E&Y says China auditor has papers regulator seeks

Ernst & Young Hong Kong, which resigned as the auditor in 2010 for a Chinese water treatment company planning an initial public offering, doesn't hold the audit papers the city's regulator wants, a court was told."The performance of the engagement was carried out by Hua Ming and all the working papers were created by staff of Hua Ming," the audit firm's lawyer, Benjamin Yu, said on Wednesday, referring to its Beijing-based affiliate Ernst & Young Hua Ming. Hong Kong's Securities and Futures Commission, believes Ernst & Young Hong Kong either possesses or has access to the documents, its lawyer, Jat Sew Tong, told the city's Court of First Instance on Wednesday.

PE, VC firms not allowed to invest in public funds

Private equity and venture capital firms are not allowed to invest in public-offered funds, the National Development and Reform Commission said. In February, the China Securities Regulatory Commission released a rule stating that PE and VC firms can apply for fund management businesses, which may be implemented on June 1. The NDRC also said that a fund between 100 million yuan ($15.92 million) and 500 million yuan should be registered with provincial departments, while a fund larger than 500 million yuan should be registered with provincial departments and then be presented to the NDRC.

Profit growth of industrial companies rebounds

The profit growth of China's industrial companies significantly rebounded in the first two months of the year, according to the National Bureau of Statistics. The profits of industrial companies with an annual revenue of 20 million yuan ($3.22 million) or more reached 709.2 billion yuan in the first two months, up 17.2 percent year-on-year. In 2012, the full-year annual profit growth of industrial companies was just 5.3 percent. In the first two months, the profits of State-owned industrial companies reached 212.5 billion yuan, up 18.9 percent year-on-year.

SAIC profit misses estimates, GM growth stalls

SAIC Motor Corp, China's largest automaker, reported full-year profit that missed analysts' estimates after earnings growth stalled at its venture with General Motors Co. Net income increased 2.6 percent to 20.8 billion yuan ($3.3 billion) last year, SAIC, which has joint ventures with GM and Volkswagen AG, said in a statement on Thursday. That missed the 22 billion yuan average of nine analyst estimates compiled by Bloomberg. Sales gained 10 percent to 478.4 billion yuan, also missing estimates. GM, the biggest foreign automaker in China, saw profit in the country fall 0.2 percent in 2012, after 14 percent growth the previous year.

Diamond joint venture poised to go public

Anhui Foreign Economic Construction Group of China and the Democratic Republic of Congo created a joint venture to mine diamonds in Eastern Kasai province and plan to take the company public. The 50-50 venture between Anhui and the central African country may produce 6 million carats a year by 2016, according to documents published on the DRC Mines Ministry's website. Anhui, based in Hefei, will pay $4.2 million for its half, plus a signing bonus of as much as $61 million, and invest an estimated $100 million in infrastructure, the documents show.

Largest banks in sixth year of record profit

China's largest banks capped a sixth year of record profits by posting a 21 percent average return on equity, more than twice the rate earned by US and European competitors led by JPMorgan Chase & Co, Industrial & Commercial Bank of China Ltd and its three major local rivals boosted their combined profits 15 percent to 716.2 billion yuan ($115 billion), filings over the past week show. By comparison, earnings at the four largest US lenders rose 9.6 percent to $51.9 billion while their ROE, a measure of how well the firms invest shareholder funds, averaged about 7.3 percent, according to data compiled by Bloomberg.

Dongfeng Motor 2012 profit beats analyst estimates

Dongfeng Motor Group Co, China's biggest maker of Japanese-branded cars, reported a full-year profit that beat analyst estimates even as sales declined. Net income fell 13 percent to 9.1 billion yuan ($1.5 billion), the Wuhan-based company said in a statement to the Hong Kong Stock Exchange. That surpassed the 8.4 billion yuan average of 31 analyst estimates compiled by Bloomberg. Sales fell 5.6 percent to 124 billion yuan. Dongfeng is recovering from Chinese consumer aversion toward its Japanese partners' products after a wave of protests erupted in September due to Tokyo's illegal "purchase" of China's Diaoyu Islands.

Sinopharm to raise up to $515m in Hong Kong

Sinopharm Group Co, China's biggest drug distributor, will sell as much as a fifth of its H-share capital to raise up to HK$4 billion ($515 million) to expand its sales network. The company will place as many as 165.7 million shares at HK$24.60 each, Sinopharm said in a filing to the Hong Kong Stock Exchange on Thursday. Shares of the Shanghai-based company fell the most in almost three years after the announcement. The money raised will be used for "the expansion of pharmaceutical distribution and retail network and replenishment of liquidity after the expansion," Sinopharm said in the statement.

China Daily - Agencies

(China Daily 03/29/2013 page14)