An analysis from Barclays’ Jon Windham, CFA makes the argument that year-over-year Chinese export gains in September and October will be massive, in part thanks to the iPhone 5.
Sept & Oct – easiest comps in 20 years: Sept and Oct 2011 saw the largest two-month sequential decline in Chinese exports, for those two months, in over 20 years. The decline was likely driven by retailers’ hesitation over building inventories in the face of a deepening EU crisis. As a result, we expect even moderate sequential export growth to result in accelerating y/y growth in Sept-Oct 2012. The roadmap for 2012 Chinese exports y/y growth is upside potential in Sept and Oct followed by more modest y/y growth in Nov and Dec, in our view. In addition, an estimated 135bps incremental monthly bump in y/y export growth from Apples’ iPhone 5 launch could drive total growth to double digits is Sept and Oct 2012. Chinese export figures are released on the 10th of each month.
What does the iPhone 5 (along with other Apple products) mean for the Chinese economy?
Barclays Tech team expect Apple’s (AAPL US, OW) 4Q12 iPhone shipments to jump +22% y/y and +93% q/Q… The significant q/q improvement should drive stronger Chinese export numbers in Sept-Dec 2012. Apple’s iPhone, iPad, and ultrabook products alone should account for almost 4% of total Chinese exports in 4Q12.
So that’s pretty eye-opening, but perhaps the more interesting chart is this one, which compares the Chinese value add of the iPhone with that of shipbuilding.
Turns out, of the money China gets for building the iPhone, just about 11% stays in China (between labour costs and materials) whereas with shipbuilding, the number is much bigger.
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