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More Doubts Grow Over Chalco's SouthGobi Bid
Work at SouthGobi Resources Ltd's (HKG: 1878) flagship Ovoot Tolgoi coalmine will cease entirely at the end of Q2, raising uncertainty about Aluminum Corp of China Ltd's (NYSE: ACH, SHA: 601600, HKG: 2600) bid to buy a controlling stake in the Canada-based, Mongolia-focused miner, the Wall Street Journal reported. State-backed Aluminium Corp of China, or Chalco, has said it will pay $920 million to buy up to 60% of SouthGobi Resources from Ivanhoe Mines Ltd (NYSE: IVN). Last week a person who claimed to be a former engineer at SouthGobi said Ovoot Tolgoi had faked the amount of its reserves in order to fraudulently attract buyers. Previously the Mongolian government suspended SouthGobi's mining license because of national security concerns. Without approval, SouthGobi will not be able to run the plant that washes coal and prepares it for transport to market. The company said it scaled back extraction at Ovoot Tolgoi during Q2 so as not to accumulate too much unsold coal and to save cash.
Ctrip Takes Over Flight Info App
Ctrip.com International Ltd (Nasdaq: CTRP), China's largest online travel service provider, has spent ¥20 million acquiring VeryZhun Pro, a flight information app developed by Feeyo.com E-Commerce Corp, people with knowledge of the matter said. Ctrip decided to explore the mobile service market after posting a 28% decline in earnings in Q1 2012. VeryZhun offers real-time information on all domestic flights.
LDK Reports Gloomy Performance
LDK Solar Co (NYSE: LDK), a leading Chinese photovoltaic manufacturer, posted $200.1 million in revenues and $185.2 million in net losses for Q1 2012, compared to $766.3 million in revenues and $135.4 million in net profits in Q1 2011. Industry-wide overcapacity continues to drive down prices across the entire solar supply chain, significantly reducing the company's revenue and margins, the company said.
Beiqi Foton Boosts Indian Subsidiary Capital
Beiqi Foton Motor Co (SHA: 600166), a leading Chinese truck maker, said it will inject $78 million into its Indian subsidiary. Foton India, into which Beiqi Foton plans to invest a total of ¥2.47 billion, has drawn ¥1.72 billion in cash and is expected to begin producing heavy and light-duty pickups by July 2013. Beiqi Foton aims to build factories in Russia, Brazil, Mexico and Indonesia by 2020.
Lifan Budgets ¥1b for Clean Motor Cells
Lifan Industry Group Co (SHA: 601777), a Chongqing-based automaker, said it plans to invest ¥1.15 billion building a plant and a R&D center to manufacture clean-energy batteries for motorcycles and vehicles. The cost of the project is expected to be recouped in 13 years.
$1 = ¥6.36
@2011 China Economy @ The China Perspective.
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