August 22 -- Shanghai Wanye Enterprises (600641) reported that its net profit fell 38.38 percent year-on-year to 83.57 million yuan in the first half of 2011, with earnings per share of 0.1037 yuan, reports the National Business Daily.

Wanye Enterprises’ revenue fell 5.22 percent year-on-year to 527 million yuan during the reporting period. Revenue from real-estate development was 397 million yuan in the first half of 2011, with transaction areas of 23,900 square meters, and the gross margin of real-estate development fell 5.62 percent to 49.8 percent. Revenue from coal sales was 129 million yuan during the reporting period, while the gross margin of its coal business slipped 0.47 percent to 31.96 percent.

Wanye Enterprises initially spent 225 million yuan to acquire a 45-percent stake in Inner Mongolia Haoyuan Coal Industry in August 2008. It also spent exactly one yuan to acquire an additional 22-percent stake in Haoyuan Coal Industry. The company spent another 96.67 yuan to acquire 29 percent stakes in Haoyuan Coal Industry in 2009. Haoyuan Coal Industry respectively contributed net profit of 13 million yuan and 13.53 million yuan to Wanye Enterprises in 2009 and 2010. 

Inner Mongolia’s government requires large coal enterprises to integrate the small coal enterprises, and requires each to maintain annual production capacity of 1.2 million tons. Haoyuan Coal Industry has production capacity of 600,000 tons, so Wanye Enterprise has to sell it.

Wanye Enterprises announced in its semi-annual report that it will sell a 96-percent stake in Inner Mongolia Haoyuan Coal Industry to Yuantong Company for 335 million yuan. And it expects to earn 13 million yuan from this transaction.

Wanye Enterprises and its share controller, Sanlin Wanye, plans to invest 1.01 billion yuan to develop the iron mine at Tariq Abu Island, Indonesia, which has received approval of China’s Ministry of Commerce. The iron mine has iron ore reserves of 35.04 million tons.