China Stocks slumped on weak consumer confidence and poor second-quarter earnings of major companies

US stock market slumped Friday after the University of Michigan and Reuters released its consumer confidence index that dropped to 66.5 in July from 76, the lowest level in a year. The share of consumers anticipating income gains during the coming year dropped to 39 percent, the lowest on record. Three of four Americans surveyed said they expected no decline in unemployment in the next 12 months. General Electric Co, Bank of America Corp. and Citigroup Inc. reported disappointing second-quarter earnings that also helped the market to go down.

The China 100 stock index dropped 19.54 points or 2.34% to 815.01. The Panda China Large Cap Stock Index lost 16.44 points or 1.66 % to close at 972.01. The Tiger China Small & Mid Cap Stock Index slid 23.61 points or 2.88% to close at 796.64 and the Dragon China Undervalued Stock Index dropped 15.08 points or 2.17 % to close at 680.72.

Orient Paper, Inc. (ONP) today announced that in order to provide the highest level of transparency to its shareholders, the Company's Board of Directors has decided to retain Loeb & Loeb LLP, who plans to work with the Company's Audit Committee to retain a Big Four audit firm, to conduct an independent investigation into the issues raised by Muddy Waters, LLC ("Muddy Waters").

"The Audit Committee of the Board of Directors of Orient Paper firmly believes that the allegations made by Muddy Waters are categorically false and without merit," stated Mr. Drew Bernstein, Independent Director and Audit Committee Chair. "We have decided to take the exceptional step of retaining a top-tier international law firm and a Big Four audit firm to conduct an independent third-party investigation into these accusations in order to further reassure our investors of the integrity of our financial statements, business operations, customer and supplier relationships, and the use of proceeds from our capital markets activities."

Mr. Zhenyong Liu, Chief Executive Officer, added, "We are confident that this investigation will vindicate the company's financial disclosures to be accurate in all material respects." Orient Paper, Inc., through its subsidiary, Hebei Baoding Orient Paper Milling Company Limited, engages in the production and distribution of paper and paper products in the People’s Republic of China. Shares of Orient Paper closed in the red today at 5.89 off 0.42 to lose 6.66%.

Tianyin Pharmaceutical (TPI) [2.71, 0.09, -3.21%] a pharmaceutical company that specializes in patented biopharmaceutical, modernized traditional Chinese medicine and branded generics provides progress update on its Jiangchuan macrolide facility. The construction of the facility is on schedule, targeting August for completion and equipment installation, immediately followed by GMP certification and trial production. The state-of-the-art macrolide facility, occupying 100mu [~16.5 acres] of land at Sichuan Xinjin Industrial Park near Chengdu, is designed for a total annual capacity of 240 tons of macrolide Active Pharmaceutical Ingredients [API] to serve the growing macrolide antibiotics market.

Dr. Jiang Guoqing, CEO of Tianyin Pharmaceutical pointed out, "Jiangchuan macrolide initiative expands our scope of business into the large arena of antibiotics. Jiangchuan is not only of great strategic significance and sustainable economic benefits, but also projected to become a leading manufacturer of macrolide antibiotics in China. It captures the growth momentum created by the ongoing healthcare reform. The steady increase of the macrolide raw material prices reaffirmed our market forecast. Additionally, the API business has an efficient profit chain that consists of three key elements: 1) raw material processing, 2) API production, and 3) sales, which are favorable for its healthy cash flow and resilient profit margins."

Taiwan Semiconductor Manufacturing Co. (TSM) [9.92, 0.23, -2.27%] whose clients include a number of high-tech companies like Broadcom Corp., Qualcomm, Marvell and many others, announced today that it is planning to invest $9.4 billion in a new plant in Taiwan. The company is expecting to deliver record profits in 2010 and is set to release its earnings for this quarter at the end of July. Shares of Taiwan Semiconductor closed Friday in the red at 9.92 off 0.23 losing 2.27%.

Telestone Technologies Corporation (TSTC) closed today among the ten best stock performers at 9.23 per share gaining 0.11 points or 1.21%. Telestone today introduced net income guidance of $22.9 million which excludes non-cash stock based compensation charges. Net profit margins are projected to be 17.7%. Management reaffirmed revenue guidance of $129.4 million for the year ending December 31, 2010.

"Demand for our proprietary, high-margin WFDS product line has accelerated as a result of Beijing's January directives to unify the delivery of telecommunication networks, TV networks, broadband data and internet access systems," stated Han Daqing, President and Chairman of the Board of Telestone Technologies. "The installation process for our WFDS business is more efficient than our traditional projects and requires less resources and working capital. We expect this to be a catalyst for both growth and margin expansion in the second half of this year and estimate that WFDS will represent at least 30% of total revenues for 2010. As a result of strong orders and improved visibility, we are reaffirming our revenue guidance of $129.4 million for 2010 and our previously stated gross margin guidance of 42%.”

China Housing & Land Development, Inc., (CHLN) [2.09, -0.04, -1.88%] today reported preliminary contract sales results for its second quarter ended June 30, 2010. During the second quarter ended June 30, 2010, contract sales of China Housing and Land Development, Inc. totaled RMB 266.6 million (US$39.4 million), representing a 93.2% increase from RMB 138 million (US$20.4 million) for the second quarter of 2009 but a 14% decrease from the RMB 310 million (US$45.8 million) in sales for the first quarter of 2010. The Company's average residential selling price per square meter in the second quarter of 2010 was RMB 5,460, a 23% increase from RMB 4,432 in the second quarter of 2009 and a 7% increase from RMB 5,099 in the first quarter of 2010.

Contract sales are reported under the percentage of completion accounting method for revenue recognition and may not be fully recognized in the second quarter. According to data from E-House [China] and the Xi'an Bureau of Statistics, Xian's residential sales in the second quarter of 2010 totaled 3.0 million square meters with an average selling price of RMB 5,862, a 26% increase in sales volume and 6% increase in sales price compared to the first quarter of 2010. In the second quarter of 2009, residential sales totaled 2.9 million square meters with an average sales price of RMB 4,714 per square meter. Total sales volume and sales price increased 5% and 24%, respectively, on a year-on-year basis.

Mr. Xiaohong Feng, Chief Executive Officer of China Housing & Land Development, said, "Our second quarter contract sales were impacted by national policies implemented in April of 2010 to curb speculation in the real estate market. In spite of the lower sequential sales, our average residential sales price improved and our contract sales performance was significantly higher than the second quarter of 2009. The majority of revenue was generated from our JunJing Two Phase II and Puhua Phase One projects."