Recent anticorruption activity in China may have implications on premium spend, but the signs still point to positivity for now, analysts from Bernstein said.
“Anti-corruption activity in China has escalated significantly in recent months… Following a long period of moderation, 2017 so far has seen the largest sustained pick-up in anti-corruption activity since 2014, as several high-profile senior politicians have been placed under investigation,” they said Friday.
That being said, Bernstein’s trackers on anti-corruption activity, which include sector-specific data (autos, gaming and other premium consumer spending categories), are still showing premium spending looking strong.
“We expect premium auto demand to remain strong – particularly at entry-level price points where the growth chiefly reflects upgrade demand among the Chinese middle class, and continued increases in auto financing penetration.”
Regarding Macau gaming, Bernstein says it believes VIP will be more tempered compared to mass, which should revert to showing relatively better growth than VIP.
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