[Today’s Guide]
> Funds with high performance remain high position in stocks in H1, growth stocks favored in future market
> Guibao Science & Technology to expand main business, three companies to introduce employee shareholding plans
> Companies resume trading with various good news, LS Heavy Equipment sees explosive performance growth
> Central enterprises actively push military-civil integration, Beidou industry enjoys huge potential
[XFA Focus]
○Funds with high performance remain high position in stocks in H1, growth stocks favored in future market
------
The second quarterly reports of funds have released by July 20 evening. As of press time, six of the top ten stock funds in terms of performance in the first half, including E Fund Emerging Growth Fund, China Universal Private-owned Enterprises Fund, Fortune SG Selected Fund, Huashang Value Selected Fund, China Universal Mobile Internet Equity Fund and CR Yuanda Information, have released their second quarterly reports. Statistics show that five funds maintained a high position in stocks (89.45 percent to 95.72 percent) by the end of the second quarter and four increased the position against the trend. China Universal Private-owned Enterprises Fund, which ranked fourth, even increased the position in stocks by up to 8.38 percentage points.
Comment: For the future market, funds with outstanding performance believe that the market will enter into a slow bullish period after the short-term adjustment. With the increasingly diverged fluctuation, it is more important in selecting individual stocks. Emerging growth sectors represented by information technology, intelligent medical treatment, military engineering and environmental protection are greatly favored. In addition, individual stocks held by funds with heavyweight and the total shareholding proportion ranking first without great growth previously but with significant decrease since July may have the potential to stand out in the market.
◆As a result of the whole environment of the market, the new shares bought by funds with a huge amount in the second quarter mainly declined in July. According to the statistics of XFA, only ten of the 50 new stocks bought by funds with a huge amount have recorded growth by July 20. Huayi Brothers Media Corporation (300027.SZ), Hubei Landing Holding Co., Ltd. (000971.SZ) and Sichuan Maker Biotechnology Co., Ltd. (300463.SZ) saw significant increases. 11 individual stocks plunged by over 20 percent. Xilong Chemical Co., Ltd. (002584.SZ) plummeted by more than 40 percent. The company recently announced that it acquired 40 percent equities of a biological reagent enterprise and would resume trading on July 21.
[XFA Selection]
○ The Political Bureau of the CPC Central Committee will hold the fifth plenary session of the 18th CPC Central Committee in Beijing in October to discuss the advices on the preparing of the 13th Five-Year Plan.
○ Li Jianhong, Chairman of China Merchants Group (CMG), indicated at the mid-year work conference held on July 20 that it will continue to further deepen the SOEs reform and follow the “Internet plus” trend to build a digitalized CMG.
○ According to the website of the Maritime Safety Administration of China, the People’s Liberation Army (PLA) will hold military exercises for 10 consecutive days from July 22 in the eastern seas off Hainai Island.
○ The News Broadcast on July 20 reported that the national supply and marketing system recorded a year-on-year growth of 13.6 percent in the first half, setting a new high.
○ Xu Shaoshi, head of the National Development and Reform Commission, hoped that PetroChina Company Limited (PTR.NYSE; 00857.HK; 601857.SH) will actively conduct pilot work in the oil and gas system reform, opening up to the outside and the separation of main and ancillary businesses.
○ The State Council approved and released the overall urban plan of Lanzhou City, proposing to build Lanzhou a strategic platform for China’s opening to the western countries and regions.
[Announcement Interpretation]
○Guibao Science & Technology to expand main business with RMB50 mln, connected parties to fully subscribe
------
Chengdu Guibao Science & Technology Co., Ltd. (300019.SZ) proposes to raise 50 million yuan by issuing 6.15 million shares at 8.13 yuan per share through private placement. The shares will be issued to certain shareholders and senior management of the company and the Huatai Guibao No. 1 employee shareholding plan. The proceeds will be used in supplementing the silicone sealant project of Guibao New Materials with an annual capacity of 50,000 tons and the construction of its ancillary projects.
○Das Intellitech, Infotmic and Central Emporium to introduce employee shareholding plans
------
Shenzhen Das Intellitech Co., Ltd. (002421.SZ) plans to introduce an employee shareholding plan with an upper limit of 50 million yuan. It will establish the preferred portion and the progressive portion with a proportion of 1:1. The controlling shareholders of the company will assume joint liability guarantees to the realization of the equities in the preferred portion and the recovery of the principals of the progressive portion. It will complete the purchasing within six months after it is passed at the general meeting. The company announced at the same time that it will invest 1 billion yuan to promote the intelligent city PPP project in Dongtai City in the following three years.
Infotmic Co., Ltd. (000670.SZ) intends to introduce an employee shareholding plan to 100 staff, including the directors, supervisors and senior management of the company to raise a maximum of 16 million yuan. The upper limit of the assets management plan will be 48 million after leveraging up by 1:2. It is expected to hold no more than 6.10 million shares, no more than 0.75 percent of the total share capital of the company. Besides, Nanjing Central Emporium (Group) Stocks Co., Ltd. (600280.SH) plans to introduce an employee shareholding plan with no more than 60 million yuan.
○Companies resume trading with various good news
------
Skyworth Digital Co., Ltd. (000810.SZ) plans to fully control Strong Group, a well-known European enterprise manufacturing set-top box, with 30 million Euros; China TransInfo Technology Co., Ltd. (002373.SZ) plans to acquire 70 percent equities of Beijing Guanhua Tianshi Digital Technology Co., Ltd. with 50 million yuan; Hefei Guoxuan Hi-Tech Power Energy Co., Ltd., a holding subsidiary of Jiangsu Dongyuan Electrical Group Co., Ltd. (002074.SZ), plans to invest 160 million yuan in jointly setting up an equity investment partnership firm engaged in new energy automobile technology innovation with its partners; some directors, supervisors and senior management of Qingdao Haili Metal One Co., Ltd. (002537.SZ) plan to increase shareholding in the company by no less than 10 million yuan in next six months; Guizhou Jiulian Industrial Explosive Material Development Co., Ltd. (002037.SZ) plans to acquire a local blasting company with 35.65 million yuan.
Yantai Tayho Advanced Materials Co., Ltd. (002254.SZ) signs strategic cooperation agreement with Zhejiang Deqing Huasi Textile Company; Xiamen Sunrise Group Co., Ltd. (002593.SZ) confirms to develop early-stage preparation for “Internet plus automobile” project; Harbin Pharmaceutical Group Co., Ltd. (600664.SH) launches equity incentive plan; Xiamen Hexing Packaging Printing Co., Ltd. (002228.SZ) signs three-year supplier contract with Anheuser-BuschInBev Investment (China) Company Limited for cartons. The amount of cartons purchased by Anheuser-BuschInBev from Hexing Packaging Printing in the contracted three years will be 30 percent, 33 percent and 36 percent, respectively.
[Financial Reports Express]
○LS Heavy Equipment sees explosive performance growth
------
Thanks to the transfer of land use right, Lanzhou LS Heavy Equipment Co., Ltd. (603169.SH) expects its net profit in the first half year to see a year-on-year growth of 1,657 percent.
○Yinyi Real Estate plans high share conversion
------
Yinyi Real Estate Co., Ltd. (000981.SZ) proposes a 20-for-10 conversion of capital surplus into shares in its semiyearly report.
[Industry Information]
○Central enterprises actively push military-civil integration, Beidou industry just unfolding
------
XFA learns from the Military and Civilian Industries Integration Expo on July 20 that relevant departments and military central enterprises are actively pushing ahead with military-civil integration and striving for connection with strategies including “Made in China 2025”, “Internet Plus”, etc. Nearly one thousand representative significant fruits and products of the integration were on display on the expo. Responsible person of aerospace science and industry indicated that the science and technology industry of national defense has acquired strong technical reserve and industrial expansion ability after years of development. Steady promotion of the reform of institutes for military technology research should be taken as an opportunity to further arouse vitality of military enterprises and improve resources integration ability.
Comment: The military-civil integration might be deepened in the future. Gradual implementation of events including the formulation of the planning for national defense industry 2025, the expansion of the opening of military market, etc. will bring positive effect to military sector. For segmented areas of military-civil integration, as the coverage of second-generation Beidou system expands from Asia Pacific to the whole world, the Beidou market might exceed 240 billion yuan by 2020, indicating a compound annual rate of growth of over 80 percent. As for listed companies, Guangzhou Haige Communications Group Incorporated Company (002465.SZ) forecasts a performance growth of nearly 40 percent in the first half year; Zhuhai Orbita Control Engineering Co., Ltd. (300053.SZ) expects a performance growth of nearly 100 percent.
○Price of rayon staple surges again, industrial profitability keeps improving
------
XFA learns that the price of rayon staple generally surges by 200~300 yuan per ton in nearly a week. Its price has surged for nearly 13 percent since this year, recording a new high since 2014. Relevant manufacturers claim that orders are abundant at the moment, industrial inventory is low and there is still room for price surge in the future.
Comment: This round of price surge is mainly resulted from capacity reduction and improving supply-demand structure. In addition, the treatment in out-dated capacity and periodic device maintenance enforced by environmental protection policies make the profitability of rayon staple take a turn for the better. The total profit gained by chemical fiber manufacturing industry in the first five months this year records 11.47 billion yuan, indicating a year-on-year growth of 56.7 percent and an improvement of the whole industry. As for listed companies, the capacity of Tangshan Sanyou Chemical Industries Co., Ltd. (600409.SH) in rayon staple reaches nearly 500,000 tons, accounting for nearly 40 percent of its revenue from principal business; Nanjing Chemical Fibre Co., Ltd. (600889.SH) owns an equity capacity of 80,000 tons and viscose filament yarn, another main product of the company, also see price surge recently.
[Data Speaks]
○Venustech Group bought by four institutional seats
------
The trading volume ranking list on July 20 shows that Venustech Group Co. Ltd. (002439.SZ) was bought by four institutional seats with a total of 210 million yuan, accounting for 14 percent of its intraday turnover. No institutions sold it.
Comment: Venustech Group, a leading enterprise in domestic information security area, joins hands with Tencent Holdings Limited (00700.HK) in launching an enterprise terminal security solution and its “general security” system is improving day by day. Institutions believe that the company turns loss into gain for the first time in its 2015 semiyearly report for the first time and its performance goes beyond expectation continuously. It will be highly possible that its annual performance will see high growth.
> Funds with high performance remain high position in stocks in H1, growth stocks favored in future market
> Guibao Science & Technology to expand main business, three companies to introduce employee shareholding plans
> Companies resume trading with various good news, LS Heavy Equipment sees explosive performance growth
> Central enterprises actively push military-civil integration, Beidou industry enjoys huge potential
[XFA Focus]
○Funds with high performance remain high position in stocks in H1, growth stocks favored in future market
------
The second quarterly reports of funds have released by July 20 evening. As of press time, six of the top ten stock funds in terms of performance in the first half, including E Fund Emerging Growth Fund, China Universal Private-owned Enterprises Fund, Fortune SG Selected Fund, Huashang Value Selected Fund, China Universal Mobile Internet Equity Fund and CR Yuanda Information, have released their second quarterly reports. Statistics show that five funds maintained a high position in stocks (89.45 percent to 95.72 percent) by the end of the second quarter and four increased the position against the trend. China Universal Private-owned Enterprises Fund, which ranked fourth, even increased the position in stocks by up to 8.38 percentage points.
Comment: For the future market, funds with outstanding performance believe that the market will enter into a slow bullish period after the short-term adjustment. With the increasingly diverged fluctuation, it is more important in selecting individual stocks. Emerging growth sectors represented by information technology, intelligent medical treatment, military engineering and environmental protection are greatly favored. In addition, individual stocks held by funds with heavyweight and the total shareholding proportion ranking first without great growth previously but with significant decrease since July may have the potential to stand out in the market.
◆As a result of the whole environment of the market, the new shares bought by funds with a huge amount in the second quarter mainly declined in July. According to the statistics of XFA, only ten of the 50 new stocks bought by funds with a huge amount have recorded growth by July 20. Huayi Brothers Media Corporation (300027.SZ), Hubei Landing Holding Co., Ltd. (000971.SZ) and Sichuan Maker Biotechnology Co., Ltd. (300463.SZ) saw significant increases. 11 individual stocks plunged by over 20 percent. Xilong Chemical Co., Ltd. (002584.SZ) plummeted by more than 40 percent. The company recently announced that it acquired 40 percent equities of a biological reagent enterprise and would resume trading on July 21.
[XFA Selection]
○ The Political Bureau of the CPC Central Committee will hold the fifth plenary session of the 18th CPC Central Committee in Beijing in October to discuss the advices on the preparing of the 13th Five-Year Plan.
○ Li Jianhong, Chairman of China Merchants Group (CMG), indicated at the mid-year work conference held on July 20 that it will continue to further deepen the SOEs reform and follow the “Internet plus” trend to build a digitalized CMG.
○ According to the website of the Maritime Safety Administration of China, the People’s Liberation Army (PLA) will hold military exercises for 10 consecutive days from July 22 in the eastern seas off Hainai Island.
○ The News Broadcast on July 20 reported that the national supply and marketing system recorded a year-on-year growth of 13.6 percent in the first half, setting a new high.
○ Xu Shaoshi, head of the National Development and Reform Commission, hoped that PetroChina Company Limited (PTR.NYSE; 00857.HK; 601857.SH) will actively conduct pilot work in the oil and gas system reform, opening up to the outside and the separation of main and ancillary businesses.
○ The State Council approved and released the overall urban plan of Lanzhou City, proposing to build Lanzhou a strategic platform for China’s opening to the western countries and regions.
[Announcement Interpretation]
○Guibao Science & Technology to expand main business with RMB50 mln, connected parties to fully subscribe
------
Chengdu Guibao Science & Technology Co., Ltd. (300019.SZ) proposes to raise 50 million yuan by issuing 6.15 million shares at 8.13 yuan per share through private placement. The shares will be issued to certain shareholders and senior management of the company and the Huatai Guibao No. 1 employee shareholding plan. The proceeds will be used in supplementing the silicone sealant project of Guibao New Materials with an annual capacity of 50,000 tons and the construction of its ancillary projects.
○Das Intellitech, Infotmic and Central Emporium to introduce employee shareholding plans
------
Shenzhen Das Intellitech Co., Ltd. (002421.SZ) plans to introduce an employee shareholding plan with an upper limit of 50 million yuan. It will establish the preferred portion and the progressive portion with a proportion of 1:1. The controlling shareholders of the company will assume joint liability guarantees to the realization of the equities in the preferred portion and the recovery of the principals of the progressive portion. It will complete the purchasing within six months after it is passed at the general meeting. The company announced at the same time that it will invest 1 billion yuan to promote the intelligent city PPP project in Dongtai City in the following three years.
Infotmic Co., Ltd. (000670.SZ) intends to introduce an employee shareholding plan to 100 staff, including the directors, supervisors and senior management of the company to raise a maximum of 16 million yuan. The upper limit of the assets management plan will be 48 million after leveraging up by 1:2. It is expected to hold no more than 6.10 million shares, no more than 0.75 percent of the total share capital of the company. Besides, Nanjing Central Emporium (Group) Stocks Co., Ltd. (600280.SH) plans to introduce an employee shareholding plan with no more than 60 million yuan.
○Companies resume trading with various good news
------
Skyworth Digital Co., Ltd. (000810.SZ) plans to fully control Strong Group, a well-known European enterprise manufacturing set-top box, with 30 million Euros; China TransInfo Technology Co., Ltd. (002373.SZ) plans to acquire 70 percent equities of Beijing Guanhua Tianshi Digital Technology Co., Ltd. with 50 million yuan; Hefei Guoxuan Hi-Tech Power Energy Co., Ltd., a holding subsidiary of Jiangsu Dongyuan Electrical Group Co., Ltd. (002074.SZ), plans to invest 160 million yuan in jointly setting up an equity investment partnership firm engaged in new energy automobile technology innovation with its partners; some directors, supervisors and senior management of Qingdao Haili Metal One Co., Ltd. (002537.SZ) plan to increase shareholding in the company by no less than 10 million yuan in next six months; Guizhou Jiulian Industrial Explosive Material Development Co., Ltd. (002037.SZ) plans to acquire a local blasting company with 35.65 million yuan.
Yantai Tayho Advanced Materials Co., Ltd. (002254.SZ) signs strategic cooperation agreement with Zhejiang Deqing Huasi Textile Company; Xiamen Sunrise Group Co., Ltd. (002593.SZ) confirms to develop early-stage preparation for “Internet plus automobile” project; Harbin Pharmaceutical Group Co., Ltd. (600664.SH) launches equity incentive plan; Xiamen Hexing Packaging Printing Co., Ltd. (002228.SZ) signs three-year supplier contract with Anheuser-BuschInBev Investment (China) Company Limited for cartons. The amount of cartons purchased by Anheuser-BuschInBev from Hexing Packaging Printing in the contracted three years will be 30 percent, 33 percent and 36 percent, respectively.
[Financial Reports Express]
○LS Heavy Equipment sees explosive performance growth
------
Thanks to the transfer of land use right, Lanzhou LS Heavy Equipment Co., Ltd. (603169.SH) expects its net profit in the first half year to see a year-on-year growth of 1,657 percent.
○Yinyi Real Estate plans high share conversion
------
Yinyi Real Estate Co., Ltd. (000981.SZ) proposes a 20-for-10 conversion of capital surplus into shares in its semiyearly report.
[Industry Information]
○Central enterprises actively push military-civil integration, Beidou industry just unfolding
------
XFA learns from the Military and Civilian Industries Integration Expo on July 20 that relevant departments and military central enterprises are actively pushing ahead with military-civil integration and striving for connection with strategies including “Made in China 2025”, “Internet Plus”, etc. Nearly one thousand representative significant fruits and products of the integration were on display on the expo. Responsible person of aerospace science and industry indicated that the science and technology industry of national defense has acquired strong technical reserve and industrial expansion ability after years of development. Steady promotion of the reform of institutes for military technology research should be taken as an opportunity to further arouse vitality of military enterprises and improve resources integration ability.
Comment: The military-civil integration might be deepened in the future. Gradual implementation of events including the formulation of the planning for national defense industry 2025, the expansion of the opening of military market, etc. will bring positive effect to military sector. For segmented areas of military-civil integration, as the coverage of second-generation Beidou system expands from Asia Pacific to the whole world, the Beidou market might exceed 240 billion yuan by 2020, indicating a compound annual rate of growth of over 80 percent. As for listed companies, Guangzhou Haige Communications Group Incorporated Company (002465.SZ) forecasts a performance growth of nearly 40 percent in the first half year; Zhuhai Orbita Control Engineering Co., Ltd. (300053.SZ) expects a performance growth of nearly 100 percent.
○Price of rayon staple surges again, industrial profitability keeps improving
------
XFA learns that the price of rayon staple generally surges by 200~300 yuan per ton in nearly a week. Its price has surged for nearly 13 percent since this year, recording a new high since 2014. Relevant manufacturers claim that orders are abundant at the moment, industrial inventory is low and there is still room for price surge in the future.
Comment: This round of price surge is mainly resulted from capacity reduction and improving supply-demand structure. In addition, the treatment in out-dated capacity and periodic device maintenance enforced by environmental protection policies make the profitability of rayon staple take a turn for the better. The total profit gained by chemical fiber manufacturing industry in the first five months this year records 11.47 billion yuan, indicating a year-on-year growth of 56.7 percent and an improvement of the whole industry. As for listed companies, the capacity of Tangshan Sanyou Chemical Industries Co., Ltd. (600409.SH) in rayon staple reaches nearly 500,000 tons, accounting for nearly 40 percent of its revenue from principal business; Nanjing Chemical Fibre Co., Ltd. (600889.SH) owns an equity capacity of 80,000 tons and viscose filament yarn, another main product of the company, also see price surge recently.
[Data Speaks]
○Venustech Group bought by four institutional seats
------
The trading volume ranking list on July 20 shows that Venustech Group Co. Ltd. (002439.SZ) was bought by four institutional seats with a total of 210 million yuan, accounting for 14 percent of its intraday turnover. No institutions sold it.
Comment: Venustech Group, a leading enterprise in domestic information security area, joins hands with Tencent Holdings Limited (00700.HK) in launching an enterprise terminal security solution and its “general security” system is improving day by day. Institutions believe that the company turns loss into gain for the first time in its 2015 semiyearly report for the first time and its performance goes beyond expectation continuously. It will be highly possible that its annual performance will see high growth.
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