China’s stocks rose on the expectation of stronger action to stimulate the economy being announced tomorrow at the annual meeting of the National People’s Congress. Nonferrous metal and property shares led the surge, on the back of higher metal prices and measures in Guangdong province to help developers.
The Shanghai Comprehensive Index rose 6.12 percent to 2198.11, the biggest gain in four months. The Hang Seng Index climbed 2.5 percent to 12331.15.
Jiangxi Copper (SH:600362; HK:00358), China’s largest producer of the metal, surged 10 percent in Shanghai and 8.73 percent in Hong Kong. Chinaclo (SH:601600; HK:02600), the nation’s largest aluminium producer, climbed 8.96 percent in Shanghai and 6.56 percent in Hong Kong. Prices of copper and other nonferrous metals rallied, on optimism that China’s consumption will rise.
Country Gardens (HK:02007), a Guangdong-based developer of residential property, surged 10.34 percent. China Vanke Co (SZ:000002), the nation’s largest developer by market value, jumped 6.5 percent. Guangdong province, where home sales fell 21 percent last year, is moving to aid developers. In addition to payment holidays, the provincial government announced on its website that it will grant equal treatment to home buyers from Hong Kong, Macau and Taiwan.
HSBC (HK:00005), Europe’s largest bank by market value, fell 4.4 percent. This follows a fall yesterday of 19 percent, its biggest since Black Monday in October 1987, after saying it plans to raise £12.5bn by selling current investors five shares for every 12 they already own.
China small-caps profits up 8.6% for 2008
The 273 small caps listed on the Shenzhen SME board posted an average 8.6 percent rise in profits for 2008.
Of the 273 companies listed on the board, 148 posted a year-on year rise in profits. Net profits at 33 of the companies increased beyond 50 percent. Profits fell at 107 (39 percent) of the companies, while 18 companies (7 percent) posted a loss.
Big winners included, electronics chain Suning (SZ:002024) which took RMB2.17bn in profits over the year. Also, Zhejiang NHU (SZ:002001) made a profit of RMB1.4bn due to an increase in the market price for Vitamin E, increase the companies profits by 1711 percent year-on-year. Earnings at Bank of Ningbo (SZ:002142) for the year reached RMB1.3bn.
Gaoxin Zhangtong (SZ: 002075) made a loss of RMB479m over the year. CNNC Huayuan Titanium Dioxide (SZ:002145) lost RMB257m. And Jiangsu Aoyang Technology (SZ:002172) lost RMB283 million.
China's outdoor and online advertisers post profits
In the face of a global advertising downturn, Chinese out-of-doors and online advertisers have been posting record profits but still remain seriously under-valued.
Domestic advertising spending climbed 15 percent in 2008, to RMB441.3bn (US$64.5bn), while online-advertising, excluding search engine keywords, rose 55 percent, reaching RMB11.9bn. Analysts expect online-advertising grow by at least 20 percent in 2009.
VisionChina Media Inc (NASDAQ:VISN), a public transport digital advertiser, posted a net income of US$14.8m for the fourth quarter of 2008, up 159 percent year-on-year. It expects first quarter profits of US$8.7-11.2m. The company sold an average of 8.83 advertising minutes per broadcasting hour in the fourth quarter, higher than the 8.69 minutes in the same period last year but lower than the 9.33 minutes in the previous quarter.
Meanwhile, Chinese online firm Fosun International (HK:0656) has bought a 26 percent stake in Focus Media (NASDAQ:FMCN), whose shares have fallen over 76 percent since the third quarter of 2008. Fosun, which has interests in property, pharmaceuticals and steel, stated that its investment will be passive.
Focus targets higher-end consumers with various media, including via mobile phones, outdoor light-emitting diode (LED) systems, in-store advertising and electronic poster systems. It last year sold its outdoor advertising operations to Sina Corp (NASDAQ:SINA), through an all-share deal worth US$1.8bn. Sina is one of China's biggest websites, with over 280m users globally. Fosun also has an 11.9 percent stake in Sina Corp.
Recruitment websites post heavy losses
A number of Chinese recruitment websites have posted heavy losses for the last quarter of 2008, with the three major rivals ChinaHR, Zhaopin.com and 51job all posting poor financial results for last year.
The results show the financial crisis hurting recruitment websites, as hiring slowed in the fourth quarter.
ChinaHR.com reported a high loss of RMB175m for 2008. Seek, Australia's leading recruitment website and Zhaopin.com’s major shareholder, with a 56.2 percent stake, revealed Zhaopin.com made a RMB170m loss last year, 3.5 times its loss in the second half of 2007.
51job meanwhile has released its results for the fourth quarter. Total revenues fell 8.1 percent in the final quarter of 2007 to RMB196.2m. Gross margin fell to 51 percent from 55.8 percent, while gross profit for the last quarter of 2008 was RMB94.5m, down from RMB112.8m for same period in 2007. Net income for the last quarter of 2008 fell to RMB6.8m from RMB13.7m for the same period of 2007.
Online recruitment revenues in the final quarter of 2008 fell 5.4 percent to RMB72.7m, from RMB76.9m year-on-year.
The company’s print advertising revenue per page for the last quarter also fell, by 28.2 percent from the same period in 2007. The estimated number of printed pages in the final quarter of 2008 decreased 12.9 percent year-on-year.
Net income for 2008 fell 26 percent to RMB76.6m, from RMB103.6m for 2007.