[Today's Guide]
>National policies to launch intensively, robot industry to see accelerated development
>Aliyun joins hands with CAS in studying quantum computing
>Hengxing Science & Technology to expand main business through private placement, Yisheng Livestock & Poultry Breeding joins CITIC M&A Fund for transformation
>Simei Media to fully control an advertising company, Rongan Property proposes high share conversion and dividend
[XFA Focus]
○National policies to launch intensively, robot industry to see accelerated development
------
National Development and Reform Commission (NDRC) indicated on the press conference held on July 30 that the National Robot Testing and Evaluation Center was kicked off at the beginning of the year. The development of robot industry will be supported from four aspects in the future including national industrial fund. NDRC also pointed out that industrial robot industry should achieve digital production and domestication of critical components including reducer; a string of national standards should be formulated. It is also learnt that the thirteenth five-year plan for robot industry is under improvement now and might be released before year end. The Ministry of Industry and Information Technology (MIIT) also indicated recently that it will promote “Made in China 2025” to launch as soon as possible.
Comment: China is now the world largest industrial robot consumption market, but critical components are mainly controlled by four main robot manufacturers. Import substitution sees broad space. It is expected that by 2020, there will be 300,000 robots in China; output of robot and system will reach around 100 billion yuan and drive a component market of 300 billion yuan. As for listed companies, Jiangsu Yawei Machine Tool Co., Ltd. (002559.SZ) is speeding up in developing linear and Selective Compliance Assembly Robot Arm (SCARA) as well as robot system integration business. The first batch of orders cooperated with German KUKA robot company has been delivered; Xuzhou Handler Special Vehicle Co., Ltd. (300201.SZ) plans to acquire service provider engaged in industrial robot training, testing and system integration. Latest announcement of the company launches staff shareholding plan.
[XFA Selection]
○The meeting of the Political Bureau of the Communist Party of China Central Committee held on July 30 proposed to pay great attentions to preventing and solving systematic risks and give big push to system and mechanism reforms of state-owned enterprises, etc.
○Chinese President Xi Jinping and Turkish President attended Sino-Turkish Economic and Trade Forum. Xi outlined key areas of cooperation between China and Turkey, including high-speed railways and new energy.
○The annualized quarterly GDP growth of the U.S. is 2.3 percent in the second quarter, lower than market expectation.
○93 banks are nodded by the People’s Bank of China, the central bank, to issue large-scale certificates of deposits (CDs), a move to further push interest rate liberalization.
○Beijing delegation for 2022 Olympic Winter Games indicated during media interview that it has been prepared for final bid push on July 31.
[Industry Information]
○Aliyun joins hands with CAS in studying quantum computing
------
Aliyun.com under Alibaba Group announced to establish a new lab together with Chinese Academy of Sciences (CAS) on July 30 for joint study on quantum computer. According to the lab’s research plan, it will achieve independent development of the design and manufacturing of physical layer as well as algorithm running; fully realize general quantum computing function and apply it into the treatment of significant actual problems like big data, etc. by 2030. Moreover, Alibaba will also develop close cooperation with CAS in achieving the application of quantum secure communication technology in e-business and the security of data center.
Comment: This is another planning made by the Internet technology giant in quantum computing. Google previously also jointly established a lab with NNSA to design and construct quantum computing processor. Once quantum computer is materialized, it means that the computing speed will be increased by billions of times. Among listed companies, Zhejiang Guomao Orient Investment Management Company Limited, 49 percent equities of which is held by Zhejiang Orient Holdings Co., Ltd. (600120.SH), develops cooperation with the quantum communication technology team of University of Science and Technology of China; Jiangsu Zhongtian Technology Co., Ltd. (600522.SH) provides the quantum communication research of USTC Shanghai Institute for Advanced Studies with optical fiber, cable and components.
○NDRC fully opens railway sector to private investment to further mobilize private capital
------
National Development and Reform Commission (NDRC) lately released implementation opinions about further encouraging and expanding social investment in the construction of railways. It actively encourages social capital in fully entering railway area. Various railway projects listed in mid- and long-term railway network planning or special/regional plans approved by the State, expect those explicitly forbidden by laws, will be all open to social capital. Social capitals are strongly encouraged in constructing and operating interurban railways, suburban railways, railways for resource development and branch railways.
Comment: NDRC’s move in fully opening railway construction to private investment this time might better mobilize private capital in stabilizing economic development. China Railway Corporation recently released a new round of tender requirements for motor train units. The procurement totals 351 units and reaches 60 billion yuan, according to measurement. It will greatly support enterprises’ production scheduling. Among listed companies, Beijing Comens New Materials Co., Ltd. (300200.SZ) indicated on interactive platform that its sub-plates of high-speed rail fastener system is under continuous goods supply; products of Hubei Huitian New Materials Co., Ltd. (300041.SZ) cover glues for high-speed rail and car body of motor train unit, etc.
[Announcement Interpretation]
○Hengxing Science & Technology to expand main business through private placement
------
Henan Hengxing Science & Technology Co., Ltd. (002132.SZ) proposes to raise over 1.4 billion yuan by issuing 200 million shares through private placement. The proceeds will be invested in the hyperfine diamond wire project with an annual capacity of 12 million kilometers. The product is mainly used in the cutting of solar silicon chips, sapphire, gallium arsenide single-crystal material and other new materials. The construction of the project will last two years and it is expected to bring an annual after-tax profit of 337 million yuan after reaching the designed capacity.
○Yisheng Livestock & Poultry Breeding joins CITIC M&A Fund for transformation
------
Shandong Yisheng Livestock & Poultry Breeding Co., Ltd. (002458.SZ) will conduct strategic cooperation with CITIC M&A Fund Management Co., Ltd. CITIC M&A Fund will assist Yisheng Livestock & Poultry Breeding in strategies making, industrial research, resources allocation, services consolidation, term incentive, the assets management for actual controllers as well as other comprehensive services to help the latter realize the enterprise transformation and upgrading.
○Simei Media to fully control an advertising company with RMB325 mln
------
Simei Media Co., Ltd. (002712.SZ) plans to acquire 100 percent equities of Beijing Aide Kangsai Advertising Co., Ltd. with a total of 325 million yuan by issuing shares at 59.63 yuan per share through private placement and in cash. The company also intends to raise 325 million yuan by issuing 5.20 million shares at 62.49 yuan per share through private placement. The target company is principally engaged in the design of advertisements and agency. Based on the performance commitment, its net profit from 2015 to 2019 will be no less than 25.00 million yuan, 32.50 million yuan, 42.25 million yuan, 46.47 million yuan and 51.12 million yuan, respectively.
○Tempus Global to raise RMB450 mln, employee shareholding plan to fully subscribe
------
Shenzhen Tempus Global Business Service Holding Ltd. (300178.SZ) intends to raise 450 million yuan by issuing 15.18 million shares at 29.64 yuan per share to the first-phase employee shareholding plan through private placement. The proceeds will be used for repaying bank loans and supplementing the working capital. According to the plan, all of the contributors of the employee shareholding plan are employees of the company and the funds will be raised by them. The duration of the plan is 48 months and the lock-up period of the stocks will be 36 months.
○Conch Profiles and Science sees shareholding increase
------
The Conch Group, the controlling shareholder of Wuhu Conch Profiles and Science Co., Ltd. (000619.SZ), and the Conch Hotel, a party acting in concert with the Conch Group, increased the shareholding in the company with 7.16 million shares from July 16 to 28, accounting for 1.99 percent of its total share capital. Guo Xiansheng, the controlling shareholder of Linzhou Heavy Machinery Group Co., Ltd. (002535.SZ), increased the shareholding in the company with 1.07 million shares from July 28 to 29, accounting for 0.17 percent of its total share capital. Erju Group, the controlling shareholder of China Railway Erju Co., Ltd. (600528.SH), increased the shareholding in the company with 8.10 million shares from July 29 to 30, accounting for 0.56 percent of its total share capital.
[Financial Reports Express]
○Rongan Property proposes high share conversion and dividend
------
Rongan Property Co., Ltd. (000517.SZ) proposes an 18-for-10 conversion of capital surplus into shares combined with 2 shares and 0.5 yuan dividend for every 10 shares according to its interim report. Chongqing Sanxia Paints Co., Ltd. (000565.SZ) proposes an 8-for-10 conversion of capital surplus into shares combined with 7 shares and 0.8 yuan dividend for every 10 shares according to its interim report. Its net profit for the first three quarters is expected to surge 291 percent to 304 percent year on year. Anxin Trust Co., Ltd. (600816.SH) proposes a 15-for-10 conversion of capital surplus into shares according to its half-year report.
[Trading Trends]
○Three fund companies to sell funds for one day, CSF may enter into market through funds
------
Each of China Southern Fund Management Co., Ltd., E Fund Management Co., Ltd. and China Merchants Fund Management Co., Ltd. introduces one new product on July 31. Like Huaxia New Economy and Jiashi New Opportunities formerly confirmed as the “customized” funds of the China Securities Finance Co., Ltd. (CSF), the three funds are all sponsored by the fund manager and senior management with a subscription period of one day. The above fund management companies are all on the subscription list of active funds of the CSF with 200 million yuan.
Comment: So many similarities trigger the market expectation on the “national teams” that they may enter into the market again through funds. Huaxia New Economy and Jiashi New Opportunities raised 40,011 million yuan and 40,010 million yuan, respectively and it is possible the remaining 120 billion yuan are targeted at the above three funds.
○Five institutes buy Zhongyuan Huadian against market trend
------
The trading volume ranking list on July 30 shows that five institutes bought Wuhan Zhongyuan Huadian Science & Technology Co., Ltd. (300018.SZ) with a total of 106 million yuan, accounting for 31.4 percent of its intraday turnover. No institutional seat sold it.
Comment: The acquisition of Jiangsu Sesan Technology Co., Ltd. by Zhongyuan Huadian has been approved recently. Sesan Technology is a leading provider of solutions to medical treatment informationization in China. The acquisition will significantly improve the profitability of the company. Sesan Technology committed that its net profit in 2015 will be no less than 46,875,000 yuan. Zhongyuan Huadian recorded a net profit of 49,859,400 yuan in 2014.
>National policies to launch intensively, robot industry to see accelerated development
>Aliyun joins hands with CAS in studying quantum computing
>Hengxing Science & Technology to expand main business through private placement, Yisheng Livestock & Poultry Breeding joins CITIC M&A Fund for transformation
>Simei Media to fully control an advertising company, Rongan Property proposes high share conversion and dividend
[XFA Focus]
○National policies to launch intensively, robot industry to see accelerated development
------
National Development and Reform Commission (NDRC) indicated on the press conference held on July 30 that the National Robot Testing and Evaluation Center was kicked off at the beginning of the year. The development of robot industry will be supported from four aspects in the future including national industrial fund. NDRC also pointed out that industrial robot industry should achieve digital production and domestication of critical components including reducer; a string of national standards should be formulated. It is also learnt that the thirteenth five-year plan for robot industry is under improvement now and might be released before year end. The Ministry of Industry and Information Technology (MIIT) also indicated recently that it will promote “Made in China 2025” to launch as soon as possible.
Comment: China is now the world largest industrial robot consumption market, but critical components are mainly controlled by four main robot manufacturers. Import substitution sees broad space. It is expected that by 2020, there will be 300,000 robots in China; output of robot and system will reach around 100 billion yuan and drive a component market of 300 billion yuan. As for listed companies, Jiangsu Yawei Machine Tool Co., Ltd. (002559.SZ) is speeding up in developing linear and Selective Compliance Assembly Robot Arm (SCARA) as well as robot system integration business. The first batch of orders cooperated with German KUKA robot company has been delivered; Xuzhou Handler Special Vehicle Co., Ltd. (300201.SZ) plans to acquire service provider engaged in industrial robot training, testing and system integration. Latest announcement of the company launches staff shareholding plan.
[XFA Selection]
○The meeting of the Political Bureau of the Communist Party of China Central Committee held on July 30 proposed to pay great attentions to preventing and solving systematic risks and give big push to system and mechanism reforms of state-owned enterprises, etc.
○Chinese President Xi Jinping and Turkish President attended Sino-Turkish Economic and Trade Forum. Xi outlined key areas of cooperation between China and Turkey, including high-speed railways and new energy.
○The annualized quarterly GDP growth of the U.S. is 2.3 percent in the second quarter, lower than market expectation.
○93 banks are nodded by the People’s Bank of China, the central bank, to issue large-scale certificates of deposits (CDs), a move to further push interest rate liberalization.
○Beijing delegation for 2022 Olympic Winter Games indicated during media interview that it has been prepared for final bid push on July 31.
[Industry Information]
○Aliyun joins hands with CAS in studying quantum computing
------
Aliyun.com under Alibaba Group announced to establish a new lab together with Chinese Academy of Sciences (CAS) on July 30 for joint study on quantum computer. According to the lab’s research plan, it will achieve independent development of the design and manufacturing of physical layer as well as algorithm running; fully realize general quantum computing function and apply it into the treatment of significant actual problems like big data, etc. by 2030. Moreover, Alibaba will also develop close cooperation with CAS in achieving the application of quantum secure communication technology in e-business and the security of data center.
Comment: This is another planning made by the Internet technology giant in quantum computing. Google previously also jointly established a lab with NNSA to design and construct quantum computing processor. Once quantum computer is materialized, it means that the computing speed will be increased by billions of times. Among listed companies, Zhejiang Guomao Orient Investment Management Company Limited, 49 percent equities of which is held by Zhejiang Orient Holdings Co., Ltd. (600120.SH), develops cooperation with the quantum communication technology team of University of Science and Technology of China; Jiangsu Zhongtian Technology Co., Ltd. (600522.SH) provides the quantum communication research of USTC Shanghai Institute for Advanced Studies with optical fiber, cable and components.
○NDRC fully opens railway sector to private investment to further mobilize private capital
------
National Development and Reform Commission (NDRC) lately released implementation opinions about further encouraging and expanding social investment in the construction of railways. It actively encourages social capital in fully entering railway area. Various railway projects listed in mid- and long-term railway network planning or special/regional plans approved by the State, expect those explicitly forbidden by laws, will be all open to social capital. Social capitals are strongly encouraged in constructing and operating interurban railways, suburban railways, railways for resource development and branch railways.
Comment: NDRC’s move in fully opening railway construction to private investment this time might better mobilize private capital in stabilizing economic development. China Railway Corporation recently released a new round of tender requirements for motor train units. The procurement totals 351 units and reaches 60 billion yuan, according to measurement. It will greatly support enterprises’ production scheduling. Among listed companies, Beijing Comens New Materials Co., Ltd. (300200.SZ) indicated on interactive platform that its sub-plates of high-speed rail fastener system is under continuous goods supply; products of Hubei Huitian New Materials Co., Ltd. (300041.SZ) cover glues for high-speed rail and car body of motor train unit, etc.
[Announcement Interpretation]
○Hengxing Science & Technology to expand main business through private placement
------
Henan Hengxing Science & Technology Co., Ltd. (002132.SZ) proposes to raise over 1.4 billion yuan by issuing 200 million shares through private placement. The proceeds will be invested in the hyperfine diamond wire project with an annual capacity of 12 million kilometers. The product is mainly used in the cutting of solar silicon chips, sapphire, gallium arsenide single-crystal material and other new materials. The construction of the project will last two years and it is expected to bring an annual after-tax profit of 337 million yuan after reaching the designed capacity.
○Yisheng Livestock & Poultry Breeding joins CITIC M&A Fund for transformation
------
Shandong Yisheng Livestock & Poultry Breeding Co., Ltd. (002458.SZ) will conduct strategic cooperation with CITIC M&A Fund Management Co., Ltd. CITIC M&A Fund will assist Yisheng Livestock & Poultry Breeding in strategies making, industrial research, resources allocation, services consolidation, term incentive, the assets management for actual controllers as well as other comprehensive services to help the latter realize the enterprise transformation and upgrading.
○Simei Media to fully control an advertising company with RMB325 mln
------
Simei Media Co., Ltd. (002712.SZ) plans to acquire 100 percent equities of Beijing Aide Kangsai Advertising Co., Ltd. with a total of 325 million yuan by issuing shares at 59.63 yuan per share through private placement and in cash. The company also intends to raise 325 million yuan by issuing 5.20 million shares at 62.49 yuan per share through private placement. The target company is principally engaged in the design of advertisements and agency. Based on the performance commitment, its net profit from 2015 to 2019 will be no less than 25.00 million yuan, 32.50 million yuan, 42.25 million yuan, 46.47 million yuan and 51.12 million yuan, respectively.
○Tempus Global to raise RMB450 mln, employee shareholding plan to fully subscribe
------
Shenzhen Tempus Global Business Service Holding Ltd. (300178.SZ) intends to raise 450 million yuan by issuing 15.18 million shares at 29.64 yuan per share to the first-phase employee shareholding plan through private placement. The proceeds will be used for repaying bank loans and supplementing the working capital. According to the plan, all of the contributors of the employee shareholding plan are employees of the company and the funds will be raised by them. The duration of the plan is 48 months and the lock-up period of the stocks will be 36 months.
○Conch Profiles and Science sees shareholding increase
------
The Conch Group, the controlling shareholder of Wuhu Conch Profiles and Science Co., Ltd. (000619.SZ), and the Conch Hotel, a party acting in concert with the Conch Group, increased the shareholding in the company with 7.16 million shares from July 16 to 28, accounting for 1.99 percent of its total share capital. Guo Xiansheng, the controlling shareholder of Linzhou Heavy Machinery Group Co., Ltd. (002535.SZ), increased the shareholding in the company with 1.07 million shares from July 28 to 29, accounting for 0.17 percent of its total share capital. Erju Group, the controlling shareholder of China Railway Erju Co., Ltd. (600528.SH), increased the shareholding in the company with 8.10 million shares from July 29 to 30, accounting for 0.56 percent of its total share capital.
[Financial Reports Express]
○Rongan Property proposes high share conversion and dividend
------
Rongan Property Co., Ltd. (000517.SZ) proposes an 18-for-10 conversion of capital surplus into shares combined with 2 shares and 0.5 yuan dividend for every 10 shares according to its interim report. Chongqing Sanxia Paints Co., Ltd. (000565.SZ) proposes an 8-for-10 conversion of capital surplus into shares combined with 7 shares and 0.8 yuan dividend for every 10 shares according to its interim report. Its net profit for the first three quarters is expected to surge 291 percent to 304 percent year on year. Anxin Trust Co., Ltd. (600816.SH) proposes a 15-for-10 conversion of capital surplus into shares according to its half-year report.
[Trading Trends]
○Three fund companies to sell funds for one day, CSF may enter into market through funds
------
Each of China Southern Fund Management Co., Ltd., E Fund Management Co., Ltd. and China Merchants Fund Management Co., Ltd. introduces one new product on July 31. Like Huaxia New Economy and Jiashi New Opportunities formerly confirmed as the “customized” funds of the China Securities Finance Co., Ltd. (CSF), the three funds are all sponsored by the fund manager and senior management with a subscription period of one day. The above fund management companies are all on the subscription list of active funds of the CSF with 200 million yuan.
Comment: So many similarities trigger the market expectation on the “national teams” that they may enter into the market again through funds. Huaxia New Economy and Jiashi New Opportunities raised 40,011 million yuan and 40,010 million yuan, respectively and it is possible the remaining 120 billion yuan are targeted at the above three funds.
○Five institutes buy Zhongyuan Huadian against market trend
------
The trading volume ranking list on July 30 shows that five institutes bought Wuhan Zhongyuan Huadian Science & Technology Co., Ltd. (300018.SZ) with a total of 106 million yuan, accounting for 31.4 percent of its intraday turnover. No institutional seat sold it.
Comment: The acquisition of Jiangsu Sesan Technology Co., Ltd. by Zhongyuan Huadian has been approved recently. Sesan Technology is a leading provider of solutions to medical treatment informationization in China. The acquisition will significantly improve the profitability of the company. Sesan Technology committed that its net profit in 2015 will be no less than 46,875,000 yuan. Zhongyuan Huadian recorded a net profit of 49,859,400 yuan in 2014.
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