[Today’s Guide]
○ 2nd batch of private owned banks licensing to launch
○ Impact of lowering leverage believed to be not completely released
○ Hengli Highpressure Oil Cylinder attracts institutional investors’ focus by sound endogenous and extensive development
○ Asset integration of Aerospace Hi-Tech expected to improve
[Authoritative Voice]
2nd batch of private owned banks licensing to launch
------
It is learned from the industry that China will expand private owned bank pilot scale, and is likely to grant licenses to the second-batch private owned banks. It is reported that banks obtained licenses last year, including WeBank, Myshare Bank, KinCheng Bank of Tianjin, MYBank, SHR Bank, have all opened to business, and formed characteristics of their own. The pilot’s effect is significant.
[XFA View]
Mid-year effect of money supply may exert pressure on leverage-based bull market
------
Although the current interbank market represents much higher mobility than previous years, the market interest rate, particularly short-term interest rate, still shows sign of continuous increase towards the middle of the year. Besides, due to more IPOs recently and intensified risk control ofillicit loans for stock purchase, capital’s mid-year effect may exert pressure on leverage-based bull market in a short time.
According to statistics, the overnight SHIBOR on June 24 surged by 4.3 basis points to 1.3380, seven-day rate rose by 13.3 basis points to 2.8080, and fourteen-day SHIBOR was up by 17.6 basis points to 3.4500. All of them have reached minor peaks. The fluctuation of SHIBOR interest rate reflects tensions of short-term funding in the interbank market.
In addition to growing IPOs, the fundamental reason causing the short-term financial strain is that banks have internal demands to recover certain loans to cope with assessment of liquidity measures towards the end of mid-year. The open market has witnessed no reverse repo for 19 consecutive periods. And the expectation that monetary policy would continue to loosen has faded. All these intensified the short-term financial strain to some degree.
The recent market trend indicates that there were signs showing the market is spontaneously lowering its leverage level. On the one hand, it is a result of stricter regulation. On the other hand, it may also because that institutional investors, including trusts have increasing difficulties to obtain low-cost capital from banks. In the short time, the stricter regulation and tighter funding supply will continue to restrain the stock market. Investors should re-examine and re-assess their own risk tolerance, and mostly importantly reduce or optimize their funding leverage ratio.
[Institutions’ Movement]
Impact of lowering leverage believed to be not completely released
------
According to the latest survey, many major security traders believe that lowering leverage in illicit loans for stock purchase is one of the main reasons for the recent market fluctuations. At present, the security traders taking the opportunity of regulating the third party access system to rectify illicit funding is in progress. Information from funding companies reveals that except those being closed position, some clients also begins initiatively squeezing leverage. Yet the Evaluation and Assessment Standard for Securities Agency External Access Information System recently issued by Securities Association of China (SAC) still needs detailed implementation regulations, such as clarifying the measures and time limit to clear inventory. Therefore, it is not clear whether the impact of lowering leverage has been released totally.
Reportedly, some securities traders with strict risk control express that Hang Seng HOMS system which is equipped with function of funding support will be shut down in the near future, including the products with function of dividing positions or clearing by HOMS system.
Several insurance enterprises lock earnings of 2015 H1
------
Based on the communications with investment managers of several large insurance enterprises from Beijing and Shanghai, XFA realizes that in order to lock earnings to ensure performance of the first half year, many insurance enterprises are clearing the high-estimated-value products which lack fundamentals support and holding positions in the small varieties like foods & beverages and coal products, which witness slight increase in early stage. They won’t consider buying in more shares until the market condition gets stable.
Hengli Highpressure Oil Cylinder attracts institutional investors’ focus by sound endogenous and extensive development
------
Nearly 30 investment institutions collectively researched on Jiangsu Hengli Highpressure Oil Cylinder Co., Ltd. （601100.SH）on June 23th. It’s said that the company is proactively exploring high-end European and American customers and its hydraulic parts have been sent to overseas customers in small quantities. The original customers are being upgraded to hydraulic pump users in the meantime, and channels for high-end customers are quite perfect. On endogenous development, the company has engaged elites from Japan and Germany in R&D design and quality control. The products of Hengli Highpressure Oil Cylinder have been supplied to robot industry with one of its clients is SINSUN.
In addition, the abundant cash flow has enhanced the company’s confidence for extensive development. The management has visited technical giants in Europe for several times since the beginning of this year and shown great momentum for extensive development.
Institutional investors to survey the progress of cooperation between Chongqing Dima and UESTC
------
More than 20 investment institutions are going to conduct survey on the cooperation between Chongqing Dima Industry Co., Ltd. (600565.SH) and UESTC (University of Electronic Science and Technology of China), with the main focus on artificial intelligent exoskeleton.
On April 1 this year, Dima Industry signed a University-Industry-Research Cooperation Agreement with UESTC, planning to have deep cooperation with the latter on the sides of scientific research, industrial application and talent cultivation. Sources said that artificial intelligent exoskeleton plays an important role in the modernization of armies and that it will firstly be used in the marine corps of China. Besides, this technology will be widely used in civilian areas such as aiding the handicapped in walking.
[News to Confirm]
Asset integration of Aerospace Hi-Tech expected to improve
------
Confirmation: Verified.
The temporary trading halt of Beijing Aerospace Changfeng Co., Ltd. (600855.SH) at noon of June 24 has aroused market’s expectation again on the asset integration of China Aerospace Science & Industry Corp. (CASIC). Among the six listed companies affiliated to CASIC, the asset integration expectation of Aerospace Hi-Tech Holding has attracted institution’s attention all the time. According to the analysis of institution, CASIC 3rd Academy, the controlling shareholder of CASIC, has great potential in asset securitization. Under the reform background, people have strong anticipation on the institute restructuring, and the company is expected to be the integration platform for the restructuring of the Military Technology Research Institute of CASIC 3rd Academy in the future.
[Information Radar]
Shaangu Power speeds up transformation and upgrading in many areas
------
Based on the survey by XFA, as the major equipment manufacturing leading enterprise, Xi'an Shaangu Power Co., Ltd. (601369.SH) speeds up the transformation and upgrading in many areas. The nuclear power draught fan project cooperated by Shaangu Power and Tsinghua University is expected to finish at the end of this year. As China is increasing investments in nuclear power projects, the company will hopefully obtain new profit growth points in the future. In terms of environment protection, Shaangu Power has already received project orders in sewage treatment field; and once Shaanxi government launches the PPP project, it is expected to gain billions of shares. In addition, it was selected into 2015 MIIT intellectual manufacturing special project in early June. Focusing on the standardization of power equipment design and development, this intellectual manufacturing project has the budget of 60 million yuan, of which 20 million yuan will be provided by Chinese government.
Xiuqiang Glasswork’s large-size coated glass program starts trial production in end-June
------
The investment with over-raised fund of Jiangsu Xiuqiang Glasswork Co., Ltd. (SZ:300160), namely the “large-size high-transmission visible light AR coated glass program”, has completed all its production lines and will begin trial production at the end of June. Currently, Xiuqiang Glasswork has received customers for AR coated glass. The newly increased productivity is likely to be digested in the future. Its products can be used as LED protective glass of tablet PC, GPS and inquiry terminals. The company has estimated that the annual average net profit of the program can reach 20.32 million yuan in a regular production period. Xiuqiang Glasswork Co., Ltd. received a net profit of 36.48 million yuan in 2014. XFA previously reported progress of the program.
[Data Reference ]
The vibrant companies in overall economic downturn
------
With the half-year report period drawing near, the listed companies with deterministic growth are expected to gain market attention. The statistics shows that by June 24, there are 1,035 listed companies that have disclosed their half-year earnings forecast, of which 64 percent forecast positively with 160 companies saying that they are going to have a growth while 44 companies are expecting to turn loss into gain. The percentage of positive forecast is lower than previous years, which indicates that the entity economy is still quite gloomy.
If analyzed from industry perspective and estimated by the lower limit of earnings forecast, the half-year earnings of electrical equipment industry, nonferrous metals industry, media and public utility all exceed 50 percent year on year; the growth is also greater than the last report period
If excluding the one-time none-core-business factors and estimated by the lower limit of earnings forecast, 35 companies have more than doubled their growth rate both H-o-H and compared to Q2 respectively. It’s worth paying attention to that Luoyang Northglass Technology Co., Ltd. (002613.SZ), Rongsheng Petro Chemical Co., Ltd. (003493.SZ), Suzhou Dongshan Precision Manufacturing Co, Ltd. (002384.SZ), Muyuan Foods CO., LTD. (002714.SZ), Jiangsu Jiuding New Material Co, Ltd. (002201.SZ) and Xinjiang Goldwind Science And Technology Co., Ltd. (002202.SZ) have all seen a big rise in their main business due to the booming of the industries.
○ 2nd batch of private owned banks licensing to launch
○ Impact of lowering leverage believed to be not completely released
○ Hengli Highpressure Oil Cylinder attracts institutional investors’ focus by sound endogenous and extensive development
○ Asset integration of Aerospace Hi-Tech expected to improve
[Authoritative Voice]
2nd batch of private owned banks licensing to launch
------
It is learned from the industry that China will expand private owned bank pilot scale, and is likely to grant licenses to the second-batch private owned banks. It is reported that banks obtained licenses last year, including WeBank, Myshare Bank, KinCheng Bank of Tianjin, MYBank, SHR Bank, have all opened to business, and formed characteristics of their own. The pilot’s effect is significant.
[XFA View]
Mid-year effect of money supply may exert pressure on leverage-based bull market
------
Although the current interbank market represents much higher mobility than previous years, the market interest rate, particularly short-term interest rate, still shows sign of continuous increase towards the middle of the year. Besides, due to more IPOs recently and intensified risk control ofillicit loans for stock purchase, capital’s mid-year effect may exert pressure on leverage-based bull market in a short time.
According to statistics, the overnight SHIBOR on June 24 surged by 4.3 basis points to 1.3380, seven-day rate rose by 13.3 basis points to 2.8080, and fourteen-day SHIBOR was up by 17.6 basis points to 3.4500. All of them have reached minor peaks. The fluctuation of SHIBOR interest rate reflects tensions of short-term funding in the interbank market.
In addition to growing IPOs, the fundamental reason causing the short-term financial strain is that banks have internal demands to recover certain loans to cope with assessment of liquidity measures towards the end of mid-year. The open market has witnessed no reverse repo for 19 consecutive periods. And the expectation that monetary policy would continue to loosen has faded. All these intensified the short-term financial strain to some degree.
The recent market trend indicates that there were signs showing the market is spontaneously lowering its leverage level. On the one hand, it is a result of stricter regulation. On the other hand, it may also because that institutional investors, including trusts have increasing difficulties to obtain low-cost capital from banks. In the short time, the stricter regulation and tighter funding supply will continue to restrain the stock market. Investors should re-examine and re-assess their own risk tolerance, and mostly importantly reduce or optimize their funding leverage ratio.
[Institutions’ Movement]
Impact of lowering leverage believed to be not completely released
------
According to the latest survey, many major security traders believe that lowering leverage in illicit loans for stock purchase is one of the main reasons for the recent market fluctuations. At present, the security traders taking the opportunity of regulating the third party access system to rectify illicit funding is in progress. Information from funding companies reveals that except those being closed position, some clients also begins initiatively squeezing leverage. Yet the Evaluation and Assessment Standard for Securities Agency External Access Information System recently issued by Securities Association of China (SAC) still needs detailed implementation regulations, such as clarifying the measures and time limit to clear inventory. Therefore, it is not clear whether the impact of lowering leverage has been released totally.
Reportedly, some securities traders with strict risk control express that Hang Seng HOMS system which is equipped with function of funding support will be shut down in the near future, including the products with function of dividing positions or clearing by HOMS system.
Several insurance enterprises lock earnings of 2015 H1
------
Based on the communications with investment managers of several large insurance enterprises from Beijing and Shanghai, XFA realizes that in order to lock earnings to ensure performance of the first half year, many insurance enterprises are clearing the high-estimated-value products which lack fundamentals support and holding positions in the small varieties like foods & beverages and coal products, which witness slight increase in early stage. They won’t consider buying in more shares until the market condition gets stable.
Hengli Highpressure Oil Cylinder attracts institutional investors’ focus by sound endogenous and extensive development
------
Nearly 30 investment institutions collectively researched on Jiangsu Hengli Highpressure Oil Cylinder Co., Ltd. （601100.SH）on June 23th. It’s said that the company is proactively exploring high-end European and American customers and its hydraulic parts have been sent to overseas customers in small quantities. The original customers are being upgraded to hydraulic pump users in the meantime, and channels for high-end customers are quite perfect. On endogenous development, the company has engaged elites from Japan and Germany in R&D design and quality control. The products of Hengli Highpressure Oil Cylinder have been supplied to robot industry with one of its clients is SINSUN.
In addition, the abundant cash flow has enhanced the company’s confidence for extensive development. The management has visited technical giants in Europe for several times since the beginning of this year and shown great momentum for extensive development.
Institutional investors to survey the progress of cooperation between Chongqing Dima and UESTC
------
More than 20 investment institutions are going to conduct survey on the cooperation between Chongqing Dima Industry Co., Ltd. (600565.SH) and UESTC (University of Electronic Science and Technology of China), with the main focus on artificial intelligent exoskeleton.
On April 1 this year, Dima Industry signed a University-Industry-Research Cooperation Agreement with UESTC, planning to have deep cooperation with the latter on the sides of scientific research, industrial application and talent cultivation. Sources said that artificial intelligent exoskeleton plays an important role in the modernization of armies and that it will firstly be used in the marine corps of China. Besides, this technology will be widely used in civilian areas such as aiding the handicapped in walking.
[News to Confirm]
Asset integration of Aerospace Hi-Tech expected to improve
------
Confirmation: Verified.
The temporary trading halt of Beijing Aerospace Changfeng Co., Ltd. (600855.SH) at noon of June 24 has aroused market’s expectation again on the asset integration of China Aerospace Science & Industry Corp. (CASIC). Among the six listed companies affiliated to CASIC, the asset integration expectation of Aerospace Hi-Tech Holding has attracted institution’s attention all the time. According to the analysis of institution, CASIC 3rd Academy, the controlling shareholder of CASIC, has great potential in asset securitization. Under the reform background, people have strong anticipation on the institute restructuring, and the company is expected to be the integration platform for the restructuring of the Military Technology Research Institute of CASIC 3rd Academy in the future.
[Information Radar]
Shaangu Power speeds up transformation and upgrading in many areas
------
Based on the survey by XFA, as the major equipment manufacturing leading enterprise, Xi'an Shaangu Power Co., Ltd. (601369.SH) speeds up the transformation and upgrading in many areas. The nuclear power draught fan project cooperated by Shaangu Power and Tsinghua University is expected to finish at the end of this year. As China is increasing investments in nuclear power projects, the company will hopefully obtain new profit growth points in the future. In terms of environment protection, Shaangu Power has already received project orders in sewage treatment field; and once Shaanxi government launches the PPP project, it is expected to gain billions of shares. In addition, it was selected into 2015 MIIT intellectual manufacturing special project in early June. Focusing on the standardization of power equipment design and development, this intellectual manufacturing project has the budget of 60 million yuan, of which 20 million yuan will be provided by Chinese government.
Xiuqiang Glasswork’s large-size coated glass program starts trial production in end-June
------
The investment with over-raised fund of Jiangsu Xiuqiang Glasswork Co., Ltd. (SZ:300160), namely the “large-size high-transmission visible light AR coated glass program”, has completed all its production lines and will begin trial production at the end of June. Currently, Xiuqiang Glasswork has received customers for AR coated glass. The newly increased productivity is likely to be digested in the future. Its products can be used as LED protective glass of tablet PC, GPS and inquiry terminals. The company has estimated that the annual average net profit of the program can reach 20.32 million yuan in a regular production period. Xiuqiang Glasswork Co., Ltd. received a net profit of 36.48 million yuan in 2014. XFA previously reported progress of the program.
[Data Reference ]
The vibrant companies in overall economic downturn
------
With the half-year report period drawing near, the listed companies with deterministic growth are expected to gain market attention. The statistics shows that by June 24, there are 1,035 listed companies that have disclosed their half-year earnings forecast, of which 64 percent forecast positively with 160 companies saying that they are going to have a growth while 44 companies are expecting to turn loss into gain. The percentage of positive forecast is lower than previous years, which indicates that the entity economy is still quite gloomy.
If analyzed from industry perspective and estimated by the lower limit of earnings forecast, the half-year earnings of electrical equipment industry, nonferrous metals industry, media and public utility all exceed 50 percent year on year; the growth is also greater than the last report period
If excluding the one-time none-core-business factors and estimated by the lower limit of earnings forecast, 35 companies have more than doubled their growth rate both H-o-H and compared to Q2 respectively. It’s worth paying attention to that Luoyang Northglass Technology Co., Ltd. (002613.SZ), Rongsheng Petro Chemical Co., Ltd. (003493.SZ), Suzhou Dongshan Precision Manufacturing Co, Ltd. (002384.SZ), Muyuan Foods CO., LTD. (002714.SZ), Jiangsu Jiuding New Material Co, Ltd. (002201.SZ) and Xinjiang Goldwind Science And Technology Co., Ltd. (002202.SZ) have all seen a big rise in their main business due to the booming of the industries.
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