Chinese companies at a glance

Expansion plan

Brilliance China Automotive Holdings Ltd, the Chinese partner of BMW AG, says it will need more than 6 billion yuan to expand capacity and add new models in China by 2010, according to its chairman Qi Yuming.

The car maker plans to double production and sales to 600,000 units in China by 2010 while gaining sales revenue of more than 80 billion yuan, Qi said at the Auto China 2008 expo in Beijing.

The aggressive plan also included sales projections of 150,000 light trucks and the same amount of mini vans in China by 2010 in addition to a doubled capacity for its advanced engines for 600,000 units. Brilliance China plans to sell 1 million vehicles and net 100 billion yuan revenue in its second fi veyear plan ending 2012.

"The huge investment would be partly funded by the stock market and we are also looking forward to get more fi nancial support from the government in terms of tax and loans," Qi said.

Strategic cooperation

New Elegant Living Timber Manufacturing (Zhongshan) Ltd, a Chinese wood fl ooring products manufacturer, announced last week that it has clinched a strategic cooperation agreement with Malaysian timber fi rm Samling Global Ltd on material supply.

Last year, the total production of wood fl oors in China hit 361 million sqm. Analysts say that the output is expected to reach 500 million sq m in 2010, with an annual growth rate of 13 percent.

"The market potential and future development provide the opportunity for the cooperation between Chinese wood floor producers and international players," said Liu Shuozhen, president of New Elegant Living.

But Liu also said China will see a huge scarcity of wood of 280 million cubic meters by 2010, while the supply in the international trading market only stands at 120 million cubic meters.

Therefore, "the stable supply of raw materials is key to the players in the industry," said Liu.

The Hong Kong-listed Samling Global manages around 4 million hectares of forest in the world.

Residential market

Yi Xing Real Estate Co, a wholly-owned subsidiary of Shenzhen-listed Financial Street Holding Co, is exploring the residential market of the Beijing Economic-Technological Development Area (BDA).

Targeting the capital's middle class, the company will launch a project in the BDA in May, with a construction area of 500,000 sqm and an occupancy rate of merely 1.2. Currently, there are 57 Fortune 500 enterprises entering the BDA, signifying the huge potential of the area's real estate market.

The average occupancy rate in BDA hovers around 1.5 percent, much lower compared to that in the downtown.

However, as the BDA community matures, the land supply is also shrinking, and there have been very few new residential buildings in the district in the past year.

Outlook on life

China Minmetals Corp and Europe's No 2 insurer AXA's joint venture AXA-Minmetals Assurance Co Ltd have launched its AXA Life Outlook Index, showing that in Asia, Chinese middle and high-end customers are the most optimistic group in terms of their outlook on life for the next five years.

The survey, covering over 2,000 interviewees in Asia, shows that most of the Chinese customers have a quite simple investment portfolio, mainly of residential property, stocks and deposits. Only 31.3 percent of the respondents have bought insurance products, meaning the potential market for insurance, especially the pension business, is still large. And AXA-Minmetals is eyeing this huge potential market.

"The pension business will be one of our major focuses for the following years," said Jamie McCarry, president of AXAMinmetals Assurance, adding customer-tailored products are the major competitiveness of the insurer, compared with other rivals.

Insurance product

China Life, the country's largest life insurer, launched its fi rst unit-linked product, in an effort to seize investment opportunities when the market is near the bottom.

"Though it is still hard to say if the market will bottom out or not, it is much safer to launch investment products at such a time," said Su Hengxuan, China Life' s assistant president.

China's benchmark Shanghai index has plummeted over 40 percent so far this year, making the stocks valuation more attractive for investors. However, the insurer has no plan to invest overseas, said Yu Yong, assistant manager of China Life's bank assurance department, adding they are more optimistic about pre-IPO investment and blue chips, especially fi nancial sector.

As one of the largest institutional investors in the country, China Life saw an investment return of 84.6 billion yuan last year, up 79.8 percent on a yearly basis.

(China Daily 04/28/2008 page7)