IN BRIEF (Page 18)

Company

FedEx boosts high-end service in Beijing

FedEx Express, a subsidiary of FedEx Corp, has expanded its operations at Beijing Capital International Airport. The new facility is located in the Beijing Tianzhu Free Trade Zone, which is dedicated to high-end industries that support the development of Beijing's economy. The upgraded facility is nearly four times the size of the previous one. Its sorting capacity is also nearly four times greater and can deal with 6,000 packages per hour. "The expansion of our facility at Beijing Airport is part of our long-term investment to support market growth in Beijing and North China," said Wilson Chung, vice-president of international services at FedEx China.

Yum! earnings fall amid food safety concerns

Yum! Brands Inc said on Thursday its second-quarter earnings fell 15 percent due to the bird flu outbreak and food safety scandals. According to the parent company of Taco Bell, KFC and Pizza Hut, sales in China, which generate more than half of its total revenue, fell 20 percent in the second quarter. This included a 26 percent decline at KFC but also 7 percent growth at Pizza Hut. Its operating earnings decreased 63 percent, while restaurant margins decreased 5 percentage points to 10.6 percent, according to the report. "China sales are recovering as expected. The extensive media coverage surrounding avian flu in China has subsided and same-store sales at KFC are clearly improving," chief executive David Novak said in a statement.

Mead Johnson cuts baby formula price

Mead Johnson Nutrition Co, a manufacturer of infant formula in the United States, announced a price cut on July 10 following China's anti-monopoly investigation into foreign baby formula brands, Beijing News reported. On July 1, the National Development and Reform Commission started an investigation into the price of infant formula sold by foreign companies. Mead Johnson was the latest to announce a price reduction of 7 to 15 percent. It has also vowed further cooperation with the NDRC and promised to offer more discounts.

Peking duck restaurant profits decline

Half-year net profits for Quanjude, China's first listed restaurant chain well known for its specialty of roast duck banquets, plunged 31.6 percent year-on-year. The Shenzhen-listed chain's revenue in that period was 850 million yuan ($139 million), a year-on-year decrease of 6.52 percent. Net profit in the first six months hit 61.44 million yuan, a year-on-year decline of 31.6 percent. The decline was the worst first-half result over the past five years. Quanjude's net profit growth in the first half has averaged more than 20 percent from 2009.

Cosco's losses triple in first half year

First-half net losses tripled at Cosco Shipping Co, a listed unit of China's biggest shipping group, according to the company, the latest sign that slowing growth in the world's second-biggest economy is eroding corporate earnings. The shipping company's loss in the first six months was 78 million yuan ($12.7 million), widening from 23.6 million yuan a year earlier, it said in a statement to Shanghai's stock exchange on July 10. Chinese data that showed an unexpected drop in June exports and imports on Wednesday underscored a slowdown amid Premier Li Keqiang's moves to reduce reliance on investments and overseas shipments for economic growth. UBS this week cut its 2013 growth forecast for companies listed in Shanghai and Shenzhen, saying earnings may deteriorate further if government policies remain unchanged.

Energy

China to increase solar capacity fivefold

China, the world's biggest maker of solar panels, plans to increase fivefold its installed solar capacity to more than 35 gigawatts by 2015 to support an industry faced with declining profits, slowing exports and a supply glut. The nation will add 10 gigawatts of solar-power capacity annually over the next three years, according to a statement from the State Council posted on the central government's website on July 15.

Refineries running at a faster pace

China processed crude at the fastest pace in four months in June as more refiners in the world's second-largest oil consumer completed plant maintenance. Refining increased to 39.6 million metric tons in June, according to data published on the website of the Beijing-based National Bureau of Statistics on July 15. That's equivalent to 9.7 million barrels a day, the most since February and 4.8 percent more than in May.

Auto

BAIC sees increase in operational income

Beijing Automotive Group Co, known as BAIC Group, achieved 125.1 billion yuan ($20.39 billion) in operational income in the first half of this year, up 34.54 percent year-on-year, according to Securities Daily. Net profits were 8.2 billion yuan, an annual increase of 18.16 percent. In the first half of 2013, the group sold 982,100 vehicles, up 28.34 percent year-on-year. In June, BAIC manufactured 147,000 units, a year-on-year increase of 19.48 percent. Of these, 163,000 were sold, up 30.95 percent from the same period last year.

Investment

Poor returns for overseas investors

China's 20-year economic boom has boosted the wealth of its 1.3 billion citizens at the fastest pace worldwide and spawned some of the biggest companies in history. But foreigners earned less than 1 percent a year investing in Chinese stocks, a sixth of what they would have made owning US Treasury bills, according to Bloomberg. The MSCI China Index has gained about 14 percent, including dividends, since Tsingtao Brewery Co became the first mainland company to sell H shares to international investors in Hong Kong in July 1993.

Finance

Hedge funds increase bullish bets on crude

West Texas Intermediate crude fluctuated after a third weekly gain amid speculation that sustained growth in China will bolster fuel demand in the world's second-largest oil consumer. Futures climbed as much as 0.4 percent in New York, then lost as much as 0.5 percent. China's economy expanded by 7.5 percent in the second quarter from a year earlier, matching economists' estimates, even as growth in industrial production in June slowed more than projected, according to data from the National Bureau of Statistics in Beijing.

Economy

JP Morgan lowers China yearly forecast

JP Morgan has revised down its estimate for China's 2013 year-on-year economic growth rate from 7.6 percent to 7.4 percent, lower than the government's official target of 7.5 percent. GDP growth for 2014 has now been forecast at 7.2 percent year-on-year, down from the previous forecast of 7.7 percent, said Jing Ulrich, managing director and chairwoman of global markets, China at JP Morgan on July 15. The government has reiterated its improved tolerance toward the slowdown of GDP growth, she told a press conference after the government said China's second-quarter GDP growth was 7.5 percent year-on-year.

Information use to see high growth

Information-related consumption could hit 3.2 trillion yuan ($521 billion) by 2015. China generated 1.7 trillion yuan in the sector last year. The government expects the sector to record at least 20 percent year-on-year growth over the next three years, making China one of the world's top users of information-related products including e-commerce, cloud computing and fourth-generation telecom services.

China Daily-Agencies

(China Daily Africa Weekly 07/19/2013 page18)