Chinese companies at a glance

FAW auto sales up 46.9 percent

China First Automotive Works (FAW) Group, one of the country's major automakers, said last week it sold 166,518 vehicles in January, a rise of 46.9 percent year-on-year.

It said sedan sales rose 58.3 percent to 146,294 units while sales of medium and heavy-duty trucks grew 11.6 percent to 11,263.

The automaker said that FAW Volkswagen, its 50-50 sedan joint venture with German Volkswagen AG, sold 65,709 cars in January, a surge of 104.8 percent from a year earlier.

Tianjin FAW Toyota Motor, its joint venture with Toyota Motor Corp, sold 34,139 cars last year, up 69.8 percent, it added.

Company sources said in January that FAW produced 1.47 million motor vehicles last year and sold 1.44 million. Sales were 23.2 percent higher than in 2006.

The sales volume included 1.19 million cars, up 23.1 percent, 155,000 heavy-duty and mid-sized trucks, up 26.6 percent, and 77,000 light trucks, up 18.4 percent.

The sources said last year saw FAW Group sell 620,000 motor vehicles under its own brands, up 12.8 percent. This total included 28,800 units exported, up 44 percent, with a value of $387million, up 100.7 percent.

Sinopec bond sale

China Petroleum and Chemical Corp (Sinopec), supplier of two-thirds of the nation's auto fuel, sold bonds valued at 30 billion yuan last week to help finance a cross-country pipeline and new ethylene plants.

Sinopec began selling six-year bonds with warrants last Wednesday, the company said in a statement to the Hong Kong stock exchange.

China is encouraging companies to issue bonds to reduce reliance on bank loans and provide investors with an alternative to the nation's stock market. Sinopec says it needs capital to fund a budget projected to increase 38 percent over last year as energy demand surges in the world's fastest-growing major economy.

Sinopec's planned pipeline will transport natural gas from the southwestern province of Sichuan to Shanghai, the company said. The State-owned giant said it is also building two ethylene plants, each with a capacity of 1 million metric tons a year, in the cities of Tianjin and Zhenhai as well as another ethylene plant in Wuhan.

The company will issue 300 million bonds incorporating warrants that can be converted into Shanghai-traded stock at a ratio of one share for every two warrants.

Sino-Singaporean media deal

Dahe Media Co Ltd, one of the nation's leading outdoor media companies, signed a strategic cooperation agreement with MediaCorp Pte Ltd of Singapore last week.

According to the agreement, MediaCorp will acquire 154 million new shares from Dahe Media worth HK$89 million at the subscription price, making up 18.55 percent of Dahe's total shares.

"It is our development strategy to seek internationally reputable investors to further diversify our shareholder base and MediaCorp can support our vision to expand in the international market," said He Chaobing, chairman of Dahe Media.

Listed in Hong Kong in November 2003, Dahe Media offers a full spectrum of outdoor media services from design and production of outdoor advertisements to rental and dissemination to advertising space throughout the country. Its network covers a dozen metros, including Beijing, Shanghai, Nanjing, Xi'an, Urumqi, Wuhan, Guangzhou and Shenzhen.

"We are establishing the tie with MediaCorp with an aim to raise funds, learn from their advanced managerial experience and build a global marketing network," said Yang Jianliang, vice-president of Dahe Media.

"This is our first investment in equity in China, though we have had various kinds of cooperation with Chinese media since the 1970s," said Tan Peck Joo, executive vice-president of MediaCorp.

Huawei-Symantec joint venture

Telecom network equipment company Huawei Technologies and US security software maker Symantec Corp recently launched a joint venture in southwest China.

The new company, Huawei-Symantec Inc, based in Chengdu in Sichuan province, is 51 percent owned by Huawei and 49 percent by Symantec. It features services in storage and Internet safety.

Huawei will provide technical support and a 750-member engineering team, while Symantec will offer software rights in storage and Internet safety, as well as $150 million in investment.

The deal received the green light from the European Commission, the anti-trust watchdog of European Union, late last year under a simplified review procedure.

The new firm aims to enable Huawei to compete with technology multinationals like Hewlett-Packard and IBM. It will also boost Symantec's security and data management business.

The global market for the storage and Internet safety industry is estimated at $23 billion, with China accounting for $1.1 billion.

New Midea Appliances stock

Appliance maker Guangdong Midea Electric Appliances Co plans to issue new shares to raise money for 10 projects to increase its production capacity.

Midea, China's second-largest appliance maker by market value, will issue no more than 10 percent of its total shares to raise 3.56 billion yuan, the Foshan-based company said in a statement to the Shenzhen Stock Exchange last week.

The money will be invested in projects to increase its production of refrigerator compressors by 5 million units, energy-saving refrigerators by 4.5 million sets, washing machines by 5.8 million units and air conditioners by 9.5 million sets.

The projects include a venture with Toshiba Carrier Corp to make compressors used in appliances in which Midea will invest 309 million yuan for a 95 percent stake.

It will also invest 190 million yuan to produce air conditioners in Vietnam.

Last week Midea reported its 2007 net profit increased 122.60 percent to 1.2 billion yuan. Its revenue rose 57.28 percent to 33 billion yuan.

Analysts say the company is expected to be the top brand in white goods industry in the near future due to its financing ability, brand reputation and professional management.

Additional steel shares

Shanxi Taigang Stainless Steel Co said this month that it is to sell additional shares to raise capital for a new plant in its bid to upgrade its product line and shore up profitability.

The country's largest maker of stainless steel said in a statement to the Shenzhen Stock Exchange that it has received approval from the China Securities Regulatory Commission to sell as many as 350 million yuan-backed A shares.

Taigang said in September that it planned to collect as much as 7.5 billion yuan from the sale of additional shares to fund the construction of a 7.7 billion yuan cold-rolled stainless steel plant.

"The new plant is expected to boost the company's product structure and improve its competitiveness on the international market," said Ma Keming, an analyst with Huatai Securities Co. "Profitability will improve steadily."

The steel maker had net profits of 3.58 billion yuan in the first three quarters of last year, up 160.7 percent year on year, while gross revenue rose 143 percent to 60.4 billion yuan.

Taigang is due to announce its 2007 profits in April.

(China Daily 02/25/2008 page7)