[Today’s Guide]
> Micro-grid power price and subsidy plans to release, energy storage industry see breakthroughs
> Ecological civilization construction to be covered in 13th Five-year Plan, following-up policies to release
> Longest-distance UHV power transmission project started, industrial prosperity to promoted
> Tongyu Heavy Industry to invest in nuclear waste treatment equipment, BYD to expand new energy car
[XFA Focus]
○ Micro-grid power price and subsidy plans to release, energy storage industry see breakthroughs
------
XFA learnt from the Energy Storage China 2015 opened on June 3 that the National Energy Administration (NEA) will introduce plans on the micro-grid power price and subsidies in the second half. The draft for soliciting opinions points out that it will give 70 percent subsidies to micro-grid projects.
Comment: The energy storage battery accounts for the largest proportion in the micro-grid investment and will benefit most from the subsidy plans. Statistics show that the new installed capacity of energy storage projects in the power system reached 31MW last year, representing an increase of 58 percent year on year. The industry is seeing breakthroughs. In addition, the energy storage battery released by Tesla received various orders, showing a booming energy storage market globally. In terms of listed companies, Shandong Sacred Sun Power Sources Co., Ltd. (002580.SZ) joins hands with Furukawa Co., Ltd. and enjoys cost advantage in lead carbon energy storage battery. Sungrow Power Supply Co., Ltd. (300274.SZ) and Samsung established a lithium-ion energy storage battery project. It is also actively develops in the photovoltaic power station market. Shenzhen Clou Electronics Co., Ltd. (002121.SZ) is the president of the Energy Storage Applications Branch of the China Industrial Association of Power Sources (CIAPS).
[XFA Selection]
○ Shandong provincial government announced on June 3 that it will adopt fiscal policies in restructuring and maintaining economic growth. It is expected to attract a capital investment of over 300 billion yuan.
○ The Information Office of Shanghai Municipality indicated that it will initiate the construction of a comprehensive state science center and focus on the building of 100 opportunities for mass entrepreneurship.
○ The National Equities Exchange and Quotations (NEEAQ) intends to transfer the examination focus on listed companies to the internal examination of securities companies. Companies will speed up in listing on the Three New Board.
○ The central enterprise China National Chemical Corporation will transfer the equities in subsidiaries on the Beijing Equity Exchange with nearly 100 million yuan. The assets consolidation of the group is advancing steadily.
○ China Nuclear Power Engineering Co., Ltd. recorded a total of 1.69 trillion yuan frozen capital online and offline, setting a new record in one year. The IPO application of Guotai Junan Securities Co., Ltd. passed the examination on June 3.
[Industry Information]
○ Ecological civilization construction to be covered in 13th Five-year Plan, series of specific policies to release
------
The State Council Information Office held a briefing on ecological civilization construction on June 3. Officials of the National Development and Reform Commission (NDRC) indicated that it will integrate the ecological civilization construction with the economic, political, cultural and social construction. The ‘13th Five-year Plan’ of the state under preparation will set a special chapter on ecological civilization construction. XFA learnt that series of policies on advancing ecological civilization construction will be introduced.
Comment: The Central Committee of the CPC and the State Council released the ‘Opinions on Speeding up in Advancing Ecological Civilization Construction’ in May. China has been accelerating in making investment on ecological restoration and environmental improvement. With the introduction of following-up policies, relevant industries will see rapid development. Inner Mongolia Hotision & Monsod Drought-resistance Greening Co., Ltd. (300355.SZ) sees rapid development in the ecological restoration business and it is actively developing an industrial platform for steppe ecology in China. Guangxi Fenglin Wood Industry Group Co., Ltd. (601996.SH) owns about 200,000 mu of afforestation in Guangxi Zhuang Autonomous Region and Guangdong Province.
○ Longest-distance UHV power transmission project started, industrial prosperity to promoted
------
XFA learns from State Grid Corporation of China that Jiuquan-Hunan ultra-high voltage (UHV) DC power transmission project was kicked off on June 3. This project was approved by the National Development and Reform Commission on May 18. It sees an engineering investment of 26.2 billion yuan and is planned to be put into operation in 2017.
Comment: Jiuquan-Hunan Project is an UHV power transmission project with 2,383 km, the longest distance by now. China plans to totally approve the construction of 14 UHV power transmission lines in 2015. The successive launch of UHV projects will promote industrial prosperity. As for listed companies, China XD Electric Co., Ltd. (601179.SH) supplies multiple equipment including transformers for UHV projects; Henan Pinggao Electric Co., Ltd. (600312.SH) is a company under the State Grid Corporation of China and its UHV switch products takes leading shares in domestic market.
[Announcement Interpretation]
○ Tongyu Heavy Industry to invest in nuclear waste treatment equipment with RMB1.5 bln through private placement
------
Tongyu Heavy Industry Co., Ltd. (300185.SZ) plans to raise 1,485 million yuan by issuing 220 million shares through private placement to invest in the intelligent treatment equipment of nuclear waste and supporting services, the manufacturing of critical component of high-power wind turbine generators, the process optimization of heavy forging manufacturing and energy-saving modification. Upon completion of private placement, the company will break the monopoly on nuclear waste treatment equipment by foreign countries and achieve domestication in nuclear waste treatment area.
○ BYD to expand new energy car with RMB15 bln through private placement
------
BYD Company Limited (002594.SZ; 01211.HK) plans to raise 15 billion yuan by issuing 261 million shares at 57.4 yuan per share through private placement, among which, 6 billion yuan will be invested in the production expansion of lithium-ion battery, 5 billion yuan will be invested in the development of new energy car and 4 billion yuan will be used to supplement working capital and pay off bank loans.
○ Zhengbang Technology to build Internet business platform with RMB200 mln
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Jiangxi Zhengnongtong Network Technology Co., Ltd. is jointly incorporated by Jiangxi Zhengbang Technology Co., Ltd. (002157.SZ) and Jiangxi Zhengrong Asset Management Co., Ltd., a wholly-owned subsidiary of Zhengbang Group Co., Ltd. The registered capital of Zhengnongtong Network Technology is 200 million yuan, among which, Zhengbang Technology invests 190 million yuan with its own capital, accounting for 95 percent. Zhengnongtong Network Technology will push forward the company’s strategic upgrading of “comprehensive service provider of modern agriculture” covering “rural material products + technical service + value-added service”.
○ Kingee Culture Development and Boomsense Technology to release staff shareholding plan
------
Beijing Kingee Culture Development Co., Ltd. (002721.SZ) plans to raise 65.00 million yuan from staff to acquire the dedicated plan set by Penghua Asset Management (Shenzhen) Co., Ltd. The latter will acquire the company’s stocks according to the ratio of 1:2 after finishing fundraising. Calculated according to the company’s stock price before trading suspension, 195 million yuan can acquire 2.72 million shares, accounting for 1.25 percent of the company’s total share capital.
Boomsense Technology Co., Ltd. (300312.SZ) plans to raise 100 million yuan from 30 staff and entrust Fortune Securities Co., Ltd. to fully subscribe Changying No.6 Aggregate Asset Management Plan. It is expected that 4.95 million shares of the company might be bought, accounting for 3 percent of its total share capital.
○ Grandland Decoration acquires shares of Udis Digital Identification System to develop face recognition
------
Shenzhen Grandland Decoration Group Co., Ltd. (002482.SZ) acquires 24 percent shares of Shanghai Udis Digital Identification System Co., Ltd. with 23.90 million yuan. The latter is a professional lockset company and is promoting high-end electronic lockset including face-recognition lockset and relevant systems in civil market. The company believes that this investment can help the company to incorporate face-recognition lockset into smart home platform and take the lead in exploring the civil market of face recognition.
[Trading Trends]
○ New energy car sector favored by institutions
------
The trading volume ranking list on June 3 shows that Wanxiang Qianchao Co., Ltd. (000559.SZ) was bought by two institutions with a total of 125 million yuan, accounting for 5.7 percent of its intraday turnover; Zhejiang Wanma Co., Ltd. (002276.SZ) was bought by one institution with 48.70 million yuan, accounting for 2.4 percent of its intraday turnover.
Comment: Institutions believe that as one of the ten key development areas of “Made in China 2025”, new energy car industry will gain continuous national support and see long-term investment value. Under governmental support, new energy car industry has entered explosive growth period in 2015. Lithium-ion power battery, lithium electricity equipment and electric motor will benefit the most.
> Micro-grid power price and subsidy plans to release, energy storage industry see breakthroughs
> Ecological civilization construction to be covered in 13th Five-year Plan, following-up policies to release
> Longest-distance UHV power transmission project started, industrial prosperity to promoted
> Tongyu Heavy Industry to invest in nuclear waste treatment equipment, BYD to expand new energy car
[XFA Focus]
○ Micro-grid power price and subsidy plans to release, energy storage industry see breakthroughs
------
XFA learnt from the Energy Storage China 2015 opened on June 3 that the National Energy Administration (NEA) will introduce plans on the micro-grid power price and subsidies in the second half. The draft for soliciting opinions points out that it will give 70 percent subsidies to micro-grid projects.
Comment: The energy storage battery accounts for the largest proportion in the micro-grid investment and will benefit most from the subsidy plans. Statistics show that the new installed capacity of energy storage projects in the power system reached 31MW last year, representing an increase of 58 percent year on year. The industry is seeing breakthroughs. In addition, the energy storage battery released by Tesla received various orders, showing a booming energy storage market globally. In terms of listed companies, Shandong Sacred Sun Power Sources Co., Ltd. (002580.SZ) joins hands with Furukawa Co., Ltd. and enjoys cost advantage in lead carbon energy storage battery. Sungrow Power Supply Co., Ltd. (300274.SZ) and Samsung established a lithium-ion energy storage battery project. It is also actively develops in the photovoltaic power station market. Shenzhen Clou Electronics Co., Ltd. (002121.SZ) is the president of the Energy Storage Applications Branch of the China Industrial Association of Power Sources (CIAPS).
[XFA Selection]
○ Shandong provincial government announced on June 3 that it will adopt fiscal policies in restructuring and maintaining economic growth. It is expected to attract a capital investment of over 300 billion yuan.
○ The Information Office of Shanghai Municipality indicated that it will initiate the construction of a comprehensive state science center and focus on the building of 100 opportunities for mass entrepreneurship.
○ The National Equities Exchange and Quotations (NEEAQ) intends to transfer the examination focus on listed companies to the internal examination of securities companies. Companies will speed up in listing on the Three New Board.
○ The central enterprise China National Chemical Corporation will transfer the equities in subsidiaries on the Beijing Equity Exchange with nearly 100 million yuan. The assets consolidation of the group is advancing steadily.
○ China Nuclear Power Engineering Co., Ltd. recorded a total of 1.69 trillion yuan frozen capital online and offline, setting a new record in one year. The IPO application of Guotai Junan Securities Co., Ltd. passed the examination on June 3.
[Industry Information]
○ Ecological civilization construction to be covered in 13th Five-year Plan, series of specific policies to release
------
The State Council Information Office held a briefing on ecological civilization construction on June 3. Officials of the National Development and Reform Commission (NDRC) indicated that it will integrate the ecological civilization construction with the economic, political, cultural and social construction. The ‘13th Five-year Plan’ of the state under preparation will set a special chapter on ecological civilization construction. XFA learnt that series of policies on advancing ecological civilization construction will be introduced.
Comment: The Central Committee of the CPC and the State Council released the ‘Opinions on Speeding up in Advancing Ecological Civilization Construction’ in May. China has been accelerating in making investment on ecological restoration and environmental improvement. With the introduction of following-up policies, relevant industries will see rapid development. Inner Mongolia Hotision & Monsod Drought-resistance Greening Co., Ltd. (300355.SZ) sees rapid development in the ecological restoration business and it is actively developing an industrial platform for steppe ecology in China. Guangxi Fenglin Wood Industry Group Co., Ltd. (601996.SH) owns about 200,000 mu of afforestation in Guangxi Zhuang Autonomous Region and Guangdong Province.
○ Longest-distance UHV power transmission project started, industrial prosperity to promoted
------
XFA learns from State Grid Corporation of China that Jiuquan-Hunan ultra-high voltage (UHV) DC power transmission project was kicked off on June 3. This project was approved by the National Development and Reform Commission on May 18. It sees an engineering investment of 26.2 billion yuan and is planned to be put into operation in 2017.
Comment: Jiuquan-Hunan Project is an UHV power transmission project with 2,383 km, the longest distance by now. China plans to totally approve the construction of 14 UHV power transmission lines in 2015. The successive launch of UHV projects will promote industrial prosperity. As for listed companies, China XD Electric Co., Ltd. (601179.SH) supplies multiple equipment including transformers for UHV projects; Henan Pinggao Electric Co., Ltd. (600312.SH) is a company under the State Grid Corporation of China and its UHV switch products takes leading shares in domestic market.
[Announcement Interpretation]
○ Tongyu Heavy Industry to invest in nuclear waste treatment equipment with RMB1.5 bln through private placement
------
Tongyu Heavy Industry Co., Ltd. (300185.SZ) plans to raise 1,485 million yuan by issuing 220 million shares through private placement to invest in the intelligent treatment equipment of nuclear waste and supporting services, the manufacturing of critical component of high-power wind turbine generators, the process optimization of heavy forging manufacturing and energy-saving modification. Upon completion of private placement, the company will break the monopoly on nuclear waste treatment equipment by foreign countries and achieve domestication in nuclear waste treatment area.
○ BYD to expand new energy car with RMB15 bln through private placement
------
BYD Company Limited (002594.SZ; 01211.HK) plans to raise 15 billion yuan by issuing 261 million shares at 57.4 yuan per share through private placement, among which, 6 billion yuan will be invested in the production expansion of lithium-ion battery, 5 billion yuan will be invested in the development of new energy car and 4 billion yuan will be used to supplement working capital and pay off bank loans.
○ Zhengbang Technology to build Internet business platform with RMB200 mln
------
Jiangxi Zhengnongtong Network Technology Co., Ltd. is jointly incorporated by Jiangxi Zhengbang Technology Co., Ltd. (002157.SZ) and Jiangxi Zhengrong Asset Management Co., Ltd., a wholly-owned subsidiary of Zhengbang Group Co., Ltd. The registered capital of Zhengnongtong Network Technology is 200 million yuan, among which, Zhengbang Technology invests 190 million yuan with its own capital, accounting for 95 percent. Zhengnongtong Network Technology will push forward the company’s strategic upgrading of “comprehensive service provider of modern agriculture” covering “rural material products + technical service + value-added service”.
○ Kingee Culture Development and Boomsense Technology to release staff shareholding plan
------
Beijing Kingee Culture Development Co., Ltd. (002721.SZ) plans to raise 65.00 million yuan from staff to acquire the dedicated plan set by Penghua Asset Management (Shenzhen) Co., Ltd. The latter will acquire the company’s stocks according to the ratio of 1:2 after finishing fundraising. Calculated according to the company’s stock price before trading suspension, 195 million yuan can acquire 2.72 million shares, accounting for 1.25 percent of the company’s total share capital.
Boomsense Technology Co., Ltd. (300312.SZ) plans to raise 100 million yuan from 30 staff and entrust Fortune Securities Co., Ltd. to fully subscribe Changying No.6 Aggregate Asset Management Plan. It is expected that 4.95 million shares of the company might be bought, accounting for 3 percent of its total share capital.
○ Grandland Decoration acquires shares of Udis Digital Identification System to develop face recognition
------
Shenzhen Grandland Decoration Group Co., Ltd. (002482.SZ) acquires 24 percent shares of Shanghai Udis Digital Identification System Co., Ltd. with 23.90 million yuan. The latter is a professional lockset company and is promoting high-end electronic lockset including face-recognition lockset and relevant systems in civil market. The company believes that this investment can help the company to incorporate face-recognition lockset into smart home platform and take the lead in exploring the civil market of face recognition.
[Trading Trends]
○ New energy car sector favored by institutions
------
The trading volume ranking list on June 3 shows that Wanxiang Qianchao Co., Ltd. (000559.SZ) was bought by two institutions with a total of 125 million yuan, accounting for 5.7 percent of its intraday turnover; Zhejiang Wanma Co., Ltd. (002276.SZ) was bought by one institution with 48.70 million yuan, accounting for 2.4 percent of its intraday turnover.
Comment: Institutions believe that as one of the ten key development areas of “Made in China 2025”, new energy car industry will gain continuous national support and see long-term investment value. Under governmental support, new energy car industry has entered explosive growth period in 2015. Lithium-ion power battery, lithium electricity equipment and electric motor will benefit the most.
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