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20-07-2007
Shares
of Chinese auto vehicle parts makers listed
in Hong Kong, including Weichai Power and Norstar
Founders Group, are poised to rise even more
as domestic auto sales soar and companies like
Volkswagen and Nissan Motor buy more Chinese-made
components. The shares of Chinese parts makers
sell at an average of about 30 times earnings,
79 percent lower than mainland-listed parts
makers, even after some of them have more than
doubled in value this year.
Exports
of engine parts and other components will, helped
by low labor costs, almost double to $40 billion
by the end of 2010, according to the China Association
of Automobile Manufacturers. Sales of Chinese-made
parts almost tripled in the last four years.
"We've
got to have parts makers in our portfolio,"
said Liu Yang, who helps manage $3 billion at
Atlantis Investment Management in Hong Kong,
including shares of Xinyi Glass Holding, the
biggest exporter of auto glass in China.
Weichai
Power, the country's largest maker of diesel
engines for heavy-duty trucks, may increase
its profit 84 percent this year, according to
Tian Sidong, an analyst at UBS Securities Asia
in Shanghai. The company's shares, which more
than doubled last year, may rise a further 36
percent, said Eric Hu, an analyst at BOC International
Holdings in Shanghai.
Norstar,
a supplier of axle modules to DaimlerChrysler's
venture in China, may increase profit 32 percent
in the year ending in March 2008 and 24 percent
the following year, said Ivan Cheung, an analyst
at Kim Eng Securities Hong Kong. He said he
expected the shares would rise 52 percent.
The
Chinese auto vehicle parts industry "is
really going to take over the global market,"
said Jack Perkowski, chairman of Asimco Technologies,
a Beijing-based components maker.
China
has more than tripled automobile output and
sales since joining the World Trade Organization
in 2001. Last year, it surpassed Germany as
the world's third-largest vehicle maker, as
economic growth pushed domestic auto sales to
7.22 million units. (Japan and the United States
are the top automakers.)
Exports
of parts surged to $22 billion last year from
$2.1 billion in 2002, according to the automobile
manufacturers association.
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