Chinese power generators arde in trouble with Datang Power no exception. The company reported net revenue increase of 4.4% for the fisrt six months of 2008 yet net profit plunged 77.5%. The company pays no dividend - not surprisingly...

The Jinzhou Thermal Power Project involves a total investment of approximately RMB2,980,000,000 (equivalent to approximately HK$3,397,947,548). The registered capital of Jinzhou Thermal Power Company, i.e. RMB596,000,000 (equivalent to approximately HK$679,589,510), accounts for about 20% of the total investment of the project. The Company’s total capital commitment in the Jinzhou Thermal Power Project is in the sum of RMB2,980,000,000 (equivalent to approximately HK$3,397,947,548). Upon the registration of Jinzhou Thermal Power Company, the Company will contribute the first installment of the registered capital of Jinzhou Thermal Power Company in the sum of RMB250,000,000 (equivalent to approximately HK$285,062,714) by way of cash.

Datang Power Int. Co. Ltd. (0991.HK) announced power tariffs increase at various power generation units. (Original press release from the Hong Kong Stock Exchange is here) Share price of China's third largest independent power producer after Huaneng Power (NYSE:HNP) and Huadian Power (1071.HK) rose 3.21% following the news - see related chart here. The increase of RMB19.93/Mwh is less than average increase rival Huaneng Power was able to obtain. Huaneng increased sale price of on-grid power by RMB21.71. The increase is effective as of August 20th and will help ease the pain power producers have to endure as a result of high coal prices. Price of coal increased 76% over the last twelve months while the central government allowed the price of power to increase twice during the same period; a 5.5% increase on June 20th and again a 5.7% increase in Aug 20th. This equals to an average price increase of just over 12%, far from making up for the increased high price of coal. To ease the pain for power generators Beijing introduced a temporary cap on thermal coal prices for the summer peak season, a step that will not necessarily work. Chinese coal producers stepped up efforts to export coal on the spot market where they can obtain high international prices, leaving domestic power generators in the cold.

China Netcom Group (NYSE:CN), China's smaller fixed line carrier, announced interim results for the first six months of 2008. This is the last time the company reports on its won without China Unicom (NYSE:CHU). CHU will acquire CN's fixed network and integrate it together with current GSM network. CHU's smaller and less dynamic CDMA network will be sold to China Telecom (NYSE:CHA), completing the largest telecom industry restructuring the world has seen yet.

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.

Chinese solar ADRs are extremely volatile. As the following summary table reveals, shares of Solarfun Power (SOLF) are up 47% just in August yet investors bought into the company on January 2nd. are down 45% year-to-date (YTD). And Solarfun is no exception. All Chinese solar ADRs but Canadian Solar (CSIQ) are trading way below their January 2, 2008 level turning this hot sector of 2007 into disaster in 2008.

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's largest independent electricity provider, Huaneng Power (NYSE:HNP), announced an increase of on-grid tariffs by Yuan22.51/MWh or 5.7% as of August 20, 2008. This increase is the second in 2008 aimed at compensating for high coal prices. China is potentially facing one of the worst power shortages in years, similar to 2004, when brown outs were rampant. The government has just ordered coal exporters to cut back on exports - so far it was an oral note. The fact of the matter is that since coal prices has been capped to keep prices low domestically, Chinese coal miners preferred to sell coal on the spot market instead. The result is low coal inventory level at power producers, potentially threatening stable power supply.

Datang Power Co. (0991.HK), a Hong-Kong listed Chinese power generator, agreed to invest 580,000,000 yuan or $84.5 million, into a thermal power plant to produce heating for Zhang Jia Kou Gaoxin District located in Hebei Province, China. Details of the transaction are below.

The9 Ltd is the leading online game operator and developer in China. Its main revenue drivers are affiliates operates licensed MMORPGs (massively multiplayer online role-play games) consisting World of Warcraft (WoW), Soul of Ultimate Nation (SUN), and Granado Espada (GE). During Q2 of FY2008, the company achieved excellent financial results due to the rising revenue from WoW and SUN. It also spent huge efforts in R&D and international affiliation. However, the results of those efforts are not foreseeable in the near future. The9’s limitation in self-developed game pipelines meant the company may suffer threats from its competitors such as Shanda and Netease. Furthermore, each game has its life cycle, The9’s over reliance on WoW may limit its future earning ability.

Here is a snapshot of today's big movers from the Chinese ADR universe. Focus Media Holdings defies overall trend, the DJIA lost almost 200 points today already, helped by better than expected 2008 Q2 results and strong Q3 outlook. Focus Media Holding shares jump on Q3 outlook. The stock is trading up $2.76 or 10.51% today.

In one hand, windfall tax load will be heavier for upstream companies because of soaring world oil price. On the other hand, domestic retail price increase is actually a "tiny" compensation and can not offset the loss of the downstream activities. Since consumer price index (CPI) remains high, government is facing pressure to tame inflation. I personally guess another retail price increase will probably not happen in a short run, which makes a conservative forecast for the downsteamers. Furthermore, the government is considering the cancellation of compensation for crude oil tariff deduction negatively effecting both Sinopec (SNP) and Petrochina (PTR).

Proposed merger of China Unicom Limited (CHU) and China Netcom group Corp. (Hong Kong) Ltd. by way of a scheme of arrangement of CN under section 166 of the Hong Kong companies ordinance
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