[Today's Guide]
○ Institutions optimistic about prospects of food & beverage and household appliances sectors
○ Pay attention to non-venture investment listed companies benefiting from bullish market
○ Listed companies plan pediatric drugs to receive policies support
○ SOEs reform to speed up, Chuantou Energy to edge into new investment sector
[XFA View]
Healthy “leveraged bullish market” meets interest of all market participants
------
As Shanghai Composite Index reaches 5,000 points, the stock market incurs more attentions. Especially after China Securities Regulatory Commission states its stand on “stock financing by systems” and “revision of management methods for margin trading and short selling”, all market participants are more sensitive to the trend of leveraged capital. From the perspective of long-term follow-up and analysis of policies, the attentions of regulators do not just focus on limiting the leverage of capital, but aim to prevent regional and systematic risks and to maintain a fair, legal and compliant market.
The leverage of capital is neutral and it widely exists in every normal financial market. The leverage of capital that not violating laws and regulations and not impacting healthy, sustainable and stable development of market is reasonable and necessary. But it also must be admitted that the leverage of capital can amplify risks. Risks grow as leverage expands. Supervision departments should be highly sensitive to this and adopt necessary measures to make risks measurable and controllable.
In fact, reasserting that securities companies and non-securities companies cannot participate in unlawful securities activities, controlling securities companies from providing convenience between clients, clients and others in margin trading and short selling, etc. are to prevent possible capital risks, narrow the development space of unlawful securities activities and avoid investors from suffering loss due to improper financial business and service sales. The “net of justice” special activity recently developed by China Securities Regulatory Commission maintains healthy operation of the market in another way. For the four batches of cases treated, they all show high pertinence towards the recent unlawful activities disturbing normal operation of the market.
“Leveraged bullish market” is a big characteristic differentiating this round of bullish market from previous ones. Blind pursuit of “surging” is unrealistic. A steady and healthy bullish market meets the interest of all market participants. Therefore, for leveraged capital, it’s better to cast a right attitude. A healthy “leveraged bullish market” must be based on compliant and healthy leverage of capital. (Qingyu)
[Institutions' Movement]
Institutions optimistic about prospects of food & beverage and household appliances sectors
------
Some renowned institutions in Shenzhen recently investigated by XFA indicate that considering there are still much incremental capital waiting for building positions at current stage. The stock index might pick up surging trend again after consolidation above 5,000 points, but the flow direction of incremental capital is quite critical.
Considering that semi-yearly reports are going to be released soon, incremental capital might prefer stocks with stable performance, especially those in food & beverage and household appliances sectors which see improving value with the access of Internet. Moreover, white spirit industry seeing turning point towards booming and new energy vehicles expecting high prosperity are also worthy of attentions.
Insurance companies actively develop trainings on options investment practice
------
It is learnt that PICC Asset Management Company Limited recently held training again on options investment practice. The training mainly focuses on SSE50 ETF Option and requires that all backbone staff related to research, combination, investment and risk control shall be familiar with the procedure and strategy of options trading. In fact, other insurance giants also have developed several rounds of relevant trainings. At present, the frequency and degree for insurance companies to use financial derivative instruments including options are quite limited, but as the fluctuation of stock indexes aggravates, it will be hard to ensure stable investment income without the hedging function of derivative instruments.
[Authoritative Voice]
List of first state-owned assets reform in Pudong to release
------
It is reported that the Shanghai Pudong New Area will convene a state-owned enterprise and assets reform meeting soon and the list of first state-owned assets reform in the area and reform plans will be released. Considering that Shanghai Jinqiao Export Processing Zone Development Co., Ltd. (600639.SH) and Shanghai Waigaoqiao Free Trade Zone Development Co., Ltd. (600648.SH) have suspended trading and the state-owned assets reform processes promoted in batches, companies under the Shanghai Pudong New Area State-owned Assets Supervision and Administration Commission, including Shanghai Lujiazui Finance & Trade Zone Development Co., Ltd. (600663.SH), Shanghai Zhangjiang Hi-tech Park Development Co., Ltd. (600895.SH), Shang Gong Group Co., Ltd. (600843.SH), Shanghai Pudong Road & Bridge Construction Co., Ltd. (600284.SH) and other A-share companies, are expected to conduct capital operations.
[Data Reference]
Pay attention to non-venture investment listed companies benefiting from bullish market
------
Under the market conditions with surging indexes and universal hiking of individual stocks, the product on May 24 disclosed that venture investment listed companies benefited a lot. As a matter of fact, non-venture investment listed companies holding other listed equities also recorded great floating profits.
They are represented by two kinds of companies. The first kind is companies with huge profits through speculations in the secondary market, such as China Baoan Group Co., Ltd. (000009.SZ). By the end of the first quarter, China Baoan Group holds ten A-share and H-share companies. Based on the preliminary estimation, the fair value of such equities is up to 366 million yuan. Such equities affect the performance in the first half with approximately 187 million yuan, exceeding 50 percent of the net profit of the company in 2014. The second kind is companies participated in the IPO and continues to hold equities of the companies. For example, Dymatic Chemicals, Inc. (002054.SZ) holds certain equities of Yibin Tianyuan Group Co., Ltd. (002386.SZ) and Liao Ning Oxiranchem, Inc. (300082.SZ), which are all original shares before the IPO of relevant companies. Currently, Dymatic Chemicals has sold all equities of Tianyuan Group and recorded investment revenue of 218 million yuan, accounting for 227.63 percent of the net profit of the company in 2014. If it sells the shares of Oxiranchem, it will record investment revenue of over 320 million yuan.
[XFA Viewpoint]
Pediatric drugs to receive policies support, listed companies speed up in planning
------
Inside authorities disclosed that the promotion of guaranteeing pediatric drugs has made breakthroughs and policies to support the marketing of pediatric drugs will be introduced. Specific measures include promoting the establishment of scientific and standard pediatric drugs instructions, guaranteeing the safety of pediatric drugs, proposing the list of basic pediatric drugs and adopting pediatric drugs into the medical insurance category. It is noteworthy that in the national drugs tendering, it will give specific supports to the development of gynecological and pediatric drugs. For example, non-patent gynecological and pediatric drugs can be directly purchased online. Various provinces will initiate the selection of the ‘Direct Online Category for Non-patent Gynecological and Pediatric Drugs’. The pediatric drugs market enjoys huge potential and various listed companies are actively promoting the development and marketing of pediatric drugs.
70 to 80 percent of the sale of Reduning Injection, a fist product of Jiangsu Kanion Pharmaceutical Co., Ltd. (600557.SH), is sold in pediatrics. It is widely used in the treatment of children hand-foot-mouth diseases. If it received policy supports in the future tender, the product will contribute more to the performance of Kanion Phar. In addition, the company also increased the reserve and the research and development of gynecological and pediatric drugs.
Sunflower Pharmaceutical Group Co., Ltd. (002737.SZ) is a leading enterprise in pediatric drugs. The company owns 70 approval numbers for pediatric drugs and plans to contribute 20 new approval numbers in the following three years to promote the sale of new drugs. In addition, the varieties of the companies are OTC drugs and are expected to raise the prices after the state deregulated the policies on drugs prices.
[Information Radar]
SOEs reform to speed up, Chuantou Energy to edge into new investment sector
------
Under the background of state-owned enterprises (SOEs) reform, Sichuan Chuantou Energy Co., Ltd. (600674.SH) has been actively promoting the reform while focusing on the strategy of the group since the beginning of this year. It is expected to edge into new investment sectors. The SOEs reform of Chuantou Group, the substantial shareholder of Chuantou Energy, is under progress currently. Chuantou Group has set 2015 as a year of promoting reform and expanding projects and specified the ‘4+1’ industrial development strategy, namely the energy, public utility and modern service industry, modern finance, assets operation and advantageous industries with the characteristics of Sichuan Province. Focusing on the strategy, Chuantou Energy has specified the development priorities, namely exploring the investment in integrated industry and financing projects or financial projects, exploring the investment in power sale platforms, exploring the acquisition of investment and power distribution assets and exploring the investment in high-tech industries and projects as well as other new sectors.
Besides, Chuantou Group is establishing a PPP industrial investment fund with 10 billion yuan and the investment scale will reach 30 billion yuan in 2017. Chuantou Energy is expected to participate in the above ‘4+1’ development orientation.
E-Hualu Info Technology and AliCloud to further deepen cooperation
------
The one-year cooperation agreement between Beijing E-Hualu Info Technology Co., Ltd. (300212) and AliCloud will be mature this month. The company is currently cooperating well with AliCloud and both sides have the intention for further cooperation. Both parties will conduct strategic cooperation in intelligent transportation and other industries. E-Hualu Info Technology has accumulated various businesses in the public security management departments and their business platform. Alibaba Group Holding Limited (BABA.NYSE) owns abundant online resources.
E-Hualu Info Technology and AliCloud signed a strategic cooperation agreement on June 18, 2014. The company develops solutions to intelligent cities based on the computation of AliCloud.
○ Institutions optimistic about prospects of food & beverage and household appliances sectors
○ Pay attention to non-venture investment listed companies benefiting from bullish market
○ Listed companies plan pediatric drugs to receive policies support
○ SOEs reform to speed up, Chuantou Energy to edge into new investment sector
[XFA View]
Healthy “leveraged bullish market” meets interest of all market participants
------
As Shanghai Composite Index reaches 5,000 points, the stock market incurs more attentions. Especially after China Securities Regulatory Commission states its stand on “stock financing by systems” and “revision of management methods for margin trading and short selling”, all market participants are more sensitive to the trend of leveraged capital. From the perspective of long-term follow-up and analysis of policies, the attentions of regulators do not just focus on limiting the leverage of capital, but aim to prevent regional and systematic risks and to maintain a fair, legal and compliant market.
The leverage of capital is neutral and it widely exists in every normal financial market. The leverage of capital that not violating laws and regulations and not impacting healthy, sustainable and stable development of market is reasonable and necessary. But it also must be admitted that the leverage of capital can amplify risks. Risks grow as leverage expands. Supervision departments should be highly sensitive to this and adopt necessary measures to make risks measurable and controllable.
In fact, reasserting that securities companies and non-securities companies cannot participate in unlawful securities activities, controlling securities companies from providing convenience between clients, clients and others in margin trading and short selling, etc. are to prevent possible capital risks, narrow the development space of unlawful securities activities and avoid investors from suffering loss due to improper financial business and service sales. The “net of justice” special activity recently developed by China Securities Regulatory Commission maintains healthy operation of the market in another way. For the four batches of cases treated, they all show high pertinence towards the recent unlawful activities disturbing normal operation of the market.
“Leveraged bullish market” is a big characteristic differentiating this round of bullish market from previous ones. Blind pursuit of “surging” is unrealistic. A steady and healthy bullish market meets the interest of all market participants. Therefore, for leveraged capital, it’s better to cast a right attitude. A healthy “leveraged bullish market” must be based on compliant and healthy leverage of capital. (Qingyu)
[Institutions' Movement]
Institutions optimistic about prospects of food & beverage and household appliances sectors
------
Some renowned institutions in Shenzhen recently investigated by XFA indicate that considering there are still much incremental capital waiting for building positions at current stage. The stock index might pick up surging trend again after consolidation above 5,000 points, but the flow direction of incremental capital is quite critical.
Considering that semi-yearly reports are going to be released soon, incremental capital might prefer stocks with stable performance, especially those in food & beverage and household appliances sectors which see improving value with the access of Internet. Moreover, white spirit industry seeing turning point towards booming and new energy vehicles expecting high prosperity are also worthy of attentions.
Insurance companies actively develop trainings on options investment practice
------
It is learnt that PICC Asset Management Company Limited recently held training again on options investment practice. The training mainly focuses on SSE50 ETF Option and requires that all backbone staff related to research, combination, investment and risk control shall be familiar with the procedure and strategy of options trading. In fact, other insurance giants also have developed several rounds of relevant trainings. At present, the frequency and degree for insurance companies to use financial derivative instruments including options are quite limited, but as the fluctuation of stock indexes aggravates, it will be hard to ensure stable investment income without the hedging function of derivative instruments.
[Authoritative Voice]
List of first state-owned assets reform in Pudong to release
------
It is reported that the Shanghai Pudong New Area will convene a state-owned enterprise and assets reform meeting soon and the list of first state-owned assets reform in the area and reform plans will be released. Considering that Shanghai Jinqiao Export Processing Zone Development Co., Ltd. (600639.SH) and Shanghai Waigaoqiao Free Trade Zone Development Co., Ltd. (600648.SH) have suspended trading and the state-owned assets reform processes promoted in batches, companies under the Shanghai Pudong New Area State-owned Assets Supervision and Administration Commission, including Shanghai Lujiazui Finance & Trade Zone Development Co., Ltd. (600663.SH), Shanghai Zhangjiang Hi-tech Park Development Co., Ltd. (600895.SH), Shang Gong Group Co., Ltd. (600843.SH), Shanghai Pudong Road & Bridge Construction Co., Ltd. (600284.SH) and other A-share companies, are expected to conduct capital operations.
[Data Reference]
Pay attention to non-venture investment listed companies benefiting from bullish market
------
Under the market conditions with surging indexes and universal hiking of individual stocks, the product on May 24 disclosed that venture investment listed companies benefited a lot. As a matter of fact, non-venture investment listed companies holding other listed equities also recorded great floating profits.
They are represented by two kinds of companies. The first kind is companies with huge profits through speculations in the secondary market, such as China Baoan Group Co., Ltd. (000009.SZ). By the end of the first quarter, China Baoan Group holds ten A-share and H-share companies. Based on the preliminary estimation, the fair value of such equities is up to 366 million yuan. Such equities affect the performance in the first half with approximately 187 million yuan, exceeding 50 percent of the net profit of the company in 2014. The second kind is companies participated in the IPO and continues to hold equities of the companies. For example, Dymatic Chemicals, Inc. (002054.SZ) holds certain equities of Yibin Tianyuan Group Co., Ltd. (002386.SZ) and Liao Ning Oxiranchem, Inc. (300082.SZ), which are all original shares before the IPO of relevant companies. Currently, Dymatic Chemicals has sold all equities of Tianyuan Group and recorded investment revenue of 218 million yuan, accounting for 227.63 percent of the net profit of the company in 2014. If it sells the shares of Oxiranchem, it will record investment revenue of over 320 million yuan.
[XFA Viewpoint]
Pediatric drugs to receive policies support, listed companies speed up in planning
------
Inside authorities disclosed that the promotion of guaranteeing pediatric drugs has made breakthroughs and policies to support the marketing of pediatric drugs will be introduced. Specific measures include promoting the establishment of scientific and standard pediatric drugs instructions, guaranteeing the safety of pediatric drugs, proposing the list of basic pediatric drugs and adopting pediatric drugs into the medical insurance category. It is noteworthy that in the national drugs tendering, it will give specific supports to the development of gynecological and pediatric drugs. For example, non-patent gynecological and pediatric drugs can be directly purchased online. Various provinces will initiate the selection of the ‘Direct Online Category for Non-patent Gynecological and Pediatric Drugs’. The pediatric drugs market enjoys huge potential and various listed companies are actively promoting the development and marketing of pediatric drugs.
70 to 80 percent of the sale of Reduning Injection, a fist product of Jiangsu Kanion Pharmaceutical Co., Ltd. (600557.SH), is sold in pediatrics. It is widely used in the treatment of children hand-foot-mouth diseases. If it received policy supports in the future tender, the product will contribute more to the performance of Kanion Phar. In addition, the company also increased the reserve and the research and development of gynecological and pediatric drugs.
Sunflower Pharmaceutical Group Co., Ltd. (002737.SZ) is a leading enterprise in pediatric drugs. The company owns 70 approval numbers for pediatric drugs and plans to contribute 20 new approval numbers in the following three years to promote the sale of new drugs. In addition, the varieties of the companies are OTC drugs and are expected to raise the prices after the state deregulated the policies on drugs prices.
[Information Radar]
SOEs reform to speed up, Chuantou Energy to edge into new investment sector
------
Under the background of state-owned enterprises (SOEs) reform, Sichuan Chuantou Energy Co., Ltd. (600674.SH) has been actively promoting the reform while focusing on the strategy of the group since the beginning of this year. It is expected to edge into new investment sectors. The SOEs reform of Chuantou Group, the substantial shareholder of Chuantou Energy, is under progress currently. Chuantou Group has set 2015 as a year of promoting reform and expanding projects and specified the ‘4+1’ industrial development strategy, namely the energy, public utility and modern service industry, modern finance, assets operation and advantageous industries with the characteristics of Sichuan Province. Focusing on the strategy, Chuantou Energy has specified the development priorities, namely exploring the investment in integrated industry and financing projects or financial projects, exploring the investment in power sale platforms, exploring the acquisition of investment and power distribution assets and exploring the investment in high-tech industries and projects as well as other new sectors.
Besides, Chuantou Group is establishing a PPP industrial investment fund with 10 billion yuan and the investment scale will reach 30 billion yuan in 2017. Chuantou Energy is expected to participate in the above ‘4+1’ development orientation.
E-Hualu Info Technology and AliCloud to further deepen cooperation
------
The one-year cooperation agreement between Beijing E-Hualu Info Technology Co., Ltd. (300212) and AliCloud will be mature this month. The company is currently cooperating well with AliCloud and both sides have the intention for further cooperation. Both parties will conduct strategic cooperation in intelligent transportation and other industries. E-Hualu Info Technology has accumulated various businesses in the public security management departments and their business platform. Alibaba Group Holding Limited (BABA.NYSE) owns abundant online resources.
E-Hualu Info Technology and AliCloud signed a strategic cooperation agreement on June 18, 2014. The company develops solutions to intelligent cities based on the computation of AliCloud.
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