THE FIRST B-share company in Shenzhen, China Southern Glass, will announce annual results based on the International Accounting Standard next week. The publication of annual reports for many B-share companies in Shanghai last month prompted criticism from international brokers, who claimed they contained incorrect information. However, China Southern Glass pledged the results in its annual report on B-shares would be prepared according to international accounting rules. ''In Shenzhen, we have tough regulations in the B-share market because we're so close to Hongkong and we've learned the international practices,'' said Mr Richard Liang Yong, an official of the company's securities division. China Southern Glass published its results for local investors, based on Chinese accounting procedures, on March 3. Turnover for 1992 was 210 million yuan (HK$283 million), up 90 per cent over the previous year. Profit after tax was 61 million yuan, an increase of 138 per cent. Mr Liang said B-share profits should be between 52 million and 55 million yuan, 10 to 15-per cent lower than that for A-shares. He predicted the company would achieve a 130-million yuan profit on a turnover of 550 million in 1993, while Baring Securities predicts profits of 132 million yuan in 1993 and 165 million yuan in 1994. Price Waterhouse is the company's accountant. The company has aggressive plans for expansion this year. The largest project is a foreign joint venture to produce hi-tech, thin-float glasses. It will involve an investment of more than US$100 million and a contract is expected to be signed next month. A joint-venture factory, producing windscreens, is also planned, with a 150-million yuan plant to be built in Tinhe, Guangzhou. In addition, the company will set up a wholly owned operation to make hi-tech ceramics for electronic products. The plant will be in operation by year-end. Due to its expansion plans, the company will offer a five-for-10 rights issue aimed at raising 400 million yuan. Incorporated in 1984, China Southern Glass is a foreign joint venture based in Shekou. It launched its A-shares and B-shares in February last year. At present, the Hongkong-based company China Merchants Steam Navigation holds an 18.6-per cent stake, while Shenzhen Building Materials Industrial, Guangdong International Trust and Investment, and China North Industries have 17.2 per cent, 13.2 per centand 17.2 per cent respectively. The B-share stock accounts for 14.9 per cent of the company, and the A-shares 15.8 per cent. The employees own the remainder. Fourty per cent of its products are shipped to overseas markets. Australia is its largest market, sharing 45 per cent of its exports, with 25 per cent for the US, 15 per cent for Southeast Asia and 20 per cent for others.
