China inc. sees profits soar but will the rally last – nikkei asian review funny jokes for adults dirty


PetroChina, the country’s largest oil and gas producer, was among those benefiting from higher resource prices, recording 12.68 billion yuan in net profit in the first half, a 24-fold jump on the year conversion aud usd. Lifted by a rebound in crude oil prices, the latest results beat the company’s own projection of 9 billion yuan to 11 billion yuan.

The company is paying out the full figure as an interim dividend to shareholders. The timing of the announcement, however, sparked speculation, as the government is pushing for "mixed-ownership" reforms — an attempt to bring private investors into large state-owned companies usd to. The top beneficiary of a hefty dividend will be PetroChina’s state-owned parent, China National Petroleum Corp., or CNPC, which has an 86% stake in the listed company.

Wang Dongjin, vice chairman and president at PetroChina, justified the payout, saying it is the result of "improving business operations and cash positions." Wang is also the vice president of CNPC.

Combined net profit of the three state-owned oil companies including PetroChina jumped 350% on the year to 56.7 billion yuan. China Petroleum & Chemical (Sinopec) rose 40% to 27.9 billion yuan, while offshore driller CNOOC swung to a 16.2 billion yuan profit from a 7.7 billion yuan loss. During the period, benchmark Brent crude oil prices soared 30% on the year to about $51.80 per barrel.

Higher resource prices also benefited coal producers binary file editor. China Shenhua Energy, the largest by volume in the country, recorded a 142.9% year-on-year jump in its net profit to 26.3 billion yuan.

Metal miners were also winners. Zijin Mining Group saw its first-half net profit nearly triple on the year to 1.5 billion yuan stock outperform. The country’s largest gold miner benefited from higher copper and zinc prices and said it intends to ramp up production to take further advantage of the trend.

The Fujian-based miner expects full-year zinc output to rise to 280,000 tons from 250,000 tons in 2016, which could make it "the largest zinc producer in China," according to Chairman Chen Jinghe.

State-owned companies also benefited from the government’s outbound policy, namely President Xi Jinping’s Belt and Road Initiative for infrastructure building. China Communications Construction’s first-half revenue rose 3.8% to 189.29 billion yuan from a year ago and net profit was up 8.7% at 7.87 billion yuan, lifted by a 52% jump in new contracts, including a number from abroad.

"We saw a big jump in overseas contracts thanks to the Belt and Road Initiative," said Fu Junyuan, executive director and chief financial officer, at an Aug. 30 press conference in Hong Kong stock connector. In 2016 alone, the company signed 100 Belt and Road-related contracts worth $10 billion, bringing the total to $37 billion to date.

MIXED OUTLOOK Real estate in general remains a lucrative sector usd rmb conversion. Riding a property boom, Guangdong-based Country Garden saw its net profit jump 39.2% on the year to 7.5 billion yuan in the first half, while revenue rose 35.5% to 77.74 billion yuan, lifted by a 131% jump in contracted sales from a year ago.

The country’s largest developer by sales in the first half said it now expects 2017 sales to reach 500 billion yuan, 25% more than its previous forecast, despite government measures to curb soaring property prices.

"I don’t know why I always get questions asking whether our target is too conservative," President Mo Bin told reporters on Aug. 22. He said the upward adjustment in its sales target was to "comply with government policies," which aimed to "ensure the healthy development of the market." Such polices, including curbs on land and home purchases, have been rolled out in major cities across China.

State-owned China Overseas Land & Investment also raised its HK$210 billion sales target by 10% for 2017, after posting a 25.2% increase in first-half core profit to HK$21.65 billion, buoyed by revaluation gains and the property boom.

"Our sales are not really slowing," said Chairman and CEO Yan Jianguo gbp usd etf. Despite soaring land prices, Yan said the company had ramped up efforts in land acquisition, adding nine sites in July alone to the 27 sites it bought in mainland China and Hong Kong in the first half.

Some major real estate players, however, sounded a cautionary note. China Evergrande, one of the country’s most indebted developers, intends to prioritize a reduction in its net debt ratio to 140% by next June and subsequently to 70% by June 2020 from the current 240%.

"As a developer with the largest land reserve of 276 million sq. meters in 233 cities, we have a solid basis for a transformation," said Vice Chairman and CEO Xia Haijun, stressing the developer would prioritize profitability over business scale for now.

Evergrande’s smaller rival, Hangzhou-based Greentown China, predicts home prices will fall from early next year, following the latest government measures binary picture. According to CEO Cao Zhounan, China’s property market has reached a "critical juncture," describing it as if "enemies are at the city walls."

Cao’s bearish remarks came even though the country’s ninth-largest homebuilder saw an 8% increase in first-half revenue to 10.45 billion yuan on record contracted sales of 59.5 billion yuan, while its net profit nearly doubled to 1.23 billion yuan, due largely to a 1.6 billion yuan gain from disposing of a serviced apartment project in Beijing and two plots of land.

The automotive sector, meanwhile, was sluggish, with profit growth below average at 9%. China’s auto sales increased by less than 4% for the half year — a crawl compared with the first six months of 2016, when tax breaks for compact cars helped drive sales up 14%.

BYD, China’s biggest manufacturer of environmentally friendly cars, logged a net profit of 1.72 billion yuan in the first six months of 2017, down 23.8% from a year earlier texas baseball. It also forecast a decline of 20-25% in its net profit to between 2.74 billion yuan and 2.93 billion yuan for the January-September period. Sales for the first half edged up a mere 0.2% on the year to 43.82 billion yuan, less than the average market forecast of 45.32 billion yuan.

ALL FOR SHOW Beijing’s efforts to bolster the economy are aimed largely at putting on a show of prosperity ahead of the Communist Party’s twice-a-decade National Congress in October, when the country’s next crop of leaders will be chosen. Once the curtain falls on that critical event, the government will likely take its massive stimulus efforts down a notch.

Downside risks in such an event may come from currently robust sectors. State-owned Anhui Conch Cement on Aug. 21 announced net profit for the first six months of 2017 had doubled from the same period last year to 6.73 billion yuan, beating the 5.205 billion yuan median forecast by analysts compiled by QUICK-FactSet, thanks to a significant rise in cement prices under the government-led supply side reform.

But some remain skeptical oil futures market hours. Patrick Xu, an analyst at Nomura International, maintained a "reduce" rating for the cement maker and kept his target price at HK$20, about 30% lower than its closing price on Sept. 1. Xu expects cement price rises to moderate in the second half of the year "as stagnant demand is outstripped by capacity growth." Anticipating the main engine of profit growth to wind down, he forecasts earnings growth to decelerate to 11% in the second half of the year and sees "no growth" for the following two years.