[Today's Guide]
>Shanghai composite index dived over 8 pct under fragile sentiment, fluctuation might dominate market
>Shandong Mining Machinery to invest in aviation technology, Kee Ever Bright Decorative Technology to fully control European e-commerce enterprise
>Sunnada Communication to transform towards commercial factoring business, Zhongheng Group proposes high share conversion and dividend in interim report
>Summer tourism enters peak season, online tourism market to expand
[XFA Focus]
○Shanghai composite index dived over 8 pct under fragile sentiment, fluctuation might dominate market
------
The Shanghai Composite Index dived 8.48 percent on July 27, the sharpest daily drop since 2008. Heavily-weighted stocks of the Shanghai gauge like oil, insurance sectors, etc. supporting the market earlier saw greater drop than the index, they led the SSE50 to set a new low of this round of adjustment. The total trading volume of Shanghai and Shenzhen Stock Exchanges recorded 1.39 trillion yuan, indicating obvious shrinkage compared with previous trading day.
Comment: The sharp daily drop is centralized release of fragile sentiment in the market. It is widely believed by the surveyed securities analysts and fund managers that it takes time for the market to be normal again and risk preference falls in general; loose liquidity driven by loose policy will still dominate the market and government bailout, hard to retreat in the short term, will support market bottom. Some fund managers consider that the market is still under fluctuation and the differentiation of individual stocks will be more obvious. The surveyed institutions are widely optimistic about the value of listed companies with excellent fundamentals and definite profit growth in a fluctuate market.
[XFA Selection]
○China Securities Regulatory Commission indicated that it had sent inspectors to Shanghai MecrtSoft Tech Co., Ltd. and Hithink RoyalFlush Information Network Co., Ltd. to investigate off-market financing business on July 27.
○Several analysts being surveyed believe that the CPI surge brought by the increase of pork price can be limited. The monetary policy will not tighten up in next few months.
○National Energy Administration (NEA) expects the annual power consumption in China to see a year-on-year growth around 3 percent this year, up a little compared with the figure of 1.3 percent in last year.
○NEA releases eight industrial standards including Intelligent Electric Energy Meter Function Standardization to push ahead the development of China’s intelligent electric energy meter technology.
○The Ministry of Industry and Information Technology (MIIT) announces guidelines for the key projects of industrial transformation and upgrading, mainly aiming at areas including intelligent manufacturing, “Internet plus”, etc.
[Announcement Interpretation]
○Shandong Mining Machinery to control aviation technology company
------
Shandong Mining Machinery Group Co., Ltd. (002526.SZ) jointly establishes an aviation technology company with the substantial shareholder of Shandong Xueye Tianyi Aviation Technology Development Co., Ltd. Shandong Mining Machinery will invest in cash, hold 51 percent equities of the company and acquire real assets of Xueye Tianyi with 12.45 million yuan at fair price.
○Kee Ever Bright Decorative Technology to fully control European e-commerce MMOGA with RMB2.1 bln
------
Kee Ever Bright Decorative Technology Co., Ltd. (002464.SZ) plans to acquire 100 percent equities of MMOGA with around 2.1 billion yuan and sell its asset in hand, business and debts to companies under the director of Kee Ever Bright Decorative Technology. MMOGA is the largest vertical e-commerce platform engaged in game registration code and virtual goods in Europe. Upon completion of this transaction, the company will transform from traditional manufacturing industry to Internet enterprise. The net profit of MMOGA from 2015 to 2017 shall be no less than 27.60 million Euros, 39.47 million Euros and 56.44 million Euros, according to performance commitment.
○Sunnada Communication to acquire commercial factoring enterprise, director of Hongling Capital takes charge
------
Fujian Sunnada Communication Co., Ltd. (002417.SZ) plans to raise 1.28 billion yuan by issuing 138 million shares at 9.25 yuan through private placement. Zhou Shiping, new actual controller of the company, plans to subscribe 1.15 billion yuan of the private placement. 800 million yuan of the raised fund will be used to increase capital in Shenzhen Qianhai Shengshi Chengze Commercial Factoring Company. The subject company mainly focuses on commercial factoring business in industries including medicine, communications, etc. which see good development prospect and slow turnover of capital. Upon completion of capital increase, the subject company will gain a net profit of 53.57 million yuan, 94.54 million yuan and 156 million yuan in the following three years. Zhou Shiping, director of Hongling Capital E-commerce Co., Ltd., becomes the new actual controller of Sunnada Communication in July this year.
○Oriental Nations to develop big data platform with RMB1.8 bln
------
Business-intelligence of Oriental Nations Corporation Ltd. (300166.SZ) proposes to raise 1,796 million yuan by issuing 90 million shares through private placement. The proceeds will be used in the construction of the big data analysis service platform, the distributed big data handling platform, the Internet-based banking platform, the urban intelligent operation center and the industrial big data intelligent connected platform as well as supplementing the working capital.
○Lifan Industry to develop new energy autos with RMB400 mln
------
Lifan Industry (Group) Co., Ltd. (601777.SH) intends to acquire 100 percent equities of Chongqing Wireless Oasis Communication Technology Co., Ltd. and its affiliated enterprise with RMB 300 million yuan. It will acquire 20 percent equities of Shandong Hengyu New Energy Co., Ltd. with 100 million yuan. Wireless Oasis provides solutions to the industrial informationization special network and data processing solutions. Based on the performance commitment, it total net profit from 2016 to 2018 will be no less than 56.30 million yuan. Hengyu New Energy will assist Lifan Industry in building a new energy battery production line to reduce the cost in purchasing batteries for new energy vehicles.
[Financial Reports Express]
○Zhongheng Group proposes high share conversion and dividend
------
Guangxi Wuzhou Zhongheng Group Co., Ltd. (600252.SH) proposes a 7-for-10 conversion of capital surplus into shares combined with 13 shares and 3.25 yuan dividend for every 10 shares according to its interim report.
○Taiji Industry expects performance to surge
------
Chongqing Taiji Industry (Group) Co., Ltd. (600129.SH) expects its net profit to surge 535 percent in the first half year on year according to its interim report thanks to the profit in the significant assets reorganization of its subsidiary Southwest Pharmaceutical Co., Ltd. (600666.SH).
[Industry Information]
○Summer tourism enters peak season, online tourism market to expand
------
The summer tourism has entered the peak season since July. Ctrip.com International, Ltd. and other industrial leaders have introduced various promotion activities to improve the market penetration of online tourism through fostering consumption models. Statistics show that the online tourism market has reached 307.79 billion yuan in 2014, increasing 39.61 percent from 2013 with a market penetration of 9.2 percent. It is expected that the market size of the online tourism will reach 800 billion yuan in 2018 and the market share will further increase. Li Jinzao, director of the National Tourism Administration, indicated that China saw an investment of 301.8 billion yuan in tourism in the first half, increasing 28 percent year on year and 17 percentage points higher than the growth in fixed assets investment.
Comment: The rapid development of the tourism plays a key supporting role in China’s domestic demand. The tourism industry has contributed more than 10 percent of the GDP in 2014. Institutes estimate that the industry will see a market of 1 trillion yuan and the online tourism will be an integral part of the Internet plus strategy. The market penetration is expected to further increase. In terms of listed companies, China CYTS Tours Holding Co., Ltd. (600138.SH) is developing a new tourism ecology with the “aoyou.com plus”. Besttone Holding Co., Ltd. (600640.SH) is a hotel and business travelling service platform under China Telecom Corporation Limited (CHA.NYSE; 00728.HK).
○13th Five-year on robots to release by year-end, enterprises to seize opportunities with industrial leaders
------
XFA learnt that the draft of the 13th Five-year Development Plan on the Robotic Industry has been completed and is likely to be released by the end of the year. According to the Ministry of Industry and Information Technology, the Plan set the orientation of the robotic industry in the following five years, including strengthening the study on the basic theory and common technology, improving the industrial ability of robots with proprietary brand and key components, promoting the application demonstration of industrial robots and service robots and establishing a complete experiment and verification standards and system on robots.
Comment: Currently, the precision reducer, controller, server system and high-performance driver as well as other core components of robots in China rely on imports, which account for over 70 percent of the whole production cost. The replacement with homemade components enjoys a huge market. Companies with technical cooperation with internationally leading enterprises will enjoy the preemptive advantages. Jiangsu Yawei Machine Tool Co., Ltd. (002559.SZ) and Reis, a company under the German enterprise KUKA, established a joint venture and obtained the technical permission from the latter. Shanghai Mechanical & Electrical Industry Co., Ltd. (600835.SH) cooperates with Nabtesco, a Japanses company, in the reducer industry.
[Trading Trends]
○Three institutes buy Zhenghong Science and Technology
------
The trading volume ranking list on July 27 shows that three institutes bought Hunan Zhenghong Science and Technology Develop Co., Ltd. (000702.SZ) with a total of 47.77 million yuan, accounting for 13.4 percent of its intraday turnover. No institutional seat sold it.
Comment: The company is principally engaged in the production and sale of various fodders. With the continuous hike of pork price and the recovery of the profitability in the breeding industry, the market expects that farmers will increase the raising of livestock and the demand for fodders is expected to be improved.
>Shanghai composite index dived over 8 pct under fragile sentiment, fluctuation might dominate market
>Shandong Mining Machinery to invest in aviation technology, Kee Ever Bright Decorative Technology to fully control European e-commerce enterprise
>Sunnada Communication to transform towards commercial factoring business, Zhongheng Group proposes high share conversion and dividend in interim report
>Summer tourism enters peak season, online tourism market to expand
[XFA Focus]
○Shanghai composite index dived over 8 pct under fragile sentiment, fluctuation might dominate market
------
The Shanghai Composite Index dived 8.48 percent on July 27, the sharpest daily drop since 2008. Heavily-weighted stocks of the Shanghai gauge like oil, insurance sectors, etc. supporting the market earlier saw greater drop than the index, they led the SSE50 to set a new low of this round of adjustment. The total trading volume of Shanghai and Shenzhen Stock Exchanges recorded 1.39 trillion yuan, indicating obvious shrinkage compared with previous trading day.
Comment: The sharp daily drop is centralized release of fragile sentiment in the market. It is widely believed by the surveyed securities analysts and fund managers that it takes time for the market to be normal again and risk preference falls in general; loose liquidity driven by loose policy will still dominate the market and government bailout, hard to retreat in the short term, will support market bottom. Some fund managers consider that the market is still under fluctuation and the differentiation of individual stocks will be more obvious. The surveyed institutions are widely optimistic about the value of listed companies with excellent fundamentals and definite profit growth in a fluctuate market.
[XFA Selection]
○China Securities Regulatory Commission indicated that it had sent inspectors to Shanghai MecrtSoft Tech Co., Ltd. and Hithink RoyalFlush Information Network Co., Ltd. to investigate off-market financing business on July 27.
○Several analysts being surveyed believe that the CPI surge brought by the increase of pork price can be limited. The monetary policy will not tighten up in next few months.
○National Energy Administration (NEA) expects the annual power consumption in China to see a year-on-year growth around 3 percent this year, up a little compared with the figure of 1.3 percent in last year.
○NEA releases eight industrial standards including Intelligent Electric Energy Meter Function Standardization to push ahead the development of China’s intelligent electric energy meter technology.
○The Ministry of Industry and Information Technology (MIIT) announces guidelines for the key projects of industrial transformation and upgrading, mainly aiming at areas including intelligent manufacturing, “Internet plus”, etc.
[Announcement Interpretation]
○Shandong Mining Machinery to control aviation technology company
------
Shandong Mining Machinery Group Co., Ltd. (002526.SZ) jointly establishes an aviation technology company with the substantial shareholder of Shandong Xueye Tianyi Aviation Technology Development Co., Ltd. Shandong Mining Machinery will invest in cash, hold 51 percent equities of the company and acquire real assets of Xueye Tianyi with 12.45 million yuan at fair price.
○Kee Ever Bright Decorative Technology to fully control European e-commerce MMOGA with RMB2.1 bln
------
Kee Ever Bright Decorative Technology Co., Ltd. (002464.SZ) plans to acquire 100 percent equities of MMOGA with around 2.1 billion yuan and sell its asset in hand, business and debts to companies under the director of Kee Ever Bright Decorative Technology. MMOGA is the largest vertical e-commerce platform engaged in game registration code and virtual goods in Europe. Upon completion of this transaction, the company will transform from traditional manufacturing industry to Internet enterprise. The net profit of MMOGA from 2015 to 2017 shall be no less than 27.60 million Euros, 39.47 million Euros and 56.44 million Euros, according to performance commitment.
○Sunnada Communication to acquire commercial factoring enterprise, director of Hongling Capital takes charge
------
Fujian Sunnada Communication Co., Ltd. (002417.SZ) plans to raise 1.28 billion yuan by issuing 138 million shares at 9.25 yuan through private placement. Zhou Shiping, new actual controller of the company, plans to subscribe 1.15 billion yuan of the private placement. 800 million yuan of the raised fund will be used to increase capital in Shenzhen Qianhai Shengshi Chengze Commercial Factoring Company. The subject company mainly focuses on commercial factoring business in industries including medicine, communications, etc. which see good development prospect and slow turnover of capital. Upon completion of capital increase, the subject company will gain a net profit of 53.57 million yuan, 94.54 million yuan and 156 million yuan in the following three years. Zhou Shiping, director of Hongling Capital E-commerce Co., Ltd., becomes the new actual controller of Sunnada Communication in July this year.
○Oriental Nations to develop big data platform with RMB1.8 bln
------
Business-intelligence of Oriental Nations Corporation Ltd. (300166.SZ) proposes to raise 1,796 million yuan by issuing 90 million shares through private placement. The proceeds will be used in the construction of the big data analysis service platform, the distributed big data handling platform, the Internet-based banking platform, the urban intelligent operation center and the industrial big data intelligent connected platform as well as supplementing the working capital.
○Lifan Industry to develop new energy autos with RMB400 mln
------
Lifan Industry (Group) Co., Ltd. (601777.SH) intends to acquire 100 percent equities of Chongqing Wireless Oasis Communication Technology Co., Ltd. and its affiliated enterprise with RMB 300 million yuan. It will acquire 20 percent equities of Shandong Hengyu New Energy Co., Ltd. with 100 million yuan. Wireless Oasis provides solutions to the industrial informationization special network and data processing solutions. Based on the performance commitment, it total net profit from 2016 to 2018 will be no less than 56.30 million yuan. Hengyu New Energy will assist Lifan Industry in building a new energy battery production line to reduce the cost in purchasing batteries for new energy vehicles.
[Financial Reports Express]
○Zhongheng Group proposes high share conversion and dividend
------
Guangxi Wuzhou Zhongheng Group Co., Ltd. (600252.SH) proposes a 7-for-10 conversion of capital surplus into shares combined with 13 shares and 3.25 yuan dividend for every 10 shares according to its interim report.
○Taiji Industry expects performance to surge
------
Chongqing Taiji Industry (Group) Co., Ltd. (600129.SH) expects its net profit to surge 535 percent in the first half year on year according to its interim report thanks to the profit in the significant assets reorganization of its subsidiary Southwest Pharmaceutical Co., Ltd. (600666.SH).
[Industry Information]
○Summer tourism enters peak season, online tourism market to expand
------
The summer tourism has entered the peak season since July. Ctrip.com International, Ltd. and other industrial leaders have introduced various promotion activities to improve the market penetration of online tourism through fostering consumption models. Statistics show that the online tourism market has reached 307.79 billion yuan in 2014, increasing 39.61 percent from 2013 with a market penetration of 9.2 percent. It is expected that the market size of the online tourism will reach 800 billion yuan in 2018 and the market share will further increase. Li Jinzao, director of the National Tourism Administration, indicated that China saw an investment of 301.8 billion yuan in tourism in the first half, increasing 28 percent year on year and 17 percentage points higher than the growth in fixed assets investment.
Comment: The rapid development of the tourism plays a key supporting role in China’s domestic demand. The tourism industry has contributed more than 10 percent of the GDP in 2014. Institutes estimate that the industry will see a market of 1 trillion yuan and the online tourism will be an integral part of the Internet plus strategy. The market penetration is expected to further increase. In terms of listed companies, China CYTS Tours Holding Co., Ltd. (600138.SH) is developing a new tourism ecology with the “aoyou.com plus”. Besttone Holding Co., Ltd. (600640.SH) is a hotel and business travelling service platform under China Telecom Corporation Limited (CHA.NYSE; 00728.HK).
○13th Five-year on robots to release by year-end, enterprises to seize opportunities with industrial leaders
------
XFA learnt that the draft of the 13th Five-year Development Plan on the Robotic Industry has been completed and is likely to be released by the end of the year. According to the Ministry of Industry and Information Technology, the Plan set the orientation of the robotic industry in the following five years, including strengthening the study on the basic theory and common technology, improving the industrial ability of robots with proprietary brand and key components, promoting the application demonstration of industrial robots and service robots and establishing a complete experiment and verification standards and system on robots.
Comment: Currently, the precision reducer, controller, server system and high-performance driver as well as other core components of robots in China rely on imports, which account for over 70 percent of the whole production cost. The replacement with homemade components enjoys a huge market. Companies with technical cooperation with internationally leading enterprises will enjoy the preemptive advantages. Jiangsu Yawei Machine Tool Co., Ltd. (002559.SZ) and Reis, a company under the German enterprise KUKA, established a joint venture and obtained the technical permission from the latter. Shanghai Mechanical & Electrical Industry Co., Ltd. (600835.SH) cooperates with Nabtesco, a Japanses company, in the reducer industry.
[Trading Trends]
○Three institutes buy Zhenghong Science and Technology
------
The trading volume ranking list on July 27 shows that three institutes bought Hunan Zhenghong Science and Technology Develop Co., Ltd. (000702.SZ) with a total of 47.77 million yuan, accounting for 13.4 percent of its intraday turnover. No institutional seat sold it.
Comment: The company is principally engaged in the production and sale of various fodders. With the continuous hike of pork price and the recovery of the profitability in the breeding industry, the market expects that farmers will increase the raising of livestock and the demand for fodders is expected to be improved.
Latest comments