China news / analysis in brief

Details:

• LJ International (ticker: JADE) signed an agreement with an unnamed US jewelry retailer to market a line of birthstone-based jewelry. The company also re-iterated guidance for Q1 2005 of $0.03 cents per share on revenue of $14.5 - $16 million. For a discussion of JADE's latest earnings and guidance, see here.

• Toshiba Corporation announced it had withdrawn from the mobile phone business in China. Toshiba sold its stake in a joint venture it set up in 2000 to Nanjing Postel Telecommunications. Toshiba had targeted the market for high-end products, but the pace of expansion was below company expectations. The company is shifting focus to the European market. Quick thought: Expect more announcements like this in the future as competition in the market intensifies. There is an overabundance of companies manufacturing mobile phones in China, and the opportunities for Chinese domestic sales are decreasing. China Mobile (ticker: CHL), for one, sees some growth opportunities in rural areas, but is also looking internationally.

• Based on preliminary statistics, Huaneng Power's (ticker: HNP) total
  power generation for Q1 2005 increased 47% over the same period last year. At the same time, Merrill Lynch (ticker: ML) released a note saying that it expected China to start
  linking coal and power prices in May, which will lead to increases in
  power prices. The government decided
  at the end of last year to link coal and power prices under a more
  market-oriented mechanism, but until now, has failed to follow through. Merrill expects that to change.