Resources Profile - China Knowledge

Apr. 29, 2008 (China Knowledge) - China may consider resuming tax incentives for textile exporters, said  Zhang Xiaoqiang, vice director of the National Development and Reform Commission (NDRC) at a trade conference in Beijing on Sunday.

Many textile export-oriented companies are on the verge of bankruptcy, as RMB appreciation dampened China's textile exports prospects, Zhang was cited as saying. China's textile products are losing markets among foreign buyers because of the RMB appreciation against the U.S. dollar.

The projected plan is aimed to help textile exports to survive amid rising costs. The government cut rebates on exports last year, including textiles, toys and steel products, in a bid to lower energy consumption and ease trade conflicts with the U.S. and Europe.

Apr. 29, 2008 (China Knowledge) - Chengdu, the capital city of Southwest China's Sichuan province, plans to build a railway container center station which will be the largest in Asia after completion, sources said.

Located in Qingbaijing District, with an investment of RMB 2 billion ($286.39 million) from China United International Rail Container Co Ltd, the project is expected to start construction at the end of this month or at the beginning of May, sources citing Jin Dazhong, director of logistics for the Chengdu Municipal Committee of Communication as saying.

It will be capable of handling 2.2 or 2.5 million TEUs upon completion. Direct lines from Chengdu to Shanghai, Guangzhou, Shenzhen, Qingdao, Lianyungang and Tianjin ports will be open by then, shortening the transportation time from 5 or 6 days to only 48 hours.

The move is part of Chengdu Municipal government's strategy to build itself into a logistics hub in western China by 2010.

Apr. 29, 2008 (China Knowledge) - Beijing Yanjing Brewery (Yanjing Brewery)<000729>, one of the largest beer groups in the country, announced on Monday that its net profits went up 31.42% to RMB 20.9 million in the first quarter.

The company realized a beer sales volume of 740 thousand kiloliters in the first quarter, up 9% from the same period of 2007. Its sales income rose 16.42 % to RMB 1.71 billion. Its total assets amounted to RMB 11.5 billion, up 5.6% over the previous year. Basic earnings per share increased 100% to RMB 0.02, according to its quarterly report.

Yanjing Brewery also revealed that despite the surging raw material prices, the company further promoted its brand construction, marketing and cost management in the first quarter, resulting in efficient energy consumption and cost saving.

Apr. 29, 2008 (China Knowledge) - Shenzhen Overseas Chinese Town Holding Co<000069> (Shenzhen OCT), announced on Monday that its net profits hit around RMB 45.97 million in the first quarter this year, up 77.37% from the same period of the previous year, citing the Chinese accounting standards. 

The Chinese Securities News cited the company's report that its total assets went up by 6.97% to RMB 13.34 billion by the end of Jan-March period. Basic earnings per share dropped 21.74% to RMB 0.018. Shareholders' interest income reached around RMB 5.10 billion, up 3.33% from the previous fourth quarter.

The Shenzhen-based company, listed on the Shenzhen Stock Exchange in 1997, is mainly engaged in the tourism and properties industries.

Apr. 29, 2008 (China Knowledge) - China Coal Energy Co Ltd<601898><1898>, the country's second largest coal producer, announced on Monday that it plans to acquire a 100% equity interest in China Coal Shanxi Dongpo Coal Co Ltd for RMB 1.33 billion (US$190 million), in a bid to tap the nation's rising energy demand, sources reported.

Shanxi Dongpo, with a registered capital of RMB 718.88 million, originally was a wholly-own subsidiary of China Coal Import & Export Co Ltd. Its total assets amounted to RMB 807.58 million ended Feb. 29, 2008 and total net assets hit RMB 13.31.

China Coal on Sunday reported that its profits in the first quarter this year went up by 36% to RMB 1.41 billion, and sales increased 39.4% to RMB 11.3 billion. 

Apr. 29, 2008 (China Knowledge) - The growth of bilateral trade between Shanghai and the U.S. slowed down to 12% in the first quarter of 2008, due to the U.S. subprime mortgage crisis and the accelerated appreciation of Chinese currency against the U.S. dollars. 

The imports and exports between Shanghai and the U.S. reached US$23.42 billion in the first quarter, 11.9 percentage points less than the average level of Shanghai's foreign trade in the same period.

Among them, the exports to the U.S. were US$18.48 billion, up 11.4% year on year. The growth rate was 7.2 percentage points lower than 2007, ranking the third among Shanghai's three major trading partners, including the E.U., Japan and the U.S.

The imports from the U.S. reached US$4.94 billion, 14.4% higher than that in Q1 of 2007, and accounting for 9.7% of Shanghai's total imports.

The trade surplus between Shanghai and the U.S. was US$13.54 billion, accounting for 36.3% of Shanghai's total, and down 6.9 percentage points year on year.

Apr. 29, 2008 (China Knowledge) - PetroChina Co. Ltd. (PetroChina)<601857><0857><PTR>, the country's largest oil and gas producer and distributor, announced today that its net profits in the first quarter went down 31.5% to RMB 28.885 billion, citing the international accounting standards.

Its sales income increased 41.9% to RMB 259.048 billion by the end of the Jan-Mar period. Basic and diluted earnings per share were RMB 0.16, down 33% from the corresponding period of 2007, according to its quarterly report.

The company also reported that, citing the Chinese accounting standards, it realized net profits of RMB 26.519 billion, down 28.6% from the same period of 2007. Basic earnings per share were RMB 0.14, dropped by 30.2% year on year.

The main reasons caused its net profits decline were because of the surging special oil gain levy and loss in oil processing business, the company said.

Apr. 29, 2008 (China Knowledge) - Chinese share closed lower on Monday amid big fluctuations, dragged by huge selling of market heavy weights.

The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, fell 2.33% or 83.03 to 3,474.72 points after fluctuating between 3,530.91 and 3,460.26 points.

Similarly, the Shenzhen Component Index on the smaller Shenzhen Stock Exchange moved down 2.46% or 322.45 points to 12,782.50 points.

The combined turnover on the two bourses saw a noticeable decrease to RMB 157.6 billion from RMB 260.5 billion of the previous trading day.

Sinopec<600028><386><SNP> and China Life<601628><2628><LFC>, the two market blue chips, both reported an up to 60% decline in first-quarter net profit, which triggered a sell-off of their shares. Sinopec dropped 4.38% to RMB 11.34 and China Life retreated 4.12% to RMB 32.8. Investors remained cautious as another two major index components, Petrochina<601857><857><PTR> and Ping An Insurance<601318><2318>, are scheduled to publish their first-quarter earnings results on Monday night and Tuesday night respectively.

Spurred by the mounting rice prices, stocks in agricultural sector were the biggest winners with an average gain of more than 3%. Yuan Longping High-tech<000998>, Denghai Seeds<002041>, Fengle Seed<000713> and Dunhuang Seed<600354> all rose by the 10% daily limit to end at RMB 26.13, RMB 18.13, RMB 16.39 and RMB 19.27 respectively.

Elsewhere, Zijin Mining Group Co<601899><2899> which experienced huge speculations by institutional investors dropped by the daily cap of 10% to RMB 12.53, in a sharp contrast with a 96.21% surge on its trading debut.

As a whole, losers outweighed winners by 518 to 398 in Shanghai and 426 to 227 in Shenzhen.

Apr. 29, 2008 (China Knowledge) - Konka Group Co<000016><200016>, China's first Sino-foreign joint consumer electronics enterprise, reported a 79% rise in first-quarter net profit backed by a boom in consumer spending.

Net profit in the first quarter climbed to RMB 47.1 million (US$6.7 million) or RMB 0.0782 per share from RMB 26.3 million a year ago, while sales dropped 9.5% to RMB 3.1 billion because of the fierce winter storm happened in the nation in January, according to its earnings statement.

Meanwhile, the Shenzhen-based company, partly owned by France's Thomson SA, predicted that its full year profit is likely to rise 50% to 100% from a year earlier.

Electronics retail sales in China booked a 21.5% surge in March, the fastest pace in nine years boosted by sales of flat-panel TVs and handsets as Chinese residents' disposable income is increasing rapidly along with the nation's double digit economic growth annually.

Apr. 29, 2008 (China Knowledge) - Indonesia's state-owned power company PLN has inked two engineering procurement contracts worth US$888.4 million with Chinese companies for the constructions of coal-fired power plants, local reporters said on Saturday.

PLN signed a US$642 million worth of contract on Apr. 25 with China National Machinery Equipment Corp. (Sinomac), China National Electric Equipment (CNEEC) and a local firm PT Penta Adi Samudra, for the 700-Megawatt Tanjugn Awar-Awar plant in East Java, according to sources. It also inked another contract worth US$247.4 million for the 200-MW Nagan Raya plant in Aceh with China's Sinohydro Corp.

PLN has a monopoly over power supply in Indonesia and has 24,000 MW of generating capacity, however, its daily output is far below capacity as most of its plants are old and inefficient.

Indonesia, the only OPEC member in Asia-Pacific region, is looking for other sources of energy such as coal and natural gas to meet rising power demand and to cut down on consumption of expensive crude oil as its own reserves dwindle.