Archives for: August 2016


Permalink 12:12:27 pm, by dacare, 333 words, 413 views   English (US)
Categories: Manufacturing & Industry

Manufacturing PMI slips as heavy flooding dents output

CHINA’S manufacturing sector weakened in July as heavy floods hit output, but private manufacturers did better than market expectations to record their first activity growth in 17 months, data showed yesterday.

The manufacturing Purchasing Managers’ Index fell to 49.9 last month, below June’s 50, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing.

The weaker pace of manufacturing growth reflected the impact from the recent massive floods along the Yangtze River Economic Belt, Australia and New Zealand Banking Group said in a research note yesterday.

It added that industrial production will be sluggish in the near term as the area’s output has been disrupted.

Factory output fell to 52.1 in July from 52.5 in June, and total new orders hovered just inside the expansionary territory at 50.4, but a dip from June’s 50.5, the PMI showed.

Meanwhile, the Caixin China General Manufacturing PMI, which reflects private and export-oriented manufacturing conditions, rose to 50.6, a better-than-expected performance and was up significantly by 2 points from its June reading.

This was the first growth in activities since February 2015, with sub-indexes of output, new orders and inventory all surging past the 50-point mark that separates growth from decline.

“The Chinese economy has begun to show signs of stability due to the gradual implementation of proactive fiscal policies,” Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, said in a note after the PMI report. China said last week that industrial profits rose at the fastest pace in three months in June, though gains were seen in electronics, steel and oil processing.

Economic data for the second quarter were slightly stronger than expected due to a housing boom and government infrastructure spending that boosted demand for materials from cement to steel.

“But the pressure on economic growth remains,” Zhong warned.

Analysts also viewed that July’s data “do not bode well for GDP growth” in the second half of this year, as the real estate sector which fueled growth in the first half may have peaked.

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Permalink 01:55:23 pm, by dacare, 216 words, 185 views   English (US)
Categories: News of China

Salary rise of 8-15% for skilled talents

SKILLED professionals in China are receiving an average pay rise of 8-15 percent this year as demand for talents continues in the information technology sector, ZW HR Consulting said in a report yesterday.

However, those “with desired skills such as leadership capabilities, on-the-job experience and language proficiency can receive up to a 25 percent rise in salary,” said Frank Yu, chairman of ZW HR Consulting.

He added that candidates are now getting 8-15 percent increase in salary.

The pay rise and growth in recruitment this year will continue to be as active as last year as employers pursue a small pool of workers with strong technical and business skills, the firm said from analysis of job placements and interviews with firms and job seekers.

The IT sector will continue to outperform and drive growth in 2016 as demand will be particularly high for specialists, mobile engineers and software developers, ZW said, adding that engineers in research and development are also highly sought-after.

“We anticipate high levels of hiring activity will continue throughout 2016. Many companies are still positive when it comes to their hiring activities,” said Yu .

Demand for professionals in digital marketing, client relationship management and e-commerce continues to exceed the supply of candidates as online businesses in China are set to grow rapidly, according to the report.

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Permalink 04:20:47 pm, by dacare, 111 words, 232 views   English (US)
Categories: News of China

GlobalSportsJobs works with China’s Alisports

GlobalSportsJobs, a specialist digital media and talent acquisition platform for the international sports industry, has entered into a partnership with Alisports to support the Chinese online sports marketing firm’s domestic and international expansion plans.

Under the terms of the agreement, GlobalSportsJobs will provide Alisports, owned by Chinese e-commerce giant Alibaba, with a range of digital talent acquisition solutions including the rights to advertise career opportunities across its multi-language platforms.

The partnership also sees GlobalSportsJobs help Alisports develop its international corporate branding through a range of content aimed at educating and inspiring professionals who are looking to further their careers in sport or make a transition into the industry from outside.

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Permalink 02:07:48 pm, by dacare, 303 words, 296 views   English (US)
Categories: News of China, Comp, Salary & Benefit

Survey: Shanghai salaries up 6.7% in 1st half of 2016

SHANGHAI employees saw their salaries increase 6.7 percent on average in the first half of the year, but the raise was the lowest of all China’s first-tier cities, according to a survey.

Pay rises in Shenzhen, Beijing and Guangzhou ranged from 7.1 percent to 8.8 percent, while the average level in second-tier cities was 7 percent, according to the survey by China International Intellectech (Shanghai) Corp.

It said 64 percent of Shanghai companies said they had increased pay for all employees, second only to Guangzhou, and no decreases were reported.

The state-owned human resources agency said the Shanghai increase was no surprise given that city pay levels were already high.

“The cost of employing people in Shanghai is very high after decades of fast growth,” said the CIIC survey center’s Pang Limin.

“The result matches our prediction of from 5 to 7 percent at the beginning of this year.”

Across the country, average pay rises dropped to 7 percent from 8.7 percent in the same period last year.

Pang attributed to the downward trend to China’s slowing economy.

Real estate replaced the Internet industry at the top of the pay rise list with an increase of 8.6 percent following a surge in house prices.

Pang said companies in Shanghai were entering a period of low pay rises as they had more mature human resources management systems with multiple staff incentives and flexible benefits, such as stock shares and allowances.

“Employers in other cities are learning such practices but they depend more on salary adjustment at this moment,” she said.

There were also more foreign ventures in Shanghai while Guangdong had more local private companies, which had the highest increase in the survey, Pang said.

Only 39 percent of companies surveyed in Shanghai said they would expand recruitment with budget increases for recruitment of 22 percent, both lowest of the four first-tier cities.

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Permalink 02:53:08 pm, by dacare, 1048 words, 332 views   English (US)
Categories: News of China

China Billionaires Chasing Electric-Car Talent Power Salaries

China’s biggest iPhone maker, largest e-commerce company and leading internet-video producer are all in the hunt to build electric cars -- and to grab the small pool of available talent to build them.
All of this is great news for marketing professional Ronan Lu, 32. The bidding wars see some workers earning double their peers’ salaries and others landing jobs with minimal experience, according to recruiters.

Jia Yueting Photographer: VCG via Getty Images
“Many companies offered me job opportunities with good payment, but I chose LeEco because I believe it has great potential,” said Lu, who left Toyota Motor Corp. to join LeEco’s auto division in Beijing last month. “Startup EV companies usually can offer a higher salary than traditional automakers. You can get good rewards from stock holdings in such companies.”
More than 200 Chinese companies -- with backers including Terry Gou, Ma Huateng, Jack Ma and Jia Yueting -- are developing 4,000 models of new-energy vehicles and unveiling prototypes at motor shows and home-electronics expos. Traditional automakers and a bevy of startups see opportunity in the government’s commitment to boost yearly sales of NEVs by a factor of 10 in the next decade.
China surpassed the U.S. last year to become the world’s biggest market for new-energy vehicles, a fleet comprising electric vehicles, plug-in hybrids and fuel-cell cars. Domestic automakers sold 331,092 units in 2015, according to the state-backed China Association of Automobile Manufacturers.

An electric car charging station in Beijing. Photographer: Qilai Shen/Bloomberg
In a country with some of the worst urban air pollution on the planet and a rapidly urbanizing populace, the government has set a sales target of 3 million units a year by 2025. China also is accelerating construction of charging stations to serve 5 million electric vehicles by 2020.
‘Prying Talents’
“Internet companies that want to make cars are prying talents from us, and other rival automakers are also trying to lure them away,” said Wang Jun, vice president of Chongqing Changan Automobile Co. “It’s not only bolstered human-resource costs but also changed people’s expectations about their future.”
For QuickTake explainer on cleaner cars, click here.
The positions in top demand include designers, software developers and engineers focusing on systems architecture and creating “smart cities,” said Shirley Xia, an auto-industry recruiter in Beijing for Aimsen & Company.

Recently, Xia and seven colleagues suspended all projects for 45 days to search for an engineer to design charging poles for electric vehicles. Their client, an auto parts maker, wanted someone with at least three years of experience but settled for a candidate with half that.
“For some positions that only emerged over the past couple of years, there aren’t that many talents in the market,” Xia said. “It’s challenging for us to find candidates.”
Salaries for key research-and-development workers have risen 30 percent this year, with some reaching 1 million yuan ($151,000), said Jennifer Feng, chief human resource expert at Shanghai-based 51job Inc. That’s almost 16 times the national average for urban Chinese, based on data from the National Bureau of Statistics.
DeLorean Doors
Park Piao left Changan Automobile to run the R&D department for startup Zhiche Auto in Shanghai. Zhiche’s chief executive officer is Shen Haiyin, who formerly worked for Chinese e-commerce company
“I received quite a lot of offers from all kinds of companies before I decided to join Zhiche,” said Piao, 38. “A startup company can be more focused on EV products and thus can achieve innovations more quickly.”
Zhiche displayed a concept electric SUV before the Beijing Auto Show this year, complete with DeLorean-style doors that flip up. Zhiche plans to release the car next year.
There’s also strong demand for branding and marketing specialists to help make household names out of startups with sights on initial public offerings.
Foxconn, Tencent
“Part of this EV startup bubble can be explained by hot money,” said Jochen Siebert, managing director of JSC Automotive Consulting in Singapore. “It reminds me a bit of the 1990s, when almost everything with internet or e-commerce was supported by private equity, and the stocks went through the roof.”
A lot of that money is being spent on recruiting for the corporate suite, with companies backed by some of Greater China’s richest people hiring top executives from rivals and from Silicon Valley to help distinguish themselves.
Take Future Mobility Corp., an EV-maker backed by Gou’s Foxconn Technology Group and Ma’s Tencent Holdings Ltd. The company hired Daniel Kirchert, who was president of Dongfeng Infiniti Motor Co., and Carsten Breitfeld, project manager for BMW AG’s i8 plug-in sports car. Then it lured more managers from BMW.
“It is such a huge opportunity and advantage to start from zero,” Kirchert said. “Our company offers a really big platform for talented people to reach their goals without hitting the glass ceilings they would have hit at traditional automakers.”
Tesla Challengers
Internet entrepreneur William Li’s NextEV Inc. hired Padmasree Warrior, Cisco Systems Inc.’s former technology chief, to lead its U.S. operations.

The Faraday Future FFZero1 concept vehicle. Photographer: Qilai Shen/Bloomberg
Jia’s Faraday Future Inc., an electric-car startup planning a $1 billion factory in Nevada to challenge Elon Musk and his Tesla Motors Inc., recruited Porter Harris from Musk’s Space Exploration Technologies Corp. Harris left Faraday earlier this year.
The presence of those high profiles usually attracts workers who can actually build cars. Only about a quarter of the 4,000-plus NEVs approved by the government are in production, according to a National Development and Reform Commission survey. Ma’s Alibaba Group Holding Ltd. is partnering with SAIC Motor Corp. on an internet-connected SUV called the Roewe RX5.
Yet public subsidies that can total 60 percent of an EV’s sticker price are helping fuel a manufacturing boom. For the first half of this year, China produced 177,000 NEVs, more than double the same period a year ago, the manufacturers’ association said.
“Talent is one of many things these EV startups need to get right,” Robin Zhu, a Hong Kong-based analyst at Sanford C Bernstein, said in an e-mail. “It may even be the most important, given how early stage many are at this point, and particularly given the realities of fund raising (investors back the best people).”
— With assistance by Yan Zhang, and Tian Ying

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Permalink 01:17:29 pm, by dacare, 329 words, 326 views   English (US)
Categories: News of China

Apple to build first R&D center in China by the end of the year

Reuters reports that Apple is to build its first research and development center in China, citing a statement by the official Chinese state broadcaster.

Tim Cook reportedly made the commitment to Vice Premier Zhang Gaoli, stating that the center will be built by the end of the year.

The pledge comes after the head of China’s industry and technology regulator in May told Cook he hoped Apple could deepen its cooperation with the country in research and development and stressed information security.

Apple likely has two reasons for investing in R&D within China …

First, Apple wants to be able to recruit the best research staff worldwide, not all of whom are willing to relocate to the USA. It has established – or is establishing – R&D centers in a number of locations around the world, including France, Israel, Japan, Sweden and the UK. A center in China has long been rumored.

Second, the company is seeking to establish closer ties to protect its interests in what is currently its second-largest market.

Apple has long had a somewhat precarious relationship with the Chinese government. China has in the past questioned the security of iPhones and banned government purchases of Apple products. More recently, China has said that Apple will be subjected to greater security scrutiny, its iBooks and iTunes Movies services were shut down by a government agency, and a Beijing patent office has ruled that the iPhone 6 copies a Chinese phone.

Reuters even suggests that Apple’s $1B investment in Chinese Uber competitor Didi Chuxing – key to Uber abandoning its own operations in the country – may have been partly motivated by political considerations.

Before Cook’s charm offensive in Beijing in May, Apple announced a $1 billion deal with ride-hailing app Didi Chuxing, a move many experts saw as an attempt to curry favor with Beijing.

Apple’s Q3 earnings report revealed that the company’s sales in China were down 33% year-on-year as it battles local brands.

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Permalink 01:29:09 pm, by dacare, 483 words, 304 views   English (US)
Categories: Opinion and View

Recruiting the right way in the digital economy

Managers seeking to meet the demands of the digital economy need to radically rethink how they recruit and develop their workers.
They should concentrate less on trying to fill vacant jobs or searching for prospective employees with particular academic or professional qualifications. Instead, they should focus more on attracting candidates with the skills the organisation needs – even if jobseekers come from different industries or lack some of the skills required.
These are some of the findings of the World Economic Forum’s 2016 Human Capital Report. The report makes compelling reading and offers valuable insight into how organisations can align their human capital requirements with the fast-changing digital economy. It examines how 130 countries around the world are developing and deploying their human capital. For the first time, the report’s authors have drawn on workforce information provided by digital employment exchanges and platform businesses. Contributors include LinkedIn, Upwork, in the US and Chinese firm Didi Chuxing. They’ve combined this information with a wide range of public sector data to produce a fascinating analysis of global skills and work trends.
Important findings for businesses include:
• Skill-sets are often a more accurate and consistent indicator of a recruitment candidate’s ability than job titles or qualifications, and can frequently be transferred from one industry to another. While data analysts in the market research and energy industries might have little in common there are strong similarities, for example, in the skills required for this role in the financial services and consumer retail sectors.
WEF report examines how 130 countries around the world are developing and deploying their human capital. Photo: Reuters
• Focusing on skills broadens an employer’s pool of prospective recruits and increases development opportunities for its workers. For example, only 84 000 of LinkedIn’s 430 million members record their job title as “data scientist” or “data analyst.” However, 9.7 million LinkedIn members possess one or more of the primary or sub-skills required by data scientists and data analysts. Around 600,000 have at least five of these skills. A modest investment in training could equip many of them for the role of data scientist or data analyst.
• Businesses can no longer act as consumers of “ready-made” human capital. They have a social responsibility to work closely with educators and governments to develop education systems that keep pace with an increasingly digital and dynamic labour market. Greater in-house development and training are also needed to enable workers to adapt to constantly changing skills requirements.
• Digital work platforms are accelerating the growth of the global “on-demand” workforce. However, most workers currently using these digital services were freelancing before they joined. Digital talent platforms still account for a very small proportion of the “own account” work performed in major economies.
• High talent mobility is shifting key digital skills between countries. Australia, Chile and the United Arab Emirates, for example, are gaining technology skills while Greece, Canada and Finland are losing them.

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Permalink 11:00:20 am, by dacare, 237 words, 285 views   English (US)
Categories: News of China

Pre-opening costs at Shanghai Disney drag down earnings

A general view of Shanghai Disney Resort.

Higher pre-opening costs at Shanghai Disney Resort partly contributed to a lower operating income of Walt Disney's international operations, according to a recent quarterly earnings report of the U.S.-based media conglomerate.

The lower-than-expected income of Walt Disney's international segment, dented by the costs of opening Shanghai Disneyland and lower attendance and higher operating costs at Disneyland Paris, was offset by an increase in domestic operations due to guest spending growth and lower costs, the report reveals.

Parks and Resorts revenues for the past fiscal quarter increased 6 percent to US$4.4 billion and segment operating income increased 7 percent to US$994 million, against staggering total quarterly earnings of US$2.6 billion, up by US$114 million over the prior-year quarter.

Disney's newest park in Shanghai, with a cost of approximately US$5.5 billion, has received close to a million visitors during less than a month after its opening, Disney Chief Executive Officer Robert Iger said last month.

Wang Jianlin, China's richest man and chairman of Dalian Wanda Group, a real estate and entertainment conglomerate, made a uncharacteristically bold remark prior to the theme park's opening, saying that "Wanda would make it impossible for Disney China to make profit in the next 10 to 20 years."

He also expressed doubt over the high cost of building such a theme park in China and believed that it would have to charge high prices in order to be profitable.

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Permalink 02:04:51 pm, by dacare, 466 words, 227 views   English (US)
Categories: News of China

BHP launches Shanghai app hub

City widely recognized as a global center for mobile application development

BHP Billiton Ltd, one of world's largest mining companies by market capitalization, has launched its new Mobile Applications Hub in Shanghai, in order to help its global operations enhance their productivity, increase efficiency and reduce costs.

Diane Jurgens, BHP Billiton chief technology officer, said the new hub is one example of the potential for technology innovation to improve the way the company works and benefit people and the company.

BHP Billiton's mobile apps hub in Shanghai will also support the company to work closely with its China partners, such as steelmakers, to improve visibility of the entire supply chain.

"About 70 percent of BHP Billiton's iron ore is exported to the Chinese market, so it is important to stay connected with Chinese clients, particularly the visibility of supply chain, from pit to railway, from ports to yard. Now we have technology team in China and we can stay better connected to our marketing team to meet clients' demands," said Jurgens.

One of the key issues for enterprises that want to move up the value chain is to attract talent to develop automation and innovation to improve proficiency, she said.

The company's $5 million apps hub will initially employ 50 technology applications designers. Shanghai is an ideal location for the hub as it is widely recognized as a global center for mobile apps development and has highly experienced, skilled workers and leading universities offering excellent programs in technology and engineering, she said.

Mobile apps in the field have helped the company reduce its costs.

A solution that allows files and data to be managed securely on a shared device in mines located in South America and Australia with 350 users sharing 85 devices and another 1,000 devices deployed to 5,000 workers will help BHP Billiton save $6.5 million.

Analysts said as prices of commodities such as iron ore and gasoline have been experiencing wild fluctuations in recent years, players in the resources sector have been making various efforts to reduce costs and improve productivity by using better technologies, a key move for companies to survive difficulties and grow.

"Many players have suspended investments to open new field. Instead, they seek to exploit potential by using better exploration technologies to increase productivities, or optimize the supply chain, manufacturing flows, or human resources deployment to reduce costs," said a research note from Guolian Securities Co Ltd.

BHP Billiton has not approved new investment in iron ore since 2011, while resources will be deployed more extensively in copper mining, according to the company's disclosure materials.

Jurgens said technologies will not only help reduce costs but also will significantly boost productivity, such as by using sensors to identify copper from waste in mines. Big data emerging from the process will help geoscientists better analyze information and improve exploration results.

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Permalink 01:35:40 pm, by dacare, 740 words, 265 views   English (US)
Categories: News of China

Making money in the home property boom

Real estate agents in Hangzhou are reaping the benefits of a boom in existing home sales, turning their occupation into one of the best paid this summer.

During the first half of this year, 52,889 existing apartments were sold, up about two-thirds from a year earlier and almost equal to total sales for the whole of 2105. Property agents, who normally get bonuses when they complete a sale, are earning an average of 12,326 yuan ($1,852) a month nowadays, according to industry analysts.

"I work almost every day," said Jason Huang, an agent in a real estate office in the Jianggan District. "I don't take breaks because that can mean money slipping away from my pocket."

In downtown areas, the average price of an existing apartment has risen to 19,652 yuan per square meter. In residential communities near sought-after primary and middle schools, prices have surpassed 20,000 yuan.

Brokerage fees vary according to the size of a transaction. Homebuyers typically have to pay 1-3 percent of the value of the apartment if a deal is concluded. On average, a real estate agent earns from 10,000-20,000 yuan on each flat sold.

"The income is much better than that of a typical white-collar office worker in Hangzhou," said Huang, who declined to reveal his earnings. "However, I do have to sacrifice weekends and leisure time for my job."

As a relative newcomer to the business, Huang said he has to familiarize himself with surrounding neighborhoods and find as many people as possible who want to sell their homes. He said he makes hundreds of calls every day to potential buys and sellers.

The most time-consuming part of his job is taking potential buyers to view apartments. On weekends, the number can triple from weekdays

"Sometimes, I take a buyer to visit a dozen flats in a day and all of them are rejected," said Huang.

"Selling a flat can take months or even a year. But once you are successful, if means money in your pocket."

Hangzhou's real estate prices have been rising for 14 months, influenced perhaps by the city's hosting of the G20 summit next month and the Asian Games in 2022.

Real estate activity in the Jianggan District has climbed 32 percent, according to Kanfang, a local real estate transaction website. That is followed by a 20 percent increase in Xiaoshan District and 19 percent in Yuhang.

In the Tier 3 city of Jiaxing in northern Zhejiang Province, the increase in real estate prices this month ranked first in the nation, according to the China Index Academy.

Veteran real estate agent Will Li said the ranking is not surprising.

Jiaxing sits at the border of Zhejiang and Shanghai, putting it only 30 minutes by bullet train from either city. In May, the government announced that Shanghai residents could use their housing accumulation funds to buy homes in Jiaxing.

"The new policy stimulated the local market," Li said. "Many sellers called to tell me they wanted to raise their prices. That means potential brokerage fees also rise."

Li owns a private real estate agency, operated out of a residential community. His track record in selling homes has made the agency popular with locals.

The boom in property is both gratifying and stressful for Li.

"It's really labor-intensive work," he said. "In addition to shuttling between houses, we have to deal with piles of contracts and sometimes resolve disputes between buyers and sellers. Yes, it means high incomes, but many of the younger agents burn out within three years.

Last month, two of his agents quit.

"More real estate agency chains are starting to open branches in the city, which means more competition and more stress for agents," Li added.

For his part, Huang said he plans to leave his current job next year and return to his hometown of Lishui in western Zhejiang, where he will open his own real estate agency.

"Hangzhou is saturated with agencies at present, so newcomers like me have to go elsewhere if we want to strike out on our own," he said. "However, the existing home market in Lishui is still full of potential. It's a great chance for me."

Huang is a young man with big dreams.

"I sell homes, but I can't afford my own house yet," he said. "I'm told that top agents can earn something like 600,000 yuan in just six months. I don't know if that's true or not. I am just saving my money to invest in my own business in Lishui."

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Permalink 01:55:53 pm, by dacare, 247 words, 233 views   English (US)
Categories: News of China

China’s 51job sees 10.2% revenue boost

Integrated HR services provider 51job, based in China, has seen revenues increase 10.2% amid “stable” growth in the country’s white-collar recruitment market.

The results were announced in unaudited financial results for the second quarter of 2016 ended 30 June 2016.

The results, published yesterday, reveal total revenues increased to RMB559.8m (£64.1m) on Q2 2015, with gross margin of 71.8% compared with 72.8% in Q2 2015.

Commenting on the results, Rick Yan, president and chief executive, said: “With the white-collar recruitment market exhibiting relatively stable, modest growth in this time of economic transition in China, our strategic focus remains on increasing online customer spend and improving cross-selling of our other value-added HR services.

“Our sales efforts to deepen customer engagement are bearing fruit as average revenue per unique online employer has increased on a year-over-year basis for five consecutive quarters.

“We will continue to execute our initiatives in a disciplined manner. We are making important investments to strengthen our sales and customer service infrastructure, expand our new targeted job seeker platforms and capture additional HR-related opportunities, all while maintaining a track record of sustained profitability.”

51job results at a glance:

Total revenues increased 10.2% on Q2 2015 to RMB559.8m
Online recruitment services revenues increased 11.2% over Q2 2015 to RMB373.1m
Other human resource related revenues increased 9.1% over Q2 2015 to RMB186.6m, which reflected the impact of a value-added tax policy change effective 1 May 2016
Gross margin of 71.8% compared with 72.8% in Q2 2015
Income from operations increased 4.7% over Q2 2015 to RMB128.2m
Fully diluted earnings per share were RMB2.9

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Permalink 12:10:05 pm, by dacare, 93 words, 265 views   English (US)
Categories: News of China

Northern Gas & Power launches radio recruitment drive

Energy firm Northern Gas & Power has taken to the airwaves to launch a recruitment drive for business account managers.

Radio Airtime Media, the radio advertising division of Media Agency Group, has launched a new North-East campaign on Capital FM to promote working at Northern Gas & Power. The 30-second radio commercials can be heard this summer as the energy supplier seeks to expand its businesses across new global offices.

The Newcastle-focused radio ads are targeting potential account managers, who will be interested in working at NGP’s North-East office on Gateshead Quayside.

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Permalink 10:58:07 am, by dacare, 314 words, 293 views   English (US)
Categories: News of China, Banking & Financial Services

KPMG listens to graduates and changes hiring process

Streamlining its recruitment processes for millennials makes good business sense for KPMG, as it proves the professional services firm has listened to feedback, says a spokesperson.

The comments come after news that KPMG has cut back on its recruitment processes for millennials, as Recruiter reported earlier this week. The firm has condensed its traditional three-stage recruitment process of first interview, assessment centre and final interview into a single day.

KPMG’s new streamlined approach, known as Launch Pad, also enables students to gain new skills, network with existing KPMG staff and partners, as well as their peers.

The firm’s move follows research carried out with market research company High Fliers Research that showed millennials were frustrated by lengthy recruitment processes (34%) and poor communication from their potential employer (43%), with over half complaining they did not receive any feedback when applying for a role.

A KPMG spokesperson told Recruiter in a statement it made good business sense for the firm to listen to views and feedback about graduate recruitment, and transform its practices to show graduates of all ages the firm listens to their feedback and adapts processes.

This is especially important, the spokesperson added, due to the “fierce” competition for the very best graduates, “even more so now big businesses are competing with smaller start-ups as well as their traditional competitors”.

The spokesperson said the new process provides more certainty to candidates about what will happen and when.

“Successful candidates will receive a job offer more quickly so that they can then focus on their studies and university life without needing to attend further interviews.

“There’s also the opportunity to learn a new skill. This will help them to determine whether KPMG is the right fit for them.”

The programme is being rolled out now for 2017 graduate trainees, while the firm will be running Launch Pad recruitment events around the country from October 2016.

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Permalink 11:33:47 am, by dacare, 705 words, 280 views   English (US)
Categories: Opinion and View

Are going-out companies paying too much?

In the late 1980s, Japan had over-inflated stock and property markets. Its companies, fleeing the lack of opportunities in Japan itself, vastly overpaid for all manner of U.S. assets. I often dreamed that some Japanese investor would overpay for the house I owned at the time.

The rate of Chinese companies making overseas investments has more than doubled since last year. They often have a business model designed to bring technology and foreign business practices to the huge domestic Chinese market?a much better-defined plan than the Japanese, who were mostly purely financial investors, ever did. But, still I worry that they are paying too much.

Let's take a look at a recent deal. Beijing-based LeEco Global Ltd announced last Tuesday that it agreed to pay $2 billion cash for Vizio Inc, a California-based manufacturer of inexpensive television sets and sound bars. This at a time when the dollar is high relative to the yuan. LeEco argued that Vizio will enable it to gain market share in the coming internet-of-things technology that links all kinds of smart products together. And, it certainly may turn out in that LeEco made a smart move in the long run. But, I still wonder about the pricing.

Vizio filed initial public offering papers with the U.S. Securities and Exchange Commission in July of 2015, but never actually carried out the IPO. According to accounting data in the SEC filing, Vizio's profits were $44.96 million in 2014 and $31.35 million in the first half of 2015.

Since Vizio is privately held and decided not to go through with the IPO, subsequent data are not available. But these numbers imply a profit of roughly $56 million in 2015, assuming that Vizio makes slightly more than half of its profits in the first half, as it did in 2014. Vizio has not been a growth company?its sales and profits in 2014 were about the same as in 2010 and were lower in the years in between.

Vizio's business in the U.S. is in brutally competitive markets. Most consumers in the U.S. consider television sets to be almost undifferentiated commodities?they buy the cheapest one. Vizio has become the biggest-selling brand of TVs in the U.S. by following a low-price strategy. But, this strategy leads to very low margins?profits have averaged less than 3 percent of sales.

Vizio's TVs are connected to the internet, so the company receives potentially valuable data on what shows its customers are watching. But, the company so far has not been able to reap profits from this information. In any case, William Wang, the current CEO and majority owner of Vizio, will retain 51 percent ownership of the Insight division, which will own this data.

The bottom line is that LeEco has agreed to pay about 35 times earnings for a producer of near-commodity products in a highly competitive business. This compares with Apple Inc, which currently trades for 11 times earnings, Google Inc at 30, and Samsung Electronics Co at 3.3.

If Vizio had completed its IPO and received 10 times earnings, which seems about right for a low-margin company, it would have had a market value of $600 million. Even at the current historically high average Dow Industrials price-to-earnings ratio of about 20, which is too high for a company in such a competitive market, Vizio would be worth $1.2 billion.

China Daily reported that Jia Yueting, founder and CEO of LeEco, said that the purchase of Vizio is part of a "big bang plan" to enter the U.S. market.

It may get access to Vizio's distribution channels to sell its phones and other products?but, Vizio sells its TVs through big box stores, such as Best Buy Co Inc, which insist on paying low-margin prices to their suppliers.

It may be able to use its LeEco system to add value to the TVs, but Vizio made its name through low prices?proving that customers are reluctant to pay more for sophisticated TVs. Just about every merger or acquisition is justified on the basis of "synergies", but few actually pay off.

Companies spending their own money have more incentive to get it right than does an outside analyst like myself. But, I do hope the current wave of Chinese companies going-out are not paying too much.

(By David Blair)

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Permalink 02:59:59 pm, by dacare, 188 words, 210 views   English (US)
Categories: News of China

Uber China team to get 6 months base salary and equity vesting as bonus

After China's ride-hailing market leader Didi Chuxing confirmed Monday that it will acquire Uber's business in China, Uber China held a staff meeting in the evening, announcing that the company will pay a cash Close Bonus in recognition of Uber China team's contribution, according to a report by technology media site,

The bonus will be valued at 6 months base salary and 6 months equity vesting that includes new hire grants, performance bonus and referral bonus.

The company said half of the bonus will be paid in cash within one week after the merger closes and the remaining half will be paid to employees one month after the closes.

Only employees who have worked with Didi or Uber for at least 30 days after the signing of the deal are qualified to receive the remaining half of the bonus.

Didi's acquisition of Uber China's business will give Uber a 5.89 percent stake in Didi, and Didi will also gain a stake valued at $68 billion in Uber's global business.

Apart from Uber's chief executive officer Travis Kalanick's blog post, Uber China officials have not commented on the acquisition yet.

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Permalink 11:27:37 am, by dacare, 513 words, 295 views   English (US)
Categories: News of China, Investing in China

Low private investment, high debt weigh down growth

Beginning with the second quarter of the year, China will be in the do-or-die battle of its economic transition, according to Hong Kong-based researchers.

The country's transition will undergo its most difficult stage, although it will probably maintain around 6 percent growth in GDP in the second half of the year, according to economists and financial analysts recently surveyed by China Daily.

According to the National Bureau of Statistics, the economy saw year-on-year growth of 6.7 percent in the second quarter, slightly above market expectations. The second quarter's growth rate was the same as in the previous quarter.

The growth was powered by retail sales, industrial output and new loans directed to fixed-asset investment.

But several things are at the center of concern, said Sun Mingchun, senior partner and chief economist of China Broad Capital Co Ltd, including an excess of industrial capacity, a large total social financing and a high leverage ratio, meaning a high level of debt.

Private investment was 15.9 trillion yuan ($2.39 trillion) in the first half of 2016. Its annualized growth rate fell from 3.9 percent in the first five months to 2.8 percent in the first half of the year, which means there was quite a dip in June alone.

Private companies are not seeing encouraging returns from their investments in most industries. And they probably still will not see a good profit in the next two to three years, Sun said.

By contrast, the State sector investment rose an impressive 23.5 percent in the first half of the year, concentrating mostly on infrastructure development in the less-developed areas.

But so much investment is still not as powerful a driver of growth as consumer spending, especially that on services, said Fielding Chen, Asia economist for Bloomberg Intelligence. If investment sees a further decline in the second half of the year, which he expects, the economy's growth engine will remain weak.

According to Cui Li, managing director and director of macroeconomic research at CCB International, the economy will be in its difficult period because it is facing an "unprecedented balancing risk", including "weaker-than-ever global demand, need for a sharper-than-expected capacity cut for the industry, and a round of bond defaults that weigh on investor sentiment."

Ding Shuang, head of China research at Standard Chartered Plc, said that although the hard landing scenario is less likely to happen, the mainland economic situation will remain complex, with questions about how to deal with its mounting debt and avoid the threat of capital outflow.

Ding expects that in the coming months of the year, China's fiscal policy will keep expanding while its monetary policy will be neutral. Cutting the reserve requirement ratio for banks may be the best way to enlarge the credit supply. But before the RRR is cut, the government may use reverse repos and lower interest rates on the medium-term lending facility.

Debt is a particularly ugly spot, the researchers said. As measured by Fitch Ratings Inc's Adjusted Measure of Total Social Financing, credit to companies, local governments and households rose as much as 15 percent in 2015 in the Chinese mainland, more than double its GDP growth.

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