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Vaccine related shares go up

Yvonne Dong — Thu, 29 Oct 2009 03:29:15 +0000

As the H1N1 flu spread all over the world, the share prices of domestic vaccine makers rose on surging order for vaccines, even the benchmark Shanghai Composite Index fell 2.83 percent.

The vaccine producer Hualan Biological rose 2.47 percent to 57.7 yuan in Shenzhen on Oct 27 while Layn Natural Ingredients rose 2.93 percent to 44.94 yuan.

As Shenzhen Neptunus Bioengineering Co increased 9.24 percent to 15.85 yuan, Zhejiang CONBA Pharmaceutical Co LTD also increased 6.13 percent to 12.12 yuan. China Meheco Corporation closed at 20.98 yuan yesterday, 10 percent up.

The share market also goes well and the five companies’ shares hit the daily limits of 10 percent on Monday.

An industrial analyst Cai Jianjun pointed, the recent gain is mainly underpinned by government orders for vaccines.

China faced a grim situation in containing the disease as the number of cases has risen, said Health Minister Chen Zhu. As of Oct 26, china reported 35,664 H1N1 inflection with 3 deaths, and also in the US President Obama declared that H1N1 a national emergency on Oct 24.

Expert with the ministry of health’s expert panel Xi Xiuming, said there is no reason for any panic but alertness is needed.

Central government has also been massively buying the H1N1 vaccines. And Hualan said it won an order for 11.21 million doses of its flu vaccine from the central government. Beijing Tiantan said it has won an order for 3.02 million doses. Sinovac Biotech received an additional order of 5.19 million.

New York listed company also gained 7.61 percent to close at $8.06 apiese on Monday and all the doses must be delivered by Dec 12.

Cai said that he still feels that the boom in H1N1 vaccine stocks stems largely from speculation, but there are two domestic companies can benefit from the new orders which are Beijing and Tiantan.

Li Yingpeng, the analyst of Galaxy Securities said that this is not the first ever rally of the vaccine sector. Since the H1N1 outbreak in Mexico in March, the pharmaceutical shares have risen many times however, that does not completely reflect their true performance. However for those companies which have won the vaccine orders, there will be substantial improvement in balance sheet. For example, a single dose is priced at 20 yuan, Hualan’s latest order can earn 200 million yuan, which may bring about 100 million yuan of profits.

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Coca-cola expands their business in China

Yvonne Dong — Tue, 20 Oct 2009 06:54:16 +0000

The Coca-Cola Company officially announced its entrance into China’s dairy beverages market on Monday and after that the company on Friday followed with a remarkable expansion of its largest single investment for strengthening its still beverage business in China.

Coca-cola opened a bottling plant in Wuhan which is the capital of Hubei province with 600 Yuan; it will be operated by the most advanced still beverages producing technology in the Coca-cola system globally.

It’s the 39th facility to bottle Coca-cola’s products across China, and the 10th opened bottling plant for manufacturing Coke’s still beverage products, with annual production capacity of 45 million unit cases of Coke’s still beverage products (which is equal to 1 billion bottles of beverages), according to the company.

Coca-cola would achieve the annual still beverage production capacity of 300million unit case by this year with this expansion and an increase of 80million unit cases compared with previous years.

Dong Jackson, the president of Coca-cola China said today, still beverages are growing to contribute more than 30 percent of Coca-cola’s sales in China, the world’s second largest beverage producer after the US. Also China has cleared shown the potential in the still beverage market as the Chinese consumers maintained high demand in non-carbonated drinks.

Coca-cola Company has already built up a strong network for manufacturing its still beverage products in 11 cities across China, including Beijing Shanghai, Xiamen in Fujian province and Dongguan in Guangdong province, as well as the new expansion in Wuhan.

The Wuhan bottling plant will be used to produce bottle water, tea and fruit juice beverages, as well as the newly launched juicy dairy beverages.

Chen Jing, an analyst from Beijing Orient Agribusiness Consultant LTD. “Minute Maid juice will continue to be the focus for Coca-cola to expand its still-beverage business in China, since it has grown to be the number 1 brand in the low-juice content beverage market since 2007.”

Ren Jiliang, a senior director of Coca-Cola bottle’s manufacturing (Dongguan) Company LTD, said that in the Wuhan plant, two of the four production lines will be used to make Minute Maid Pulpy Super Milky and its related juice dairy products.

There is an unnamed industry insider commented that the newly established plant was s signal of Coca-Cola’s expectation to drive further business growth in China’s still beverage market after its failed bid to buy the Huiyuan group.

But the company might not give up China’s pure juice market in the coming future, although Jackson refused to mention the timetable for entering into the sector.

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Graduates get more teaching jobs

Yvonne Dong — Fri, 10 Jul 2009 10:19:33 +0000

6.11 million fresh graduates will crowd into the job hunting market this year while it was only 5.59 million in 2008. Since there is a great pressure of the employment around the country, this year, 50000 graduate students which are three times more than it was in 2008 could work as short-term teachers.

There is a contract with the local government that graduate students should work there for 3 years and the central government will pay a special fund for them. “Some jobs are only available to students who will graduate in the summer of 2009,” Ministry Spokeswomen said on March 18th 2009. However, some excellent graduates such as those who once volunteered to work in the countryside in the past year, still, could take part in this project.

The short-term teacher project began 3 years ago to help college graduates find the jobs. Most of the graduates in this project may work in the rural areas and teach pupils or high school students. Besides the wage the get from the central government, they could get some extra money from the local government, said the Xu. Schools may have the right to decide whether to recruit students again after 3 years. The teachers will be employed in public job fairs.

This week, the Ministry also showed some other policies to the public, which may relieve the pressure of employment. There is also a new policy for the graduates who join the army. Government will pay their education loans and those who contribute a lot in the army may have the right to be recruited as the postgraduate students without taking those tough exams.

Those small and middle-size companies who may employ graduates this year will have good news. The government may give them some bonus and reduce some taxes.

MHRSS demanded the local governments to create more jobs for the graduates to ease the employment pressure. In the earlier interview, Wang Yadong, the deputy director of MHRSS’s employment promotion said that local government will give some bonus to college students who work at the bottom class.

Why are there some special funds or subsidies for the college students? These benefit policy is to encourage students to work in the rural area or the grassroots position or to have their own business.

Quite different from the students in the developed countries, Chinese students tend to work in the large cites and companies rather than start their own business. A recent study from MHRSS shows that only 0.3% college students choose to have their own business, while the number is much lower than the number of developed countries which is 40 percent.

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China Life May Invest in Property Market

Yvonne Dong — Mon, 25 May 2009 09:52:32 +0000

Yang Chao, Chairman of China Life Insurance Co Ltd, said yesterday that the company plans to have a try at the property market to diversify its investment lay out. He said China Life would seek to invest in infrastructure, equity, fixed-income securities and the property market.

According to Yang, China Insurance Regulatory Commission is expected to permit insurers to invest in infrastructure and real estate soon and is drawing up guidelines concerning it. China Life is waiting for the inaction of these regulations and making preparations for their emergence.

Industry analysts confirmed the promise of more profits through more investment options, not only in capital markets but also in property market. The financial downturn led to a tremendous fall in capital markets, resulting in 61.4% decrease in total return in 2008 and 45.3% drop in net profit. China Life has changed its capital distribution, emphasizing on fixed-income securities and term deposits while reducing its proportion on equities.

Donghai Securities analyst Tao Zheng’ao suggested that the insurers seek long-term investment opportunities to win stable returns, and he showed his preference in the commercial market instead of residential housing market. He also recommended some more fields such as private funds and the soon to-be launched real estate investment trusts. Industry experts advised that learning from international experience, it should be better that the insurers’ property investment consist 5% of their total investment at the most.

Orient Securities analyst Wang Xiaogang says since it is without precedent that Chinese insurers’ would be permitted to invest in the property market, it is necessary to set a lower investment threshold to control risks. He suggests limiting investment in commercial property, equity and infrastructure to no more than 5% of the total.

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Continental Airlines goes into China’s market

Yvonne Dong — Thu, 07 May 2009 08:10:22 +0000

Continental Airlines’ first daily nonstop flight between Shanghai and New York was launched on March 26th, which made it the first carrier to start a new cross-border route in China when the global economic situation is worsening.

Jeff Smisek, president and chief operating officer of the US airline, said that China was one of the most important markets and was very important for its future development and success in Asia.

This first daily non-stop flight connects 2 of the largest financial centre in the world. Therefore, the world’s fifth largest carrier, Continental has become only airline providing daily nonstop services from three Chinese cities to New York. Based in Houston, it also provides the flight service from Shanghai to Hong Kong.

The aviation analyst of CITIC China Securities named Li Lei said that this route would not be lucrative in the short time; however, it will definitely become the golden route over the medium to long term due to the importance of those 2 cities in the global economy.

According to the Civil Aviation Administration of China, there was a 16% drop in passenger traffic on the international routes in February compared with the number in the last year.

The International Air Transport Association said that the international air travel in China was expected to have a 5 and 10 percent’s shrink this year.

On March 26th, United Airlines claimed that it would postpone the beginning of a nonstop service between San Francisco and Guangzhou to June 30, 2010. United Airlines that is located in Chicago was supposed to start the flight in 2008, but later this plan was deferred to this year.

Delta Air Lines said that they would not change their plans that provide flight service between Shanghai and Detroit from June, though there was an announcement in March that they would start to cut international capacity by an additional 10 percent from the beginning of September. An analyst said that as Shanghai is being more and more important in global finance, this city is attracting more Airlines companies.

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Suning launches ambitious war to occupy the rural market

Yvonne Dong — Thu, 30 Apr 2009 07:31:00 +0000

Suning is going to expand its rural market by taking advantage of the government’s rebate programme for household electric appliances. Suning is currently the second largest electrical appliances retailer, immediately after Gome. And through this effort, it is making an attempt to beat Gome in this war.

The company will open no less than 1000 shops, of which a small amount will belong to Suning, while the rest will belong to those who invested in Suning’s brand shops. These newly opened stores are to meet the rural residents’ needs by occupying smaller areas (at about 2,000 sqm).

The latest Rural Household Appliances Consumption survey conducted by Suning and a Beijing-based research company reveals that the rural electric appliances market has bigger potential than the urban market.

According to the report, televisions, refrigerators, washing machines and kitchen appliances are the mostly bought products in rural regions. High-tech products such as flat screen televisions, air conditioners, computers and other digital appliances, are becoming increasingly attractive to the rural purchasers. Sun believed that the report would help to tap into the new market more effectively.

The biggest concern now for Suning is how to realize more efficient cooperation with the suppliers and how to deliver the goods to the customers in a more efficient way.

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Tight job market for graduates

Yvonne Dong — Fri, 03 Apr 2009 08:53:09 +0000

In this tough time, more than 70% upcoming graduates are hunting jobs. In March 70% graduates had job offers, but the situation was really different now.

It is reported by Shanghai Foreign Service Co Ltd (SFSC) that since last fall more than 60% graduates have sent out more than 30 resumes. According to Wu Xiaohui, senior campus recruitment consultant with SFSC, graduates are forced by the financial crisis to make full use of every chance to get a job, because lots of companies do not intend to recruit.

In Shanghai, lots of graduates have regretted to lose chances to hand out their resume since last year. Now there are not really many chances for students to find an ideal job. After the Chinese Spring Festival, March is the peak season for fresh graduates to sign job contacts with employers, according to the survey by SFSC.

And another survey shows that more than half of multinational companies didn’t intend to recruit new employees in this tough time, while companies have recruitment plan are going to hire fewer employees.

However, 157 multinational corporations will offer 1000 vocational training opportunities 1,000 vocational training opportunities, 1,000 internship positions and 1,000 job openings for graduates.

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E-grocer makes shopping much easier

Yvonne Dong — Thu, 02 Apr 2009 10:02:16 +0000

Every day in order to buy fresh foods, imposing ourselves to shop in a wet market is an irritating thing we have to do after a whole day of weary work, but now we have an alternative.

A website establishing by a group of college graduates in Shanghai has provided the shoppers with timely deliveries of fresh vegetables, meat, fruits and flavoring which are necessary for a meal with one quick click.

“We have made shopping for food easier and convenient,” said Yanghua, one of the founders of gv123.com, a new online food store in shanghai. “It is a way of life more than just a simple convenience, because this concept of store is accepted and accustomed by our consumers.”

Yang and his colleagues believe it is the trend of shopping revolution. The E-grocer offers a wide range of choices of fresh and clean foods at discount prices compared with the wet market to the customers who just need to stay at home with one click.

The business has achieved a big success five months later after its establishment with more than 100 orders a day. This is beyond the expectation of its founder Yang who is very happy to see the growing business and considering hiring more deliverers. Yang is a 28-year-old graduate and loves E-commerce. Last November he started the business with his friends.

Aiming to solve real problem, he tried to launch this store in order to solve the conflict between the scarce time of the workers who are very tired after work and the necessity for the fresh foods.

Other than providing convenience for working people, the business can also help elders who can not get to wet markets or supermarkets. They now just need a call in their phones.

Yang now is considering new plans to make further inroads into the food market after five months into the business.

Being aware of the preference of the customers who like high quality of foods, yang said he is planning to provide branded healthy products such as eco-friendly vegetables supplied by reputed suppliers. He believes it will bring bigger marginal profits. He also intends to expand the shop’s portfolio to processed food.

According to yang, this will not only meet the customers’ need but also create more job opportunities if he launches such a manufacturing division. In addition, he welcomes new college graduates to join in his team pursuing a highly promising business.

At last trying to eliminating the misunderstanding of e-grocer by graduates and other people, he explains his business which in other words is e-commerce, aims to make people’ life easier and convenient. He believes new opportunities will emerge as long as they are always conceiving new ideas of improving people’s life.

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New medicines of Novartis in China to be launched this year

Yvonne Dong — Fri, 06 Mar 2009 09:39:57 +0000

Because of the 29 percent rise of China sales for its patent medicines, the Swiss drug maker Novartis shows that they may start six new medicines in the domestic market this year.

Senior company executives forecasted that there would be 30 percent growth in sales as sales rose to 3.3 billion yuan in 2008.

Jeffrey, chief executive officer, Novartis China said that 2008 is the best year in their sales in recent years, in spite of the financial turmoil.

This year, a global sales growth of five percent is Novartis’ target. According to Li, the proportion of Novartis’ global sales in China is one percent.

2.26 billion yuan has already been invested and more will be laid in establishing infrastructure, research and development (R&D) and marketing, the CEO said.

The sharp contrast is that during other multinationals are cutting jobs, 20 percent more staff are planned to be hire by the company for the expansion plans in China.

The company will focus on the talent training. Li showed that the company would spend double money on talent training.

From this year, Novartis China will pay more attention to Local community clinics in China in order to benefit from China medical reform program.

It will help train doctors and instruct patients at the clinics. What is more, diagnosis and therapy standards for commonly and frequently encountered diseases will be popularized in public by Novartis China.

In 2008, Novartis China started the establishment of its R&D center in Shanghai, which is the third biggest within the group and ranks top in Asia.

Li added that Novartis is the only foreign pharmaceutical company to integrate comprehensive fundamental research work in China.

The Ministry of Civil Affairs granted the honour of the 2008 China Charity Award to Novartis China for donating cash and drugs worth more than 15 million yuan during the Sichuan earthquake.

The primary school in Sichuan, constructed with 1 million yuan which was donated by the employees from Novartis China is expected to put into use later this year.

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China to be one of the top five life insurance markets

Yvonne Dong — Fri, 20 Feb 2009 08:59:49 +0000

According to McKinsey& Company, China will be one of the top five life insurance markets in the world by 2015 with up to $275 billion gross written premiums (GWP). The rapid emergence of the middle class, the shift of high savings to investment products and broader distribution channels will contribute to the growth.

“The slumping demand, shrinking bancassurance and the regulatory move arising from the financial woes may affect life insurers in the short term, but the market in China is promising in the future,” said McKinsey partner Joseph Ngai.

It is indicated that GWP in the domestic life insurance market will grow annually by 16-19 percent over the 10 years since 2007, and up to touch $220 billion to $275 billion by 2015, from $100 billion in 2008.

Stephan Binder, director of McKinsey’s Shanghai office, said ,We believe that in the next five to 10 years, 40 percent of the global insurance growth in life insurance will come from Asia, 30 to 40 percent will be from China,”

The company said that about 50 to 70 million Chinese households will join the $10,000 annual income to the burgeoning middle class between 2007 and 2012. Thus 100 to 150 million new customers will buy life insurance for the first time.

What’s more, McKinsey said that the third-tier cities will see an increase of up to $55 billion in terms of GWP by 2012, while the first-tier cities will have approximately 11 percent growth.

Ngai said that the broader array of distribution channels from the traditional sales force to bancassurance and telesales will also help to penetrate the products, pegged at 2 percent in 2007,

McKinsey forecasted that the first half of 2008, 40-50 percent of life insurance premiums were sold through banks, up from 25 percent in 2005,”

Chinese consumers held 71 percent of their financial assets as cash, down from 84 percent in 2002.

Insurers are facing several challenges under financial crisis, such as waning investor confidence, low profit from bancassurance, and rising competition from domestic predators.

At last, Ngai said that as competition upgrades, the ‘land-grab’ mindset among Chinese insurers will focus on profitability and value creation.

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