Although the epidemic prevention work in China has achieved phased victories and various industries have begun to resume work and production, as the epidemic spreads overseas, European and American countries have become the new epicenter of the new crown pneumonia epidemic, and it is urgent to prevent imported risks.

According to real-time statistics from Johns Hopkins University, as of 9:30 on March 25, Beijing time, there were 417,966 confirmed cases worldwide and 18,615 deaths. More than 330,000 cases have been confirmed outside China.

In fact, in addition to the epidemic itself, risks also include impacts on economic industries. Recently, a company's "dismissal notice" for employees swiped the screen. A watch company in Dongguan was facing a business crisis because its US customer cancelled a large order, and had to actively persuade employees to seek another career. The impact of overseas risks on the operation of domestic companies is evident.

As the global epidemic enters the second half, which industries in China will be greatly affected?

On March 20, the Big Data Display Center displayed transaction data in real time. Photo by China News Agency reporter Ran Yang

Home Appliances: Pessimistic Expects Overseas Revenue in the Second Quarter

Down over 70%

Everbright Securities analyst Venus said that the current market has some concerns about the overseas business of the home appliance sector. According to industry online statistics, in 2017, China's air-conditioning, refrigerator, washing machine, television and other home appliance production capacity accounted for 78%, 52%, 37%, and 49% of the world's total. In 2019, the export sales of the four categories accounted for the total domestic and foreign sales. The proportions are 39%, 44%, 32%, and 64%, respectively, and their weight cannot be ignored.

CITIC Securities analyst Ji Min also held similar opinions. Ji Min said that if the impact of overseas epidemics on the domestic appliance industry is analyzed from the three assumptions of optimism, neutrality and pessimism, of which: under optimism, the negative impact of the epidemic will be controlled in the second quarter; under neutral conditions, the negative impact of the epidemic will continue Until the third quarter; under pessimistic conditions, the negative impact of the epidemic continued into the fourth quarter.

Ji Min further pointed out that in the short term, the continued epidemic will lead to a decline in overseas demand, and the income of globalized enterprises and export-oriented enterprises will be under pressure. Under the optimistic situation, it is expected that the decline in overseas revenue of home appliances companies in the second quarter is expected to be within 50%; in a neutral situation, the downward trend in sales in the second quarter continues, and the company's overseas revenue decline in the second quarter is about 50% to 70%; Under pessimistic conditions, overseas sales declined and showed no signs of improvement. It is expected that the decline in overseas revenue in the second quarter may be more than 70%.

Automotive industry: industry chain faces risk of break

Pacific Securities analyst Bai Yu said that the worsening of the overseas epidemic has caused some risks to the supply side of the domestic automotive industry. The localization rate of a domestically produced vehicle is basically above 95%. However, a car is a highly complex product. A car has 20,000 parts, and 5% means 1,000 parts. As long as there is no one part, the car is difficult to deliver to customers. . This complexity has created the highly globalized characteristics of the automotive industry. Vehicles and component companies in different regions rely on different costs and technological advantages to form global supplies.

The characteristics of globalization have also caused the global automotive industry to be a grasshopper on a rope. In addition to any problem, it will have a huge impact.

Bai Yu said that China is currently the world ’s largest producer of automobile vehicles and parts, but some parts still depend on imports. These imported parts are mainly concentrated in the core control unit of the engine, transmission, and fuel injection system. The core chip, connector and other units of the body stabilization system also have some machined parts that require extremely high manufacturing accuracy. These parts are mainly from Europe, Japan, South Korea, and the United States, and their proportions are about 65%, 30%, and 5%. Therefore, the epidemic trend in these three regions is crucial to the safety of the entire industrial chain in the future.

Bai Yu believes that in the short term, major domestic OEMs have more than two months of safety stock cycles, so the domino has not yet collapsed. However, if the epidemic lasts for a long time, the pressure on the supply side will gradually emerge, and the risk of industrial chain disruption is facing.

Photovoltaics: Nearly 15% of installed capacity could be impacted

China is the world's largest manufacturer and exporter of photovoltaic products. In recent years, domestic photovoltaic exports have been at a high level. Take the export of modules as an example. In 2019, the export volume of photovoltaic modules in China has reached 66.6GW. The export of major photovoltaic companies accounted for 70% -80%, and some even exceeded 90%. The spread of overseas epidemics is obviously not good news for photovoltaic exports.

Zhou Yuan, secretary general of PGO Photovoltaic Green Ecological Cooperation Organization, said that according to the development process of foreign epidemics, if effective control cannot be carried out, 70% of China's photovoltaic industry that depends on exports will be greatly affected. The impact of overseas epidemics on photovoltaic projects is mainly reflected in the decrease or slowdown in downstream demand, as well as project promotion, financing, and logistics.

Everbright Securities analyst Yin Zhongshu said that the overseas epidemic remains the main risk of the current photovoltaic industry. At present, the overseas epidemic situation continues to "deteriorate", and some overseas photovoltaic markets have begun to be affected. Although some European countries have signed projects that are under normal construction and operation, and domestic module exports are also being shipped normally, due to quarantine and local logistics and other issues after the modules arrive in Hong Kong, It is difficult to get the components in place in time. At the beginning of the year, the market generally estimated that the global installed capacity will be about 140GW in 2020, based on the domestic situation and overseas epidemics and closures; based on the current situation, it is estimated that the negative impact of the epidemic on global photovoltaic demand in 2020 should be around 20GW, accounting for nearly 15%. If the overseas epidemic situation can not be effectively controlled, or even dragged into the second half of the year, the impact of photovoltaic overseas demand will be further deepened.

Real estate: appreciation of the US dollar increases pressure to repay debt

Recently, the dollar has continued to appreciate. On March 19, the US dollar index broke through the 102 mark and hit a new high in the past three years. Although the US dollar index has fallen since then, it still remains above 100.

Zhao Xijun, deputy dean of the School of Finance of Renmin University of China, said that the reason for the appreciation of the US dollar was mainly due to the impact of the new crown pneumonia epidemic. When investors are particularly uncertain about their future expectations and think that the risks are increasing, they want to hold cash. Cash is the most important way to deal with future uncertainty. The more pessimistic the future, the greater the demand for cash. The Fed's interest rate cuts and quantitative easing policies have not played a role in stabilizing expectations. Instead, they have heightened market concerns about the future, which has led to an increase in investors' cash needs in preparation for future needs.

With the continued appreciation of the US dollar, the pressure to repay debts of Chinese housing companies will also increase. According to Wind statistics, in the first quarter of 2020, the US dollar debt repayment amount of real estate enterprises was $ 11.075 billion, accounting for 33.27% of the year. Bloomberg's data shows that the peak period for overseas debt repayments of housing companies in 2020 will be March and November. The maturity scale of overseas debts of real estate companies reached 29.465 billion US dollars throughout the year.

Aviation industry: International market still at trough

The global aviation industry is one of the sectors most affected by the epidemic, or it may be extinct. The list of international airlines that have announced grounding is getting longer. The latest ones are Emirates and Singapore Airlines.

Dubai-based Emirates is the world's largest long-haul airline and will suspend passenger flights to most destinations starting on March 25 as travel bans have been issued in many countries. Singapore Airlines said on March 23 that it will reduce its capacity by 96% until the end of April, which is similar to the previously announced Cathay Pacific measures.

The International Air Transport Association (IATA) said that the new crown pneumonia epidemic could cost 252 billion US dollars in global aviation revenue in 2020, equivalent to 44% of total revenue in 2019.

As far as China's aviation industry is concerned, Western Securities analyst Wu Jianliang said that the worst period in China may have passed and the international market is still at a trough. With the improvement of the domestic epidemic situation, the demand for domestic routes has resumed. According to the statistics of the Ministry of Transport, as of March 19, the average daily number of passengers sent by civil aviation was 449,000, which was an increase of 66.2% from the February daily average of 270,000, and still fell 72.9 %.

However, with the escalation of overseas epidemics, entry and exit of all countries have been restricted, and international routes have tightened. Currently, there are 20,000 people entering international flights every day, and foreigners account for 10%. National land ports, seaports, and air ports have an average of 120,000 people daily, compared with last year. Compared with the same period, it decreased by 80%.

As of March 19, the number of flights to and from mainland China by March was less than 18%, of which Japan ’s flight rate was 10.1%, South Korea ’s 14.7%, and Thailand ’s 24.8%. International flights will still be under pressure.

Author: Chen Kangliang