Dim Sum Express

Auto: March sales data review; PV sales up slightly, HDT remains strong.

    Total auto sales volume grew 4.2% YoY to 2.54m units in March, with passenger vehicles up 2.8%and commercial vehicles rising 16.3%. The sales volume of SUVs picked up 20.1% YoY, whichremained the key growth driver for passenger vehicle sales, though this pace of growth slowed fromFeb. Our index tracking industry production costs picked up 50.4% YoY but came down 9.6% MoMin March. Given that current industry business conditions are quite strong, the positive impact ofdemand growth on profitability should more than offset the negative impact of higher productioncosts.Home Appliances: Small appliance industry experiencing consumption upgrade.

    We believe the small appliance industry is experiencing consumption upgrade, and is set to seesubstantial room for growth over the next 5-10years. Going forward, higher-end versions oftraditional small appliances will replace their older-version counterparts, which will benefit marketleaders most. In addition, new products will become more popularized, which will benefit leadingplayers that can successfully penetrate new markets, while new leaders are also likely to come intobeing in segments or markets for products that differ significantly from existing ones.