Business agency August 9 hearing Deutsche Bank issued a research report on August 8, said that after the US sovereign credit rating was lowered, the slowdown in demand growth in the United States, the European Union and emerging markets is still the focus of attention of Deutsche Bank. Deutsche Bank has reason to believe that the news of this downgrade is bad news for companies like Shenzhen Mindray, Wuxi PharmaTech, and Federal Pharmaceuticals.
Take Mindray as an example, 60% of its revenue comes from overseas markets. Although the Chinese economy will continue to accelerate growth in the second half of 2011, the expected slowdown in economic growth in the United States, the European Union, and other emerging markets will hurt its ability to obtain expected profits. The reduction in the expenditures of biopharmaceutical companies and the tightening of credit policies have also caused WuXi PharmaTech to face the same risks.
Even though Deutsche Bank cannot quantify the strength and durability of this demotion on demand growth, Deutsche Bank is still reminding investors that the bank’s Chinese team has reduced the growth rate of Chinese exports from 18% to 10% in the second half of 2011. The annual growth rate for 2011 was reduced from 24% to 16%.
In addition, Deutsche Bank predicts that in the coming months, with the growth of exports from 25% in the first half of the year to 15% or less in the second half (if the U.S. and the EU’s GDP decline is obvious), the appreciation of the renminbi will slow down. . As an important measure of a country’s economy, the exchange rate of the RMB against the US dollar has soared at an annual rate of 5% over the past seven months. On the morning of August 8, the exchange rate of the yuan against the US dollar reached 6.425, setting a new high since April.
According to Deutsche Bank, the continued acceleration of the renminbi is a bad for companies such as Mindray and WuXi PharmaTech. However, the bank’s Chinese team expects the appreciation of the renminbi in 2011 to be 3.8%, which is lower than the previous 5% appreciation. Ma Jun, chief China economist at Deutsche Bank, attributed this slowdown to the expected slowdown in exports in the second half of 2011.
Deutsche Bank reminded investors that a 1 percentage point decrease in the GDP growth of the United States or the EU would result in a 7 percentage point drop in China’s export volume. This result is inferred from historical data. Compared with other sectors in the real economy, industries closely related to exports will suffer the most.
Take Mindray as an example, 60% of its revenue comes from overseas markets. Although the Chinese economy will continue to accelerate growth in the second half of 2011, the expected slowdown in economic growth in the United States, the European Union, and other emerging markets will hurt its ability to obtain expected profits. The reduction in the expenditures of biopharmaceutical companies and the tightening of credit policies have also caused WuXi PharmaTech to face the same risks.
Even though Deutsche Bank cannot quantify the strength and durability of this demotion on demand growth, Deutsche Bank is still reminding investors that the bank’s Chinese team has reduced the growth rate of Chinese exports from 18% to 10% in the second half of 2011. The annual growth rate for 2011 was reduced from 24% to 16%.
In addition, Deutsche Bank predicts that in the coming months, with the growth of exports from 25% in the first half of the year to 15% or less in the second half (if the U.S. and the EU’s GDP decline is obvious), the appreciation of the renminbi will slow down. . As an important measure of a country’s economy, the exchange rate of the RMB against the US dollar has soared at an annual rate of 5% over the past seven months. On the morning of August 8, the exchange rate of the yuan against the US dollar reached 6.425, setting a new high since April.
According to Deutsche Bank, the continued acceleration of the renminbi is a bad for companies such as Mindray and WuXi PharmaTech. However, the bank’s Chinese team expects the appreciation of the renminbi in 2011 to be 3.8%, which is lower than the previous 5% appreciation. Ma Jun, chief China economist at Deutsche Bank, attributed this slowdown to the expected slowdown in exports in the second half of 2011.
Deutsche Bank reminded investors that a 1 percentage point decrease in the GDP growth of the United States or the EU would result in a 7 percentage point drop in China’s export volume. This result is inferred from historical data. Compared with other sectors in the real economy, industries closely related to exports will suffer the most.
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