* Double-digit rise in share prices of car parts suppliers
* Car sales in China rose 33.2 percent in 2010
* Amtek to double Shanghai plant space in next 2 years
By Eveline Danubrata
SINGAPORE, Jan 13 (Reuters) – As China’s car sales surge,
Singapore-listed auto parts suppliers with operations in the
country like Amtek Engineering , which manufactures
precision engineering, plastic and rubber components, are
basking in market attention.
Shares of Amtek, which plans to double the space at its
production plant in Shanghai to around 72,000 square metres in
the next two years to tap on the increasing demand for cars,
have risen about 25 percent so far this month.
The firm was delisted from the Singapore bourse in 2007
after being bought out by private equity firm CVC Capital
and a unit of Standard Chartered , and made a
come-back on Dec 1.
Car sales in China rose 33.2 percent in 2010, securing the
country’s position as the world’s biggest automotive market
for the second straight year, official data showed.
[ID:nTOE70603Q]
“China will continue to be a large and growing automotive
market. And with global automakers lining up to set up
manufacturing plants in China, I expect prospects for the
industry to remain strong,” said Gregory Yap, a Kim Eng analyst.
Other Singapore-listed car parts suppliers are Armstrong
Industrial , which manufactures foam and rubber parts
used for cushioning in car doors, and Cheung Woh Technologies
, which produces components like car seat recliners.
Shares of Armstrong Industrial are flat so far this month
but rose 72 percent last year. Cheung Woh stock has gained
around 37 percent since the start of 2010.
DBS Vickers has started coverage on Amtek with a “buy”
rating and a S$1.65 target price, against its current price of
S$1.35.
“The emphasis on automotives in their business is one of
the factors that have been driving their share prices,” Yap
said.
However, he cautioned that the growth pace of car sales in
China this year is likely to slow down as the financial
incentives to spur consumers to either buy new cars or upgrade
their existing vehicles will be withdrawn.
GEARS UP