SAIC Motor

China Stock Watch 23/1/14

After yesterday’s nearly unanimous gains, the lower-than-expected manufacturing Purchasing Managers’ Index report today has led to across-the-board losses. Declines ranged from 3.43% in the case of Noble Group to a marginal 0.08% for SAIC Motor. The problem was, not only was the PMI index lower than expected, but coming in at 49.6, it indicated contraction. If so, the Chinese economy may well be slowing faster than expected. It may be that with Chinese New Year coming up, purchases are being delayed, but give liquidity worries, it could equally be that businesses are holding off on investment until the business and macroeconomic environment stabilizes.

The other really interesting story concerns a judge ruling that the Chinese units of the “Big 4” auditors (Ernst & Young, KMPG, Deloitte and PwC) should barred from auditing US-listed companies for six months. The stand-off over their refusal to pass documents to the Securities Commission has been rumbling on for some time, and while it may seem esoteric, comes down to the ability of the US to control and administer its markets as it sees fit. It is an intriguing case of two nations with deep-seated belief in their exceptionalism. As Prof Gillis notes, the consequence may well be state-owned enterprises withdrawing from their US listings.

The Shanghai Composite fell 9.57 points (or -0.47%) to close at 2,042.18.

Name Price Change Mkt cap 52wk high 52wk low EPS P/E
Sinopec 4.58 -0.07 (-1.51%) 533,869.13M 7.03 4.05 CN¥0.62 7.45
PetroChina 7.62 -0.07 (-0.91%) 1.39B 9.5 7.08 CN¥0.68 11.28
ICBC 3.41 -0.02 (-0.58%) 1.20B 4.53 3.38 CN¥0.74 4.64
China Construction Bank 3.92 -0.04 (-1.01%) 980,043.05M 5.19 3.8 CN¥0.85 4.63
Agricultural Bank 2.37 -0.02 (-0.84%) 769,762.02M 3.28 2.35 CN¥0.50 4.72
Bank of China 2.49 -0.02 (-0.80%) 695,617.74M 3.26 2.45 CN¥0.53 4.69
China Mobile 77.00* -0.65 (-0.84%) 1.55B 89.2 74.9 HK$8.20 9.39
Noble Group 0.985 -0.035 (-3.43%) 6,527.67M 1.27 0.785 SGD0.04 26.99
China State Construction 3.02 -0.05 (-1.63%) 90,600.00M 4.18 2.9 CN¥0.62 4.9
CNOOC 12.74* -0.12 (-0.93%) 568,808.58M 16.52 12.04 HK$1.89 6.73
China Railway Construction 4.23 -0.07 (-1.63%) 52,187.80M 6.25 3.95 CN¥0.84 5.02
China Railway Group 2.45 -0.03 (-1.21%) 52,184.76M 3.36 2.3 CN¥0.44 5.59
SAIC Motor 13.08 -0.01 (-0.08%) 144,214.41M 19 11.83 CN¥2.05 6.38
China Life Insurance 14.51 -0.13 (-0.89%) 410,120.88M 22 12.88 CN¥0.97 15.01
Dongfeng Motor 11.44* -0.14 (-1.21%) 98,568.41M 13.28 9.48 HK$1.38 8.31
China Shenhua 14.26 -0.13 (-0.90%) 283,625.99M 25.28 13.97 CN¥2.25 6.33
Ping An Insurance 41 -0.81 (-1.94%) 324,561.83M 53.27 31.69 CN¥3.45 11.89
China Telecom 3.66* -0.05 (-1.35%) 296,212.48M 4.4 3.48 HK$0.26 14.16
China Communications Construction 3.86 -0.03 (-0.77%) 62,434.48M 5.79 3.74 CN¥0.81 4.77
Bank of Communications 3.75 -0.03 (-0.79%) 278,485.22M 5.68 3.65 CN¥0.84 4.45

China Stock Watch 22/1/14

The big news today is of course the revelations (if something so unsurprising can be revelatory) of the offshore haven fortunes of China’s princelings and leaders. One of the main implications for business in China will be for facilitators such as PricewaterhouseCoopers, UBS and Credit Suisse etc. It will be difficult for any foreign company to work with them in China without the suspicion of corruption. Fallout for the tax-haven companies themselves won’t be such a problem; they are not there to conduct business after all, but to facilitate the smooth transfer of large amounts of capital from China to a safe place. It will be interesting to see if there are shareholder revolts for major companies caught up in the disclosures of offshore entities.

China-watcher Bill Bishop commented that the Chinese leadership will believe that “it is under attack from Western media“, after similar exposes of the fortunes of the family of Wen Jiabao and Xi Jinping. Perhaps so. They do provide an enormously satisfying target, in a country where they have a ruthless monopoly of power. Nonetheless, with power and prominence comes scrutiny, for which their behaviour suggests they are not prepared.

With the PBOC having provided fresh liquidity on Monday, stocks continued to rebound, with nineteen of the twenty blue chips finishing up on the day’s trading. SAIC Motor (up 3.23% to RMB13.09) and China Telecom (up 2.49% to HK$3.70) were the best performers, though a full fourteen out of twenty rose by over 1%. Only CNOOC fell, with yesterday’s disappointing news of missed targets still depressing investors; it closed down 1.99% to HK$12.82.

The Shanghai Composite finished at 2,051.75, up 43.44 (+2.16%). Increasing the (feeling of) wealth of ordinary Chinese is the only means of legitimacy the party has. This may mean that tough choices which reduce short-term growth in favour of restructuring will be delayed. More sabre-rattling in the South China Sea is another possibility for a pressurised leadership. Neither is encouraging for those who wish China well.

Name Price Change Mkt cap 52wk high 52wk low EPS P/E
Sinopec 4.64 +0.03 (0.65%) 540,863.04M 7.03 4.05 CN¥0.62 7.54
PetroChina 7.7 +0.07 (0.92%) 1.41B 9.5 7.08 CN¥0.68 11.4
ICBC 3.43 +0.03 (0.88%) 1.21B 4.53 3.38 CN¥0.74 4.66
China Construction Bank 3.96 +0.04 (1.02%) 990,043.48M 5.19 3.8 CN¥0.85 4.68
Agricultural Bank 2.38 +0.01 (0.42%) 773,010.04M 3.28 2.35 CN¥0.50 4.74
Bank of China 2.51 +0.04 (1.62%) 701,205.02M 3.26 2.45 CN¥0.53 4.73
China Mobile 77.85* +0.70 (0.91%) 1.56B 89.2 74.9 HK$8.20 9.49
Noble Group 1.01 +0.01 (1.00%) 6,726.49M 1.27 0.785 SGD0.04 27.82
China State Construction 3.07 +0.07 (2.33%) 92,100.00M 4.18 2.9 CN¥0.62 4.98
CNOOC 12.82* -0.26 (-1.99%) 572,380.37M 16.52 12.04 HK$1.89 6.77
China Railway Construction 4.3 +0.10 (2.38%) 53,051.43M 6.25 3.95 CN¥0.84 5.11
China Railway Group 2.48 +0.06 (2.48%) 52,823.75M 3.36 2.3 CN¥0.44 5.66
SAIC Motor 13.09 +0.41 (3.23%) 144,324.67M 19 11.83 CN¥2.05 6.38
China Life Insurance 14.65 +0.35 (2.45%) 414,077.92M 22 12.88 CN¥0.97 15.16
Dongfeng Motor 11.70* +0.18 (1.56%) 100,808.60M 13.28 9.48 HK$1.38 8.49
China Shenhua 14.39 +0.24 (1.70%) 286,211.65M 25.28 13.97 CN¥2.25 6.39
Ping An Insurance 41.85 +0.50 (1.21%) 331,290.53M 53.27 31.69 CN¥3.45 12.13
China Telecom 3.70* +0.09 (2.49%) 299,449.77M 4.41 3.48 HK$0.26 14.31
China Communications Construction 3.89 +0.08 (2.10%) 62,919.72M 5.79 3.74 CN¥0.81 4.81
Bank of Communications 3.77 +0.04 (1.07%) 279,970.48M 5.68 3.65 CN¥0.84 4.47

China Stock Watch 21/1/14

After yesterday’s pessimism over the spiking interbank rate and worries over trust product defaults, stocks rebounded upon a RMB2255bn liquidity injection from the PBOC. Cash shortages were partly down to the run-up to Chinese New Year, although evidently the influence of funds from Alibaba and Ping An Insurance, for example, which offer substantially over the bank rate, is helping dry up bank deposits. The expectation is that with the PBOC sitting on massive FX reserves, it will be able to smooth over the bumps as banks have less deposits, SOEs have less access to capital (and hence are issuing more overseas bonds), and as the trust products and the shadow banking industry fail to provide the promised dividends. Time will tell, but the basic system of the Chinese economy is undergoing a rapture, and chances are there will be victims. Stocks trading around or even below book value is an almighty red flag.

On today’s trading, then, railway stocks did best, with China Railway Group gaining 2.19% to RMB4.2 a share, and China Railway Construction adding 1.68% to close at RMB2.42. Twelve of the twenty major stocks closed up, though only the aforementioned pair, SAIC Motor and Ping An Insurance put on over 1%. CNOOC had a very bad day, going down 6.3% to HK$13.08 on news that it had failed to meet production targets for the third year running. Energy stocks were otherwise flat, with China’s slower growth believed to herald lower growth in energy usage; both Sinopec and PetroChina finished the day as they started.

The Shanghai Composite closed at 2,008.31, having gained 17.06 points, or 0.86%.

Name Price Change Mkt cap 52wk high 52wk low EPS P/E
Sinopec 4.62 0.00 (0.00%) 538,531.74M 7.03 4.05 CN¥0.62 7.51
PetroChina 7.63 0.00 (0.00%) 1.40B 9.5 7.08 CN¥0.68 11.29
ICBC 3.4 0.00 (0.00%) 1.19B 4.53 3.38 CN¥0.74 4.62
China Construction Bank 3.92 +0.02 (0.51%) 980,043.05M 5.19 3.8 CN¥0.85 4.63
Agricultural Bank 2.37 +0.01 (0.42%) 769,762.02M 3.28 2.35 CN¥0.50 4.72
Bank of China 2.47 0.00 (0.00%) 690,030.45M 3.26 2.45 CN¥0.53 4.65
China Mobile 77.15* +0.50 (0.65%) 1.55B 89.2 74.9 HK$8.19 9.41
Noble Group 1 -0.01 (-0.99%) 6,660.21M 1.27 0.785 SGD0.04 27.64
China State Construction 3 +0.02 (0.67%) 90,000.00M 4.18 2.9 CN¥0.62 4.87
CNOOC 13.08* -0.88 (-6.30%) 583,988.72M 16.52 12.04 HK$1.89 6.91
China Railway Construction 4.2 +0.09 (2.19%) 51,817.67M 6.25 3.95 CN¥0.84 4.99
China Railway Group 2.42 +0.04 (1.68%) 51,545.76M 3.36 2.3 CN¥0.44 5.52
SAIC Motor 12.68 +0.20 (1.60%) 139,804.19M 19 11.83 CN¥2.05 6.18
China Life Insurance 14.3 +0.08 (0.56%) 404,185.29M 22 12.88 CN¥0.97 14.79
Dongfeng Motor 11.52* -0.04 (-0.35%) 99,257.71M 13.28 9.48 HK$1.38 8.37
China Shenhua 14.15 +0.06 (0.43%) 281,438.12M 25.28 13.97 CN¥2.25 6.29
Ping An Insurance 41.37 +0.65 (1.60%) 327,490.79M 53.27 31.69 CN¥3.45 11.99
China Telecom 3.61* -0.01 (-0.28%) 292,165.84M 4.42 3.48 HK$0.26 13.98
China Communications Construction 3.81 +0.02 (0.53%) 61,625.74M 5.79 3.74 CN¥0.81 4.71
Bank of Communications 3.73 +0.01 (0.27%) 276,999.97M 5.68 3.65 CN¥0.84 4.43

China Stock Watch 15/1/14

There may not be any posts tomorrow, I am flying London to Beijing tonight so chances to write will be minimal.

Today was tepid, with the majority moving by less than one percent, either way; a plurality showed a mild loss, while a moderate proportion showed gains. The biggest movers were Sinopec (gaining 1.31% to RMB4.65) and ICBC (down 1.99% to RMB3.45). ICBC is now close to its 52-week low of RMB3.4. With the Big 4 state-owned banks all trading around a P/E of 4.7, the market evidently has no great expectations of future growth (and large fears of thus-far hidden bad debts). They are, it is interesting to note, expanding into overseas markets, opening branches in cities from London to Calgary. One wonders what UK-born Chinese think of Bank of China‘s lumbering rules and regulations, for example. Probably not a lot.

Elsewhere only China Construction Bank moved by 1% (down to RMB3.96, losing 1% exactly).

Mild gains were seen in the auto manufacturing sector, with SAIC Motor (up 0.10% to RMB13.21) and Dongfeng Motor (up 0.34% to HK$11.64) shading up. Domestic sales are certainly zooming (or whatever onomatopoeic term you want to use) ahead but sales to the US remain minimal. This remains the holy grail for Chinese auto manufacturers, but with recalls too frequent and safety standards lagging, this is far out of their reach at the moment.

The Shanghai Composite closed down a smidgeon, to use the technical phrase, at 2,023.35 (down 3.49 points or -0.17%).

Name Price Change Mkt cap 52wk high 52wk low EPS P/E
Sinopec 4.65 +0.06 (1.31%) 542,028.72M 7.03 4.05 CN¥0.62 7.56
PetroChina 7.58 -0.04 (-0.52%) 1.39B 9.5 7.08 CN¥0.68 11.22
ICBC 3.45 -0.07 (-1.99%) 1.21B 4.53 3.4 CN¥0.74 4.69
China Construction Bank 3.96 -0.04 (-1.00%) 990,043.48M 5.19 3.8 CN¥0.85 4.68
Agricultural Bank 2.4 -0.01 (-0.41%) 779,505.91M 3.28 2.38 CN¥0.50 4.78
Bank of China 2.52 +0.01 (0.40%) 703,998.67M 3.26 2.48 CN¥0.53 4.75
China Mobile 77.10* -0.45 (-0.58%) 1.55B 90.45 74.9 HK$8.20 9.4
Noble Group 1.03 0.00 (0.49%) 6,859.03M 1.27 0.785 SGD0.04 28.64
China State Construction 2.98 +0.02 (0.68%) 89,400.00M 4.18 2.9 CN¥0.62 4.84
CNOOC 13.78* -0.06 (-0.43%) 615,241.93M 16.52 12.04 HK$1.89 7.28
China Railway Construction 4.16 -0.01 (-0.24%) 51,324.17M 6.46 3.95 CN¥0.84 4.94
China Railway Group 2.4 0.00 (0.00%) 51,119.76M 3.41 2.3 CN¥0.44 5.47
SAIC Motor 13.21 +0.10 (0.76%) 145,647.74M 19 11.83 CN¥2.05 6.44
China Life Insurance 14.25 +0.01 (0.07%) 402,772.05M 22 12.88 CN¥0.97 14.74
Dongfeng Motor 11.64* +0.04 (0.34%) 100,291.64M 13.28 9.48 HK$1.38 8.45
China Shenhua 14.53 -0.10 (-0.68%) 288,996.18M 25.28 14.4 CN¥2.25 6.45
Ping An Insurance 39.7 -0.29 (-0.73%) 314,270.85M 53.27 31.69 CN¥3.45 11.51
China Telecom 3.71* -0.01 (-0.27%) 300,259.09M 4.42 3.48 HK$0.26 14.36
China Communications Construction 3.84 -0.03 (-0.78%) 62,110.98M 5.79 3.8 CN¥0.81 4.74
Bank of Communications 3.76 -0.03 (-0.79%) 279,227.85M 5.68 3.65 CN¥0.84 4.46

China Stock Watch 13/1/14

A decent day for the major Chinese stocks, for the first since the post-Third Plenum euphoria wore off, it seems. Fourteen of the twenty gained on the day, with Dongfeng Motor by far the best performer, gaining 3.2% to close to HK$11.62. Sinopec, oddly enough, was the second best, up 1.36% to close at RMB4.48. This seems odd given the cost of the Qingdao refinery explosion and the loss of executives, but Chinese SOE executives are always disposable, and regularly rotated by the party machinery. One supposes it could have been worse. The Piper Alpha disaster cost 167 lives and £1.7 billion. Hopefully this will get safety regulations on Chinese oil and gas producers enforced with far greater stringency. The safety record in the mining industry does not inspire confidence elsewhere.

Only four stocks fell, with China State Construction doing worst, going down 1.01% to RMB2.95. SAIC Motor, China Life Insurance and Ping An Insurance all fell by less than 1%.

Nonetheless, the Shanghai Composite fell 3.73 (-0.19%) to close at 2,009.56. That barrier is awfully close.

Name Price Change Mkt cap 52wk high 52wk low EPS P/E
Sinopec 4.48 +0.06 (1.36%) 522,212.61M 7.03 4.05 CN¥0.62 7.28
PetroChina 7.56 +0.03 (0.40%) 1.38B 9.5 7.08 CN¥0.68 11.19
ICBC 3.54 +0.01 (0.28%) 1.24B 4.53 3.4 CN¥0.74 4.81
China Construction Bank 4.01 +0.05 (1.26%) 1.00B 5.19 3.8 CN¥0.85 4.74
Agricultural Bank 2.41 0.00 (0.00%) 782,753.85M 3.28 2.38 CN¥0.50 4.8
Bank of China 2.52 +0.03 (1.20%) 703,998.67M 3.26 2.48 CN¥0.53 4.75
China Mobile 77.85* +0.05 (0.06%) 1.56B 91.1 74.9 HK$8.20 9.5
Noble Group 1.04 0.00 (0.48%) 6,892.16M 1.27 0.785 SGD0.04 28.63
China State Construction 2.95 -0.03 (-1.01%) 88,500.00M 4.18 2.9 CN¥0.62 4.79
CNOOC 13.88* +0.12 (0.87%) 619,706.69M 16.62 12.04 HK$1.89 7.33
China Railway Construction 4.14 +0.02 (0.49%) 51,077.42M 6.46 3.95 CN¥0.84 4.92
China Railway Group 2.38 0.00 (0.00%) 50,693.76M 3.41 2.3 CN¥0.44 5.43
SAIC Motor 13.01 -0.05 (-0.38%) 143,442.62M 19 11.83 CN¥2.05 6.34
China Life Insurance 14.18 -0.12 (-0.84%) 400,793.53M 22 12.88 CN¥0.97 14.67
Dongfeng Motor 11.62* +0.36 (3.20%) 100,119.31M 13.28 9.48 HK$1.38 8.44
China Shenhua 14.57 +0.08 (0.55%) 289,791.76M 25.28 14.4 CN¥2.25 6.47
Ping An Insurance 39.5 -0.07 (-0.18%) 312,687.61M 53.27 31.69 CN¥3.45 11.45
China Telecom 3.73* +0.03 (0.81%) 301,877.74M 4.42 3.48 HK$0.26 14.44
China Communications Construction 3.85 +0.01 (0.26%) 62,272.73M 5.79 3.8 CN¥0.81 4.76
Bank of Communications 3.82 +0.02 (0.53%) 283,683.61M 5.68 3.65 CN¥0.84 4.53

China Stock Watch 10/1/14

Sorry there’s no business briefs today. I am in London and time is tight. I will be in Beijing next week for the first time in some months, and am very much looking forward to it.

Today was mixed, but something of an improvement for major Chinese stocks, with eight rising and only seven falling (unusually, five were flat on the day). Gains were however tentative, with none breaching 1% – China Telecom was the best performer on the day, up 0.82%. It is perhaps no coincidence that China Telecom has won awards for its investor relations, reflecting a commitment to transparency. Elsewhere, rail stocks were worst performers, with China Railway Group and China Railway Construction down 2.46% and 2.83% respectively. China Railway Group has not been forthcoming since the death of chairman Bai Zhongren, and the suspicions of unmanageable debts and who-knows-what problems have dragged down China Railway Construction, too.

The Shanghai Composite Index slumped to 2,013.30, down 14.32 points or 0.71%. My predictions of a buy-back led rise have not come about. The big SOEs could be finding themselves between a rock and a hard place, ordered to deleverage, revenue streams not kicking in as forecast (projections of likely returns always being likely to be grossly optimistic) and now being “advised” to buy-back shares to increase prices. One almost feels sorry for them.

Name Price Change Mkt cap 52wk high 52wk low EPS P/E
Sinopec 4.42 +0.02 (0.45%) 515,218.70M 7.03 4.05 CN¥0.62 7.19
PetroChina 7.53 -0.06 (-0.79%) 1.38B 9.5 7.08 CN¥0.68 11.14
ICBC 3.53 0.00 (0.00%) 1.24B 4.53 3.4 CN¥0.74 4.8
China Construction Bank 3.96 +0.01 (0.25%) 990,043.48M 5.19 3.8 CN¥0.85 4.68
Agricultural Bank 2.41 0.00 (0.00%) 782,753.85M 3.28 2.38 CN¥0.50 4.8
Bank of China 2.51 +0.01 (0.40%) 701,205.02M 3.26 2.48 CN¥0.53 4.73
China Mobile 77.85* +0.50 (0.65%) 1.56B 91.1 74.9 HK$8.20 9.49
Noble Group 1.03 0.00 (0.00%) 6,859.03M 1.27 0.785 SGD0.04 28.47
China State Construction 2.97 -0.04 (-1.33%) 89,100.00M 4.18 2.9 CN¥0.62 4.82
CNOOC 13.74* -0.14 (-1.01%) 613,456.04M 16.76 12.04 HK$1.89 7.25
China Railway Construction 4.12 -0.12 (-2.83%) 50,830.67M 6.46 3.95 CN¥0.84 4.89
China Railway Group 2.38 -0.06 (-2.46%) 50,693.76M 3.41 2.3 CN¥0.44 5.43
SAIC Motor 13.07 +0.01 (0.08%) 144,104.15M 19 11.83 CN¥2.05 6.37
China Life Insurance 14.31 0.00 (0.00%) 404,467.94M 22 12.88 CN¥0.97 14.8
Dongfeng Motor 11.24* -0.20 (-1.75%) 96,845.19M 13.28 9.48 HK$1.38 8.16
China Shenhua 14.49 +0.05 (0.35%) 288,200.60M 25.33 14.4 CN¥2.25 6.44
Ping An Insurance 39.58 -0.39 (-0.98%) 313,320.92M 53.27 31.69 CN¥3.45 11.48
China Telecom 3.69* +0.03 (0.82%) 298,640.44M 4.42 3.48 HK$0.26 14.28
China Communications Construction 3.84 0.00 (0.00%) 62,110.98M 5.79 3.8 CN¥0.81 4.74
Bank of Communications 3.8 +0.01 (0.26%) 282,198.36M 5.68 3.65 CN¥0.84 4.51

Week’s Movers

Movement over the week shows how disappointing the major stocks have been so far this year.

Bank of Communications rose 1.06%, SAIC Motor rose 0.08%, and Noble Group was flat. The other seventeen stocks fell over the week, with China Railway Group not surprisingly leading the way, falling 5.18%, while China Railway Construction was not far off, going down 4.63%. It’s been a very poor start to the year. Perhaps 2014 will surprise us and see some solid share performance, but with reforms challenging the privileges of SEOs and lower growth practically assured, companies will have to show some real innovation and agility. It remains to be seen if they as institutions have it in them.

risersfallers

China Stock Watch 9/1/14

Another particularly poor day for major stocks, with a full sixteen falling on the day, and with SAIC Motor, China Life Insurance and Dongfeng Motor falling by over 2%. (They declined by 2.54%, 2.52% and 2.23% respectively). The two automakers likely fell on news of increased US imports, despite their own impressive sales figures: despite the government’s efforts, and for all the joint ventures and technology transfers, China still has not produced a competitive, aspirational auto manufacturer. (See GE Anderson’s book Designated Drivers for more info).

The only gains were posted by Sinopec (up 0.23% to RMB4.4 a share) and China Railway Construction (up 0.71% to RMB4.24 a share). Both are near their 52-week low (around 10% of it in both cases), so this is hardly break-out-the-champagne news.

The Shanghai Composite Index closed at 2,027.62,  down 16.72 (-0.82%). With SOEs “advised” to take part in stock buy-back operations, I would not bet that it would fall below the 2000 level; and yet, on this form, who could be sure?

Name Price Change Mkt cap 52wk high 52wk low EPS P/E
Sinopec 4.4 +0.01 (0.23%) 512,887.39M 7.03 4.05 CN¥0.62 7.15
PetroChina 7.59 -0.05 (-0.65%) 1.39B 9.5 7.08 CN¥0.68 11.23
ICBC 3.52 -0.05 (-1.40%) 1.24B 4.53 3.4 CN¥0.74 4.79
China Construction Bank 3.96 -0.02 (-0.50%) 990,043.48M 5.19 3.8 CN¥0.85 4.68
Agricultural Bank 2.42 0.00 (0.00%) 786,001.79M 3.28 2.38 CN¥0.50 4.82
Bank of China 2.5 -0.01 (-0.40%) 698,411.38M 3.26 2.48 CN¥0.53 4.71
China Mobile 77.35* -1.10 (-1.40%) 1.55B 91.1 74.9 HK$8.20 9.43
Noble Group 1.03 0.00 (-0.48%) 6,859.03M 1.27 0.785 SGD0.04 28.54
China State Construction 3.01 0.00 (0.00%) 90,300.00M 4.18 2.9 CN¥0.62 4.89
CNOOC 13.88* -0.10 (-0.72%) 619,706.69M 17 12.04 HK$1.89 7.33
China Railway Construction 4.24 +0.03 (0.71%) 52,311.17M 6.46 3.95 CN¥0.84 5.04
China Railway Group 2.43 -0.01 (-0.41%) 51,758.76M 3.41 2.3 CN¥0.44 5.54
SAIC Motor 13.06 -0.34 (-2.54%) 143,993.90M 19 11.83 CN¥2.05 6.37
China Life Insurance 14.32 -0.37 (-2.52%) 404,750.57M 22 12.88 CN¥0.97 14.81
Dongfeng Motor 11.42* -0.26 (-2.23%) 98,396.09M 13.28 9.48 HK$1.38 8.29
China Shenhua 14.45 -0.11 (-0.76%) 287,405.01M 25.39 14.4 CN¥2.25 6.42
Ping An Insurance 39.94 -0.69 (-1.70%) 316,170.70M 53.27 31.69 CN¥3.45 11.58
China Telecom 3.65* -0.07 (-1.88%) 295,403.15M 4.42 3.48 HK$0.26 14.12
China Communications Construction 3.84 -0.03 (-0.78%) 62,110.98M 5.79 3.8 CN¥0.81 4.74
Bank of Communications 3.78 -0.02 (-0.53%) 280,713.10M 5.68 3.65 CN¥0.84 4.49

China Business Briefs 9/1/14

ECONOMY

China’s 2012 GDP revised to 51.95 trillion yuan – Xinhua | English.news.cn China’s gross domestic product (GDP) growth for 2012 has been revised to 51.95 trillion yuan (8.52 trillion U.S. dollars), 52.8 billion yuan higher than the preliminary reading released in September, the National Bureau of Statistics (NBS) said Wednesday.

Primary industries took up a 10.1-percent share in the GDP structure, while secondary and tertiary sectors accounted for 45.3 percent and 44.6 percent respectively, remaining unchanged from readings of the preliminary verification.

China Asks Systemically Important Banks to Comply With Disclosure Rules – WSJ.com China’s banking regulator said Wednesday that it has asked the nation’s large commercial banks to disclose their off-balance-sheet exposures, in an effort to align its regulations with international practices.

The guideline applies to the Chinese banks identified by FSB as systemically important, as well as other banks with on- and off-balance sheet assets worth at least 1.6 trillion yuan ($264 billion), the CBRC said.

Carson Block backs China short calls as buyers circle – Market Extra – MarketWatch “Investors seemed to forget the lessons of 2011 by the time we got into 2013,” said Block, the founder of Muddy Waters Research and the man who became famous in the investing world two-plus years ago when a research report he wrote help set in motion the collapse of Sino-Forest Corp., a Toronto-listed firm that managed forest land in China.

China’s World: Beijing Should Scrap the GDP Target – WSJ.com Here’s another idea: Scrap the national GDP target altogether. It would send a powerful message that Beijing is serious about shifting the drivers of growth.

The target is a relic of the Stalinist planned economy, the basis on which the government planned the allocation of scarce resources for industrial production. Its continued existence is testament to how far China has to go to fully embrace a market economy, one that operates according to market signals.

China’s Toxic Debt Doctors Prepare for Surgery – Regulators eager to resolve China’s local government debt conundrum are setting standards for an emerging class of asset management companies (AMCs) responsible for settling bad loans without Beijing’s help.

One standard, issued in early-December by the China Banking Regulatory Commission (CBRC), set the floor for each local AMC’s registered capital at 1 billion yuan. It was the first financial parameter of its kind since CBRC and the Ministry of Finance started promoting these debt restructuring vehicles in May 2012.

Chinese Consumers Bought Over 20 Million Vehicles In 2013 As Foreign Automakers Jockey For Market Share China’s 2013 auto sales figures are incomplete until next week, when the December figures will be released by the China Association of Automobile Manufacturers. But as of November, Chinese have exceeded U.S. sales in every month of 2013 by as much as double the number of vehicles purchased in the world’s second-largest auto market.

China is importing more US-built cars|Business|chinadaily.com.cn According to the latest information from the US Department of Commerce, 1.9 million vehicles were exported from the US in 2012. China was among the top five markets for light vehicles made in the US, a list that also includes Canada, Mexico, Germany and Saudi Arabia.

Robots replacing low-end workers in China|Markets|Business|WantChinaTimes.com As Chinese plants lay off workers in the wake of rising labor costs, producers of industrial robots have found their domain expanding, according to Guangzhou’s 21st Century Business Review, citing the example of the Asea Brown Boveri (ABB) Group.

Speculative investment hurting China’s economy: report|Markets|Business|WantChinaTimes.com The preference of Chinese investors to plow their money into financial markets rather than in the physical economy poses a great challenge for the country, which is trying to reinvent its manufacturing sector, reports the Chinese-language Economic Information Daily.

The sizable profits to be made from financial asset speculation in a market with ample liquidity and growing foreign capital attracted by an appreciating currency have pulled money away from investments in business, the paper said.

Oil-Tanker Data Show China Shift – MoneyBeat – WSJ Although China’s economic growth has diminished since the early post-financial-crisis period, when massive government stimulus made the country the last great hope of exporting nations, its gross domestic product growth has maintained a level above 7.5% that is enviable in most developed countries. It imported 255 million barrels of oil in the first 11 months of 2013, or 5.6 million barrels a day, up 3.2% on year. Its steady demand combined with the U.S.’s declining need for imports thanks to its energy boom have skewed the global flow of both oil and products.

Shenzhen to ease access – BUSINESS – Globaltimes.cn Shenzhen’s government aims to further relax the restriction of access to domestic and overseas financial institutions and plans to encourage more private capital to enter the financial services industry, Shanghai Securities News reported Wednesday.

Guangdong Starts Electricity Sales Pilot Involving Open Bidding – Late last year the southern province started to allow large industrial consumers of electricity and generators to determine the price together through open bidding. The move gained nationwide attention since it dealt with the nation’s rigid power pricing mechanism. It was designed to minimize resistance from monopolistic state power grid.

COMPANIES

Bank of China Chooses London to Sell Yuan-Denominated Bonds – MoneyBeat – WSJ China took another step towards broadening the use of its currency outside its shores Wednesday, with state-run Bank of China set to become the third Chinese  lender to sell yuan-denominated bonds in London.

Bank of China, the country’s fourth-largest lender and the sole yuan clearing bank in Hong Kong, Wednesday opened the sale of three-year bonds, with early signs suggesting a yield of 3.50%, one of the banks working on the deal said. The sale is expected to be concluded Thursday morning.

Bitcoin Banned by Alibaba’s Taobao After China Tightens Rules – Bloomberg Taobao Marketplace, one of the main platforms that link buyers and sellers on Alibaba, will bar from Jan. 14 the sale of Bitcoin and related products, including mining software and hardware for the virtual currency, the company said on its website yesterday.

Baidu in 2014: Can It Keep Rolling? (BIDU) China’s leading search engine raced back into investor fancy last year. Game-changing acquisitions and accelerating growth projections work wonders on discarded former market darlings. The stock soared 77% last year, and that’s pretty remarkable since it was trading lower for 2013 at its midpoint. However, now that Baidu is armed with new toys that will increase its presence in mobile and online video, it will be interesting to see if it can live up to heightened expectations.

BoCom sees 2014 growth at 7.8% – BUSINESS – Globaltimes.cn China’s economy is expected to grow by around 7.8 percent in 2014, as both domestic and external demand will be sufficiently stable to maintain the overall economic growth momentum, Bank of Communications (BoCom) said Wednesday in its annual forecast for the country’s economy.

But the economy still faces downward pressure, including challenges arising from the central government’s pledge to de-leverage and rebalance the economy for longer-term sustainability, which might put short-term growth at risk, Lian Ping, chief economist with Shanghai-based BoCom, told reporters in Beijing Wednesday, while releasing the outlook report.

Anhui Conch to Step Up Acquisitions With Record Cash Level – Bloomberg Anhui Conch Cement Co. (914), China’s biggest cement producer by market value, plans to add as much as 30 million metric tons to capacity through acquisitions amid a government drive to consolidate production.

Rural Mobile Commerce Service MMB Launches Low-cost Smartphone Q1 Maimaibao (MMB.cn)  started in 2006 as a m-commerce retailer targeting at the rural China. It offers more than 50,000 items, from apparel to digital devices, and daily transactions are 20,000, according to the company intro.. As one of the biggest of this kind, MMB has developed its own logistics service to serve customers who buy through WAP pages and don’t have any online payment account. The company is funded by investors including Tencent and reached partnership with the latter on mobile shopping.

China’s Meizu plans to launch smartphones in US market in Q3 Chinese phone-maker Meizu unveiled its latest flagship phone, the MX3, last September, but it’s getting a fresh wave of coverage today as the company makes its debut at CES in Las Vegas. Meizu also revealed today that it will launch for the first time in the US market in Q3 of 2014.

Huawei talks up global goals at CES – Business – Chinadaily.com.cn Colin Giles, executive vice-president of Huawei Consumer Business Group, said Huawei’s goal this year is to deliver 80 million smartphones, a 28 million increase over last year’s number.

According to Giles, Huawei’s global brand awareness increased by 110 percent from 25 percent in 2012 to the current 52 percent. Over the past 18 months, Huawei’s brand awareness increased three to four times in countries such as Spain, Germany, Italy, the United Kingdom, France and Japan. In the US, it rose from 9 percent to 22 percent.

Mobile Video Contest Co-Hosted by China Mobile and Youku Tudou Breaks New Records, Generating More than 100 Million Yuan in Mobile Box Office Sales – Yahoo Finance An annual mobile video contest co-organized by by China Mobile Ltd. (NYSE: CHL; 0941 HK), and Youku Tudou Inc., China’s leading Internet television company, broke new records in 2013 with 110 million yuan in mobile box office sales and one single title garnering more than 5 million yuan from mobile video-on-demand sales, which is a new record in China.

Bank of China Limited : Bank of China London Branch issues RMB-denominated bonds | 4-Traders On 8th January 2014, Bank of China London Branch will issue RMB-denominated bonds, providing UK and European investors with an additional high quality RMB product.

China Life Insurance Stock Rating Upgraded by Deutsche Bank (LFC) | North Fork Vue China Life Insurance (NYSE:LFC) was upgraded by Deutsche Bank from a “sell” rating to a “hold” rating in a research note issued on Monday, TheFlyOnTheWall.com reports.

SAIC Motor Corporation Limited : SAIC Motor 2013 Sold 5.1mn Cars | 4-Traders SAIC Motor posts that it sold more than 5.1 million complete cars in 2013, up 13.7% year on year. The company became the first Chinese automaker with an annual sales volume of over 5 million units.

Netizens React On Weibo To Mysterious Death Of Bai Zhongren, President Of China Railway Group Ltd. (601390) The story quickly spread through China’s major papers, but Chinese netizens were even quicker to call bluff in turn on the media report, pointing out that since China Railway Group Ltd. is a state-owned enterprise, the theory doesn’t make sense. Most executives of state-owned enterprises are bureaucrats and Communist Party officials who only assume the leadership of these companies for a few years before moving on to other posts.

Chinese company interested in rail link | Nuneaton News China Railway Group has expressed it wants involvement in the line in North Warwickshire.

The project attracting Chinese interest is the proposal, put forward six months ago, to restore the 11.7 kilometres (7.3 miles) Stonebridge Railway, together with a link to the planned HS2 Birmingham Interchange station and ‘people mover’ connections to Birmingham Airport, the existing Birmingham International Station and the National Exhibition Centre.

Moving further into West Africa’s frontier market – MarketWatch China is a huge investor in Sierra Leone. According to the country’s Ministry of Mines and Mineral Resources, China’s Kingho Energy Group Co., Ltd  (private) will spend more than $6 billion in the development of mineral resources there. These projects include the construction of a railway and a deep-water port.

China State Const. Eng. Corp Ltd : Strategic Cooperation Agreement Signed | 4-Traders On December 25 2013, a strategic Cooperation Agreement on Qingyang Red Star Macalline Project was signed between China Construction Seventh Engineering Division Corp. Ltd. (CSCEC Seventh Bureau) and Gansu Wanhui Real Estate Ltd. The total contract price is 2 billion yuan.

Red Star Macalline Project, located in Qingyang City, Gansu Province, covers a total building area of approximately 900,000sqm. Being made up of large shopping malls, residences, office buildings and hotels, the Project will become a local landmark upon completion. (from CSCEC Seventh Bureau)

RPT-Fitch Upgrades China State Construction International to ‘BBB’; Outlook Stable | Reuters Fitch Ratings has upgraded China State Construction International Holdings Limited’s (CSCI) Long-Term Issuer Default Rating (IDR) and senior unsecured rating to ‘BBB’ from ‘BBB-‘. The Outlook on IDR is Stable. The rating action follows Fitch’s reassessment of the credit profiles of CSCI’s parent companies.

Bank of China Limited : China : Bank of China Achieves Customer-Centric Transformation with IBM | 4-Traders Bank of China and IBM have successfully completed the launch of the Bank s next generation global online banking platform, providing 100 million customers with a fully integrated experience spanning branch, phone, mobile and web banking. The Bank leveraged IBM s business consulting expertise to revolutionize all aspects of its online banking strategy including site redesign, improved functionality and interactivity as well as implementation of more personalized services.

SinoShip News – BOCOM Finance Leasing completes first ship charter deal in FTZ Bank of Communications (BOCOM) Finance Leasing has signed shipbuilding contract with China Shipping Industry for the construction of three 9,400 teu containerships.

The ships will be leased to CMA CGM under a long term bareboat chartering contract upon completion. The deal is also the first ship charter deal BOCOM operated through its SPV in the Shanghai Free Trade Zone.

Athabasca Oil loses its third executive since May The company is suffering from a shortage of capital as it waits for Alberta government sign-off on the Dover oilsands project it shares with PetroChina. Once final approval is granted, it expects to sell its 40 per cent share of the project to PetroChina for $1.3 billion.

China State Const. Eng. Corp Ltd : CSCEC Wins the Bid for RJZQ-1 Section of Ruichang-Jiujiang Railway | 4-Traders On December 29, 2013, China State Construction Engineering Corporation Ltd. won the bid for RJZQ-1 Section between Ruichang and Jiujiang Railway Station Project with the contract value reaching nearly 1.9 billion yuan.

Bank of Communications Co Ltd : BoCom Settled at Horgos Int’l Border Cooperation Center | 4-Traders Bank of Communications’ central sub-branch at Sino-Kazakhstan Horgos International Border Cooperation Center opened on January 6, marking BoCom has settled at the center as one of the first financial institutions.

Posted from Diigo.

China Stock Watch 8/1/14

A so-so day’s trading today, with seven stocks rising, ten falling and three flat. The best performance was posted by CNOOC, up 2.2% to HK$13.96 a share, and SAIC Motor, up 2.05% to RMB13.41 a share. The biggest falls were by China Shenhua (-1.69%) and China Railway Group (-1.61%), still reeling from the death of its chairman.

We are likely to see a rise in major stocks, as regulators have advised firms to buy back shares if they trading below net asset value. We can take this as being more than just “advice”, particularly with that 2000 threshold ominously close.

The Shanghai Composite Index closed at 2,044.34, down 2.98 (-0.15%).

Name Price Change Mkt cap 52wk high 52wk low EPS P/E
Sinopec 4.4 0.00 (0.00%) 512,887.39M 7.03 4.05 CN¥0.62 7.15
PetroChina 7.64 -0.10 (-1.29%) 1.40B 9.5 7.08 CN¥0.68 11.31
ICBC 3.58 +0.03 (0.85%) 1.26B 4.53 3.4 CN¥0.74 4.87
China Construction Bank 3.98 -0.03 (-0.75%) 995,043.70M 5.19 3.8 CN¥0.85 4.71
Agricultural Bank 2.42 -0.01 (-0.41%) 786,001.79M 3.28 2.38 CN¥0.50 4.82
Bank of China 2.51 -0.01 (-0.40%) 701,205.02M 3.26 2.48 CN¥0.53 4.73
China Mobile 78.35* +0.30 (0.38%) 1.58B 91.1 74.9 HK$8.20 9.55
Noble Group 1.04 +0.01 (0.97%) 6,892.16M 1.27 0.785 SGD0.04 28.7
China State Construction 3.02 -0.02 (-0.66%) 90,600.00M 4.18 2.9 CN¥0.62 4.9
CNOOC 13.96* +0.30 (2.20%) 623,278.49M 17.32 12.04 HK$1.89 7.37
China Railway Construction 4.21 -0.05 (-1.17%) 51,941.05M 6.46 3.95 CN¥0.84 5
China Railway Group 2.45 -0.04 (-1.61%) 52,184.76M 3.41 2.3 CN¥0.44 5.59
SAIC Motor 13.41 +0.27 (2.05%) 147,852.85M 19 11.83 CN¥2.05 6.54
China Life Insurance 14.68 -0.06 (-0.41%) 414,925.88M 22 12.88 CN¥0.97 15.19
Dongfeng Motor 11.66* +0.06 (0.52%) 100,463.96M 13.28 9.48 HK$1.38 8.47
China Shenhua 14.57 -0.25 (-1.69%) 289,791.76M 25.39 14.42 CN¥2.25 6.47
Ping An Insurance 40.63 +0.54 (1.35%) 321,632.86M 53.27 31.69 CN¥3.45 11.78
China Telecom 3.71* 0.00 (0.00%) 300,259.09M 4.42 3.48 HK$0.26 14.35
China Communications Construction 3.88 -0.01 (-0.26%) 62,757.98M 5.79 3.8 CN¥0.81 4.79
Bank of Communications 3.79 +0.02 (0.53%) 281,455.73M 5.68 3.65 CN¥0.84 4.5

China Stock Watch 7/1/14

There’s been more than a few articles about how 2014 will be a good year for stock markets, but there’s been little sign of it so far with Chinese stocks. Major Chinese stocks are in several cases hovering around 10% above their 52-week low, and the Shanghai Composite is also circling that psychologically important 2000 barrier. That reform stuff that the Hu/Wen leadership kept putting off and putting off? They weren’t procrastinating. They knew it was backbreaking, painful stuff. Now Xi/Li have some enormously difficult work to do, in reining in debt, making at least a start on cleaning up the environment, breaking up or reforming the bloated SOEs, improving productivity, improving IP laws to enhance innovation, deflating the real estate bubble without bursting it, reforming pensions, the hukou and healthcare, improving education… and it goes on. It’s a monumental to-do list. Chinese stocks, consequently, face considerable uncertainty, as the macroeconomic environment tightens and reforms look set to burst SOE privileges.

On the day, then, fifteen of the major stocks fell, with China Construction Bank the worst performer, falling 1.96% to RMB4 a share (against a year low of RMB3.8). The P/E ratios of the four major banks (ICBC, Construction Bank, Agricultural Bank and Bank of China) are all around 4.8, which is remarkably low – until one reflects the likelihood of unrevealed bad debts and the problems revealed by the two recent credit crunches.

The only gains were posted by SAIC Motor (+0.84%), China Communications Construction (+0.78%) and Bank of Communications (+0.27%).

The Shanghai Composite Index closed marginally up, by 1.61 points (+0.08%), at 2,047.32.

Name Price Change Mkt cap 52wk high 52wk low EPS P/E
Sinopec 4.41 -0.07 (-1.56%) 514,053.02M 7.03 4.05 CN¥0.62 7.17
PetroChina 7.73 -0.04 (-0.51%) 1.41B 9.5 7.08 CN¥0.68 11.44
ICBC 3.55 0.00 (0.00%) 1.25B 4.53 3.4 CN¥0.74 4.83
China Construction Bank 4 -0.08 (-1.96%) 1.00B 5.19 3.8 CN¥0.85 4.73
Agricultural Bank 2.43 -0.01 (-0.41%) 789,249.73M 3.28 2.38 CN¥0.50 4.84
Bank of China 2.51 -0.02 (-0.79%) 701,205.02M 3.26 2.48 CN¥0.53 4.73
China Mobile 78.10* -0.05 (-0.06%) 1.57B 91.8 74.9 HK$8.20 9.52
Noble Group 1.03 0.00 (-0.48%) 6,825.89M 1.27 0.785 SGD0.04 28.42
China State Construction 3.03 0.00 (0.00%) 90,900.00M 4.18 2.9 CN¥0.62 4.92
CNOOC 13.66* -0.18 (-1.30%) 609,884.24M 17.38 12.04 HK$1.89 7.21
China Railway Construction 4.26 -0.05 (-1.16%) 52,557.93M 6.49 3.95 CN¥0.84 5.06
China Railway Group 2.49 -0.02 (-0.80%) 53,036.75M 3.41 2.3 CN¥0.44 5.68
SAIC Motor 13.15 +0.11 (0.84%) 144,986.20M 19 11.83 CN¥2.05 6.41
China Life Insurance 14.75 -0.03 (-0.20%) 416,904.40M 22.04 12.88 CN¥0.97 15.26
Dongfeng Motor 11.62* -0.16 (-1.36%) 100,119.31M 13.28 9.48 HK$1.38 8.44
China Shenhua 14.82 -0.02 (-0.13%) 294,764.17M 25.47 14.72 CN¥2.25 6.58
Ping An Insurance 40.1 -0.19 (-0.47%) 317,437.29M 53.27 31.69 CN¥3.45 11.63
China Telecom 3.70* -0.04 (-1.07%) 299,449.77M 4.42 3.48 HK$0.26 14.31
China Communications Construction 3.89 +0.03 (0.78%) 62,919.72M 5.79 3.8 CN¥0.81 4.81
Bank of Communications 3.76 +0.01 (0.27%) 279,227.85M 5.68 3.65 CN¥0.84 4.46