of CQi's materials panels was flat or positive YoY in December. The sentiment of material panels and downstream manufacturers have lifted. Seasonal price corrections in cement and aluminium may be muted by low inventory levels in the supply chain. CQi's steel panel expects scrap supply to loosen slightly YoY in 2020.

January 15, 2020

CQi Business Monitor: SMEs see orders bounce and improving capex in 4Q

CQi's recent visit to 400 privately owned manufacturing and services businesses in 90+ cities reveals an improving economy. Both their domestic and export order growth jumped and they are relatively optimistic about 1Q. The firms' capex was up mildly in 4Q. Utilization rates stayed high. These SMEs are seeing improved support from commercial banks.

January 15, 2020

CQi infant formula: A2 and Feihe outperform

CQi's survey to 240 young mothers and 40 maternal & infant store owners in 20 cities indicates consumers' rising confidence in Chinese milk. Feihe is the most popular brand in lower-tier cities. A2 is fast penetrating the China market. Offline channels contribute to most of the sales and will continue to be important compared with online stores.

January 10, 2020

CQi Property: Policy tweaks

Mortgage rates edged up month-on-month (MoM). Some cities loosened policy and a few tightened. Prices and sales across city tiers were also mixed but the short term outlook for both prices and sales improved at the projects. The gap between the home affordability in Tier 2 and Tier 3 cities is small, which makes Tier 2 cities relatively more attractive to buyers.

January 9, 2020

CQi Consumer: 5G mobile sales gaining momentum

Half of the respondents planning to upgrade to 5G phones will buy in 2020. As prices of 5G mobile plans and phones fall, more consumers may be spurred to buy. The panel's YoY income growth weakens for the third month in a row. These households' free cash is returning to bank deposits while stock market sentiment has improved on the month.

January 3, 2020

CQi Strategy: Auto sales recovery and the macro impact

Half of fifty the auto dealers that CQi visited expect their sales growth to turn positive in 2020, with an average growth across the panel expected to be over 6% YoY, versus negative 1% in 2019. The sales pick up will be led by upgrading demand, dealers say, suggesting foreign joint venture (JV) brands will do better. Dealers are positive on electric vehicles (EV). 

November 27, 2019

CQi Material: Near-term demand holds up

Most CQi materials panels reported positive demand growth in October except for steel mills. Panels expect the trends to continue in November, but our observations suggest steel demand may beat expectations. Among all panels, cement plants are the most optimistic about prices in 4Q. In terms of capex spend compared to a year ago, CQi panels are cautious.

November 26, 2019

CQi Property: 2020 outlook

In October, home prices fell MoM in Tier 2 and Tier 4-5 cities; price growth in Tier 3 cities slowed. Home sales rose YoY in Tier 1-2 but fell YoY in Tier 3 cities. CQi panel expects price and sales momentum for the next 1-2 months to weaken. We expect China's property sales to fall by 0-5% YoY and investment to grow in mid-single digit in 2020.

November 15, 2019

CQi Consumer: Tracking consumer sentiment in over 50 cities

CQi consumer survey reveals slightly weaker sentiment among Chinese consumers in Oct vs Sept. YoY growth of household disposable income of the “high” and “upper middle” income groups slowed. Inflation still hurts but expectations on further price hikes cooled a bit. Interest in property investment improved but in China's stock market was still low.

November 15, 2019

CQi Strategy: Trade war pains vs economic resilience

CQi finds manufacturing under pressure from the trade war. The broad service and property sectors remain resilient; middle class households saw strong income growth. We are positive on prospects for a “phase one” trade deal. With trade tensions easing, the next few quarters may see a mild recovery in consumption and manufacturing investment.