China Business Briefs 24/4/14

Economy Finance Auto Energy Tech Property Agriculture Retail

Economy

Manufacturing remains weak[1]- Chinadaily.com.cn The preliminary reading was 48.3, compared with 48.0 in March. A reading below 50 indicates a contraction.

Domestic demand improved slightly, as suggested by an increase in new orders. The sub-index reading rose to 47.7 in April from 46.5 in March. Output rebounded to 48.0 from 47.2.

Infrastructure projects set to boost growth – Business – Chinadaily.com.cn China announced 80 major public infrastructure projects on Wednesday to arrest the economy’s slowdown while experimenting with wider access for private and overseas investors.

The projects will cover railway and harbor construction, new infrastructure needed by information technology, major clean energy projects such as hydropower, wind power and photovoltaic power, as well as modernization projects in oil and gas and chemical industries.

China Opens 80 Projects in State-Run Sectors to Investors – Bloomberg The projects are in industries including railways, ports and clean energy, according to a statement posted on the central government’s website yesterday that cited a State Council meeting. The projects are also in information technology, oil and gas pipelines, coal-to-chemicals and petrochemicals, it said.

State-controlled companies including PetroChina Co. (857) and China Petroleum & Chemical Corp. (386) have been leading a drive to find private investors amid a push by Premier Li Keqiang to give markets a bigger role in the allocation of resources. The country’s economy grew 7.4 percent in the first three months of the year, the slowest pace in six quarters.

Weakening RMB affecting dim sum bond market|Finance|Business|WantChinaTimes.com Continued depreciation of the renminbi has made investors more cautious in credit checks of offshore RMB bond issuers as the fear of a market reaction has caused some Chinese companies to turn to dollar bonds to raise cash.

Since mid-February, the Chinese currency has depreciated by nearly 3%, meaning investors snapping up “dim sum bonds,” or RMB-denominated bonds issued outside the Chinese mainland, can no longer speculate on a rising yuan.

China Resources ‘mistress’ business link tracked – FT.com China Resources, the state-owned conglomerate whose chairman was detained last week by anti-corruption investigators, has allocated many of its investment banking deals over the past five years to institutions employing the chairman’s alleged mistress.

From 2009 until 2012, Credit Suisse was one of the most prominent advisers on acquisitions and capital market activity carried out by China Resources and its numerous subsidiaries, according to data from Dealogic financial services information. This period coincides with the employment of Yang Lijuan, who also goes by the name Helen Yang and who is alleged to have been the mistress of the disgraced China Resources chairman Song Lin.

Contrarian Fund Will Seek Opportunities in Suffering Chinese Shares – WSJ.com Value Partners Group Ltd., a money manager based in Hong Kong, plans to open a fund in the third quarter to snap up shares in companies such as coal miners and steelmakers. They have been big decliners since China’s government started making noise about pollution and taking aim at energy-intensive heavy industries.

“They are too severely punished, to the point where it’s worth thinking about deep value buying,” said Cheah Cheng Hye, chairman and co-chief investment officer of Value Partners Group Ltd., which will likely look to raise at least US$50 million for its contrarian fund.

Finance

Chinese firms turn to foreign investors to borrow – MarketWatch Businesses based in mainland China–led by banks, property developers and energy companies–at the end of last year had a total of $169.2 billion of bonds outstanding held by investors outside China, up 60% from the previous year and more than double the amount from 2011, according to a new analysis by Nomura Holdings Inc. Many of the bonds are sold in Hong Kong, a Chinese city that operates under its own laws, and in the Caribbean. Of all the estimated $2 trillion of Chinese corporate bonds outstanding, about 8% is held by foreigners, the Nomura study shows.

Chinese brokerages queue up for next round of IPOs | GlobalPost The China Securities Regulatory Commission published the application prospectuses of 19 firms on its website on Tuesday evening, bringing the total to 65 applicants over the last five days.

One firm, Guotai Junan Securities Co Ltd, has applied for an IPO in Shanghai that could raise nearly 22 billion yuan ($3.5 billion), according to Reuters calculations.

Short-Seller Accuses Chinese Rubber Recycler of Doctoring Financials – WSJ.com Short-seller Glaucus Research Group California LLC on Thursday accused a Taipei-listed Chinese foam-rubber recycler of doctoring its financials.

In a 32-page report, Glaucus said it believes Asia Plastic Recycling Holding Ltd , based in China’s Fujian province, has overstated its net income by around 10 times, citing Chinese government tax records. Glacus also said public-land records show the company paid much less than it reported in acquiring two pieces of land and in expanding a factory since 2011.

Auto

Tesla CEO Pledges to Build Up Support Network in China – WSJ.com Tesla Motors Inc. Chief Executive Elon Musk pledged to enhance the auto maker’s support network in China to help broaden use of the company’s niche electric car, and offered new details about a $5 billion battery factory Tesla plans to build in the U.S.

Speaking in Beijing Tuesday at a ceremony marking the first handover of a Tesla vehicle to a customer in China, Mr. Musk said U.S.-based Tesla is building out hundreds of service centers around China but didn’t offer a time frame for their completion.

Energy

China Ends Environmental Ban on CNPC, Sinopec Refining Projects – Bloomberg Overturning an eight month-old ban, China National Petroleum Corp. and China Petrochemical Corp. can resume applying for clearance from the Ministry of Environmental Protection for new refining and petrochemicals projects, the ministry said today on its website.

CNPC, China’s biggest oil and gas company and parent of PetroChina Co. (857), and Sinopec Group, Asia’s biggest refiner and parent of China Petroleum & Chemical Corp. (386) known as Sinopec, were banned from seeking environmental clearances in September 2013 following a review of their emissions in 2012. The ban effectively prevented the companies from building new refineries and petrochemical facilities.

PetroChina Company Limited Given Average Rating of “Buy” by Brokerages (NYSE:PTR) | WKRB News PetroChina Company Limited (NYSE:PTR) has received an average recommendation of “Buy” from the twelve brokerages that are covering the company, ARN reports. One analyst has rated the stock with a sell recommendation, four have given a hold recommendation and seven have given a buy recommendation to the company. The average twelve-month target price among analysts that have issued a report on the stock in the last year is $102.00.

CNOOC Ltd offers $4bn bonds -Upstreamonline.com The overseas arm of state-run China National Offshore Oil Corporation (CNOOC) is offering $4 billion worth of bonds to help repay loans related to its takeover of Canada’s Nexen last year.

CNOOC Ltd revealed it planned to sell $1.25 billion three-year notes, $2.25 billion 10-year notes and $500 million 30-year notes.

CNOOC Ltd names new Nexen boss -Upstreamonline.com Current executive vice president of CNOOC Ltd Fang Zhi will take over for Kevin Reinhart as Nexen’s chief executive, the company said.

Reinhart, who has worked for Nexen for 20 years, was named interim chief executive in early 2012 following the abrupt departure of former boss Marvin Romanow. Reinhart has held the position since then and oversaw the $15.1 billion sale to CNOOC Ltd, which was finalised in February last year.

Tech

Competition, Subsidies Hit China Mobile Earnings – WSJ.com China Mobile, however, has been dependent on homegrown 3G technology, which is compatible with fewer handsets. To maintain its dominant position, the company plans to double its capital spending to $12 billion this year to build a speedier 4G network. Apple and other major smartphone makers including Samsung Electronics Co., Sony Corp. and HTC Corp. already make phones to support this 4G standard.

China Mobile added 1.34 million 4G users in February, of which about one million were new iPhone users, Chief Executive Li Yue told The Wall Street Journal last month. The company said Tuesday it added 1.45 million 4G users in March, but it didn’t give a breakdown of iPhone users.

Tencent $2.5bn bond sale defies tech sector gloom – FT.com The deal, announced to the Hong Kong stock exchange on Wednesday, is part of the company’s medium-term notes programme established earlier this month, and is split into three-year and five-year tranches. The shorter duration debt offers a yield of just over 2 per cent while the notes maturing in 2019 – the bulk of the deal, at $2bn – pay out 3.4 per cent.

The five-year portion was priced at a spread over US Treasuries of 165 basis points, a new low for the company. It paid a spread of 375 bps in its first US dollar deal in 2011, and 275 bps in 2012.

Alibaba Starts to Sells First Ever Private Brand Hardware Tmall Box for 299 Yuan | TechNode Alibaba starts to sell set-top-box Tmall Box today on its B2C e-commerce site Tmall. This is the first time for the Chinese Internet giant to commercialize private brand hardware, although it has released last year another set-top box Wasu Rainbow together with Wasu Media, one of the several state-authorized content providers.

The product is priced at 299 yuan (around $48), while 10,000 Tmall credits will be distributed to each buyer, who can purchase 100 yuan worth of products on Tmall.

Xiaomi announces expansion into 10 more countries this year This afternoon Xiaomi, China’s fast-growing smartphone maker, held a meetup in Beijing to announce it would enter some new markets and also reveal a new product it had been teasing for the past several weeks.

  • Asia: Malaysia, Indonesia, India, the Philippines, Thailand, Vietnam
  • Europe: Russia, Turkey
  • Latin America: Mexico, Brazil

Uber rolls into Beijing, now in 5 cities across China As is Uber’s usual strategy, the Beijing debut is a quiet ‘soft’ launch ahead of a more high-profile entrance at a later date. Uber gave rides to two Beijing luminaries earlier today – local tech blogger Keso, and Beijing newbie Hugo Barra, the Googler who’s now heading the global push at phone-maker Xiaomi.

New competition coming soon in China 4G, broadband | South China Morning Post Just a day after China Mobile (0941.HK; NYSE: CHL) reported some of its worst results in years, new developments in the telecoms space are showing why the nation’s leading telco will face a rough time for the rest of this year and quite possibly well beyond that. According to the latest media reports, China’s telecoms regulator could issue 4G licenses for the main technology being used by China Mobile’s two rivals as soon as next month, injecting a major shot of competition into the market. The second telecoms news bit comes in broadband, with reports that the nation’s newly formed national cable TV company has formally registered and will start business soon.

Huawei to boost its smartphone brand via new retail, online push | South China Morning Post “There are different ways to build a brand,” said Shao Yang, vice-president of marketing for Huawei’s consumer business group. “We will adopt measures not that new to the market but new to Huawei.”

Shao said the China market will be the focus of the company’s efforts in 2014, mainly because of the launch of 4G networks on the mainland. The company trails only Samsung and Apple as a leading producer of smartphones. It plans to manufacture 80 million smartphones this year, having shipped 52 million units in 2013.

China mobile Zong wins Pakistan’s 3G, 4G spectrum – Xinhua | English.news.cn Pakistan raised 1.1 billion U.S. dollars in its first auction for 3G and 4G mobile phone networks on Wednesday and China Mobile Pakistan, or Zong, emerged the sole winner of Pakistan 4G spectrum license and one of four winners of the country’s 3G spectrum licenses.

Property

China Money Network − CITIC Capital, Sonae Sierra Launch Property Management Joint Venture CITIC Capital Holdings Limited and international shopping center operator Sonae Sierra says they have launched a joint venture to provide management and leasing services to shopping centers in China, according to a company announcement.

Headquartered in Shanghai, the joint venture will focus on adding long-term value to shopping centers in China. It will start by providing property management services to retail projects currently invested by CITIC Capital.

Agriculture

Shanghai Dairy planning independent public listing|Companies|Business|WantChinaTimes.com Shanghai Dairy Group, a subsidiary of Bright Dairy and Foods, plans to go public independently, the subsidiary’s chairperson Shen Weiping told Shanghai-based China Business News, denying rumors about Shanghai Dairy’s capital being invested into the listed Bright Foods stock-trading platform.

Shen also said that Shanghai Dairy had reached an agreement with Nestle to build a milk production line in the Heilongjiang region of northeastern China to supply milk to Nestle’s baby formula brands. The planned investment will be worth several billion yuan, Shen stated.

Posted from Diigo.

 

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