NDP mill affected

Mainland paper manufacturer Nine Dragons Paper (NDP) said the commencement of the new factory in Sichuan will be delayed for seven to 18 months due to the destruction of power system by the earthquake in May.

NDP Chairwoman Cheung Yan did not comment on market estimation toward the company's surging costs and squeezing margins. She said there is no overcapacity and she will prove that with the coming results announcement.

Investment banks earlier cut the company's price target and sector rating of paper manufacturers. Nine Dragon closed at HK$6.10 yesterday, down 1.77 percent.

Profit margin slide

Shanghai Electric warned yesterday its profit margin will fall by as much as 3 percentage points as it grapples with rising steel prices, despite strong demand from a country ramping up electricity generation to combat endemic shortages.

Still, Shanghai Electric Group Co Ltd, the largest of the country's three dominant suppliers of power generation equipment, chalked up around 60 billion yuan of new orders in the first half, hitting 95 percent of its full-year target, senior executives from its power division told Reuters.

Orders on hand for Shanghai Electric, which vies with Dongfang Electric and Harbin Power Equipment to sell to the likes of Huaneng Power International, exceeded 150 billion yuan at the end of June, Cai said.

Acer Q2 net gains up 47.5%

Acer Inc, the world's third-biggest PC vendor, posted yesterday a second-quarter net profits of NT$2.92 billion ($95 million), below estimates but up 47.5 percent from a year ago amid steady global demand.

Acer Chairman J T Wang said the company expected third-quarter net profits to be higher than the previous three months as the US housing downturn and global inflationary woes had little impact on its business, but did not provide any figures.

Acer has increased its market share, moving ahead of Lenovo Group Ltd, since buying US computer brand Gateway Inc and Paris-based Packard Bell.

HK dollar strengthens

The Hong Kong dollar gained some ground against the US dollar yesterday after market players took profits on the greenback overnight.

The currency was firmly supported at 7.8040 to the US dollar. Trade was quiet as players awaited US second-quarter GDP data, due at 1230 GMT, as well as US monthly payrolls data on Friday, for further indications on the likely direction of the US dollar and interest rates.

The overnight interbank rate spiked higher, supported by end-of-the-month demand for funds, traders said.

China Daily-Reuters

(HK Edition 08/01/2008 page2)