China Stock Watch 15/4/14

Economy Finance Auto Infrastructure Energy Telecoms Property Travel Tech Agriculture Retail

Economy

China Business Leaders Hedge Bets on Xi Jinping – WSJ.com Without the support of entrepreneurs to drive innovation and create jobs Mr. Xi’s reforms will falter. He needs them to help shake up complacent state monopolies in areas like energy, banking and telecommunications, just as they’ve revolutionized the retail sector through e-commerce.

Right now, though, they’re on the fence. That’s the message coming from the business elites who gather in this southern resort each year at the Boao Forum for Asia.

China forex reserves hit 3.95 trln US dollars – BUSINESS – Globaltimes.cn The People’s Bank of China (PBOC) said on Tuesday that China’s foreign exchange reserves hit 3.95 trillion US dollars at the end of March.

The figure was 130 billion US dollars more than that at the end of 2013, according to the bank

Shanghai zone in search of identity[1]- Chinadaily.com.cn The central government has pinned its hopes on the Shanghai FTZ to test policies for national financial reform and to better prepare China for regional free-trade frameworks, such as the Trans-Pacific Partnership.

Party chief Xi Jinping and Premier Li Keqiang have reiterated on different occasions that Shanghai should try out practices that will further the nation’s integration into global trade.

But the Shanghai government has been taking a wait-and-see attitude.

China new bank loans rise to 1.05 trillion yuan – MarketWatch China’s banks stepped up their lending in March, just as Beijing tried to hold the line on its shadow-banking sector amid fears of growing financial risk.

The country’s financial institutions issued 1.05 trillion yuan ($168.8 billion) in new yuan loans in March–up from 644.5 billion yuan in February and slightly above the 1 trillion yuan forecast of economists polled by The Wall Street Journal, data from the central bank showed Tuesday.

Why Chinese Stimulus May Not Be a Good Thing This, coupled with more conservative growth expectations (currently set at 7.5% growth versys last year’s 7.7% expectation), has some economists fearing that China will suffer a wave of credit defaults similar to the Lehman Brothers meltdown several years ago in the U.S. Several economists even contend that it’s time for China to reverse its anti-stimulus policies and save its economic gains by propping up ailing industries.

This may be something of an overreaction. China’s economy is still strong and has a few things going for it that most people are overlooking.

Harbin seeks to promote economic ties with Russia – Business – Chinadaily.com.cn The province, sharing a 2,981-km-long border with Russia, should not rest on its laurels with the already prosperous border trade, said Lu Hao, governor of Heilongjiang province.

Lu stressed that Heilongjiang should take advantage of Harbin’s Russia-friendly environment and its ability to further boost ties with the country.

Finance

Where Are the Big Five Headed? — Beijing Review However, there has been a slowdown in profit growth in all but one of the Big Five. ICBC, the world’s biggest bank in assets, registered 263 billion yuan ($42 billion) in net profits in 2013, up 10.2 percent from 2012. But this growth rate is much lower than the 14.5 percent in 2012. BOCOM saw the sharpest decline in profit growth, from 15.05 percent in 2012 to 6.73 percent in 2013.

A research report from Deloitte predicted that Chinese banks may have entered an era featuring single-digit profit increases.

China Rate Swap Slides to One-Month Low as New Lending Declines – Bloomberg The one-year rate swap, the fixed payment needed to receive the floating seven-day repurchase rate, fell seven basis points, or 0.07 percentage point, to 4.05 percent as of 1:01 p.m. in Shanghai, according to data compiled by Bloomberg. It reached 4.04 percent, the lowest level since March 14.

Rules on Chinese trust firms tightened | South China Morning Post Trust companies are non-bank lenders that raise funds by selling high-yielding investments known as wealth management products and use the proceeds to fund loans to risky borrowers such as property developers, local governments and others to whom banks are reluctant to lend.

The new rules from the China Banking Regulatory Commission aim to reduce liquidity risks associated with off-balance-sheet WMPs by forbidding trusts from operating so-called fund pools that enable them to fund cash payouts on maturing products with the proceeds from new WMP sales.

China Money Network − Shunwei Capital Targets $525M For Two New Funds Founded in 2011 by Tuck Lye Koh, Shunwei is a China-focused venture capital firm primarily focused on early to mid-stage start-ups in China’s Internet and technology industry.

The firm currently runs one fund with over $200 million, according to its LinkedIn profile.

Two-way through train better for mainland investors, brokers | South China Morning Post The through train is back on, and this time not filled with passengers on their way to financial ruin.

The Shanghai-Hong Kong Stock Connect scheme, due to begin in October, is a two-way stock trading programme designed to keep a good portion of the benefits on the mainland. Hong Kong stockbrokers are already griping that Shanghai will get the bulk of the glory and commissions.

Auto

Peugeot Sets Out Recovery Plan: ‘Back in the Race’ – WSJ.com Dongfeng Motor and the French state are each contributing €800 million as part of a planned €3 billion capital increase aimed at helping the company develop its sales and presence in China and southeast Asia. Peugeot said it also plans to target new growth markets in Africa and the Mediterranean basin. However, a shorter-term priority has been set to make its loss-making operations in Russia and Latin America profitable by 2016.

African success revs for auto firm – Headlines, features, photo and videos from ecns.cn The brand FAW may not ring a bell with most people outside China, but it certainly strikes a chord on South African roads.

China’s oldest vehicle manufacturer has been carving an indelible impression in South Africa since 1994 with its range of affordable heavy-duty trucks and other commercial vehicles. Next, if things go according to plan, it will start making passenger vehicles in Port Elizabeth on South Africa’s southern coast.

Infrastructure

New railway tour route to link China, six countries – Headlines, features, photo and videos from ecns.cn A railway tour route that connects China with six countries in Asia and Europe will open in July, local media reported Monday.

The tour, which costs 32,000 yuan ($5,148) per person, will take tourists to historical and natural scenic spots in Turkey, Bulgaria, Romania, Hungary, Austria and the Czech Republic, according to a report in the Metro Express.

Analysis and Forecast of China AFC (Automatic Fare Collection System) Industry,… — DUBLIN, April 14, 2014 /PR Newswire UK/ — With the acceleration of subway and high-speed rail investment and construction in China, China’s Automatic Fare Collection equipment market also ushers in a new round of rapid growth during 2011 to 2020. By 2015, the operating mileage of China’s rail transit will reach more than 3,000 km and will reach 6,000 km by 2020, which will need the investment amount of about CNY 3 trillion to CNY 4 trillion. In 2013, the market scale of AFC will reach CNY 4.2 billion and it will achieve CNY 6 billion by 2017, among which, the urban rail transit AFC application will be CNY 3.5 billion and the high-speed rail field will be CNY 2.5 billion. The market prospect is broad.

Firm wins part of lucrative roads upgrade project – Fiji Times Online THE first contract for work on the Nadi and Suva roads upgrading project has been awarded to China Railway 5th.

Energy

CNPC Pushes ahead with Controversial Sichuan Refinery Project – The project’s troubles started in 2008, when a large earthquake struck Sichuan. Later that year, a series of protests halted production.

The facility was back in the headlines this year because of a corruption probe. The Communist Party’s anti-graft watchdog accused Li Dongsheng, the former general manager of the Pengzhou facility, of illegal bidding related to the project.

China Inc joins the big league in oil and gas services | Reuters Global oil companies are increasingly turning to China for services and equipment, attracted by lower costs and a newly acquired expertise that is challenging more established rivals.

State-run and privately controlled Chinese rig makers, oil and gas services and engineering firms are showing up in the supply chain everywhere from the Middle East, the North Sea and North America to frontier areas like Mozambique.

CNPC and affiliate employees probed on graft allegations|Politics|chinadaily.com.cn At least 45 people related to China National Petroleum Corp, the country’s largest oil and gas producer and supplier, have been investigated over graft allegations from last year until this month, Beijing Times reported.

Among them, 21 are current or former managers of CNPC, and the other 24 are not company employees but have business with the company, the report said.

PetroChina Company Limited Upgraded by Credit Suisse to “Neutral” (PTR) | Zolmax PetroChina Company Limited (NYSE:PTR) was upgraded by research analysts at Credit Suisse from an “underperform” rating to a “neutral” rating in a report released on Monday, Stock Ratings Network reports.

Shares of PetroChina Company Limited (NYSE:PTR) opened at 114.22 on Monday. PetroChina Company Limited has a one year low of $94.75 and a one year high of $132.19. The stock has a 50-day moving average of $105.7 and a 200-day moving average of $108.8. The company has a market cap of $209.0 billion and a price-to-earnings ratio of 10.11.

Tesla’s charge into China may get Sinopec boost – The Technology Chronicles Billionaire CEO Elon Musk reportedly is visiting the world’s most populous country this month to talk to China Petroleum & Chemical Corp., or Sinopec, about building charging units in Sinopec gas stations, Chinese media reported Monday. Sinopec, one of the country’s largest refiners, would first offer charging stations in Beijing.

Sunshine Oilsands seeking new equity issue to restart construction at stalled West Ells project | Financial Post Sunshine Oilsands Ltd., the Alberta oil sands startup backed by Chinese state-owned enterprises (SOEs), will ask shareholders in a special meeting in Hong Kong Tuesday for permission to issue more equity so it can restart construction of its stalled West Ells project.

Site approval for Chinese AP1000 plant The Xudabao site in China’s Liaoning province has been approved for the construction of the first two of six AP1000 units planned there.

The site of the proposed Xudabao nuclear power plant is in Xingcheng City on the island of Hulu, in the northeast of the coastal province of Liaoning. While the initial phase of the project will comprise two AP1000s, a further four such units are planned for the site.

Property

Housing Trouble Grows in China – WSJ.com Economists have worried for years that China is setting itself up for a housing-market bust. In big international cities like Beijing and Shanghai, prices continue to rise. But evidence is mounting that in dozens of third- and fourth-tier Chinese cities rarely visited by foreigners, overbuilding is out of control and a major property-market slowdown is now under way.

Chinese land price growth slows – Xinhua | English.news.cn The average price of land in 105 monitored Chinese cities stood at 3,412 yuan (554 U.S. dollars) per square meter in the first quarter of 2014, up 1.89 percent from the previous quarter, a report said on Tuesday.

The price growth saw a decrease of 0.17 percentage points from the previous quarter. It also marked a first cutback after land price growth expanded for seven consecutive quarters, according to the report released by the China Land Surveying and Planning Institute.

Travel

Rise of China’s budget airlines – news – travel | Stuff.co.nz China’s first low-cost airline has been profitable since 2006, its first full year of operation, but the budget aviation market is about to get a lot more competitive as the government moves to promote low-cost travel to meet a surge in demand from an increasingly wealthier population.

Over the last 18 months, Spring has been joined by two new competitors. China’s big state-backed carriers are also looking at launching budget carriers, a strategy industry executives say would be an additional boon to plane makers Airbus Group and Boeing.

China Money Network − Hony-Backed NetJets Plans Mid-Year Launch Of China Service Global private aviation firm NetJets Inc. says that it is preparing to begin its China business once government approval is finalized, according to a company announcement.

NetJets, a Berkshire Hathaway company, is hiring employees in China, partnering with vendors and positioning aircraft to the Chinese market. It expects government certification to be granted mid-year in 2014.

Tech

Tiny Chinese startup gets $29 million in funding to emulate Xiaomi, build a smartphone Chinese software maker Smartisan has secured RMB 150 million (US$24 million) in funding to help the small, largely unknown startup launch a smartphone.

The funding hasn’t been confirmed or detailed yet, notes 36Kr, but Smartisan’s Luo Yonghao stated publicly on his Sina Weibo account that its first ever phone will be unveiled on May 20. There’s no word yet on the hardware, but it’ll cost around RMB 3,000 (US$487).

P2P Lending Service Ppdai Gets Millions of Dollars Series B Funding for Risk Control | TechNode Chinese P2P lending service Ppdai recently announced that it has raised millions of dollars in Series B financing led by LightSpeed China Partners, Noah Private Wealth Management and existing investor Sequoia Capital. The company has received $25 million of Series A funding from Sequoia Capital in last December. The capital raised this time will be used in the credit system and team construction.

Will Intel’s China Push Pay Off? (INTC) In a declining PC market, Intel (NASDAQ: INTC) needs to increase its tablet processor market share, and it’s looking at China to make it happen. That’s why the company hosted its Developer Forum in Shenzhen, China, this year, and is spending $100 million on an innovation fund in the country.

But despite Intel’s efforts to do business with Chinese tablet vendors, it is facing fierce competition from both small chipmakers in China that use ARM Holdings‘ (NASDAQ: ARMH) chip designs.

LinkedIn’s obstacle in China isn’t censorship, it’s culture One Chinese audience member at the forum posed a particularly insightful question to Shen: In a society where people guard their close connections and often keep their professional contacts a secret, how will LinkedIn get users to open up and share their professional network with the world?

China and “Datathermal Energy” China is a natural place for the development of data-thermal energy. The country is early enough in the cycle of development for data centers to start designing its largest server farms to capture and channel heat efficiently. And scale will not be an issue in China. Leaving out government-run data centers entirely, some commercial data centers, like one 6.3 million square-foot beast under construction in Langfang just outside of Beijing, will have more floor space than the Pentagon.

Agriculture

Two Chinese executives awarded $600m for US pork deal | Business | theguardian.com Two executives at the Chinese company that bought the US firm Smithfield Foods, the world’s biggest pork producer, last September have been awarded more than $600m (£360m) of shares for their part in the $4.9bn deal.

WH Group and some of its shareholders launched an initial public offering for up to $5.3bn in Hong Kong last week, the second biggest ever listing by a food and beverage company.

Chinese pork giant plans IPO | Business Spectator China’s WH Group said late on Monday it was selling 3.65 million shares priced at between 8 and 11.25 Hong Kong dollars ($A1.10 -$A1.55).

That would raise between $US4.1 billion and $US5.3 billion for WH Group, formerly known as Shuanghui International Holdings.

Retail

Sanpower House Of Fraser purchase ‘shows ambition'[1]- Chinadaily.com.cn Once again a world-famous brand has been surprisingly snapped up by a relatively unknown Chinese company. This time it is Nanjing-based Sanpower Group which launched a successful 450 million ($750.47 million) takeover of House of Fraser, one of Britain’s best-known retail store brands.

Nippon Paint tops C-BPI polls for second consecutive year – BUSINESS – Globaltimes.cn The China-Brand Power Index (C-BPI) is the most trusted brand-evaluating system used by consumers and companies. The China Brand Research Center conducted its 2014 C-BPI survey covering 30 cities nationwide to examine brand awareness and loyalty among 13,500 people aged from 15 to 60. Covering 170 sectors, a total of 7,600 mainstream brands were included in the evaluation. In the “household goods” category, Nippon Paint China topped other companies in the “interior paint” and “wood coatings” categories.

Posted from Diigo.

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