On 27 June 2008, the Company completed the Acquisition of SinoSing Power from Huaneng Group. Immediately following completion of the Acquisition of SinoSing Power, TPGS became an indirect non-wholly owned subsidiary of Company and is owned as to 75% by Tuas Power, an indirect wholly owned subsidiary of the Company, and 25% by GSPL which is a subsidiary of Temasek. Temasek therefore became a substantial shareholder of a subsidiary of the Company and a connected person of the Company under the Hong Kong Listing Rules. By virtue of being an associate of Temasek, each of Tuas Power Connected Persons became a connected person of the Company for purposes of the Hong Kong Listing Rules.

The Acquisition has already been approved by China Huaneng Group in accordance with its internal procedures, as well as by the board of directors and shareholders of the Company and the relevant governmental authorities. All conditions precedent in the Transfer Agreement have been satisfied. In accordance with the Transfer Agreement, the Company has made an one-off payment of the consideration in full to China Huaneng Group.

Stocks in Asia and Europe rose at the end of the month as fears of a deep U.S. recession receded. Despite favorable global economic climate change, Chinese stocks haven’t regained their shine yet. As the chart on the page testifies Chinese domestic shares in Shanghai are off 35% year-to-date (YTD) a far cry for U.S. China stock investors whose benchmark, the China ADR Index is down by 16.7% YTD.

There is not much to be happy for as far as Chinese stock trading goes today. Most of Chinese ADRs are giving up gains of previous days, such as Baidu.com after yesterday's $25 rally. As the following summary table shows, the China ADR index (CAI), a broad measure of the performance of Chinese ADRs, lost 23.48 points today and is down 25.8% year-to-date (YTD).

In this volatile environment looking for momentum stocks is important. here is a list of stocks that portray such momentum measured by their 10- and 30-day moving averages or DMAs. the following five stock have their 10-DMA surpass of their 30-DMA. On the flip side all their current price is BELOW 10-DMA, a sign that their current rally may have some to a temporary halt. Still, I think this table is good to look at and check on the stocks that might be of your interest.

As at the record date (i.e. 23 May 2008), there were totally 12,055,383,440 shares of the Company entitled to attend the EGM and to vote for or against the resolution tabled thereat. Shareholders and authorized proxies holding an aggregate of 9,906,082,864 shares of the Company, representing 82.17% of the total shares of the Company, were present at the EGM. Holders of 580,467,886 H shares of the Company, through HKSCC (Nominees) Limited, appointed the chairman of the Meeting as their proxy to attend and vote on their behalf. Holders of 998,372,440 H shares of the Company, through HSBC Nominees (Hong Kong) Limited, appointed the chairman of the Meeting as their proxy to attend and vote on their behalf.

As at the record date (i.e. 23 May 2008), there were totally 12,055,383,440 shares of the Company entitled to attend the EGM and to vote for or against the resolution tabled thereat. Shareholders and authorized proxies holding an aggregate of 9,906,082,864 shares of the Company, representing 82.17% of the total shares of the Company, were present at the EGM. Holders of 580,467,886 H shares of the Company, through HKSCC (Nominees) Limited, appointed the chairman of the Meeting as their proxy to attend and vote on their behalf. Holders of 998,372,440 H shares of the Company, through HSBC Nominees (Hong Kong) Limited, appointed the chairman of the Meeting as their proxy to attend and vote on their behalf.

We just argued yesterday that unless you acted on time, you missed out the opportunity. Shares of Chinese oil refining related companies have started to rise last week before the news of gasoline and diesel price increase broke out yesterday. As the following Google finance screenshot testifies, shares of Asia's largest refiner by capacity, Sinopec (SNP), rose 18.05% followed by the polyethylene and propylene producer Sinopec Shanghai Petrochemical (SHI). Petrochina, China's largest oil company with significant refining capacity rose 7.67% during the last five days.

Shares of Chinese oil companies are leading Chinese ADRs today on news that Beijing will increase price of refined oil and electricity. Shares of China's largest oil company by market value, Petrochina (PTR), jumped $9.78 or 7.27 percent by 11:00 followed closely by Sinopec (SNP) and China's largest independent electricity provider, Huaneng Power (HNP).

China's largest coal miner by output reported a 13.3% increase in commercial coal production in May 2008 from a year ago. Export of Chinese coal came to a standstill in 2007 as China is struggling to feed its growing electricity demand. Nearly two-thirds of Chinese electricity is generated by unsing coal fired power plans. The winter storm related coal supply shortages just highlightened the problems facing both the cola nad the power generating industry.

Last week we published a study that looked at 10- and 30-day moving averages and their crossing patterns to find momentum stocks. We continue with some technical analysis today by introducing the Overbought/Oversold techincal indicator. The one we use gives investors a gauge of the market in a snapshot by laying down all Chinese ADRs on a single paper. This method makes it very easy to find stocks that are out of their normal trading characteristics; thus offering trading opportunities.

The members of the new sessions of the board of directors and supervisory committee of the Company were elected at the 2007 annual general meeting of the Company held on 13 May 2008. The tenure of the office of each of Mr. Na Xizhi, Mr. Ding Shida, Mr. Qian Zhongwei, Mr. Xia Donglin, Mr. Wu Yusheng (as directors); and Mr. Shen Zongmin and Ms. Zou Cui (as supervisors) had ended on 13 May 2008, the date on which the term of the new session of the board of directors and the new session of the supervisory committee commenced. The members of the new sessions of the board of directors and supervisory committee of Huaneng Power International Inc. (the “Company”) were elected at the 2007 annual general meeting of the Company held on 13 May 2008. Biographies of the members of the new sessions of the board of directors and the supervisory committee are set out below

On 29 April 2008, the Board made an announcement (“Announcement”) regarding the acquisition of 100% interest in SinoSing Power from Huaneng Group. As stated in the Announcement, the Company shall issue a circular to the Shareholders containing further information of the transaction as contemplated by the Transfer Agreement and will convene a general meeting for obtaining the Independent Shareholders’ approvals for the conduct of the Acquisition.

1. Mainly because of investing in construction projects and repaying the debts, the cash as at the end of the reporting period decreased by 55.86%, compared to the beginning of the reporting period.
2. Mainly because of the increase in value of coal inventories, the inventories as at the end of the reporting period increased by 30.20% compared to the beginning of the reporting period.
3. Mainly because of investing in construction projects, the construction materials as at the end of the reporting period increased by 40.27% compared to the beginning of the reporting period.
4. The notes payable as at the end of the reporting period were reduced by 100% to zero, as all notes payable were due and settled accordingly as at balance sheet date.

Based on the Company’s preliminary statistics, as of 31 March 2008, the Company’s total power generation based on a consolidated basis amounted to 46.103 billion kWh, an increase of 18.62% over the same period last year. The power generation of Yingkou Power Plant, Yuhuan Power Plant, Weihai Power Plant, Shanghai Shidongkou Second Power Plant, Changxing Power Plant, Luohuang Power Plant, Dezhou Power Plant increased significantly as compared to the same period last year. The increase in power generation of the Company’s power plants was mainly attributable to the following reasons:

The Company develops, constructs, operates and manages power plants in China nationwide, with a total generation capacity of 33,723MW on an equity basis. The Company wholly owns sixteen operating power plants, and has controlling interests in thirteen operating power companies and minority interests in five operating power companies. To date, it is one of the largest listed power producers in China. Huaneng Group is principally engaged in the operation and management of industrial investments; the development, investments, construction, operation and management of power plants; organising the generation and sale of power (and heat); and the development, investment, construction, production and sale of products in relation to information, transportation, new energy and environmental protection industries. Huaneng Group is the controlling shareholder of HIPDC, holding a 51.98% direct interest in HIPDC. In addition, Huaneng Group also holds a 5% indirect interest in HIPDC and directly holds approximately 8.75% of the total issued share capital of the Company.

A near 20 percent correction in the Chinese stock universe in January marked the worst month for Hong Kong equities since Oct. 1997 as rising risks of a U.S. recession prompted a global equities sell-off. As the following chart suggests, the Hang Seng Index of Hong Kong lost 15 percent in January alone. U.S. listed Chinese stocks did not make it any better as the broad China ADR Index or CAI lost 14.7 percent, too. U.S. stocks held up better, sending the DJIA down 4.9 percent for the month to 12,650. To make matters worse, ratings agency Standard & Poor's said it cut or may cut its rating on up to $534 billion of subprime bonds. Where is the bottom? Where do Chinese ADRs go from here?

China stocks post biggest weekly loss in a decade: China's main stock index closed Friday with a weekly loss of 8 percent, its biggest weekly drop since May 1997. Chinese ADR portfolio was just as bad with no clear indication where the bottom is. Look up from the table below how your Chinese stocks did.

I expect China ADRs to beat expectations and cheer investors all over the board. Stocks that I expect to fly today are: YZC, PTR, CEO, BIDU, SNP, LFC, CHL, CHA, CHU plus quality NASDAQ listed Chinese stocks.

Looks as if price assymetry between Hong Kong and Shanghai double listed shares remains for sometime. What implications it has on U.S. listed Chinese ADRs?

Hope you had steel nerves in August. Referring back to the main article in our previous Newsletter, “Strong stomach needed”, we could not have timed that article better. August turned out to be a heck of a month. U.S. subprime problems put pressure on equity markets globally, sinking our favorite proxy for U.S. listed Chinese stocks, the FXI, 15 percent by Aug 16th. Then the FED’s decision to lower inter-bank lending rates by a half point sent our benchmark up 20 percent by Aug 27th, just to see those gains evaporate the next day. Still, investor optimism fuelled the index to a 7.43 percent gain for the month, attributed to further rate-cut hopes and news that the U.S. governments would help tackle the subprime mortgage problem.

Huaneng Power (HNP) 2007 first six month: food for thought

Chinese stocks have risen since the notorious 9 percent intraday plunge in late February. As the matter of fact, the Shanghai Composite (^SSEC) is up almost 25 percent since the incident while the record breaking DJIA barely keeps space with such a sharp rally.

We are bullish on Chinese stocks. It seems to us however that average American investors got a distaste of China after the 9 percent plunge in Shanghai on February 26 that sent global equity markets south. As a result, March has been a very quiet month for us, stock researchers, while this was the time stock research would have been needed the most. We will get back to this later.

Mr. Alan Greenspan is still a heavyweight. Some secondary remarks from the former FED Chairman, e.g. the U.S. is showing signs of recession, shook global equity markets overnight.

Investing in Chinese equities is a risky business. But one can ask: how risky? Is there a reliable risk measure geared specifically to investors who navigate in the Chinese stock universe? Our current Newsletter addresses this very important question and will shed light on stocks that are relatively safe and stocks that you should avoid.

Liquidity, or the ability to buy and sell large blocks without effecting the share price, is perhaps the most important factor for institutional investors in choosing where to execute their trades. Looking at the Chinese stock universe from an American investor’s point of view, there are three markets that investors would consider: the NYSE, the NASDAQ and the Hong Kong Stock Exchange. Investing in Shanghai and Shenzen is still limited for foreigners and is further complicated by corporate accounting differences and information asymmetry.

I can’t help but quote from our February Newsletter, page 4 last paragraph. “Based on our latest field trip to China, Chinavestor.com expects The9 Ltd. (NCTY) to report a nice surprise. On the other hand, we did not see much activity of Shanda’s line of products and expect the battled game and home entertainment developer to slip.” End of quote. So when Shanda released earnings after the close on February 27th, disappointing news did not surprise us. China’s top online game operator said it swung to a quarterly loss and missed Wall Street revenue targets as online game sales weakened, sending its shares down 19 percent after hours.

I can’t help but quote from our February Newsletter, page 4 last paragraph. “Based on our latest field trip to China, Chinavestor.com expects The9 Ltd. (NCTY) to report a nice surprise. On the other hand, we did not see much activity of Shanda’s line of products and expect the battled game and home entertainment developer to slip.” End of quote.

Chinavestor noticed when China Mobile (Hong Kong) Ltd. (CHL), the world’s biggest wireless carrier, announced on Dec 13, 2005 that it is seeking to sell shares domestically to complement Hong Kong and New York listings. And again when Aluminum Corp. of China (ACH), the world’s second largest alumina producer, announced plans to take its A-share companies private, paving a way for its own listing in mainland China. The Company will need a total of more than 5.6 billion yuan ($694 million) to buy the shares it does not own in it’s A-share units.

Chinavestor “Stock of the month” ends up 5.2% in 2005 and is up 55.6% since inception, despite the fact that China’s booming economy failed to translate into stock-market gains. Defying rises in oil prices and interest rates, Asia stocks rose as domestic economies picked up and foreign funds sought cheap valuations. But the country level performances were far from uniform with indices in the greater China region at the bottom of the list.