Tag Archives: China Development Bank

News, Politics, Government

Chinese Oil Billionaire's Union Energy Says 1st-Half Profit Soared

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By Russell Flannery, Forbes Staff China’s energy business is largely under the purview of big government-controlled companies such as PetroChina, Cnooc and Sinopec.  An oil company led by one of only a handful of private sector entrepreneurs to make a large fortune in the field reported a big jump in profit today. Hong Kong-listed United Energy Group’s net profit in the six months to June more than doubled to HK$525 million, or $67 million, from HK$214 million a year earlier, according to a company announcement. Earnings rose on increased production and higher oil prices, United said.  Revenue climbed to HK$2.3 billion from HK$1.4 billion a year earlier.   Union acquired the upstream operations of BP in Pakistan for $775 million in 2011, and has since increased its production there.  Last October, it announced a “production cooperation agreement” with Chinese government-run China Development Bank for $5 billion, giving providing capital for additional acquisitions.   Union’s chairman Zhang Hongwei ranked No. 825 on the 2013 Forbes Billionaires List with wealth of $1.85 billion.   — Follow me on Twitter @rflannerychina     …read more

Source: FULL ARTICLE at Forbes Latest

Business, Finance, Occupation & Industry

Why Solar Stocks Were on Fire This Week

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By Travis Hoium, The Motley Fool

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Solar stocks were on fire this week, soaring double digits on a variety of positive news items. China continues to support a few specific players, major projects are now under way, and analysts are starting to buy into the solar industry.

FSLR Total Return Price data by YCharts

These factors have helped solar this week, so here’s what investors need to know.

China continues to prop up solar
Suntech Power and LDK Solar have both defaulted on loans, but that doesn’t appear to be a clear sign that China is willing to let its solar industry consolidate. These two companies along with countless others would be bankrupt in the U.S. or Europe but investments from state-owned entities and loans from state-owned banks have propped up the entire industry.

This week, LDK Solar received a cash infusion of $25.8 million when Fulai Investments agreed to buy 25 million shares. This is the second investment by the company and may help LDK pay back loans it defaulted on last week.  

Yingli Green Energy was also the beneficiary of a $165 million loan agreement with the China Development Bank, which is owned by the Chinese government. This includes a one-year, $110 million loan and a three-year, $55 million loan for working capital needs. Yingli is one of the most indebted companies in the industry, but the government doesn’t look like it is willing to let it fail.  

The reason China is propping up solar is simple. It sees the industry as a key employer and an industry that can grow exports. The government is willing to put billions of dollars behind manufacturers and even solar installations to make sure the industry survives. It’s less clear what that means for U.S. investors. Will debt holders eventually hold all of these companies, which are effectively insolvent anyway? There’s little equity value unless these companies are propped up indefinitely and can grow out of their debt obligations. With losses growing and the next generation of solar products on its way, I don’t see China being a good investment for U.S. investors, even if these companies do survive.

Utility projects get under way
A number of major utility projects marked milestones this week. NRG Energy‘s 26 MW Solar Borrego I Project had its ribbon-cutting and is now producing at full capacity. The company announced a milestone for its electric vehicle to grid, or eV2g, project. The PJM Interconnection will now be a resource for the project in the hopes of making electric vehicles a backup power source for the grid. This has been an academic idea for a while, and now there’s hope it will become an economic reality.

SunEdison, a subsidiary of MEMC Electronic Materials , announced an agreement with Fox Energy, a subsidiary of Foxconn Technology, to manufacture 350 MW of solar modules. This is part of a virtual integration plan where SunEdison will have agreements with outside

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Jinko Solar Earnings: An Early Look

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By Dan Caplinger, The Motley Fool

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Spring is finally here, and a new earnings season is right around the corner. On Wednesday, Jinko Solar will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Chinese solar stocks have struggled especially hard lately, as a glut of capacity has made many players in the industry unprofitable. Jinko Solar actually earned an annual profit as recently as 2011, but its fortunes have reversed with most of its peers. Let’s take an early look at what’s been happening with Jinko Solar over the past quarter and what we’re likely to see in its quarterly report on Wednesday.

Stats on Jinko Solar

Analyst EPS Estimate

($0.80)

Year-Ago EPS

($2.58)

Revenue Estimate

$244.5 million

Change From Year-Ago Revenue

28%

Earnings Beats in Past 4 Quarters

1

Source: Yahoo! Finance.

Can Jinko Solar shine this quarter?
As dire as Jinko’s earnings appear, analysts haven’t gotten any more pessimistic about them in recent months, keeping their consensus views stable both for its most recent quarter and for full-year 2013. But the stock hasn’t been as fortunate, as it has lost a third of its value since the beginning of 2013.

Solar companies in China have largely survived poor conditions in the industry due to the generosity of government subsidies. Last December, China‘s Ministry of Finance set aside $1.1 billion in solar subsidies, while the Ministry of Science and Technology said it would provide subsidies to 100 different companies. While those subsidies help the industry as a whole, they don’t help shake out weaker players from the industry.

But Jinko may have an inside track to survival. The company got a $1 billion loan from the China Development Bank to help it with European solar projects. With a stronger balance sheet than many of its peers, Jinko appears better poised to survive the inevitable shakeout, while LDK Solar and Yingli Green Energy struggle under more substantial debt burdens. Already, the bankruptcy of Suntech Power has shown that China won’t rescue investors in every solar company.

Still, the fundamental problem in the industry is that capacity far exceeds demand. U.S. giant SunPower has a huge efficiency lead over its rivals, making it most likely to capture its share of the 30 gigawatts of demand that companies with 70 gigawatts of capacity are fighting over. Similarly, First Solar has found ways to remain profitable even with challenges from subsidy-supported Chinese rivals.

In its earnings report, watch carefully for Jinko to comment on the impact of the Suntech bankruptcy on its business. If Jinko can capture …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

China Continues to Give Away Solar

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By Travis Hoium, The Motley Fool

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Suntech Power isn’t the only solar company in China struggling to pay its bills. Across the board, companies are struggling with huge losses, stoked by excess supply in the industry.

In the U.S., many of these companies would have failed by now, but China funds solar companies through state-run banks such as the China Development Bank. Just last week, ReneSola, which has $902 million in debt and had a gross margin of just 3.3% last quarter, signed another $50.9 million loan agreement with the bank.

This free flow of money has nearly every Chinese solar manufacturer giving away solar panels.

Another bad quarter
Today’s news comes from JA Solar , one of the largest manufacturers in the world. The company shipped 500 MW of solar products in the fourth quarter but managed just $263.2 million in revenue and had a negative-4.6% gross margin. On the bottom line, the company lost $102.4 million, or $2.65 per share, almost as much as the entire company is worth.  

JA Solar shipped 80 MW more product than it anticipated, but even higher shipments couldn’t bring the company close to a profit. If you have to give away solar product at 4.6% below cost, even when you’re running close to capacity, there must be something wrong.

Hanwha SolarOne also recently announced a bad quarter. Shipments were 198.9 MW and revenue was $134.3 million, but the company had a negative 31.3% gross margin and lost $104.4 million, or $1.24 per share. In this case, that’s more than the entire company is worth.  

These aren’t unusual results in the Chinese solar market. Trina Solar and Yingli Green Energy , two more of the world’s largest solar manufacturers, also reported low-single-digit gross margins for the fourth quarter, despite strong shipments. The only hope is that all of this will lead to long-term profits as the solar market grows.

A means to an end — sort of
The goal for China is to basically starve everyone else out of the market. It’s worked in a way. Q.Cells, Energy Conversion Devices, Solyndra, and many others have gone bankrupt trying to compete against subsidized Chinese companies.

The U.S. and Europe are fighting back with tariffs on Chinese solar products, with some success. Companies have had to rely on China for more of their sales recently, and they’re having a hard time charging reasonable prices in the U.S. and Europe. But can companies survive long enough for supply and demand to get back into balance? And will they still be relevant by the time they do?

Fighting against the grain
The problem with China‘s strategy is that they’ve invested so much in technology that will eventually become obsolete. GT Advanced Technologies is constantly improving the efficiency and cost effectiveness of equipment it supplies to solar manufacturers. This summer, the company should be releasing a new HiCz product that brings efficiency to a …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

These Stocks Have Investors Cashing Out

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By Rich Duprey, The Motley Fool

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The market can’t decide whether it should focus on the Federal Reserve‘s pumping of cash into the U.S. economy or keep its eye on the unraveling of the European Union. Yesterday it was the latter, as the Dow Jones Industrial Average fell 90 points as the financial components of the index — Bank of America and JPMorgan Chase — wobbled over fears that the EU crisis could widen.

The following three stocks faced a run of a different sort as investors turned tail, but don’t go running over the cliff with them like a bunch of lemmings just yet: This could just be a temporary situation. Let’s first see whether they had good reason to fall, as panic-fueled routs can sometimes lead to excellent buying opportunities.

Company

% Change

General Moly

(16.6%)

Oracle

(9.7%)

MAKO Surgical

(7.1%)

Arrested development
Nothing like having your business partner getting arrested to put a damper on things. Rare-earth minerals miner General Moly was looking to finance its Mount Hope project in Nevada by having Chinese conglomerate Sichuan Hanlong Group back its efforts and help it arrange for a loan from the government-owned China Development Bank.

Things were going swimmingly until Chinese authorities arrested the chairman of Sichuan Hanlong on suspicion of harboring a fugitive. Seems Liu Han‘s brother has been on the lam for years, wanted for questioning in a murder. Not much more information was forthcoming from the tight-lipped authorities, but with its backer in the hoosegow, General Moly had to suspend its efforts to secure the $665 million loan from the CDB.

I’ve cautioned investors for months now to avoid the miner because of serious doubts about its financial acumen. It’s weighed down by a mountain of debt — something the current loan it was pursuing wasn’t about to alleviate — and it’s being pursued by SEC investigations. The stock is down 42% since I last weighed in on it, and I continue to recommend investors keep far away from the miner.

When consulting the oracles fails
Wall Street dumped on business software giant Oracle after it reported disappointing earnings that missed on several fronts, with new software licenses falling 2% (some analysts were looking for 7% growth!), hardware system sales down 23%, and hardware support revenue off 6%.

One analyst finds it “bizarre” that Oracle is unable to make even its own targets when it comes to system sales, noting that it has missed in seven out of the past eight quarters. Wall Street almost uniformly lowered its price targets on the software specialist as a result of the dismal performance, and though some analysts left their various ratings in place, more were cutting the recommendations from “outperform” to something less. 

Oracle blasted its sales team for its anemic effort, but some top Fool analysts think this is a temporary slump from which it will emerge. At 11 …read more
Source: FULL ARTICLE at DailyFinance

News, Politics, Government

Chinese police say missing tycoon helped hide murder suspect

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Police disclosed Friday that a Chinese tycoon whose disappearance threatened to disrupt deals with mining companies in the United States and Australia is being held on suspicion he helped hide a brother who is a murder suspect.

A newspaper reported this week that Liu Han, chairman of Sichuan Hanlong Group, was detained in mid-March by police in Beijing but a two-sentence statement Friday by the police ministry was the first official word about him.

Liu is under investigation on charges of harboring a fugitive and other unspecified “serious offenses,” the statement said. It announced the capture of his brother as a “major murder suspect” but gave no other details.

Police spokespeople in Chengdu, where Liu lives, said they had no more information. Phone calls to the police ministry in Beijing were not answered.

Liu’s company said this week it was unable to reach him by phone.

Hanlong owns a 13 percent stake in General Moly, a miner of molybdenum, a mineral used to harden steel. Hanlong was arranging financing for a mine in Nevada.

General Moly said Wednesday it had suspended work on a $665 million loan for its Mt. Hope mine from the state-run China Development Bank until it receives clarification from Hanlong.

Hanlong also owns 14 percent of Australia‘s Sundance Resources, which is developing an iron mine in Congo and neighboring Cameroon in central Africa.

Hanlong is offering 1.5 billion Australian dollars ($1.5 billion) to acquire the rest of the company. Sundance said this week the deal has yet to receive final approval from China‘s economic planning agency.

Sundance asked Wednesday for trading in its shares on Australian markets to be suspended while it sought information about Liu.

Liu was No. 148 last year on Forbes magazine’s list of the richest Chinese businesspeople, with a fortune estimated at $855 million.

Hanlong was founded in 1997 and has interests in mining, construction of hydroelectric power, highway and tourism infrastructure and other businesses with a total workforce of more than 12,000 people, according to its website

It is part of a wave of Chinese energy and mining companies that are buying assets abroad in Australia, Africa and elsewhere in hopes of profiting from growing global demand.

Liu also is chairman of Sichuan Jinlu Group, which produces polyvinyl chloride and other chemicals.

Liu told The Wall Street Journal in 2010 that an investor once shot up his car after suffering losses in a deal. He called himself “Liu Han, the only survivor.”

…read more
Source: FULL ARTICLE at Fox World News