Biz scene

MARKET

Earnings drop

China BlueChemical Ltd, the fertilizer unit of the nation's third largest oil company, said 2007 profit fell 12 percent after income in the previous year was inflated by a one-time gain.

The company's net income dropped to 1.45 billion yuan, or 0.31 yuan a share, from 1.65 billion yuan, or 0.48 yuan, the Hainan-based company said in a statement to the Hong Kong stock exchange. Sales gained 25 percent to 4.34 billion yuan.

The company had a one-time gain of 577.6 million yuan related to an acquisition of fertilizer assets in 2006.

Profit up 53%

Bank of Nanjing Corp, partly owned by BNP Paribas SA, boosted profit 53 percent last year as it issued more loans.

The bank's net income climbed to 909.5 million yuan, or 0.62 yuan a share, from 594.6 million yuan, or 0.49 yuan a share, a year earlier, the bank said in a statement yesterday. Bank of Nanjing, which lends mainly to small companies, increased lending 20 percent to 30.6 billion yuan last year.

Engine venture

Cummins Inc, the first overseas engine maker to invest in China, and Beiqi Foton Motor Co established a 2.4 billion yuan venture to make engines as the country's truck sales rise.

The venture will start production in 2009 and will have production capacity of 400,000 engines a year, according to a statement on Cummins' website. Cummins and Beiqi Foton, China's biggest maker of light trucks, will each own half of the Beijing-based venture.

The venture will make 2.8-liter and 3.8-liter diesel engines for light trucks, pickups and sport utility vehicles.

GRAPEVINE

Dell retail deal

Five Star Appliance will sign a cooperation agreement with Dell, the world's second largest PC maker, for retail selling, China Securities Journal reported yesterday.

From May, Five Star will begin to sell Dell's desktop and notebook computers in its major stores in big cities, and will expand the business to more stores in the next few months. Meanwhile, Dell's staff will be in Five Star stores to help consumers buy computers, the report said, citing Liu Li, general manager of Five Star's IT department.

Dell officials declined to comment yesterday.

Investment bank

The Industrial and Commercial Bank of China Ltd has applied to Hong Kong's Securities and Futures Commission to set up a wholly owned investment bank, the South China Morning Post reported yesterday, citing unnamed sources.

The investment bank would focus on deals raising up to HK$2 billion of funds, the report said. The plan is an attempt by ICBC to expand its investment-related business to earn fee income instead of relying heavily on interest income, the report said.

IPO on hold

Grand China Air, the parent of Hainan Airlines, had to delay its initial public offering in Hong Kong as investors renegotiate the terms of a $1.3 billion deal, the South China Morning Post reported yesterday, citing unnamed sources.

Grand China is offering a stake of more than 30 percent to a group of foreign and domestic investors in the form convertible bonds. Some funds, unhappy with the terms offered, have pulled out of negotiations, the report said.

The transaction was to have closed in January, followed by a $2 billion IPO, the report said. Some investors are looking to invest in airports, which could be better than airlines, it said.

BIZ UNUSUAL

Marketing move

Some companies are offering consumers free product samples by registering basic information on their websites.

Many local companies are starting to use the Internet in this way - for marketing and data collection.

Industry analysts said this marketing method originated in the United States.

Baked eggs

A farmer in Zibo, Shandong province, sells cooked eggs for 0.7 yuan apiece. But Wu Shengying's eggs aren't cooked in the usual way - Wu bakes his eggs in an oven. He said it's easier to control the temperature and cooking time of an oven compared with microwaves or charcoal stoves.

Wu makes 0.2 yuan in profit on each baked egg. He has applied for a patent on his cooking method and hopes to bring in 100,000 yuan a year through the patent.

Fresh yogurt

A retrenched worker is selling fresh yogurt, which she sells within 24 hours of making it.

Wang Shurong offers customers a tub of plain yogurt to which they can add their choice of fruit or vegetables.

Wang's yogurt is priced at 4.2 yuan per 220-g tub, and extras cost 0.4 yuan.

Wang said she sells 500 to 600 tubs a day of the fresh yogurt, which earns her about 1,500 yuan.

Sugar flower

Made of colorful paper with candy inside, "sugar flowers" are catching on in Tianjin. Chu Li designs the "sugar flower" and even gives them fancy names such as "pink memory", "love bird" and "fruit in summer".

These candies can be kept for a long time. Popular among all age groups, they are regarded as good gift items and are often seen at wedding ceremonies and birthday parties.

BIZ MOVE

Swire chief

Swire Properties, a wholly owned subsidiary of Swire Pacific, recently set up its mainland headquarters in Beijing and appointed Gordon Ongley as CEO.

Ongley joined Swire Properties in 1995 and has been the company's COO since 2006. So far, the Hong Kong-based company has four representative offices on the mainland, including Guangzhou, Beijing, Shanghai and Chengdu, with total investment in excess of 20 billion yuan.

LOCAL

Construction boom

Sanya in Hainan province recently kicked off 12 construction projects, with a total investment of 9.4 billion yuan.

Of the funding, 5.8 billion yuan to be invested in four infrastructure projects, 1.1 billion yuan will go to four real estate projects and the rest will be used to build hotels.

The city will focus on 148 projects this year and the total investment will exceed 100 billion yuan, the local government said.

Waste disposal

Restaurants and canteens in Beijing will be charged disposal fees for food waste soon, with authorities working on pricing standards and charging methods, the Beijing municipal administration commission has said.

The collection, transport and treatment of food waste will be handled by professional companies under a franchising system. According to the plan, five waste treatment plants will be built in Beijing. One plant has already been completed and the other four are under construction or preparation.

Transshipping base

Fujian's largest coal transshipping base will be built on Kemen Port in Fuzhou, jointly invested by three industry heavyweights - China Huadian Coal Group, Fujian Provincial Communication Transport (Shareholding) Co Ltd and BHP Billiton.

The total investment is about 4 billion yuan. China Huadian holds the main share and BHP Billiton takes 10 percent. The transshipping base will be completed by the end of this year with an estimated annual handling capacity of 40 million tons.

(China Daily 04/01/2008 page15)