[Today’s Guide]
>Shanghai to introduce progress of SSTIC, more supporting policies expected to introduce
>MEP promotes withdrawal of environmental monitoring powers, monitoring industry to see sound progress
>Dajin Heavy Industry to gain shareholding increase, Xi’an Minsheng to acquire commercial chain asset...
>Cau Technology and Baocheng Investment bought through secondary market acquisition to 5 pct limit again, Honyu Wear-Resistant New Materials plan high share conversion
[XFA Focus]
○Shanghai to introduce progress of SSTIC, more supporting policies expected to introduce
------
The People’s Government of Shanghai Municipality will hold a press conference on Aug. 5. It will invite the government of the Pudong New Area, the China (Shanghai) Pilot Free Trade Zone Administration and officials from relevant departments to introduce the construction of core functional zones of the Shanghai Science and Technology Innovation Center (SSTIC). Various cooperation agreements and key projects between Shanghai Municipality and the Ministry of Science and Technology, the Chinese Academy of Sciences (CAS) and other departments have been introduced since July. XFA learnt that the plan on the construction of a comprehensive national science center in Shanghai is under preparation. The plan on the construction of the global science and technology innovation center in Zhangjiang area has been completed generally and special policies supporting the construction of the SSTIC will be introduced soon.
Comment: Chinese President Xi Jinping proposed that Shanghai has to “speed up in advancing towards a science and technology innovation center with global influence. Shanghai gives the highest priority to it among the work of this year. The policy supports and the publicity of the media show that the SSTIC has become another significant strategy after the FTZ. Institutes estimate that it will bring a social research and development market with 50 billion yuan. Shanghai Zhangjiang Hi-tech Park Development Co., Ltd. (600895.SH) and Shanghai Shibei Hi-tech Co., Ltd. (600604.SH) will benefit from the improvement in main businesses and the benefits from the transformation into science and technology investment banks.
[XFA Selection]
○CITIC Securities Company Limited (06030.HK; 600030.SH), Guosen Securities Co., Ltd. (002736.SZ), Huatai Securities Co., Ltd. (601688.SH) and other securities companies issued notices on Aug. 4 that they will suspend short selling as a result of the change of the short-selling rules announced by the two exchanges.
○The meeting attended by presidents of the branches of the central bank of China proposed to stabilize financial market expectations and prevent financial risks.
○The National Development and Reform Commission (NDRC) released key project packages on strengthening the core competitiveness of the manufacturing industry with the focus on rail transportation, maritime works, robotics, electric vehicles and other industrialization projects with key technologies.
○According to the Ministry of Commerce, the prices of pork and eggs increased 2.2 percent and 3.3 percent, respectively, last week. The spokesperson indicated that the pork supply will not see obvious shortage.
○Hubei Sanonda Co., Ltd. (000553.SZ) announced trading suspension from Aug. 5 as China National Chemical Corporation, its actual controller, is mulling significant matters about the company.
[Companies Hotspot]
○Chinese Universe Publishing and Media sees rapid growth in Internet-based business, social security funds hold large proportion
------
Elex Technology Company, a wholly-owned subsidiary of Chinese Universe Publishing and Media Co., Ltd. (600373.SH), saw rapid performance growth this year as its mobile game business achieved a huge success in overseas market. Early this year, Chinese Universe Publishing and Media completed its acquisition of Elex, a comprehensive Internet platform enterprise. Apart from its mobile game business, other Internet-based businesses (including antivirus software and navigation business) have seen rapid cash inflows. The counterparty committed that its net profit will be no less than 202 million yuan in 2015. Institutes predict that Elex is very likely to outperform the commitment. Besides, Chinese Universe Publishing and Media will actively develop its business in such fields as Internet-based education by taking the advantages of Elex. Related products are expected to be introduced to the market in the near future.
Based on the top ten major shareholders recently disclosed by other listed companies, companies held by social insurance funds with large proportions are usually favored by China Securities Finance Corporation Limited (CSF). As of the end of the first quarter of this year, the third and sixth largest shareholders of Chinese Universe Publishing and Media are social security funds, which hold a total of more than 38 million shares of the company, accounting for 2.78 percent of the total shares.
[Industry Information]
○MEP promotes withdrawal of environmental monitoring powers, monitoring industry to see sound progress
------
On August 4, the Ministry of Environmental Protection (MEP) released a review on environmental monitoring work in the first half and summarized the development of China’s environmental monitoring field. Reportedly, the MEP and the Ministry of Finance have come to an agreement on withdrawing powers of monitoring national environment quality. They will take three steps to withdraw powers of monitoring air, water and soil environment quality in order to realize the goal of assessment by the country and monitoring by the country. Officials from the MEP remarked that the MEP has made arrangements on fund guarantee. One of the key points of special funds 2.5 billion yuan of pollutant charge is to guarantee the work of withdrawing monitoring powers.
Comment: The withdrawal of monitoring powers can fundamentally prevent monitoring data from administrative interference including assessment. Improvement in monitoring data reliability is expected to bring sound progress to monitoring industry. Institutions believe that the monitoring industry will not only benefit from expansion of air quality monitoring scope, but also see prosperous water quality monitoring market under the promotion of the Action Plan on Water Pollution Control. In addition, enterprises’ transformation from equipment providers to participants in environmental monitoring system and operation maintenance is also catchy. Among the listed companies, Beijing SDL Technology Co., Ltd. (002658.SZ) and Hebei Sailhero Environmental Protection High-tech Co., Ltd. (300137.SZ) are engaged in air and water quality monitoring businesses.
○Piloting of network security in telecom industry launched, advantages of leading enterprises come out
------
The Ministry of Industry and Information Technology (MIIT) on August 4 released the Notice on Developing Demonstration Work of Network Security Piloting in Telecom Industry to push forward the construction of network security technical means in telecom industry and improve the security guarantee ability of network infrastructure. According to the notice, the piloting work this time mainly leads in eight aspects including centralized security management inside enterprises, security management of network and information system assets, protection of data security, etc. For selected piloting demonstration projects, MIIT will support them in the application of national special fund and technology awards, etc. according to relevant policies.
Comment: Industrial insiders believe that under the incentive of special funds provided by MIIT, telecom enterprises might increase the purchase of relevant products and services. For quite some time, many listed companies have been actively making planning in above area. Technical advantage of leading enterprises starts to come out. Venustech Group Co. Ltd. (002439.SZ), a leading enterprise in domestic information security, owns a market share as high as 70~80 percent in government and military areas and ranks top concerning market share in finance area; Nsfocus Information Technology Co., Ltd. (300369.SZ), one of the first enterprises engaged in network security business in China, is mainly involved in providing service to enterprise users in areas including government, telecom operators, finance, energy, Internet, etc.
[Announcement Interpretation]
○Dajin Heavy Industry, etc. resume trading with announcement of shareholding increase plan by actual controllers
------
Jin Xin, actual controller of Dajin Heavy Industry Corporation (002487.SZ), will increase shareholding in the company by no more than 2 percent of its total share capital in next six months with no less than 5 million yuan; actual controller of Baoding Heavy Industry Co., Ltd. (002552.SZ) will increase shareholding in the company by no more than 1.5 percent of its total share capital with no less than 10 million yuan in next six months; Kingsignal Technology Co., Ltd. (300252.SZ) resumes trading with termination of significant reorganization.
○Xi’an Minsheng to acquire commercial chain asset with RMB26.8 bln
------
Xi'an Minsheng Group Co., Ltd. (000564.SZ) plans to acquire 100 percent equities of Hainan Supply and Marketing Daji Holding Company Limited with 26.8 billion yuan by issuing shares at 5.10 yuan per share through private placement to its substantial shareholder HNA Commercial Holding Company Limited. It also plans to raise a supporting fund of 13.2 billion yuan by issuing shares at no less than 5.41 yuan per share through private placement and all raised fund will be invested in the construction projects of Supply and Marketing Daji Holding.
Subsidiaries under Supply and Marketing Daji Holding are engaged in various business forms, including chain supermarket, business department and commercial complex, and are transforming towards O2O mode. The counterparty promises that the net profit of Supply and Marketing Daji Holding from 2016 to 2018 will reach 181 million yuan, 1.48 billion yuan and 2.33 billion yuan.
○Cau Technology and Baocheng Investment bought by CSC through secondary market acquisition to 5 pct limit again
------
Nearly 4.20 million shares of Shenzhen Cau Technology Co., Ltd. (000004.SZ) was bought by Zhongke Huitong (Shenzhen) Equity Investment Fund Company Limited, a subsidiary under China Science & Merchants Investment Management Group (CSC), with 118 million yuan from July 19 to August 3, accounting for 5 percent of its total share capital. Zhongke Huitong totally holds 10 percent shares of the company now; Zhongke Huitong also increased shareholding in Baocheng Investment Co., Ltd. (600892.SH) by 3.48 percent of the company’s total share capital and its shareholding in the company totals 10.04 percent now.
○Sciyon Automation promises a performance growth over 40pct in 2015 to support stock price
------
Nanjing Sciyon Automation Group Co., Ltd. (002380.SZ) promises a net profit of 60.00~68.05 million yuan this year, meaning a year-on-year growth of 41.08~60.00 percent. The company shows eagerness in supporting its stock price recently. Besides the shareholding increase plan announced by controlling shareholder on July 7 and the upward modification of performance growth on July 15, the company also disclosed its semiyearly distribution plan of “a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares” on August 3.
○Shanghai Tianchen bought by Liu Yiqian through secondary market acquisition to 5 pct limit again
------
Shanghai Tianchen Co., Ltd. (600620.SH) was bought by Guohua Life Insurance Co., Ltd., controlled by Liu Yiqian, to 5 percent of its total share capital from July 28 to August 4, just 20 days after its previous purchase through secondary market acquisition to the 5 percent limit. By then, Guohua Life totally holds 10 percent equities of the company.
○Hunan Development and Lancy launches shareholding increase and repurchase plans
------
Controlling shareholder of Hunan Development Group Co., Ltd. (000722.SZ) plans to increase shareholding in the company by no more than 2 percent of its total share capital in next one year; Lancy Co., Ltd. (002612.SZ) plans to repurchase its shares at no more than 37 yuan per share with 100 million yuan in next six months. It is expected that 2.70 million shares can be repurchased, accounting for 1.35 percent of its total share capital.
[Financial Reports Express]
○Honyu Wear-Resistant New Materials, etc. plan high share conversion
------
Honyu Wear-Resistant New Materials Co., Ltd. (300345.SZ) expects its net profit to see a year-on-year growth of 1,226 percent in its semiyearly report and proposes a 20-for-10 conversion of capital surplus into shares and 2-for-10 bonus shares combined with 0.4 yuan dividend for every 10 shares; Zhejiang Dingli Machinery Co., Ltd. (603338.SH) forecasts its net profit to see a year-on-year growth over 41 percent and proposes a 15-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares in its semiyearly report; Zhejiang Wanfeng Auto Wheel Co., Ltd. (002085.SZ) expects its net profit to grow by 29.84 percent year on year in its semiyearly report and proposes a 12-for-10 conversion of capital surplus into shares.
[Data Speaks]
○Shareholding increase plans launched intensively in July, stock prices of some companies drop below average cost price
------
According to statistics made by XFA, totally 4.54 billion shares of 948 A-share companies, aggregating a market value as high as 66.0 billion yuan, are bought by senior management, substantial shareholders and staff shareholding plan since July. As of August 4, the stock price of 61 stocks has dropped by 10 percent below the average price of their shareholding increase, excluding factors like trading suspension. Stocks seeing large shareholding increase and large drop below price of shareholding increase include Beijing JIAYU Door, Window and Curtain Wall Joint-Stock Co., Ltd. (300117.SZ), Sichuan Kexin Mechanical and Electrical Equipment Co., Ltd. (300092.SZ), Zhejiang Satellite Petrochemical Co., Ltd. (002648.SZ), Jiangsu Skyray Instrument Co., Ltd. (300165.SZ), etc.
>Shanghai to introduce progress of SSTIC, more supporting policies expected to introduce
>MEP promotes withdrawal of environmental monitoring powers, monitoring industry to see sound progress
>Dajin Heavy Industry to gain shareholding increase, Xi’an Minsheng to acquire commercial chain asset...
>Cau Technology and Baocheng Investment bought through secondary market acquisition to 5 pct limit again, Honyu Wear-Resistant New Materials plan high share conversion
[XFA Focus]
○Shanghai to introduce progress of SSTIC, more supporting policies expected to introduce
------
The People’s Government of Shanghai Municipality will hold a press conference on Aug. 5. It will invite the government of the Pudong New Area, the China (Shanghai) Pilot Free Trade Zone Administration and officials from relevant departments to introduce the construction of core functional zones of the Shanghai Science and Technology Innovation Center (SSTIC). Various cooperation agreements and key projects between Shanghai Municipality and the Ministry of Science and Technology, the Chinese Academy of Sciences (CAS) and other departments have been introduced since July. XFA learnt that the plan on the construction of a comprehensive national science center in Shanghai is under preparation. The plan on the construction of the global science and technology innovation center in Zhangjiang area has been completed generally and special policies supporting the construction of the SSTIC will be introduced soon.
Comment: Chinese President Xi Jinping proposed that Shanghai has to “speed up in advancing towards a science and technology innovation center with global influence. Shanghai gives the highest priority to it among the work of this year. The policy supports and the publicity of the media show that the SSTIC has become another significant strategy after the FTZ. Institutes estimate that it will bring a social research and development market with 50 billion yuan. Shanghai Zhangjiang Hi-tech Park Development Co., Ltd. (600895.SH) and Shanghai Shibei Hi-tech Co., Ltd. (600604.SH) will benefit from the improvement in main businesses and the benefits from the transformation into science and technology investment banks.
[XFA Selection]
○CITIC Securities Company Limited (06030.HK; 600030.SH), Guosen Securities Co., Ltd. (002736.SZ), Huatai Securities Co., Ltd. (601688.SH) and other securities companies issued notices on Aug. 4 that they will suspend short selling as a result of the change of the short-selling rules announced by the two exchanges.
○The meeting attended by presidents of the branches of the central bank of China proposed to stabilize financial market expectations and prevent financial risks.
○The National Development and Reform Commission (NDRC) released key project packages on strengthening the core competitiveness of the manufacturing industry with the focus on rail transportation, maritime works, robotics, electric vehicles and other industrialization projects with key technologies.
○According to the Ministry of Commerce, the prices of pork and eggs increased 2.2 percent and 3.3 percent, respectively, last week. The spokesperson indicated that the pork supply will not see obvious shortage.
○Hubei Sanonda Co., Ltd. (000553.SZ) announced trading suspension from Aug. 5 as China National Chemical Corporation, its actual controller, is mulling significant matters about the company.
[Companies Hotspot]
○Chinese Universe Publishing and Media sees rapid growth in Internet-based business, social security funds hold large proportion
------
Elex Technology Company, a wholly-owned subsidiary of Chinese Universe Publishing and Media Co., Ltd. (600373.SH), saw rapid performance growth this year as its mobile game business achieved a huge success in overseas market. Early this year, Chinese Universe Publishing and Media completed its acquisition of Elex, a comprehensive Internet platform enterprise. Apart from its mobile game business, other Internet-based businesses (including antivirus software and navigation business) have seen rapid cash inflows. The counterparty committed that its net profit will be no less than 202 million yuan in 2015. Institutes predict that Elex is very likely to outperform the commitment. Besides, Chinese Universe Publishing and Media will actively develop its business in such fields as Internet-based education by taking the advantages of Elex. Related products are expected to be introduced to the market in the near future.
Based on the top ten major shareholders recently disclosed by other listed companies, companies held by social insurance funds with large proportions are usually favored by China Securities Finance Corporation Limited (CSF). As of the end of the first quarter of this year, the third and sixth largest shareholders of Chinese Universe Publishing and Media are social security funds, which hold a total of more than 38 million shares of the company, accounting for 2.78 percent of the total shares.
[Industry Information]
○MEP promotes withdrawal of environmental monitoring powers, monitoring industry to see sound progress
------
On August 4, the Ministry of Environmental Protection (MEP) released a review on environmental monitoring work in the first half and summarized the development of China’s environmental monitoring field. Reportedly, the MEP and the Ministry of Finance have come to an agreement on withdrawing powers of monitoring national environment quality. They will take three steps to withdraw powers of monitoring air, water and soil environment quality in order to realize the goal of assessment by the country and monitoring by the country. Officials from the MEP remarked that the MEP has made arrangements on fund guarantee. One of the key points of special funds 2.5 billion yuan of pollutant charge is to guarantee the work of withdrawing monitoring powers.
Comment: The withdrawal of monitoring powers can fundamentally prevent monitoring data from administrative interference including assessment. Improvement in monitoring data reliability is expected to bring sound progress to monitoring industry. Institutions believe that the monitoring industry will not only benefit from expansion of air quality monitoring scope, but also see prosperous water quality monitoring market under the promotion of the Action Plan on Water Pollution Control. In addition, enterprises’ transformation from equipment providers to participants in environmental monitoring system and operation maintenance is also catchy. Among the listed companies, Beijing SDL Technology Co., Ltd. (002658.SZ) and Hebei Sailhero Environmental Protection High-tech Co., Ltd. (300137.SZ) are engaged in air and water quality monitoring businesses.
○Piloting of network security in telecom industry launched, advantages of leading enterprises come out
------
The Ministry of Industry and Information Technology (MIIT) on August 4 released the Notice on Developing Demonstration Work of Network Security Piloting in Telecom Industry to push forward the construction of network security technical means in telecom industry and improve the security guarantee ability of network infrastructure. According to the notice, the piloting work this time mainly leads in eight aspects including centralized security management inside enterprises, security management of network and information system assets, protection of data security, etc. For selected piloting demonstration projects, MIIT will support them in the application of national special fund and technology awards, etc. according to relevant policies.
Comment: Industrial insiders believe that under the incentive of special funds provided by MIIT, telecom enterprises might increase the purchase of relevant products and services. For quite some time, many listed companies have been actively making planning in above area. Technical advantage of leading enterprises starts to come out. Venustech Group Co. Ltd. (002439.SZ), a leading enterprise in domestic information security, owns a market share as high as 70~80 percent in government and military areas and ranks top concerning market share in finance area; Nsfocus Information Technology Co., Ltd. (300369.SZ), one of the first enterprises engaged in network security business in China, is mainly involved in providing service to enterprise users in areas including government, telecom operators, finance, energy, Internet, etc.
[Announcement Interpretation]
○Dajin Heavy Industry, etc. resume trading with announcement of shareholding increase plan by actual controllers
------
Jin Xin, actual controller of Dajin Heavy Industry Corporation (002487.SZ), will increase shareholding in the company by no more than 2 percent of its total share capital in next six months with no less than 5 million yuan; actual controller of Baoding Heavy Industry Co., Ltd. (002552.SZ) will increase shareholding in the company by no more than 1.5 percent of its total share capital with no less than 10 million yuan in next six months; Kingsignal Technology Co., Ltd. (300252.SZ) resumes trading with termination of significant reorganization.
○Xi’an Minsheng to acquire commercial chain asset with RMB26.8 bln
------
Xi'an Minsheng Group Co., Ltd. (000564.SZ) plans to acquire 100 percent equities of Hainan Supply and Marketing Daji Holding Company Limited with 26.8 billion yuan by issuing shares at 5.10 yuan per share through private placement to its substantial shareholder HNA Commercial Holding Company Limited. It also plans to raise a supporting fund of 13.2 billion yuan by issuing shares at no less than 5.41 yuan per share through private placement and all raised fund will be invested in the construction projects of Supply and Marketing Daji Holding.
Subsidiaries under Supply and Marketing Daji Holding are engaged in various business forms, including chain supermarket, business department and commercial complex, and are transforming towards O2O mode. The counterparty promises that the net profit of Supply and Marketing Daji Holding from 2016 to 2018 will reach 181 million yuan, 1.48 billion yuan and 2.33 billion yuan.
○Cau Technology and Baocheng Investment bought by CSC through secondary market acquisition to 5 pct limit again
------
Nearly 4.20 million shares of Shenzhen Cau Technology Co., Ltd. (000004.SZ) was bought by Zhongke Huitong (Shenzhen) Equity Investment Fund Company Limited, a subsidiary under China Science & Merchants Investment Management Group (CSC), with 118 million yuan from July 19 to August 3, accounting for 5 percent of its total share capital. Zhongke Huitong totally holds 10 percent shares of the company now; Zhongke Huitong also increased shareholding in Baocheng Investment Co., Ltd. (600892.SH) by 3.48 percent of the company’s total share capital and its shareholding in the company totals 10.04 percent now.
○Sciyon Automation promises a performance growth over 40pct in 2015 to support stock price
------
Nanjing Sciyon Automation Group Co., Ltd. (002380.SZ) promises a net profit of 60.00~68.05 million yuan this year, meaning a year-on-year growth of 41.08~60.00 percent. The company shows eagerness in supporting its stock price recently. Besides the shareholding increase plan announced by controlling shareholder on July 7 and the upward modification of performance growth on July 15, the company also disclosed its semiyearly distribution plan of “a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares” on August 3.
○Shanghai Tianchen bought by Liu Yiqian through secondary market acquisition to 5 pct limit again
------
Shanghai Tianchen Co., Ltd. (600620.SH) was bought by Guohua Life Insurance Co., Ltd., controlled by Liu Yiqian, to 5 percent of its total share capital from July 28 to August 4, just 20 days after its previous purchase through secondary market acquisition to the 5 percent limit. By then, Guohua Life totally holds 10 percent equities of the company.
○Hunan Development and Lancy launches shareholding increase and repurchase plans
------
Controlling shareholder of Hunan Development Group Co., Ltd. (000722.SZ) plans to increase shareholding in the company by no more than 2 percent of its total share capital in next one year; Lancy Co., Ltd. (002612.SZ) plans to repurchase its shares at no more than 37 yuan per share with 100 million yuan in next six months. It is expected that 2.70 million shares can be repurchased, accounting for 1.35 percent of its total share capital.
[Financial Reports Express]
○Honyu Wear-Resistant New Materials, etc. plan high share conversion
------
Honyu Wear-Resistant New Materials Co., Ltd. (300345.SZ) expects its net profit to see a year-on-year growth of 1,226 percent in its semiyearly report and proposes a 20-for-10 conversion of capital surplus into shares and 2-for-10 bonus shares combined with 0.4 yuan dividend for every 10 shares; Zhejiang Dingli Machinery Co., Ltd. (603338.SH) forecasts its net profit to see a year-on-year growth over 41 percent and proposes a 15-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares in its semiyearly report; Zhejiang Wanfeng Auto Wheel Co., Ltd. (002085.SZ) expects its net profit to grow by 29.84 percent year on year in its semiyearly report and proposes a 12-for-10 conversion of capital surplus into shares.
[Data Speaks]
○Shareholding increase plans launched intensively in July, stock prices of some companies drop below average cost price
------
According to statistics made by XFA, totally 4.54 billion shares of 948 A-share companies, aggregating a market value as high as 66.0 billion yuan, are bought by senior management, substantial shareholders and staff shareholding plan since July. As of August 4, the stock price of 61 stocks has dropped by 10 percent below the average price of their shareholding increase, excluding factors like trading suspension. Stocks seeing large shareholding increase and large drop below price of shareholding increase include Beijing JIAYU Door, Window and Curtain Wall Joint-Stock Co., Ltd. (300117.SZ), Sichuan Kexin Mechanical and Electrical Equipment Co., Ltd. (300092.SZ), Zhejiang Satellite Petrochemical Co., Ltd. (002648.SZ), Jiangsu Skyray Instrument Co., Ltd. (300165.SZ), etc.
Latest comments