Tingyi gets nod for Taiwan share sale

Tingyi gets nod for Taiwan share sale

Tingyi (Caymen Islands) Holding Corp plans to raise as much as NT$17.1 billion ($532 million) in Taiwan depository receipts, the biggest offering by an overseas Taiwanese company returning to the island’s stock market.
Tingyi, the largest noodle maker in China, plans to sell 380 million Taiwan depositary receipts at between NT$43 and NT$45 each, said Sinopac Securities Corp, its underwriter. The shares will be priced on Dec 8 and start trading Dec 16.
The Tianjin-based company, which is controlled by Taiwanese investors, joins companies including Want Want China Holdings Ltd in raising funds on the Taiwan exchange after the island eased restrictions on its capital markets last year as relations with the mainland improved.
“It’s worth buying Tingyi for long-term investment,” said Sam Hsieh, a Taipei-based fund manager at Fuh Hwa Investment Trust Co, who helps oversee the equivalent of $4.8 billion. “In the next three years, we can expect Tingyi’s profit to continue growing and its share price to rise with the popularity of Chinese consumer shares.”
Net income for the Hong Kong-listed company surged 41 percent to $179.4 million in the first half from a year ago, while sales rose 22 percent to $2.5 billion. The 17-year-old company, which runs 24 noodle factories and has bottling plants in almost every province in the mainland, is also benefiting from rising incomes.
Tingyi rose 1.64 percent to HK$19.82 ($2.55) in Hong Kong trading yesterday. The shares have more than doubled this year, compared with the 56 percent advance in Hong Kong’s Hang Seng Index and 68 percent surge in the Taiwan Taiex Index. Each Tingyi stock in Hong Kong will be equivalent to two Taiwan shares, the underwriter said.
Its Master Kong-brand instant noodles continue to lead in the mainland with a market share of 50.8 percent by sales value according to a survey by ACNielsen, a global marketing research firm, at the end of 2008.
Its competitors Hualong Group and Baixiang Food Group hold a market share of 12.6 percent and 8.2 percent respectively, the survey said.
Want Want shares in Taiwan have risen 60 percent since they started trading on the exchange in April, the first Taiwan depositary receipt to list after the rules were eased. The gain outperformed the 48 percent advance in its Hong Kong-listed stock.

Southeast Motor recalls Lingyue sedans

Southeast Motor recalls ‘Lingyue’ sedans

China’s quality watchdog said Tuesday that China’s Southeast (Fujian) Motor Co Ltd would recall its “Lingyue” sedans because of engine flaws.
The General Administration of Quality Supervision, Inspection and Quarantine said that 2,056 vehicles, produced between July 17 and Sept 5, would be involved.
A company statement said improper anti-rust oil was used in the engine, which may obstruct heat dissipation for water tank under extreme circumstances, and lead to engine overheating.
The manufacturer will, from Tuesday on, check and clean defective parts for free. Owners can dial the company’s hotline for consultation, or log on the GAQSIQ website for more information.

Shanda keen for more buys to diversify

Shanda keen for more buys to diversify

China’s leading Internet company Shanda Interactive Entertainment aims to buy more digital entertainment platforms and game content developers to diversify its revenue stream.
Shanda, which spun off its online games unit Shanda Games in September, is keen to use its $1.6 billion cash pile on more acquisitions, company executives told investors in a conference call on Monday after it unveiled its results.
“We will consider acquiring more game content developers and other digital entertainment content players,” said Grace Wu, Shanda’s chief financial officer.
The company’s spin off of its core online game unit in a $1 billion initial public offering came as it tries to shed its roots as an online game company and position itself as a full-fledged entertainment company.
Shanda Games operates “Legend of Mir,” a popular multi-player online role-playing game and “Aion” in China.
Shanda Games competes with NetEase and Tencent Holdings in China’s increasingly competitive gaming landscape, as well as Changyou Ltd, a videogame company spun off from Internet portal Sohu.com.
Government of Singapore Investment Corporation, Singapore’s biggest sovereign wealth fund, said in November it bought a 5.4 percent stake in Shanda Games.
Last month, Shanda said it will set up a joint venture with a Chinese television company with an investment of 600 million yuan ($88 million) to produce and distribute movies. Hurray! Holding, The music production unit of Shanda, said last week it will buy Chinese video-sharing website Ku6 in a stock transaction.
Money-spinner
Some analysts including Alan Hellawell from Deutsche Bank said Shanda’s core games unit is still likely to be the money-spinning unit for Shanda.
Earlier, Shanda reported a 29 percent rise in third quarter net profit to 435 million yuan ($64 million).
Earnings per American Depositary Share came in at 90 cents. Analysts had on average expected 88 cents a share, according to Thomson Reuters I/B/E/S. It was not immediately clear if the two figures were entirely comparable.
Shanda Games contributed 92 percent of Shanda’s revenue in the quarter. The unit’s revenue and gross profit rose 45 percent driven by strong user growth.
Total revenue for the group in the quarter was 1.38 billion yuan versus 936.5 million yuan.
China, with more than 69 million online gamers, is expected to corner more than 40 percent of a global market which is estimated to be worth more than $13 billion by 2011, according to Samsung Securities.?
Shanda shares, which rose 1.0 percent in after-hours trade, have risen about 54 percent this year outpacing a 35 percent rise on the Nasdaq.

Retest shows tainted soft drinks safe

Retest shows ‘tainted’ soft drinks safe

Two soft drink brands suspected of high levels of arsenic have proved to be of acceptable quality after a retest, the xinhuanet.com reported Tuesday.
The brands Uni-President and Nongfu Spring had previously been found of unacceptable quality during spot checks in the Haikou market by the Haikou quarantine department.
A call-back announcement for the products were made on November 24.
However, retest results from Chinese Academy of Inspections and Quarantine show the three batches of samples from the two soft drink companies all meet the required standard, the report said.
The Haikou Commercial and Industrial Bureau in Hainan province has confirmed the results, and has already stopped pulling the products off shelves.

Nongfu Spring doubts legitimacy of test in S China

Nongfu Spring doubts legitimacy of test in S China

Nongfu Spring, China’s leading producer of bottled water and beverages, voiced its doubts over the legitimacy of the tests in south China’s Hainan Province.
“The entire procedure was not legitimate,” said Zhong Shanshan, board chairman of the corporation Wednesday, referring to the two consecutive tests by the industry and commerce watchdog of Haikou city.

According to Ye Zhijian, attorney of Nongfu Spring, regulation by the State Administration for Industry and Commerce stipulated that sampling and test must be witnessed by three parties: the industry and commerce authorities, the producer and the lab in charge of the test.
If the producer has doubt over result of the test, it could apply for a second test and the producer has the right to choose which lab to use for the test, Ye said.
“The Nongfu Spring was not present when the first test took place, and after the result came out, the beverage corporation applied twice to the Haikou municipal bureau of industry and commerce but received no definite reply,” he said.
The second test was still not witnessed by Nongfu Spring.
Zhong said the entire procedure of the test was not acceptable.
“Fortunately the second test by the comprehensive testing center under the Chinese Academy of Inspection and Quarantine was correct,” Zhong Shanshan said. “But with so many loopholes in the procedure, who knows next time will our beverages be qualified or not?”
“A corporation shouldn’t be satisfied with just the result,” Zhong said.
According to Wang Jianlu, vice head of the bureau, when someone in charge from the headquarters of Nongfu Spring arrived at Haikou on November 27, they invited them to check the backup sample of the test and proposed to decide another authoritative lab together for a second test.
“But the beverage producer rejected the proposal,” he said.
An official with the company said it declined the offer because in the initial test, the sample was not confirmed by Nongfu Spring. In the second test, the company could not tell whether the backup sample was authentic or not.
The provincial health department admitted that the Haikou bureau of industry and commerce had “errors in its procedure”.
“It (the procedure) didn’t conform with the Measures for the Supervision and Administration of Food Safety in the Circulation Links,” said Ma Yongzhong, an official with the provincial health department.
The Haikou bureau of industry and commerce issued a caution on Nov 24, warning that the Nongfu Spring’s 30 percent mixed vegetable and fruit juice and its C-100 grapefruit juice, as well as a beverages of the Uni-President Co., contained arsenic.
The products were also ordered to be taken off the shelves  immediately.
The Nongfu Spring Co. and Uni-President Co. doubted the results and appealed to the national lab for a retest. The products were sent to the Chinese Academy of Inspection and Quarantine on November 27.
The Haikou bureau of industry and commerce notified retailers Tuesday that the products should be stopped from being removed from shelves after the final results by the national test center.

Nongfu Spring cleared of arsenic charges

Nongfu Spring cleared of arsenic charges

Nongfu Spring, China’s leading producer of bottled water and beverages, was cleared by the national quality watchdog of charges that its products contain high-level of arsenic, the Haikou municipal bureau of industry and commerce said Tuesday.
Products of Nongfu Spring Co and Uni-President Co had been tested qualified by the testing center of the Chinese Academy of Inspection and Quarantine, said an official with the Haikou bureau.
The national center had retested three kinds of soft drinks from the two companies and confirmed them to be qualified. The same samples were tested to contain arsenic in excess of allowable standards by the test lab of the Hainan Entry-Exit Inspection and Quarantine Bureau on Nov 23.
The Haikou bureau of industry and commerce issued a caution on Nov 24, warning that the Nongfu Spring’s 30 percent mixed vegetable and fruit juice and its C-100 grapefruit juice, as well as a beverages of the Uni-President Co, contained arsenic.
The products were also ordered to be taken off the shelves immediately.
The Nongfu Spring Co and Uni-President Co doubted the results and appealed to the national lab for a retest. The products were sent to the Chinese Academy of Inspection and Quarantine on Nov 27.
The Haikou bureau of industry and commerce notified retailers Tuesday that the products should be stopped from being removed from shelves after the final results by the national test center.

Haier consolidates home appliance business

Haier consolidates home appliance business

China’s white goods maker Haier is consolidating its home appliance business by integrating its two subsidiaries listed in Shanghai and Hong Kong, China Daily reported Wednesday.
Shanghai-listed Qingdao Haier Co. Ltd. is planning to buy a 31.93 percent stake in Haier Electronic Group Co. Ltd. from its parent Haier Group, to increase its holdings in the Hong Kong-listed company to 51.31 percent.
Both the companies are yet to formalize the arrangement, but a preliminary agreement has been reached, the newspaper said, citing a statement of Qingdao Haier.
Qingdao Haier will become the flagship for the white goods business and add Haier Electronic’s washing machine and water heater to its line up of refrigerators, air conditioners and ice chests, the newspaper reported, citing Ming Guozhen, secretary to the board of directors of Qingdao Haier.
Haier currently has 29 manufacturing plants, eight comprehensive research and development centers and 19 overseas trading companies across the world. It employs over 50,000 at these facilities. In 2008, the group reported global revenue of 119 billion yuan (17.5 billion U.S. dollars).
Qingdao Haier reported a 28.72 percent year-on-year increase innet profit during the first nine months of this year to 966 million yuan. Haier Electronic posted profit of 163.15 million Hong Kong dollars (21 million U.S. dollars) in the first six months, up 27.15 percent over the same period in 2008, according to the newspaper.

Teck may reap gains from CIC alliance

Teck may reap gains from CIC alliance

Teck Resources Ltd, Canada’s largest base-metals producer, said its partnership with China’s sovereign wealth fund will win the company more coal, copper and zinc sales and provide financing for future acquisitions.
China Investment Corp (CIC), which bought about 17 percent of Teck in July, has helped the company gain better access to customers including Jiangxi Copper Co as well as three of the nation’s largest steelmakers, Chief Executive Officer Don Lindsay said in an interview yesterday in New York.
Teck and China Investment have discussed at least a dozen ways to cooperate, including some acquisitions of a couple of billion dollars, he said. CIC may provide financing for purchases if Teck decided to make any, Lindsay said. While Teck doesn’t need takeovers, “opportunities will continue to be shown to us”, he said.
“We have a financial partner there that has basically the deepest pockets in the world,” said Lindsay, 51, a former investment banker at CIBC World Markets who took over as Teck’s CEO in April 2005. “These people can open doors.”
Teck and CIC have discussed opportunities including copper projects, Lindsay said, without providing details. So far, Teck has chosen not to move ahead because the assets were too low-grade or were subject to environmental or political risks, Lindsay said.
Shares surge
The market hasn’t priced much of a contribution from the CIC partnership into Teck’s shares, and the stock could gain if it leads to additional sales, said John Hughes, an analyst at Desjardins Securities Inc in Toronto. He rates the shares “buy” and doesn’t own any.
“Ultimately, CIC could provide a conduit for Teck to sell additional commodities such as metallurgical coal, zinc and copper into China,” Hughes said in an interview.
Teck’s shares have risen more than sixfold this year, partly driven by a recovery in demand for metallurgical coal, copper and zinc, the company’s three biggest products. Vancouver-based Teck rose 19 cents to C$36.49 on Monday in Toronto Stock Exchange trading.
China’s imports of metallurgical coal this year will surge to more than 30 million tons from 3.2 million tons last year, Lindsay said.
“In a year when you have the greatest economic meltdown the world has seen in three generations, the demand for our core product increased by a factor of 10 in China,” Lindsay said. “This is something we thought would occur over a three-to-five-year period. Yet in one year the market has changed that much.”
Coal, used as a key ingredient in steelmaking, accounted for 59 percent of Teck’s operating profit in the first nine months this year, Lindsay said. A year earlier, copper was the largest component, at 52 percent.
Disputes with resource suppliers in Australia may also benefit Teck as it forges closer ties with CIC, Lindsay said.
“CIC and China are quite welcome in Canada, and clearly their investments have not been as welcome in other countries. Obviously, in Australia there was a lot of friction,” Lindsay said.

Zijin Mining vows to take over Indophil

Zijin Mining vows to take over Indophil

Zijin Mining Group Co, China’s largest gold producer and third-largest copper producer, announced Tuesday that it would pay A$545 million ($500 million) to take over Indophil, an Australian gold and copper company.
The Fujian-based Zijin Mining would make a conditional cash off-market takeover bid for all of the issued shares in Indophil for A$1.28?per share, according to a statement on the company website.
Indophil Resources NL, with its registered office in Victoria, Australia, owns 34 percent operating interest in Sagittarius Mines, Inc, a Philippine mineral exploration and development company which controls the world-class Tampakan Copper-Gold Project in the Southern Philippines.
The Tampakan Project’s mineral resource is the largest undeveloped copper-gold deposit in southeast Asia. The latest confirmed mineral resource estimate is 2.4 billion tons containing 13.5 million tons of copper and 15.8 million ounces of gold at a 0.3 percent copper cut-off grade, the company said in the statement.
The deal, reached on Sunday, is still waiting for regulatory approval from both the Chinese and Australian governments, the company said.

Geely taps China banks to back Volvo deal

Geely taps China banks to back Volvo deal

Geely, the Chinese carmaker tagged as the preferred bidder for Ford Motor’s Volvo unit, is seeking at least $1 billion in loans from Chinese banks to finance its $1.8 billion bid, sources said on Tuesday.
At least three major Chinese banks including Bank of China, China Construction Bank and Export-Import Bank of China had agreed to extend loans to Zhejiang Geely Holding Group, said the banking sources briefed on the plan.
“Money is not a problem for Geely,” said a source. “They definitely have strong support from Chinese banks and there are a number of private equity funds queuing up to invest in Geely.”
Export-Import Bank of China is a policy lender wholly owned by the Chinese government and directly led by the cabinet. Bank of China is China’s top foreign exchange lender. China Construction Bank is the country’s No 1 property lender.
The loans backing Geely’s bid for Volvo are expected to have a five-year tenor, said another of the sources, who declined to be identified as they were not authorized to speak to the media.
Geely declined to comment.
All three banks involved declined to immediately comment on the matter.
Bohai Industrial Investment Fund, a private equity fund backed by the Chinese government, was also in talks with Zhejiang Geely Holding Group, the parent of Hong Kong-listed Geely Automobile, to support its bid for Volvo, said the sources.
However, no agreement between Bohai and Geely had been reached and Bohai’s investment would only be a small part of Geely’s acquisition of Volvo, said the sources.
In September, Goldman Sachs invested $334 million in Geely Automobile, although Geely said Goldman’s money would mainly support its domestic car plant expansion.