China Business Briefs 8/1/14


PBOC Shows Strong Hand on China’s Shadow Banks – China’s move to step up regulation of its shadow-banking system highlights the weakness of its financial regulators, which have failed to slow the country’s lending boom even as top government officials raised concerns.

The lack of strong action by China’s securities and banking watchdogs to limit the growth of lending outside traditional banks contrasts with aggressive moves by the country’s central bank, which has emerged as the main bulwark against shadow banking.

Beijing’s assault on property developers threatens global economy –
Last week, China Central Television doubled down on its attacks on real estate companies for owing billions in unpaid land taxes, training its guns on no less a target than the country’s biggest listed developer, Vanke. The report marked the second time in little more than a month that the broadcaster had made these accusations. Developers have denied them both times.

What might seem like an obscure tussle between CCTV and the property companies could turn out to be one of the most serious risks facing the global economy this year.

China to try to make local, national GDP stats match amid skepticism | Reuters The difference between gross domestic product reported in aggregate by China’s 31 provinces in 2011 and the national level, for instance, showed a huge discrepancy, roughly equivalent to the GDP of Turkey.

“We will promote statistical reform and innovation this year to actively and steadily push forward unified accounting for regional GDP,” said Ma Jiantang, head of the National Bureau of Statistics.

Convertibles perk up China’s limp markets – Chinese groups turned to convertible bonds in near record numbers last year as it became the most reliable way to issue a large chunk of equity – and so support growth – for companies that are already listed.

The market is dominated by domestic investors, but foreigners are becoming more active as corporate interest in using this financing tool means companies are prepared to offer convertible bonds at cheap premiums. The bonds allow issuers to offer debt that pays investors a low monthly coupon and gives them the option to convert the security into the issuer’s stock if it climbs to a preset premium over the bond’s tenure.

Hiring demand hits five-year low – Business – About 45 percent of 1,000 employers, who were polled said they will increase the head count at their companies in the first quarter of the year, down 9.7 percentage points from the previous quarter. Some 44 percent of surveyed employers are expecting to keep staffing steady in the next three months, up 7.6 percentage points from a quarter earlier, while more than 10 percent of employers intend to cut their workforce in the next quarter, up 2.1 percentage points.

Crisis Risk Flagged by Haitong as Debt Snowballs: China Credit – Bloomberg Liabilities at non-financial companies may rise to more than 150 percent of gross domestic product in 2014, raising default risks, according to Haitong Securities Co. The ratio of 139 percent at the end of 2012 was already the highest among the world’s 10 biggest economies, according to the most recent data. That compares with 108 percent in France, 103 percent in Japan and 78 percent in the U.S., figures from the Bank for International Settlements and the World Bank show.

Regulators Push Banks, Giant SOEs to Buy Back Stocks: Paper-Caijing Chinese authorities have expressed hopes that major companies with shares below their net asset value, or NAV, should buy back stocks on the stock exchange, reported by the Shanghai Securities News.

The “advice”, delivered at a meeting gathering officials largely from banks and large SOEs, came at a time when Chinese stocks extend their dramatic 2013 falls into 2014. A liquidity squeeze in June and again in December had hit China’s stock market, making it one of the world’s worst performing in 2013.

Three Priorities Identified for Marketization of Financial Resources -Caijing Financial resources are an integral part of capital factors, and achieving the market-oriented configuration of financial resources is an important element of perfecting the socialist market economic system. Overall, China’s economic development has an advantage in that the savings rate is relatively high, so if financial resources can be effectively mobilized and efficiently utilized, it can strongly support the sustained, healthy development of the country.

In the process of promoting market-oriented reforms of financial resources, we should pay special attention to the following three areas:

Is China About to Let the Yuan Rise? Don’t Hold Your Breath – China Real Time Report – WSJ China’s central bankers are beginning to think the country’s huge pile of reserves – which is still growing as authorities intervene to keep the yuan from rising too fast– is excessive. Curbing its growth could even help the economy’s transition from an export-led model to one based on domestic consumption.

China’s World: Beijing Should Scrap the GDP Target – An alarming surge in local government debt reflects China’s obsession with gross domestic product growth, which encourages officials at every layer of the bureaucracy to borrow and spend, often recklessly.

Rural houses to be covered by system – Business – China will establish a unified real estate information database where urban and rural housing will be registered, the 21st Century Business Herald reported on Wednesday.

Analysts said this means that houses in rural areas, now under collective-ownership, could be granted property right certificates, paving the way for selling.

PBOC Should Be More Flexible in Managing Liquidity – BoCom – China’s central bank should be more flexible in managing liquidity this year as it presses ahead with market-based interest rate reforms, Bank of Communications Co. (3328.HK, 601328.SH) chief economist Lian Ping said Wednesday.

“It’s better to push forward interest rate liberalization when liquidity conditions are relatively loose,” Mr. Lian said at a news briefing to release the bank’s research reports for 2014.

China Adds Nearly CNY400Bn Outstanding Funds for Forex in Nov. -Caijing November’s new outstanding funds for forex were at  CNY399.3billion($66billion), according to the People’s Bank of China (PBoC),  slightly down from the precious month when the figure hit over 441.6billion, the  second highest seen in 2013, but remained at a relatively high level. China  added a staggering CNY 683.7billion last January.

China’s Credit Hole Seen Limiting 2014 Growth Prospects – Bloomberg China’s new credit probably fell by a record in the second half amid a crackdown on speculative lending, limiting prospects for economic expansion this year as policy makers focus on controlling financial risks.

The broadest measure, aggregate financing, was 7.1 trillion yuan ($1.2 trillion) based on published figures plus economists’ median estimate for December data due in coming days. That would be about 931 billion yuan less than in July-to-December 2012, the largest drop in figures going back to 2002.

The Guardian blocked by China’s Great Firewall The move comes as a bit of a surprise since both the Wall Street Journal‘s and Reuters’ Chinese-language sites were just unblocked on Monday. Those sites took a two-month involuntary hiatus from the Chinese internet after they published stories about the shady connection between former premier Wen Jiabao and American bank JP Morgan Chase

CCP Face Boycott Over Threats To Slash Salaries – New Tang Dynasty Television (NTD TV) The Central Committee of the Chinese Communist Party(CCP)have been threatened with boycott if they lower the salaries of the Senior Executives of State-Owned Enterprises. – SOE’s. More than 30 State-Owned Enterprises (SOE) oppose the measure and more than 170 executives threaten to resign. Private entrepreneurs pointed out that SOE Senior Executives are not only Government Officials but also managers with high pay and no risk. It’s a good thing if they are willing to resign. They can go to the open job market to find out what their real value is.

Protecting Your IP from China The bottom line for protecting your IP from China: do what you can on both the legal side and the non-legal side to protect your IP from China.  It’s tough out there and the more “weapons” you employ, the better your chances.

Growing number of machinery firms hire Chinese executives|Markets|Business| A growing number of multinational machinery companies in China are appointing Chinese executives after losing their market share to Japanese and South Korean rivals, reports the Chinese-language Global Entrepreneur magazine.

What I learned in my first year as an angel investor in Greater China I’m no stranger to tech companies, investing or China, but being in charge of a massive region including China, Taiwan, and Hong Kong and having to dig deep for quality early stage investments. I’ve also done fundraising and participated in and organized numerous community events which were, to say the least, challenging. Here are some of my key learnings:

IamA nanny for a super-rich family in China AMA! : IAmA IamA nanny for a super-rich family in China AMA!

Solar firms face ‘total eclipse’ in the US – Chinese solar companies will be “entirely blocked” from the United States market if that nation’s government imposes new duties on solar cell products made in the Chinese mainland and Taiwan, experts have warned.

“It will keep all the Chinese companies out of the US market if new duties are imposed, in addition to the already unfair trade environment,” said Sun Guangbin, secretary-general for solar energy and photovoltaic products at the China Chamber of Commerce of Machinery and Electronic Products.

China 2013: A Year in Review by Stan Abrams | China Briefing News So what was the big IP case of 2013? Arguably it was the alleged infringement of copyrights held by Dutch artist Florentijn Hofman, creator of the giant inflatable yellow duck that graced harbors, lakes and rivers all over China earlier this year. This copyright issue, which never quite escalated to an actual legal dispute, generated a lot of talk but then fizzled out like air escaping a . . . well, a giant inflatable yellow duck.

Trust Companies, Wealth Managers Banned from Investing Pooled Money – Trust companies and wealth management plans cannot pool investor money to make investments, the China Banking Regulatory Commission (CBRC) said on January 6, indicating renewed efforts at reining in the shadow banking system.

Trust companies and wealth managers cannot maintain a “capital pool,” which typically forms when funds collected from investors of different trust products or wealth management plans are kept together to provide capital for investments or covering the repayment of maturing debt, the CBRC said in a meeting that sets priorities for this year’s regulatory work.

China Gold Congress and Expo | China Economic Review Hosted by the China Gold Association and organized by the China International Mining Cooperation Committee and the Capital Exhibition and Conference Corporation, the Congress will be held at the Beijing International Convention Center on September 10-12, 2014.

Global and China Cobalt Industry Report, 2013 – 2016 | Jan 7, 2014 China lacks of cobalt ore resources, with the total proven reserves of cobalt approximating 80,000 tons, accounting for just 1% of global total, and the vast majority of proven resources are associated ore, whereas independent mineralized cobalt ore occupies only 4.7 % of the reserves in China.


Shaanxi Coal $1.6 Billion China IPO to Be Biggest in 2 Years – Bloomberg Shaanxi Coal Industry Co. plans to raise 9.83 billion yuan ($1.6 billion) in an initial public offering, set to be China’s biggest IPO in more than two years.

The company will sell 1 billion A-shares on the Shanghai Stock Exchange on Jan. 17 and proceeds will be used to fund projects worth 18.3 billion yuan, according to a statement from the Xi’an, Shaanxi province-based company to the exchange today.

Shanxi Coal Industry nearly halves IPO size – MarketWatch The Shanxi province-based coal miner said it plans to sell 1 billion new shares, half of a target previously announced in 2011, when it first revealed plans for an IPO. The current fund-raising target is 57% of the CNY17.3 billion previous target.

Ping An Bank boosts capital with $2.4 billion private share sale – Yahoo Singapore Finance China’s Ping An Bank Co Ltd has raised 14.73 billion yuan ($2.43 billion) by selling stock to its main shareholder, becoming the latest lender to raise funds to meet new banking standards and to absorb an expected rise in bad loans.

Through the sale, Ping An Insurance Group (HKG:2318) raised its stake in the bank to 59 percent from 52 percent, the two firms said in exchange filings late Tuesday.

Rebuffed by New York Times, Chinese Millionaire Chen Guangbiao Remains Undaunted – China Real Time Report – WSJ Chen Guangbiao said Tuesday that a New York Times Co. executive sent him a memo rejecting his request to meet this week to discuss an investment. A recycling magnate known for combining philanthropy and theatrics, Mr. Chen said he would settle for visiting Manhattan newsstands to improve his understanding of the U.S. media landscape.

Great Wall Sells 750,000 Vehicles in 2013, Sales Up But Growth Rate Slowing | China Car Times – China Auto News Great Wall sold an impressive 754,000 vehicles over the course of 2013, an increase of 21% over 2012. SUV sales accounted for 417,400 units, an increase of 48.47%, sedan sales reached 210,000 units showing a minor increase of 2% whilst pick up sales dropped by 8% to 210,000 units.

L’Oréal joins Revlon in pullback from China market – French cosmetics group L’Oréal has halted sales of Garnier beauty products in China to focus on other brands, a week after US rival Revlon said it would pull out from the slowing China market.

The company will concentrate on its L’Oréal Paris and Maybelline New York product lines, a China-based spokeswoman said in an email to Reuters on Wednesday. Those brands have been performing more strongly in China.

Chinese Gaming Companies Top Forbes China’s Most Promising Small Businesses List for 2014 Forbes China just released the mainland China’s most promising small businesses list for 2014. Boyaa Interactive International and Shanghai Kingnet Technology Co., both being gaming companies, top the most promising listed and privately held small businesses, respectively.

Alibaba reveals plans go into mobile games Chinese e-commerce giant Alibaba spent much of 2013 entering seemingly every sector in the mobile internet space it wasn’t already active in, but one area remained untouched – games. That has historically always been the domain of rival Tencent (HKG: 0700), among other players like Netease.

This morning, however, that’s changed, as Alibaba announced it will begin developing a platform for mobile games.

General Electric Plans Acquisition and Chinese Automakers Eye U.S. Market Despite recent recalls of more than 1.5 million Buick Excelle and Chevrolet Sail units in China, Buick sales in China increased 15.7% in 2013 to finish with nearly 810,000 units sold for an all-time high. In similar fashion, Chevrolet also set a record with an increase of 8.5% in 2013, to slightly more than 650,000 units.

China Telecom Cuts IPhone Price Ahead of China Mobile Release – Bloomberg China Telecom is offering a combination of price reductions and gift packages that together amount to an 800 yuan ($132) off the list price of 5,288 yuan for a 16 gigabyte iPhone 5s, according to promotional material at the carrier’s Beijing retail locations today.

Chow Tai Fook’s Q3 revenue rises by 26% – BUSINESS – Sales in the Chinese mainland rose 34 percent and sales in Hong Kong and Macao rose 18 percent in the three months ended December 31, Chow Tai Fook said in a statement to the Hong Kong Stock Exchange. Gold products remained its top bestsellers, accounting for 57 percent of total revenue.

China Oilfield to Raise $759 Million in Share Placement – Bloomberg The company will sell 276.3 million Hong Kong-listed shares at HK$21.30 each, a 7 percent discount to yesterday’s closing price, according to a Jan. 7 filing with the city’s stock exchange. Units of China International Capital Corp., Credit Suisse Group AG (CSGN), JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. and Morgan Stanley (MS) are the placing agents, China Overseas said.

Sony to Nintendo Mull China’s Console Market as Ban Lifted – Bloomberg “China mainland is an attractive market,” said Satoshi Nakajima, a Tokyo-based spokesman for Sony’s game unit, which sold 2.1 million of its PlayStation 4 units as of early December since it went on sale Nov. 15. “We will seek to expand when there is an opportunity.”

Kyoto, Japan-based Nintendo is studying what it can do in the Shanghai free-trade zone, according to Yasuhiro Minagawa, a company spokesman. He declined to elaborate.

Cloud Service Provider QingCloud Raised $20 million in Series B for Global Expansion Chinese Cloud service provider QingCloud today announced completion of $20 million funding in Series B. The round is led by Lightspeed China Partners and joined by Matrix Partners China and existing investor BlueRun Ventures.

Alibaba’s payment affiliate teams up with Sina – MarketWatch Alibaba Group Holding Ltd.’s online payment affiliate has struck a deal with Sina Corp. to launch an online payment service as competition rises between the e-commerce giant and rival Tencent Holdings Ltd. (0700.HK).

The affiliate, called Alipay, said on its official microblog account that the new service allows users of Sina’s Weibo microblog service to make online and offline payments through their Alipay accounts.

Apple Opens Store on Alibaba’s Tmall – Digits – WSJ Tmall, launched in 2008, is a shopping website that hosts more than 70,000 merchants, including global brands like Nike Inc.NKE +0.63% and Gap Inc.GPS +1.20% Apple’s new Tmall storefront has a design similar to its own Chinese online store.

An Alibaba spokeswoman confirmed that the Tmall page is indeed Apple’s and that it opened recently, but declined to comment further. An Apple spokeswoman wasn’t immediately available for comment.

China Communications Int’l Buys in Zhenhua Heavy Industries | 4-Traders Shanghai Zhenhua Heavy Industries announces that Zhenhua Engineering plans to sell 749,677,500 B-shares held in the company to China mmunications International, which represent 17.08% of capital stock.

Starbucks Introduces Gift Cards in China|PaymentsSource The deployment in China comes as Starbucks broadens its use of gift cards and rewards, in the U.S. and other markets. A significant part of the company’s card volume has migrated to the mobile channel; 11% of the company’s sales in the U.S. and Canada are made through its mobile app.

Yosen Group Honored ‘2013 China Telecom’s Highest Potential Award’ – BWWGeeksWorld China Telecom hosted its 2013 Annual Appreciation Gala last month in Hangzhou, China, where Yosen is headquartered. It was China Telecom’s largest-scaled, most influential annual gathering in recognition of its collaborative partners. Samsung, Huawei, among many other well-known names in the industry, attended the meeting.

Posted from Diigo.


China Business Briefs 4/1/14


China’s credit spiral | FT Alphaville **Good read** Just when you think there’s nothing left to say about China’s debt dilemma up pop some more pieces to greet the new year. Two of the most recent saw Soros on the self-contradiction in Chinese policy boat saying that “restarting the furnaces also reignites exponential debt growth, which cannot be sustained for much longer than a couple of years” and Patrick Chovanec providing a touch more detail about what all that messy debt actually means:

China is No. 1 risk for world economy: George Soros – The Tell – MarketWatch The People’s Bank of China moved to rein in debt in 2012, but then the world’s No. 2 economy experienced “real distress,” Soros writes. So China’s Communist Party reasserted its supremacy, ordering steelmakers to restart their furnaces and bankers to ease credit.

China’s economy turned around, and party leaders also announced major reforms in November. “These developments are largely responsible for the recent improvement in the global outlook,” Soros says.

China may raise Iran oil imports with new contract: sources – Tehran Times Industry sources say Chinese state-trader Zhuhai Zhenrong Corp, which was sanctioned by Washington in early 2012 for supplying gasoline to Iran, is in talks with the National Iranian Oil Company (NIOC) for a new contract for condensate.

Zhenrong, an affiliate of China’s defense authorities in the 1990s, acts largely as an import agent for China Petroleum and Chemical Corp, or Sinopec, whose refineries process Iranian crude.

Investors clamoring for high-yield funds in China|Finance|Business| **Ponzi** Financial products touted as highly profitable and risk-free, which were launched by internet giants and fund management firms, have soared in popularity recently.

Five hundred million yuan’s worth (US$83 million) of money management products called “Tianjin” unveiled by Chinese internet company NetEase were sold within an hour on Dec. 25. The product promised yields of 11%.

Policymakers can’t turn blind eye to debt dangers – BUSINESS – **Global Times shifts blame to “alarmist” reports, no doubt from foreign media** Though the results of these two previous audits also suggested that China’s debt risk is manageable, their lack of granularity only created new worries and concerns. Fear of the unknown led many investors and think tanks to adopt increasingly alarmist views concerning the country’s debt risk. By the beginning of 2013, many even believed that a Chinese financial crisis was imminent. At the very least, the local credit situation was acknowledged as untenable and counterproductive to the financial health of China.

China pledges further support for solar industry | Reuters China pledged further support for its ailing solar power industry on Saturday as the government seeks to revive a sector struggling with overcapacity and falling prices.

The State Council, China’s cabinet, said in July that the country aimed to more than quadruple solar power generating capacity to 35 gigawatts by 2015 in an apparent bid to ease a glut in the domestic solar power industry.

China set to overtake US as world’s biggest goods trader |Economy | The value of trade in China’s goods in 2013 is set to exceed that of the United States, making the world’s second-largest economy the world’s top trader for the first time, certainly in modern times.

“Judging from the current statistics, there is a very high possibility that the value of China’s goods trade will have exceeded the US in 2013,” said Wang Haifeng, a researcher with the Institute for International Economic Research at the National Development and Reform Commission.

IPO rules overhauled for PE and VC firms — China Daily Article | China Private Equity Chinese PE and VC companies used to evaluate the companies by the standards of the China Securities Regulatory Commission for quicker IPOs, but now the market will play a more important role, said Peter Fuhrman, chairman, founder and chief executive officer at China First Capital.

“Under the new IPO system, the share pricing of an IPO company is decided by its strength and competitiveness, so investors will choose companies with real potential to invest in and provide them with the resources of strategy, management and market development to make their own return the best,” said Fuhrman *.

Panel to push financial reform in FTZ |Economy | Financial reform in the China (Shanghai) Pilot Free Trade Zone will shift into higher gear and detailed policies may be issued by the end of next month, following the establishment of a high-level panel.

The special group has been established to coordinate and advance the affairs of financial reform in the 28 sq km test zone, China Business News reported, citing an unidentified source connected to the financial authorities in Shanghai.

Currency tax under consideration: SAFE |Economy | Yi Gang, head of the State Administration of Foreign Exchange, made the comments in an article in the Communist Party journal Qiushi.

Yi wrote that a Tobin tax, a tax on all spot foreign currency transactions that’s named after Nobel economist James Tobin, should be “studied in depth”.

China Signs over CNY1 Tln Currency Swap Agreements in 2013-Caijing China’s central bank signed CNY1.16trillion currency swap agreements with eight countries in 2013 to promote bilateral trade and investment in a broader area, according to Great Wisdom, a Shanghai-based financial information provider.

The eight countries or regions include Singapore, Brazil, England, Hungary, Albania, Iceland, Indonesia and Europe.

As a supplement to the country’s RMB going-out policy, the People’s Bank of China (PBoC) has reached currency swap agreements totaling CNY2.5 trillion with 23 foreign central banks since 2008.

China Moves to Tighten Rare-Earths Control, Pave Way for Consolidation – China is moving to tighten control over its far-flung rare-earths industry, paving the way for state-backed mining giants to acquire smaller producers and carry out Beijing’s consolidation mandate.

The central government faces increased urgency to corral an unruly industry. Beijing is under pressure from the World Trade Organization to give up its rare-earths export quota, a key tool for influencing global prices.

A Look Back at China Tech Market in 2013 2013 is quite a year for China tech industry. TechNode reporters produced a series of articles about China tech market in the past year. Here are what we believe you should know about.

Public holidays in China | McKinsey China **Would be** It would be a further sign of a maturing of the Chinese economy and of growth in services industries, which lend themselves to more flexible vacation schedules, if the government shifted its focus from mandating public holidays towards increasing the mandatory minimum vacation dates that employers must provide, and then spend its time ensuring that regulations are adhered to. For manufacturing enterprises, there could be a shift towards the model previously used in Europe of staggering some of the vacation periods, with companies in one region having mandated vacation periods that do not overlap with those in an adjacent region or city.

Hangzhou to invest US$1.7bn in Qiandao lake water diversion project|Markets|Business| Hangzhou plans to start the construction of a reservoir off Qiandao lake in 2014 and finish 60% of the 10 billion yuan (US$1.7 billion) investment in three years, which will deliver drinking water to residents of Hangzhou after the construction is complete, according to Zhou Dingyan, the head of the city’s Forest and Water Bureau, said.

Local authorities have been unable to discover the reason behind the “strange taste in the tap water,” reported four times since March 2013. A Hangzhou government official pointed out that Hangzhou’s ability to handle polluted drinking water is inadequate because a safe water supply network has yet to be established.


Alibaba investment fund China’s largest|Finance|Business| An investment fund backed by China’s e-commerce giant Alibaba has become the country’s largest, with the business model built around its third-party payment service Alipay being seen as an incredible success, the Shanghai-based China Business News reports.

The size of the currency fund Tianhong Zenglibao reached 185.3 billion yuan (US$30.62 billion) at the end of 2013, making it the largest in China and making Tianhong Asset Management the second largest fund company in the country.

Tech in China 2013: High Hopes of Disrupting Domestic Financial Market Yuebao is a mutual fund tailored to Alipay users. Launched in mid-2013, 43.03 million Alipay users adopted it in half a year since its launch. A total of RMB185.3 billion ($30 bn), an average of RMB 4307 ($700)  per user account, were transferred into Yuebao that generated RMB1.70 billion in total return in half a year, disclosed Alipay, the online payments service of Alibaba Group.

Tech in China 2013: The Call from Overseas We discussed on why increasingly more Chinese tech companies test the water of overseas markets. In 2013, they must feel more encouraging as there were several more successful cases. Sungy Mobile, an Android launcher and app developer with 70% users from overseas, went public on the NASDAQ. Another Chinese company that launched IPO in the US in 2013, online retailer LightIntheBox, has a majority of orders from outside China. IGG, an online gaming company that went public in Hong Kong, isn’t known as a Chinese company in many markets. Keyboard app TouchPal announced 100 million users, most being overseas.

Wal-Mart’s Reputation Takes a Hit From China Donkey Meat Scandal (WMT) **WalMart in China is still poor. Logistics problems inhibit quality supermarket sector** For a country in which food quality is already suspect, it’s probably not much of a surprise that China is suffering though yet another bout of tainted goods. The fact that it involves Wal-Mart (NYSE: WMT  ) , however, which takes care to preserve its reputation as a quality retailer, could jeopardize the company’s expansion plans the

Is Apple’s China Mobile Deal a Dud? (AAPL, CHL) There are several reasons low pre-order estimates do not necessarily imply weak sales when the iPhone becomes available at China Mobile later this month. If Apple investors are patient, they are likely to be rewarded with substantial share appreciation this year and beyond as Apple starts to exploit this big opportunity.

Why International, Ltd., Arch Coal Inc., and Inovio Pharmaceuticals Inc Tumbled Today (ACI, CTRP, INO, PCLN) Ctrip dropped 8% as a Bloomberg report detailed the heightened competition that the online travel company could see in the near future. With companies like newly public Qunar Cayman Islands saying that it saw record levels for bookings of air travel in late 2013, Ctrip is suddenly facing threats not just on the hotel side of its business, but also on airline ticketing. Yet, Ctrip still has its size advantage to use, and U.S. giant (NASDAQ: PCLN  ) has demonstrated the value of using its size to create other competitive advantages it has used to send its shares soaring.

Murdoch’s Fox Sells Star China Stake to Management Group – Bloomberg **China beats Murdoch. Not sure how to feel about that one…** China Media Capital and the management team of Star China, owner of three 24-hour Mandarin-language TV networks, are buying Fox’s 47 percent stake in the venture, the companies said yesterday in a statement. Terms weren’t disclosed.

China Shows Off Its Helicopters – China Real Time Report – WSJ But the biggest recent China helicopter story got less coverage: the maiden flight of a domestically designed medium-lift craft analysts are calling the Z-20, which lifted off from an unidentified snowy military base in the northeast late last month.

James Hardy, Asia-Pacific editor at IHS Jane’s Defence Weekly, said the Z-20 project appears to mark a particularly important advancement, both in terms of its domestic development and the type of lift it will provide.  “It fills a real gap,” said Mr. Hardy.

China Probes Vaccine Makers Amid Heightened Scrutiny – China Real Time Report – WSJ China’s food and drug regulators are coming down on the country’s largest makers of the hepatitis B vaccine, even after clearing the manufacturers as a potential cause of nine infant deaths.

The country’s food and drug watchdog halted vaccine production at Beijing Tiantan Biological Products Corp.600161.SH +6.59% , Shenzhen Kangtai Biological Products Co. and Dalian Hissen Bio-Pharm, citing a failure to meet new production quality, according to the official Xinhua News Agency. It didn’t elaborate on which quality requirements were unmet.

Who are Xiaomi’s 30 million MIUI users? (INFOGRAPHIC) Chinese phone-maker Xiaomi recently released an infographic covering some data points for MIUI, the company’s Android skin and ecosystem that comes pre-installed on all of its handsets.

Apple Inc. (AAPL): Impact On Apple If 2% – 4% Of China Mobile Customers Buy An iPhone – Seeking Alpha Conservative estimates for the amount of China Mobile (CHL) customers to buy an iPhone are approximately 2% for 2014. With the total China Mobile customer count at about 763 million as of the end of November 2013, this equates to approximately 15 million in iPhone sales. With the average price of an iPhone in China, currently at $525, Apple (AAPL) stands to gain about $7.9 billion in additional revenue from China Mobile in 2014.

Moody’s rates ICBC (Argentina)’s senior note issuance Moody’s Latin America assigned today a Ba3 global local currency debt  rating to ICBC (Argentina) S.A.’s (ICBC) expected issuance  of up to ARS 300 million, which will be due in 18 months under the  bank’s $250 million medium-term note program. At  the same time, Moody’s Latin America assigned a national  scale local currency debt rating to the expected issuance.

Huawei Technology Co Ltd : Joint Project by Huawei and China Mobile Gets DatacenterDynamics Greater China 2013 Green Data Center Award | 4-Traders Huawei, a global information and communications technology (ICT) solutions provider, and China Mobile, a telecommunications service provider, jointly announced that the China Mobile – Huawei Warehouse IDC project, a collaboration between Huawei and a subsidiary of China Mobile, Heilongjiang Mobile, has won the DatacenterDynamics Greater China 2013 Award in the Green Data Center Category.

Singapore’s OCBC in exclusive talks to buy Wing Hang Bank – sources | 4-Traders Singapore’s Oversea-Chinese Banking Corp (OCBC) has begun exclusive talks to buy Hong Kong’s Wing Hang Bank in a deal that would value the family-run lender at about $5.3 billion, two people familiar with the matter told Reuters.

Reuters previously reported that the sale process had attracted interest from suitors including Agricultural Bank of China, Australia and New Zealand Banking Group and Singapore’s United Overseas Bank. But Wing Hang’s high price expectations prompted many to drop out of the auction.

BRIEF-ICBC says 65.69 pct of convertible bonds not converted into A-shares, appoints new senior exec VP | Reuters Industrial and Commercial Bank of China Ltd (ICBC)

* Says 65.69 percent of convertible bonds issued in August 2010 has not been converted into A-shares as of end-2013

* Says received regulatory approval to appoint Wang Jingdong as senior executive vice president

Posted from Diigo.

China Business Briefs 24/12/13


China’s Total Debt at 215 Percent of GDP in 2012: CASS-Caijing **Which puts it above Greece in % of GDP – see here** China’s total debt topped more than 100trillion yuan in 2012, which  was 215 percent of that year’s GDP, according to the China Balance Sheet  2013 released by the Chinese Academy of Social Sciences (CASS).

China Cash Crunch Pushes Up Short-Term Rates – Rates rose again despite cash injections last week by the People’s Bank of China, which has tried to rein in lending but is facing crosscurrents ranging from government budget tightening to quirks in bank accounting rules to distrust among banks to rising losses on loans that haven’t yet been disclosed.

Chinese Rate Crunch Exposes Cracks – In an echo of last June’s cash crunch, interest rates that Chinese banks charge each other for short-term funds have again shot up to worrying levels. Despite moves by the central bank to calm the interbank market, the benchmark seven-day repo rate averaged 8.94% on Monday and spiked as high as 9.8%. That’s up from an already elevated 8.2% on Friday.

China banks squeezed for cash – Dec. 23, 2013 Some banks in the world’s second largest economy have been struggling to secure funds as the end of the year approaches, a time when they usually need extra cash to meet minimum deposit requirements, and as companies seek more money for operations.

China cash crunch eases as PBoC reassures – The People’s Bank of China pumped Rmb29bn ($4.8bn) into the financial system via open-market operations on Tuesday morning. Although the injection was tiny relative to the country’s Rmb100tn banking market, it was an important gesture to coax wary lenders back into doing business with each other.

The relief was virtually immediate. The seven-day bond repurchase rate, a key gauge of short-term funding, fell 344 basis points to 5.4 per cent, the steepest decline in more than two years, as liquidity improved.

China cash squeeze persists even after central bank reassures market | Reuters China’s cash market squeeze showed little sign of easing on Monday, reinforcing the view the central bank has shifted to tighter monetary policy.

Closer Look: Repeated Liquidity Crunches Beg a Question: Where’d the Money Go? – Some analysts say capital has left the country in anticipation of the U.S. Federal Reserve ending its policy of so-called quantitative easing, while others say interest rates have risen as reform deepens. Still others say the money that has been released was looped in a cycle formed by the property sector and the financial market instead of flowing into the real economy.

China Banks Stock Falls Due to Portfolio Adjustment | 4-Traders A slump in shares of banks like China Construction Bank Corp. late Friday was a result of changes in the investment portfolios of one or two foreign institutional investors, the Shanghai Stock Exchange said.

Some foreign index service providers adjusted the components and the weight of components of their indexes for stocks trading in the Shanghai and Shenzhen stock exchanges, which led to one or two foreign investors under the so-called Qualified Foreign Institution Investor program to accordingly adjust their positions in those stocks, the bourse said Sunday through its official account on the Weibo, a U.S. Tweeter-like microblogging service in China.

Local Bonds Set for Approval-Caijing **About time. But lessens central government control** China may allow city governments to issue municipal bonds independently as early as March next year to support their financial need for urbanization and relieve the pressure on mounting government debt, experts close to the matter said.

Key to Debt Problem ‘Is Giving Local Gov’ts More Autonomy’ – The key to the solution is matching local governments’ rights to their obligations and establishing a self-restraint mechanism through which local officials are responsible for their own income and spending, Wei Jianing, a research fellow at the State Council’s Development Research Center, said at an academic forum on local government debt last week.

IMF Working Paper 10.2013–Local Government Financing Platforms in China: A Fortune or Misfortune? Yinqiu Lu and Tao Sun China’s rapid credit expansion in 2009–10 brought local government financing platforms (LGFPs) into the spotlight. This paper discusses their function, reasons behind their recent expansion, and risks they are posing to the financial sector, local governments, and sovereign balance sheet. This paper argues that LGFPs were a fortune for China in the past, but would turn out to be a misfortune if the causes of the rapid expansion of LGFPs are not addressed promptly.

Chinese Steel Firms Reported Debt Ratio of 70pct, Margins at 0.43Pct in Jan.-Oct. Period-Caijing **Major restructuring ahead** Total liabilities in the companies – 21 percent of which posted a net loss – hit 1 trillion yuan in the period, and their margins were among the lowest across all sectors in the economy, said Miao Changxing, a senior official at the Ministry of Industry and Information Technology.

Property Investors Still Can’t Get Enough of Shanghai – China Real Time Report – WSJ **Same as London – property is an asset** According to a report published jointly by PricewaterhouseCoopers and U.S. research organization the Urban Land Institute, Shanghai ranked second out of 23 Asian cities in terms of investment prospects. The city held the No. 2 spot for the fourth year running, finishing behind Tokyo, which catapulted to the top with a hand from the economic reforms of Prime Minister Shinzo Abe. Last year’s winner, Jakarta, slipped to third place this year.

Sotheby’s, Liu Yiqian Deny That $8.2 Million Calligraphy Scroll Is Fake – China Real Time Report – WSJ **How corrupt are the experts?** The public spat began Saturday when three art experts from the Shanghai Museum alleged that the calligraphy work, titled “Gong Fu Tie,” was a forgery. Purchased at a Sotheby’s auction in September by collector Liu Yiqian, the piece is attributed to the Song Dynasty poet Su Shi, who lived from 1037 to 1101 and is known by the literary name Su Dongpo.

Chinese Investments In US Commercial Property Soar By 500% | Zero Hedge **Buy low, sell high!** Investors from multi-billion dollar hedge funds to individuals buying as few as 10 properties have acquired more than 1 million homes across the U.S. in the past three years, transforming a mom-and-pop business into one of Wall Street’s hottest investments. As we noted here, Blackstone Group LP alone has acquired more than 40,000 properties in 14 cities to become the largest single-family landlord in the country. As Bloomberg notes, the new landlords are transforming the way Americans live and accumulate wealth. But while Wall Street is becoming America’s largest residential landlord, it appears China wants to get paid for commercial properties… and Detroit.

Learning the Wrong Lessons from the Three Gorges Dam – **Experts don’t face the pressure on infrastructure which Chinese leaders do** The “South-North” project will cost at least 350 billion yuan. Once again, scientists are warning of dire environmental effects. Critics say the money would be better spent on water conservation, better infrastructure and making industry use scarce supplies more efficiently. Chinese leaders prefer grand projects above complex policy adjustments requiring debate and consent. The 3,000 kilometer network of viaducts, pipelines and canals is proceeding.

Q. and A.: U.S. Commerce Secretary Penny Pritzker on China Trade Talks – Since a key Communist Party conference issued a plan in November to advance market reforms, a series of foreign envoys have rolled through China seeking to capitalize on some of its more business-friendly initiatives. Top American trade officials took the same tack during talks in Beijing last week, but made clear afterward that it would take time for United States businesses to reap dividends from the conference, known as the Third Plenum.

MOFCOM seeks foreign investment – BUSINESS – China will encourage investment by foreign capital in the tourism, elderly care and education sectors next year, a spokesman for the Ministry of Commerce (MOFCOM) said Monday.

New incentives weighed to curtail overcapacity |Economy | **Very necessary** China will use fiscal and financial incentives to encourage consolidation in a number of industries, Minister of Industry and Information Technology Miao Wei said on Monday.

In a sign of shifting policy focus, Miao said that instead of mandatory, administrative-oriented consolidation, the industry regulator will do more to create a sounder environment for mergers and acquisitions.

8 tech trends to watch in China for 2014 The new year is a time for reflection, but it’s also a time for looking forward. In this regard, we’ve taken a broad look at some of the budding trends we expect to continue in China in 2014. In an ecosystem growing as fast as China’s tech scene, anything is possible within a year, but here’s a few predictions we think will change the country’s landscape.

SOE Reform in China — Big Change is On the Way | China Private Equity, Published by China First Capital The reality, however, is substantially different and substantially more challenging. SOEs live in a different world than they did ten, or even three years ago. They are more and more often under intensifying pressure to achieve two incompatible goals: to continue to expand revenues by 15%-25% a year, but to do so without corresponding large increases in net bank borrowing. The result, over time, will be that SOEs will need to rely increasingly on private sector capital to finance their future growth.

How going global can go well for firms – Headlines, features, photo and videos from|china|news|chinanews|ecns|cns China’s overseas business is still at its beginning stages, and more effort has been urged to strengthen the enterprises’ “soft power” abroad amid the boom of going global.


China Mobile Faces Hit From Lower Connection Fees – China Real Time Report – WSJ **Competition is a bitch, ain’t it?** China’s telecoms regulator said it will reduce the interconnection fees that smaller carriers pay to dominant player China Mobile Ltd. beginning next year, as part of the government’s effort to promote competition.

The new fee regime will hit China Mobile’s earnings, analysts say, even as the extent of the profit boost from its new 4G services remains unclear.

Alibaba International Platforms to Merge into One Marketplace Alibaba’s AliExpress, Tmall International and the international division of Taobao, reportedly will merge into one marketplace, targeting individual consumers overseas (via Sina Tech).

Chinese users welcome Apple, China Mobile deal – Yahoo Finance UK Chinese users welcomed a long-awaited tie-up between Apple and China Mobile, the world’s biggest wireless operator, but analysts warned Monday that the deal’s impact depends on the quality of the carrier’s 4G network.

How China’s Richest Man Plans to Take on Hollywood (CMCSK, DIS, IMAX) Small, coastal Qingdao, China, may seem like an odd place for the next entertainment production mecca, but that is just where China’s wealthiest man, Wang Jianlin, with his company Dalian Wanda Group, plan to build their entertainment metropolis. Wanda Group is currently the largest land development company in China, developing and running shopping malls, department stores, hotels, and over 500 cinemas.

Pricing will be key to success of China Mobile’s deal with Apple – **But profit comes from a small percentage of high-end phones** Operators such as China Mobile traditionally agree to subsidise part of the cost of popular handsets, but some are now trying to end that practice. T-Mobile USA recently began replacing smartphones subsidies with mobile device financing plans, while Randall Stephenson, chief executive of AT&T, said that as smartphones become ubiquitous in more mature markets such as the US, “the model has to change. You can’t afford to subsidise devices like that.”

Chinese Energy Giants Refocus on Traditional Assets – The world’s biggest firms, or majors, are putting plenty of oil assets on the sale block, and Chinese companies are snapping them up. So far this year, China’s top three oil companies—China National Petroleum Corp., China Petrochemical Corp., or Sinpoec Group, and Cnooc Ltd. have spent $32 billion on conventional oil and gas asset acquisitions overseas, according to data provider Dealogic.

China is Preparing for the Future by Buying Up Energy Resources of All Kinds Energy is a necessity for growth. That’s why countries like China and India are building so many new power plants—without reliable electricity their growth would eventually strain and falter. China has been particularly aggressive in partnering with and buying foreign oil companies. And it’s doing the same thing with coal.

Xiaomi reports monthly revenues of $4.9 million from MIUI First, in a post on Xiaomi’s excellent official blog (hat-tip Marbridge Daily), the company revealed that its Android-based MIUI software has over 30 million users. This includes Xiaomi phone buyers as well as those who have installed the software on their Android phones as a ROM. The company points out that this means that one in every 48 people in China have MIUI installed on their devices, if you assume that China has a population of 1.4 billion people – a subject that’s best suited for other blogs.

China’s Jingdong set to pull in over $16 billion in sales in 2013 Jingdong – formerly called 360Buy – is the second largest Amazon-like site in China. It’s behind Alibaba’s Tmall in terms of market share, according to data from iResearch. With China’s whole business-to-consumer e-shopping sector worth $71 billion in Q2 this year, Jingdong has 17.1 percent market share to Tmall’s dominant 50.7 percent. Jingdong differs from Tmall in that it buys and ships its own stock, whereas Tmall serves as an online mall for brands and merchants.

Jingdong Posts Small Profit in Q1-Q3 2013 | Marbridge Consulting – China Internet News **Very low margins on high turnover** Beijing-based B2C e-commerce platform Jingdong has released financial performance figures for the first three quarters of 2013, revealing that the company achieved a small profit during the period. Jingdong’s total gross merchandise volume (GMV) (including the Jingdong open platform) exceeded RMB 100 bln in Q1-Q3 2013.

Netease to Sell Wealth Management Product -Caijing **Leading the market. Shows the dynamism of capital – always seeking returns** Following Baidu’s Baifa, NetEase’s first wealth management product, Tianjin, will be sold starting Dec 25 on that platform.

Tianjin will be launched in collaboration with Xianjinbao, a money market fund managed by China Universal Asset Management. Currently, the seven-day annualized yield of Xianjinbao is 5.97 percent.

HSBC may Target Industrial Bank in Next China Sell: Report-Caijing HSBC is in line to sell its 10 percent stake in China’s Industrial Bank after it spun off all stakes in Ping’an Insurance last year and stakes in Shanghai Bank earlier this month, reported the Money Week.

The Apple-China Mobile Deal Doesn’t Solve Anything – Businessweek Coming just a few months after a similar breakthrough with the leading carrier in Japan, NTT Docomo (9437:JP), the China Mobile deal addresses Apple’s traditional weakness in Asia. What it won’t do, however, is propel Apple to the top of the Chinese market. Samsung Electronics (005930:KS) is No. 1 now, followed by Lenovo (992:HK) and other local makers that sell good smartphones for far less than the cost of an iPhone. “Chinese consumers like to buy low-end, so-called white box, low-priced mobile phones,” Barclays analyst Kirk Yang told Bloomberg Television.

Delivery Industry Faces Review after Leaked Chemical Kills Parcel Recipient – The order was issued after media reports about the death of a man in Weifang, in the eastern province of Shandong, in late November. The man died after taking delivery of a parcel – a box of shoes he bought online – from Shanghai YTO Express (Logistics) Co.

China Telecom (CHA) Updates on Interconnection Settlement Standards; Sees Lower Revenue The Board of Directors of China Telecom Corporation Limited (NYSE: CHA) announced that the Company was notified by the Ministry of Industry and Information Technology of the PRC (the “MIIT”) that amongst others, public telecommunications network interconnection settlement standards of basic telecommunications operators will be adjusted with effect from 1 January 2014.

iOS Jailbreaks Bundled with Chinese App Store Is Just A Matter of Time? No matter who is backing TaiG or who are the other Chinese companies that were in talks with SaurikIT, Chinese tech industry are not surprised that Chinese companies tried to reach partnership with jailbreaks.

Mobile Payment and Loyalty Startup Mobexo Expanding to Four Tier 1 Chinese Cities Mobexo offers a customizable system of pre-payment, payment, and post-payment services. The Mobexo mobile payment e-wallet is a free app on iOS, Android and Windows Phone, which allows two parties to transfer funds without the need of additional devices. The app enables users to pay online or at physical shops, restaurants and bars. At the time of payment, users can earn points on their preferred merchants’ loyalty card and redeem promotional deals. Unlike credit cards or cash, Mobexo allows merchants to accept funds from customers without requiring them to give out their personal banking information.

Tsinghua Unigroup Completes Acquisition of Spreadtrum for US$31.00 per ADS Tsinghua Unigroup Ltd. (“Tsinghua Unigroup”), an operating subsidiary of Tsinghua Holdings Co., Ltd., a solely state-owned limited liability corporation funded by Tsinghua University in China, and Spreadtrum Communications, Inc. (NASDAQ: SPRD; “Spreadtrum” or the “Company”), a leading fabless semiconductor provider in China with advanced technology in 2G, 3G and 4G wireless communications standards, today jointly announced the completion of the approximately US$1.7 billion merger of Spreadtrum with an affiliate of Tsinghua Unigroup (the “Merger”) as contemplated by the previously announced agreement and plan of merger, dated as of July 12, 2013 (the “Merger Agreement”), between Tsinghua Unigroup and Spreadtrum. Ethiopia: Chinese Firms to Undertake Two Billion Birr Road Projects in Amhara, South The roads, totaling 121.5km, are found in the Amhara and Southern regional states. The road in Amhara will be undertaken by China First Highway Engineering (CFHE) for 1.55 billion Br. It involves 24kms of badly damaged asphalt road, constructed during the Italian occupation more than 60 years ago, and 43.5kms of gravel road. Called Dessie-Kutaber-Tenta Junction Road, it will be upgraded to asphalt.

CNOOC’s Huizhou refinery plans Q4 overhaul next year – source | Reuters **You wonder what problems they’ve found in their plants around China** China’s 240,000 barrels-per-day Huizhou refinery, owned by China National Offshore Oil Corp (CNOOC), has set a tentative plan to shut down its whole plant for major overhaul for about 45 days in the fourth quarter of 2014, a company source said on Tuesday.

Moody’s affirms CCB Asia’s ratings and assigns (P)A2/(P)P-1 ratings to the bank’s MTN program Moody’s Investors Service has today affirmed China Construction Bank (Asia)  Limited’s (CCB Asia) long-term and short-term deposit ratings  at A2/P-1. The agency has also affirmed the bank’s  bank financial strength rating (BFSR) at C, which translates into  a baseline credit assessment (BCA) of a3. At the same time,  Moody’s has assigned (P)A2/(P)P-1 long-term and short-term  senior unsecured ratings to the bank’s USD 3 billion Medium-Term  Note Program, and affirmed the bank’s long-term and  short-term certificate of deposit program ratings at (P)A2/(P)P-1.

Posted from Diigo.

China Financial Results 15/11/13 – Netease, Youku, China Power Equipment, China Education Alliance, SinoCoking Coal and Coke

Netease posts record revenues despite ailing World of Warcraft

Chinese online gaming and web giant Netease (NASDAQ:NTES) posted record numbers in Q3 2013 despite a fall in the number of World of Warcraft subscribers, which Netease operates in China. Here’s a quick summary (all growth stats are year-on-year):

  • Netease made RMB 2.5 billion ($411 million) in revenue, up 23 percent. That’s a new record for the company.
  • Net profit came out to RMB 1 billion ($171 million), up 29 percent from last year.
  • Online game revenue grew 21 percent to RMB 2.1 billion ($344 million).
  • Advertising revenue grew 23 percent to RMB 299 million ($49 million).

Youku Tudou Announces Third Quarter 2013 Unaudited Financial Results – Bloomberg

  • Net revenues were RMB857.7 million (US$140.2 million), a 14% increase  quarter over quarter.
  • Our accumulated traffic data of TV serial dramas and movies reflected a  new consumption pattern and we have adjusted our accounting estimates on  content costs amortization accordingly.
  • Gross profit was RMB82.3 million (US$13.4 million).
  • Net loss was RMB218.6 million (US$35.7million).
  • Cash, cash equivalents, restricted cash and short-term investments totaled  RMB3.2 billion (US$523.5 million) as of September 30, 2013.
  • Acquisition of property and equipment was RMB67.3 million (US$11.0  million).
  • Acquisition of intangible assets was RMB171.6 million (US$28.0 million).

China Auto Logistics Reports Third Quarter Results

  • Net revenues in the quarter were $125,489,366, compared with  $170,456,821 in the same period last year.
  • The gross profit margin in Auto Sales in the third quarter continued  to be squeezed by the Company’s decision to be very competitive in its  Auto Sales pricing to maintain industry leadership in the face of  significant competition.
  •  Reflecting the reduced contributions to operating income, net income  attributable to shareholders in the third quarter was $553,275  compared with $1,517,549 in the year earlier period.
  • For the nine months ended September 30, 2013, net revenues were  $343,370,742, compared with $427,950,375 a year earlier. Net earnings  attributable to shareholders in the first nine months of 2013 were  $2,361,094, or $0.64 per share, compared with $4,748,487, or $1.29 per  share in the first nine months of 2012.

China Recycling Energy Corporation Reports 520% Increase in 9 Months’ Profit for 2013 Third Quarter Financial Results

  • Total sales was $21.74 million, an increase of 21.26 million as compared  to $0.48 million for the third quarter of 2012.
  • Income from operations was $10.46 million, increased 108% compared to  $5.03 million for the third quarter of 2012.
  • The net income is 4.39 million, while it was a net loss of 1.41 million in  the third quarter of 2012.
  • Fully diluted EPS of $0.08, increased 167% compared to $0.03 for the third  quarter of 2012.

China Power Equipment Announces Third Quarter 2013 Financial Results

  • Revenues decreased 14.5% to $ 9.13 million year over year, while increased 2.78% quarter over quarter
  • Net income decreased 22% to $1.63 million year over year, while increased 17.4% quarter over quarter, with $0.07 in diluted EPS

China Jo-Jo Drugstores Announces Fiscal 2014 Second Quarter Financial Results

  • In three months online sales contributed $1.6 million in revenue, an  increase of 85.6% from the prior period
  • Retail sales, approximately 65.6% of total revenue for the three months  ended September 30, 2013, increased by $0.6 million or 5.3% to $11.1  million compared with the same period last year
  • Cost of goods sold in the second quarter decreased to $13.9 million, down  40.2% compared with the same period last year
  • Gross margin increased quarter over quarter from 12.8% to 17.5%
  • Net loss was $0.55 million in the second quarter, losses narrowed 64.3%  compared with the same period last year
  • Diluted and basic loss per share was $0.04

China Education Alliance Announces Third Quarter 2013 Financial Results

  • Total revenues decreased by 21% to $1.6 million.
  • Net loss of $7.8 million.
  • Loss per share was $0.74 per fully diluted share.

SinoCoking Coal and Coke Chemical Industries Announces Fiscal 2014 First Quarter Financial Results

  • Total revenue slightly decreased to $17.5 million, as compared to $17.6  million.
  • Gross margin improved to 17.7%, as compared to 10.9%.
  • Income from operations increased by 98% to $2.5 million, as compared to  $1.2 million.
  • Net income increased by 75.9% to $1.2 million or $0.05 per diluted share,  as compared to $0.7 million or $0.03 per diluted share.

China Cord Blood Corporation Reports Financial Results for the Second Quarter and First Half of Fiscal 2014

  • Revenues for the second quarter of fiscal 2014 increased by 10.3% to  RMB141.6 million ($23.1 million) from RMB128.5 million in the prior year  period.
  • New subscriber sign-ups and accumulated subscriber base were 15,928 and  343,170, respectively.
  • Gross profit increased by 12.7% to RMB114.3 million ($18.7 million) from  RMB101.4 million in the prior year period.
  • Gross margin was 80.7%, compared to 78.9% in the prior year period.
  • Operating income increased by 19.7% to RMB56.3 million ($9.2 million) from  RMB47.0 million in the prior year period.
  • Interest expense amounted to RMB16.5 million ($2.7 million), which was  largely attributable to the convertible notes issued to KKR China  Healthcare Investment Limited (“KKR”) and Golden Meditech Holdings Limited  (“Golden Meditech”).
  • Net income attributable to the Company’s shareholders increased by 0.8% to  RMB24.9 million ($4.1 million) from RMB24.7 million in the prior year  period, after taking into account higher income tax expense in the second  quarter.
  • Operating cash flow for the quarter amounted to RMB121.0 million ($19.8  million), after taking into account the coupon payment made to the  Company’s convertible note holder.