China Logistics Sector
Industrials / China
16 December 2013
Initiation: ready to move up in the world
China Logistics Sector
• We see the development of China’s logistics industry in the next decade following the path established by the US, Japan and Korea
• Given a growing need for cost savings, emerging 3PL services and a demand boost from e-commerce should be major sector drivers
• Positive rating; top pick Sinotrans; also recommend SZI, CIMC
See important disclosures, including any required research certifications, beginning on page 60
Positive (initiation)
Neutral
Negative
Industrials / China
16 December 2013
Initiation: ready to move up in the world
China Logistics Sector
Positive (initiation)
Neutral
• We see the development of China’s logistics industry in the next decade following the path established by the US, Japan and Korea
• Given a growing need for cost savings, emerging 3PL services and a demand boost from e-commerce should be major sector drivers
• Positive rating; top pick Sinotrans; also recommend SZI, CIMC
management to maintain their margins. Kelvin Lau
(852) 2848 4467 kelvin.lau@hk.daiwacm.com David Lum, CFA
(65) 6329 2102 david.lum@sg.daiwacm.com ■ Investment case
We see strong demand-growth potential in the China Logistics
Sector over the next decade, as companies will have to find ways to reduce costs to counter the impact of a slowdown in economic growth. In addition, we expect new demand to emerge from e-commerce, continuing industry migration inland, and rising domestic consumption. We initiate coverage of the sector with a Positive rating.
■ Catalysts
With reference to the development of the logistics industries in Japan,
Korea, and the US, we expect to see the following trends in China.
Emergence of third-party logistics (3PL) services. We believe 3PL services will be a trend in
China in the next decade, as Daiwa expects top-line growth for most
China companies to slow
16 December 2013
Initiation: ready to move up in the world
China Logistics Sector
• We see the development of China’s logistics industry in the next decade following the path established by the US, Japan and Korea
• Given a growing need for cost savings, emerging 3PL services and a demand boost from e-commerce should be major sector drivers
• Positive rating; top pick Sinotrans; also recommend SZI, CIMC
See important disclosures, including any required research certifications, beginning on page 60
Positive (initiation)
Neutral
Negative
Industrials / China
16 December 2013
Initiation: ready to move up in the world
China Logistics Sector
Positive (initiation)
Neutral
• We see the development of China’s logistics industry in the next decade following the path established by the US, Japan and Korea
• Given a growing need for cost savings, emerging 3PL services and a demand boost from e-commerce should be major sector drivers
• Positive rating; top pick Sinotrans; also recommend SZI, CIMC
management to maintain their margins. Kelvin Lau
(852) 2848 4467 kelvin.lau@hk.daiwacm.com David Lum, CFA
(65) 6329 2102 david.lum@sg.daiwacm.com ■ Investment case
We see strong demand-growth potential in the China Logistics
Sector over the next decade, as companies will have to find ways to reduce costs to counter the impact of a slowdown in economic growth. In addition, we expect new demand to emerge from e-commerce, continuing industry migration inland, and rising domestic consumption. We initiate coverage of the sector with a Positive rating.
■ Catalysts
With reference to the development of the logistics industries in Japan,
Korea, and the US, we expect to see the following trends in China.
Emergence of third-party logistics (3PL) services. We believe 3PL services will be a trend in
China in the next decade, as Daiwa expects top-line growth for most
China companies to slow