China Business Briefs 12/11/13

By 9:19 pm, the value of transactions on Tmall and Taobao surpassed 30 billion yuan, up nearly 60 percent on sales for the event last year, as Ma had predicted.

The projected increase is driven in part by China’s growing number of mobile Internet users, which research firm Analysys International has forecast will exceed 700 million this year.

China Credit Trails Estimates as Officials Check Debt Risks – Bloomberg

China’s top four banks posted their biggest increase in soured loans since at least 2010 as a five-year credit spree left companies with excess manufacturing capacity and slower profit growth amid a cooling economy.

Bad debts at Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., Agricultural Bank of China Ltd. and Bank of China Ltd. rose 3.5 percent in the third quarter to a combined 329.4 billion yuan, data compiled from earnings reports showed.

Watch: China’s Urbanization Push Heads Underground – China Real Time Report – WSJ

China is stepping up what is already one of the most ambitious urban rail projects in history despite concerns that the country’s obsession with infrastructure could be dragging it into a pit of unmanageable debt. The aim of the expansion isn’t stimulus but urbanization.

China to allow more private investment in state firms – Yahoo Finance UK

According to the China Daily, private partners will be allowed to take 10 to 15 percent stakes in the country’s state-owned enterprises (SOEs).

The move would give such companies or investors a bigger say in decision-making, it quoted officials of the state-owned Assets Supervision and Administration Commission (SASAC) as saying.

The agency is a powerful body that oversees large SOEs collectively worth trillions of dollars, many of which enjoy monopolies in key sectors such as rail and energy.

China’s Recovery Gives Boost to Xi Amid Reform Summit: Economy – Bloomberg

China’s economy entered the final quarter of 2013 with an acceleration in manufacturing and exports, momentum that offered confidence to Communist leaders gathering to determine policy shifts for the coming decade.

Industrial output rose a more-than-estimated 10.3 percent from a year earlier in October and manufacturing investment strengthened, according to data released Nov. 9 by the National Bureau of Statistics. Customs data the previous day showed overseas sales rebounded by more than forecast.


When a Chinese engineering firm sets off to build a road or a dam in a distant country, a Chinese bank is usually not far behind them. Bank branches bearing Chinese characters can be found on the streets of Lima and Warsaw, as well as Paris and New York.

A deal at the end of October in which China Construction Bank (CCB) acquired a lender in Brazil underscores the size of the banks’ ambitions. The second-largest Chinese bank by assets agreed to pay 1.62 billion reais (US$716 million) for 72% of Banco Industrial e Comercial.

Let’s take four of the STI’s components, Jardine Matheson Holdings (SGX: J36), Jardine Strategic Holdings, Jardine Cycle & Carriage and Hongkong Land Holdings, as an example.

An investor who had invested in these four companies might think he’s diversified, but he’s not: all four companies have inextricable links with each other.

JMH owns more than 80% of JSH, which in turn owns half of Hongkong Land and almost three-quarters of Jardine C&C.

And to top it off, JSH also owns slightly more than half of JMH. This creates a complex web of ownership-links between these few companies and unites them in the realm of risk-exposures. An untoward development in properties that Hongkong Land Holdings owns, for instance, might turn out to be a kick in the gut for JMH and JSH as well.

(Reuters) – Singapore state investor Temasek Holdings TEM.UL and China-focused private equity firm Hopu were among five investors buying a $213 million stake in Yashili International Holdings Ltd (1230.HK), after parent China Mengniu Dairy Co Ltd (2319.HK) sold down shares to meet Hong Kong listing requirements.

Temasek, through one of its Mauritius subsidiaries, Hopu and three individual investors agreed to buy 471.13 million shares of Yashili from Mengniu for HK$3.50 each, putting the total deal at HK$1.65 billion ($213 million), the dairy companies said in a securities filing on Monday.

Industrial & Commercial Bank of China Ltd. was added to a list of too-big-to-fail banks that must set aside additional capital to guard against losses as part a global regulator’s plans to protect the economy.

ICBC was the only firm joining the Financial Stability Board’s annual list of too-big-to-fail banks, which it produces in preparation for capital rules scheduled to be phased in starting in 2016. Other changes include lower surcharges for Deutsche Bank AG (DBK), and Citigroup Inc. (C), which both drop out of the top category and Bank of New York Mellon Corp.

LONDON (ShareCast) – BG Group has sold its stake in the Queensland Curtis LNG (QCLNG) project in Australia for 1.93bn dollars to China National Offshore Oil Corporation.CNOOC has also reimbursed BG for project expenditure in line with its increased interests incurred from January 1st 2012 to September 30th 2013.

Carlsberg A/S’s pursuit of faster growth in Asia may make takeover targets out of Tsingtao Brewery Co. and Beijing Yanjing Brewery Co.

The Danish brewer’s controlling shareholder signaled last month that it will give Carlsberg more leeway to pursue deals. The $15 billion company is eyeing about a half-dozen potential candidates, especially in Asia, including Tsingtao and Yanjing, for a possible purchase, said a person with knowledge of the matter, who declined to be identified as the discussions are private. The Chinese companies each produce some of the most popular beer brands in China, the world’s biggest beer market.

Financial Results

Chindex International, Inc. Reports Financial Results for Third Quarter and First Nine Months of 2013

**Chindex owns United Family Hospitals, which runs Beijing United hospital. I once wrote a profile of CEO Roberta Lipson.**

Third Quarter 2013 Financial Highlights
  • Revenue from healthcare services increased 16% to $43.1 million from $37.3  million in the prior year period.
  • Adjusted EBITDA was $5.0 million, compared to $6.0 million in the prior  year period.
  • Development, pre-opening and start-up expense was $4.9 million, compared  to $2.7 million in the prior year period.
  • Loss from operations was $2.8 million, compared to income from operations  of $1.5 million in the prior year period.
  • Net loss was $3.8 million, or $(0.23) per diluted share, compared to net loss of $664,000, or $(0.04) per diluted share, in the prior year period.
  • Full year guidance adjustment primarily due to government regulatory delays.

China Yuchai International Announces Record Third Quarter Net Revenue

Financial Highlights for the Third Quarter of 2013
  • Net revenue increased 21.6% to RMB 3.7 billion (US$ 608.7 million)  compared with RMB 3.1 billion in the third quarter of 2012;
  • Gross profit rose 25.7% to RMB 781.5 million (US$ 127.1 million), with a  gross margin of 20.9% compared with RMB 621.5 million and a gross margin  of 20.2% in the third quarter of 2012;
  • Operating profit increased 17.4% to RMB 252.8 million (US$ 41.1 million)  compared with RMB 215.2 million in the same quarter a year ago;
  • Earnings per share were RMB 2.86 (US$ 0.46) compared with RMB 2.98 in the  third quarter of 2012;
  • Total number of diesel engines sold rose 21.5% to 118,282 units compared  with 97,328 units in the third quarter of 2012.

Posted from Diigo.


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