ChinaScope Daily Dim Sum: December 2011

Thursday, December 29, 2011

Dec 29 - Launch of New Railway Lines Will Boost High-Speed Train Procurement

Source: China Securities Journal, ChinaScope Financial (Data)

+ The Harbin-Dalian and the Beijing-Shijiazhuang-Wuhan passenger railway line will be put into service next year. As a result, the procurement of high-speed trains will restart after months of suspension. Freight train will, however, continue to be a core business area for train manufacturers.

+ China South Locomotive & Rolling Stock Co., Ltd. (SSE: 601766; HKEX: 1766) disclosed in their semi-annual report that the company, as of June 30, had about CNY 100 billion worth of undelivered orders, of which CNY 50 billion were high-speed train orders (including CNY 11.3 billion for BST Company) and CNY 12 billion were overseas orders.

+ China CNR Co., Ltd. (SSE: 601299) did not disclose the value of the orders in the semi-annual report, but insiders estimate that CNR has about CNY 80 billion worth of orders.

+ Related Data: Revenue by Product, Sales volume, Newly Signed Contracts

+ Related Companies: CNR (SSE: 601299), CSR (SSE: 601766)

Driven by the development of high speed railway, both companies have a fast growth in recent years.

Sales volume of China South Locomotive & Rolling Stock Co., Ltd. and China CNR Co., Ltd.

China South Locomotive & Rolling Stock Co., Ltd. has released a newly signed contract summary of RMB 5.87 billion and China CNR Co., Ltd. reported RMB 4.47 billion newly signed contracts.

Trading Comparable

Other News Headlines

Subordinated Bonds Increase by More Than 240 Percent This Year
Launch of New Railway Lines Will Boost High-Speed Train Procurement
Guangdong’s Property Sale Drops While Investment Continues to Rise
BYD Has Received Approval to Issue CNY 6 Billion Corporate Bonds

If you'd like to receive a daily e-mail update of ChinaScope Daily Dim Sum Newsletter, please contact us: newsletter@chinascopefinancial.com. If you'd like to try out ChinaScope Database, apply for a trial here.

Dec 29 - Subordinated Bonds Increase by More Than 240 Percent This Year

Source: Securities Times, ChinaScope Financial (Data)

+ Industrial and Commercial Bank of China Ltd. (ICBC) (SSE: 601398; HKEX: 1398) is planning to issue CNY 50 billion worth of subordinated bonds.

+ In 2011, commercial banks have issued a total of CNY 313.2 billion subordinated bonds, a 241% year-on-year increase. China’s five major banks, namely ICBC, Bank of China Ltd. (SSE: 601988, HKEX: 3988), Agricultural Bank of China Ltd. (SSE: 601288; HKEX: 1288), China Construction Bank Co. (SSE: 601939; HKEX: 0939) and Bank of Communications Co., Ltd. (SSE: 601328; HKEX: 3328), have in total issued CNY 236 billion worth of subordinated bonds this year.

+ From December 28 to December 30, 2011, subordinated bonds worth a total of CNY 54.3 billion will be issued by Guangxi Beibu Gulf Bank, Bank of Changsha, ICBC, Bank of Nanchang and Bank of Lanzhou.

+ Related Data: Sub-debt, CAR

+ Related Sector: Commerical Banks

China’s five major banks account for 75% of total subordinated debts issued this year.

The CAR of city commercial banks has dropped more than other diversified banks this year.

Trading Comparable

For more data on other banks, please visit www.chinascopefinancial.com

Other News Headlines

Subordinated Bonds Increase by More Than 240 Percent This Year
Launch of New Railway Lines Will Boost High-Speed Train Procurement
Guangdong’s Property Sale Drops While Investment Continues to Rise
BYD Has Received Approval to Issue CNY 6 Billion Corporate Bonds

Dec 28 - Jiaozuo Wanfang Will Issue 280 Million Shares via Private Placement

Source: Securities Times , ChinaScope Financial (Data)

+ Jiaozuo Wanfang Aluminum Manufacturing (SZSE: 000612) announced on December 27 that the company will issue up to 281 million shares via private placement at the price of CNY 10.64 per share, with the aim of raising up to CNY 3 billion.

+ The funds raised will be used for a 2×300MW thermal power project and to supplement liquidity.

+ Related Data: Capacity Utilization and Output Sales Ratio, Capacity, Production and Sales, Cost Structure of Aluminum, Total Revenue and Margin, Electricity Supplier after the Completion of Project, Electricity Supplier (2010)

+ Related Company: Jiaozuo Wanfang Aluminum Manufacturing (SZSE: 000612)

Jiaozuo Wanfang Power Co., Ltd. has a capacity of 0.42 million tons. So far, the capacity utilization has been saturated.

The company has been developing smoothly, with its annual sales remaining stable. The fluctuation was mainly caused by electrolytic aluminum prices.

The cost of electrolytic aluminum is largely composed of costs of electric power and alumina, among which power cost exerts greater impacts on the gross profit.

The net proceeds of this additional right issue will be invested in construction of the 2*300MW thermal power unit. After the project is completed, the electricity cost will be saved by around CNY462 million annually.

The company’s integration structure of aluminum, electricity and coal will be formed preliminarily after the project is done.

Price trend of aluminum and alumina

For more data on aluminum and companies, please visit www.chinascopefinancial.com

Other News Headlines

Nov. Statistics on China’s Financial Market
Banks’ Total Assets Reached CNY 107.9 Trillion
Industrial Enterprises’ Profit Increased 24.4% in Jan. to Nov.
China’s External Debt at USD 697.16 Billion at the End of Q3
Crude Steel Output Drops 0.2% YoY in Nov.
Jiaozuo Wanfang Will Issue 280 Million Shares via Private Placement

Dec 28 - Banks’ Total Assets Reached CNY 107.9 Trillion

Source: China Business News, ChinaScope Financial (Data)

+ According to the China Banking Regulatory Commission (CBRC), total assets of the banking sector was CNY 107.9 trillion at the end of November, a 16.7% year-on-year increase.

+ Meanwhile, total liabilities of banks increased 16.2% year-on-year to CNY 100.8 trillion.

+ Large commercial banks have CNY 50.6 trillion of total assets, an 11.3% year-on-year increase, which accounts for 46.9% of the industry’s aggregate assets. Total liabilities were CNY 47.3 trillion, up 10.7% year-on-year, and accounts for 46.9% of the industry’s aggregate liabilities.

+ Related Data: Total Assets, Total Liabilities

Market Share of Big Five National Banks is Declining

For more data on other financial sectors, please visit www.chinascopefinancial.com

Other News Headlines

Nov. Statistics on China’s Financial Market
Banks’ Total Assets Reached CNY 107.9 Trillion
Industrial Enterprises’ Profit Increased 24.4% in Jan. to Nov.
China’s External Debt at USD 697.16 Billion at the End of Q3
Crude Steel Output Drops 0.2% YoY in Nov.
Jiaozuo Wanfang Will Issue 280 Million Shares via Private Placement

Dec 28 - Nov. Statistics on China’s Financial Market

Source: PBOC, ChinaScope Financial (Data)

+ Bond issuance: CNY 669.4 billion worth of bonds was issued on the inter-bank bond market in November, a 21.7% increase from the previous month. Year-to-date bond issuance in this market has decreased 26% year-on-year to CNY 6.7 trillion.

+ Inter-bank transactions: The weighted average inter-bank offered rate fell 25 basis points to 3.49% in November. The total amount of transactions was about CNY 30 trillion in the period from January to November, up 18% year-on-year.

+ Repurchase transactions: The trading volume of bond pledged repos in November was CNY 9 trillion, a 25% increase from last month. The total trading volume from January to November has increased 11.8% year-on-year to CNY 86.1 trillion.

+ Spot trading: The total spot trading turnover on interbank bond market has increased 35.9% from last month to CNY 5.4 trillion. The accumulated value was CNY 57.2 trillion for the first 11 months, decreasing 0.4% year-on-year.

+ Stock trading: Shanghai Composite Index fell 5.5% or 134.83 points to 2,333.42 in November. The average daily trading volume on the Shanghai Stock Exchange increased CNY 3.89 billion from last month to CNY 73.62 billion.

+ Related Data: Pledged Bonds Repo, Cash Bonds, Inter-bank Lending

Declining Growth of Financial Market since the Middle of This Year

For more data on other financial sectors, please visit www.chinascopefinancial.com

Other News Headlines

Nov. Statistics on China’s Financial Market
Banks’ Total Assets Reached CNY 107.9 Trillion
Industrial Enterprises’ Profit Increased 24.4% in Jan. to Nov.
China’s External Debt at USD 697.16 Billion at the End of Q3
Crude Steel Output Drops 0.2% YoY in Nov.
Jiaozuo Wanfang Will Issue 280 Million Shares via Private Placement

Tuesday, December 27, 2011

Dec 27 - 2011 Gross Ocean Product Reach CNY 4.3 Trillion

Source: Xinhua, ChinaScope Financial (Data)

+ LIU Cigui, Director of the State Oceanic Administration (SOA), said in Beijing on December 26 that China’s gross ocean product in 2011 is estimated to reach CNY 4.3 trillion, up 13.1% year-on-year, creating 700,000 new jobs.

+ According to LIU, in order to promote the economic development in coastal regions, the SOA has planned land reclamation of 20,000 hectares, and has invested CNY 560 million into 25 comprehensive improvement projects along the coastline.

+ Related Data: Breakdown of Gross Ocean Product, Gross Ocean Product by Year

With its steady growth, Gross Ocean Product was estimated to exceed CNY4.3 trillion in 2011.

For more data of Chinese macro data, please visit www.chinascopefinancial.com

Other News Headlines

CAAC: Steady Growth in China’s Civil Aviation This Year
China’s Textile Export Slowed Down in Nov.
2011 Gross Ocean Product Reach CNY 4.3 Trillion
Metersbonwe Faces High Inventory Pressure
Ministry of Finance: More Funds to Support Agriculture and Rural Areas in 2012

Dec 27 - China’s Textile Export Slowed Down in Nov.

Source: International Business Daily, ChinaScope Financial (Data)

+ Due to weak external demand and increasing costs, export of Chinese textile and garment products in November slowed down to 7.2% year-on-year, 29 percentage points lower than the same month in previous year. This is also lower than the growth rate of 13.8% in overall export for the month.

+ In November, the export of textile and garments totaled USD 20.39 billion, with USD 8.03 billion of textile and USD 12.36 billion of garment exports.

+ China’s textile industry mainly exports yarn and fabric to Southeast Asia, while finished products, such as clothing, are exported to European markets.

+ The downturn in the industry is expected to become worse next year, where there might be very small or even negative growth in export value.

+ Related Data: Garment Export Value, Major Destination of Garment Export

For more data on garment export, please visit www.chinascopefinancial.com

Other News Headlines

CAAC: Steady Growth in China’s Civil Aviation This Year
China’s Textile Export Slowed Down in Nov.
2011 Gross Ocean Product Reach CNY 4.3 Trillion
Metersbonwe Faces High Inventory Pressure
Ministry of Finance: More Funds to Support Agriculture and Rural Areas in 2012

Dec 27 - CAAC: Steady Growth in China’s Civil Aviation This Year

Source: Caijing, ChinaScope Financial (Data)

+ China’s civil aviation industry is expected to record 5.1% growth in net profit, or CNY 45.6 billion this year. The annual passenger turnover will be over 290 million people, a 8.2% year-on-year increase.

+ LI Jun, Deputy Chief of the Civil Aviation Administration of China (CAAC), said the regulator will adhere to a moderate policy in capacity expansion, and add less than 150 transport aircrafts next year.

+ Statistics from the CAAC show that China currently has 1,745 transport aircrafts and 46 airlines. There are 27,569 pilots with valid licenses in the entire industry, 25,853 of which are Chinese citizens.

+ Related Data: Aircraft Delivery, Turnover of Freight and Passenger, Trading Comparable of Airline Companies

China's civil aviation capacity is boosted by imported aircrafts from Boeing and Airbus.

The turnover of freight and passenger slow down late this year.

Trading Comparable

Other News Headlines

CAAC: Steady Growth in China’s Civil Aviation This Year
China’s Textile Export Slowed Down in Nov.
2011 Gross Ocean Product Reach CNY 4.3 Trillion
Metersbonwe Faces High Inventory Pressure
Ministry of Finance: More Funds to Support Agriculture and Rural Areas in 2012

Dec 26 - Southwest Securities Will Merge Guodu Securities

Source: China Securities Journal, ChinaScope Financial (Data)

+ Southwest Securities (SSE: 600369) will merge and consolidate Guodu Securities with a share swap of 2.156:1. Given that the registered capital of Guodu Securities was CNY 2.62 billion at the end of 2010, 1.2 billion new shares will be added due to the merger.

+ After the restructuring, Southwest Securities will be the surviving entity, and all the assets, liabilities, businesses and employees of Guodu Securities will be merged into Southwest Securities.