[Today's Guide]
>Price reform of PTD accelerated, three kinds of enterprises to benefit first
>Draft regulations on carbon emission trading to submitted for review, Alibaba promotes O2O business with Suning Commerce
>Searainbow Holding to introduce employee shareholding plan, controlling shareholder of Woer Heat-Shrinkable Material to increase shareholding with large amount
>Invengo Information Technology and Vanward New Electric sign cooperation agreements, Zoomlion Heavy Industry Science and Technology bought by CSF
[XFA Focus]
○Price reform of PTD accelerated, three kinds of enterprises to benefit first
------
The National Development and Reform Commission (NDRC) issues circular on Aug.10 claiming that the price reform will be pushed forward in depth and breadth:the power price reform will be further deepened; the piloting price reform of power transmission and distribution (PTD) will be further advanced and expanded; the management methods on the price of natural gas pipeline transportation and the supervision methods on pricing cost will be studied and formulated in the second half year. It is also learnt that the Power Law (revised version) and the Energy Law have been completed and submitted to the State Council for approval; State Power Investment Corporation (SPIC) recently established its first company selling power and other power generation groups are also actively making early-stage preparation for the establishment of power-selling companies.
Comment: Price reform of PTD is ranked as top priority in this round of power reform. The promotion of power reform might change the competition status and ways of pricing of the power industrial chain. With estimated power-selling market reaching trillions of yuan, those who obtain power-selling license first will gain first-mover advantage. Local listed companies engaged in distribution system include Yunnan Wenshan Electric Power Co., Ltd. (600995.SH) under China Southern Power Grid, Sichuan Xichang Electric Power Co., Ltd. (600505.SH) and Sichuan Mingxing Electric Power Co., Ltd. (600101.SH), etc. under State Grid Corporation of China. Local power generation companies, including Jilin Power Share Co., Ltd. (000875.SZ), Shanxi Zhangze Electric Power Co., Ltd. (000767.SZ), and etc. under SPIC which is a reform pioneer among five power generation groups, enjoy strong competitiveness in regional market. Hydropower has advantages in the cost of power generation and will seize bigger market share in power price competition in the future.
[XFA Selection]
○Experts on state-owned assets reform claim that a number of documents about state-owned enterprise reform have been passed on principle by the central authority, including the document about state-owned capital being invested in operational companies, etc., which is a plan initiated by the Ministry of Finance.
○In July, there are 4,933 licensed new-energy cars sold in Shanghai, setting a historical new high concerning the sales of licensed new-energy car.
○Egg price has risen by 14.8 percent accumulatively since July 13 in China. Festival factors may arouse a new round of egg price rise in Sept.
○The central bank will issue the fifth set of 100-yuan bank note in Nov., 2015 which features improved anti-forgery technology.
○The Pacific Securities Co., Ltd. (601099.SH) claims that due to recent changes in market, it will reduce the amount of fundraising through shares allotment from 12 billion yuan to 4.5 billion yuan.
[Industry Information]
○Draft regulations on carbon emission trading to submitted for review, energy-saving service industry to see market opportunity
------
The NDRC discloses on its website on Aug.10 that in order to accelerate the construction of China's carbon emission trading market, the draft regulations on the trading of carbon emission permit will soon be submitted to the State Council for review. The introduction of the regulations, with legal guarantee, will facilitate the implementation of the trading system concerning carbon emission permit and the allocation of carbon emission quota.
Comment: According to the statement on emission reduction jointly made by China and the U.S., China's carbon emission will reach a peak around 2030, accelerating the launching of domestic carbon emission market. The potential market will reach a scale of hundreds of millions yuan. Enterprises engaged in the fields of emission reduction technology, emission reduction equipment and carbon trade will embrace market opportunities. In terms of companies, Jiangsu Akcome Science and Technology Co., Ltd. (002610.SZ) has vigorously developed its business in carbon emission area. It has also marched into the carbon finance field by acquiring the equities of Beijing Design Carbon Co., Ltd. and cooperating with China Beijing Environment Exchange. Shanghai Zhixin Electric Co., Ltd. (600517.SH) has set up a subsidiary on carbon assets with a registered capital of 100 million yuan, which mainly focuses on the development of carbon assets and carbon trading services, aiming at becoming a leading carbon trading service provider in China.
○Alibaba promotes O2O business with Suning Commerce, offline resources see increasing value
------
Suning Commerce Group Co., Ltd. (002024.SZ) announces on Aug. 10 that it will raise 29.3 billion yuan from Taobao (China) Software Company Limited under Alibaba Group and the company's phase II staff shareholding plan by issuing shares at 15.23 yuan per share through private placement to invest in the building of logistics platform, the cloud store of Suning Ecommerce and the internet-based financial project, etc. Upon completion of the transaction, Alibaba will hold 19.99 percent equities of Suning Commerce and become its second largest shareholder. The price of shares bought by Alibaba is 10 percent higher than the company's stock price before trading suspension. In addition, Suning Commerce will invest 14 billion yuan in buying the shares of Alibaba.
Comment: Alibaba owns unparalleled online advantages. Its investment in Suning Commerce is based on the strong offline resources of the latter. Both parties are likely to complement each other's advantages and accelerate the O2O strategies of each other. Among listed companies, Yonghui Superstores Co., Ltd. (601933.SH) is principally engaged in the operation of fresh agricultural foods supermarkets. It also owns channel and offline stores resources. It announced equities cooperation with JD.com recently. Besides, the O2O strategy is based on strong storage and logistics. CMST Development Co., Ltd. (600787.SH) has the biggest storage and logistics network in China. Media reported that the chairman of the company and Jack Ma have conducted an informal meeting on logistics cooperation.
[Announcement Interpretation]
○Searainbow Holding to introduce employee shareholding plan
------
Searainbow Holding Corp. (000503.SZ) proposes to introduce an employee shareholding plan to about 1,000 members, including the directors, supervisors and senior management of the company and the employees of its subsidiaries, to raise a total of no less than 150 million yuan. The employee shareholding plan appoints an asset management plan in implementation. It will establish the preferred portion and the secondary portion with a proportion of no more than 1:1. The upper limit of the asset management plan will be no less than 300 million shares.
○Controlling shareholder of Woer Heat-Shrinkable Material to increase shareholding with large amount
------
Zhou Heping, the controlling shareholder of Shenzhen Woer Heat-Shrinkable Material Co., Ltd. (002130.SZ), intends to increase the shareholding in the company with no less than 250 million yuan. Shanghai Keter Polymer Co., Ltd., a subsidiary of the company, will invest 80 million yuan during trading suspension in the establishment of three production lines for heat power protection components. The company also announced the termination of assets acquisition at the same time.
○Invengo Information Technology and Vanward New Electric sign cooperation agreements
------
Invengo Information Technology Co., Ltd. (002161.SZ) signed a product supply agreement and confidentiality agreement with a Chinese joint venture of a multinational corporation. The company will provide some theme park with commemorative pass systems and services based on the Radio Frequency Identification (FRID) technology.
Guangdong Vanward New Electric Co., Ltd. (002543.SZ) signed a cooperation agreement with an internationally leading Italian enterprise engaged in kitchen appliances. They plan to carry out business cooperation currently and to establish a joint venture engaged in production and operation of kitchen ventilators and other kitchen appliances in the future.
○Zoomlion Heavy Industry Science and Technology bought by CSF
------
Zoomlion Heavy Industry Science and Technology Co., Ltd. (01157.HK; 000157.SZ) disclosed the register of shareholders as of July 31. China Securities Finance Co., Ltd. (CSF) directly holds 255 million shares of the company as its third largest shareholder. Another ten asset management plans in the name of the CSF totally hold 118 million shares in the company. The above 11 shareholders hold 373 million shares in total, accounting for 4.84 percent of the total share capital.
○Der International Home Furnishing to raise RMB2 bln through private placement for graphene ultra-lithium battery
------
Der International Home Furnishing Co., Ltd. (002631.SZ) intends to raise 2 billion yuan by issuing shares at no less than 21.81 yuan per share through private placement. The funds will be invested into a project containing graphene ultra-lithium battery and a project containing graphene ultra-lithium battery materials (such as negative electrode materials, ceramic diaphragm and flexible packaging materials). After reaching the designed capacity, these two projects are expected to see increases of 2.8 billion yuan and 450 million yuan in annual operating revenue and annual net profit, respectively. The company recorded a net profit of 130 million yuan in 2014. In addition, it plans to change its name into Der Future Science and Technology Holding Group Co., Ltd.
○Chengfei Integration Technology to jointly establish battery project with RMB10 bln
------
China Aviation Lithium Battery Co., Ltd., a subsidiary of Sichuan Chengfei Integration Technology Corp. Ltd. (002190.SZ), proposes to jointly invest and establish the 'China Aviation Lithium-ion Power Battery Project' with Jintan District government of Changzhou City, Jiangsu Province. The project is expected to have a total investment of 12.5 billion yuan with an annual lithium-ion battery production capacity of 12 billion watt-hours after the establishment. Meanwhile, Chengfei Integration Technology proposes a three-phase construction project in China Aviation Lithium Battery (Luoyang) Industrial Park with a total investment of 1.45 billion yuan. It is predicted to achieve a sales revenue of 2.4 billion yuan after reaching the designed production capacity.
○Tinci Materials Technology to incentive performance quadrupled in three years
------
Guangzhou Tinci Materials Technology Co., Ltd. (002709.SZ) proposes to grant 2.53 million shares of the company to 45 incentive targets at 18.21 yuan per share. The restricted stocks will be unlocked in three years. The condition on the performance requires a net profit growth of 40 percent, 124 percent and 236 percent from 2015 to 2017 based on the net profit in 2014. The net profit of the company was 61.53 million yuan in 2014.
[Financial Report Express]
○Yunnei Power expects growth in first three quarters
------
Kunming Yunnei Power Co., Ltd. (000903.SZ) predicts a year-on-year growth of 30 to 50 percent in its performance in the first three quarters mainly thanks to the implementation of the National IV emission standard on diesel engines for automobiles since this year, which strengthens the company's product profitability. The company also announced an employee shareholding plan at the same time.
>Price reform of PTD accelerated, three kinds of enterprises to benefit first
>Draft regulations on carbon emission trading to submitted for review, Alibaba promotes O2O business with Suning Commerce
>Searainbow Holding to introduce employee shareholding plan, controlling shareholder of Woer Heat-Shrinkable Material to increase shareholding with large amount
>Invengo Information Technology and Vanward New Electric sign cooperation agreements, Zoomlion Heavy Industry Science and Technology bought by CSF
[XFA Focus]
○Price reform of PTD accelerated, three kinds of enterprises to benefit first
------
The National Development and Reform Commission (NDRC) issues circular on Aug.10 claiming that the price reform will be pushed forward in depth and breadth:the power price reform will be further deepened; the piloting price reform of power transmission and distribution (PTD) will be further advanced and expanded; the management methods on the price of natural gas pipeline transportation and the supervision methods on pricing cost will be studied and formulated in the second half year. It is also learnt that the Power Law (revised version) and the Energy Law have been completed and submitted to the State Council for approval; State Power Investment Corporation (SPIC) recently established its first company selling power and other power generation groups are also actively making early-stage preparation for the establishment of power-selling companies.
Comment: Price reform of PTD is ranked as top priority in this round of power reform. The promotion of power reform might change the competition status and ways of pricing of the power industrial chain. With estimated power-selling market reaching trillions of yuan, those who obtain power-selling license first will gain first-mover advantage. Local listed companies engaged in distribution system include Yunnan Wenshan Electric Power Co., Ltd. (600995.SH) under China Southern Power Grid, Sichuan Xichang Electric Power Co., Ltd. (600505.SH) and Sichuan Mingxing Electric Power Co., Ltd. (600101.SH), etc. under State Grid Corporation of China. Local power generation companies, including Jilin Power Share Co., Ltd. (000875.SZ), Shanxi Zhangze Electric Power Co., Ltd. (000767.SZ), and etc. under SPIC which is a reform pioneer among five power generation groups, enjoy strong competitiveness in regional market. Hydropower has advantages in the cost of power generation and will seize bigger market share in power price competition in the future.
[XFA Selection]
○Experts on state-owned assets reform claim that a number of documents about state-owned enterprise reform have been passed on principle by the central authority, including the document about state-owned capital being invested in operational companies, etc., which is a plan initiated by the Ministry of Finance.
○In July, there are 4,933 licensed new-energy cars sold in Shanghai, setting a historical new high concerning the sales of licensed new-energy car.
○Egg price has risen by 14.8 percent accumulatively since July 13 in China. Festival factors may arouse a new round of egg price rise in Sept.
○The central bank will issue the fifth set of 100-yuan bank note in Nov., 2015 which features improved anti-forgery technology.
○The Pacific Securities Co., Ltd. (601099.SH) claims that due to recent changes in market, it will reduce the amount of fundraising through shares allotment from 12 billion yuan to 4.5 billion yuan.
[Industry Information]
○Draft regulations on carbon emission trading to submitted for review, energy-saving service industry to see market opportunity
------
The NDRC discloses on its website on Aug.10 that in order to accelerate the construction of China's carbon emission trading market, the draft regulations on the trading of carbon emission permit will soon be submitted to the State Council for review. The introduction of the regulations, with legal guarantee, will facilitate the implementation of the trading system concerning carbon emission permit and the allocation of carbon emission quota.
Comment: According to the statement on emission reduction jointly made by China and the U.S., China's carbon emission will reach a peak around 2030, accelerating the launching of domestic carbon emission market. The potential market will reach a scale of hundreds of millions yuan. Enterprises engaged in the fields of emission reduction technology, emission reduction equipment and carbon trade will embrace market opportunities. In terms of companies, Jiangsu Akcome Science and Technology Co., Ltd. (002610.SZ) has vigorously developed its business in carbon emission area. It has also marched into the carbon finance field by acquiring the equities of Beijing Design Carbon Co., Ltd. and cooperating with China Beijing Environment Exchange. Shanghai Zhixin Electric Co., Ltd. (600517.SH) has set up a subsidiary on carbon assets with a registered capital of 100 million yuan, which mainly focuses on the development of carbon assets and carbon trading services, aiming at becoming a leading carbon trading service provider in China.
○Alibaba promotes O2O business with Suning Commerce, offline resources see increasing value
------
Suning Commerce Group Co., Ltd. (002024.SZ) announces on Aug. 10 that it will raise 29.3 billion yuan from Taobao (China) Software Company Limited under Alibaba Group and the company's phase II staff shareholding plan by issuing shares at 15.23 yuan per share through private placement to invest in the building of logistics platform, the cloud store of Suning Ecommerce and the internet-based financial project, etc. Upon completion of the transaction, Alibaba will hold 19.99 percent equities of Suning Commerce and become its second largest shareholder. The price of shares bought by Alibaba is 10 percent higher than the company's stock price before trading suspension. In addition, Suning Commerce will invest 14 billion yuan in buying the shares of Alibaba.
Comment: Alibaba owns unparalleled online advantages. Its investment in Suning Commerce is based on the strong offline resources of the latter. Both parties are likely to complement each other's advantages and accelerate the O2O strategies of each other. Among listed companies, Yonghui Superstores Co., Ltd. (601933.SH) is principally engaged in the operation of fresh agricultural foods supermarkets. It also owns channel and offline stores resources. It announced equities cooperation with JD.com recently. Besides, the O2O strategy is based on strong storage and logistics. CMST Development Co., Ltd. (600787.SH) has the biggest storage and logistics network in China. Media reported that the chairman of the company and Jack Ma have conducted an informal meeting on logistics cooperation.
[Announcement Interpretation]
○Searainbow Holding to introduce employee shareholding plan
------
Searainbow Holding Corp. (000503.SZ) proposes to introduce an employee shareholding plan to about 1,000 members, including the directors, supervisors and senior management of the company and the employees of its subsidiaries, to raise a total of no less than 150 million yuan. The employee shareholding plan appoints an asset management plan in implementation. It will establish the preferred portion and the secondary portion with a proportion of no more than 1:1. The upper limit of the asset management plan will be no less than 300 million shares.
○Controlling shareholder of Woer Heat-Shrinkable Material to increase shareholding with large amount
------
Zhou Heping, the controlling shareholder of Shenzhen Woer Heat-Shrinkable Material Co., Ltd. (002130.SZ), intends to increase the shareholding in the company with no less than 250 million yuan. Shanghai Keter Polymer Co., Ltd., a subsidiary of the company, will invest 80 million yuan during trading suspension in the establishment of three production lines for heat power protection components. The company also announced the termination of assets acquisition at the same time.
○Invengo Information Technology and Vanward New Electric sign cooperation agreements
------
Invengo Information Technology Co., Ltd. (002161.SZ) signed a product supply agreement and confidentiality agreement with a Chinese joint venture of a multinational corporation. The company will provide some theme park with commemorative pass systems and services based on the Radio Frequency Identification (FRID) technology.
Guangdong Vanward New Electric Co., Ltd. (002543.SZ) signed a cooperation agreement with an internationally leading Italian enterprise engaged in kitchen appliances. They plan to carry out business cooperation currently and to establish a joint venture engaged in production and operation of kitchen ventilators and other kitchen appliances in the future.
○Zoomlion Heavy Industry Science and Technology bought by CSF
------
Zoomlion Heavy Industry Science and Technology Co., Ltd. (01157.HK; 000157.SZ) disclosed the register of shareholders as of July 31. China Securities Finance Co., Ltd. (CSF) directly holds 255 million shares of the company as its third largest shareholder. Another ten asset management plans in the name of the CSF totally hold 118 million shares in the company. The above 11 shareholders hold 373 million shares in total, accounting for 4.84 percent of the total share capital.
○Der International Home Furnishing to raise RMB2 bln through private placement for graphene ultra-lithium battery
------
Der International Home Furnishing Co., Ltd. (002631.SZ) intends to raise 2 billion yuan by issuing shares at no less than 21.81 yuan per share through private placement. The funds will be invested into a project containing graphene ultra-lithium battery and a project containing graphene ultra-lithium battery materials (such as negative electrode materials, ceramic diaphragm and flexible packaging materials). After reaching the designed capacity, these two projects are expected to see increases of 2.8 billion yuan and 450 million yuan in annual operating revenue and annual net profit, respectively. The company recorded a net profit of 130 million yuan in 2014. In addition, it plans to change its name into Der Future Science and Technology Holding Group Co., Ltd.
○Chengfei Integration Technology to jointly establish battery project with RMB10 bln
------
China Aviation Lithium Battery Co., Ltd., a subsidiary of Sichuan Chengfei Integration Technology Corp. Ltd. (002190.SZ), proposes to jointly invest and establish the 'China Aviation Lithium-ion Power Battery Project' with Jintan District government of Changzhou City, Jiangsu Province. The project is expected to have a total investment of 12.5 billion yuan with an annual lithium-ion battery production capacity of 12 billion watt-hours after the establishment. Meanwhile, Chengfei Integration Technology proposes a three-phase construction project in China Aviation Lithium Battery (Luoyang) Industrial Park with a total investment of 1.45 billion yuan. It is predicted to achieve a sales revenue of 2.4 billion yuan after reaching the designed production capacity.
○Tinci Materials Technology to incentive performance quadrupled in three years
------
Guangzhou Tinci Materials Technology Co., Ltd. (002709.SZ) proposes to grant 2.53 million shares of the company to 45 incentive targets at 18.21 yuan per share. The restricted stocks will be unlocked in three years. The condition on the performance requires a net profit growth of 40 percent, 124 percent and 236 percent from 2015 to 2017 based on the net profit in 2014. The net profit of the company was 61.53 million yuan in 2014.
[Financial Report Express]
○Yunnei Power expects growth in first three quarters
------
Kunming Yunnei Power Co., Ltd. (000903.SZ) predicts a year-on-year growth of 30 to 50 percent in its performance in the first three quarters mainly thanks to the implementation of the National IV emission standard on diesel engines for automobiles since this year, which strengthens the company's product profitability. The company also announced an employee shareholding plan at the same time.
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