China Shenhua Group (1088.HK), China's largest coal producer with substantial power generation of its own, announced power tariffs adjustment, as allowed by the central government. Beijing is keen to keep a tight lid on inflation and contain core inflation as much as possible. In this effort the government allowed two relatively small increases in power prices this year: a 5.5% one in June 20th and a 5.75% increase on Aug 20th.

Yanzhou Coal (NYSE:YZC), China's third largest coal producer after China Shenhua energy (HKEx:1088) and China Coal (HKEx:1898), reported 2008 first six months report. (Details of the original press release is here.) Strong showing helped lift the price of Yanzhou ADRs 5.35% in the last five trading days as the markets were expecting solid numbers. See related chart here. Highlights and Outlook:

China Shenhua Energy Co. Ltd., the largest Chinese coal miner reported that net income rose to RMB14,146 million ($2.06 billion) up 35.7% vs. same period last year. Jump in profits is attributed to strong coal prices in the first six months of the year. In a document submitted to the Hong Kong Stock Exchange Shenhua reported operating income to climb to RMB49,282 million ($7.176 billion) representing an increase of 26.8% vs. last year. Operating profit rose 32.5% contributing to the strong net income growth.

China's largest coal miner, China Shenhua Co. (1088.HK), announced changes to on-grid tariffs its power plans will charge in the future. Shenhua is not only China's larget coal miner by output but operates a significant power generating capacity in various regions in China. Based on capacity and other factors, the above increase represents an average increase of 13.8/Mwh Yuan or an increase of 4.53%.

During the reporting period, in accordance with IFRSs, revenues of the Group was RMB23,788 million (for the three months ended 31 March 2007: RMB18,489 million), representing an increase of 28.7%. Profit for the period attributable to shareholders of the Company was RMB6,772 million (for the three months ended 31March 2007: RMB4,919 million), representing an increase of 37.7%. During the reporting period, changes in major items of the financial statements and explanation thereof are as follows:

Special Notification China Shenhua Energy Company Limited and all members of its board of directors warrant the authenticity, accuracy and completeness of the information contained in this announcement, and jointly and severally accept full responsibility for any misrepresentation, misleading statements or material omissions contained in this announcement.

I have been following Chinese ADRs (U.S. listed Chinese companies) for a long time to realize a change in the dynamics of new IPOs. Investors have to be very selective when it comes to Chines IPOs, especially that high quality Chinese companies seems to choose Hong Kong and Shanghai lately.

Chinese companies have gone a long way. Table of top ten companies by market capitalization has a surprise: five of them are from China! Exxon Mobile is followed by PetroChina... Impact of Chinese companies on the Hong Kong and Shanghai Stock Exchanges.

Even though China’s economy continues to boom, to transform that into the green in our own pocket, is a different story. Investors have to remember that not economic growth but corporate earnings are driving stock prices. For the most part, of course. In addition to current earnings, seasoned analysts have to be able to differentiate between high– and low-quality earnings.

A fierce battle has been accelerating for a niche in China’s banking industry in the face of China’s preparation to completely open doors of its banking industry. Foreign banks have been staking out strategic alliances in China, hoping to be well-positioned for the eventual full opening of the industry just one year and three months ahead. Chinese welcome this competition and look at it as an opportunity to bolster their capital and improve management.