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Is the Chinese State Media Out to Knock Apple Down?


Plus, China Unicom, China Telecom, and PetroChina all reported earnings last week.

Here is the week's other business news from China:


If you were curious about how often Tencent (HKG:0700) and Sina censor posts on their micro-blogging platforms, former Google (NASDAQ:GOOG) China head Kaifu Lee has helpfully provided a chart of his experience with censorship on Tencent Weibo and Sina Weibo.

According to Lee, he had the most posts deleted in recent weeks because he had been talking about the story of the almost 15,000 dead pigs found in the Huangpu River, which is a source of drinking water for Shanghai. Lee had also been discussing a Chinese parliament session about leadership succession.

In February, Lee was temporarily banned from Sina and Tencent's Weibo sites for three days after he pointed out flaws in Jike, a state-run search engine.

China Unicom (NYSE:CHU)

China's second largest wireless carrier stated that 2012 profit jumped 68%, thanks to its ability to generate revenue from 3G services. The first Chinese carrier to offer the iPhone, China Unicom earned 7.1 billion yuan ($1.1 billion) in 2012, compared to 4.3 billion yuan in 2011.

Revenue for last year jumped 19% to 249 billion yuan ($40 billion). A big part of the increase came from 3G services revenue, which rose over 80% to some 60 billion yuan.

China Unicom said it gained 20% more wireless subscribers in 2012, and now has a total of 239.3 million, with about 75% of them on 3G subscriptions.

China Telecom (NYSE:CHA)

With help from the iPhone, China Telecom reported a fourth-quarter earnings beat. Net earnings actually dipped 17% to 2.36 billion yuan ($380 million) from 2.84 billion yuan a year ago, but that was higher than the consensus estimate of 2.04 billion yuan.

When it first started selling the iPhone in March 2012, China Telecom said that the Apple device would contribute to the company's long-term growth, but hurt margins in the short-term. The company's words have proved prescient, for China Telecom has reported three straight quarters of profit drops.

China Telecom will be happy with its iPhone-powered 3G subscription growth. The operator added 69 million 3G customers last year, which was a 43% jump. While it only has 15% of China's overall mobile market, China Telecom now holds a 30% share of 3G customers.

PetroChina (NYSE:PTR)

The world's biggest publicly listed oil producer by volume saw net income fall 13% to 115.3 billion yuan ($18.6 billion) in 2012. Analysts had projected profit of 119.8 billion yuan. Revenue, however, improved 9.6% to 2.2 trillion yuan.

PetroChina said its profit drop despite a revenue increase was due to high natural gas import prices and the government's domestic fuel price controls, which eroded refining margins.

As a result of its domestic weakness, the state-owned company said it will look outside the mainland for growth.

"Over the next three years, we'll expand our presence in overseas markets," said PetroChina vice president Sun Longde at a press conference this week, according to Bloomberg. "Our target by the end of 2015 is to have 50% of our output come from overseas projects and by the end of 2020, 60%." Overseas production accounts for 10% now, the company said.

Twitter: @sterlingwong
No positions in stocks mentioned.
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