Casting
Casting is a manufacturing process by which a liquid material is poured into the mold, which contains a hollow cavity of the desired shape, and then allowed to solidify.
Forging
Forging is the manufacturing process involving the shaping of metal using localized compressive force. Forging is often classified according to the temperature at which it is performed:"cold," "warm," or "hot" forging. Forged parts can range in weight from less than a kilogram to 580 metric tons. Forged parts usually require further processing to achieve a finished part.
Source from wikipedia
Sunday, January 23, 2011
Saturday, January 15, 2011
Containerships most likely to surprise positively
The containerships sector is attractive because of favorable demand/supply dynamics coupled with attractive valuations. Container freight rates may continue to soften over the next three months before rebounding from 2Q11. However, this is discounted at current valuations of 1.0X EV/fleet value. An early than expected recovery in rates could lead to positive earnings surprise, driving share price performances over the next 12 months.
Transpacific and intra-Asia rates could outperform Asia-Europe rates on more favorable demand/supply dynamics. Stronger US economics recovery and intra-regional trade could underpin robust volume growth for Transpacific and intra-Asia trade. Meanwhile, Asia-Europe trade may also suffer from higher supply growth as the current orderbook consists of mainly larger vessel classes, which are more likely to be deployed in Asia-Europe trade as deepwater ports than can accommodate these large vessels are mainly located in Europe. The following top picks have greater exposure to Transpacific and intra-Asia trade relative to their peers.
Favorable tip picks: Orient Overseas (0316.hk); Neptune Orient Lines (NO3.sgx); Hanjing shipping (000700.KS); Evergreen Marine (2603.TW) and Wan Hai (2615.TW).
From GS Report: Asia Transportation 13 Jan 2011
Transpacific and intra-Asia rates could outperform Asia-Europe rates on more favorable demand/supply dynamics. Stronger US economics recovery and intra-regional trade could underpin robust volume growth for Transpacific and intra-Asia trade. Meanwhile, Asia-Europe trade may also suffer from higher supply growth as the current orderbook consists of mainly larger vessel classes, which are more likely to be deployed in Asia-Europe trade as deepwater ports than can accommodate these large vessels are mainly located in Europe. The following top picks have greater exposure to Transpacific and intra-Asia trade relative to their peers.
Favorable tip picks: Orient Overseas (0316.hk); Neptune Orient Lines (NO3.sgx); Hanjing shipping (000700.KS); Evergreen Marine (2603.TW) and Wan Hai (2615.TW).
From GS Report: Asia Transportation 13 Jan 2011
Friday, January 7, 2011
China / Wuhan Retail
The growth potential for China's tier 2/3 cities is still bright. Wuhan's GDP grew 15.2% in 2009, well ahead of the 9.7% average of four tier 1 cities (namely, SH, BJ, GZ, SZ). Massive infrastructure investments are taking place, and local government is linking the 8 satellite cities close to Wuhan's development. Wuhan's properties are 20-25% Shanghai prices, suggesting income/consumption has significant room to grow.
The department store format, compared with street-standing stores (usually for brand building rather than profit making) or malls, has strong competitiveness and viability. The space allocated to each brand in department store is smaller than in the mall space. Additionally, the ability to change tenants as frequently as on a six-month basis (compare to mall tenancy contracts which normally last for 3 years) which makes department store very nimble to adjusting product mix to changing fashion and taste.
Domestic sports brand saturation appears uncomfortably high, with rising rent being the single biggest challenge. As rent increases continue to outpace sales productivity gains, the economics of domestic sports brand business model could face significant challenges in the coming year.
While the demand side remains bright, we see a significant amount of new modern retail capacity coming up in the next 2-3 years. Dalian Wanda has three shopping centers under construction. The quality of new projects and growth scalability will become increasingly more important in differentiating companies from others.
Buy: Intime 1883.HK; Maoye 0848.HK; Belle 1880.HK; Xtep 1368.HK
Sell: NWDS 0825.HK; Anta 2020.HK; Ports Design 0529.HK
From GS Report: Thoughts from Wuhan: Retail field trip takeaways
The department store format, compared with street-standing stores (usually for brand building rather than profit making) or malls, has strong competitiveness and viability. The space allocated to each brand in department store is smaller than in the mall space. Additionally, the ability to change tenants as frequently as on a six-month basis (compare to mall tenancy contracts which normally last for 3 years) which makes department store very nimble to adjusting product mix to changing fashion and taste.
Domestic sports brand saturation appears uncomfortably high, with rising rent being the single biggest challenge. As rent increases continue to outpace sales productivity gains, the economics of domestic sports brand business model could face significant challenges in the coming year.
While the demand side remains bright, we see a significant amount of new modern retail capacity coming up in the next 2-3 years. Dalian Wanda has three shopping centers under construction. The quality of new projects and growth scalability will become increasingly more important in differentiating companies from others.
Buy: Intime 1883.HK; Maoye 0848.HK; Belle 1880.HK; Xtep 1368.HK
Sell: NWDS 0825.HK; Anta 2020.HK; Ports Design 0529.HK
From GS Report: Thoughts from Wuhan: Retail field trip takeaways
Saturday, January 1, 2011
China Banking outlook 2011
The systemic risk is low given that total government borrowing, and LGP loans (loan to local government-owned platforms) account for less than 50% of the GDP. And the government is closely monitoring the LGP loans by the China Banking Regulatory Commission(CBRC), Ministry of Finance (MOF) and banks. Additionally, loans to projects that rely on fiscal revenue to repay are largely loans to LGPs owned by big cities or rich province. Big banks' LGP customers are largely owned by these government, too.
There are some positive development in the resolution of LGP loans. First, LGP loans now are closely monitored by CBRC/MOF. The coming property tax and resources tax will be an initial positive step in providing new stable revenues for local government. Current reduction of local government layers will build a foundation for taxation reform of government.
Risk still exits. The problematic LGP loans may result from inadequate due diligence or weak lending practices by some banks in 2009. On a standalone basis and excluding subsidies, many LGPs cash flow and interest coverage are low, and thus low stand-alone credit ratings. In the case of severe macro slowdown, whether local government will support LGPs or allow banks to sell the collaterals remains a question.
From GS report: Banking panel on LGP loans: low systemic risk, ongoing fiscal reform (2nd Nov 2010)
There are some positive development in the resolution of LGP loans. First, LGP loans now are closely monitored by CBRC/MOF. The coming property tax and resources tax will be an initial positive step in providing new stable revenues for local government. Current reduction of local government layers will build a foundation for taxation reform of government.
Risk still exits. The problematic LGP loans may result from inadequate due diligence or weak lending practices by some banks in 2009. On a standalone basis and excluding subsidies, many LGPs cash flow and interest coverage are low, and thus low stand-alone credit ratings. In the case of severe macro slowdown, whether local government will support LGPs or allow banks to sell the collaterals remains a question.
From GS report: Banking panel on LGP loans: low systemic risk, ongoing fiscal reform (2nd Nov 2010)
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