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CSCI Morning News Circular - 20180828

1. Macro News

• China Industrial Profit Sustains Surge Even as Economy Wobbles. Profit growth at Chinese industrial companies continued to surge last month, according to official data, even as the economy showed signs of weakening. Industrial profits advanced 16.2 percent in July from a year earlier, versus a 20 percent jump in June.  [Bloomberg]    
• Early Indicators Show China’s Economy Weakening Again in August. The earliest indicators for China’s economy show that the pace of expansion slowed for a fourth month in August, highlighting the pressure for the government to push through pro-growth policies.  [Bloomberg]    
• Thailand invites Chinese entrepreneurs to invest in Eastern Economic Corridor. Kanit Sangsubhan, secretary-general of the Thailand's Eastern Economic Corridor Office introduced the EEC project to a group of Chinese entrepreneurs in Pattaya city and invited them to invest in infrastructure, new industries projects.  [China Daily] 

1. Industry News   

• China’s Top Regulator Has Its Eye on Share Pledges, Online Loans. China’s top financial regulator sent a message to the industry on Monday: we’re closely watching online lenders and corporate share pledges. The Financial Stability Development Committee’s latest meeting featured discussion of the two areas, according to a statement, and while officials deemed the risks “controllable,” they said further efforts are needed to ensure stability.  [Bloomberg]    
• TCM exports up as local firms ride B&R Initiative. Traditional Chinese medicine or TCM exports are rising on the back of resilient demand from traditional markets and as the Belt and Road Initiative stimulates new demand in participating countries and regions. China exported 358,000 tons of TCM in the form of patented drugs, extracts, and raw materials in 2017, up 0.7% YoY.  [China Daily]
• Chinese automakers charge to develop smart, connected cars. Chinese carmakers are stepping up efforts to develop smart and connected cars, with the conviction that vehicles of the future should be more than just the tools of transport that they were in the past.  [China Daily] 
• Corporate News
• China Mobile to Get 100 MHz 5G Spectrum. China Mobile will be distributed 100 MHz of spectrum in the 2.6 GHz band, Securities Times reports. China Telecom, China Unicom will get 100 MHz of spectrum in the 3.5 GHz band respectively.  [Bloomberg]
• Sinopec Raises Dividend as Oil Rally Boosts Profit to Record. China Petroleum & Chemical Corp. raised its dividend payout after half-year earnings jumped to a record. The world’s biggest refiner by capacity, known as Sinopec, proposed an interim dividend of 0.16 yuan a share, a 60 percent increase from the previous year.  [Bloomberg]
• Sinopec May Keep Sharing Its Cash With Shareholders. Sinopec’s record half-year earnings show its strength in cash generation, analysts say, highlighting the increase in interim dividend as a signal the company will continue to share good returns with investors. [Bloomberg]
• China Energy Says Hasn’t Canceled Planned $83.7B U.S. Investment. China Energy Investment Corp. is still in close contact with West Virginia partners on advancement of business deals, including a planned $83.7b investment, general manager Ling Wen says at briefing in Hong Kong.  [Bloomberg]
• Malaysia Bans Foreigners From Buying Forest City Development. Malaysia won’t grant visas to foreigners buying property at Country Garden Holdings Co.’s Forest City project, Prime Minister Mahathir Mohamad tells reporters in Kuala Lumpur.  [Bloomberg]
• BAIC Group betting big on SUVs, new energy vehicles. Beijing Automotive Group Co, the Chinese partner of Hyundai Motor Co and Daimler AG, is betting that developing SUVs and new energy cars is the best way to achieve growth of its brands.  [China Daily]    
• Great Wall opens up to making NEVs with launch of Ora brand. Great Wall Motor Co unveiled its all-new brand of Ora electric vehicles last week, marking the first step taken by China's biggest SUV maker into the electro-mobility that is gaining momentum across the globe.  [China Daily]     
• Hisense starts innovative expansion in Africa. Liu Xin, general manager of Hisense's international marketing company, said Hisense South Africa hired 700 local employees, accounting for over 90 percent of the total staff. Thirty-three of them are senior executives and managers.  [China Daily]     
• Ant and UN body partner for African financial inclusion. The United Nations Economic Commission for Africa has forged a partnership this month with Ant Financial of China, an affiliate of the Alibaba Group and a specialist in online financial services, to promote financial inclusion in the continent.  [China Daily]     
• Tesla CEO Musk drops ambitions to take company private. Tesla Inc Chief Executive Elon Musk said late on Friday he would heed shareholder concerns and no longer pursue a $72 billion deal to take the luxury electric carmaker private, abandoning an idea that stunned investors and drew regulatory scrutiny.  [China Daily] 
• Cosco Shipping Ports reports US$13.6m profit from Greece Piraeus Terminal. First half net profit at Cosco Shipping Ports, adjusted for exceptional items, soared by 70.1 percent to US$168.98mn, the company reported. It also booked half-year profit from the Greece Piraeus Terminal.   [The Standard]     
• Nissan rolls out electric car in China for 166,000 yuan. Nissan’s first electric sedan designed for China began production yesterday (27 Aug) at the start of a wave of dozens of planned lower-cost electrics being created by global automakers for their biggest market. The Sylphy Zero Emission, which costs 166,000 yuan, based on Nissan’s leaf, is being produced by Nissan Motor Co. and a Chinese partner, Dongfeng Motor group.  [The Standard]  
• Q Tech Swings into Interim Loss RMB51.29M on GPM Down to 1.2%. The turnover declined 11% yearly to RMB3.207 billion. Net loss amounted to RMB51.288mn, against RMB202mn profit for the same period last year. LPS equaled 4.6 fen. No dividend was declared.  [AAStocks]  
• China Shenhua Expects Balanced Coal Demand/ Supply This Yr. The coal consumption and supply volume of China reached approx.. 1.89bn and 1.69bn tons in 1H18, said Wang Jinli, Senior VP of China Shenhua. Wang furthered that coal prices rose in 1H18 amid balanced demand/supply, while those from 2Q18 to recently retreated to green interval. [AAStocks]  
• Lenovo Group Subsidiary Grants Option to Buy Hefei Mfg Platform Equity. Lenovo Group announced that its subsidiary Lenovo Beijing granted the put option to Yuan Jia to require Lenovo Beijing to purchase the entire equity interest in the share capital of ZJSB owned by Yuan Jia. The option can be exercised at any time 36 months after Sep 1,2018. [AAStocks] 
• Q Tech: RMB Devaluation Impacts Need Proactive Handling, Hopes to Improve 2H18 GPM. Chairman He Ningning disclosed that the company was under shock from RMB devaluation, as it made payments by USD and received payments in RMB. It is hoped that the issue can be tackled by financial means and higher operation efficiency.[AAStocks]