August 26 – Shenzhen Rainbow Fine Chemical Industry (002256) posted 3.84-percent year-on-year growth in interim net profits to 15.22 million yuan, reports China Business News, citing a company filing. Sales revenues grew 17.93 percent year-on-year to 190 million yuan. The firm predicts net profits for the first nine months will hit 26.44 million yuan.

However, several controlling shareholders, Naerte Heat Insulator Material Limited, Shenzhen Rainbow Biodegradation Material Limited and Zhuhai Rainbow Precision Chemical Limited, incurred losses during that period.

On March 2, Rainbow Biodegradable Material announced it had received orders worth 2.08 billion yuan from 2Degrees, Jiaxing International, Suzhou Chengsuda and SMIC (0981.HK). However, the total contract value later shrank to 510,000 yuan as the subsidiary came under investigation by the China Securities Regulatory Commission. Executives of the firm were punished by authorities and issued a public apology.

Rainbow Fine Chemical posted a 92.15-percent rise from the beginning of 2011 in inventory as the firm intended to purchase more goods while market prices remained low.

In 2010, the firm formed Rainbow Biodegradation Material Limited with Shenzhen Green World Biodegradation Materials. The new entity began with registered capital of 100 million yuan.

Rainbow Fine Chemical Industry invested 55 million yuan in the joint venture for a 55-percent interest.