Thursday, April 26, 2012

China Vanke: Net Profit CNY 1.4 Billion, Up 15.8% YoY in Q1

Source: Shenzhen Stock Exchange, ChinaScope Financial (Data)
+       The first-quarter report released by China Vanke disclosed that the company’s recognized sold area was 754,000 square meters in Q1. Revenue and net profit were CNY 10.35 billion and CNY 1.4 billion respectively, up 29.8% and 15.8% year-on-year.
+       At the end of the first quarter, the developer had CNY 39.05 billion in cash, and loans with more than one-year term totaled CNY 17.8 billion. The net debt ratio was 23.0%, down 0.8 percentage point from the beginning of 2012.

In Q1 Vanke (000002.SZ) recorded a revenue growth of approximately 30% YoY.
The recognized sales volume of the remaining three quarters is expected to be driven up by an increase in unrecognized contracted sales in the first quarter.
The average price of recognized sales might decrease in the next two quarters due to low average price of unrecognized contracted sold inventory.
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China's Crude Steel Output 174.22 Million Tons, Up 2.5% YoY in Q1


Source: NDRC, NDRC, ChinaScope Financial (Data)
+       According to data released by the NDRC, China’s crude steel output reached 174.22 million metric tons in the first quarter, up 2.5% year-on-year.
+       The output of steel products was 222.46 million tons, up 6.5% and iron ore imports were 187.62 million tons, up 6% year-on-year.
+       The cement output in Q1 was 398.1 million tons, up 7.3% year-on-year. Average ex-factory price of cement amounted to CNY 363.4 per ton, a decrease of CNY 18.2 per ton compared with in the previous month.

Lower FAI and real estate investment growth underpins the downward growth trend for cement and steel. Growth of cement output in 2012Q1 was a mere 7.3% YoY, while crude steel output growth fell to 2.5% YoY
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Electricity Consumption Grows 6.8% YoY to 1.17 Trillion kWh in Q1

Source: China Electricity Council, ChinaScope Financial (Data)
+       Data released by the China Electricity Council on April 23 shows that China’s electricity consumption in the first quarter rose 6.8% year-on-year to 1.17 trillion kWh. Growth in March was 7% YoY.
+       The slowing growth corresponds to the low GDP growth numbers released by the National Bureau of Statistics on April 13.
+       In the first quarter, China’s power generating capacity increased 9.24 million kW, with 1.27 million kW coming from hydropower and 6.49 million kW from thermal energy.

The growth of China’s electricity consumption dropped to 7.0% in March 2012, driven down by lower consumption in the primary and secondary industry. Notably, electricity consumption of the tertiary rose to 19.36%.

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Thursday, April 19, 2012

MOFCOM: China’s FDI down 6.1% to USD 11.76 Bn in March


Source: Ministry of Commerce, ChinaScope Financial (Data)
+       According to the Ministry of Commerce (MOFCOM), China’s net inflow of FDI decreased 6.1% to USD 11.7 billion in March, the fifth month in a row with YoY decreases.
+       In the first quarter of 2012, the accumulative net inflow of FDI amounted to USD 29.48 billion, down 2.8% year-on-year.
+       FDI coming from the 27 European countries was USD 1.41 Bn, down 31.2% YoY while FDI from the US was USD 893 Mn, down, up 10.1% YoY in 2012Q1.

Incoming FDI was USD 11.76 Bn in March, down 6.1%, marking the fifth month in a row with negative growth rates.
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Land Parcel in Downtown Beijing Sold for CNY 1.9 Billion

Source: Securities Times, ChinaScope Financial (Data)

+       On April 16, Nanchang Municipal Public Investment Holding Group bought a land lot in Beijing’s Dongcheng District for CNY 1.92 billion, equivalent to an average price of floor area of CNY 25,700 per square meter. The land can be used for both commercial and residential purposes.
+       The lot was sold with a premium rate of 43% due to its special location. In Beijing and other cities, both land auction price and premium rate have fallen due to the real estate tightening policies.

The price of the target lot is low compared with prices of other land lots in the Dongcheng district.

Average sales prices of both commercial and residential land in Beijing have dropped this year

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China’s Holdings of US Treasuries up 12.7 Bn in Feb


Source: US Department of the Treasury, ChinaScope Financial (Data)
+       Data from the United States Department of Treasury shows that China held USD 1.18 tn worth of treasury bills and bonds in February, up USD 12.7 bn from January. This is the second month in a row with slight increase in treasuries holdings.
+       By the end of March, China’s foreign exchange reserves were USD 3.31 trillion, up USD 123.9 billion from December 2011.

The share of US treasuries in China’s foreign reserves holdings is decreasing

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Friday, April 13, 2012

Apr 13 - XCMG Machinery: Net Profit Up 15.12% in 2011, Tight Liquidity in the Industry


Source: Shenzhen Stock Exchange, ChinaScope Financial (Data)
+       The 2011 annual report of XCMG Construction Machinery Co., Ltd. released on April 11 shows that the company made CNY 32.97 billion in revenues last year, up 28.03% year-on-year. Net profit was CNY 3.37 billion, up 15.12% year on year.
+       With accounts receivable time increasing, liquidity is a concern among engineering machinery companies. According to XCMG’s annual report, its accounts receivable was CNY 9.77 billion at the end of 2011, up 148.36%. The figure at the same time was for Sany Heavy Industry Co., Ltd CNY 11.3 billion, up 97.3% year-on-year and for Zoomlion Heavy Industry CNY 11.65 billion, up 67.81% year-on-year.

Revenue growth was 28.03%, while net profit attributed to equity holders grew at 15.12% in 2011.



The growth in inventory days and accounts receivable days led to a longer cash conversion cycle.


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Apr 13 - China CNR: Net Profit Grows 55.16% in 2011


Source: Shanghai Stock Exchange, ChinaScope Financial (Data)
+       According to the annual report released by China CNR Corporation Limited on April 11, the company made CNY 89.35 billion in revenue in 2011, up 38.91% year-on-year. Profit was CNY 3.18 billion, up 60.75% year-on-year.
+       The adjustments made to the high-speed railway construction plan last year have had little impact on the annual performance of China CNR, which met its planned sales target with CNY 23.94 billion sales revenue from coaches sold.

The 55.16% growth in net profit attributed to equity holders is due to high revenues and improved margins. The company’s revenue still largely depends on purchases made by the Ministry of Railways.


High-speed trains and locomotives are the largest revenue generator of China CNR Co., Ltd. The decreasing investment into the Chinese railway sector is indicating a gloomy 2012 outlook.

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Apr 13 - Growth of SUV Sale Spikes in March

Source: China Association of Auto Manufacturers, ChinaScope Financial (Data)
+       According to recent statistics released by the China Association of Automobile Manufacturers (CAAM) on April 11, output of automobile was 1.88 million, up 3.38% year-on-year and sales of automobiles was 1.84 million, up 1.02% year-on-year in March 2012.
+       A total of 1.4 million passenger vehicles were sold in March, up 4.54% year-on-year, of which 176,200 were sports utility vehicles (SUV) which recorded a steep 32.38% year-on-year increase.
+       The market share of domestic-brand passenger vehicles declined, with 603,600 sold vehicles in March, down 1.7% year-on-year, equivalent to a 43.1% market share, 2.7 percentage points lower than in March last year.

The automobile sales volume growth dropped to 1.02% YoY in March.


With a 32.28% YoY growth in March, SUV growth was the highest among passenger vehicles.

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Thursday, April 12, 2012

Apr 12 - China’s Population Will Not Break 1.39 Bn in the 12th Five-year Plan Period


Source: PRC Government, ChinaScope Financial (Data)
+       According to an announcement made by the Central Government on April 10, China aims to continue keeping population growth under control during the 12th Five-year Plan period.
+       During this period the average annual population growth rate should be below 7.2‰, and the total population not exceed 1.39 billion. In terms of population distribution, the urbanization rate is estimated to increase by about 4 percentage points.

ChinaScope Financial’s forecast shows population of 1.35 Bn in 2012

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Apr 12 - China's Trade Surplus at USD 5.35 Billion in March


Source: China Customs, ChinaScope Financial (Data)
+       According to an April 10 announcement made by the General Administration of Customs, China’s imports and exports stood at USD 160.31 billion and USD 165.66 billion in March, equivalent to a non-seasonally adjusted YoY growth of 4.6% and 9.8%, respectively.
+       China’s trade surplus was USD 5.35 billion in March; due to February’s trade deficit, the total surplus in the first quarter is only USD 660 million.

Export picked up a bit in March, growing at 8.9% YoY, while import declined to a YoY growth of 5.3%

The trade surplus in March was CNY 5.35 Bn
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Apr 12 - Entrepreneur Confidence Index Shows Some Optimism


Source: NBS, ChinaScope Financial (Data)
+       According to data released by the National Bureau of Statistics on April 10, the entrepreneur confidence index for 2012Q1 was 123, up 2.1 points quarter-on-quarter. 
+       The spot entrepreneur confidence index was 121.2, down 0.8 point quarter-on-quarter; and the predictive entrepreneur confidence index was 124.2, up 4.0 points quarter-on-quarter, reflecting higher expectations among entrepreneurs.
+       The NBS also released the business climate index for 2012Q1, which was 127.3, 0.5 points lower than in 2011Q4.

While the business climate index declined slightly in 2011Q1, the entrepreneur confidence index and the predictive entrepreneur confidence index increased some.


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Friday, April 6, 2012

Apr 6 - Poly Real Estate’s Net Profit CNY 6.53 Bn in 2011, up 32.74% YoY


Source: Shanghai Stock Exchange, ChinaScope Financial (Data)
+       Poly Real Estate Group Co., ltd. released its 2011 annual report today, showing operating revenue of CNY 47.04 billion, up 31.04% year-on-year, and net profit attributable to the parent company of CNY 6.53 billion, up 32.74% YoY
+       In 2011, due to the expansion of real estate projects, Poly’s inventory value increased 38.41% year-on-year to CNY 15.21 million.

The sales growth of Poly (600048.SH) slowed down in 2011, mainly due to the slower sales growth in tier-one cities.

In 2011 average sales prices dropped in tier-three cities, while they rose quickly in tier-one cities.



Both property inventory growth and cash ratios are at reasonable levels.
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Apr 6 - Four Major Insurance Companies Report CNY 65 Billion Surrenders in 2011


Source: CLIC, NCI, PINGAN, CPIC, ChinaScope Financial (Data)
+       2011 performance disclosures of China’s four major insurance companies all show increase in surrenders. Last year the amount of surrenders by China Life Insurance Co., Ltd. (601628. SH, 2628. HK), Ping An Insurance (Group) Co. of China Ltd. (601318.SH, 2318.HK), China Pacific Insurance (group) Co., Ltd. (601601.SH, 2601.HK), and New China Life Insurance Co. Ltd. (601336. SH, 1336. HK) exceeded CNY 65 billion, and the surrender ratio increased considerably compared with last year. Among them, Pacific Insurance surrender rate increased the most, by 113.6% year-on-year.
+       The higher surrender rate is explained by poor capital market return, higher bank deposit rates and the tighter bancassurance control of the China Insurance Regulatory Commission (CIRC).

Due to rise in interest rates and the larger issuance of financial products, the surrenders of major insurers increased rapidly last year.


Trading Comparable


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Apr 6 - Property Transaction in Major Cities Grows MoM but Falls YoY in March


Source: Cnstock, ChinaScope Financial (Data)
+       Data from the China Index Academy shows that of 40 monitored cities, 33 recorded month-on-month increase in transaction volume.
+       On a yearly growth basis, 14 out of 20 cities recorded lower transacted areas. The decrease in Dalian was the highest, reaching 73.14%. The transacted areas in the other 6 cities rose compared with last year, the rise in Suzhou being the highest, with over 100%.

Commodity housing trading in key cities increased considerably in Q1 2012

However, the trading volume of land market, especially residential land, continued to decrease.

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Thursday, April 5, 2012

Apr 5 - Founder Securities: Net Profit Drops 79% to CNY 256 Million in 2011


Source: Shanghai Stock Exchange, ChinaScope Financial (Data)
+       According to Founder Securities’ 2011 financial report released on April 4, the brokerage firm made CNY 1.7 billion in revenues last year, a 44.65% year-on-year decrease. Net profit attributable to shareholders was CNY 256 million, declining 79.42% year-on-year. Basic earnings per share were CNY 0.0504.
+       The company plans to pay a cash dividend of CNY 0.7 per share.

Due to poor market performance, Founder Securities’s profits declined dramatically last year.


Trading Comparable


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Apr 5 - Housing Prices in 100 Chinese Cities Fall for Seven Consecutive Months


Source: Soufun, ChinaScope Financial (Data)
+       Data from the China Index Academy shows that the average price of residential properties in 100 Chinese cities was CNY 8,741 per square meter, down 0.3% month-on-month in March. The price has been declining in month-on-month terms since last August.
+       Property prices in major cities such as Beijing and Shanghai are also declining. Statistics show that the average housing price in ten major cities was CNY 15,454 per square meter in March, down 0.4% month-on-month.


For the last seven months, the average price in 100 cities has dropped in month-on-month terms.



In March, the number of cities that experienced month-on-month growth of average sales price was 7 more than in February.

The average housing prices dropped year-on-year in seven out of China’s ten major cities. Prices in Shenzhen, Guangzhou and Wuhan rose.

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Apr 5 - China’s Non-Manufacturing PMI Grows to 58% in March


Source: NBS, ChinaScope Financial (Data)
+      In March, China’s seasonally adjusted non-manufacturing PMI was 58%, 0.7 percentage points higher than in February and still high above the demarcation line of 50. All sub-indices; new orders, business activity index, input costs, sales price and business activity outlook all increased.

The Non-manufacturing PMI continued its upward climb and landed at 58 in March 2012. Among sub-indices, business activity outlook increased the most, by 2.8 ppt.


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