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

August 12, 2020

CQi Property - Further tightening likely; full-year sales outlook improves

More local governments issued tightening policies, raising the prospect of further tightening in cities with price hike. Property prices on CQi panel rose MoM in July, but managers' full-year outlook softens given the renewed tightening and oversupply seen in the rest of the year. Sales rose YoY in July and managers' full-year outlook improved.

August 10, 2020

CQi Energy Bulletin - Solar: Tight material supply drives up prices

The CQi solar survey reveals upside room for prices in the near future as tight material supply remains and order backlogs grow. Further price hikes in supply chain could hurt solar system developers, and in turn dampen demand and export growth, our industry panel says. Some producers we track are planning a strategic shift to the domestic market.

August 10, 2020

CQi Consumer Monthly Watch - Consumer confidence softens, while A-share sentiment rises

CQi's consumer survey reflects continued recovery in household disposable income growth. The panel's income outlook continues to be dampened by uncertainty around the coronavirus however. More consumers plan to hold back on their post-virus consumption. The panel's investment sentiment on bank deposits, stocks and their own businesses improved.

August 9, 2020

CQi Strategy - Profile of A-share investors

CQi interviewed 200 retail investors in the A-share market. The mood among them seems far from overheated despite the July rally, and the families' ample savings appear to be supportive of more stock buying. While a bull market may boost overall consumption only mildly, it could offer stronger support to spending on travel, education and autos.

July 28, 2020

CQi Ecommerce - Discussion with merchants about PDD

CQi revisited 500 e-shoppers for our ecommerce survey and 46 PDD merchants about the platform's sustainability. The reopening of economic activity offline has diverted some online traffic. Alibaba maintains its leading position. JD and PDD gained popularity. The PDD merchants appreciate the effectiveness of the cheap prices in attracting consumers.

July 22, 2020

CQi Strategy - Three key factors weighing on consumption recovery

Based on recent surveys, CQi sees income decline, debt repayment pressure and consumers' fears of a 2nd COVID outbreak as the three key factors weighing on consumption in China. The slower recovery in retail consumption when compared with investment may persist throughout 2H as these three factors remain in play.

July 17, 2020

CQi Entertainment - Survey shows Bili gains vs iQiyi's loss in 1H20

CQi survey shows that although iQiyi still leads in long-form video traffic, the share of iQiyi subscribers on the panel has declined from October. In contrast, the number of Bilibili's subscribers has jumped. Douyin keeps its leading edge on short video, and also becomes the most popular platform where people watch livestreaming.

July 16, 2020

CQi Business Monitor – Headwinds for exports still strong, rebound in domestic activity flattening

Business conditions for private companies tracked by CQi improved in 2Q in terms of demand, profitability and access to financing. Export orders of manufacturers, however, continued to see a steep YoY decline. The pace of recovery in domestic demand seems to be flattening out. New orders of service SMEs dipped slightly more YoY in June than in May.

July 15, 2020

CQi NEV Market Monitor - Customers see autonomous driving as a must rather than a plus

NEV makers and sales centres CQi tracks say customers today see autonomous driving functions as a critical factor for their purchase decisions. This could be a new catalyst for autonomous driving's commercialization, which has been accelerating since late last year. Tesla leads in autopilot applications, but faces new rivals.

July 15, 2020

CQi Lending Lens - Moving to moderate mode

CQi financials surveys confirm that monetary policy is switching to a moderate mode as the economy recovers and the authorities move to rein in capital arbitrage. Most of the lending firm manager's CQi talks to make it clear the loan extension policy has softened the NPL rate. Meanwhile, New Asset Management Rule may be prolonged for a second time.

July 13, 2020

CQi Materials - Positive 3Q outlook

All CQi-tracked materials panels saw positive YoY growth in June. All panels expect positive growth for July though cement plants we talked to in flood affected areas yesterday now expect to see negative demand. For 2Q, the panels had flat or positive YoY demand growth, and their expectations for 3Q are generally higher than 2Q.

July 12, 2020

CQi Strategy - COVID-19: Analysis of a second wave

The second COVID-19 outbreak in Beijing in June hurt local SMEs' revenue growth and prompted consumers to cut spending again, CQi surveys show. The government response was fast and overwhelming and infections were quickly contained. Beyond the capital, CQi-tracked SMEs, property projects and consumers are on high alert for a second outbreak.

July 9, 2020

CQi Energy Bulletin - Could intensifying geopolitical conflicts interrupt China's solar export recovery?

The CQi energy panel said some of their overseas orders, previously cancelled because of the pandemic, have come back. Despite the escalation of tensions between China and its key trading partners in the solar sector, i.e. India, Europe, and Oz, exporters expect that, in 2H, they will achieve single-digit growth and domestic demand will recover.

July 9, 2020

CQi Property – Price growth accelerates; Tier 2 cities to benefit from Hukou reforms

CQi's latest survey shows property sales continued to rebound in June and managers are confident on sales in the next 1-2 months. Price growth picked up, and three cities issued modest tightening measures in response. With more hukou policy loosening in big cities, smaller property markets face more pressure from population outflow.

July 8, 2020

CQi Sportswear - Heavy promotions in the wake of pandemic; Nike holds firm in lead position

CQi talked with both sportswear consumers and retailers in June. COVID-19 has hit business hard and resulted in heavy promotions throughout 2020. But long-term growth prospects seem strong driven by people's demand for both sports and leisure wear. Nike holds firm to its lead position in China. Li Ning stands out in lower-tier cities.

July 7, 2020

CQi Consumer Monthly Watch - Tensions with Australia show impact

CQi checked with our consumer panel about their attitude toward Australia. Clearly the deteriorating relationship between the two countries has led to an increase in negative views and affected the appetite for Australian products. Also their desire to travel to Australia and send their children to study there is affected by the tension.

July 2, 2020

CQi Strategy - Auto dealership survey: Trading up continues amid tepid post-virus recovery

CQi revisited 50 auto dealers to reveal a tepid recovery in sales under the impact of COVID-19. The dealers still expect a double-digit sales decline this year, but a 9% YoY rebound in 2021. They are more confident in NEVs than in ICE cars. The price trend of the best-selling cars provides strong proof that auto buyers are continuing to trade up.

June 25, 2020

CQi Business Monitor - China-based European businesses navigating in the dark

The Business Confidence Survey by the EU Chamber of Commerce gives an extensive analysis of European firms' operations in China. COVID-19 is expected to exacerbate the slowdown in revenue growth that EU firms reported for 2019. Despite the challenges, EU firms will remain committed to China but they call for Beijing to widen market access for them.

June 22, 2020

CQi Strategy - Auto buyer survey: Who is buying cars?

A CQi survey of 233 families interested in buying a car gives insights on the COVID-19 impact on auto demand. Though 25% went ahead with their plan to buy in the past year, another 25% cancelled. The 51% planning to buy in the next two years clearly prefer foreign & JV brands to domestic ones, and a third of them are considering an EV.

June 18, 2020

CQi Lending Lens - Bank capital inadequacy: threats and solutions

Banking data shows that liquidity easing designed to spur economic recovery risks triggering capital inadequacy thresholds at Chinese banks something that may require them to raise capital promptly. CQi analysis of bank data suggests that about Rmb1.4tn in capital may be needed in 2Q-4Q to keep banks' capital ratio stable compared with 4Q19.

June 14, 2020

CQi NEV Market Monitor - Bringing NEVs to the countryside and allowing global brands to raise stakes in JVs

CQi sees early signs of a market recovery but the momentum is weak. Managers at NEV sales centres say bringing NEVs to the countryside may help them tap into the extensive potential demand from rural consumers. Beijing may welcome more global brands to increase their stakes and even gain controlling shares in their NEV joint ventures in China.

June 14, 2020

CQi Materials - Domestic demand stable; exports still weak

The majority of CQi material panels saw flat or positive YoY demand growth in May, but exports remain weak. With the pent-up orders having been mostly released, most of the panels expect orders to fall slightly YoY in June. Steel mills plan to further lift their utilization rate in June despite the wet season, a traditionally slower demand period.

June 12, 2020

CQi Business Monitor - Exporters strive to survive and PPE boom to falter as domestic recovery inches forward

Export orders at CQi-tracked SMEs fell more in May than in April; domestic orders improved at a slow but steady pace. Struggling exporters seek various ways to mitigate losses, such as diversifying to producing medical supplies and tapping into domestic markets. Some Chinese manufacturers appear to be speeding up automation.

June 10, 2020

CQi Strategy - How likely is a wave of consumer defaults?

CQi consumer surveys and our reading of banks' NPL disclosures indicate increasing repayment pressure on households. Yet a significant increase in household defaults still seems unlikely thus far. Families with debt have to use an average 37% of their disposable income to pay down debt, up slightly from pre-virus level.

June 9, 2020

CQi Property – Full-year outlook still weak; virus brings down rental yield

Full-year outlook on sales of sales managers CQi surveyed in May did not improve much from March, though their short-term outlook was positive. Managers saw property new starts rise MoM in their cities. Rental yield at delivered residential projects dipped vs November last. Only low-end projects saw their average rent pick up as renters downgraded.

June 9, 2020

CQi Consumer - Stronger appetite for 5G but smaller demand for premium models

Compared with CQi's 5G check in January, our consumer survey in May finds that after the COVID-19 outbreak more respondents want to upgrade to 5G. Apart from being attracted by the faster speed, they want to get ready for the emergence of 5G applications. Models priced at Rmb3,000-3,999 looks set to be the best-sellers.

June 4, 2020

CQi Consumer Monthly Watch - Recovering sentiment

CQi's consumer survey in May reveals a recovery in Chinese consumer sentiment. Expectations of better financial conditions and business conditions at their employers in 12M are almost back to pre-pandemic levels. Family incomes continue to retrace losses. Spending plans also improved. Slightly more consumers want to invest in their own businesses.

June 3, 2020

CQi Energy Bulletin - China's squeeze on Australian coal and LNG imports

CQi's energy panel expects Beijing to quietly impose tougher restrictions on Australian coal imports. Domestic coal producers don't think they can fully meet the potential supply gap stemming from import cuts, especially for coking coal; they don't expect Beijing to restrict Australian LNG imports given the high cost of breaching an LNG contract.

May 28, 2020

CQi Education – Insights into China's K-12 after-school tutoring market

CQi's survey among parents shows their persistent determination to invest in childrens' education. COVID-19 has boosted the use of online education. When life goes back to normal CQi expects the demand for online-merge-offline grow significantly. Our findings suggest market consolidation helps TAL and New Oriental increase their market share.

May 27, 2020

CQi Business Monitor – Virus disruptions to overseas education

The pandemic has severely disrupted overseas studies for Chinese students. CQi spoke with two education consultant who project a 30-40% decline in Chinese student enrolments worldwide in 2020. Such a drop would have financial implications on foreign universities and the current account balances of host countries. Australia appears the most exposed.

May 27, 2020

CQi Strategy - Consolidation to pick up among home developers amid liquidity stress

By studying the financing and sales activities of property developers, CQi believes liquidity stress at smaller developers is likely to continue despite monetary easing. As a result, sector consolidation looks set to accelerate. CQi surveys also suggests new home buying demand has been too soft to mitigate developers' liquidity risks.

May 27, 2020

CQi Lending Lens – Banks' role in supporting jobs will affect profitability

Regulators will continue to urge banks to increase support for the post-virus recovery, according to the government work report. A research note by the PBoC recently warns that banks' profit growth may stall or turn negative this year, reflecting the regulator's awareness that banks' profitability is the price to pay for doing national service.

May 19, 2020

CQi Consumer Credit – Three types of lenders on risk

CQi interviewed three types of lenders in mid-May. The bank is cautious in loosening credit access to consumers, especially low-quality borrowers; the internet finance firm is rushing to apply AI technology to detect risks early; and the P2P company remains subject to tightened regulations enforced on this industry in the past several years.

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.