china – strong april data; macau plus; trade talks...source: swift, evrisi calculations rmb’s...
TRANSCRIPT
China Research
Tuesday, May 1, 2018
Donald [email protected]
Neo Wang, [email protected]
China – Strong April Data; Macau Plus; Trade Talks
1
Donald Straszheim
310.473.4051
5/1/2018
News Tracker – May 1, 2018
FOREIGN RELATIONS
China Foreign Minister said China and the Dominican
Republic have signed an agreement to establish diplomatic
ties. --- Reuters, May 1
Taiwan Foreign Minister: President Danilo Medina of the
Dominican Republic has ignored our long-term
partnership, the wishes of the people of the Dominican
Republic, and the years of development assistance provided
by Taiwan, to accept false promises of investment and aid by
China. --- Reuters, May 1
OUTBOUND INVESTMENT
HNA has dropped its bid to buy SkyBridge Capital, a hedge
fund investment firm founded by Trump's former aide
Scaramucci, as the deal was still stuck with U.S . regulators
after more than a year. --- Reuters, May 1
May 1, 2018
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Donald Straszheim
310.473.4051
5/1/2018
News Tracker – April 30, 2018
FOREIGN DIRECT INVESTMENT
CSRC released new guidelines for foreign investment in
Chinese security ventures, removing the restrictions that
limit single foreign investors to a 30% stake in securities
ventures. --- Reuters, Apr 30
FOREIGN RELATIONS
Mnuchin said US and Chinese official will hold trade talks
in China on Thursday and Friday, and he was cautiously
optimistic about the meeting. He also said the American
officials planned to raise intellectual property rights, joint
technology and joint ventures with Chinese officials. ---
Reuters, Apr 30
China Foreign Minister will visit N. Korea on Wednesday
and Thursday. --- Reuters, Apr 30
Singapore PM Lee said a mounting trade spat between the
U.S . and China was one of the most pressing worries for
ASEAN as their leaders echoed the concern over rising
protectionism. --- Reuters, Apr 27
The Trump administration labeled 36 countries as
inadequately protecting U.S . intellectual property rights,
keeping China on a priority watch list and adding Canada
over concerns about its border controls and pharmaceutical
practices. --- Reuters, Apr 30
India Foreign Secretary said India and China have agreed
to improve communication between their militaries to
maintain peace at the border. --- Reuters, Apr 30
China Vice Foreign Minister said China does not think it is
important whether India accepts China's Belt and Road
Initiative and China won't force it to. --- Reuters, Apr 30
U.S. Treasury officials are said to be meeting with about 10
industry groups to discuss the latest draft of legislation that
would tighten scrutiny of foreign investment in order to
limit Chinese efforts to acquire sophisticated U.S .
technology. --- Reuters, Apr 30
TAIWAN
Tsai Ing-wen said she would be willing to meet Xi for peace
and stability in the wake of a landmark summit between
the leaders of the two Koreas. --- SCMP, Apr 30
May 1, 2018
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Donald Straszheim
310.473.4051
5/1/2018
Apr 2018 PMIs – NBS and Markit
NBS Mfg PMI: Apr 51.4, vs.
Mar 51.5.
Sep 2017 was 52.4, the
highest since Apr 2012.
Markit Mfg PMI: Scheduled
May 1st , tonight.
NBS’ sample biased toward state-
owned and bigger companies.
NBS Non-mfg PMI, two
components; Construction
Index and Service Index.
Approx weights, Services 78-
85%. Construction 15-22%.
NBS Non-mfg PMI: Apr 54.8, vs.
Mar 54.6.
• NBS Services PMI: Apr 53.8,
vs. Mar 53.6.
• NBS Construction PMI: Apr
60.6, vs. Mar 60.7.
Markit Services PMI:
Scheduled May 3rd, this
Thursday, evening.
Service sector -- growing in
importance. Beijing wants more jobs
here with capacity cuts, phase down
in steel, coal, heavy industry.
May 1, 2018
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5/1/2018
Includes both SOEs and
private owned cos.
Industrial Revenue
Mar (calculated), -13.0%
y/y, vs. Jan+Feb -7.3%,
Dec -34.0%, the worst
growth ever, Nov -27.9%,
and Oct -5.9%.
Mar YTD, +9.6% y/y, vs.
+14.0% in 2017, +2.4% in
2016, +2.0% in 2015, +8.0%
in 2014, and +11.9% in
2013.
Industrial Profits
Mar (reported), +3.1% y/y,
vs. Jan+Feb +16.1%, Dec
+10.8%, Nov +14.9%, and
Oct +25.1%.
Mar YTD, +11.6% y/y, vs.
+28.3% in 2017, +7.4% in
2016, -2.7% in 2015,
+10.1% in 2014, and
+12.1% in 2013.
Profit margin
Profit margin Mar YTD
6.2%, vs. 6.1% in 2017,
5.4% in 2016, 5.2% in 2015,
5.4% in 2014, 5.3% in 2013,
5.3% in 2012, and 6.1% in
2011.
Mar INDUSTRIAL Revenue & Profit
Data Note:
(1) Data from NBS. Various changes in reporting
sample. Ask us.
(2) Caution. Little detail on these data are
available – coverage, sample size, survey
methodology. And, basic questions (doubts) about
the source data themselves.
May 1, 2018
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Donald Straszheim
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5/1/2018
SOE Revenue
Mar was +5.8% y/y,
vs. Jan+Feb +14.7%,
Dec -17.9%, first
negative growth in 16
months,
Nov +17.1%,
and Oct +7.8%.
Mar YTD --
+11.3% y/y in 2018,
vs. +16.9% in 2017,
-3.6% in 2016,
-6.2% in 2015,
+6.8% in 2014,
+8.9% in 2013.
Mar SOE Revenue & Profit
SOE Profit
Mar was +20.4% y/y,
vs. Jan+Feb +21.7%,
Dec -33.2%, worst in
2017, Nov +12.9%,
Oct +4.0%.
Mar YTD --
+21.1% y/y in 2018,
vs. +35.9% in 2017,
-13.5% in 2016,
-6.4% in 2015,
+3.9% in 2014,
+6.4% in 2013.
Including SOEs in all industries, not only industrial. Note: Data is suspect for substandard quality. For reference only.
May 1, 2018
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Donald Straszheim
310.473.4051
5/1/2018
April 2018 Macau Gaming Revenue
Apr was +27.6% y/y, the 21st y/y rise
after 26 months of y/y declines.
Mar, +22.2% y/y, Jan+Feb, +19.7%.
1Q17 was +20.5% y/y, vs.
4Q17 +19.8%.
Data highly seasonal.
SA’d m/m, Apr +4.4% m/m, vs. Mar
+8.2%, Feb -8.7%, Jan +12.9%. Volatile
2017 = +19.1%.
2016 = -3.3%.
2015 = -34.3%.
2014 = -2.6%.
Macau Gaming Revenue
Source: DataInsight, Bloomberg, EVRISI Calculations
Evercore ISI
NSA, Monthly, % Y/Y
-50
-40
-30
-20
-10
0
10
20
30
40
50
60
70
80
05 06 07 08 09 10 11 12 13 14 15 16 17 18
% Y/Y
Latest Apr
+27.6%12M Avg. -5.1% Y/Y
24M Avg. 48.2% Y/Y
06/14-05/16 Avg. -23.2% Y/Y
Caution!Lunar New Year distorion. 2018
Jan+Feb, +19.7%
History. Macau 2014-16, two negatives. One, cyclical slowdown. Two, Anti-
corruption campaign; begun Oct 2014. Focus on non-gaming by PM Li in Oct
2016 visit. Macau Development Plan 2016-20 on diversification/tourism, not gaming.
Years required for transformation.
May 1, 2018
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Donald Straszheim
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Mar Hotel Occupancy & Other Macau Indicators
Hotel occupancy rate – seasonal. New high Jan 2018.
Visitor Arrivals (multi-day stay) –
bigger spending than day-trippers.
More families arriving -- for recreation vs. for gaming.
Macau economy –
Gaming, tourism, construction
Macau Beats Vegas
Macau Beats Las Vegas
Source: IHS Global Insight, Nevada Gaming Control Board
Evercore ISI
Gaming Revenue
0
5
10
15
20
25
30
35
40
45
50
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
USD Billions
Macau (CAGR 00-17: 18%)
Nevada - Clark County (63% from Strip)
2010-2016, USD blnSingapore 5.0, 5.4, 5.9, 6.1, 5.3, 4.8, 4.1LV Strip 5.1, 5.2, 5.4, 5.6, 5.7, 5.8, 6.0
(2 Casinos in Singapore vs. 30+ on LV Strip)
May 1, 2018
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Donald Straszheim
310.473.4051
5/1/2018
March SWIFT Yuan Payment Tracker
Yuan’s share as
an int’l payment
currency rose to
1.62% in Mar, vs.
1.56% in Feb and
1.78% a year ago.
Now ranked #6,
vs. #20 in Jan
2012.
Peaked at 2.79%
and was ranked
#4 in Aug 2015.
Source: SWIFT, EVRISI Calculations
RMB’s Rank as Int’l Payment CurrencySWIFT customer initiated and institutional payments. Based on value.
Evercore [email protected]
0
5
10
15
20
2012 2013 2014 2015 2016 2017 2018
1
5
10
15
20
Mar: #6
RANK
Source: SWIFT, EVRISI Calculations
RMB’s Share of Int’l Payment CurrenciesSWIFT customer initiated and institutional payments. Based on value.
Evercore [email protected]
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
2012 2013 2014 2015 2016 2017 2018
RMB Share (%)
Mar: 1.62%
The SWIFT RMB Tracker provides key statistics on Chinese Renminbi (RMB)'s
progress towards becoming an international currency.
These statistics -- calculated using the value of customer initiated and
institutional payments (inbound and outbound traffic) made via SWIFT only.
% Share of SWIFT Payments
Rank Currency Mar-18
1 USD 39.45
2 EUR 34.55
3 GBP 7.09
4 JPY 3.50
5 CAD 1.70
6 CNY 1.62
7 AUD 1.48
8 CHF 1.43
9 HKD 1.33
10 THB 1.03
11 SGD 0.96
12 SEK 0.86
13 NOK 0.71
14 PLN 0.58
15 ZAR 0.44
16 DKK 0.34
17 NZD 0.33 18 MXN 0.30
Source: SWIFT
May 1, 2018
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