Saturday, September 5, 2015

The 14 Largest Chinese Companies With December Year Ends and Reporting in Yuan With the US SEC 1st Half 2015 Total Profits Down 13% From 1st Half 2014

From a review of the superb Google Finance Website and the US SEC Website, I found 14 Companies headquartered in China with December year ends, which filed their financial statements in the Chinese Yuan (RMB) with the US SEC and with Stock Market Capitalizations of more than US$4 bil.
The Chinese Yuan (RMB) is worth 16 cents US.

When I include Alibaba Group Holding Ltd, which has a March fiscal year end, these 15 very large Chinese Companies registered Total Audited Earnings in annual 2014 which were down 20% from annual 2013 and also down 20% from annual 2007 before the worldwide financial meltdown hit.

So how did these 14 large Chinese Companies do in the most recent first half of 2015?  Total GAAP Earnings were down 13%, but down dramatically more in real economic terms.  Let me explain.

One of them ..... China Life Insurance ..... registered a massive profit increase of more than RMB 13 bil in the first half of 2015 over the first half of 2014.  However, this was more than all due to RMB 50 bil of higher Pretax Realized Gains from Sales of Equity Securities and Recognized Fair Value Gains from Equity Securities in 2015 over 2014.  These RMB 50 bil of Equity Securities Gains even exceeded Total Pretax Income of RMD 41 bil.  Thus absent these RMB 50 bil of Equity Securities Gains, China Life Insurance would have recorded a Pretax Loss of RMB 9 bil in the first half of 2015 as compared with a Pretax Income of RMB 23 bil in the first half of 2014.

Alibaba Group Holding generated a very healthy profit increase of more than RMB 18 bil in the June 2015 Quarter over the June 2014 Quarter.  However, nearly all of that profit increase came from a nearly RMB 25 bil Pretax Gain from Deconsolidating Alibaba Pictures.   

Below here are the reported Earnings (Losses) for each of  these 14 very large Chinese Companies for the first half of 2015 and 2014, presented by Market Cap:

First First

Half Half

2014 2015 2014
China Largest Companies
Most Net Net
Filing With US SEC in RMBs City Recent Profit Profit
With December Year Ends HQs FYE (Loss) (Loss)

RMB mils RMB mils

PetroChina Co Ltd Beijing  Dec14             28,591            74,055
China Life Insurance Co Ltd Beijing  Dec14             31,734            18,554
China Petroleum & Chemical Corp Beijing  Dec14             31,608            33,851
Baidu Inc Beijing  Dec14               5,319              5,742
China Telecom Corporation Limited Beijing  Dec14             11,008            11,474
JD.Com Inc Beijing  Dec14             (1,220)            (4,378)
NetEase Inc Beijing  Dec14               2,747              2,348
China Eastern Airlines Corp Ltd Shanghai  Dec14               3,857                   44
China Southern Airlines Co Ltd Guangzhou  Dec14               4,095               (814)
Aluminum Corp of China Limited Beijing  Dec14                  205            (4,246) International Ltd Shanghai  Dec14                  (84)                 200
Sinopec Shanghai Petrochemical Co Shanghai  Dec14               1,748               (162)
Yanzhou Coal Mining Co Ltd Jining, Shandong  Dec14                      2                 371
Qunar Cayman Islands Ltd Beijing  Dec14             (1,519)               (606)

Total all 14

         118,091          136,433

Earnings % Decline:

….. 1st Half 2015 Below 1st Half 2014