Incredible Chinese Auto Sales Growth Bodes Well For Parts Players (TM, HMC, F, CAAS, SORL, TXI, WATG)

Tickerspy’s Chinese Auto Parts Index

CHINESE AUTO PARTS INVESTING IDEAS

• Popular long ideas: CAAS, CYD, SORL
• Popular short ideas: CAAS, TXIC, CYD
• Top dividend plays: None
• Pro favorites: CYD, SORL

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CHINESE AUTO PARTS COVERAGE

Auto parts manufacturers and retailers based in China

• China Spy: Liquidity is Back, Youku Has a Partner (EFUT, ISS, CAAS, ZX, YOKU, ZNH, SVN, HSOL, SOL, NQ)
• SORL's Earnings Not Enough To Lift Chinese Auto Parts Stocks (SORL, TXIC, CAAS, CYD, WATG)
• Three Hot U.S.-Listed China Sectors (CYD, CAAS, SORL, HSFT, ASIA, EFUT, NTES, CYOU, PWRD, GA, WZENY)

CHINESE AUTO PARTS CHART

CHINESE AUTO PARTS METRICS

Avg. Market Cap:	$193.6M
Avg. P/E Ratio:	5.0
Avg. Div Yield:	0.0%

China’s vehicle sales surged by more than 45% last year, overtaking the U.S. as the largest car market in the world.

In the U.S., the struggling automotive segment was a recurring theme throughout the recession, ultimately leading to record low auto sales in 2009. In China, however, sales spiked to a record high last year as the country developed a new appetite for passenger vehicles. According to The Wall Street Journal, monthly Chinese auto sales have outpaced those in the U.S. since last January.

While Toyota (TM), Honda (HMC), Ford (F), and other major carmakers are all trying to get a piece of the pie, a handful of parts players could also be set to benefit from the recent trend.

As a whole, the Chinese Auto Parts Stocks Index is ahead by 3% today. The segment is now outperforming the S&P 500 by 15.5% over the last month.

High-flier China Automotive Systems (CAAS) is now up by over 130% over the last three months. The company manufactures power steering systems and other automobile components in China.

Sorl Auto Parts (SORL) is the sector’s top-performer over the last month, adding more than 35%. Commercial vehicle breaking systems are among the company’s specialties, and its parts are distributed to original equipment manufacturers (OEMs) as well as the aftermarket in China and internationally.

Body panel player Tongxin International (TXI) has lagged its peers over the last three months. The stock has slipped by -5% in just the last five sessions while the rest of the sector moved higher by as much as 20%.

Two Pro investors counted Jinzhou, China-based Wonder Auto Technology (WATG) among their top-15 U.S.-listed positions at the end of Q3. With fourth-quarter 13F filings due by mid-February, it will be interesting to see whether the segment’s recent trend was enough to attract more Pros to the segment.

As of this writing, the Chinese Auto Parts Stock Index is one of the top-15 performing tickerspy Indexes over the last month, up by 18%.

Investors can track the Chinese Auto Parts Stock Index, and eight other Chinese sub-sectors for performance trends and a suite of other metrics at tickerspy.com.

Tags: CAAS, F, HMC, SORL, TM, TXI, WATG