[Today's Guide]
>Executive meeting of State Council arranges agricultural development, critical illness insurance to in full operation
>NEA supports construction of new energy micro power grid, industrial development to accelerated
>United Electronics to resume trading, three companies to introduce employee shareholding plans
>Token Sciences to develop big data, Medicalsystem Biotechnology proposes high share conversion
[XFA Focus]
○Executive meeting of State Council arranges agricultural development, critical illness insurance to in full operation
------
At the executive meeting of the State Council, presided over by Chinese Premier Li Keqiang on July 22, it is determined to intensify support towards agricultural technology; carry out improvement on modern seed industry; promote agricultural machinery and informatization; strive for closer international cooperation; enhance comprehensive agricultural competitiveness and anti-risk capability; strive to develop water-saving agriculture; promote standardized production in an all-round way. It is also decided on the meeting that the insurance for urban and rural residents for major illnesses will cover all the subscribers to the urban and rural resident basic medical insurance as of the end of 2015. At least 50 percent of expenses that patients previously had to pay themselves will be reimbursed by the new insurance, and such a proportion will be gradually increased to effectively reduce the burden on such patients, according to the meeting.
Comment: It has been an irresistible trend to develop agricultural modernization. The Ministry of Agriculture announced on its website on July 21 that China’s grain output and capacity both see improvement; moderate-scale management and subject cultivation both speed up; technical support and equipment guarantee are both upgraded in the first half year. The meeting proposes to carry out improvement on modern seed industry. Leading positions of companies including Yuan Longping High-tech Agriculture Co., Ltd. (000998.SZ) will be highlighted in the seed industry; Shimge Pump Industry Group Co., Ltd. (002532.SZ), as a leading company in agricultural water pump, will benefit from big growth of water-saving agriculture; the promotion of agricultural informatization might bring policy support to a batch of enterprises transforming towards rural e-commerce including Anhui Sierte Fertilizer Industry Co., Ltd. (002538.SZ), Jiangsu Huifeng Agrochemical Co., Ltd. (002496.SZ), etc.
For the critical illness insurance for urban and rural residents to be in full operation, experts of medicine industry believe that it will bring actual benefit to some medicine enterprises, such as Beijing SL Pharmaceutical Co., Ltd. (002038.SZ) engaged in the production of antineoplastic drug, Huaren Pharmaceutical Co., Ltd. (300110.SZ) manufacturing peritoneal dialysis solution, etc.
[XFA Selection]
○State Development & Investment Corporation (SDIC) expects its net profit in the first half year to see a year-on-year growth of 90 percent. Director of the company indicates that reform piloting work will be further pushed in the next step.
○Latest announcement of Inner Mongolia Yili Industrial Group Co., Ltd. (600887.SH) shows that China Securities Finance Corporation Limited, one of its top 10 tradable-share holders, held 370 million shares of the company on July 9 and held 260 million shares of the company on July 17.
○XFA learns that the thirteenth five-year plan for textile industry is under formulation. The establishment of recycling system of waste textile is determined as a priority.
○XFA learns that the consolidated revenue of China Life Insurance (Group) Company sees a year-on-year growth of nearly 40 percent in the first half year, based on this, the performance growth of China Life Insurance Company Limited (601628.SH; 02628.HK) should be over 50 percent.
[Industry Information]
○NEA supports construction of new energy micro power grid, industrial development to accelerated
------
National Energy Administration (NEA) released the Guidelines on Promoting Construction of New Energy Micro Power Grid Demonstrative Projects on July 22, encouraging the construction of networking and independent new energy micro power grid demonstrative projects and proposing specific technical requirement and quantity. Each province shall apply for 1-2 demonstrative projects in 2015. As for supporting policies, NEA indicates that it will work together with relevant departments on specific support policies combining with economic analysis of projects. Local regions are encouraged to formulate policies and measures to support the construction and operation of new energy micro power grid considering local actual situations.
Comment: Analysts point out that no specific project subsidy is mentioned in the guideline. It is good news for industrial standardization. At the meantime, it can promote consumption of new energy, force electricity reform and promote the development of the whole new energy industry. Under the push of policies, the construction of micro power grid might be accelerated. As for listed companies, Beijing Sifang Automation Co., Ltd. (601126.SH) is the supplier of micro power grid access system for Zhangbei wind and light storage & transmission demonstrative project and undertakes more than half of the intelligent micro power grid control systems in China; Shenzhen Clou Electronics Co., Ltd. (002121.SZ) develops strategic cooperation with Huawei Technologies Co., Ltd. in photovoltaic power generation and micro power grid areas.
○Guidance on industrial cloud and big data to release, big data listed as national strategy
------
Zhang Feng, chief engineer of the Ministry of Industry and Information Technology (MIIT), indicated at the press conference of the State Council Information Office on July 22 that China will promote the implementation of key projects in intelligent manufacturing and the establishment of the big data centers in important industrial cloud and industrial areas. In addition, the MIIT will also promote the guidance on the Internet and industry integration, service-based manufacturing, industrial cloud and big data, accelerate the revision of laws and regulations, build alliances in making standards on :Internet plus” manufacturing and preparing the comprehensive criteria and system on intelligent manufacturing.
Comment: China has been increasing its efforts in supporting the big data and the big data strategy has been listed as a national strategy. Institutes expect that driven by the demands of enterprises and the government, the big data industry will see an average annual growth of over 100 percent. Among listed companies, Xiamen Kehua Hengsheng Co., Ltd. (002335.SZ) has been developing the big data industry in recent two years. It acquired 67 percent equities of Beijing Kezhong and Shanghai Chenyi in June, which will facilitate the company in developing in the IDC industry. Beijing TRS Information Technology Co., Ltd. (300229.SZ) is principally engaged in non-structural information processing software. It is a leader in the technology in the text mining and contents management and has client advantages in governmental departments.
[Announcement Interpretation]
○United Electronics and Donghua Enterprise to resume trading with bullish news
------
United Electronics Co., Ltd. (002642.SZ) proposes to acquire the remaining 25 percent equities of Beijing Carsmart Technology Co., Ltd. with 187 million yuan. Guangzhou Donghua Enterprise Co., Ltd. (600393.SH) will introduce an employee shareholding plan. Shanghai Bright Holstan Co., Ltd., a subsidiary of Bright Dairy & Food Co., Ltd. (600597.SH), plans to inject cow breeding assets worth 1.1 billion yuan. The actual controller of Shenzhen Rainbow Fine Chemical Industry Co., Ltd. (002256.SZ) will increase the shareholding in the company with no more than 2 percent of the total share capital of the company in the following six months.
Thaihot Group Co., Ltd. (000732.SZ) intends to accept no more than 14.16 percent equities of a commercial bank in China with an expected turnover of 1.5 billion to 4 billion yuan. Yunnan Tin Co., Ltd. (000960.SZ), Yantai Dongcheng Biochemicals Co., Ltd. (002675.SZ) and E-food Group Co., Ltd. (000796.SZ) have been approved by the China Securities Regulatory Commission (CSRC) to conduct assets reorganization through purchasing assets by issuing shares. In addition, Kennede Electronics Mfg Co., Ltd. (002723.SZ) will resume trading.
○Pci-suntek Technology, Heilan Home and Hanwang Technology to introduce employee shareholding plans
------
Pci-suntek Technology Co., Ltd. (600728.SH) plans to introduce an employee shareholding plan to no more than 177 staff, including the directors, supervisors, senior management and core staff, to raise a maximum of 40 million yuan. It will establish the preferred portion and the secondary portion with a proportion of no more than 1:1. The total size of the corresponding assets management plan will be no more than 80 million yuan. Besides, the controlling shareholder of the company proposes a 15-for-10 conversion of capital surplus into shares according to its interim report.
Heilan Home Co., Ltd. (600398.SH) proposes to introduce an employee shareholding plan to the directors, supervisors, senior and middle management to raise no more than 150 million yuan. It will establish the preferred portion and the secondary portion with a proportion of 2:1. The total size of the corresponding assets management plan will be no more than 450 million yuan. Hanwang Technology Co., Ltd. (002362.SZ) intends to introduce an employee shareholding plan with 45 million yuan. Employees will contribute no more than 15 million yuan with their own capital and the remaining will be provided by the controlling shareholder with borrowings.
○Token Sciences joins substantial shareholder in developing big data
------
Wuhu Token Sciences Co., Ltd. (300088.SZ) and Xinjiang Runfeng Equities Investment Enterprise, the biggest shareholder, plan to contribute 100 million yuan in the establishment of Token Intelligent Control Network Technology Co., Ltd. Token Sciences will contribute 30 million yuan and hold 30 percent equities. The move is to promote the company to develop the big data business and expand into intelligent transportation, safety, medical treatment and insurance as well as the Internet of Vehicles.
○Sunshine Insurance increases shareholding in Fynex Textile, actual controller increases shareholding
------
Sunshine Insurance Group, a shareholder of Fujian Fynex Textile Science & Technology Co., Ltd. (600493.SH), increased the shareholding in the company with 2.72 million shares on July 20 with an average price of 11.27 yuan per share, accounting for 1 percent of the total share capital. Sunshine Insurance totally holds 13.60 million shares of the company, accounting for 5 percent of the total share capital after that. Meanwhile, Chen Chengqing, the actual controller of the company, increased the shareholding in the company with over 5.90 million shares through Chen Hui, a person acting in concert, on June 8, July 21 and July 22, accounting for 2.17 percent of the total share capital.
Comment: The shareholding increase by financial capital and industrial capital shows the value of the company. The current market value of the company is only 3.7 billion yuan.
[Financial Reports Express]
○Medicalsystem Biotechnology proposes high share conversion
------
Ningbo Medicalsystem Biotechnology Co., Ltd. (300439.SZ) proposes a 20-for-10 conversion of capital surplus into shares combined according to its interim report.
○Ping An Insurance expects 60 pct growth in net profit
------
Ping An Insurance (Group) Company of China, Ltd. (02318.HK; 601318.SH) expects its net profit in the first half to increase 62 percent from the same period of last year according to its half-year report.
[Trading Trends]
○Four institutes buy Lonkey Industrial
------
The trading volume ranking list on July 22 shows that four institutional seats bough Lonkey Industrial Co., Ltd., Guangzhou (000523.SZ) with 53.34 million yuan, accounting for 12.29 percent of its intraday turnover. No institutional seat sold it.
Comment: Analysts believe that with years’ of operation experience in the daily chemical industry and the resources advantage of the Guangzhou Light Industry Group, its parent company, the company is expected to expand to the upstream and downstream of the supply chain through expansion and merger and facilitate industrial integration. Meanwhile, the plans on the SOEs reform in Guangzhou City have been passed. As the only listed platform of the Guangzhou Light Industry Group, the company is expected to conduct assets consolidation.
>Executive meeting of State Council arranges agricultural development, critical illness insurance to in full operation
>NEA supports construction of new energy micro power grid, industrial development to accelerated
>United Electronics to resume trading, three companies to introduce employee shareholding plans
>Token Sciences to develop big data, Medicalsystem Biotechnology proposes high share conversion
[XFA Focus]
○Executive meeting of State Council arranges agricultural development, critical illness insurance to in full operation
------
At the executive meeting of the State Council, presided over by Chinese Premier Li Keqiang on July 22, it is determined to intensify support towards agricultural technology; carry out improvement on modern seed industry; promote agricultural machinery and informatization; strive for closer international cooperation; enhance comprehensive agricultural competitiveness and anti-risk capability; strive to develop water-saving agriculture; promote standardized production in an all-round way. It is also decided on the meeting that the insurance for urban and rural residents for major illnesses will cover all the subscribers to the urban and rural resident basic medical insurance as of the end of 2015. At least 50 percent of expenses that patients previously had to pay themselves will be reimbursed by the new insurance, and such a proportion will be gradually increased to effectively reduce the burden on such patients, according to the meeting.
Comment: It has been an irresistible trend to develop agricultural modernization. The Ministry of Agriculture announced on its website on July 21 that China’s grain output and capacity both see improvement; moderate-scale management and subject cultivation both speed up; technical support and equipment guarantee are both upgraded in the first half year. The meeting proposes to carry out improvement on modern seed industry. Leading positions of companies including Yuan Longping High-tech Agriculture Co., Ltd. (000998.SZ) will be highlighted in the seed industry; Shimge Pump Industry Group Co., Ltd. (002532.SZ), as a leading company in agricultural water pump, will benefit from big growth of water-saving agriculture; the promotion of agricultural informatization might bring policy support to a batch of enterprises transforming towards rural e-commerce including Anhui Sierte Fertilizer Industry Co., Ltd. (002538.SZ), Jiangsu Huifeng Agrochemical Co., Ltd. (002496.SZ), etc.
For the critical illness insurance for urban and rural residents to be in full operation, experts of medicine industry believe that it will bring actual benefit to some medicine enterprises, such as Beijing SL Pharmaceutical Co., Ltd. (002038.SZ) engaged in the production of antineoplastic drug, Huaren Pharmaceutical Co., Ltd. (300110.SZ) manufacturing peritoneal dialysis solution, etc.
[XFA Selection]
○State Development & Investment Corporation (SDIC) expects its net profit in the first half year to see a year-on-year growth of 90 percent. Director of the company indicates that reform piloting work will be further pushed in the next step.
○Latest announcement of Inner Mongolia Yili Industrial Group Co., Ltd. (600887.SH) shows that China Securities Finance Corporation Limited, one of its top 10 tradable-share holders, held 370 million shares of the company on July 9 and held 260 million shares of the company on July 17.
○XFA learns that the thirteenth five-year plan for textile industry is under formulation. The establishment of recycling system of waste textile is determined as a priority.
○XFA learns that the consolidated revenue of China Life Insurance (Group) Company sees a year-on-year growth of nearly 40 percent in the first half year, based on this, the performance growth of China Life Insurance Company Limited (601628.SH; 02628.HK) should be over 50 percent.
[Industry Information]
○NEA supports construction of new energy micro power grid, industrial development to accelerated
------
National Energy Administration (NEA) released the Guidelines on Promoting Construction of New Energy Micro Power Grid Demonstrative Projects on July 22, encouraging the construction of networking and independent new energy micro power grid demonstrative projects and proposing specific technical requirement and quantity. Each province shall apply for 1-2 demonstrative projects in 2015. As for supporting policies, NEA indicates that it will work together with relevant departments on specific support policies combining with economic analysis of projects. Local regions are encouraged to formulate policies and measures to support the construction and operation of new energy micro power grid considering local actual situations.
Comment: Analysts point out that no specific project subsidy is mentioned in the guideline. It is good news for industrial standardization. At the meantime, it can promote consumption of new energy, force electricity reform and promote the development of the whole new energy industry. Under the push of policies, the construction of micro power grid might be accelerated. As for listed companies, Beijing Sifang Automation Co., Ltd. (601126.SH) is the supplier of micro power grid access system for Zhangbei wind and light storage & transmission demonstrative project and undertakes more than half of the intelligent micro power grid control systems in China; Shenzhen Clou Electronics Co., Ltd. (002121.SZ) develops strategic cooperation with Huawei Technologies Co., Ltd. in photovoltaic power generation and micro power grid areas.
○Guidance on industrial cloud and big data to release, big data listed as national strategy
------
Zhang Feng, chief engineer of the Ministry of Industry and Information Technology (MIIT), indicated at the press conference of the State Council Information Office on July 22 that China will promote the implementation of key projects in intelligent manufacturing and the establishment of the big data centers in important industrial cloud and industrial areas. In addition, the MIIT will also promote the guidance on the Internet and industry integration, service-based manufacturing, industrial cloud and big data, accelerate the revision of laws and regulations, build alliances in making standards on :Internet plus” manufacturing and preparing the comprehensive criteria and system on intelligent manufacturing.
Comment: China has been increasing its efforts in supporting the big data and the big data strategy has been listed as a national strategy. Institutes expect that driven by the demands of enterprises and the government, the big data industry will see an average annual growth of over 100 percent. Among listed companies, Xiamen Kehua Hengsheng Co., Ltd. (002335.SZ) has been developing the big data industry in recent two years. It acquired 67 percent equities of Beijing Kezhong and Shanghai Chenyi in June, which will facilitate the company in developing in the IDC industry. Beijing TRS Information Technology Co., Ltd. (300229.SZ) is principally engaged in non-structural information processing software. It is a leader in the technology in the text mining and contents management and has client advantages in governmental departments.
[Announcement Interpretation]
○United Electronics and Donghua Enterprise to resume trading with bullish news
------
United Electronics Co., Ltd. (002642.SZ) proposes to acquire the remaining 25 percent equities of Beijing Carsmart Technology Co., Ltd. with 187 million yuan. Guangzhou Donghua Enterprise Co., Ltd. (600393.SH) will introduce an employee shareholding plan. Shanghai Bright Holstan Co., Ltd., a subsidiary of Bright Dairy & Food Co., Ltd. (600597.SH), plans to inject cow breeding assets worth 1.1 billion yuan. The actual controller of Shenzhen Rainbow Fine Chemical Industry Co., Ltd. (002256.SZ) will increase the shareholding in the company with no more than 2 percent of the total share capital of the company in the following six months.
Thaihot Group Co., Ltd. (000732.SZ) intends to accept no more than 14.16 percent equities of a commercial bank in China with an expected turnover of 1.5 billion to 4 billion yuan. Yunnan Tin Co., Ltd. (000960.SZ), Yantai Dongcheng Biochemicals Co., Ltd. (002675.SZ) and E-food Group Co., Ltd. (000796.SZ) have been approved by the China Securities Regulatory Commission (CSRC) to conduct assets reorganization through purchasing assets by issuing shares. In addition, Kennede Electronics Mfg Co., Ltd. (002723.SZ) will resume trading.
○Pci-suntek Technology, Heilan Home and Hanwang Technology to introduce employee shareholding plans
------
Pci-suntek Technology Co., Ltd. (600728.SH) plans to introduce an employee shareholding plan to no more than 177 staff, including the directors, supervisors, senior management and core staff, to raise a maximum of 40 million yuan. It will establish the preferred portion and the secondary portion with a proportion of no more than 1:1. The total size of the corresponding assets management plan will be no more than 80 million yuan. Besides, the controlling shareholder of the company proposes a 15-for-10 conversion of capital surplus into shares according to its interim report.
Heilan Home Co., Ltd. (600398.SH) proposes to introduce an employee shareholding plan to the directors, supervisors, senior and middle management to raise no more than 150 million yuan. It will establish the preferred portion and the secondary portion with a proportion of 2:1. The total size of the corresponding assets management plan will be no more than 450 million yuan. Hanwang Technology Co., Ltd. (002362.SZ) intends to introduce an employee shareholding plan with 45 million yuan. Employees will contribute no more than 15 million yuan with their own capital and the remaining will be provided by the controlling shareholder with borrowings.
○Token Sciences joins substantial shareholder in developing big data
------
Wuhu Token Sciences Co., Ltd. (300088.SZ) and Xinjiang Runfeng Equities Investment Enterprise, the biggest shareholder, plan to contribute 100 million yuan in the establishment of Token Intelligent Control Network Technology Co., Ltd. Token Sciences will contribute 30 million yuan and hold 30 percent equities. The move is to promote the company to develop the big data business and expand into intelligent transportation, safety, medical treatment and insurance as well as the Internet of Vehicles.
○Sunshine Insurance increases shareholding in Fynex Textile, actual controller increases shareholding
------
Sunshine Insurance Group, a shareholder of Fujian Fynex Textile Science & Technology Co., Ltd. (600493.SH), increased the shareholding in the company with 2.72 million shares on July 20 with an average price of 11.27 yuan per share, accounting for 1 percent of the total share capital. Sunshine Insurance totally holds 13.60 million shares of the company, accounting for 5 percent of the total share capital after that. Meanwhile, Chen Chengqing, the actual controller of the company, increased the shareholding in the company with over 5.90 million shares through Chen Hui, a person acting in concert, on June 8, July 21 and July 22, accounting for 2.17 percent of the total share capital.
Comment: The shareholding increase by financial capital and industrial capital shows the value of the company. The current market value of the company is only 3.7 billion yuan.
[Financial Reports Express]
○Medicalsystem Biotechnology proposes high share conversion
------
Ningbo Medicalsystem Biotechnology Co., Ltd. (300439.SZ) proposes a 20-for-10 conversion of capital surplus into shares combined according to its interim report.
○Ping An Insurance expects 60 pct growth in net profit
------
Ping An Insurance (Group) Company of China, Ltd. (02318.HK; 601318.SH) expects its net profit in the first half to increase 62 percent from the same period of last year according to its half-year report.
[Trading Trends]
○Four institutes buy Lonkey Industrial
------
The trading volume ranking list on July 22 shows that four institutional seats bough Lonkey Industrial Co., Ltd., Guangzhou (000523.SZ) with 53.34 million yuan, accounting for 12.29 percent of its intraday turnover. No institutional seat sold it.
Comment: Analysts believe that with years’ of operation experience in the daily chemical industry and the resources advantage of the Guangzhou Light Industry Group, its parent company, the company is expected to expand to the upstream and downstream of the supply chain through expansion and merger and facilitate industrial integration. Meanwhile, the plans on the SOEs reform in Guangzhou City have been passed. As the only listed platform of the Guangzhou Light Industry Group, the company is expected to conduct assets consolidation.
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