JULY 26, 2010, 11:38 P.M. ET
BEIJING (Dow Jones)--State-owned Huarong Asset Management Corp. said Monday its first-half net profit grew 76.6% from a year earlier, and the company aims to launch banking, equity investment and futures units in the second half as part of its efforts to transform itself into a more market-oriented firm.
The company's comments about its reform plan come after peer China Cinda Asset Management Co. restructured itself into a joint stock company earlier this month, following a capital injection of about CNY15 billion from the Ministry of Finance.
The government has yet to approve Huarong's reform plan, but it is widely believed the company will follow in the path of Cinda, the first of China's four debt-clearing agencies to restructure itself. The government set up the four agencies in 1999 to dispose of bad loans for the country's Big Four state-owned banks. The other two agencies are China Orient Asset Management Corp. and China Great Wall Asset Management Corp.
Huarong said in the statement its first-half net profit accounts for 80.7% of its full-year target. It also said its first-half revenue was up 58.2% from a year earlier. It didn't provide any details.
The company also reiterated its plan to introduce strategic investors to help it with its transformation into a joint stock company before eventually listing.
Huarong is hoping to launch the banking unit, to be called Huarong Xiangjiang Bank, as soon as possible, the statement said, without giving a timetable.
Huarong will own 51% of the bank, which will merge several city commercial banks and credit cooperatives in the central province of Hunan, according to earlier local media reports.
The company also said it plans to launch a fund management company for equity investments and a futures company as soon as possible. It didn't elaborate.
China Business News reported earlier this month, without citing any sources, that the fund-management company, of which Huarong will own 70%, plans to raise a total of CNY10 billion worth of funds in three phases.
Huarong has been diversifying its operations, with units in the leasing, asset management, brokerage, and trust investment industries.
-Victoria Ruan contributed to this article, Dow Jones Newswires; 8610 8400 7799; victoria.ruan@dowjones.com
From The Wall Street Journal published on JULY 26, 2010, 11:38 P.M. ET
