[Today’s Guide]
> Concerted efforts to stabilize confidence, value discovery of market recovers
> Premier Li highlights science and technology innovation, CAS to play more important role
> Local guidelines on sport industry development issued, Desertification control highlighted
> Yilida Ventilator to develop cross-border e-commerce, Jiajia Food to gain shareholding increase
[XFA Focus]
○Concerted efforts to stabilize confidence, value discovery of market recovers
------
The central bank disclosed the information on the “mid-year symposium of managers of branches and sub-branches” on July 28 and indicated that it will maintain prudent monetary policy in the second half of this year to boost real economy as the prices recovered from a low level. The National Development and Reform Commission (NDRC) made remarks the stock market for the first time at a press conference on the same day, indicating that the fundamentals of China’s economic development have been improving, which provided foundation and conditions for the sustainable and healthy development of the stock market. The trading volume ranking list shows that three operation departments of CITIC Securities Company Limited (06030.HK; 600030.SH) in Beijing have bought shares of 20 companies with a total of 2.4 billion yuan.
Comment: The indications of the central bank and the NDRC removed the market doubts on whether the monetary policies will change and the economy will recover as well as other key problems, showing the support of policies on the stock market. The authorities have clear targets on the stable and healthy development of the capital market. It will restore and build the market gradually while maintaining table and ensure stability in the process. Despite the weak performance of the stock market, the market has discovered hotspots focusing on the theme of low valuation and the expectations on reform. The financial and SOEs reform sectors have become bullish. The value discovery function of the market is gradually recovering after significant fluctuations.
○Premier Li highlights science and technology innovation, CAS to play more important role
------
Chinese Premier Li Keqiang attended a symposium on science and technology strategy on July 27 and listened to the introduction on the development of the Academic Divisions of the Chinese Academy of Sciences (CAS) by the responsible staff of the CAS. Li called for giving the central stage to the innovation in science and technology in the national development, continuing to release reform benefits and dealing with unreasonable constraints on entrepreneurship and innovation as well as building the most extensive innovation platform based on the “Internet plus” and other new technologies and models. On the same day, the ScienceNet.cn under the CAS announced that the CAS has achieved fruitful results after initiating the campaign focusing on the classification and reform of the research institutes one year ago.
Comment: As the “national team in technology”, the CAS has been a pioneer in deepening reform since Chinese President Xi Jinping inspected the CAS two years ago. CASTECH Inc. (002222.SZ), Changchun Up Optotech Co., Ltd. (002338.SZ) and Siasun Robot & Automation Co., Ltd. (300024.SZ) under the CAS have advantages in the new materials, military equipment and intelligent equipment and other industries and are expected to play more important roles in the wave of innovation in science and technology.
[XFA Selection]
○The China Securities Regulatory Commission (CSRC) indicated that it had organized inspection and enforcement teams to investigate the “massive sell-off” after the sharp dive in the market on July 27.
○The SSE B index surged 5.35 percent on July 28. The acceleration in the Shanghai FTZ reform and the conversion of B shares into A shares by Jiangsu Future Land Co., Ltd. improved the market expectations.
○The NDRC arranged special funds on the preliminary work of key projects in the revitalization of the northeast China to promote the construction of key projects in this and next years.
○The National Energy Administration issued the targets on the upgrading and transformation of energy saving and emission cut in central coal power generation enterprises in 2015, proposing to further improve the energy efficiency of coal-fired power generator sets and reduce the emission of pollutants.
○The latest weekly report of the China Securities Depository and Clearing Corporation Limited (CSDC) shows that the number of new stock investors declined 26 percent last week and the number of new fund accounts dropped 30 percent on a weekly basis.
[Industry Information]
○Local guidelines on sport industry development issued, industry boosted by intensive policies
------
XFA learns that recently local governments in Tianjin Municipality and Guangxi Zhuang Autonomous Region have introduced implementation guidelines on accelerating the development of the sport industry, proposing that the industrial size will reach above 1 hundred billion yuan. The General Administration of Sport of China recently indicated that it is estimated that 31 provincial governments will release their implementation guidelines by the end of this month. Besides, the International Olympic Committee will discuss and choose the host city of the 2022 Winter Olympics on July 31.
Comment: As required by the State Council, the sport industry will play a vital role in expanding domestic demands, increasing employment and cultivating new economic growth points. The industry will see a total scale of over 5 trillion yuan by 2025. With the implementation of local supporting policies and the bid for the Winter Olympics, China’s sport industry will see rapid development. Among listed companies, Toread Holdings Group Co., Ltd. (300005.SZ), a leader in the outdoor products industry, is focusing on creating an ecosystem that integrates outdoor products plus outdoor travelling and big sports. Changbai Mountain Tourism Co., Ltd. (603099.SH), the exclusive carrier of passenger transport in Changbai Mountain, is focusing on building an ice-snow resort.
○Desertification control highlighted, market with trillion of RMB to initiate
------
The 5th Kubuqi International Desert Forum kicked off in Inner Mongolia on July 28. Chinese Vice-Premier Wang Yang attended and made a speech at the opening ceremony. Wang emphasized that China should regard desertification control as important content of ecological civilization construction and give high priority to it by strengthening and quickening control. The country should intensify cooperation in prevention and control of desertification with foreign countries, especially cooperation with those countries and regions along the “Belt and Road Initiatives” to jointly build the Green Silk Road. Relevant stuff from the United Nations (UN) indicated that the UN and Chinese government are exploring public-private-partnership (PPP) mode for desertification control. Once introduced, it will attract trillions of yuan.
Comment: The Suggestions on Accelerating Promotion of Ecological Civilization Construction launched by the State Council in May proposed that over 50 percent of controllable desertificated land will be under control by 2020. Among the listed companies, Inner Mongolia Hotision & Monsod Drought-resistance Greening Co., Ltd. (300355.SZ) cultivates and applies Inner Mongolia grass to build economically ecological environment based on the status of ecological environment in arid and semi-arid region of China. Gansu Dayu Water-Saving Group Co., Ltd. (300021.SZ) is principally engaged in water-saving materials and water-saving projects and possesses comprehensive system integration capacity.
[Announcement Interpretation]
○Yilida Ventilator to control two companies to develop cross-border e-commerce
------
Zhejiang Yilida Ventilator Co., Ltd. (002686.SZ) plans to acquire 51 percent equities of Shanghai Changtian International Trade Company Limited with 2.55 million yuan. At the meantime, Yilida International Holding Company Limited, a fully-owned subsidiary under Yilida Ventilator, plans to acquire 51 percent equities of Aishen Technology Company Limited with 58.65 million yuan. Changtian International Trade and Aishen Technology provide global renowned air conditioner manufacturers with product components, raw metal material and air conditioner production equipment. They have made planning in several oversea warehouses to explore international businesses of bulk commodities including steel products, aluminium products, etc. The company paves way for its upcoming cross-border e-commerce business by acquiring above subject assets.
○Jiajia Food to gain shareholding increase
------
Actual controller and senior management of Jiajia Food Group Co., Ltd. (002650.SZ) will increase shareholding in the company with no less than 50 million yuan in next six months. The company stops the planning of significant issues at the same time. Beijing BDStar Navigation Co., Ltd. (002151.SZ) resumes trading with the termination of the planning of staff/senior management shareholding increase.
○Controlling stake of Shanghai Jahwa United transferred to Ping An Life Insurance
------
Shanghai Jahwa United Co., Ltd. (600315.SH) announces that to strengthen China Ping An Insurance (Group) Company Ltd.’s controlling position in Shanghai Jahwa United, Ping An Insurance plans to acquire 100 percent equities of Shanghai Jahwa United controlled by Shanghai Pingpu Investment Company Limited, its former controlling shareholder, with 8.4 billion yuan through Ping An Life Insurance Company, a subsidiary under Ping An Insurance. Both the controlling shareholder and actual controller of Shanghai Jahwa United will remain unchanged before and after the transaction.
Comment: Based on that Pingpu Investment indirectly holds 182 million shares of Shanghai Jahwa United, Ping An Life Insurance will buy shares of Shanghai Jahwa United at 45.6 yuan per share, while the company’s stock price closed at 40.26 yuan per share before trading suspension.
○Huiyuan Optical Communications bought by director of Sunlight Electrical Appliance through secondary market acquisition to 5 pct limit
------
Sichuan Huiyuan Optical Communications Co., Ltd. (000586.SZ) was bought by natural person Yang Ning’en through secondary market acquisition to the 5 percent limit. The latter totally bought 9.87 million shares of Huiyuan Optical Communications from July 20 to now, accounting for 5.1 percent of the company’s total share capital. Yang might continue the shareholding increase in next 12 months. It might have already cost Yang over 150 million yuan for the acquisition.
Comment: Yang Ning’en is the director of Ningbo Sunlight Electrical Appliance Co., Ltd. (002473.SZ). Yang transferred the controlling stake of Sunlight Electrical Appliance to Stellar Mega International Group Co., Ltd. not long ago. Huiyuan Optical Communications has failed twice in planning reorganization since last year and now it is almost a shell company.
○Noposion Agrochemicals, etc. gain shareholding increase
------
By July 27, Lu Boqiang, actual controller of Shenzhen Noposion Agrochemicals Co., Ltd. (002215.SZ), increased shareholding in the company by 6.08 million shares at an average price of 17.41 yuan per share; controlling shareholder of Gansu Gangtai Holding (Group) Co., Ltd. (600687.SH) increased shareholding in the company by 3.69 million shares on July 28; controlling shareholder of New Hua Du Supercenter Co., Ltd. (002264.SZ) increased shareholding in the company by 1.20 million shares on July 28; three senior management of Ccs Supply Chain Management Co., Ltd. (600180.SH) increased shareholding in the company by 2.02 million shares on July 28.
Controlling shareholder of China Shipping Network Technology Co., Ltd. (002401.SZ) increased shareholding in the company by 606,000 shares on July 28; actual controller of Sichuan Great Wall International Acg Co., Ltd. (000835.SZ) increased shareholding in the company by 600,000 shares at an average price of 14.51 yuan per share on July 28; substantial shareholder of Jilin Aodong Pharmaceutical Group Co., Ltd. (000623.SZ) increased shareholding in the company by 1.60 million shares from July 10 to 27 at an average price of 31.33 yuan per share; substantial shareholder and some senior management of Sany Heavy Industry Co., Ltd. (600031.SH) increased shareholding in the company by 96.84 million shares from July 15 to 28.
[Financial Reports Express]
○Fushun Special Steel forecasts explosive performance growth
------
Thanks to product structure adjustment, Fushun Special Steel Co., Ltd. (600399.SH) expects its net profit in the first half year to see a year-on-year growth of 780~830 percent in its semiyearly report.
[Companies Hotspot]
○Staff shareholding plan of Yaxia Automobile to see accelerated implementation
------
Wuhu Yaxia Automobile Corporation (002607.SZ) plans to hold general meeting of shareholders on July 29 to review the staff shareholding plan launched on July 14. The market expects that the company will soon implement the plan after approval. According to the plan, Southwest-Yaxia No.1 targeted asset management plan will finish the purchase of subject stocks through secondary market within six months after the approval of staff shareholding plan.
[Trading Trends]
○Guosen Securities bought by four institutional seats
------
The trading volume ranking list on July 28 shows that Guosen Securities Co., Ltd. (002736.SZ) was bought by four institutional seats with a total of 1.19 billion yuan; another three institutional seats sold 268 million yuan of Guosen Securities, indicating a total net buying of 917 million yuan, accounting for 30 percent of its intraday turnover.
Comment: Securities stocks were the main force in supporting market on July 28. Several institutions believe that securities enjoy the best asset quality in financial system and also the most definite performance growth prospect. In addition, equity incentive becomes an important measure in maintaining the stability of capital market this time. The equity incentive launched by securities will embrace important policy support. Human resource is the core factor impacting the operation efficiency and development prospect of securities industry. Equity incentive might fully mobilize staff’s initiative so as to largely improve securities’ operation efficiency.
> Concerted efforts to stabilize confidence, value discovery of market recovers
> Premier Li highlights science and technology innovation, CAS to play more important role
> Local guidelines on sport industry development issued, Desertification control highlighted
> Yilida Ventilator to develop cross-border e-commerce, Jiajia Food to gain shareholding increase
[XFA Focus]
○Concerted efforts to stabilize confidence, value discovery of market recovers
------
The central bank disclosed the information on the “mid-year symposium of managers of branches and sub-branches” on July 28 and indicated that it will maintain prudent monetary policy in the second half of this year to boost real economy as the prices recovered from a low level. The National Development and Reform Commission (NDRC) made remarks the stock market for the first time at a press conference on the same day, indicating that the fundamentals of China’s economic development have been improving, which provided foundation and conditions for the sustainable and healthy development of the stock market. The trading volume ranking list shows that three operation departments of CITIC Securities Company Limited (06030.HK; 600030.SH) in Beijing have bought shares of 20 companies with a total of 2.4 billion yuan.
Comment: The indications of the central bank and the NDRC removed the market doubts on whether the monetary policies will change and the economy will recover as well as other key problems, showing the support of policies on the stock market. The authorities have clear targets on the stable and healthy development of the capital market. It will restore and build the market gradually while maintaining table and ensure stability in the process. Despite the weak performance of the stock market, the market has discovered hotspots focusing on the theme of low valuation and the expectations on reform. The financial and SOEs reform sectors have become bullish. The value discovery function of the market is gradually recovering after significant fluctuations.
○Premier Li highlights science and technology innovation, CAS to play more important role
------
Chinese Premier Li Keqiang attended a symposium on science and technology strategy on July 27 and listened to the introduction on the development of the Academic Divisions of the Chinese Academy of Sciences (CAS) by the responsible staff of the CAS. Li called for giving the central stage to the innovation in science and technology in the national development, continuing to release reform benefits and dealing with unreasonable constraints on entrepreneurship and innovation as well as building the most extensive innovation platform based on the “Internet plus” and other new technologies and models. On the same day, the ScienceNet.cn under the CAS announced that the CAS has achieved fruitful results after initiating the campaign focusing on the classification and reform of the research institutes one year ago.
Comment: As the “national team in technology”, the CAS has been a pioneer in deepening reform since Chinese President Xi Jinping inspected the CAS two years ago. CASTECH Inc. (002222.SZ), Changchun Up Optotech Co., Ltd. (002338.SZ) and Siasun Robot & Automation Co., Ltd. (300024.SZ) under the CAS have advantages in the new materials, military equipment and intelligent equipment and other industries and are expected to play more important roles in the wave of innovation in science and technology.
[XFA Selection]
○The China Securities Regulatory Commission (CSRC) indicated that it had organized inspection and enforcement teams to investigate the “massive sell-off” after the sharp dive in the market on July 27.
○The SSE B index surged 5.35 percent on July 28. The acceleration in the Shanghai FTZ reform and the conversion of B shares into A shares by Jiangsu Future Land Co., Ltd. improved the market expectations.
○The NDRC arranged special funds on the preliminary work of key projects in the revitalization of the northeast China to promote the construction of key projects in this and next years.
○The National Energy Administration issued the targets on the upgrading and transformation of energy saving and emission cut in central coal power generation enterprises in 2015, proposing to further improve the energy efficiency of coal-fired power generator sets and reduce the emission of pollutants.
○The latest weekly report of the China Securities Depository and Clearing Corporation Limited (CSDC) shows that the number of new stock investors declined 26 percent last week and the number of new fund accounts dropped 30 percent on a weekly basis.
[Industry Information]
○Local guidelines on sport industry development issued, industry boosted by intensive policies
------
XFA learns that recently local governments in Tianjin Municipality and Guangxi Zhuang Autonomous Region have introduced implementation guidelines on accelerating the development of the sport industry, proposing that the industrial size will reach above 1 hundred billion yuan. The General Administration of Sport of China recently indicated that it is estimated that 31 provincial governments will release their implementation guidelines by the end of this month. Besides, the International Olympic Committee will discuss and choose the host city of the 2022 Winter Olympics on July 31.
Comment: As required by the State Council, the sport industry will play a vital role in expanding domestic demands, increasing employment and cultivating new economic growth points. The industry will see a total scale of over 5 trillion yuan by 2025. With the implementation of local supporting policies and the bid for the Winter Olympics, China’s sport industry will see rapid development. Among listed companies, Toread Holdings Group Co., Ltd. (300005.SZ), a leader in the outdoor products industry, is focusing on creating an ecosystem that integrates outdoor products plus outdoor travelling and big sports. Changbai Mountain Tourism Co., Ltd. (603099.SH), the exclusive carrier of passenger transport in Changbai Mountain, is focusing on building an ice-snow resort.
○Desertification control highlighted, market with trillion of RMB to initiate
------
The 5th Kubuqi International Desert Forum kicked off in Inner Mongolia on July 28. Chinese Vice-Premier Wang Yang attended and made a speech at the opening ceremony. Wang emphasized that China should regard desertification control as important content of ecological civilization construction and give high priority to it by strengthening and quickening control. The country should intensify cooperation in prevention and control of desertification with foreign countries, especially cooperation with those countries and regions along the “Belt and Road Initiatives” to jointly build the Green Silk Road. Relevant stuff from the United Nations (UN) indicated that the UN and Chinese government are exploring public-private-partnership (PPP) mode for desertification control. Once introduced, it will attract trillions of yuan.
Comment: The Suggestions on Accelerating Promotion of Ecological Civilization Construction launched by the State Council in May proposed that over 50 percent of controllable desertificated land will be under control by 2020. Among the listed companies, Inner Mongolia Hotision & Monsod Drought-resistance Greening Co., Ltd. (300355.SZ) cultivates and applies Inner Mongolia grass to build economically ecological environment based on the status of ecological environment in arid and semi-arid region of China. Gansu Dayu Water-Saving Group Co., Ltd. (300021.SZ) is principally engaged in water-saving materials and water-saving projects and possesses comprehensive system integration capacity.
[Announcement Interpretation]
○Yilida Ventilator to control two companies to develop cross-border e-commerce
------
Zhejiang Yilida Ventilator Co., Ltd. (002686.SZ) plans to acquire 51 percent equities of Shanghai Changtian International Trade Company Limited with 2.55 million yuan. At the meantime, Yilida International Holding Company Limited, a fully-owned subsidiary under Yilida Ventilator, plans to acquire 51 percent equities of Aishen Technology Company Limited with 58.65 million yuan. Changtian International Trade and Aishen Technology provide global renowned air conditioner manufacturers with product components, raw metal material and air conditioner production equipment. They have made planning in several oversea warehouses to explore international businesses of bulk commodities including steel products, aluminium products, etc. The company paves way for its upcoming cross-border e-commerce business by acquiring above subject assets.
○Jiajia Food to gain shareholding increase
------
Actual controller and senior management of Jiajia Food Group Co., Ltd. (002650.SZ) will increase shareholding in the company with no less than 50 million yuan in next six months. The company stops the planning of significant issues at the same time. Beijing BDStar Navigation Co., Ltd. (002151.SZ) resumes trading with the termination of the planning of staff/senior management shareholding increase.
○Controlling stake of Shanghai Jahwa United transferred to Ping An Life Insurance
------
Shanghai Jahwa United Co., Ltd. (600315.SH) announces that to strengthen China Ping An Insurance (Group) Company Ltd.’s controlling position in Shanghai Jahwa United, Ping An Insurance plans to acquire 100 percent equities of Shanghai Jahwa United controlled by Shanghai Pingpu Investment Company Limited, its former controlling shareholder, with 8.4 billion yuan through Ping An Life Insurance Company, a subsidiary under Ping An Insurance. Both the controlling shareholder and actual controller of Shanghai Jahwa United will remain unchanged before and after the transaction.
Comment: Based on that Pingpu Investment indirectly holds 182 million shares of Shanghai Jahwa United, Ping An Life Insurance will buy shares of Shanghai Jahwa United at 45.6 yuan per share, while the company’s stock price closed at 40.26 yuan per share before trading suspension.
○Huiyuan Optical Communications bought by director of Sunlight Electrical Appliance through secondary market acquisition to 5 pct limit
------
Sichuan Huiyuan Optical Communications Co., Ltd. (000586.SZ) was bought by natural person Yang Ning’en through secondary market acquisition to the 5 percent limit. The latter totally bought 9.87 million shares of Huiyuan Optical Communications from July 20 to now, accounting for 5.1 percent of the company’s total share capital. Yang might continue the shareholding increase in next 12 months. It might have already cost Yang over 150 million yuan for the acquisition.
Comment: Yang Ning’en is the director of Ningbo Sunlight Electrical Appliance Co., Ltd. (002473.SZ). Yang transferred the controlling stake of Sunlight Electrical Appliance to Stellar Mega International Group Co., Ltd. not long ago. Huiyuan Optical Communications has failed twice in planning reorganization since last year and now it is almost a shell company.
○Noposion Agrochemicals, etc. gain shareholding increase
------
By July 27, Lu Boqiang, actual controller of Shenzhen Noposion Agrochemicals Co., Ltd. (002215.SZ), increased shareholding in the company by 6.08 million shares at an average price of 17.41 yuan per share; controlling shareholder of Gansu Gangtai Holding (Group) Co., Ltd. (600687.SH) increased shareholding in the company by 3.69 million shares on July 28; controlling shareholder of New Hua Du Supercenter Co., Ltd. (002264.SZ) increased shareholding in the company by 1.20 million shares on July 28; three senior management of Ccs Supply Chain Management Co., Ltd. (600180.SH) increased shareholding in the company by 2.02 million shares on July 28.
Controlling shareholder of China Shipping Network Technology Co., Ltd. (002401.SZ) increased shareholding in the company by 606,000 shares on July 28; actual controller of Sichuan Great Wall International Acg Co., Ltd. (000835.SZ) increased shareholding in the company by 600,000 shares at an average price of 14.51 yuan per share on July 28; substantial shareholder of Jilin Aodong Pharmaceutical Group Co., Ltd. (000623.SZ) increased shareholding in the company by 1.60 million shares from July 10 to 27 at an average price of 31.33 yuan per share; substantial shareholder and some senior management of Sany Heavy Industry Co., Ltd. (600031.SH) increased shareholding in the company by 96.84 million shares from July 15 to 28.
[Financial Reports Express]
○Fushun Special Steel forecasts explosive performance growth
------
Thanks to product structure adjustment, Fushun Special Steel Co., Ltd. (600399.SH) expects its net profit in the first half year to see a year-on-year growth of 780~830 percent in its semiyearly report.
[Companies Hotspot]
○Staff shareholding plan of Yaxia Automobile to see accelerated implementation
------
Wuhu Yaxia Automobile Corporation (002607.SZ) plans to hold general meeting of shareholders on July 29 to review the staff shareholding plan launched on July 14. The market expects that the company will soon implement the plan after approval. According to the plan, Southwest-Yaxia No.1 targeted asset management plan will finish the purchase of subject stocks through secondary market within six months after the approval of staff shareholding plan.
[Trading Trends]
○Guosen Securities bought by four institutional seats
------
The trading volume ranking list on July 28 shows that Guosen Securities Co., Ltd. (002736.SZ) was bought by four institutional seats with a total of 1.19 billion yuan; another three institutional seats sold 268 million yuan of Guosen Securities, indicating a total net buying of 917 million yuan, accounting for 30 percent of its intraday turnover.
Comment: Securities stocks were the main force in supporting market on July 28. Several institutions believe that securities enjoy the best asset quality in financial system and also the most definite performance growth prospect. In addition, equity incentive becomes an important measure in maintaining the stability of capital market this time. The equity incentive launched by securities will embrace important policy support. Human resource is the core factor impacting the operation efficiency and development prospect of securities industry. Equity incentive might fully mobilize staff’s initiative so as to largely improve securities’ operation efficiency.
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