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MAKE MONEY BLOG$ ~ Investors in China’s main financial district are talking about the following before the start of trade today:
The overnight rebound in U.S. stocks may give China’s shares a boost for a second day. Investors today will be keeping an eye on speculation about tomorrow’s first-quarter GDP report. The Securities Times, a Chinese-language daily, reported on its front page today that market is expecting an increase of 8.4% from a year earlier, down from 8.9% in the fourth quarter of last year. Individual shares will also be affected by first-quarter earnings reports coming out this month; thus far, they have been mixed.
Among the gainers in the U.S. last night was solar-related stocks that rebounded following reports that the struggling industry was facing layoffs in China. LDK gained 4.3% and Suntech rose by 7.9%. Among U.S.-traded China shares to fall: online retailer Dangdang lost 4% on worries that it will be a loser from an online price war this month launched by Suning, the country’s largest electrical appliance retailer.
Back in Shanghai yesterday, Xi’an Longji Silicon Materials, which raised $250 million in an IPO last month, lost 5.9% on its debut at the stock exchange here amid worries about the industry’s long-term prospects. Chairman Li Zhenguo and his wife Li Xiyan own 72.4 million shares, or 24%, of the company. U.S.-listed Suntech Power owns 3.3%; a Fosun International- backed investment arm owns 4%. Fosun Media is a China licensing partner of Forbes Media. Net profit at Longji last year fell 35% to $45 million, on sales that climbed 22% to $320 million.
In other news involving Fosun-backed companies, shares in Shanghai Fosun Pharmaceutical (Group), a Chinese pharmaceutical manufacturer and distributor, fell by 1% yesterday after the company said it had received domestic regulatory approval for a secondary stock listing in Hong Kong. Shanghai Fosun Pharmaceutical can sell up to 547.5 million so-called “H shares” in Hong Kong. (See related story here.) Fosun’s main holding company, Fosun International, is controlled by Guo Guangchang, who ranked No. 521 on the 2012 Forbes Billionaires List with wealth of $2.4 billion.
Shares in Shanghai financial information provider Great Wisdom may be hurt by reports today that the company is facing a lawsuit by Bloomberg for infringing on the U.S. media giant’s product designs. Great Wisdom’s profit fell by 34% last year, and its chairman Zhang Changhong was one of a world-leading 35 Chinese billionaires from 2011 that failed to make the cut on this year’s new Forbes Billionaires List. (See related story here.)
Among companies to report first-quarter profits today, Shenzhen-listed jewelry manufacturer and retailer Zhejiang Ming Jewelry said it expects net profit in the first three months of this year to plunge by as much as 59% from last year’s $11 million due in part to decline in gold prices. Yu Awu, the company’s biggest shareholder along with his son, ranked No. 99 on the Forbes China Rich List with wealth of $1.17 billion. The company competes in China with Chow Tai Fook, the Hong Kong retailer controlled by billionaire Cheng Yu-tung.
Shanghai-listed Fujian retailer Yonghui Superstores also had some disappointing earnings news this morning: first-quarter net profit dropped by 25% compared with last year’s 155 million yuan, or $25 million. The cost of new stores openings and rising wage outlays eroded income, even as sales increased by 45%. Chairman Zhang Xuansong ranked No. 219 on the 2011 Forbes China Rich list with wealth of $760 million
In other retailing news, Hong Kong-traded shares in Belle International, China’s biggest shoe retailer, lost 1% after it said on Tuesday same-sales stores rose by only a tepid 2.8% in the first quarter. Belle is China’s No. 1 shoe retailer. (See related story here.) In a possible warning about other sportswear companies including Nike, it also noted that same-store sportswear business shrank 2.4%.
– with Maggie Chen
source: forbes.com
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