[Today’s Guide]
>A-share transaction fees to cut 30 pct, authorities intend to protect market
>Leading Group for Overall Reform passes various new policies, environmental protection to highlight
>State Council General Office issues opinions on big data development, credit collection industry to see policy benefits..
>Actual controller of Sanxing Electric and Tempus Global Business Service increase shareholding, RAAS Blood Products, etc. plan high share conversion
[XFA Focus]
○A-share transaction fees to cut 30 pct, authorities intend to protect market
------
The Shanghai and Shenzhen stock exchanges and the China Securities Depository and Clearing Company (CSDC) held a press conference on lowering A-shares transaction and settlement fees on July 1 evening. It is proposed to cut A-share transaction fees charged by stock exchanges by 30 percent from August 1. The A-share transaction and transfer fees charged by the CSDC will also lowered by approximately 33 percent based on the market statistics in recent two years.
Comment: The cut on the required reserve ratio and interest rate and the introduction of pension fund into the stock market last weekend as well as the new policy measures fully show the intention of authorities to protect the stock market. Follow-up policies, including new regulations on margin trading and short selling and restricting the financing scale of new big-cap shares are expected to be introduced, which will play a key role in stabilizing market confidence.
○Leading Group for Overall Reform passes various new policies, environmental protection to highlight
------
Chinese President Xi Jinping chaired the 14th meeting of the Leading Group for Overall Reform on July 1. The meeting passed various new policies on environmental protection, including the ‘Plan on Environment Protection and Supervision (Pilot)’, the ‘Plan on Construction of Ecological Environment Monitoring Network’, the ‘Pilot Plan on Conducting Audit on Natural Resources on Leaving of Leaders’ and the ‘Method on Investigation of Responsibilities of Party and Political Leaders on Damaging Ecological Environment’. The meeting pointed out that China has entered into a period to accelerate the ecological civilization construction. Leaders responsible for damaging the ecological environment, whether they have been transferred, promoted or retired, shall be investigated seriously.
Comment: The strict accountability system means that China will take serious measures in strengthening environment protection enforcement. Since the beginning of this year, the strictest environment protection law, the Water Pollution Prevention Action Plan (the ‘Water Ten’), the ‘Opinions on Accelerating and Promoting Ecological Civilization Construction’ have been introduced. The 13th Five-year Plan under preparation will have one chapter on ecological civilization construction. The environmental protection has caught unprecedented attention. The research reports of institutes are rosy about the monitoring equipment industry to benefit firstly. The air pollution in Beijing-Tianjin-Hebei region is also likely to receive more policy supports.
[XFA Selection]
○ China’s manufacturing purchasing managers’ index (PMI) posted 50.2 percent in June, unchanged from last month. The non-manufacturing PMI hiked 0.6 percentage points to 53.8 percent from last month.
○ The Asset Management Association of China issued the ‘Series of Public Funds’ View on Market’ on its website. China Asset Management Company and Zhong Ou Asset Management Co., Ltd. are optimistic about reform benefits.
○ The chairmen of various listed companies in Zhejiang Province jointly issued a proposal to take practical actions to maintain the prosperity of the capital market.
○ The Standing Committee of the National People’s Congress passed the National Security Law, which specifies the concept of the ‘cyberspace sovereignty’.
○ The first military-civil integration theme exhibition will be held from July 16. The high score 2 satellite and other significant results will make appearances.
[Industry Information]
○State Council General Office issues opinions on big data development, industry to see policy benefits
------
The General Office of the State Council recently published certain opinions on strengthening the services and regulation on market entities with big data, requiring improving the government services with the construction of the social credit system and the disclosure of government information and data opening as drivers through full use of big data, cloud computing and other modern information technology. In addition, it is disclosed at the Guiyang International Big Data Expo 2015 held in end-May that China is preparing state strategies and action plans on big data.
Comment: As a key owner of big data resources, the government plays a leading and promoting role in the development of the industry. Such sub-divided industries as credit collection services, collection of big data and application solutions provision, will see more market opportunities. Beijing TRS Information Technology Co., Ltd. (300229.SZ) owns 15 percent equities of Lakala Credit Management Co., Ltd. The company is principally engaged in text mining, contents management and other technologies and enjoys a high market share in the government industry. Shenzhen Infogem Technologies Co., Ltd. (300085.SZ) holds 40 percent equities of Sinoway Credit. It also obtained the license for Internet-based insurance and holds 15 percent equities of Yian Asset Insurance Co., Ltd. It enjoys obvious advantages in the big data industry.
○Merger and reorganization meeting of milk powder enterprises convened, market share to centralized in leading enterprises
------
Latest information from the website of the Ministry of Industry and Information Technology (MIIT) shows that the merger and reorganization meeting of infant formula milk powder enterprises was convened recently in Beijing. Wang Liming, chief engineer of MIIT, pointed out that nearly 20 mergers and reorganizations of enterprises were done since last year; the concentration ration of the industry improved obviously. The industrial concentration ration of top 10 domestic band enterprises reached 54.2 percent by end-2014, increasing by nearly 10 percent compared with last year.
Comment: According to the reorganization scheme of the milk industry launched in June last year, efforts shall be spared to build around 10 large-scale infant formula milk powder enterprises with sales income exceeding 2 billion yuan and the industrial concentration ratio of top 10 domestic brand enterprises shall reach 65 percent by December, 2015. The market share might be further centralized in leading enterprises in the future. As for listed companies, institutions are optimistic about the continuous increase of the market shares of Inner Mongolia Yili Industrial Group Co., Ltd. (600887.SH) in the first half year; Beingmate Baby & Child Food Co., Ltd. (002570.SZ) received tender offer from Fonterra Co-operative Group Ltd. The tender offer has been completed now at the price of 18 yuan per share, higher than its latest market price.
[Announcement Interpretation]
○Actual controller of Sanxing Electric and Tempus Global Business Service increase shareholding
------
Zheng Jianjiang, actual controller of Ningbo Sanxing Electric Co., Ltd. (601567.SH), increased shareholding in the company on June 30 by 727,000 shares at an average price of 14.12 yuan per share, accounting for 0.06 percent of the company’s total share capital. Zhong Baisheng, actual controller and President of Shenzhen Tempus Global Business Service Holding Ltd. (300178.SZ), increased shareholding in the company by 569,300 shares at an average price of 35.12 yuan per share, accounting for 0.11 percent of the company’s total share capital. Zhong plans to totally increase shareholding in the company by no more than 10 million shares, accounting for 1.86 percent of the company’s total share capital, in next 12 months. The stock price of Tempus Global Business Service closed at 32.5 yuan per share on July 1, plummeting by the daily 10 percent limit.
○TCL Corporation to launch share repurchase plan of RMB800 mln
------
To promote value return of its stocks, TCL Corporation (000100.SZ) determines to repurchase shares with its own money at an up-limit of 10.05 yuan per share through centralized price bidding. The maximum amount of capital used to repurchase shares is 25 percent of its net profit in 2014, namely 795 million yuan. It is expected that no less than 79.10 million shares, accounting for 0.65 percent of its total share capital, will be repurchased if 795 million yuan are all invested and the repurchased shares will be cancelled. The stock price of TCL Corporation saw sharp drop recently and its latest stock price is 5.24 yuan per share.
○Party acting in concert with controlling shareholder of Lawton Development increases shareholding by 4.72 percent
------
Beijing De Tao Education Investment Company Limited, the party acting in concert with Hainan Luoheng Mechanical and Electrical Equipment Installation Company Limited which is the controlling shareholder of Lawton Development Co., Ltd. (600209.SH), purchases 20.72 million shares of the company through block trade on June 29, accounting for 4.72 percent of the company’s total share capital.
[Financial Reports Express]
○RAAS Blood Products, Csg Smart Science & Technology and Cosunter Pharmaceutical plan high share conversion
------
Shanghai RAAS Blood Products Co., Ltd. (002252.SZ) proposes a 10-for-10 conversion of capital surplus into shares in its semiyearly report; Csg Smart Science & Technology Co., Ltd. (300222.SZ) proposes a 8-for-10 conversion of capital surplus into shares in its semiyearly report; Fujian Cosunter Pharmaceutical Co., Ltd. (300436.SZ) proposes a 10-for-10 conversion of capital surplus into shares in its semiyearly report.
○Inspur Software, etc. forecast performance growth in semiyearly report
------
Thanks to the growth of principal business and the sales of stocks of Tungkong Inc. (002117.SZ), Inspur Software Co., Ltd. (600756.SH) expects its net profit in the first half year to see a year-on-year growth of 100~150 percent; due to expansion of business scale, Gansu Gangtai Holding (Group) Co., Ltd. (600687.SH) expects its net profit in the first half year to see a year-on-year growth of 167~217 percent; resulted by large sales growth of pouch-packed products, Xiwang Foodstuffs Co., Ltd. (000639.SZ) expects its net profit in the first half year to see a year-on-year growth of 45~56 percent; thanks to both production and marketing thrive, Huafon Microfibre (Shanghai) Co., Ltd. (300180.SZ) expects its net profit in the first half year to see a year-on-year growth of 35~65 percent.
[Trading Trends]
○Shouhang Resources Saving bought by five institutional seats
------
The trading volume ranking list on July 1 shows that Beijing Shouhang Resources Saving Co., Ltd. (002665.SZ) was bought by five institutional seats with a total of 168 million yuan, accounting for 26.5 percent of its intraday turnover.
Comment: Shouhang Resources Saving recently announced that it has reached cooperation agreement with Indian Lanco Company in 2X100MW groove-type photo-thermal project. The equipment and technical service supplied by the company are amounted to 1.24~1.86 billion yuan, accounting for 111~167 percent of the company’s revenue in last year. Smooth progress of the agreement might bring positive impact on the company’s revenue and profit from 2015 to 2017.
○Central bank continues to input mid- and long-term capital to reduce social financing cost
------
Central bank released the operation of monetary policy in June: launched six-month Medium-term Lending Facility (MLF) and provided China Development Bank with longer-term capital through Pledged Supplementary Lending (PSL) at an interest rate as low as 3.35 percent and 3.1 percent, respectively. 287.6 billion yuan mid- and long-term capital was provided to the market through MLF and PSL throughout June. Analysis believes that central bank aims to further decrease the policy interest rate of mid- and long-term capital so as to reduce social financing cost.
>A-share transaction fees to cut 30 pct, authorities intend to protect market
>Leading Group for Overall Reform passes various new policies, environmental protection to highlight
>State Council General Office issues opinions on big data development, credit collection industry to see policy benefits..
>Actual controller of Sanxing Electric and Tempus Global Business Service increase shareholding, RAAS Blood Products, etc. plan high share conversion
[XFA Focus]
○A-share transaction fees to cut 30 pct, authorities intend to protect market
------
The Shanghai and Shenzhen stock exchanges and the China Securities Depository and Clearing Company (CSDC) held a press conference on lowering A-shares transaction and settlement fees on July 1 evening. It is proposed to cut A-share transaction fees charged by stock exchanges by 30 percent from August 1. The A-share transaction and transfer fees charged by the CSDC will also lowered by approximately 33 percent based on the market statistics in recent two years.
Comment: The cut on the required reserve ratio and interest rate and the introduction of pension fund into the stock market last weekend as well as the new policy measures fully show the intention of authorities to protect the stock market. Follow-up policies, including new regulations on margin trading and short selling and restricting the financing scale of new big-cap shares are expected to be introduced, which will play a key role in stabilizing market confidence.
○Leading Group for Overall Reform passes various new policies, environmental protection to highlight
------
Chinese President Xi Jinping chaired the 14th meeting of the Leading Group for Overall Reform on July 1. The meeting passed various new policies on environmental protection, including the ‘Plan on Environment Protection and Supervision (Pilot)’, the ‘Plan on Construction of Ecological Environment Monitoring Network’, the ‘Pilot Plan on Conducting Audit on Natural Resources on Leaving of Leaders’ and the ‘Method on Investigation of Responsibilities of Party and Political Leaders on Damaging Ecological Environment’. The meeting pointed out that China has entered into a period to accelerate the ecological civilization construction. Leaders responsible for damaging the ecological environment, whether they have been transferred, promoted or retired, shall be investigated seriously.
Comment: The strict accountability system means that China will take serious measures in strengthening environment protection enforcement. Since the beginning of this year, the strictest environment protection law, the Water Pollution Prevention Action Plan (the ‘Water Ten’), the ‘Opinions on Accelerating and Promoting Ecological Civilization Construction’ have been introduced. The 13th Five-year Plan under preparation will have one chapter on ecological civilization construction. The environmental protection has caught unprecedented attention. The research reports of institutes are rosy about the monitoring equipment industry to benefit firstly. The air pollution in Beijing-Tianjin-Hebei region is also likely to receive more policy supports.
[XFA Selection]
○ China’s manufacturing purchasing managers’ index (PMI) posted 50.2 percent in June, unchanged from last month. The non-manufacturing PMI hiked 0.6 percentage points to 53.8 percent from last month.
○ The Asset Management Association of China issued the ‘Series of Public Funds’ View on Market’ on its website. China Asset Management Company and Zhong Ou Asset Management Co., Ltd. are optimistic about reform benefits.
○ The chairmen of various listed companies in Zhejiang Province jointly issued a proposal to take practical actions to maintain the prosperity of the capital market.
○ The Standing Committee of the National People’s Congress passed the National Security Law, which specifies the concept of the ‘cyberspace sovereignty’.
○ The first military-civil integration theme exhibition will be held from July 16. The high score 2 satellite and other significant results will make appearances.
[Industry Information]
○State Council General Office issues opinions on big data development, industry to see policy benefits
------
The General Office of the State Council recently published certain opinions on strengthening the services and regulation on market entities with big data, requiring improving the government services with the construction of the social credit system and the disclosure of government information and data opening as drivers through full use of big data, cloud computing and other modern information technology. In addition, it is disclosed at the Guiyang International Big Data Expo 2015 held in end-May that China is preparing state strategies and action plans on big data.
Comment: As a key owner of big data resources, the government plays a leading and promoting role in the development of the industry. Such sub-divided industries as credit collection services, collection of big data and application solutions provision, will see more market opportunities. Beijing TRS Information Technology Co., Ltd. (300229.SZ) owns 15 percent equities of Lakala Credit Management Co., Ltd. The company is principally engaged in text mining, contents management and other technologies and enjoys a high market share in the government industry. Shenzhen Infogem Technologies Co., Ltd. (300085.SZ) holds 40 percent equities of Sinoway Credit. It also obtained the license for Internet-based insurance and holds 15 percent equities of Yian Asset Insurance Co., Ltd. It enjoys obvious advantages in the big data industry.
○Merger and reorganization meeting of milk powder enterprises convened, market share to centralized in leading enterprises
------
Latest information from the website of the Ministry of Industry and Information Technology (MIIT) shows that the merger and reorganization meeting of infant formula milk powder enterprises was convened recently in Beijing. Wang Liming, chief engineer of MIIT, pointed out that nearly 20 mergers and reorganizations of enterprises were done since last year; the concentration ration of the industry improved obviously. The industrial concentration ration of top 10 domestic band enterprises reached 54.2 percent by end-2014, increasing by nearly 10 percent compared with last year.
Comment: According to the reorganization scheme of the milk industry launched in June last year, efforts shall be spared to build around 10 large-scale infant formula milk powder enterprises with sales income exceeding 2 billion yuan and the industrial concentration ratio of top 10 domestic brand enterprises shall reach 65 percent by December, 2015. The market share might be further centralized in leading enterprises in the future. As for listed companies, institutions are optimistic about the continuous increase of the market shares of Inner Mongolia Yili Industrial Group Co., Ltd. (600887.SH) in the first half year; Beingmate Baby & Child Food Co., Ltd. (002570.SZ) received tender offer from Fonterra Co-operative Group Ltd. The tender offer has been completed now at the price of 18 yuan per share, higher than its latest market price.
[Announcement Interpretation]
○Actual controller of Sanxing Electric and Tempus Global Business Service increase shareholding
------
Zheng Jianjiang, actual controller of Ningbo Sanxing Electric Co., Ltd. (601567.SH), increased shareholding in the company on June 30 by 727,000 shares at an average price of 14.12 yuan per share, accounting for 0.06 percent of the company’s total share capital. Zhong Baisheng, actual controller and President of Shenzhen Tempus Global Business Service Holding Ltd. (300178.SZ), increased shareholding in the company by 569,300 shares at an average price of 35.12 yuan per share, accounting for 0.11 percent of the company’s total share capital. Zhong plans to totally increase shareholding in the company by no more than 10 million shares, accounting for 1.86 percent of the company’s total share capital, in next 12 months. The stock price of Tempus Global Business Service closed at 32.5 yuan per share on July 1, plummeting by the daily 10 percent limit.
○TCL Corporation to launch share repurchase plan of RMB800 mln
------
To promote value return of its stocks, TCL Corporation (000100.SZ) determines to repurchase shares with its own money at an up-limit of 10.05 yuan per share through centralized price bidding. The maximum amount of capital used to repurchase shares is 25 percent of its net profit in 2014, namely 795 million yuan. It is expected that no less than 79.10 million shares, accounting for 0.65 percent of its total share capital, will be repurchased if 795 million yuan are all invested and the repurchased shares will be cancelled. The stock price of TCL Corporation saw sharp drop recently and its latest stock price is 5.24 yuan per share.
○Party acting in concert with controlling shareholder of Lawton Development increases shareholding by 4.72 percent
------
Beijing De Tao Education Investment Company Limited, the party acting in concert with Hainan Luoheng Mechanical and Electrical Equipment Installation Company Limited which is the controlling shareholder of Lawton Development Co., Ltd. (600209.SH), purchases 20.72 million shares of the company through block trade on June 29, accounting for 4.72 percent of the company’s total share capital.
[Financial Reports Express]
○RAAS Blood Products, Csg Smart Science & Technology and Cosunter Pharmaceutical plan high share conversion
------
Shanghai RAAS Blood Products Co., Ltd. (002252.SZ) proposes a 10-for-10 conversion of capital surplus into shares in its semiyearly report; Csg Smart Science & Technology Co., Ltd. (300222.SZ) proposes a 8-for-10 conversion of capital surplus into shares in its semiyearly report; Fujian Cosunter Pharmaceutical Co., Ltd. (300436.SZ) proposes a 10-for-10 conversion of capital surplus into shares in its semiyearly report.
○Inspur Software, etc. forecast performance growth in semiyearly report
------
Thanks to the growth of principal business and the sales of stocks of Tungkong Inc. (002117.SZ), Inspur Software Co., Ltd. (600756.SH) expects its net profit in the first half year to see a year-on-year growth of 100~150 percent; due to expansion of business scale, Gansu Gangtai Holding (Group) Co., Ltd. (600687.SH) expects its net profit in the first half year to see a year-on-year growth of 167~217 percent; resulted by large sales growth of pouch-packed products, Xiwang Foodstuffs Co., Ltd. (000639.SZ) expects its net profit in the first half year to see a year-on-year growth of 45~56 percent; thanks to both production and marketing thrive, Huafon Microfibre (Shanghai) Co., Ltd. (300180.SZ) expects its net profit in the first half year to see a year-on-year growth of 35~65 percent.
[Trading Trends]
○Shouhang Resources Saving bought by five institutional seats
------
The trading volume ranking list on July 1 shows that Beijing Shouhang Resources Saving Co., Ltd. (002665.SZ) was bought by five institutional seats with a total of 168 million yuan, accounting for 26.5 percent of its intraday turnover.
Comment: Shouhang Resources Saving recently announced that it has reached cooperation agreement with Indian Lanco Company in 2X100MW groove-type photo-thermal project. The equipment and technical service supplied by the company are amounted to 1.24~1.86 billion yuan, accounting for 111~167 percent of the company’s revenue in last year. Smooth progress of the agreement might bring positive impact on the company’s revenue and profit from 2015 to 2017.
○Central bank continues to input mid- and long-term capital to reduce social financing cost
------
Central bank released the operation of monetary policy in June: launched six-month Medium-term Lending Facility (MLF) and provided China Development Bank with longer-term capital through Pledged Supplementary Lending (PSL) at an interest rate as low as 3.35 percent and 3.1 percent, respectively. 287.6 billion yuan mid- and long-term capital was provided to the market through MLF and PSL throughout June. Analysis believes that central bank aims to further decrease the policy interest rate of mid- and long-term capital so as to reduce social financing cost.
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