文档介绍：27 May 2005
Asia Pacific/China
Investment Strategy
Equity Research
Research team
Vincent Chan
852 2101 6568
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Jonathan Garner
44 20 7883 6887
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Trina Chen
852 2101 7031
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Jeannie Cheung
852 2101 7663
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Prashant Gokhale
852 2101 6944
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Angello Chan
852 2101 6314
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Neelkanth Mishra
65 6212 3370
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Source: CSFB Research. Alison Yip
852 2101 7196
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China’s Capacity Expansion
When the dragon strikes ...
Investment cycle and major drivers
During the investment upturn of past few years, property and basic materials and machinery/electronics
have been the major drivers. Financial statistics of industrial corporations indicates that investment
behaviour has little relationship with profitability, gearing and profit growth.
Global impact
To assess the global impact of different sectors, there are three issues to be considered: 1) whether they
can be traded internationally, 2) if they plementary to or substitutes and 3) existing capacity
utilisation and inventory/sales positions. Considering these factors, industries globally facing more
downside risk in terms of pricing are apparel & textiles, furniture, communication equipment, computer &
electronic products, motor vehicle & parts and fabricated metals.
Capacity impact by sector
We looked at: white goods (including refrigerators, air-conditioners, washing machines and microwaves),
autos, modities (including coal, cement, aluminium, cement, glass and steel), oil &
chemicals, power, semiconductors and mobile handsets. The demand-and-supply balance of autos,
power, aluminium and steel products (particularly flat steel products) will worsen in next few years.
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