Dim Sum Express

Auto: Nov HDT sales data review; strong business conditions persist

    We estimate HDT sales value growth of -5% to 5% in 2018, with any positive surprises likely to comefrom restrictions on the use of National III or bellow vehicles and tougher regulation against truckoverload. Industry earnings would be much better than expected by the market in 2018even in thecase of slightly negative or zero sales volume growth. In addition, over the longer term, Chinese HDTproducts have the room for 3-4x ASP growth compared with their overseas peers. Product upgradesshould significantly enlarge industry profit margins. Leading HDT companies have considerable reratingpotential in 2018.