There has been a lot of action within the Chinese oil industry lately and I think this might be a good time to sum all important news into a reasonable summary. First of all, China has three publicly traded oil companies: Petrochina (PTR), Sinopec (SNP) and CNOOC Ltd. (CEO). These companies went public on the NYSE first, then in Hong Kong and recently in Shanghai. Since Chinavestor is a china stock analyst for the U.S. investors, we'll cover NYSE listed ADRs only. Note: Hong Kong listed H-shares correlate very closely to the NYSE listed ADRs, so basically there is not much difference there. The difference comes in from Shanghai, China's domestic stock market because it is closed for foreigners and thus price distortions occur.

Shares of chinese companies listed on the U.S. exchanges opened up mixed. China Mobile (CHL), the world's largest mobile phone company by subscriber number came back strong in Hong Kong, signalling a good start for the day in New York. The positive outlook of the industry leader had a positive effect on smaller players such as China Ntecom (CN) and China unicom (CHU). All three Chinese telecom companies are between 2.38% and 1.55%.

High oil sent Wall Street lower today, the DJIA sinking 166.75 points to a two year low of 11,215.51 points. Shares of Chinese companies followed suit, the China ADR Index (CAI) losing 38.28 points to close at 701.88. The index is down 29.81% year-to-date (YTD), following negative Wall Street sentiment.

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.

The rapid speed of globalization means English is becoming significantly important in people’s daily life. New Oriental’s major product such as English-language course and test-preparation courses right hit the target, since Chinese workforce puts an extremely high priority on education, and the fierce competition meant a rising demand on English education. Public schooling cannot keep up with the growing demand and people are turning to private educators to fill the void.

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 the following table tracking top movers from the China ADR universe, Yanzhou Coal (YZC) - China's third largest and only U.S. listed coal miner - is taking the top spot. The stock is trading $2.30 higher vs. yesterday's close. Is it a technical rebound? Absolutely! How do we know? Check this out: Yanzhou Coal (YZC) : Is it oversold? - a post on this very same blog dated June 20, Friday. Here is the quote: "Going back ot Yanzhou Coal: a temporary freeze on coal prices means previous earnings calculations are off the window. So it's time to readjust YZC to new regulations.

Large cap Chinese ADRs helped lifting the China ADR index (CAI) by 3.96 points. Still, the index lost a quarter of her value since the beginning of 2008 and jittery market conditions in the U.S. keep pressure on Chinese stocks. Couple of stock of interest: Aluminum corp. of China (ACH). The stock lost another -2.54% today on weak outlook. Today's performance came as no surprise to us, because events just unfolded as we predicted it on last Saturday. Here is the actual posting on the blog from last week

Shares of Chinese companies listed in the U.S. opened mixed to day after steep losses in last week. oil compnies are in focus again. China's offshore specialist, CNOOC Ltd. (CEO), is enjoying a ride on the back of strong oil prices. The stock is up $4.25 or 2.68% at the open. High oil prices hurt refiners. Asia's largest refiner, Sinopec (SNP) opened -0.23 percent lower while Petrochina (PTR), China's largest oil produceer with a significant refining on its own, opened -0.65 percent lower. China's decision to increase gasoline and diesel retail prices last week sent prices of refiners out the roof just to see them tumbling the next day. Overall SNP and PTR are trading sideways signalling as if the markets haven't figured out what to make out of the price increae combined with record oil prices yet. SNP is red while PTR is blue on the following chart.

A temporary freeze on coal prices means previous earnings calculations are off the window. So it's time to readjust YZC to new regulations. Going back to the original question, if YZC is oversold - the answer is YES! With that in mind a technical correction could swing back YZC $5-$6 next trading day. However given current negative market sentiment, a sentiment that is most likely to spill over to Asia on Monday, investors may have to wait until Tuesday to short all YZC holdings.

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).

LFC tripled its net profits in 2007, gaining most from the rise of equity markets, however the capital market downturn in 2008 has significantly shrunk LFC’s net profits. This has made LFC’s generic growth a key determinant to its prospects. In 2008, LFC generated a considerably increased premium income as a result of promotion of participating products and increased demand for insurance protection. This can be due to increasing awareness of insurance protection after consecutive occurrence of the natural disasters. In addition to the limited negative impacts of the earthquake, combined with a concern about the uncertainly of equity market performance, and we recommend...(you have to subscribe for premium content)

Stock markets in the U.S. continued to slug: inflation concerns and high oil kept pressure on equity markets. Tuesday's economic data illustrated how the steep run-up in energy costs this year is affecting businesses. The Labor Department data showed that producer price index jumped 1.4 percent in May, the largest increase since last November. The DJIA shed 108.78 points. The S&P 500 index, a measure of the broader market, fell 9.21 points to 1,350.93, while the Nasdaq composite index fell 17.05, or 0.69 percent, to 2,457.73.

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.

We published a list of chinese stocks last week. The criteria we used was very simple: if 10 DMA was above 30DMA, a stock qualified. The result is not too rosy: stocks on average lost -6.5% between 6/6 - 6/13. Well, it is also noteable that last week was a bloodbath for Chinese stocks not just in the U.S. but worldwide. The Hang Seng Index in hog Kong lost 1,810 points from 24,402.18 points to 22,592.30. This is a 7.4% drop just in one week!

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.

From the annual income statement, Chalco achieved major improvement in revenue, increasing from 37,826.5 million RMB in 2005 to 76,180.4 million in 2007. This significant increase was mainly due to its several acquisitions during 2006 and increasing global commodity price. The acquisitions increased the production capacity dramatically. Total revenue had increased 17.5% from 2006 to 2007. However, as the continuing strong demand from Asian countries especially from China had been pushing the sales price up, the global oil price had increased as well to push up the cost of the industry. Specifically, Chalco’s cost of revenue went up from 43,930.7 million in 2006 to 57,197.5 million in 2007, representing a 30% jump. The significant increase in cost resulted in the net income had dropped 15.6% from 11,726.5 million to 9,899.6 million. In addition, gross profit margin dropping from 32.2% in 2006 to 24.9% in 2007. Also, operating profit margin and net profit margin decreased 7.68% and 5.09% respectively during the period from 2006 to 2007.

A very dear Chinavestor client has been encouraging me to develop a filter that tracks 10-DMA and 30-DMA for Chinese ADRs and keeps track of the developemnt of such values. All basic and advanced technical tools widely used by the small investor comunity can draw charts to display the divergence between the two indicators. But the problem is that if someone wants to gauge all Chinese ADRs in the market, it takes time to visually observes each chart.

Wall Street saw better days then today. The DJIA is down over 300 points on high unemployment rate and record oil, approaching $150 a barrel. No wonder, shares of U.S. listed Chinese companies, or ADRs, follow suit measured by the broad China ADR Index or CAI. As the following table demonstrates, Chinese ADRs lost 3.41% today however there is a significant difference between NYSE and NASDAQ listed ADRs. While index heavy NYSE listed China stocks lost ground, measured by the China NYSE Index (CYI), NASDAQ listed Chinese ADRs hold ground thanks to a superb performance of NetEase (NTES), The9 and some solar companies.

Price of Aluminium Corp. of China (NYSE:ACH) is down 18% year-to-date. This should not surprise many as the company reported weak 2007 Q4 and an even worse 2008 Q1 financial results. The company had to tap into short term borrowings of RMB 4.7bln in order to keep cash flow position stable. However this took a hit on liquidity measures. Underlying reason is overcapacity of alumina. For additional info, read the following story.

The underlying reason for the drop is very simple. The company announced in a statement that the provincial government of Shandong, where Yanzhou Coal is headquartered, had introduced a temporary price cut for thermal coal in the next three months. The argument goes that the provincial government wants to secure electricity production for the upcoming summer months when demand peaks. We saw Huaneng Power (NYSE:HNP), China's largest independent power generator, to report an 80% drop in first quarter profits due to high coal prices. The problem is that state-set power prices have not been increased since June 2006. Some fear that high coal prices prevent local power generators to stock up coal before the peak summer season, endangering smooth power supply.

Chalco did not perform well in sales in the first quarter 2008. Its gross margin only reached 19% compared to yearly gross margin of 25% as of 31 December 2007. The declining trend had begun in the second-half of 2007 from which aluminum price in China declined and raw material costs increased. Company had been boosting output for the purpose of taking advantage of lower product price, but objectively suffered pressure on increased raw material price, power and transportation cost. By March 2008, quarterly net profit dropped to 1.3 billion yuan which is only 58% of the third quarterly net profit in 2007. Total cost of revenue, however, increased by 5% accompanied declining sales in the same period.

Despite surging commodity prices and a weak dollar shares of China's largest aluminum and alumina maker, Aluminium Corp. of China or CHALCO, are down 16.57% year-to-date (YTD). The question is: what's wrong with Chalco? Chinavestor reached out to different analysts to find some clues. Here is Chalco's first quarter performance from a fundamental analyst's point of view.

Stock markets have been keeping a close eye on oil prices as a proxy for near term momentum. For today, as oil fell close to the $130 range before news on US oil inventories, the markets may take a breather. But for China, oil is a different story. Fears of rationing of diesel have been around as the summer season nears. The latest reports suggest that diesel rationing spread from coastal areas to big cities such as Shanghai, Ningbo, Beijing and Guangzhou. The question remains: are China's oil triumvirate capable of securing China's oil needs. On the investor corner, we give you tips how to benefirt from the current situtaion.

Shanda is the leading online game company in China. Its 4th Qtr earning in 2007 has surpassed analysts’ estimation. Its diversified online game lines, robust profitability of each line, and Come-Stay-Pay (CSP) revenue model contribute to its robust profit. Also, its “online game platform” strategy enables its game pipelines to be fulfilled in a timely manner. It is expected to remain such strong earning in the next period.

China's telecom industry restructuring got the green light on Saturday, May 24, 2008. This is the Chinese telecom landscape before and after. While the general idea of leveling the battleground for telecom players may sound well, the end result will be three seemingly similar, yet different companies. As an investor, you should look into details to get ahead of the game.

Yanzhou Coal, China's third largest coal miner, is the best performing Chinese stock today. The stock is up excatly 15.0% year-to-date or even better, up 75% since March 26, 2008 as the following screenshot from Google finance testifies. You may say: "Wish I had known this stock just two months ago."

Yanzhou Coal Mining Company Limited (hereafter the “Company”) has entered into a sale and purchase agreement of coal with Huadian Power International Corporation Limited (hereafter “Huadian International”) for year 2008 (hereafter the “Agreement”). Pursuant to the Agreement, the quantity of coal sales by the Company to Huadian International for year 2008 amounts to a total of 7.3 million tonnes, representing an increase of 2.5 million tonnes or 52.1% as compared with the amount sold in year 2007. Such increase in the quantity of coal sales to Huadian International is mainly due to the increased coal consumption by Huadian International resulted from its increase in the number of power generators. The net price of coal under the Agreement is RMB470.15 per tonne, representing an increase of RMB129.12 per tonne or 37.9% as compared with the price per tonne supplied in 2007, given such change in quantity of coal sales under the Agreement.

China ADRs or U.S. listed shares of Chinese companies made a remarkable comeback after hitting all time lows YTD on March 20th. As the following chart demonstrates, Chinese stocks trading in Americn stock exchanges are down by almost 15% year to date (YTD) vs. the 28% negative return measured in late March. This makes it a 13% comeback in just two months, fueling investors optimism.

As approved at the 2008 EGM of Aluminum Corporation of China Limited (hereafter as the “Company”), the Company submitted to China Beijing Equity Exchange on 12 May 2008 the application to acquire 100% of the equity interests in Lanzhou Liancheng Longxing Aluminum Company Limited, 100% of the equity interests in Chinalco Southwest Aluminum Cold Rolling Company Limited, 84.02% of the equity interests in Chinalco Henan Aluminum Company Limited, 75% of the equity interests in Chinalco Ruimin Co., Ltd., 60% of the equity interests in Chinalco Southwest Aluminum Co., Ltd. and 56.86% of the equity interests in Huaxi Aluminum Company Limited from Aluminum Corporation of China and China Nonferrous Metals Processing Technology Co., Ltd. (hereafter as “Transferors”). The equity interests of the above companies are listed on China Beijing Equity Exchange for bidding at a consideration of RMB4,174.7589 million. On 13 May 2008, the Company received the confirmation from China Beijing Equity Exchange and became the ultimate transferee of the aforementioned equity interests.

We have been bullish on Ctrip.com (CTRP) and you might well ask what’s been going on with the stock today? As you probably noticed the stock tumbled 9.24% to $57.48 on weaker 2008 Q2 forecast. We were not so much surprised by the actual results, in the last analysis of CTRP, released on 3/15/2008, analyst Lin Xu said “Snow Storm caused block of transportation and cancellations of travels which will reduce the profitability of Q1 2008, not to a large extent. Business will recover as the cold season ends.”

There were three main businesses that experienced significant growth during 2007. They include internet access services, value-added and integrated information application services and Leased line services and others, rising 32.1%, 35.4% and 19.9% respectively. Collectively, they contributed 34% of total operating revenues in 2007. The internet service is the largest component of the three growing business in 2007. The operating revenue from the internet service was RMB 31,340 million in 2007, making up 23% of the total operating revenue. Broadband subscribers increased at an average rate of 1.87% monthly and had amounted to 37.71 million by the end of Q1 2008.

As far as I know, the China Finance Minister announced in 15th that they will reture part of import tariffs paid by SINOPEC and CNPC for some predetermined oil products from 1st April to 30th June.

It is a new policy to assist oil producer in China, issued by Ministry of Finance People's Republic of China. Unfortunately, there is no English version yet. The content official from document is:

Momentum to loose steam
According to its announcement in 26th March, CNOOC realized an increase in both the total revenue and net income; however, the growing momentum is not so strong compared to previous years.

If there were no expectations on a potential revamp of telecommunication industry, China Unicom would be considered overvalued at current price although it reported doubled profits for 2007 full year result, however, considering the revaluation of two networks of China Unicom in the case of the restructuring, China Unicom is a good buy at current value. We will address these points below in detail:

China has become one of the biggest energy-consuming countries in the world. Currently, the oil price has reached its historical price. It is because the two largest developing countries, China and India, are hungry to energies and resources to feed their high speed growths. However, the negative impact of use of resources, that is pollution, has caused a series of social problems and is seen as one of critical issues which can restrict Chinese economic development. Therefore, an alternative clean-energy and renewable energy, such as solar PV, is highly recommended by Chinese government.

Based on my research, I agree with the points that: CNPC and SINOPEC's growth might be dented this year because of 'the windfall taxes and widening refining losses', which however, is not saying that they pay rising windfall taxes on their refining arm. The tax or 'special gain charge'is assessed on the production arm. The loss of refining is because the price of crude oil is increaseing while China has a fixed retail oil price at home. CEO has no refinery exposure,so is not hurt by this fixed retail price. For more detail, read this post.

The Company intends to revise the existing annual cap for the year ending December 31, 2008 in respect of the CLIC Asset Management Agreement dated December 27, 2005. In addition, for the reasons set out below, the annual cap in respect of the CLIC Asset Management Agreement for the year ended December 31, 2007 has slightly exceeded the original annual cap by RMB2 million. Given that each of the revised annual cap for the year ending December 31, 2008 and the actual service fees paid for the year ended December 31, 2007 under the CLIC Asset Management Agreement represents less than 2.5% of the applicable percentage ratios as defined in the Listing Rules, the transactions contemplated thereunder fall within Rule 14A.34 of the Listing ules, and are only subject to the reporting, announcement and annual review requirements under the Listing Rules and are exempt from independent shareholders’ approval.

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.