China Market Pulse: Baidu, China Mobile, CNOOC, Shuanghui

Central government-owned enterprises, China's largest companies controlled by the central government, posted ¥13.5 trillion ($1 = ¥6.6) in revenue and ¥723.1 billion in net profit for the 10 months through October, up 36.5% and 53.1% respectively from a year earlier, according to the State-Owned Assets Supervision and Administration Commission.

China's economic growth is likely to maintain an 8% pace on average over the next decade, 2 percentage points slower than in the previous decade, predicted Morgan Stanley.

Baidu.com Inc (NASDAQ: BIDU), the world's largest Chinese language search engine, will spend at least ¥10 million in the next 6 months seeking strategic investment in browser game developers aiming to own at least a 10% stake, said Wei Hongrui, general manager of its gaming division. Baidu's gaming division was founded in January and currently employs 100 people and expects to double the headcount in 2011.

China Mobile Ltd (NYSE: CHL, HKG: 0941), the world's biggest wireless carrier by subscribers, has begun building a ¥900 million logistics and data processing center in Foshan, Guangdong province to serve Guangdong, Guangxi, Hainan, Hunan, Jiangxi and Fujian provinces. The 74,000m2 facility is expected to become operational by 2012.

CNOOC Ltd (NYSE: CEO, HKG: 0883), China's biggest offshore petrol energy explorer, said Bridas Corp (its 50:50 subsidiary with Argentina's BEH) has acquired a 60% stake in Pan American Energy from BP for $7.1 billion. The Chinese and Argentine companies agreed to fund $4.9 billion, or 70%, of the cost, and the remainder will be covered by bank loans. The deal is expected to be finalized in 1H 2011 and lift CNOOC's proven reserves and daily capacity by 429 million barrels and 68,000 barrels of oil equivalent.

Huaneng Power International Inc (NYSE: HNP, SHA: 600011, HKG: 0902), China's largest listed power producer, has agreed to acquire a 50% stake in InterGen, a Massachusetts-based electricity producer, for $1.2 billion. Huaneng also has to repay $2 billion of InterGen's debts. The deal will give it licenses to operate 12 power plants in England, Holland, Mexico, Australia and the Philippines.

China Pacific Insurance Group Co (SHA: 601601) listed a 50% stake in its Pacific-Antai Life Insurance Co for ¥943 million. Pacific-Antai, one of the earliest Sino-foreign joint venture insurers in China, was founded by Pacific Insurance and Aetna Life Insurance in October 1998 with ¥800 million in registered capital. ING later bought Aetna's international business and thus gained ownership in Pacific-Antai, which posted ¥647 million in revenue and ¥27 million in net profit for Q1-Q3.

Huadian Power International Corp (SHA: 600027, HKG: 1071) said it will spend ¥700 million purchasing two coalmines in Shanxi province, the nation's top coal producer.

China South Locomotive & Rolling Stock Corp (SHA: 601766, HKGL 1766), a railway transportation equipment manufacturer, said it has won a ¥4 billion contract to supply subway trains to Malaysia by April 2011.

Henan Shuanghui Investment & Development Co (SHE: 000895), China's largest meat processor, said it will purchase ¥34 billion worth of assets from its parent through additional share offerings. The deal will help its parent list all its meat processing-related assets.

China Gas Holdings Ltd (HKG: 0384) has signed a deal with Oman Oil Co for the establishment of a joint venture for liquefied natural gas business. China Gas will inject all assets of Shanghai Zhongyou Energy to the joint venture and hold a 55% stake, while Oman Oil will spend $131.5 million on a 45% stake.

South Korea's Hyundai Motor said it will build its third factory in Beijing. The new plant, expected to be inaugurated by July 2012, will increase Hyundai's capacities in China by 400,000 units to 1 million. Hyundai predicted it would sell 690,000 vehicles in China this year.