IPO

Alibaba gets nod to list in the US

Alibaba Group Holding Ltd is likely to list its shares in the United States after its special corporate governance structure passed muster at two US bourses. The special corporate governance structure had earlier derailed the company's initial public offering plan in Hong Kong.

Alibaba officials said that the New York Stock Exchange and the Nasdaq have accepted the e-commerce company's special partnership structure, which would let its top executives nominate the majority of board members.

"Apart from saying the two bourses have confirmed to accept Alibaba's partnership structure, we have nothing more to add."

Despite the progress, the company has not made a timetable for the IPO nor chosen its listing venue and underwriter, the officials said.

Metals

Chalco transfers stake in iron ore venture

Hong Kong listed aluminium giant Chalco is transferring its stake in an iron ore venture to its parent Aluminium Corp of China Ltd, to improve its capital structure.

Chalco Hong Kong Ltd plans to dispose 65 percent of an equity interest in Chalco Iron Ore Holding Ltd, to Aluminium Corp of China Overseas Holdings Ltd, a fully-owned subsidiary of Chalco for $2.067 billion, according to a regulatory filing.

The Hong Kong-based company is expected to profit by 5.4 billion yuan from the disposal. The proposal is subject to mutual agreement between the two parties.

The Simandou-based iron ore project in Guinea, West Africa, is a large-scale project that requires long-term investment, Chalco said, adding it needs to reduce capital debt ratio and interest payments to optimise cash flow.

Deals

Suning to cash in on prime mover advantage

With China set to release the first group of licenses for mobile virtual network operators soon, electronics conglomerate Suning Commerce Group Co Ltd is eyeing to make the most of its prime mover advantage in the telecoms market through its tie-ups with two leading carriers.

As new entrants to the once-exclusive telecom industry vie to boost their portfolios, gain public exposure and possibly cash in on the fledgling business, new capital will flow into the sector and improve the quality of service.

Thanks to its first-mover strategy, Suning, whose business spans electronics, retail malls and e-commerce, will move into telecommunications by partnering with China Unicom Ltd and China Telecom Corp Ltd, the company said on Oct 21.

Suning said it is well placed to meet the application requirements, which include telecommunications-related experience, a long and consistent track record of profitability and a team of 50 people to oversee the business.

Retail

Li Ka-shing drops ParknShop sale plan

Asia's richest man, Li Ka-shing, has abandoned a plan to sell his Hong Kong-based supermarket chain ParknShop, saying the Hutchison Whampoa group will focus on expansion on the Chinese mainland.

Potential buyers of ParknShop included well-known retailers such as China Resources Enterprise. The estimated acquisition price was between $3 billion and $4 billion.

Li has, however, sold Oriental Financial Center in Shanghai's Lujiazui financial district, in which his Hutchison Whampoa and Cheung Kong (Holdings) both had 50 percent of the shares.

The center sold for 7.1 billion yuan ($1.16 billion), with buyers including Hong Kong-listed China Everbright.

Telecoms

China Mobile profit disappoints

China Mobile Ltd, the world's largest phone company, missed expectations on Oct 21 with a nearly 9 percent drop in third-quarter net profit as social messaging applications ate into the company's traditional revenue streams.

The applications send messages using a subscriber's data plan, thus depriving telecom operators of the ability to charge for SMS messages.

Third-quarter net profit fell to 28.37 billion yuan ($4.65 billion) from 31.1 billion yuan in the same period last year, below analyst estimates of 30.72 billion yuan.

The company blamed its "severe difficulties and challenges" on a tougher competitive environment and also blamed so-called "over the top products" like Tencent Holdings' WeChat social messaging app and those from other mobile carriers.

Energy

Natural gas industry set for strong growth

As the economy grows and the government carries out policies to raise clean energy use, China's natural gas demand will increase at an annual rate of 8 percent, reaching almost 400 billion cubic meters a year by 2025 when the market will become 2.5 times larger than it is today, according to a White Paper titled China's Age of Gas, released on Oct 21 by multinational conglomerate General Electric Co.

It says China's share of gas in the primary energy consumption mixture is expected to double from 4 percent at present to 8 percent in 2025 and non-hydrocarbon resources are expected to grow to 17 percent of primary energy in 2025.

Economy

Steady rise seen in R&D spending

Research and development spending in China reached one trillion yuan ($164.1 billion) in 2012, about 1.98 percent of its gross domestic product, Minister of Finance Lou Jiwei said on Oct 22.

R&D expenditure as a percentage of GDP is viewed as an important indicator to evaluate a country's investment in innovation. R&D spending as a percentage of GDP in China was 1.54 percent in 2008.

The growth rate of fiscal expenditure in R&D surpassed the growth rate of fiscal revenue, Lou said while delivering a report to the ongoing bi-monthly session of the Standing Committee of the National People's Congress, the country's top legislature.

Fiscal expenditure in science and technology development increased to 560 billion yuan in 2012 from 168.9 billion yuan in 2006, an average annual growth rate of 22.73 percent, Lou told senior legislators.

Pharma

Global drug firms find the going good in China

The Chinese pharmaceutical market has emerged as a major driver of revenue growth for global drug firms, according to a new report released during the PharmAsia-Shanghai Summit 2013.

The analysis from consultancy firm McKinsey & Co, in cooperation with Elsevier Business Intelligence and BayHelix Group, showed that China's pharmaceutical market has grown at a rapid compound annual growth rate of 21 percent over the past five years, reaching 600 billion yuan ($98.4 billion) in retail sales in 2012.

In the forecast developed jointly by McKinsey and the China Pharmaceutical Association, China's pharmaceutical market is projected to grow at about 17 percent annually through 2020, reaching 1.9 trillion yuan in retail sales. By then, China will be the second-largest pharmaceutical market in the world, the forecast said.

Property

Home prices continue their upward march

Prices of both new and existing homes continued to rise in most Chinese cities in September, according to official data released on Oct 22.

Of a statistical pool of 70 major Chinese cities, 65 saw a month-on-month rise in new home prices, down from 66 in August, the National Bureau of Statistics said.

According to the bureau, 63 cities reported month-on-month price gains in existing and second-hand homes in September, compared to 58 in August.

On a year-on-year basis, the cost of new homes rose in 69 cities last month, the same as the August figure, while 68 reported higher year-on-year prices for existing homes last month, also the same as the August number.

China Daily Agencies

Alibaba Group Holding Ltd is to be listed in the United States after its special corporate governance structure passed muster at two US bourses. Provided to China Daily

( China Daily European Weekly 10/25/2013 page18)