Archive | July, 2010

Pharma Tycoons Take on China’s Market

Pharma Tycoons Take on China’s Market

China Pharmaceutical Group Limited (HKG:1093), Hua Han Bio-Pharmaceutical Holdings Ltd. (HKG:0587) and SINOPHARM HOLDING CO LTD (HKG:1099) are the Pharma giants in China that keep bringing down the cost of medications. These tycoons are securing the emerging health needs of the Chinese people and are getting well paid for their efforts.

Sinopharm is China’s largest distributor and provider of supply services for healthcare and pharmaceuticals. The company is involved in logistics, retail, manufacturing and scientific research as well. Sinopharm is leading the way in China by setting an example of responsibility and efficiency in pharmaceutical work. The company is also accomplishing dramatic revenue increases and a volume driven high priced stock. Aside from healthy profit margins, the company has been seen fighting SARS in 2003, battling floods in 1998 and at numerous other national disasters. Sinopharm has a market cap of $66.24 billion and is currently traded at $29.25 per share.

Hua Han Bio-Pharmaceutical Holdings Ltd. has many production facilities in China and can produce billions of capsules per years. The company has 28 production lines and has a far-reaching distribution and sales network with representatives in 29 provinces throughout China. Hua Han employs over 1,000 employees and is pushing for the development of more products for women. Hua Han has a market cap of $4.03 billion and their stock is currently trading at $2.53 per share

China Pharmaceutical Group Limited is one of the largest pharmaceutical companies in China. The company manufactures vitamin C, penicillin G and 7-ACA in bulk and is one of the largest manufacturers of drugs in the world. China Pharm owns well organized distribution networks in China. The company also sells cefazolin and amoxicillin in different dosages and forms. Bringing investors to the table has not proven to be a problem because they opened the door to investors in 1994 when they were listed on the HKEX. Breaking down the barriers of globalization has been a large part of the company’s reputation. China Pharm has a market cap of $6.65 billion and their stock is currently valued at $4.33 per share.

These companies are dominating a market that has emerged in China and meeting the needs of the sick. China is developing economically and also has health problems. Now that the market is more fully developed and Chinese citizens have a healthy portion of purchasing power, they are bound to focus their cash flows on another aspect of healthy living. These companies may have started off with modest budgets, but are now bringing in the dough. Some of these companies have been with the People’s Republic of China since the 1970’s and are only recently turning a big profit. However, longevity has offered these companies an opportunity in practicing what they know in a market that has developed throughout the last decade. Integrity and hard work are the staples of good business, and the benefits for these companies are double digit profit margins.

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China Borrows John Henry’s Hammer

China Borrows John Henry’s Hammer

China Railway Construction Corp Limited (HKG:1186), China Railway Group Limited (HKG:0390) and China State Const. Eng. Corp Ltd (SHA:601668) all ensure that China’s railways stretch from the countryside to sea ports. These companies are implementing infrastructure development demands and meeting the expectations of international construction companies. These companies are in a race to secure contracts across the globe.

China Railway Construction Corp Limited bulldozes through mountains and extends bridges over waterways. The company has completed 287 construction projects and has 137 other projects in progress. It has been listed as 225th largest global contractors in the world. China Railway Construction Corp Limited covers all 31 provinces in China and holds a whopping value of $131.27 billion. Securing contracts and building a reputation for success is part of the bottom line at China Railway Construction Corp Limited. The company’s stock is currently valued at $10.64

China Railway Group Limited reorganized in 2007 to allow itself to be listed in domestic and overseas stock markets in order to edge away from being owned by the state. The company has 46 subsidiaries and in 2006 was the third largest construction company in the world. China Railway Group Limited has participated in the construction of more than 22,600 kilometers of electrified railway, has been involved in the construction of more than 4,320 kilometers of bridges and more than 3,900 kilometers of tunnels. The company works on expressways, metropolitan railways, bridges, tunnels, buildings, airports and more. The company has provided construction services to more than 230 overseas projects. The company has a market cap of $123.54 billion and their stock is valued at $5.80 per share.

China State Const. Eng. Corp Ltd was originally established in 1982 and has become one of the largest international construction companies in China. The company is known for delivering its services in record times and overcoming barriers. The new Hong Kang Airport Passenger Terminal has been recognized by worldwide organizations and has been called one of the top 10 building projects of the 20th century. The company aspires to become one of the top transactional enterprises in the world. The company is currectly valued at $114 billion and their stock trades at $3.80 per share.

These companies are laying out railway in China and using the resources allocated to them to create a reputation of being leading construction firms. Emerging from the struggle of globalization will leave some companies in the dust, but it does not appear that any of these companies fit the description. Recognized in the world for hard work, remarkable turnaround times and laying miles of rail will surely lead to gaining favor in international markets.

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China’s Airspace Industry Struggles

China’s Airspace Industry Struggles

China Airlines Ltd. (TPE:2610), China Southern Airlines Limited (SHA:600029), Air China Ltd. (SHA:601111) and China Eastern Airlines Corporation Ltd. (SHA:600115) are the big players in China’s airline market right now. However, keeping competition at bay is another story. With markets popping up all across the map in China and the rest of the world, it is easy to see how an emerging airline could end up capturing some profitable market segments.

Bullying the big boys is no easy task when you are a start-up airline with a handful of planes and staff. The only hope for a start-up airline is to capture a neglected route and make it profitable. Baltia Air Lines Inc (OTC:BLTA) is an airline in the US that has taken notice that there is no direct route from St. Petersburg to New York and is planning to capitalize on a highly sought after route. Surely something like this is boiling up in China, because evidently China Eastern Airlines gave up a route to South Africa.

Air China is the 18th largest airline in the world by fleet size and is based out of Beijing. It is the second largest commercial airline in China. Air China flies over 5,000 flights per week, and takes people to hundreds of location across the globe. The company brings people to destinations in Asia, the Middle East, North America and Western Europe. Air China joined Star Alliance in 2007, which allowed the company to gain a competitive advantage. Air China has a market cap of $150.69 billion.

China Southern Airlines is a member of SkyTeam and is the world’s 5th largest airline by passengers carried. The company has its headquarters in Guangzhou Baiyun International Airport and also operates out of Beijing Capital International Airport. The company has hundreds of planes in its fleet and flies its passengers to over 120 destinations across the globe. The company went up on the NYSE and HKEX on July of 2000 and captured over $700 million for the company. China Southern Airlines currently has a market cap of $56.67 billion.

China Airlines has over 10,000 employees and is based out of Taiwan. The company flies to destinations across North America, Europe, Asia and Oceania. China Air has been in talks to become a part of SkyTeam sometime in the near future. The company has a generous number of planes in its fleet. It flies to hundreds of locations across the globe and competes for Chinese airspace just like the rest of these companies. China Airlines has a market cap of $82.02 billion.

China Eastern Airlines is based out of Shanghai, China. The company had over 16,000 employees in 2005, and is continually expanding their operations. China Eastern Airlines travels to places all across the globe, with destinations in Asia, Europe, North America and Oceania. In April of 2010, China Eastern announced plans to join SkyTeam, which would allow for them to consolidate operations and become more competitive. The company is hoping to fend off competitors by building alliances and increasing efficiency in their existing markets. China Eastern Airlines has a market cap of $89.94 billion.

Titans like these are constantly in a struggle against time to hammer out competition. With new cities springing up all the time in China, and companies continuously focusing on a global environment, smaller companies are going to start getting the edge. Behemoth airline companies are unable to notice every single detail when they have their eyes focused in on large markets. Small emerging companies are sure to get into the action because they are not even capable of tackling huge flight markets. Their eyes are set on capturing what the big players are missing and that is their strategy for success.

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China’s Booming Steel Market Plugs Onward

China’s Booming Steel Market Plugs Onward

ArcelorMittal (AMS:MT), Nippon Steel Corporation (TYO:5401) and Baosteel group corporation are all giant companies that manufacture and distribute steel across the globe. China has become the largest producer and consumer of steel in the world. In 2008, China produced over 500 million tonnes of steel. ArcelorMittal is a Luxembourg-based steel manufacturing corporation, who has become the largest single producer of steel in the world.

Nippon Steel Corporation is based in Tokyo, Japan. Yawata Steel and Fuji Steel merged in 1970 to form the Nippon Steel Corporation. Mr. Akio Mimura is the Representative Director and Chairman of Nippon Steel. The company managed to produce 37.5 million tonnes of steel in 2008. In 2006, Nippon Steel got together with Mitsubishi Heavy Industries, Ltd. To create a high tensile strength steel. The original application of this new steel was to create a less thick steel that would be just as strong in order to cut back on fuel usage. The company produced $36.44 billion in revenue in 2007.

ArcelorMittal is a combination of steel companies that have merged over time. Mittal Steel was founded in 1989. It has aquired many different steel companies around the world, including Arcelor in 2006, who was the second largest steel producer in the world in 2005. Mr. Lakshmi N. Mittal is the Chairman of the Board of Directors and CEO of ArcelorMittal. ArcelorMittal has produced over 103 million tonnes of steel in 2008. With Mr. Mittal overseeing the largest producer of steel in the world, Superman may no longer
be entitled to the name “the man of steel” . ArcelorMittal brought in revenues at $65.11 billion in 2009.

Baosteel is a Chinese based company that started construction in Shanghai in 1978, and is now the third largest steel producer in the world. The company employs over 108,000 employees and has been ranked 220th on the Global 500. The company is as environmentally conscious as a steel producer can be. The company became the first enterprise to gain the title of “National environment-friendly enterprise” in the Chinese metallurgical sector and Shanghai Municipality. The company is continually acquiring new assets and building an empire to meet the needs of new demand. Baosteel pulled in $21.7 billion in 2009.

The market is definitely set to meet the demands of the new Chinese business dynamic. Steel companies in China are pushing the classic front runners of the industry to the back of the line. Producing over 500 million tonnes of steel is no small task, and Chinese steel companies are constantly setting new records. It is only a matter of time before the new man of steel takes up residency in China. He may stay in China for longer than the rest of the world may be comfortable with. Then again, the attitude of the market is set in China’s favor.

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