China Industry: Sept. 2

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Sept. 2 – This is a regular series of relevant industry news from around China.

Air transport

China Southern Airlines will commence additional flights to Australia from October 31. The company will boost the number of daily flights between Guangzhou and Sydney from the current one to two. China Southern will also start flying seven times a week between Guangzhou and Melbourne, up from the current three flights a week.

The air carrier will also start flying between Dalian and Brisbane via Guangzhou from November 1. The company will use Airbus 330 aircraft on its Australian services.

China Southern Airlines has started a direct cargo service between Shanghai and Los Angeles. The company will fly on the return route on Mondays, Thursdays and Saturdays. This is China Southern’s second U.S. cargo service, the first being between Shanghai and Chicago. In July, the air carrier started two international cargo routes: Guangzhou-Amsterdam and Shanghai-Vienna-Amsterdam.

Hainan Airlines intends to start a direct route between Beijing and Toronto, Canada, on November 27. The 13-hour flights will be operated three times a week and served by Airbus A340 aircraft.

Last month, Hainan Airlines posted a first-half 2010 net profit of RMB556.8 million, an increase of 218.19 percent compared to the same period last year.

In a filing with the Shanghai Stock Exchange, the company said its earnings per share was RMB0.141, compared to RMB0.051 in the first six months of 2009.  Hainan Airlines’ business revenue was RMB8.742 billion, up 42.84 percent year-on-year.

China Southern Airlines said last week that it has received its fifth Boeing 777-200F freighter – the second in two months. The company said that now its freighter fleet comprises of seven aircraft, including two Boeing 747-400F and five Boeing 777-200F dedicated freighters.

China Eastern Airlines booked a first-half 2010 net profit of RMB1.94 billion, 49.2 percent more than in the same period last year.

The company’s revenue jumped by 92.2 percent to RMB33.64 billion. China Eastern’s earnings per share stood at RMB0.176.

Dragonair, a subsidiary of Cathay Pacific said this week that it would resume its service to Hongqiao International Airport in Shanghai on September 15. This will be the first time the airline will fly into the airport since moving its operations to Pudong International Airport in October 2002.

The Hongqiao service is being resumed following an announcement by the Hong Kong SAR Government earlier this year that an agreement had been inked with relevant mainland authorities to add Shanghai Hongqiao as a destination for scheduled air services between Hong Kong and mainland China.

Dragonair added that the Hongqiao service will be a daily flight operated by an Airbus A330 aircraft.

Shandong Airlines posted a first-half 2010 net profit of RMB206 million, an increase of 82.71 percent compared to the same period last year. The company’s operating revenue climbed by 33.82 percent to RMB3.13 billion and its earnings per share rose 82.14 percent to RMB0.51.

Solar power

Taiwanese photovoltaic company DelSolar has signed a second long-term wafer supply contract with Chinese polysilicon maker GCL Solar Energy Technology Holdings, a wholly owned subsidiary of Chinese solar power company GCL-Poly Energy Holdings.

GCL-Poly will provide to DelSolar wafers that can meet the needs of about 664 megawatt cells from October 2010 to December 2015. The agreement includes a mechanism by which the parties may adjust prices to better reflect prevailing market conditions. DelSolar expects the alliance to greatly enhance its overall operational needs and profitability, it said, but did not elaborate.

Taiwanese photovoltaic company DelSolar has submitted its initial public offering application to the Taiwan Stock Exchange. DelSolar is convinced that the IPO will benefit current and future shareholders with a number of significant advantages including an enhanced and more diversified capital funding universe, a more prestigious profile globally and a reinforced corporate governance platform.

DelSolar is currently executing its capacity expansion plans given the robust trend in demand. Capacity utilization in its Hsinchu-based fab has been upgraded to 120 percent from its original 120 megawatts to the current 144 megawatts while the newly-expanded 216 megawatt Wujiang, China-based facility has further room for growth given a larger capacity being installed.

Meanwhile, construction of DelSolar’s Jhunan fab was launched in June 2010 and is currently running smoothly. The company expects Jhunan to enter mass production in the second half of 2011. It is estimated that the photovoltaic cell production capacity could hit three gigawatts.

Chinese solar company Yingli Green Energy Holding said that it had sealed a US$442 million  polysilicon supply agreement with Korean chemicals producer OCI Chemical Corp (OCI). Under the five-year deal, OCI will supply polysilicon to Yingli Green Energy. The deliveries will run from 2011 to 2015.

At present, the Chinese company maintains a balanced production capacity of over 600 megawatts per year. Last month, it launched initial production of two capacity expansion projects of 300 megawatts and 100 megawatts located in Baoding and Hainan, respectively. The move is anticipated to bring Yingli Green Energy’s total capacity to one gigawatt by the end of the third quarter of 2010.

Additionally, Yingli Green Energy’s in-house polysilicon plant, Fine Silicon, with a designed annual production capacity of 3,000 tons, has started commercial operations in early August 2010.


China Guangdong Nuclear Power Group has broken ground on a 49.5 megawatt wind power project in Shangyi, Hebei Province. The company, specializing in construction of nuclear reactors, expects the wind farm to be commissioned by October 2011. The facility is being built by its unit China Guangdong Nuclear Wind Power Co. The value of the project was not disclosed.

China Guangdong Nuclear also commissioned a 240 megawatt wind power project in Daan, Jilin Province. In May, the company announced that it intends to build a 800 megawatt wind power project at the cost of RMB8 billion in the province of Yunnan.

Eager to get rid of its reputation as the world’s largest polluter, China aims to expedite development of alternative energy including wind, solar and nuclear power. The share of renewables in the nation’s total supplies should rise to 15 percent by 2020 from 8.5 percent at present.

This industry report brief is courtesy of Aii Data Processing.