China Industry: Nov. 9

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Nov. 9 – This is a regular series of relevant industry news from around China.

Air transport
China Southern Airlines carried 6.59 million passengers in September, an increase of 20 percent compared to the same month last year. The airline transported 20 percent more mail and cargo in September, or 113,880 tons. Passenger load factor jumped 7.7 percentage points to 79.9 percent, with comprehensive load factor increasing 3.5 percentage points to 69.6 percent.

China Eastern Airlines’ September passengers increased to 5.62 million, up 53.61 percent compared to the same month in 2009. Passenger load factor jumped 8.87 percentage points to 78.99 percent. The airline carried some 129,700 tons of mail and cargo in September, an increase of 31.88 percent year-on-year. Cargo and mail load factor rose 2.45 percentage points to 61.22 percent.

Air China Limited carried 3.97 million passengers in September, up 20 percent over the same period in 2009. The company transported 105,700 tons of cargo and mail in September, an increase of 7.8 percent compared to September last year. Passenger load factor rose 7.18 percentage points to 82.1 percent.

South Korean budget airline Jeju Air Co will start flying between Incheon, South Korea and Hong Kong three times a week from October 27. The low-cost airline will also initiate services to Cebu and Manila, the Philippines.

Air China, China Southern Airlines and China Eastern Airlines raised their fuel surcharges on domestic services on October 27. The companies’ decision was prompted by an increase in jet fuel prices by the National Development and Reform Commission. The commission said the price would rise by RMB220, reaching RMB5,690 a ton. For routes shorter than 800 kilometers (497 miles) the three major airlines and six local carriers now charge RMB40 per passenger, an increase from the previous RMB20. The figure rose from RMB40 to RMB70 for routes longer than 800 kilometers.

Air China said in a filing with the Hong Kong Stock Exchange its net profits for the third quarter of 2010 increased to RMB5.17 billion from the RMB885 million booked in the same period a year ago. The company’s operating revenue rose 76.7 percent to RMB24.83 billion. Operating costs jumped by 44 percent to RMB19.42 billion.

The fifth civil airport in China’s Tibet Autonomous Region, in Xigaze City, commenced operations on October 30, costing US$ 79.7 million. Xigaze Peace Airport is situated 3,782 meters (12,408 feet) above sea level. The region also has airports in Lhasa, Nyingchi, Qamdo and Ngari.

Xu Bo, chief of the Civil Aviation Bureau of Tibet Autonomous Region, said the airport was expected to service around 230,000 passengers and 1,150 tons of cargo and mail annually by 2020.

BOC Aviation, an aircraft leasing company owned by Bank of China, said on November 2 that it has ordered eight 777-300ERs from Boeing for long-term lease to Thai Airways. The airline is expected to take delivery of the aircraft from August 2012 to October 2013.

BOC Aviation added that it now has 13 wide body aircraft on firm order and another four on committed purchase and leaseback for delivery through to 2013.

Solar power
Taiwanese renewable energy company Neo Solar Power Corp said on October 26 it had ordered 350 megawatts of solar wafers from Chinese photovoltaic-producer GCL-Poly Energy Holdings. Under the three-year agreement, GCL will deliver solar wafers to NSP from the fourth quarter of 2010 to end-2013.

Solar cell maker China Sunergy said yesterday it had completed the acquisition of module manufacturers CEEG (Shanghai) Solar Science & Technology and CEEG (Nanjing) New Energy for about US$46 million. The acquisition has added a total 480 megawatts to China Sunergy’s annual module capacity.

Chinese photovoltaics-maker ReneSola Ltd turned to a record third-quarter net profit of US$ 60.1 million from a US$10.2 million loss a year earlier, aided by cost-cutting measures and strong demand. The company made an operating profit of US$86.4 million in the third quarter, against an operating loss of US$7.8 million a year ago. Gross margin was 32.5 percent, compared with 3.4 percent in the third quarter of 2009.

Revenue rose 154.6 percent year-on-year to US$358.7 million, the company said in a statement on November 5. During the period, ReneSola shipped 324.9 megawatts of solar wafers and modules, up 122.1 percent in annual terms, which prompted it to upgrade its guidance for the fourth quarter.

The photovoltaics-maker said it expects fourth-quarter shipments to be between 310 megawatts and 330 megawatts with revenue of between US$340 million and US$360 million. Gross profit margin is seen at 30 percent to 32 percent. Full-year shipments are projected at 1.13 gigawatts to 1.15 gigawatts, and the figure is seen to rise to around 1.7 gigawatts in 2011.

Chinese thin-film solar company Apollo Solar Energy Tech Holdings Ltd on October 4 sold a 30 megawatt production line for silicon-based thin-film modules for US$33 million. The firm did not disclose the name of the customer. It said it will ship the production line on or before August 31, 2011. Apollo also sold a non-exclusive, non-transferable license for the use of the related technology.

Wind power
Wind farm-maker and operator China Longyuan Power Group Co Ltd said on October 21 it will acquire a 60 percent interest in a wind power development in northeastern China for an undisclosed amount.

The company has agreed to buy a stake in the project’s owner Buerjin Tianrun Wind Power Co Ltd. The wind farm is located in the northwestern part of Aletai district, Xinjiang province, in the valley of the Irtysh River, a major wind zone in the province. Its installed capacity is currently 49.5 megawatts after its first phase came on stream in July 2009.

Chinese wind turbine-maker Xinjiang Goldwind Science and Technology Company won a 1.3 gigawatt supply contract and fellow company Sinovel Wind Group bagged 1.35 gigawatts in a bidding process in China.

Local Guangzhou Daily reported on November 5 that Goldwind had in its order book 800 megawatts in the Xinjiang region and 500 megawatts of equipment agreements in the Zhangjiakou city. Sinovel was also awarded 800 megawatts of contracts in Xinjiang and 550 megawatts in Zhangjiakou. Twelve enterprises took part in the bidding for a total of 3.3 gigawatts of wind projects.

This industry report brief is courtesy of Aii Data Processing.