Suning reports soaring net profit in 2009
Suning Appliance Co. Ltd., an electronics retailing giant in China, Tuesday reported that its net profit in 2009 reached 2.89 billion yuan (423.6 million U.S. dollars), up 33.17 percent year on year.
In its annual business report filed to the Shenzhen Stock Exchange, the Nanjing-based company said its earnings per share stood at 0.64 yuan, up 30.61 percent from the previous year.
The company attributed the surge in net profit mainly to its expansion in chain shops, which reached 22 more cities with 182 new outlets opening last year.
Shares of Suning closed higher at 18.13 yuan per share, up 1.69 percent compared to the previous close on the profit jump report.
Wuhan Steel raises April steel prices
China\’s Wuhan Iron and Steel Co has raised April prices for hot- and cold-rolled steel by 300 yuan a ton, and for galvanised steel by 200 yuan a ton, the China Securities Journal said on Tuesday.
Wuhan Steel was the first to announce April prices among China\’s steel sector, which produced almost half the world\’s steel last year, but the paper gave no further details.
Baosteel, the country\’s top steel firm, has yet to announce prices of its mainstream products for April, after it hiked March prices of hot- and cold-rolled steel coil to their highest since November 2008.
But Baosteel has raised prices of steel wire rod by 150 to 300 yuan per ton for April, the paper said.
China\’s steel mills and global miners are locked in negotiations for 2010\’s iron ore contract, and the country\’s steel sector faces a huge increase in iron ore costs this year.
HP apologizes for its faulty laptops
\”Hewlett-Packard sincerely apologized to its customers for the inconvenience brought by its products and services,\” said Zhang Yongli, global vice president of HP, in a statement posted on its official website on Monday.
HP began offering an extension of warranty periods for some laptop models, such as the HP Pavilion and Compaq Presario, and urged consumers to contact the company\’s after-sales department to report problems, according to the statement.
But HP did not respond to consumers\’ request for a recall for the faulty laptops, 21cbn.com said.
On March 5, a nonprofit website on behalf of more than 170 consumers filed an official complaint against HP to the country\’s quality control watchdog over faulty laptop computers.
The General Administration of Quality Supervision, Inspection and Quarantine launched an investigation into HP laptops following the complaints.
BYD scales back electric-car plans: report
BYD Co, the Chinese carmaker backed by Warren Buffett, has given up a plan to mass produce electric cars in China by the middle of this year, the South China Morning Post said.
The company will make 100 E6 electric cars to be used as taxis in Shenzhen of Guangdong province, where BYD is based, the report said, citing BYD\’s Chairman Wang Chuanfu. Further development of the vehicles will depend on the success of the taxis, the newspaper said.
Paul Lin, a spokesman for the carmaker, didn\’t immediately answer calls to his mobile phone seeking comment. Lin on Feb 24 denied a report that the introduction of BYD\’s first electric car would be delayed.
BYD, 10 percent owned by Buffett\’s Omaha, Nebraska-based Berkshire Hathaway Inc, said March 8 it plans to market electric and hybrid cars in Europe next year including the E6. The company also planned to start selling the model in the US late this year, Henry Li, general manager of BYD\’s auto export division, said at the Detroit auto show in January.
The E6 hatchback will be able to travel 200 miles (322 kilometers) on one charge, according to the company.
BYD introduced its F3DM plug-in hybrid to corporate and government agency customers in December 2008 and supplied 48 of the vehicles in 2009.
The automaker plans to start selling the F3DM to consumers by the end of this year and will set up a sales office in the US, the Morning Post cited Chairman Wang as saying.
Profit surges
BYD said March 14 it more than tripled net income last year to 3.79 billion yuan ($555 million) from 1.02 billion yuan in 2008, as consumers took advantage of government subsidies to buy the automaker\’s gasoline-fueled F3 compact cars. The model was China\’s best-selling vehicle in 2009.
The carmaker\’s sales increased 162 percent to 448,397 vehicles last year as China\’s industrywide auto demand jumped 46 percent to a record.
BYD, a battery maker that entered the automobile market in 2003, teamed up with German luxury-car manufacturer Daimler AG this month to develop and sell electric vehicles in China.
The Chinese carmaker signed a separate electric-vehicle agreement in May with Volkswagen AG, Europe\’s largest automaker. The two companies plan to cooperate in areas including hybrids and lithium battery-powered electric vehicles.
Quality watchdog starts HP investigation
An investigation has been launched following complaints about faulty Hewlett-Packard laptops, an official from the General Administration of Quality Supervision, Inspection and Quarantine, China\’s quality control watchdog said, xinhuanet.com reported today.
The agency said complaints over the quality of HP laptops from 60 customers have been received.
As of March 10, on a nonprofit website in China, more than 1,400 consumers had expressed their willingness to take part in a group complaint against HP over faulty laptop computers and more than 80 lawyers offered help in the case, another report on xinhuanet.com said on Friday.
On March 5, the website filed an official complaint against HP to the General Administration of Quality Supervision, Inspection and Quarantine. Within five days more than 200 consumers had officially joined the protest group.
The complaint centered on video cards that overheated and caused the laptop to malfunction. The complaints asked the quality watchdog to launch an investigation into HP laptops, hoping the government would order the company to have the faulty goods returned or replaced with new ones, and provide compensation. It was also suggested that government issued orders to launch a recall on all the faulty computers.
An unofficial alliance of more than 3,000 consumers in approximately 40 online chat groups has formed to defend their rights in the HP case before World Consumer Rights Day on March 15, according to the Friday report.
Google to \’bear consequences\’
Google \”will bear the consequences\” if it stops censoring search results on its Chinese website, the Ministry of Industry and Information Technology (MIIT) said on Friday.
The statement by Minister Li Yizhong at a press conference was the strongest one yet by the Chinese government over the issue since Jan 12, when the US-based Internet search giant threatened to pull out of China because of cyber attacks that it claimed originated from the country.
The Chinese government welcomes Google to expand its market share in the country if it abides by Chinese laws and regulations, Li said.
But when reporters asked him what China would do if Google stops censoring search results on its local website, Li, 65, said: \”If you don\’t respect Chinese laws, you are unfriendly and irresponsible, and you will bear the consequences.\”
Google has been in negotiations with Chinese authorities over providing unfiltered online services since its announcement two months ago of the alleged cyber attacks and its unwillingness to continue censoring its search results on domestic website Google.cn.
But talks between the Chinese authorities and Google have made little headway, with MIIT Vice-Minister Miao Wei telling reporters earlier that there has not been any \”direct contact\” with the search engine.
Google was reportedly planning to stop censorship of its search results on its Chinese website within weeks, the Wall Street Journal on Wednesday cited an unnamed source as saying. The report came shortly after Google CEO Eric Schmidt said he expected his company to reach a conclusion soon in its talks with the Chinese government.
Google may end up making individual agreements with different Chinese agencies to allow it to operate some parts of its business in a patchwork arrangement, the newspaper reported.
Li on Friday did not confirm if his ministry was in talks with Google.
Still, he said Google has \”done a good job\” by taking up 30 percent of China\’s search engine market since it entered the country in 2007.
\”If Google chooses to stay, that will be beneficial to China\’s Internet market and we welcome that,\” Li said.
But China respects Google\’s rights if it decides to pull out of the country and the country\’s online market will continue to grow with or without Google, he said.
Google established a joint venture in China in 2007 and launched its domestic website Google.cn. The domestic website accepts the government\’s requirement to censor some of the content such as political issues and pornography.
Such content needs to be regulated by the government, according to current Chinese laws and regulations.
The country\’s Internet market is open and government regulation of it is in line with international practices, Li said.
ICBC remains most profitable
The Industrial and Commercial Bank of China (ICBC), the world\’s largest bank by market value, continued to be the country\’s most profitable company last year as it reaped 129.4 billion yuan (18.95 billion U.S. dollars) of after-tax profits.
So far 996 companies listed in China\’s Shanghai and Shenzhen stock exchanges have released their annual business reports as of Thursday. They reported a combined 7.2 trillion yuan of business revenues for 2009, down 1.38 percent year on year, the Beijing-based China Securities Journal reported Thursday.
Total net profits of these companies were 801.9 billion yuan for 2009, up 19.21 percent compared to the previous year, with more than 70 percent of them reporting year on year growths in net profits, the report said.
Public utility companies fared well. Five electric power companies report their net profits grew more than 100 percent in the past year. The Guangxi Guiguan Electric Power Co., Ltd., for instance, boosted its net profit by 959.73 percent to 328 million yuan.
Baosteel Co.,Ltd, the country\’s largest steelmaker, however, said in its annual business report released Thursday that net profit for 2009 was 5.82 billion yuan, a decline of almost 10 percent year on year. Business revenue fell to 148.53 billion yuan, nearly down 26 percent. . Full story
Chinese firms more cautious on foreign buyouts
Chinese companies are planning to take a more cautious approach to foreign acquisitions, avoiding outright buyouts and seeking more partnerships and alliances, a report by the Economist Intelligence Unit said on Tuesday.
According to the report, among survey respondents who say they are definitely or likely to make an overseas investment, 47 percent would prefer to strike either joint ventures (29 percent) or alliances (18 percent) while only 27 percent say they will do so through acquisitions.
\”Our analysis of transactions worth more than $50 million between 2004 and 2009 shows that half the deals involved the buyer taking at least 50 percent ownership of the target. But Chinese executives are beginning to sense that this may not be the best approach, not least because it can set off alarm bells among the public and regulators,\” said Xu Sitao, China chief representative of the Economist Group.
Chinese companies made 298 cross-border acquisitions in 2009, with much of those investments welcomed by cash-strapped Western companies that would be hard-pressed to survive without it. But China\’s buying spree has raised a number of concerns, particularly where it has involved State-owned enterprises (SOEs).
And Chinese companies are discovering just how difficult it can be to get mergers and acquisitions (M&A) right, especially when they are cross-border deals. These factors have encouraged companies to lower their ambitions.
\”Multiple investments of minority stakes in different companies in different countries can give a Chinese company many valuable \’windows\’ to learn about management and technology in different markets without triggering foreign investment review or the political pressure associated with \’control\’ issues,\” said Stephen Harder, managing partner of law firm Clifford Chance LLP (China).
Meanwhile, the report showed that outbound M&As remains dominated by SOEs. According to analysis of deals worth more than $50 million between 2004 and 2009, an overwhelming majority of China\’s outbound M&A transactions – 81 percent – were made by State-owned entities.
\”This will remain a cause for concern abroad, not only because many deals involve control of natural resources but also because State ownership seems to confer unfair advantages on the acquired companies,\” said Alison Kennedy, managing partner of strategy with consulting firm Accenture in China.
In the survey conducted for the report, 82 percent of respondents cited a lack of management expertise in handling M&As as the biggest challenge for Chinese companies making purchases abroad. Only 39 percent feel they know what is required to integrate a foreign acquisition. And only 39 percent of survey respondents say they had identified attractive targets within their chosen geographic markets – increasing the risk that Chinese buyers will succumb to the temptation to buy assets that have become available as a result of the global financial crisis, rather than focusing on carefully researched targets.
The report is based on in-depth interviews with large Chinese companies with extensive investment experience abroad, an online survey of 110 Chinese executives and interviews with several foreign participants and advisers to Chinese deals overseas.
In addition, the report analyses available data on Chinese companies\’ cross-border transactions over the past five years, focusing on deals worth more than $50 million.
China Shenhua net profit up 16.6% in 2009
China Shenhua Energy Company Limited, the largest coal producer in the country, Friday said its net profit rose 16.6 percent to 30.28 billion yuan (4.43 billion U.S. dollars) in 2009 from the previous year.
Business revenue expanded 13.2 percent to 121.31 billion yuan in 2009 year on year, said the company in an annual business report filed to the Shanghai Stock Exchange.
Earnings per share was 1.522 yuan, up 16.6 percent year on year.
Shares of China Shenhua dipped 0.24 percent to 28.77 yuan Friday, before the release of its annual earnings.
Shanghai GM recalls imported Captiva jeeps
Shanghai General Motors (SGM) is contacting the owners of 2,065 Captive jeeps to recall the vehicles for repair due to risk of steering malfunction, the company said on Friday.
The defected vehicles were manufactured by GM Daewoo Auto in the Republic of Korea between September 18, 2007 and December 31, 2008, said a spokesman with SGM.
China\’s General Administration of Quality Supervision, Inspection and Quarantine (GAQSIQ) released a bulletin on Friday, approving SGM\’s application for the recall.
SGM had received no customer reports on the defect, the spokesman said.
GAQSIQ has stopped the importation of GM Daewoo Auto\’s Captive jeeps, according to the bulletin.
