Reports » China

China stock market report by ChinaStockAdvice.com (May 6, 2009)

Macro-economic Policy

National Generating Capacity Continued Declining in April 2009, Down by 3.55% YoY

SASAC to Look into Financial Investment of Central Enterprises

Domestic Market

Opening Accounts Dropped 10% Last Week; Accounts with Positions Hit Summit of Recent 7 Weeks

Focus of State Assets Supervision Shifted to Listed State-owned Equity

As of closing on May 5, 2009, share prices of 5 companies plunged below their net asset value per share, with P/B ratio between 0.57x and 0.98x. These companies covered several fields including iron & steel, real estate and garment & textile, etc. From 2007 onwards, 264 companies issued initial public offering. Of these companies, 18 companies’ closing prices were lower than their IPO after their equity rights’ recovery, accounting for 6.82% of the total IPO companies.

Of all companies implemented additional issuance since 2007, 105 companies’ closing prices were lower than their initial additional-issuance prices, among which 38 were public additional-issuance companies, while 67 were directional add-issuance companies. From 2007 onwards, among the 190 companies who announced the additional-issuance plan and additional-issuance prices but not implemented them, 38 companies’ closing prices were below their planned additional-issuance prices, of which, 7 had their plans approved by the CRSC. Additionally, 68 companies abandoned the additional issuance since 2007.

Hang Seng index closed high by 49.03 points or 0.30% at 16430.08 points.

Companies & Industries

- BBMG Corporation Likely to Start up IPO Scheme Next Week, Raising Funds at USD500-700mn

- In 2008, of the 672 listed companies of railway equipment sector, total business turnover was Rmb111340mn (+31.44% yoy), and total profit was Rmb6234mn (+52.66% yoy). In January-February 2009, 753 listed companies’ total sales revenue was Rmb16657mn (+16.36% yoy), and total profit was Rmb590mn (-15.85% yoy). Industrial revenue growth in Q1 2009 obviously slowed down compared with that of 2008; moreover, total profit suffered a negative growth.

- Of the comparable listed companies of the component industry, total business turnover in 2008 was Rmb48057mn (-0.6% yoy), total profit was Rmb3464mn (-18.10% yoy), net profit attributable to owners of parent of Rmb2859mn (-11.68% yoy, or -14.1% yoy if nonrecurring gain or loss deducted), and EPS was Rmb0.19 based on weighted average of total equity. 

- In 2008, total net profit attributable to parent of the 47 companies of non-ferrous metal sector was Rmb8669mn (-75.57% yoy). In Q1 2009, these companies reported net profit attributable to parent of Rmb-972mn (-113.07% yoy), However, compared with that of Q4 2008, losses had been sharply lessened. 

- In Q1 2009, number of electric power companies suffered year-on-year decrease in net profit was 17-27 less than that of the previous year, and since Q4 2008, net profit increased by 6.26ppt to 6.51% compared with that of the previous quarter, whereas status in Q1 2009 continued the upturn and turned loss into profit; overall profitability saw improvement.

- It was a gloomy season for operators. In 2008, performance of the three telecom giants was not so optimistic, among which their business turnover totaled Rmb745.1mn (+9% yoy), EBITDA totaled Rmb369.3bn (+4.7% yoy), and net profit totaled Rmb147.2bn (+17.5% yoy). China Telecom and China Unicom suffered negative growth, whereas profit increase of China Mobile was mostly sourced from tax rate adjustment.

- In 2008, 29 listed companies of TX construction industry achieved operating revenue of Rmb617.07bn (+27.2% yoy), net profit attributable to owners of parent of Rmb9.39bn (-9.3% yoy). Industrial business turnover maintained steady growth in 2008, and net profit slid, which was mainly due to impact of huge exchange loss between China Railway Group (601390) and China Railway Construction (601186); if this element deducted, industrial net profit attributable to parent grew by ~39.1% yoy in 2008, which was faster than business turnover acceleration.

- Net profit saw year-on-year decline, and net non-operating income contributed to nearly 50% of net profit. In 2008, 35 listed agricultural companies realized operating revenue of Rmb61.435bn (+23.17% yoy), total net profit attributable to owners of parent of Rmb1.961bn (-27.69% yoy). Profit from main business of listed agricultural companies was of limit, and net non-operating income contributed to nearly 50% of total profit. Net profit declined mainly due to increasing expenditure and asset impairment losses.

- In 2008, listed companies of white electrical appliance reported revenue of Rmb157.46bn (+15.07% yoy, down by 39.4ppt yoy), net profit of Rmb5.246bn (+16.51% yoy, down by 85.9ppt yoy); in Q1 2009, listed companies of white electrical appliance sector reported revenue of Rmb32.73bn (+20.03% yoy, enlarged by 13.62ppt compared with that of Q4 2008), and net profit fell by 15.07% yoy, narrowed by 62ppt compared with that of Q4 2008.

- In 2008, total business turnover of daily consumer goods industry was Rmb9398mn (+4.44% yoy), and net profit attributable to parent was Rmb324mn (-67.92% yoy). Thereinto, Liuzhou Liangmianzhen (600249) suffered great fluctuation of investment return; in 2007, its investment return was Rmb887mn, whereas in 2008 it saw substantial decrease of over 90% and only reported Rmb68mn. This factor deducted, net profit attributable to parent of the industry saw decline of 18.15%. In Q1 2009, the sector reported business turnover of Rmb2123mn (+0.87% yoy or +17.46% qoq compared with that of Q4 2008), net profit attributable to parent of Rmb17.6mn (-75.14% qoq), which was a great improvement compared with losses of Rmb55.97mn in Q4 2008

Global Markets

- According to report released by ISM on Tuesday, April ISM non-manufacturing index in America was forecasted to be 42, and the real data is 43.7, while it was 40.8 for the previous time.

- Euro-zone PPI in March was forecasted at -0.6%, and it is fixed at -0.70%; last time it was -0.4% after the adjustment.   

- British PMI of construction industry in April is increased to 38.1, which is above 31.9 of the market expectation, while it was 30.9 for the previous month.

- British CPI in April was forecasted at 43, and actually it is rallied to 50, while last moth it was 42.

- Today’s most eye-catching global economic indicators: American housing mortgage loan application index and Euro-zone retail sales index.