[Today’s Guide]
> State Council executive meeting supports consumer finance with huge potential
> Draft of environment protection taxes law for soliciting opinions released, environment monitoring to see huge potential
> Unilumin to fully control ROE, Troy Information Technology to acquire Grid Electric Power Technology
> AoKang Shoes to become substantial shareholder of LightInTheBox Holding, Dowstone Technology to invest in supply chain finance
[XFA Focus]
○ State Council executive meeting supports consumer finance with huge potential
------
Chinese Premier Li Keqiang chaired the executive meeting of the State Council on June 10 to plan the development of consumer finance. With the deregulation on the market accesses and the delegation of approval rights, it will encourage qualified private capital to participate. The meeting pointed out that the consumer finance and commercial banks will conduct stagger competition and are complementary to the development of each other, which will facilitate the driving force of consumption in economic growth.
Comment: With the transformation of China’s economy, consumption is playing an increasingly important role in the three driving forces to economic growth, namely investment, consumption and exports. In developed countries, consumer finance is parallel with the credit card and individual bank loans. It enjoys unique advantages in the grass-root financial market. Consumer finance is at the initial stage in China and institutes estimate that the size of consumer credit will double in four years. The consumer finance company of Suning Commerce Group Co., Ltd. (002024.SZ) opened recently and introduced the first product ‘Willful Payment’. Institutes are rosy about the increasingly improved Internet-based retail ecological cycle. Chongqing Department Store Co., Ltd. (600729.SH) and Zhejiang China Commodities City Group Co., Ltd. (600415.SH) also participated in the establishment of consumer finance companies.
◆ The executive meeting of the State Council also proposes to facilitate the healthy and rapid development of cross-border e-business. The supporting policies include streamlining cargo clearance processes and implementing policies on taxes refunding and exemption.
○ Xinjiang to apply third FTZs to promote infrastructure investment
------
XFA learnt that the Aksu Textile Industrial City in Xinjiang Uygur Autonomous Region will be adopted into key projects in the ‘One Belt and One Road’ strategy and is expected to be covered by the Xinjiang Free Trade Zone in the future. Xinjiang has been actively applying for the third batch of free trade zones. The Kashgar Comprehensive Bonded Zone in Xinjiang, which just closed recently, is expected to be further upgraded.
Comment: The first two batches of free trade zones are in coastal regions. Taken into account that Xinjiang has been positioned as the core area in the Silk Road Economic Belt, it enjoys unique advantages in the competition for the third batch of free trade zones. The construction of free trade zones will firstly promote local investments in infrastructure. Xinjiang Urban Construction (Group) Co., Ltd. (600545.SH), Xinjiang Tianshan Cement Co., Ltd. (000877.SZ) and Xinjiang Qingsong Building Materials And Chemicals (Group) Co., Ltd. (600425.SH) are leading building materials enterprises in the region.
[XFA Selection]
○ The Ministry of Finance assigned another 1 trillion yuan debt swap line to local governments. Institutes are rosy about following monetary policies.
○ The net inflow of margins reached a new high of 907.8 billion yuan last week. Investors continued to swarm into the stock market.
○ The National Development and Reform Commission approved two railway projects with a total investment of 109.9 billion yuan and various airport projects with a total investment of 16.8 billion yuan on June 10.
○ XFA learnt from the Tianjin Municipal Transportation Commission that Tianjin will introduce supporting policies on sea-railway-air cross-border logistics and foreign trade.
○ 25 companies have published the prospectus by June 10 evening. Guotai Junan Securities Co., Ltd. will initiate online subscription on June 18.
○ The largest reorganization of structured funds A and B in six years will list on June 11.
[Industry Information]
○ Draft of environment protection taxes law for soliciting opinions released, environment monitoring to see huge potential
------
The Legislative Affairs Office of the State Council issued the ‘Environment Protection Taxes Law of the People’s Republic of China (Draft for Soliciting Opinions)’ on June 10. The tax standard required in the law is generally consistent with the current standard on pollution discharge fees. For those discharge pollutants exceeding the standard and total amount, the environment protection tax will be multiplied. Those paid the environment protection tax according to the environment protection taxes law will be waivered from charging pollution discharge fees.
Comment: The releasing of the draft for soliciting opinions means the approaching of the environment protection taxes law. As there are no accurate technologies in the monitoring and evaluation of pollution factors, the charging of pollution discharge fees is just a transitional means. The implementation of the environment protection taxes law is based on the accurate environment monitoring and enjoys huge potential in the market. Among listed companies, the products of Beijing SDL Technology Co., Ltd. (002658.SZ) are widely used in the online monitoring of pollution sources and the online analysis on industrial processes in various industries. Hebei Sailhero Environmental Protection High-tech Co., Ltd. (300137.SZ) focuses on the field monitoring, automatic monitoring and online monitoring in solving environment pollution. Its clients include the environment monitoring, water environment monitoring and municipal departments and relevant enterprises.
○ WGDC convened, geospatial information industry sees intensive policy support
------
2015 World Geospatial Developers Conference (WGDC) was convened on June 10, discussing the latest development trend of geospatial information. It can be seen from conference agenda that map service, big data analysis, location service, etc. are the focus of discussion. Under joint-push of the improvement of internal demand including geospatial information security, location service, etc., geospatial information industry gains intensive policy support. The State Council recently approved the Guidance for 2015-2030 Medium-Term and Long-Term Plan of National Basic Surveying and Mapping, proposing to construct new-type basic surveying and mapping system and to improve the service ability of surveying and mapping geospatial information in an all-round way.
Comment: Geospatial information, as an important access of O2O scene of life, is targeted by all technology giants. At present, Baidu, Inc. and Tencent Company are fighting in the acquisition of Nokia’s map business. The industry predicts that the geospatial information industry will embrace hundreds of billions yuan market. Segmented areas including vehicle navigation, location service, etc. will gain rapid development. Hi-Target Navigation Tech Co., Ltd. (300177.SZ) enjoys whole-industrial-chain advantage in data collection, supply and application; Hwa Create Co., Ltd. (300045.SZ) enjoys strong competitiveness in Beidou navigation chips and vehicle terminal market.
[Announcement Interpretation]
○ Unilumin to fully control ROE to develop LED industry
------
Unilumin Group Co., Ltd. (300232.SZ) plans to acquire 40 percent equities of ROE, previously named as Radiant Opto-Elec Technology Co., Ltd., by issuing 12.68 million shares at 16.96 yuan per share through private placement. The subject asset is priced at 215 million yuan. Meanwhile, it plans to raise 215 million yuan from Lin Mingfeng, controlling shareholder of the company, through private placement to increase capital in the new project of ROE, invest in R&D and supplement ROE’s working capital.
ROE, principally engaged in the development and sales of LED high-definition energy-saving full-color screen products, is a leading domestic professional service provider of LED display solutions. Upon completion of acquisition, the company will fully control 100 percent equities of ROE. The counterparty promises that the net profit of ROE from 2015 to 2018 will be no less than 51.00 million yuan, 58.00 million, 65.00 million yuan and 73.80 million yuan, respectively.
○ Troy Information Technology to acquire Grid Electric Power Technology with over RMB800 mln to develop informatization of power industry
------
Sichuan Troy Information Technology Co., Ltd. (300366.SZ) plans to acquire 100 percent equities of Grid Electric Power Technology Co., Ltd. with 874 million yuan by issuing 24.55 million shares at 26.7 yuan per share through private placement and paying in cash. Meanwhile, the company plans to raise a supporting fund of 245 million yuan to pay the cash needed by the transaction and the agency fee.
Grid Electric Power is a professional overall-solution provider of the informatization of power industry and its main customers cover State Grid Corporation of China, China Southern Power Grid, etc. The counterparty promises that its net profit from 2015 to 2017 will be no less than 58.50 million yuan, 76.00 million yuan and 95.00 million yuan, respectively.
○ AoKang Shoes to become substantial shareholder of LightInTheBox Holding to integrate international e-commerce
------
ZheJiang AoKang Shoes Co., Ltd. (603001.SH) signs agreement planning to accept 24.55 million shares of LightInTheBox Holding Co., Ltd. (NYSE: LITB) at 6.30 U.S. dollar per share (increasing by 26.5 percent compared with the stock price closed the day before) with 480 million yuan, accounting for 25.66 percent of its total shares. LightInTheBox Holding, principally engaged in international e-commerce, mainly focuses on European and North American market. The core varieties of LightInTheBox Holding include garments, home furnishing and various accessories. Impacted by the devaluation of Euro, LightInTheBox Holding saw a net loss of 8.70 million U.S. dollar in the first quarter of this year.
○ Dowstone Technology to raise RMB1.0 bln through private placement to invest in supply chain finance, etc.
------
Guangdong Dowstone Technology Co., Ltd. (300409.SZ) plans to raise 999 million yuan by issuing 10.00 million shares to Rong Jihua, controlling shareholder, etc. through private placement to invest in the company’s ceramic ink project (Phase III) and commercial factoring project, and to supplement working capital, among which, 600 million yuan will be invested in the commercial factoring project to expand the company’s main business to supply chain finance area and to explore new profit growth point.
○ China Shipping Haisheng to raise RMB2.0 bln through private placement, Lanhai Investment to become substantial shareholder
------
China Shipping Haisheng Co., Ltd. (600896.SH) plans to raise 2.0 billion yuan by issuing 290 million shares to Shanghai Lanhai Investment Company Limited at 6.85 yuan per share through private placement to pay off loans. Upon completion of the issuance, the largest shareholder of the company will be replaced by Lanhai Investment and the actual controller of the company will be replaced by Mi Chunlei. The business scope of Lanhai Investment includes industrial investment, etc. It will help China Shipping Haisheng to implement business transformation and develop towards emerging industries with stronger profitability.
○ Tangel Publishing to control Emerald Education Technology
------
Tangel Publishing Co., Ltd. (300148.SZ) plans to acquire 60 percent equities of Beijing Emerald Education Technology Co., Ltd. with no less than 315 million yuan. The counterparty promises that the performance of Emerald Education from 2015 to 2017 will be no less than 35.00 million yuan, 45.50 million yuan and 59.15 million yuan, respectively. Emerald Education is a professional education institution engaged in mobile Internet and digital entertainment areas.
○ Senyuan Electric to sigh contracting order of RMB8.5 bln
------
Henan Senyuan Electric Co., Ltd. (002358.SZ) plans to sign the EPC general contract of the 1000MWp photovoltaic power station project of Yuzhou City with Senyuan Group, its controlling shareholder. The contract totals an amount of 8.5 billion yuan, accounting for 741.71 percent of the company’s audited sales revenue in 2014. It will largely increase the company’s net profit from 2015 to 2017.
[Financial Reports Express]
○ Semi-yearly report of Kinetic Medical forecasts doubled growth
------
Shanghai Kinetic Medical Co., Ltd. (300326.SZ) predicts that its profit in the first half of the year to see a year-on-year growth of 170~200 percent. During the report period, the vertebra-plasty products of the company continue to maintain stable growth. In addition, Jiangsu IDEAL Medical Science & Technology Co., Ltd. and Essen Technology (Beijing) Company Limited are incorporated into the company’s consolidated report. Moreover, non-recurring gains and losses as well as investment income also bring big impact on profit.
> State Council executive meeting supports consumer finance with huge potential
> Draft of environment protection taxes law for soliciting opinions released, environment monitoring to see huge potential
> Unilumin to fully control ROE, Troy Information Technology to acquire Grid Electric Power Technology
> AoKang Shoes to become substantial shareholder of LightInTheBox Holding, Dowstone Technology to invest in supply chain finance
[XFA Focus]
○ State Council executive meeting supports consumer finance with huge potential
------
Chinese Premier Li Keqiang chaired the executive meeting of the State Council on June 10 to plan the development of consumer finance. With the deregulation on the market accesses and the delegation of approval rights, it will encourage qualified private capital to participate. The meeting pointed out that the consumer finance and commercial banks will conduct stagger competition and are complementary to the development of each other, which will facilitate the driving force of consumption in economic growth.
Comment: With the transformation of China’s economy, consumption is playing an increasingly important role in the three driving forces to economic growth, namely investment, consumption and exports. In developed countries, consumer finance is parallel with the credit card and individual bank loans. It enjoys unique advantages in the grass-root financial market. Consumer finance is at the initial stage in China and institutes estimate that the size of consumer credit will double in four years. The consumer finance company of Suning Commerce Group Co., Ltd. (002024.SZ) opened recently and introduced the first product ‘Willful Payment’. Institutes are rosy about the increasingly improved Internet-based retail ecological cycle. Chongqing Department Store Co., Ltd. (600729.SH) and Zhejiang China Commodities City Group Co., Ltd. (600415.SH) also participated in the establishment of consumer finance companies.
◆ The executive meeting of the State Council also proposes to facilitate the healthy and rapid development of cross-border e-business. The supporting policies include streamlining cargo clearance processes and implementing policies on taxes refunding and exemption.
○ Xinjiang to apply third FTZs to promote infrastructure investment
------
XFA learnt that the Aksu Textile Industrial City in Xinjiang Uygur Autonomous Region will be adopted into key projects in the ‘One Belt and One Road’ strategy and is expected to be covered by the Xinjiang Free Trade Zone in the future. Xinjiang has been actively applying for the third batch of free trade zones. The Kashgar Comprehensive Bonded Zone in Xinjiang, which just closed recently, is expected to be further upgraded.
Comment: The first two batches of free trade zones are in coastal regions. Taken into account that Xinjiang has been positioned as the core area in the Silk Road Economic Belt, it enjoys unique advantages in the competition for the third batch of free trade zones. The construction of free trade zones will firstly promote local investments in infrastructure. Xinjiang Urban Construction (Group) Co., Ltd. (600545.SH), Xinjiang Tianshan Cement Co., Ltd. (000877.SZ) and Xinjiang Qingsong Building Materials And Chemicals (Group) Co., Ltd. (600425.SH) are leading building materials enterprises in the region.
[XFA Selection]
○ The Ministry of Finance assigned another 1 trillion yuan debt swap line to local governments. Institutes are rosy about following monetary policies.
○ The net inflow of margins reached a new high of 907.8 billion yuan last week. Investors continued to swarm into the stock market.
○ The National Development and Reform Commission approved two railway projects with a total investment of 109.9 billion yuan and various airport projects with a total investment of 16.8 billion yuan on June 10.
○ XFA learnt from the Tianjin Municipal Transportation Commission that Tianjin will introduce supporting policies on sea-railway-air cross-border logistics and foreign trade.
○ 25 companies have published the prospectus by June 10 evening. Guotai Junan Securities Co., Ltd. will initiate online subscription on June 18.
○ The largest reorganization of structured funds A and B in six years will list on June 11.
[Industry Information]
○ Draft of environment protection taxes law for soliciting opinions released, environment monitoring to see huge potential
------
The Legislative Affairs Office of the State Council issued the ‘Environment Protection Taxes Law of the People’s Republic of China (Draft for Soliciting Opinions)’ on June 10. The tax standard required in the law is generally consistent with the current standard on pollution discharge fees. For those discharge pollutants exceeding the standard and total amount, the environment protection tax will be multiplied. Those paid the environment protection tax according to the environment protection taxes law will be waivered from charging pollution discharge fees.
Comment: The releasing of the draft for soliciting opinions means the approaching of the environment protection taxes law. As there are no accurate technologies in the monitoring and evaluation of pollution factors, the charging of pollution discharge fees is just a transitional means. The implementation of the environment protection taxes law is based on the accurate environment monitoring and enjoys huge potential in the market. Among listed companies, the products of Beijing SDL Technology Co., Ltd. (002658.SZ) are widely used in the online monitoring of pollution sources and the online analysis on industrial processes in various industries. Hebei Sailhero Environmental Protection High-tech Co., Ltd. (300137.SZ) focuses on the field monitoring, automatic monitoring and online monitoring in solving environment pollution. Its clients include the environment monitoring, water environment monitoring and municipal departments and relevant enterprises.
○ WGDC convened, geospatial information industry sees intensive policy support
------
2015 World Geospatial Developers Conference (WGDC) was convened on June 10, discussing the latest development trend of geospatial information. It can be seen from conference agenda that map service, big data analysis, location service, etc. are the focus of discussion. Under joint-push of the improvement of internal demand including geospatial information security, location service, etc., geospatial information industry gains intensive policy support. The State Council recently approved the Guidance for 2015-2030 Medium-Term and Long-Term Plan of National Basic Surveying and Mapping, proposing to construct new-type basic surveying and mapping system and to improve the service ability of surveying and mapping geospatial information in an all-round way.
Comment: Geospatial information, as an important access of O2O scene of life, is targeted by all technology giants. At present, Baidu, Inc. and Tencent Company are fighting in the acquisition of Nokia’s map business. The industry predicts that the geospatial information industry will embrace hundreds of billions yuan market. Segmented areas including vehicle navigation, location service, etc. will gain rapid development. Hi-Target Navigation Tech Co., Ltd. (300177.SZ) enjoys whole-industrial-chain advantage in data collection, supply and application; Hwa Create Co., Ltd. (300045.SZ) enjoys strong competitiveness in Beidou navigation chips and vehicle terminal market.
[Announcement Interpretation]
○ Unilumin to fully control ROE to develop LED industry
------
Unilumin Group Co., Ltd. (300232.SZ) plans to acquire 40 percent equities of ROE, previously named as Radiant Opto-Elec Technology Co., Ltd., by issuing 12.68 million shares at 16.96 yuan per share through private placement. The subject asset is priced at 215 million yuan. Meanwhile, it plans to raise 215 million yuan from Lin Mingfeng, controlling shareholder of the company, through private placement to increase capital in the new project of ROE, invest in R&D and supplement ROE’s working capital.
ROE, principally engaged in the development and sales of LED high-definition energy-saving full-color screen products, is a leading domestic professional service provider of LED display solutions. Upon completion of acquisition, the company will fully control 100 percent equities of ROE. The counterparty promises that the net profit of ROE from 2015 to 2018 will be no less than 51.00 million yuan, 58.00 million, 65.00 million yuan and 73.80 million yuan, respectively.
○ Troy Information Technology to acquire Grid Electric Power Technology with over RMB800 mln to develop informatization of power industry
------
Sichuan Troy Information Technology Co., Ltd. (300366.SZ) plans to acquire 100 percent equities of Grid Electric Power Technology Co., Ltd. with 874 million yuan by issuing 24.55 million shares at 26.7 yuan per share through private placement and paying in cash. Meanwhile, the company plans to raise a supporting fund of 245 million yuan to pay the cash needed by the transaction and the agency fee.
Grid Electric Power is a professional overall-solution provider of the informatization of power industry and its main customers cover State Grid Corporation of China, China Southern Power Grid, etc. The counterparty promises that its net profit from 2015 to 2017 will be no less than 58.50 million yuan, 76.00 million yuan and 95.00 million yuan, respectively.
○ AoKang Shoes to become substantial shareholder of LightInTheBox Holding to integrate international e-commerce
------
ZheJiang AoKang Shoes Co., Ltd. (603001.SH) signs agreement planning to accept 24.55 million shares of LightInTheBox Holding Co., Ltd. (NYSE: LITB) at 6.30 U.S. dollar per share (increasing by 26.5 percent compared with the stock price closed the day before) with 480 million yuan, accounting for 25.66 percent of its total shares. LightInTheBox Holding, principally engaged in international e-commerce, mainly focuses on European and North American market. The core varieties of LightInTheBox Holding include garments, home furnishing and various accessories. Impacted by the devaluation of Euro, LightInTheBox Holding saw a net loss of 8.70 million U.S. dollar in the first quarter of this year.
○ Dowstone Technology to raise RMB1.0 bln through private placement to invest in supply chain finance, etc.
------
Guangdong Dowstone Technology Co., Ltd. (300409.SZ) plans to raise 999 million yuan by issuing 10.00 million shares to Rong Jihua, controlling shareholder, etc. through private placement to invest in the company’s ceramic ink project (Phase III) and commercial factoring project, and to supplement working capital, among which, 600 million yuan will be invested in the commercial factoring project to expand the company’s main business to supply chain finance area and to explore new profit growth point.
○ China Shipping Haisheng to raise RMB2.0 bln through private placement, Lanhai Investment to become substantial shareholder
------
China Shipping Haisheng Co., Ltd. (600896.SH) plans to raise 2.0 billion yuan by issuing 290 million shares to Shanghai Lanhai Investment Company Limited at 6.85 yuan per share through private placement to pay off loans. Upon completion of the issuance, the largest shareholder of the company will be replaced by Lanhai Investment and the actual controller of the company will be replaced by Mi Chunlei. The business scope of Lanhai Investment includes industrial investment, etc. It will help China Shipping Haisheng to implement business transformation and develop towards emerging industries with stronger profitability.
○ Tangel Publishing to control Emerald Education Technology
------
Tangel Publishing Co., Ltd. (300148.SZ) plans to acquire 60 percent equities of Beijing Emerald Education Technology Co., Ltd. with no less than 315 million yuan. The counterparty promises that the performance of Emerald Education from 2015 to 2017 will be no less than 35.00 million yuan, 45.50 million yuan and 59.15 million yuan, respectively. Emerald Education is a professional education institution engaged in mobile Internet and digital entertainment areas.
○ Senyuan Electric to sigh contracting order of RMB8.5 bln
------
Henan Senyuan Electric Co., Ltd. (002358.SZ) plans to sign the EPC general contract of the 1000MWp photovoltaic power station project of Yuzhou City with Senyuan Group, its controlling shareholder. The contract totals an amount of 8.5 billion yuan, accounting for 741.71 percent of the company’s audited sales revenue in 2014. It will largely increase the company’s net profit from 2015 to 2017.
[Financial Reports Express]
○ Semi-yearly report of Kinetic Medical forecasts doubled growth
------
Shanghai Kinetic Medical Co., Ltd. (300326.SZ) predicts that its profit in the first half of the year to see a year-on-year growth of 170~200 percent. During the report period, the vertebra-plasty products of the company continue to maintain stable growth. In addition, Jiangsu IDEAL Medical Science & Technology Co., Ltd. and Essen Technology (Beijing) Company Limited are incorporated into the company’s consolidated report. Moreover, non-recurring gains and losses as well as investment income also bring big impact on profit.
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