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News Research

US$930m likely for China Eastern stake

(Bloomberg)
Updated: 2007-05-30 09:19

Singapore Airlines Ltd and parent Temasek Holdings Pte may pay about $930 million for a stake in China Eastern Airlines Corp to expand the carrier's reach in China, according to sources.

Singapore Airlines would invest about $600 million and Temasek about $330 million for a combined stake of about 24 percent, said the sources who did not want to be identified before the terms of the deal are finalized and approved by the regulators.

A man watches a China Eastern plane taxi at Shanghai's Hongqiao Airport. Singapore Airlines Ltd and parent Temasek Holdings Pte may pay about $930 million for a stake in China Eastern. [Bloomberg]

The deal would give Singapore Airlines, Asia's most profitable carrier, more access to a market forecast to grow fivefold by 2025. And China Eastern, the mainland's only listed carrier to make a loss last year, may reduce debt and gain a partner to help fend off competition from Cathay Pacific Airways Ltd and Air China Ltd in Shanghai, its home market.

"China Eastern is potentially a goldmine for Singapore Airlines," said Greg Kuhnert, who manages about $1 billion in Asian equities, including Singapore Airlines shares, at Investec Asset Management in London. "The Chinese airline industry has one of the highest growth rates worldwide."

Chinese carriers flew 160 million passengers last year, 15 percent more than a year earlier, according to the General Administration of Civil Aviation. China's economy has grown at least 10 percent in each of the past four years, making travel affordable to more people.

China Eastern has a market value of $4.89 billion, meaning a 24 percent stake would be valued at about $1.17 billion.

A deal may be announced this week, according to the sources, ending at least 10 months of talks.

Singapore Airlines spokesman Stephen Forshaw, Temasek spokeswoman Lim Siow Joo and China Eastern board secretary Luo Zhuping all declined to comment.

Related readings:
Singapore Airlines may buy 25% stake of China Eastern
China Eastern Airlines looks for investors
Temasek eyes more investment in China

A deal would help Singapore Airlines, which made a record S$2.12 billion ($1.4 billion) profit last fiscal year, build on its 104 flights a week to Chinese cities. It would also complement the carrier's cargo operations.

"The air cargo side of the business offers significant opportunities," Kuhnert said.

China Eastern's loss widened to 3.31 billion yuan in 2006 from 467 million yuan a year earlier. The carrier has 205 planes and 35,000 employees.

A stake in China Eastern may help Singapore Airlines compete with Cathay Pacific in the North Asian market.

International News

6 bombs wound 10 in southern Thailand

(AP)
Updated: 2007-05-28 10:19

BANGKOK, Thailand - Six bombs ripped through a key commercial district in restive southern Thailand Sunday, wounding 10 people, police said.

Thai policemen look at site bomb in Hat Yai district Narathiwat province southern Thailand Sunday May 27. 2007. [AP]

The attacks in Hat Yai, where scores of Malaysians, Singaporeans and Indonesians spend their weekends, took place near two hotels, two pharmacies, a department store and a restaurant, Police Lt. Pod Suansuwan said.

The bombs outside the two pharmacies were placed in motorcycles and triggered by a timer, Police Col. Jetanakorn Maneetapad said.

Thailand's Muslim-dominated south has been wracked by violence in recent months. Citizens there have complained of rights abuses by soldiers and discrimination by the country's Buddhist majority.

Last September, six homemade bombs exploded in Hat Yai, killing four people, including a Canadian who became the first Westerner to die in the separatist insurgency.

Since the Muslim rebellion flared in early 2004, drive-by shootings and other attacks have killed more than 2,200 people.

Industry News

Business investigator probes direct foreign link

(Reuters)

By Zhang Yu (China Daily )
Updated: 2007-05-31 09:44

Liu Changjiang, one of the first business investigators in China, is trying to improve the earnings of his Beijing company, Oriental Business Investigation Co Ltd, by directly reaching out to overseas clients.

About 70 percent of his clients are already from the overseas market, but what troubles 35-year-old Liu, founder and president of Oriental, is that most foreign deals are subcontracts.

Foreign business investigation companies act as the bridge between Oriental and its overseas clients. The result: Oriental gets far less than what the foreign companies pocket.

"Actually, we do all the investigation work. The foreign companies act only as agents but get the lion's share, which is unfair," said Liu, who has been in the trade for more than 10 years.

There are two reasons why this happens. First, foreign clients have no easy way to access Chinese companies; second, they don't have enough confidence to hand their cases to Chinese companies.

According to Liu, this can be rectified by widening the marketing channel to make foreign clients aware of his company's abilities and reputation.

As a relatively new line of business, with a history of just around 10 years, investigation can't even call itself an "industry" as thousands of small companies are engaged in a low-level competition, with not even a single umbrella association in China.

Most Chinese investigation companies are generally involved in two types of businesses: helping suspicious wives or husbands with evidence of adultery of their spouses; and aiding companies to demand the repayment of a loan.

Few are engaged in business investigation, which includes corporate investigation like due diligence, asset tracing, business fraud and bankruptcy; individual investigation such as family and educational background, criminal and civil records; insurance claim investigation; and business security services such as providing bodyguards.

As China gets more integrated with the world economy, more and more foreign companies are doing business with their Chinese counterparts, opening up more potential for business investigation, says Liu.

To prepare for the new opportunities, Oriental not only hires retired soldiers and former government security guards but also employs information analysts with solid English-language skills.

In 2004, Liu led his company to join the World Association of Detectives, the oldest international organization in the segment, as a major step into the international market.

Seeing Hong Kong as a key link between the mainland and the global market, Liu also registered a new company there this month.

Domestic News
Survey: working women use one quarter revenue for the face and makeup

(Beijing Morning News)
Updated: [ 2007-05-29 11:00 ]

"Young Chinese Female Workers Lifestyle Survey" Organized by the All-China Women's Federation Hua-kun women living center and love lady magazine released yesterday. The results showed that: young female workers spend one quarter of a monthly income on faces and make-up, spend three months wages a year to buy clothes and accessories. Half of the consumers pay by credit card, nearly a quarter of the girls have overdraft consumption. Their average monthly expenditure is RMB 2,901.5.

The survey was conducted in Beijing, Shanghai, Guangzhou, Hangzhou, four front-line cities and Shenzhen, Nanjing, Dalian, Chengdu four second-line cities. Survey topics include "individual basic information", "consumption status" and "lifestyle" and "life satisfaction", "ideal life factors" five aspects. Investigations revealed that the average age of the female investigated is 28.9; of them 68.1% are between the ages of 25 to 35. They generally received higher education and are mainly company executives, media / entertainment industry staff, civil servants, or the management staff, etc. Most of them are single, or married couples insisting the duo world, the two accounted for 66.8%.

Investigations revealed that the average monthly income is RMB 4,420.9, half of them monthly income is between RMB 2,000-4,000. In eight surveyed cities, the monthly income of the females from the front-line cities is nearly RMB 1,000 higher than those from the second-line cities. The average monthly income level is the highest in Beijing, reaches about RMB 6,000 yuan, the lowest is in Dalian, less than RMB 3,000. Pink collars (young ladies) in Hangzhou were most satisfied with the state of life while pink collar in Beijing were most unsatisfied with the state of life. Most Guangzhou pink collars have travel habits; Chengdu pink cillars choosing to travel aboard take the highest proportion. Pink collars spend three and a half months income a year on clothes and accessories. 80% of them love traveling; almost one seventh of their income is spent on leisure and entertainment, for example: watching movies, going to KTV, teahouses and cafés. Pink collars dine out at least once a week; one-tenth of their monthly income is for dining out. Pink collars spend one fourth of their monthly income on hair and face. More than one-third of them have blog on the internet. Pink collars, nearly half of the consumers pay by credit cards, over 70% of them frequently use credit cards. At least two-thirds of their income is spent on consumption expenditure, their average monthly expenditure of RMB 2,901.5. Nearly a quarter of pink collars have overdraft consumption, nearly one-fifth of them once spent more than the amount in their credit cards.

“Pink collar” first appeared in the year 1978. At that time it referred to western females engaged in the service field. Now it mainly refers to two kinds of people: one is the soho with free professions; the other refers to young office ladies.