The Chinese automobile market has been rapidly growing, and the growth of the auto modified plastic space is growing at an even faster rate. Between 2005 and 2009, automobile production volume has gone from 5.7 million to 13.8 million, which implies a CAGR of 25%, and the growth of this sector's sales volume has an estimated CAGR of 27%. One company which benefits from these trends is China XD Plastics Co. (CXDC).

On July 21st, the company signed an exclusive product development agreement with Hafei Dongyang, which is one of the leading automotive parts suppliers in Northeast China, to deliver 3 tons of specialized plastic compounds. These compounds will be used in the battery casing during a pilot production for electric vehicles. According to the press release, China XD Plastics will have the opportunity to receive additional exclusive product development rights for a period of five years upon the successful design of new specialized plastic products to be used in HD's plastics parts in electric vehicles.

Analyst Upgrades

• Baird upgraded Visa (V) to outperform from neutral and raised its target to $100 from $88, citing valuation and an improvement in key trends that include transactions, volume and international travel.
• FBR Capital upgraded Illinois Tool Works (ITW) to outperform from market perform to reflect valuation and expectations for earnings upside in the first half of 2010. The firm raised its target on shares to $58 from $55.
• Goldman added Brookdale Senior Living (BKD) to its conviction buy list based on a bottom in fundamentals and positive senior housing trends. The firm raised its target to $22 from $20.
• Exxon Mobil (XOM) was upgraded to buy from hold at Societe Generale.
• Newfield Exploration (NFX) was upgraded to overweight from equal weight at Barclays.
• PPD (PPDI) was upgraded to buy from hold at Jefferies.