[Today’s Guide]
> Chinese Premier emphasized innovation in symposium, intelligent manufacturing development to speed up
> Refractory material industry to implement bulletin management, leaders to see reorganization opportunities
> Over 150 companies resume trading with good news, Sundiro Holding to raise fund through private placement at price over 70 pct higher than current stock price
> Lu Thai Textile and Xcmg Construction Machinery to launch repurchase plan, Lanzhou Huanghe Enterprise, Hubei Golden Ring, etc. forecast explosive performance growth
[XFA Focus]
○Chinese Premier emphasized innovation in symposium, intelligent manufacturing development to speed up
------
It is disclosed on the www.gov.cn on July 13 that Chinese Premier Li Keqiang chaired a symposium recently to listen to the opinions and suggestions on the current economic conditions and economic work from the entrepreneurs of Suning Commerce Group Co., Ltd. (002024.SZ), Qihoo 360 Technology Co Ltd (QIHU.NYSE), Weichai Power Co., Ltd. (02338.HK; 000338.SZ), Dajiang Innovations Technology Co., Ltd. and Iflytek Co., Ltd. (002230.SZ). Premier Li emphasized that China’s economic reform and innovation is fundamentally driven by reform and innovation and it should collect various innovation resources for enterprises. On the same day, Xinhua News Agency released the survey on the first “unmanned factory” in Dongguan City. The performance of the factory was greatly improved.
Comment: The five enterprises participated at the symposium are all leaders in the “Made in China 2025” and the “Internet Plus” strategies, which shows that Chinese authorities are fully aware of the important of the economic transformation into driven by innovation. Since the releasing of the “Made in China 2025”, various supporting policies and local plans in provinces and municipalities were released. The development of the intelligent manufacturing is spending up driven by policies and the market. Among A-share companies, Miracle Automation Engineering Co., Ltd. (002009.SZ) is principally engaged in the manufacturing of intelligent equipment in the automobile industry. The employee shareholding price of the company is 14.9 yuan and it closed at 14.87 yuan before trading suspension. Harbin Boshi Automation Co., Ltd. (002698.SZ) recently announced that it proposes to establish a fund for the robotic industry in Dongguan City. J.S. Corrugating Machinery Co., Ltd. (000821.SZ) turned losses into profits in the first half thanks to the acquisition of Sankyo precision (Huizhou) Co., Ltd., a manufacturer of automation equipment.
[XFA Selection]
○ Liu Yandong, vice-premier of the State Council, emphasized on increasing efforts in educational poverty alleviation and improving the employment in vocational education during a visit to Hebei Province.
○ XFA learnt from various fund companies that their products sale has changed from net redemption to net subscription from July 9.
○ The Ministry of Culture held a work symposium on the 13th Five-year Plan on July 13, proposing to promote the cultural industry to be a pillar industry in the national economy.
○ The structure of the medical industry will be adjusted significantly in the 13th Five-year Plan, including improving the pharmaceuticals innovation and promoting the domestication of medical devices.
○ The substantial shareholder of Hua Xia Bank Co., Ltd. (600015.SH) committed that it will not reduce the shareholding. The shareholding in China Minsheng Banking Corp., Ltd. (01988.HK; 600016.SH) is expected to reduce by 260 million shares last week.
[Industry Information]
○Refractory material industry to implement bulletin management, leaders to see reorganization opportunities
------
XFA learnt from the Ministry of Industry and Information Technology (MIIT) that the “Method on the Bulletin Management of Standard Conditions on the Refractory Material Industry” has solicited public opinions. According to insiders of the Association of China Refractories Industry, the association will establish communication channels for superior enterprises and those intend to conduct mergers and reorganizations to improve the combination and reorganization and improve the industrial concentration on the condition of equal or less amount.
Comment: After the implementation of the method, small enterprises with outdated capacity will see difficulties in being listed on the white list of the bulletin, which will improve the excess production capacity in the industry. According to the opinions on the development of the industry issued by the MMIT in the beginning of 2013, the industrial concentration industry of the top 10 enterprises will be improved to 45 percent by 2020. Insiders believe that leading enterprises will see more reorganization opportunities with their capital and technology advantages. Puyang Refractories Group Co., Ltd. (002225.SZ) is the biggest supplier of finished refractory products in the steel and iron industry in China. Ruitai Materials Technology Co., Ltd. (002066.SZ) also develops refractory materials. China National Building Materials Group Corporation, the actual controller of the company, is among the first central enterprises to conduct mixed ownership reform.
○Chemical engineering varieties to see performance surge thanks to improved bargaining power and booming sale
------
According to the XFA, certain subdivided industries in the chemical engineering industry continued to improve as a result of the shrunk capacity caused by environmental pressure and the strengthened the bargaining power brought by the improved concentration of the industry. According to the statistic of the XFA, Meihua Holdings Group Co., Ltd. (600873.SH), Huafon Microfibre (Shanghai) Co., Ltd. (300180.SZ) and Luxi Chemical Group Co., Ltd. (000830.SZ) rank high in the chemical engineering industry in terms of the performance growth and the P/E ratio. They expect an increase of 35 percent to 150 percent in net profit according to their half-year reports with a dynamic P/E ratio of about 40 times.
Meihua Holdings is a leading enterprise in the gourmet powder industry. Benefited from the improved industry concentration, the gourmet powder market has raised the price four times this year. Relevant factories are expected to maintain an average price rise of 1,000 yuan per ton in the following years. Huafon Microfibre is a leader in the superfine fiber synthetic leather industry. The environmental pressure has greatly improved the demand for superfine fibers. Luxi Chemical is principally engaged in urea and other fertilizers. As a result of the new tariff policies, it imported 6,092,000 tons of urea in the first five months, surging 60 percent compared with the 3,818,000 tons in the corresponding period of last year.
[Announcement Interpretation]
○Over 150 companies resume trading with good news
------
By the time the news is issued, over 150 companies on Shanghai and Shenzhen Stock Exchanges resume trading with good news.
For listed companies signing agreement of cooperation, Palm Landscape Architecture Co., Ltd. (002431.SZ) signs cooperation agreement with the government of Jishou City with a total investment of around 2 billion yuan and the cooperation project will be constructed in the way of Public-Private-Partnership (PPP), Engineer & Procure& Construct (EPC), etc.; Zhejiang Southeast Space Frame Co., Ltd. (002135.SZ) signs a project contract, covering comprehensive office building, commercial residential building and factory warehouse, with a company in Panama. The contract totals an amount of 3,136 million yuan, accounting for 73 percent of the company’s revenue in 2014; Wuhan Langold Real Estate Co., Ltd. (002305.SZ) signs contract with Wuhan Fangrong Financial Service Company and the latter will provide the company with Internet finance innovation business; Yunnan Nantian Electronics Information Co., Ltd. (000948.SZ) plans to join hands with ChinaPnR company to develop Internet finance.
For listed companies planning to launch shareholding increase and staff shareholding plans, Jilin Zixin Pharmaceutical Industrial Co., Ltd. (002118.SZ) plans to launch staff shareholding plan to raise no more than 30 million yuan; Zhejiang Sanhua Co., Ltd. (002050.SZ) plans to launch a staff shareholding plan of around 218 million yuan; Der International Home Furnishing Co., Ltd. (002631.SZ) will launch a staff shareholding plan of 36.77 million yuan; actual controller of Sichuan Kelun Pharmaceutical Co., Ltd. (002422.SZ) plans to increase shareholding in the company with at least 50 million yuan between July 14 and October 13.
For listed companies planning external investment, Fujian Septwolves Industry Co., Ltd. (002029.SZ) plans to launch domestic RMB fund with Beijing Zhiyuan Lixin Investment Management Company Limited; Jiangsu Aoyang Technology Corporation Limited (002172.SZ) plans to set Xing’ao Fund with no more than 50 million yuan and prioritize investment in promising enterprises in medical & health, new energy and environmental protection industries. The company will turn loss into gain in the first half year; TBEA Co., Ltd. (600089.SH) plans to set up a subsidiary to construct TBEA power equipment industrial park and be involved in the manufacturing and sales of inverter.
○Sundiro Holding to raise fund through private placement at price over 70 pct higher than current stock price
------
Sundiro Holding Co., Ltd. (000571.SZ) plans to raise no more than 408 million yuan through private placement at no less than 9.33 yuan per share to acquire 60 percent equities of Simpson Holding Company, invest in the establishment of yacht financing and leasing company, etc. By cooperating with leading enterprises in the yacht industry, the company effectively breaks industrial barrier and enterprise limit and achieves trans-boundary operation. Meanwhile, the company also expands to yacht finance area and builds an eco-industry platform of “yacht products and finance”. The company’s offering price of private placement increases by 76 percent, compared with its stock price which closed at 5.28 yuan per share before trading suspension.
○Lu Thai Textile and Xcmg Construction Machinery to launch repurchase plan
------
Lu Thai Textile Co., Ltd. (000726.SZ) plans to repurchase some A shares and B shares. The A shares are planned to be repurchased at no more than 15 yuan per share, while the B shares are planned to be repurchased at no more than 11.8 HK dollar per share, and the total amount of repurchase will be no higher than 1 billion yuan. At present, the company’s A share records a price of 13.09 yuan per share. If 1 billion yuan are all used to repurchase A shares at 15 yuan per share, then the repurchased shares will account for 6.98 percent of its total share capital.
Xcmg Construction Machinery Co., Ltd. (000425.SZ) plans to repurchase shares at no more than 20 yuan per share, 81 percent higher compared with its closing price of 11.02 yuan per share before trading suspension, through centralized competitive price transaction, bulk trading, etc. Since the company expects to repurchase shares with no more than 500 million yuan, the maximum number of shares repurchased will reach 25 million based on the calculation of 20 yuan per share, accounting for 1.06 percent of its current total share capital. The resolution will be validate in 12 months from the day it is approved by the company’s general meeting.
○Fujitsu Microelectronics and Nationstar Optoelectronics resume trading with plans of asset acquisition
------
Nantong Fujitsu Microelectronics Co., Ltd. (002156.SZ) plans to acquire 100 percent equities of Shenzhen Svian Optoelectronic Company with 350 million yuan. Svian Optoelectronic is principally engaged in the manufacturing and sales of liquid crystal display module and records a net profit of 5.43 million yuan in 2014.
Foshan Nationstar Optoelectronics Co., Ltd. (002449.SZ) plans to transfer the 100 percent equities of Guangdong Desheng Industrial Company Limited and all corresponding rights and interests held by Guangdong Electronics Information Industry Group Ltd. with no more than 250 million yuan. Desheng Industrial is a project company set to develop and construct “Guangdong Electronics Information Industry Group Ltd. Nansha GEC Industrial Park Project”. Meanwhile, Foshan Sigma Venture Capital Company Limited, substantial legal person shareholder of Nationstar Optoelectronics, will increase shareholding in the company with no less than 10 million yuan in next six months.
[Financial Reports Express]
○Lanzhou Huanghe Enterprise, Hubei Golden Ring, etc. forecast explosive performance growth
------
Lanzhou Huanghe Enterprise Co., Ltd. (000929.SZ) expects its net profit to see a year-on-year growth of 1046~1074 percent in its semiyearly report; Hubei Golden Ring Co., Ltd. (000615.SZ) expects its net profit to see a year-on-year growth of 3832~4453 percent in its semiyearly report; Jinlong Machinery & Electronic Co., Ltd. (300032.SZ) expects its net profit to see a year-on-year growth of 4415~4641 percent in its semiyearly report; Shenzhen Zhenye (Group) Co., Ltd. (000006.SZ) expects its net profit to see a year-on-year growth of 400~450 percent in its semiyearly report.
> Chinese Premier emphasized innovation in symposium, intelligent manufacturing development to speed up
> Refractory material industry to implement bulletin management, leaders to see reorganization opportunities
> Over 150 companies resume trading with good news, Sundiro Holding to raise fund through private placement at price over 70 pct higher than current stock price
> Lu Thai Textile and Xcmg Construction Machinery to launch repurchase plan, Lanzhou Huanghe Enterprise, Hubei Golden Ring, etc. forecast explosive performance growth
[XFA Focus]
○Chinese Premier emphasized innovation in symposium, intelligent manufacturing development to speed up
------
It is disclosed on the www.gov.cn on July 13 that Chinese Premier Li Keqiang chaired a symposium recently to listen to the opinions and suggestions on the current economic conditions and economic work from the entrepreneurs of Suning Commerce Group Co., Ltd. (002024.SZ), Qihoo 360 Technology Co Ltd (QIHU.NYSE), Weichai Power Co., Ltd. (02338.HK; 000338.SZ), Dajiang Innovations Technology Co., Ltd. and Iflytek Co., Ltd. (002230.SZ). Premier Li emphasized that China’s economic reform and innovation is fundamentally driven by reform and innovation and it should collect various innovation resources for enterprises. On the same day, Xinhua News Agency released the survey on the first “unmanned factory” in Dongguan City. The performance of the factory was greatly improved.
Comment: The five enterprises participated at the symposium are all leaders in the “Made in China 2025” and the “Internet Plus” strategies, which shows that Chinese authorities are fully aware of the important of the economic transformation into driven by innovation. Since the releasing of the “Made in China 2025”, various supporting policies and local plans in provinces and municipalities were released. The development of the intelligent manufacturing is spending up driven by policies and the market. Among A-share companies, Miracle Automation Engineering Co., Ltd. (002009.SZ) is principally engaged in the manufacturing of intelligent equipment in the automobile industry. The employee shareholding price of the company is 14.9 yuan and it closed at 14.87 yuan before trading suspension. Harbin Boshi Automation Co., Ltd. (002698.SZ) recently announced that it proposes to establish a fund for the robotic industry in Dongguan City. J.S. Corrugating Machinery Co., Ltd. (000821.SZ) turned losses into profits in the first half thanks to the acquisition of Sankyo precision (Huizhou) Co., Ltd., a manufacturer of automation equipment.
[XFA Selection]
○ Liu Yandong, vice-premier of the State Council, emphasized on increasing efforts in educational poverty alleviation and improving the employment in vocational education during a visit to Hebei Province.
○ XFA learnt from various fund companies that their products sale has changed from net redemption to net subscription from July 9.
○ The Ministry of Culture held a work symposium on the 13th Five-year Plan on July 13, proposing to promote the cultural industry to be a pillar industry in the national economy.
○ The structure of the medical industry will be adjusted significantly in the 13th Five-year Plan, including improving the pharmaceuticals innovation and promoting the domestication of medical devices.
○ The substantial shareholder of Hua Xia Bank Co., Ltd. (600015.SH) committed that it will not reduce the shareholding. The shareholding in China Minsheng Banking Corp., Ltd. (01988.HK; 600016.SH) is expected to reduce by 260 million shares last week.
[Industry Information]
○Refractory material industry to implement bulletin management, leaders to see reorganization opportunities
------
XFA learnt from the Ministry of Industry and Information Technology (MIIT) that the “Method on the Bulletin Management of Standard Conditions on the Refractory Material Industry” has solicited public opinions. According to insiders of the Association of China Refractories Industry, the association will establish communication channels for superior enterprises and those intend to conduct mergers and reorganizations to improve the combination and reorganization and improve the industrial concentration on the condition of equal or less amount.
Comment: After the implementation of the method, small enterprises with outdated capacity will see difficulties in being listed on the white list of the bulletin, which will improve the excess production capacity in the industry. According to the opinions on the development of the industry issued by the MMIT in the beginning of 2013, the industrial concentration industry of the top 10 enterprises will be improved to 45 percent by 2020. Insiders believe that leading enterprises will see more reorganization opportunities with their capital and technology advantages. Puyang Refractories Group Co., Ltd. (002225.SZ) is the biggest supplier of finished refractory products in the steel and iron industry in China. Ruitai Materials Technology Co., Ltd. (002066.SZ) also develops refractory materials. China National Building Materials Group Corporation, the actual controller of the company, is among the first central enterprises to conduct mixed ownership reform.
○Chemical engineering varieties to see performance surge thanks to improved bargaining power and booming sale
------
According to the XFA, certain subdivided industries in the chemical engineering industry continued to improve as a result of the shrunk capacity caused by environmental pressure and the strengthened the bargaining power brought by the improved concentration of the industry. According to the statistic of the XFA, Meihua Holdings Group Co., Ltd. (600873.SH), Huafon Microfibre (Shanghai) Co., Ltd. (300180.SZ) and Luxi Chemical Group Co., Ltd. (000830.SZ) rank high in the chemical engineering industry in terms of the performance growth and the P/E ratio. They expect an increase of 35 percent to 150 percent in net profit according to their half-year reports with a dynamic P/E ratio of about 40 times.
Meihua Holdings is a leading enterprise in the gourmet powder industry. Benefited from the improved industry concentration, the gourmet powder market has raised the price four times this year. Relevant factories are expected to maintain an average price rise of 1,000 yuan per ton in the following years. Huafon Microfibre is a leader in the superfine fiber synthetic leather industry. The environmental pressure has greatly improved the demand for superfine fibers. Luxi Chemical is principally engaged in urea and other fertilizers. As a result of the new tariff policies, it imported 6,092,000 tons of urea in the first five months, surging 60 percent compared with the 3,818,000 tons in the corresponding period of last year.
[Announcement Interpretation]
○Over 150 companies resume trading with good news
------
By the time the news is issued, over 150 companies on Shanghai and Shenzhen Stock Exchanges resume trading with good news.
For listed companies signing agreement of cooperation, Palm Landscape Architecture Co., Ltd. (002431.SZ) signs cooperation agreement with the government of Jishou City with a total investment of around 2 billion yuan and the cooperation project will be constructed in the way of Public-Private-Partnership (PPP), Engineer & Procure& Construct (EPC), etc.; Zhejiang Southeast Space Frame Co., Ltd. (002135.SZ) signs a project contract, covering comprehensive office building, commercial residential building and factory warehouse, with a company in Panama. The contract totals an amount of 3,136 million yuan, accounting for 73 percent of the company’s revenue in 2014; Wuhan Langold Real Estate Co., Ltd. (002305.SZ) signs contract with Wuhan Fangrong Financial Service Company and the latter will provide the company with Internet finance innovation business; Yunnan Nantian Electronics Information Co., Ltd. (000948.SZ) plans to join hands with ChinaPnR company to develop Internet finance.
For listed companies planning to launch shareholding increase and staff shareholding plans, Jilin Zixin Pharmaceutical Industrial Co., Ltd. (002118.SZ) plans to launch staff shareholding plan to raise no more than 30 million yuan; Zhejiang Sanhua Co., Ltd. (002050.SZ) plans to launch a staff shareholding plan of around 218 million yuan; Der International Home Furnishing Co., Ltd. (002631.SZ) will launch a staff shareholding plan of 36.77 million yuan; actual controller of Sichuan Kelun Pharmaceutical Co., Ltd. (002422.SZ) plans to increase shareholding in the company with at least 50 million yuan between July 14 and October 13.
For listed companies planning external investment, Fujian Septwolves Industry Co., Ltd. (002029.SZ) plans to launch domestic RMB fund with Beijing Zhiyuan Lixin Investment Management Company Limited; Jiangsu Aoyang Technology Corporation Limited (002172.SZ) plans to set Xing’ao Fund with no more than 50 million yuan and prioritize investment in promising enterprises in medical & health, new energy and environmental protection industries. The company will turn loss into gain in the first half year; TBEA Co., Ltd. (600089.SH) plans to set up a subsidiary to construct TBEA power equipment industrial park and be involved in the manufacturing and sales of inverter.
○Sundiro Holding to raise fund through private placement at price over 70 pct higher than current stock price
------
Sundiro Holding Co., Ltd. (000571.SZ) plans to raise no more than 408 million yuan through private placement at no less than 9.33 yuan per share to acquire 60 percent equities of Simpson Holding Company, invest in the establishment of yacht financing and leasing company, etc. By cooperating with leading enterprises in the yacht industry, the company effectively breaks industrial barrier and enterprise limit and achieves trans-boundary operation. Meanwhile, the company also expands to yacht finance area and builds an eco-industry platform of “yacht products and finance”. The company’s offering price of private placement increases by 76 percent, compared with its stock price which closed at 5.28 yuan per share before trading suspension.
○Lu Thai Textile and Xcmg Construction Machinery to launch repurchase plan
------
Lu Thai Textile Co., Ltd. (000726.SZ) plans to repurchase some A shares and B shares. The A shares are planned to be repurchased at no more than 15 yuan per share, while the B shares are planned to be repurchased at no more than 11.8 HK dollar per share, and the total amount of repurchase will be no higher than 1 billion yuan. At present, the company’s A share records a price of 13.09 yuan per share. If 1 billion yuan are all used to repurchase A shares at 15 yuan per share, then the repurchased shares will account for 6.98 percent of its total share capital.
Xcmg Construction Machinery Co., Ltd. (000425.SZ) plans to repurchase shares at no more than 20 yuan per share, 81 percent higher compared with its closing price of 11.02 yuan per share before trading suspension, through centralized competitive price transaction, bulk trading, etc. Since the company expects to repurchase shares with no more than 500 million yuan, the maximum number of shares repurchased will reach 25 million based on the calculation of 20 yuan per share, accounting for 1.06 percent of its current total share capital. The resolution will be validate in 12 months from the day it is approved by the company’s general meeting.
○Fujitsu Microelectronics and Nationstar Optoelectronics resume trading with plans of asset acquisition
------
Nantong Fujitsu Microelectronics Co., Ltd. (002156.SZ) plans to acquire 100 percent equities of Shenzhen Svian Optoelectronic Company with 350 million yuan. Svian Optoelectronic is principally engaged in the manufacturing and sales of liquid crystal display module and records a net profit of 5.43 million yuan in 2014.
Foshan Nationstar Optoelectronics Co., Ltd. (002449.SZ) plans to transfer the 100 percent equities of Guangdong Desheng Industrial Company Limited and all corresponding rights and interests held by Guangdong Electronics Information Industry Group Ltd. with no more than 250 million yuan. Desheng Industrial is a project company set to develop and construct “Guangdong Electronics Information Industry Group Ltd. Nansha GEC Industrial Park Project”. Meanwhile, Foshan Sigma Venture Capital Company Limited, substantial legal person shareholder of Nationstar Optoelectronics, will increase shareholding in the company with no less than 10 million yuan in next six months.
[Financial Reports Express]
○Lanzhou Huanghe Enterprise, Hubei Golden Ring, etc. forecast explosive performance growth
------
Lanzhou Huanghe Enterprise Co., Ltd. (000929.SZ) expects its net profit to see a year-on-year growth of 1046~1074 percent in its semiyearly report; Hubei Golden Ring Co., Ltd. (000615.SZ) expects its net profit to see a year-on-year growth of 3832~4453 percent in its semiyearly report; Jinlong Machinery & Electronic Co., Ltd. (300032.SZ) expects its net profit to see a year-on-year growth of 4415~4641 percent in its semiyearly report; Shenzhen Zhenye (Group) Co., Ltd. (000006.SZ) expects its net profit to see a year-on-year growth of 400~450 percent in its semiyearly report.
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