What China slowdown? Three Chinese companies making big money globally


More Chinese companies are becoming international players. BYD, and other Chinese electric cars brands, flocked to the German auto show last week to announce their plans for the European Market. Customs data shows that car exports are still a bright spot for China’s overall economic slump. In a note published Wednesday, UBS Securities China Equity Strategist Leimeng stated that these overseas sales helped China’s auto industry earnings increase by 46% from a quarter ago. Counterpoint Research reported that BYD, SAIC, and other Chinese firms gained 9% market share in the global electric vehicle market in the 2nd quarter. This is up from 5% the previous quarter. This is on top of their share of the Chinese auto market, which is the largest in the world. CLSA raised its BYD target price by 10 Hong Kong Dollars to 310 HKD on September 4, a 25% increase from BYD’s closing price for the week. Analyst Xiao Feng, along with a team of analysts, predict that BYD will join the world’s top ten original equipment manufacturers this year before moving up to the top five in 2026. CLSA’s report stated that Toyota will be the world leader in 2022 with 10.43 millions units sold. Analysts expect BYD sales to grow by 65% this year to 3,05 million units, including between 250,000 and 300,000. This is a step in the direction of Toyota. Britannica reports that the Japanese automaker started increasing its exports overseas 60 years ago. It grew through the decades and in 2008, it surpassed General Motors as the largest automobile manufacturer. The Japanese auto giant struggles to maintain its strong presence on the all-electric vehicle market. Beyond EVs The slowing growth of China has also led companies, such as startups, to turn their attention abroad. Meng, from UBS, said that mainland Chinese stocks (also known as A-shares) saw a 8% drop in earnings year-on-year during the second quarter. He said that “another industry that benefited from strong exports was machinery: H123 earnings YoY grew, despite the YoY decline seen in Q1.” Shenzhen construction machinery company XCMG reported in its filings over the past two weeks that international revenue grew by 33.5% during the first half of this year, to 21 billion yuan (2.86 billion dollars). The company, whose name is Xuzhou Construction Machinery Group, reported that this accounted for 41%, an increase of 11 percentage points, in total revenue. The company claimed that revenue from West Asia and North Africa, as well as Central America, more than tripled in the first half of this year. The company reported that revenue from Europe increased by 150% while Central Asia and North America doubled. UBS stock analysts Phyllis Wang, and a team, said in a note dated Sept. 4, that XCMG’s export sales are expected to grow by 50% for the entire year. Analysts raised their price target from 6.20 to 6.70 Yuan, citing higher earnings expectations. They maintained a neutral rating. This is about where the stock ended on Friday. Chinese companies have tried to “go international” for many years with the tacit encouragement of Beijing. Cosco, the state-owned shipping company, has ships all over. Haier, a Shanghai-listed company, acquired GE Appliances in 2016. Mingyang is also listed in Shanghai and is a world leader in wind energy. JPMorgan analysts cited Omed and S & P capital IQ to say that China’s biggest homegrown medical device manufacturer Mindray is among the top 50 in the world. JPMorgan analysts Helen Zhu, and team, said that Mindray’s overseas sales in the second quarter “accelerated significantly”, with a surge of 40% from a previous year. They said that Europe sales increased by 20% in the first half of this year compared to a year earlier. Analysts have lowered their growth forecasts due to ongoing anti-corruption measures in China’s healthcare sector. However, the company’s Shenzhen shares still offer a 67% premium to JPMorgan’s price target of $433 yuan. Michael Bloom, a CNBC reporter, contributed to this article.