[Today’s Guide]
> President Xi highlights SOEs’ position, SOEs reform under quick and stable progress
> Satellite Petrochemical expands principal business with RMB3 bln, Garden Bio-chemical High-tech to develop downstream industrial chain
> Kingsun Science & Technology increases investment in online education, companies to resume trading with good news
> Homemade movies see continuous refreshing of box office record
[XFA Focus]
○ President Xi highlights SOEs’ position, SOEs reform under quick and stable progress
------
Chinese President Xi Jinping indicated in his visit to Jilin Province that state-owned enterprises (SOEs) play an important role in promoting modernization and guaranteeing people’s common interest. China should firmly hold the important position of SOEs in the national development and strive to improve SOEs and male them bigger, stronger and better. The SOEs reform will facilitate the value maintenance and increase of state-owned capital, improving the competitiveness of the state-owned economy and making the state-owned capital play a more important role. It should make plans on the reform in key areas and make quick and stable progress and should not miss the reform opportunities or postpone reform progress with a wait-and-see attitude.
Comment: The high-level statements clearly set the important position of SOEs in the national economy again and the reform is expected to be conducted in a quick and stable pace. The Leading Group for Overall Reform passed two important documents on SOEs reform on June 5, which bridged the gap in the SOEs reform routes and the plan on the top design has made great progress. Except the repeated report on the first six central enterprises to conduct pilot reform, the market is also looking for the potential pilot enterprises in the second batch. In addition, driven by the Made in China 2025 and the SOEs reform, the central enterprises in Northeastern China are expected to make breakthroughs first. The total market value of Changchun Yidong Clutch Co., Ltd. (600148.SH) and Daqing Huake Co., Ltd. (000985.SZ) is less than 3 billion yuan. FAW Car Co., Ltd. (000800.SZ) is also expected to conduct assets consolidation.
[XFA Selection]
○ Chinese President Xi Jinping inspected 16th Army of the Chinese People’s Liberation Army on July 18 afternoon , emphasizing promoting efforts in building a strong army in the grass roots .
○ 10 ministries and commissions including the People’s Bank of China, namely, the central bank, jointly released the Guidelines on Promoting Healthy Development of Internet Finance, encouraging financial institutions to actively develop new products and services oriented in Internet technology.
○ The State Grid Corporation of China independently won the bidding of the franchise rights of an extra-high voltage (EHV) direct current project in Brazil. This might drive domestic general contractor and equipment of power transmission and transformation to go out.
○ Latest data from the National Bureau of Statistics shows that the housing price in Beijing, Shanghai, Guangzhou and Shenzhen continues to rank the top in surging. The housing price in Shenzhen sees a year-on-year growth of 15.9 percent, ranking the first.
○ Gratifying financial report of Google Inc. (NASDAQ:GOOG) leads to its surge of 16 percent in stock price, recording a new all-time high. Benefited from this, the NASDAQ index surged by 0.9 percent and also recorded a new all-time high.
[Announcement Interpretation]
○ Satellite Petrochemical expands principal business with RMB3 bln, minimum offering price of private placement 50 pct higher than current stock price
------
Zhejiang Satellite Petrochemical Co., Ltd. (002648.SZ) plans to raise 3 billion yuan by issuing 194 million shares at no less than 15.47 yuan per share through private placement. Zhejiang Satellite Holding Group, the substantial shareholder of the company, will subscribe 300 million yuan. The raised fund will be invested in the Phase II propylene project with an annual production of 450,000 tons of Zhejiang Satellite Energy Company Limited, super absorbent polymer (SAP) expansion project with an annual production of 120,000 tons of Satellite Petrochemical. The company’s latest stock price closes at 10.78 yuan per share.
○ Garden Bio-chemical High-tech to develop downstream industrial chain with RMB540 mln
------
Zhejiang Garden Bio-chemical High-tech Co., Ltd. (300401.SZ) plans to raise 540 million yuan by issuing 50 million shares to Zhejiang Xiangyun Technology Co., Ltd., its controlling shareholder, etc. to invest in core premix project, environment friendly rodenticide project with an annual production of 4,000 tons, the R&D center of Garden Bio-chemical High-tech and to supplement working capital. The company’s stock price closed at 13.43 yuan per share before trading suspension, indicating a market value of only 2.4 billion yuan.
○ Kingsun Science & Technology increases investment in online education with 900 million yuan
------
Shenzhen Kingsun Science & Technology Co., Ltd. (300235.SZ) plans to raise 900 million yuan by issuing 30 million shares through private placement for the construction of the “teaching research cloud platform” and the “synchronous resources learning system”. Meanwhile, the company launches a staff shareholding plan with 11.50 million yuan. The total capital reached 34.50 million yuan with leverage. The stock price of the company closed at 23.09 yuan before trading suspension.
○ Selen Science & Technology. to resume trading with good news
------
Shenzhen Selen Science & Technology Co., Ltd. (000234.SZ), along with Chengdu municipal government, plans to invest 500 million yuan to 1 billion yuan in Xinjin County to construct the “Selen Production Base of High Polymer Material” project. The share of the company slumped over 60 percent before trading suspension. Kaistar Lighting (Xiamen) Co., Ltd., an associated company of Shenzhen Kaifa Technology Co., Ltd. (000021.SZ), plans to acquire a U.S. company engaged in the development of LED cores, encapsulation and optical module products. Better Life Commercial Chain Share Co., Ltd. (002251.SZ) establishes strategic partnership with E-Commerce China Dangdang Inc. (DANG. NYSE) in merchandise sales, business development and resource utilization. The actual controller of Beijing Beilu Pharmaceutical Co., Ltd. (300016.SZ) will increase the shareholding in the company at a price of no more than 46.71 yuan with 50 to 100 million yuan.
Shanghai Kinetic Medical Co., Ltd. (300326.SZ) plans to acquire 30 percent equities of a medical device company to supplement its orthopaedics production line. Huayi Environmental Protection Co., Ltd., a subsidiary of Huayi Electric Co., Ltd. (600290.SH), intends to acquire 85 percent equities of Zhejiang Yeking Environmental Protection Co., Ltd. with 18.84 million yuan and inject 17 million yuan into the company. Guangdong Orient Zirconic Ind Sci and Tech Co., Ltd. (002167.SZ) introduced plans on shareholding increase by senior executives. Vanfund Urban Investment& Development Co., Ltd. (000638.SZ) plans to acquire equities of Beijing Harmonious Rehabilitation Hospital.
[Financial Reports Express]
○ Huapengfei Modern Logistics and Jinke Peroxides propose high share conversion
------
Shenzhen Huapengfei Modern Logistics Co., Ltd. (300350.SZ) proposes a 10-for-10 conversion of capital surplus into shares in the interim report with the actual controller and senior management of the company to increase no less than 13 million yuan in shareholding. Zhejiang Jinke Peroxides Co., Ltd.（300459.SZ）proposes a 15-for-10 conversion of capital surplus into shares in the half-year report.
○ Billions Chemicals witnesses booming performance
------
Henan Billions Chemicals Co., Ltd. （002601.SZ） expects an increase of 301 percent in net profit year on year according to the interim report. Shanxi Securities Co., Ltd. (002500.SZ) is expected to see an increase of 404 percent in net profit in the half-year report year on year.
[Industry Information]
○ Homemade movies see continuous refreshing of box office record
------
According to the statistics from “Cat’s Eye Box Office”, the box office of China has broken the major threshold of 400 million on July 18, refreshing the record in Chinese movie history. Of the large income, 97.5 percent is from domestic Chinese movies. Specifically speaking, the accumulative box office of Monkey King: Hero is Back is as high as 460 million for the first 10 days by 19:00, July 19, the first time in Chinese animation film industry that a single animation movie has won a box office of more than 400 million. This figure is expected to surpass Kongfu Panda 2 and make Monkey King: Hero is Back the champion in the mainland’s animation box office history. In addition, A Hero or Not set a record for 2D Chinese movies with an intraday box office of 149 million yuan. The Monster Hunt set a record for Chinese movies with an intraday box office of 180 million yuan.
Comments: The popularity of domestic Chinese movies is not without relation to the “protection month” at present for domestic films, but viewing the movies’ quality, the above-said films have had the merits that are comparable to that of Hollywood films. In the next two months, the movies on show will still mainly be domestic ones so the industry of Chinese movies is expected to continue the boom. In terms of listed companies, Beijing Enlight Media Co., Ltd. (300151.SZ) will put on show the sequel of Lost in Thainland—Lost in Hong Kong during the National Day holiday and may achieve good performance due to the sound reception of the previous work. Huayi Brothers Media Corporation (300027.SZ) will jointly launch a blockbuster at the end of the year —“Search Tactic of the Light”, which is adapted from a famous internet novel and drawing much industry expectation.
○ Local supporting policies on charging piles issued, industry to see a market of RMB100 bln
------
Recently, supporting policies on chargings pile have been intensively issued in various regions, like Guangzhou City, Shanghai and etc., The Industry and Information Technology Commission of Guangzhou Municipality held a promotion activity for the construction of battery charging facilities for new energy automobiles on July 17, planning to construct 10,000 charging piles this year. Shanghai clearly proposed that newly-constructed dwelling houses and commercial buildings should reserve spaces no less than 10 percent of total parking space for installing charging facilities, which has been put into effect since July 1. Additionally, Beijing Automobile Telaidian Energy Co., Ltd., the first joint venture company for battery charging, officially established on July 16, devoting to building up a leading urban battery charging system mode and network technology platform.
Comments: Under the intensive promotions of various local governments, It is expected to accelerate the issuing of charging facility supporting policy by the central government. According to some officials, it is predicted that the Guidance on Charging Infrastructures for Electric Automobiles will be issued this month. The revision of the national charging standard has been generally finished and it will possibly be issued in August. The industry is expected to see a market of 100 billion yuan. Qingdao TGOOD Electric Co., Ltd. (300001.SZ) indirectly holds 85 percent equities of Telaidian Energy. Shenzhen Auto Electric Power Plant Co., Ltd.(002227.SZ) plans to establish an electric automobile charging network service cloud platform covering major cities in China and a ‘charging pile network’ with 1 million users and 500,000 equipment.
[Weekly Review]
○ Pick up beautiful shells
------
Rainbow comes after storm. The SSE Composite Index falls below 4,000 points again. Market sentiment is getting stabilized and market confidence is being restored.
When the market feared that there would be a double dip after the rebound ended and many companies resumed trading, XFA excavated a great number of oversold individual shares, employees shareholding plans, shareholding increases by shareholders and institutions, which led the soaring of the market and received good market effect. As for the military sector which drew market attention on July 17, XFA had successively made hints in advance. XFA clearly pointed out the military sector was faced with various drivers on July 13 and emphasized that the civil participation in the military industry would embrace opportunities on July 16. The aerospace and military sectors surged by over 8 percent on July 17.
XFA indicated in the Focus on July 16 that the value exploration has gradually become a market consensus. After the slump in the market, the prices of various stocks have converged. Various value stocks suffered excessive price decreases and the risks on stocks with high valuation were released. Under the support of the loose liquidity, the state strictly cracks down malicious short selling. The A shares will look for value point in structural adjustment and companies with high growth will stand out.
The beautiful shells glitter with charming gloss on the sands after the storm. We will be with you on the way looking for quality companies.
> President Xi highlights SOEs’ position, SOEs reform under quick and stable progress
> Satellite Petrochemical expands principal business with RMB3 bln, Garden Bio-chemical High-tech to develop downstream industrial chain
> Kingsun Science & Technology increases investment in online education, companies to resume trading with good news
> Homemade movies see continuous refreshing of box office record
[XFA Focus]
○ President Xi highlights SOEs’ position, SOEs reform under quick and stable progress
------
Chinese President Xi Jinping indicated in his visit to Jilin Province that state-owned enterprises (SOEs) play an important role in promoting modernization and guaranteeing people’s common interest. China should firmly hold the important position of SOEs in the national development and strive to improve SOEs and male them bigger, stronger and better. The SOEs reform will facilitate the value maintenance and increase of state-owned capital, improving the competitiveness of the state-owned economy and making the state-owned capital play a more important role. It should make plans on the reform in key areas and make quick and stable progress and should not miss the reform opportunities or postpone reform progress with a wait-and-see attitude.
Comment: The high-level statements clearly set the important position of SOEs in the national economy again and the reform is expected to be conducted in a quick and stable pace. The Leading Group for Overall Reform passed two important documents on SOEs reform on June 5, which bridged the gap in the SOEs reform routes and the plan on the top design has made great progress. Except the repeated report on the first six central enterprises to conduct pilot reform, the market is also looking for the potential pilot enterprises in the second batch. In addition, driven by the Made in China 2025 and the SOEs reform, the central enterprises in Northeastern China are expected to make breakthroughs first. The total market value of Changchun Yidong Clutch Co., Ltd. (600148.SH) and Daqing Huake Co., Ltd. (000985.SZ) is less than 3 billion yuan. FAW Car Co., Ltd. (000800.SZ) is also expected to conduct assets consolidation.
[XFA Selection]
○ Chinese President Xi Jinping inspected 16th Army of the Chinese People’s Liberation Army on July 18 afternoon , emphasizing promoting efforts in building a strong army in the grass roots .
○ 10 ministries and commissions including the People’s Bank of China, namely, the central bank, jointly released the Guidelines on Promoting Healthy Development of Internet Finance, encouraging financial institutions to actively develop new products and services oriented in Internet technology.
○ The State Grid Corporation of China independently won the bidding of the franchise rights of an extra-high voltage (EHV) direct current project in Brazil. This might drive domestic general contractor and equipment of power transmission and transformation to go out.
○ Latest data from the National Bureau of Statistics shows that the housing price in Beijing, Shanghai, Guangzhou and Shenzhen continues to rank the top in surging. The housing price in Shenzhen sees a year-on-year growth of 15.9 percent, ranking the first.
○ Gratifying financial report of Google Inc. (NASDAQ:GOOG) leads to its surge of 16 percent in stock price, recording a new all-time high. Benefited from this, the NASDAQ index surged by 0.9 percent and also recorded a new all-time high.
[Announcement Interpretation]
○ Satellite Petrochemical expands principal business with RMB3 bln, minimum offering price of private placement 50 pct higher than current stock price
------
Zhejiang Satellite Petrochemical Co., Ltd. (002648.SZ) plans to raise 3 billion yuan by issuing 194 million shares at no less than 15.47 yuan per share through private placement. Zhejiang Satellite Holding Group, the substantial shareholder of the company, will subscribe 300 million yuan. The raised fund will be invested in the Phase II propylene project with an annual production of 450,000 tons of Zhejiang Satellite Energy Company Limited, super absorbent polymer (SAP) expansion project with an annual production of 120,000 tons of Satellite Petrochemical. The company’s latest stock price closes at 10.78 yuan per share.
○ Garden Bio-chemical High-tech to develop downstream industrial chain with RMB540 mln
------
Zhejiang Garden Bio-chemical High-tech Co., Ltd. (300401.SZ) plans to raise 540 million yuan by issuing 50 million shares to Zhejiang Xiangyun Technology Co., Ltd., its controlling shareholder, etc. to invest in core premix project, environment friendly rodenticide project with an annual production of 4,000 tons, the R&D center of Garden Bio-chemical High-tech and to supplement working capital. The company’s stock price closed at 13.43 yuan per share before trading suspension, indicating a market value of only 2.4 billion yuan.
○ Kingsun Science & Technology increases investment in online education with 900 million yuan
------
Shenzhen Kingsun Science & Technology Co., Ltd. (300235.SZ) plans to raise 900 million yuan by issuing 30 million shares through private placement for the construction of the “teaching research cloud platform” and the “synchronous resources learning system”. Meanwhile, the company launches a staff shareholding plan with 11.50 million yuan. The total capital reached 34.50 million yuan with leverage. The stock price of the company closed at 23.09 yuan before trading suspension.
○ Selen Science & Technology. to resume trading with good news
------
Shenzhen Selen Science & Technology Co., Ltd. (000234.SZ), along with Chengdu municipal government, plans to invest 500 million yuan to 1 billion yuan in Xinjin County to construct the “Selen Production Base of High Polymer Material” project. The share of the company slumped over 60 percent before trading suspension. Kaistar Lighting (Xiamen) Co., Ltd., an associated company of Shenzhen Kaifa Technology Co., Ltd. (000021.SZ), plans to acquire a U.S. company engaged in the development of LED cores, encapsulation and optical module products. Better Life Commercial Chain Share Co., Ltd. (002251.SZ) establishes strategic partnership with E-Commerce China Dangdang Inc. (DANG. NYSE) in merchandise sales, business development and resource utilization. The actual controller of Beijing Beilu Pharmaceutical Co., Ltd. (300016.SZ) will increase the shareholding in the company at a price of no more than 46.71 yuan with 50 to 100 million yuan.
Shanghai Kinetic Medical Co., Ltd. (300326.SZ) plans to acquire 30 percent equities of a medical device company to supplement its orthopaedics production line. Huayi Environmental Protection Co., Ltd., a subsidiary of Huayi Electric Co., Ltd. (600290.SH), intends to acquire 85 percent equities of Zhejiang Yeking Environmental Protection Co., Ltd. with 18.84 million yuan and inject 17 million yuan into the company. Guangdong Orient Zirconic Ind Sci and Tech Co., Ltd. (002167.SZ) introduced plans on shareholding increase by senior executives. Vanfund Urban Investment& Development Co., Ltd. (000638.SZ) plans to acquire equities of Beijing Harmonious Rehabilitation Hospital.
[Financial Reports Express]
○ Huapengfei Modern Logistics and Jinke Peroxides propose high share conversion
------
Shenzhen Huapengfei Modern Logistics Co., Ltd. (300350.SZ) proposes a 10-for-10 conversion of capital surplus into shares in the interim report with the actual controller and senior management of the company to increase no less than 13 million yuan in shareholding. Zhejiang Jinke Peroxides Co., Ltd.（300459.SZ）proposes a 15-for-10 conversion of capital surplus into shares in the half-year report.
○ Billions Chemicals witnesses booming performance
------
Henan Billions Chemicals Co., Ltd. （002601.SZ） expects an increase of 301 percent in net profit year on year according to the interim report. Shanxi Securities Co., Ltd. (002500.SZ) is expected to see an increase of 404 percent in net profit in the half-year report year on year.
[Industry Information]
○ Homemade movies see continuous refreshing of box office record
------
According to the statistics from “Cat’s Eye Box Office”, the box office of China has broken the major threshold of 400 million on July 18, refreshing the record in Chinese movie history. Of the large income, 97.5 percent is from domestic Chinese movies. Specifically speaking, the accumulative box office of Monkey King: Hero is Back is as high as 460 million for the first 10 days by 19:00, July 19, the first time in Chinese animation film industry that a single animation movie has won a box office of more than 400 million. This figure is expected to surpass Kongfu Panda 2 and make Monkey King: Hero is Back the champion in the mainland’s animation box office history. In addition, A Hero or Not set a record for 2D Chinese movies with an intraday box office of 149 million yuan. The Monster Hunt set a record for Chinese movies with an intraday box office of 180 million yuan.
Comments: The popularity of domestic Chinese movies is not without relation to the “protection month” at present for domestic films, but viewing the movies’ quality, the above-said films have had the merits that are comparable to that of Hollywood films. In the next two months, the movies on show will still mainly be domestic ones so the industry of Chinese movies is expected to continue the boom. In terms of listed companies, Beijing Enlight Media Co., Ltd. (300151.SZ) will put on show the sequel of Lost in Thainland—Lost in Hong Kong during the National Day holiday and may achieve good performance due to the sound reception of the previous work. Huayi Brothers Media Corporation (300027.SZ) will jointly launch a blockbuster at the end of the year —“Search Tactic of the Light”, which is adapted from a famous internet novel and drawing much industry expectation.
○ Local supporting policies on charging piles issued, industry to see a market of RMB100 bln
------
Recently, supporting policies on chargings pile have been intensively issued in various regions, like Guangzhou City, Shanghai and etc., The Industry and Information Technology Commission of Guangzhou Municipality held a promotion activity for the construction of battery charging facilities for new energy automobiles on July 17, planning to construct 10,000 charging piles this year. Shanghai clearly proposed that newly-constructed dwelling houses and commercial buildings should reserve spaces no less than 10 percent of total parking space for installing charging facilities, which has been put into effect since July 1. Additionally, Beijing Automobile Telaidian Energy Co., Ltd., the first joint venture company for battery charging, officially established on July 16, devoting to building up a leading urban battery charging system mode and network technology platform.
Comments: Under the intensive promotions of various local governments, It is expected to accelerate the issuing of charging facility supporting policy by the central government. According to some officials, it is predicted that the Guidance on Charging Infrastructures for Electric Automobiles will be issued this month. The revision of the national charging standard has been generally finished and it will possibly be issued in August. The industry is expected to see a market of 100 billion yuan. Qingdao TGOOD Electric Co., Ltd. (300001.SZ) indirectly holds 85 percent equities of Telaidian Energy. Shenzhen Auto Electric Power Plant Co., Ltd.(002227.SZ) plans to establish an electric automobile charging network service cloud platform covering major cities in China and a ‘charging pile network’ with 1 million users and 500,000 equipment.
[Weekly Review]
○ Pick up beautiful shells
------
Rainbow comes after storm. The SSE Composite Index falls below 4,000 points again. Market sentiment is getting stabilized and market confidence is being restored.
When the market feared that there would be a double dip after the rebound ended and many companies resumed trading, XFA excavated a great number of oversold individual shares, employees shareholding plans, shareholding increases by shareholders and institutions, which led the soaring of the market and received good market effect. As for the military sector which drew market attention on July 17, XFA had successively made hints in advance. XFA clearly pointed out the military sector was faced with various drivers on July 13 and emphasized that the civil participation in the military industry would embrace opportunities on July 16. The aerospace and military sectors surged by over 8 percent on July 17.
XFA indicated in the Focus on July 16 that the value exploration has gradually become a market consensus. After the slump in the market, the prices of various stocks have converged. Various value stocks suffered excessive price decreases and the risks on stocks with high valuation were released. Under the support of the loose liquidity, the state strictly cracks down malicious short selling. The A shares will look for value point in structural adjustment and companies with high growth will stand out.
The beautiful shells glitter with charming gloss on the sands after the storm. We will be with you on the way looking for quality companies.
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