With the Chinese economy weighed down by a host of factors, it’s worth focusing on businesses that are managing to hold their own and buck the downturn.
Among the notable bright spots is the new-energy sector.
Earlier this month, e-car maker BYD (01211.HK) revised upward its 2015 earnings forecast to an increase of between 518-557 percent compared to the 2014 level.
Demand for electric cars “experienced explosive growth” in the fourth quarter, the company said. Its plug-in hybrid vehicles enjoyed brisk sales and orders for the firm’s e-bus and e-cars have both been rising.
Brisk demand will help keep BYD’s production lines running at full capacity, which is crucial to a healthy margin and sustaining strong earnings.
Makers of battery and related products are also having a good time.
Hefei Guoxuan High-tech (002074.CN) predicted that its 2015 profit will show an expansion of 120-150 percent, an upward revision from the firm’s previous forecast for 80-110 percent gain.
Its new factory in Nanjing began operation in the fourth quarter, the perfect time to ride the booming battery market.
Tianqi Lithium (002466.CN) also lifted its full-year earnings forecast, as volume and price gains in its products contributed to rising sales and better margin.
New-energy is a critical part of China’s manufacturing upgrade strategy, as well as a key component of its plan to cut pollution.
Given the supportive policies, the sector should stay relatively immune to the general economic slowdown.
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