Chinese companies at a glance

Aviation companies to be consolidated

The businesses of China Aviation Industry Corp (AVIC) I and AVIC II, the country's two leading State-owned aviation manufacturers, are likely to be restructured and consolidated to realize the country's ambitious plan of developing a homegrown large commercial aircraft.

"A possible plan is to consolidate the commercial aircraft manufacturing businesses of the two enterprises and establish a new firm, which will become a shareholder in a company taking charge of assembling the large airplane," said an official with AVIC II last week.

The move is aimed at "strengthening the country's aviation manufacturing capabilities" and "pooling resources to carry out the large commercial airplane project", the official said on condition of anonymity.

The State Commission of Science, Technology and Industry for National Defense is working on the restructuring plan, which will await approval from the State Council and the National People's Congress, the official said.

A source with AVIC I confirmed the move and said the country's plan to develop its own large commercial airplanes is the major driving force behind the consolidation.

"Details will likely be announced in March," said the source, who declined to be named.

New models boost Brilliance sales

Brilliance China Automotive Holdings Ltd said it earned a profit last year as new models helped boost sales.

The Chinese partner of BMW AG sold 300,369 cars last year, beating an earlier forecast of 280,000 units, according to its statement released last week.

Shenyang-based Brilliance recorded revenue of 43 billion yuan last year, an increase of 32 percent year-on-year.

A former light-vehicle specialist, Brilliance began to win more customers after moving into the booming passenger car market with its own nameplate in the world's second-largest auto market.

It launched several new self-branded models last year, including the Zhonghua Junjie sedan, using China's first self-developed 1.8T engine, and the Zhonghua Coupe sports sedan.

Sales of its Zhonghua-branded cars soared 82 percent to 115,000 units last year while exports also rose 79 percent to 15,500 vehicles during the same period.

Brilliance is also adding capacity and expanding overseas to meet aggressive targets of doubling sales to 600,000 units by 2010 with revenue topping 100 billion yuan.

In November, the carmaker signed a contract to open its fourth overseas factory, in Russia, paving the way to sell more than 100,000 cars in the east European market within five years, according to company projections.

CNPC to fund new pipeline

China National Petroleum Corp (CNPC) will invest 16 billion yuan to fund construction of a planned Central Asia-China natural gas pipeline, CNPC's listed subsidiary PetroChina said recently.

CNPC Exploration and Development Co Ltd (CNPC E&D) will be responsible for building the pipeline expected to pump natural gas China purchased from Central Asia's Turkmenistan, said the announcement.

PetroChina and China National Oil and Gas Exploration and Development Corp - both CNPC subsidiaries and each with 50 percent of CNPC E&D - will supply 8 billion yuan in cash apiece.

PetroChina said in the announcement that CNPC E&D planned to cooperate with two State-owned development companies in Kazakhstan and Uzbekistan to build the pipeline.

In July, CNPC, the country's largest oil and gas company, agreed to import 30 billion cu m of natural gas annually through the planned pipeline for 30 years from Turkmenistan.

According to the construction plan, the pipeline would start from Gedaim on the border of Turkmenistan and Uzbekistan and extend 1,818 km. About 525 km will run through Uzbekistan and 1,293 km in Kazakhstan to reach Khorgos in Northwest China's Xinjiang Uygur Autonomous Region.

Cosco orders 16 vessels

China Cosco Holdings Ltd, Asia's largest container-shipping line, said it is ordering 16 vessels for $1.08 billion to meet rising demand, according to Bloomberg News.

The company will ask Jiangsu Tianyuan Marine Import & Export Co and Jiangsu New Yangzi Shipbuilding Co to build the vessels, according to a statement filed with the Hong Kong Stock Exchange last Monday. The vessels will have a capacity for carrying 4,250 standard 20-foot-containers each, the statement said.

China Cosco, based in Tianjin, forecast on December 20 that its 2007 profit will probably jump nine-fold to 18 billion yuan on higher demand for shipping services in the world's fastest-growing economy. The company's shares, traded in Shanghai and Hong Kong, surged five-fold last year.

According to its current market forecast, global demand for container shipping services will continue to grow. China Cosco will borrow from banks to finance 80 percent of the cost and cover the remainder through internal resources, the company said.

China Cosco will take delivery of seven of the vessels in 2011 and the remainder in 2012, it said. The company has an option to order four more vessels, according to the statement.

Railway construction firm to go public

China Railway Construction Corp (CRCC), the country's second largest construction firm, is likely to go public in Shanghai and Hong Kong in March, according to sources.

The State-owned CRCC is expected to raise 25 billion yuan by issuing 2.8 billion A shares and 2 billion H shares.

Its initial public offering (IPO) is on track to be the mainland's largest in the first quarter, based on Thomson Financial data. The Shanghai IPO price could be 4-5 yuan per share and its H shares will be no less than HK$5 each. Its Shanghai listing is expected in late March, with the Hong Kong listing slated for a few days later, said the sources, who declined to be named.

The company has already filed its listing applications with the China Securities Regulatory Commission and hired CITIC Securities Co, Citigroup Inc and Macquarie Bank Ltd to prepare and manage its share sales in Shanghai and Hong Kong.

China Power moves into Guangdong

China Power International Development Ltd agreed to pay 749.5 million yuan to buy 25 percent of Guangzhou Power Enterprise (Group) Ltd, in an attempt to boost its business in the region.

China Power, China Power Investment Corp's Hong Kong-listed arm, will use the deal as a platform to expand in Guangzhou and the Pearl River Delta, the company said in a statement to the Hong Kong stock exchange last week.

Power consumption in Guangzhou, an industrial hub, grew 12.5 percent between 2001 and 2005, the statement said.

Guangzhou Power, wholly owned by Guangzhou Development Group Ltd, is a major power producer in the city.

China's power companies are increasing their capacity to supply the world's fastest-growing major economy. As of the end of 2006, the total installed capacity of China Power was 5,348 MW. The company's total revenue was 5.2 billion yuan, an increase of 19.3 percent from the year before, according to the company's 2006 annual report.

Its parent, China Power Investment, had a total installed power capacity of 37,800 MW at the end of 2006.

(China Daily 01/05/2008 page7)