[Today's Guide]
> MIIT to hold meeting for top three communications operators, expectations for merge to rise again
> Intelligentization of coal machinery speeds up, maritime engineering equipment to see more supportive policies
> CSF and Central Huijin Investment hold shares of phar. companies, Oriental Nations Corporation to develop big data
> Liu Yiqian buys shares of New World, Jincheng Phar. proposes high share conversion and dividend
[SSN Focus]
○MIIT to hold meeting for top three communications operators, expectations for merge to rise again
------
According to the report on www.yicai.com, the Ministry of Industry and Information Technology (MIIT) will hold a national teleconference for China's three largest communications operators in the morning of Aug. 21. Major management at the headquarters and provincial level of the three operators will attend the conference which may deliberate on changes in their leadership. Shanghai Securities News (SSN) also learns that the top management at China United Network Communications Limited (China Unicom) (600050.SH; 00762.HK; NYSE:CHU) and China Telecom Corporation Ltd. (00728.HK) will change at the same time. China Mobile Ltd. (00941.HK; NYSE:CHL) is also likely to change its leadership.
Comment: Previously, the former CSR Corporation Limited and China CNR Corporation Limited, COSCO Shipping Co., Ltd. (600428.SH) and China Shipping Container Lines Company Limited (601866.SH) all changed their senior management before suspending trading. Wang Xiaochu, Chairman of China Telecom, declared on the afternoon of Aug. 19 that "the company was not required to merge with China Unicom." His declaration is no different from CSR and CNR's response to the rumor of their reorganization, fanning the market expectations for the merger of China Unicom and China Telecom. In the 4G era, both China Unicom and China Telecom have obtained licenses on LTE FDD. Even if the two are merged, there will be no repeated construction. Researches from many securities companies point out that the merger between China Unicom and China Telecom, and that between China Mobile and Shaanxi Broadcast ＆ TV Network Intermediary (Group) Co., Ltd. (600831.SH) may not be merely a groundless rumor.
[SSN Selection]
○The executive meeting of the State Council hosted by Chinese Premier Li Keqiang arranges rescuing disposal for the blast in Tianjin Port and requires developing safety production check by various places and departments.
○The People's Bank of China, the central bank, carries out a reverse repo of 120 billion yuan on Aug. 20. The large net input of capital this week is rarely seen since the second half of this year.
○The State Council Information Office is going to hold a press conference at 3:00pmon Aug. 21 on the introduction to the preparation work of military parade.
○The price of epoxy propane rises about 10 percent in recent week. The memorial day of Anti-Japanese War in Sept. may give rise to continuous rise in price due to power supply ration.
○The Social Sciences Weekly published on Aug. 20 shows an article written by a research group of Chinese Academy of Governance which proposes Shenzhen, Qingdao and Dalian to be municipalities directly under the central government and proposes to expand their administrative region.
[Industry Information]
○State Administration of Work Safety starts to pilot using of robots in work, intelligentization of coal machinery speeds up
------
The State Administration of Work Safety announces on Aug. 20 that to further advance "mechanization to replace human labor, robotic work and automation for reducing human labor", it's decided that 10 demonstration enterprises including Shaanxi Coal and Chemical Industry Group will conduct the pilot work. The requirement is that pilot enterprises should actively adopt the applicable advanced mechanized and automatic technical equipment of China or overseas and that in the jobs that have high safety risk and potential of occupational disease, robots should be "particularly used" to replace human labor.
Comment: Along with the increasing attentions paid to safety production and the growing cost of human labor, enterprises are more willing than ever to replace human labor with machines and this might become a trend. Coal equipment enterprises first to transform towards intelligent machines will enjoy first-mover advantages. As to listed companies, Linzhou Heavy Machinery Group Co., Ltd. (002535.SZ), principally engaged in coal mine machinery and mine construction services, is now planning to transform towards the development of robots and oilfield service business; Zhengzhou Coal Mining Machinery Group Co., Ltd. (601717.SH;00564.HK) is now quickening its transformation towards high-end equipment.
○Plan on national main ocean functional areas issued, maritime engineering equipment to see more supportive policies
------
The State Council issues the plan on the national main ocean functional areas on Aug. 20, requiring improving the maritime resources development ability and implementing the maritime power strategy. The plan proposes to establish a clear and reasonable pattern in the unitization of maritime space and develop a pattern for maritime oil and gas resources with storage in short term for future use so as to greatly improve the utilization efficiency in maritime spaces and the sustainable development ability by 2020. As an integral part of the maritime economy, maritime oil and gas resources will see more policy support. The plan also requires supporting the exploration of oil and gas resources in deep and far seas, the development of the maritime engineering equipment manufacturing and other industries, and providing policy guarantees.
Comment: The total output value of China's maritime economy recorded nearly 6 trillion yuan in 2014, indicating a year-on-year growth of 7.7 percent. Segment areas including maritime engineering equipment see rapid growth. The State's great efforts in supporting maritime economic development bring market expansion opportunities to the construction of maritime engineering equipment. As for listed companies, Offshore Oil Engineering Co., Ltd. (600583.SH) is principally engaged in the general contracting business of maritime engineering; China Oilfield Services Limited (601808.SH) takes relatively large market share in maritime oilfield drilling service and technical equipment areas.
[Companies Hotspot]
○ Central Huijin Investment holds shares of Zhongli Science and Technology with current price below issue price
------
Zhongli Science and Technology Group Co., Ltd. (002309.SZ) indicated at the interactive platform on Aug. 20 that Central Huijin Investment Ltd. and the China Securities Finance Co., Ltd. (CSF) totally hold 18.80 shares of the company through assets management plans, accounting for 3.31 percent of its total share capital. Its firstly quarterly report shows that Changshu Zhongju Investment Management Co., Ltd., the second biggest shareholder of the company, holds 16.19 million shares. In addition, the private placement for constructing a photovoltaic power station project was approved by the general meeting of shareholders. The issue price is set at 22.48 yuan while the latest stock price is 21.84 yuan.
[Announcement Interpretation]
○ CSF and Central Huijin Investment hold shares of phar. companies
------
During and after the trading hours on Aug. 20 and as at press time, another 12 listed companies released the shareholding by the China Securities Finance Co., Ltd. (CSF) and Central Huijin Investment Ltd. Most of the companies are in Shanghai and the pharmaceutical industry accounts for a higher proportion.
The CSF and Central Huijin Investment hold 8.85 percent, 9.29 percent, 6.5 percent and 6.01 percent shares of Kangmei Pharmaceutical Co., Ltd. (600518.SH), Zhejiang Medicine Co., Ltd. (600216.SH), Jangho Group Co., Ltd. (601886.SH) and Guanghui Energy Co., Ltd. (600256.SH) though various accounts as at Aug. 14. In addition, Shuangliang Eco-energy Systems Co., Ltd. (600481.SH), Sichuan Minjiang Hydropower Co., Ltd. (600131.SH), Shanghai Dingli Technology Development (Group) Co., Ltd. (600614.SH), Guangxi Guiguan Electric Power Co., Ltd. (600236.SH), Jointown Pharmaceutical Group Co., Ltd. (600998.SH), Guangdong HEC Technology Holding Co., Ltd. (600673.SH) and Zhejiang Conba Pharmaceutical Co., Ltd. (600572.SH) were also bought by the CSF and Central Huijin Investment. Besides, Zhejiang Huahai Pharmaceutical Co., Ltd. (600521.SH) disclosed 5.21 percent of its equities were held by the two companies as at end-July.
In addition, according to the statistics of the SSN, more than 20 listed companies announced shareholding by the CSF are engaged in pharmaceutical or medical care informationization. Based on the closing price on Aug. 20, the CSF holds nearly 20 billion yuan of big pharmaceutical stocks. In terms of the shareholding proportion in listed companies, the CSF holds 18.42 percent equities of Shanghai Kingstar Winning Software Co., Ltd. (300253.SZ), 11.79 percent equities of Jiangsu Kanion Pharmaceutical Co., Ltd. (600557.SH) and 11.42 percent equities of Shanghai Kaibao Pharmaceutical Co., Ltd. (300039.SZ).
○ Oriental Nations Corporation acquires Sinovatech with RMB0.3 bln to develop big data
------
Business-intelligence of Oriental Nations Corporation Ltd. (300166.SZ) acquired the 100 percent equities of Beijing Sinovatech Co., Ltd. with a total of 312 million yuan. Sinovatech is an Internet-based technology company, providing the establishment, operation and innovation for the new media marketing channel through the precise internet, based on the technologies of the mobile internet and big data. Based on the performance commitment, Sinovatech expects the net profit after extra-ordinary items to be no less than 21 million yuan, 26 million yuan and 32 million yuan from 2015 to 2017. The acquisition P/E is 15 times.
Comment: After accessing to bank clients, the company intends to expand the client contact in the telecom industry, strive for the mobile Internet user access and release the value of the big data capacity through this acquisition.
○ Liu Yiqian buys shares of New World through secondary market acquisition to 5 pct limit again
------
Shanghai New World Co., Ltd. (600628.SH) announced that Guohua Life Insurance Co., Ltd. under Liu Yiqian bought 26.59 million shares of the company at an average of 21.37 yuan per share on Aug. 19 and 20 through secondary market acquisition. It totally holds 10 percent of the total share capital of the company and exceeds the 5 percent limit once again. Previously, Guohua Life Insurance had bought the share of Tianjin Marine Shipping Co., Ltd. (600751.SH), Grinm Advanced Materials Co., Ltd. (600206.SH), Shenzhen Cau Technology Co., Ltd. (000004.SZ), Hongda Xingye Co., Ltd. (002002.SZ), Shanghai Tianchen Co., Ltd. (600620.SH), Shanghai Chinafortune Co., Ltd. (600621.SH) and Wuhan East Lake High Technology Group Co., Ltd. (600133.SH) through secondary market acquisition to the 5 percent limit.
○ CSC Huitong becomes largest shareholder of Communications Planning and Design Institute
------
Jiangsu Province Communications Planning and Design Institute Limited Company (603018.SH) announced that CSC Huitong (Shenzhen) Equities Investment Fund Co., Ltd. held 5.63 million shares of the company up to Aug. 14, accounting for 5.4 percent of the total share capital as the biggest shareholder of the company. Previously, CSC Huitong bought the share of the company through secondary market acquisition to the 5 percent limit. The equity structure of the company is diversified without controlling shareholders or actual controllers.
○ Jetsen Technology to buy equity of Xingjiyuan at RMB325 mln
------
Beijing Jetsen Technology Co., Ltd. (300182.SZ) plans to purchase 25 percent equities of Xingjiyuan Video Cultural and Media Co., Ltd with 325 million yuan from its own capital. After the transaction, it totally holds 30 percent equities in Xingjiyuan. Xingjiyuan once made some classic TV series such as I Am a Special Forces of Fire Phoenix and Special Police Forces. The movie Wolf Warriors recorded a box office of nearly 600 million. The net profit after extra-ordinary items of Xingjiyuan will be no less than 100 million yuan, 130 million yuan and 169 million yuan from 2015 to 2017 with an acquisition P/E ratio of 13 times.
[Financial Reports Express]
○ Jincheng Phar. proposes high share conversion and dividend
------
Shandong Jincheng Pharmaceutical and Chemical Co., Ltd. (300233.SZ) sees a growth of 62 percent in net profit and proposes a 10-for-10 conversion of capital surplus into shares according to its interim report. Yifeng Pharmacy Chain Co., Ltd. (603939.SH) shows an increase of 30 percent in net profit and proposes a 10-for-10 conversion of capital surplus into shares combined with 5 yuan dividend for every 10 shares according to its interim report. Ningbo Medicalsystem Biotechnology Co., Ltd. (300439.SZ) witnesses a growth of 20 percent in net profit and proposes a 20-for-10 conversion of capital surplus into shares according to its interim report.
[Trading Trends]
○ Three institutes buy Lvxin Packing Materials Science Technology
------
The trading volume ranking list on Aug. 20 shows that three institutional seats bought Shanghai Lvxin Packing Materials Science Technology Co., Ltd. (002565.SH) with a total of 190 million yuan, accounting for 30.1 percent of its intraday turnover. At the same time, one institutional seat sold it with 28.16 million yuan.
Comment: The company indicates in answering questions from investors at an interactive platform on Aug. 20 that Central Huijin Investment Ltd. holds 6,995,000 shares in the company, accounting for 1 percent of the total capital share. Ten funds hold 20,874,000 shares through the assets management plan of China Securities Finance Co., Ltd, accounting for 3 percent of the total capital share.
> MIIT to hold meeting for top three communications operators, expectations for merge to rise again
> Intelligentization of coal machinery speeds up, maritime engineering equipment to see more supportive policies
> CSF and Central Huijin Investment hold shares of phar. companies, Oriental Nations Corporation to develop big data
> Liu Yiqian buys shares of New World, Jincheng Phar. proposes high share conversion and dividend
[SSN Focus]
○MIIT to hold meeting for top three communications operators, expectations for merge to rise again
------
According to the report on www.yicai.com, the Ministry of Industry and Information Technology (MIIT) will hold a national teleconference for China's three largest communications operators in the morning of Aug. 21. Major management at the headquarters and provincial level of the three operators will attend the conference which may deliberate on changes in their leadership. Shanghai Securities News (SSN) also learns that the top management at China United Network Communications Limited (China Unicom) (600050.SH; 00762.HK; NYSE:CHU) and China Telecom Corporation Ltd. (00728.HK) will change at the same time. China Mobile Ltd. (00941.HK; NYSE:CHL) is also likely to change its leadership.
Comment: Previously, the former CSR Corporation Limited and China CNR Corporation Limited, COSCO Shipping Co., Ltd. (600428.SH) and China Shipping Container Lines Company Limited (601866.SH) all changed their senior management before suspending trading. Wang Xiaochu, Chairman of China Telecom, declared on the afternoon of Aug. 19 that "the company was not required to merge with China Unicom." His declaration is no different from CSR and CNR's response to the rumor of their reorganization, fanning the market expectations for the merger of China Unicom and China Telecom. In the 4G era, both China Unicom and China Telecom have obtained licenses on LTE FDD. Even if the two are merged, there will be no repeated construction. Researches from many securities companies point out that the merger between China Unicom and China Telecom, and that between China Mobile and Shaanxi Broadcast ＆ TV Network Intermediary (Group) Co., Ltd. (600831.SH) may not be merely a groundless rumor.
[SSN Selection]
○The executive meeting of the State Council hosted by Chinese Premier Li Keqiang arranges rescuing disposal for the blast in Tianjin Port and requires developing safety production check by various places and departments.
○The People's Bank of China, the central bank, carries out a reverse repo of 120 billion yuan on Aug. 20. The large net input of capital this week is rarely seen since the second half of this year.
○The State Council Information Office is going to hold a press conference at 3:00pmon Aug. 21 on the introduction to the preparation work of military parade.
○The price of epoxy propane rises about 10 percent in recent week. The memorial day of Anti-Japanese War in Sept. may give rise to continuous rise in price due to power supply ration.
○The Social Sciences Weekly published on Aug. 20 shows an article written by a research group of Chinese Academy of Governance which proposes Shenzhen, Qingdao and Dalian to be municipalities directly under the central government and proposes to expand their administrative region.
[Industry Information]
○State Administration of Work Safety starts to pilot using of robots in work, intelligentization of coal machinery speeds up
------
The State Administration of Work Safety announces on Aug. 20 that to further advance "mechanization to replace human labor, robotic work and automation for reducing human labor", it's decided that 10 demonstration enterprises including Shaanxi Coal and Chemical Industry Group will conduct the pilot work. The requirement is that pilot enterprises should actively adopt the applicable advanced mechanized and automatic technical equipment of China or overseas and that in the jobs that have high safety risk and potential of occupational disease, robots should be "particularly used" to replace human labor.
Comment: Along with the increasing attentions paid to safety production and the growing cost of human labor, enterprises are more willing than ever to replace human labor with machines and this might become a trend. Coal equipment enterprises first to transform towards intelligent machines will enjoy first-mover advantages. As to listed companies, Linzhou Heavy Machinery Group Co., Ltd. (002535.SZ), principally engaged in coal mine machinery and mine construction services, is now planning to transform towards the development of robots and oilfield service business; Zhengzhou Coal Mining Machinery Group Co., Ltd. (601717.SH;00564.HK) is now quickening its transformation towards high-end equipment.
○Plan on national main ocean functional areas issued, maritime engineering equipment to see more supportive policies
------
The State Council issues the plan on the national main ocean functional areas on Aug. 20, requiring improving the maritime resources development ability and implementing the maritime power strategy. The plan proposes to establish a clear and reasonable pattern in the unitization of maritime space and develop a pattern for maritime oil and gas resources with storage in short term for future use so as to greatly improve the utilization efficiency in maritime spaces and the sustainable development ability by 2020. As an integral part of the maritime economy, maritime oil and gas resources will see more policy support. The plan also requires supporting the exploration of oil and gas resources in deep and far seas, the development of the maritime engineering equipment manufacturing and other industries, and providing policy guarantees.
Comment: The total output value of China's maritime economy recorded nearly 6 trillion yuan in 2014, indicating a year-on-year growth of 7.7 percent. Segment areas including maritime engineering equipment see rapid growth. The State's great efforts in supporting maritime economic development bring market expansion opportunities to the construction of maritime engineering equipment. As for listed companies, Offshore Oil Engineering Co., Ltd. (600583.SH) is principally engaged in the general contracting business of maritime engineering; China Oilfield Services Limited (601808.SH) takes relatively large market share in maritime oilfield drilling service and technical equipment areas.
[Companies Hotspot]
○ Central Huijin Investment holds shares of Zhongli Science and Technology with current price below issue price
------
Zhongli Science and Technology Group Co., Ltd. (002309.SZ) indicated at the interactive platform on Aug. 20 that Central Huijin Investment Ltd. and the China Securities Finance Co., Ltd. (CSF) totally hold 18.80 shares of the company through assets management plans, accounting for 3.31 percent of its total share capital. Its firstly quarterly report shows that Changshu Zhongju Investment Management Co., Ltd., the second biggest shareholder of the company, holds 16.19 million shares. In addition, the private placement for constructing a photovoltaic power station project was approved by the general meeting of shareholders. The issue price is set at 22.48 yuan while the latest stock price is 21.84 yuan.
[Announcement Interpretation]
○ CSF and Central Huijin Investment hold shares of phar. companies
------
During and after the trading hours on Aug. 20 and as at press time, another 12 listed companies released the shareholding by the China Securities Finance Co., Ltd. (CSF) and Central Huijin Investment Ltd. Most of the companies are in Shanghai and the pharmaceutical industry accounts for a higher proportion.
The CSF and Central Huijin Investment hold 8.85 percent, 9.29 percent, 6.5 percent and 6.01 percent shares of Kangmei Pharmaceutical Co., Ltd. (600518.SH), Zhejiang Medicine Co., Ltd. (600216.SH), Jangho Group Co., Ltd. (601886.SH) and Guanghui Energy Co., Ltd. (600256.SH) though various accounts as at Aug. 14. In addition, Shuangliang Eco-energy Systems Co., Ltd. (600481.SH), Sichuan Minjiang Hydropower Co., Ltd. (600131.SH), Shanghai Dingli Technology Development (Group) Co., Ltd. (600614.SH), Guangxi Guiguan Electric Power Co., Ltd. (600236.SH), Jointown Pharmaceutical Group Co., Ltd. (600998.SH), Guangdong HEC Technology Holding Co., Ltd. (600673.SH) and Zhejiang Conba Pharmaceutical Co., Ltd. (600572.SH) were also bought by the CSF and Central Huijin Investment. Besides, Zhejiang Huahai Pharmaceutical Co., Ltd. (600521.SH) disclosed 5.21 percent of its equities were held by the two companies as at end-July.
In addition, according to the statistics of the SSN, more than 20 listed companies announced shareholding by the CSF are engaged in pharmaceutical or medical care informationization. Based on the closing price on Aug. 20, the CSF holds nearly 20 billion yuan of big pharmaceutical stocks. In terms of the shareholding proportion in listed companies, the CSF holds 18.42 percent equities of Shanghai Kingstar Winning Software Co., Ltd. (300253.SZ), 11.79 percent equities of Jiangsu Kanion Pharmaceutical Co., Ltd. (600557.SH) and 11.42 percent equities of Shanghai Kaibao Pharmaceutical Co., Ltd. (300039.SZ).
○ Oriental Nations Corporation acquires Sinovatech with RMB0.3 bln to develop big data
------
Business-intelligence of Oriental Nations Corporation Ltd. (300166.SZ) acquired the 100 percent equities of Beijing Sinovatech Co., Ltd. with a total of 312 million yuan. Sinovatech is an Internet-based technology company, providing the establishment, operation and innovation for the new media marketing channel through the precise internet, based on the technologies of the mobile internet and big data. Based on the performance commitment, Sinovatech expects the net profit after extra-ordinary items to be no less than 21 million yuan, 26 million yuan and 32 million yuan from 2015 to 2017. The acquisition P/E is 15 times.
Comment: After accessing to bank clients, the company intends to expand the client contact in the telecom industry, strive for the mobile Internet user access and release the value of the big data capacity through this acquisition.
○ Liu Yiqian buys shares of New World through secondary market acquisition to 5 pct limit again
------
Shanghai New World Co., Ltd. (600628.SH) announced that Guohua Life Insurance Co., Ltd. under Liu Yiqian bought 26.59 million shares of the company at an average of 21.37 yuan per share on Aug. 19 and 20 through secondary market acquisition. It totally holds 10 percent of the total share capital of the company and exceeds the 5 percent limit once again. Previously, Guohua Life Insurance had bought the share of Tianjin Marine Shipping Co., Ltd. (600751.SH), Grinm Advanced Materials Co., Ltd. (600206.SH), Shenzhen Cau Technology Co., Ltd. (000004.SZ), Hongda Xingye Co., Ltd. (002002.SZ), Shanghai Tianchen Co., Ltd. (600620.SH), Shanghai Chinafortune Co., Ltd. (600621.SH) and Wuhan East Lake High Technology Group Co., Ltd. (600133.SH) through secondary market acquisition to the 5 percent limit.
○ CSC Huitong becomes largest shareholder of Communications Planning and Design Institute
------
Jiangsu Province Communications Planning and Design Institute Limited Company (603018.SH) announced that CSC Huitong (Shenzhen) Equities Investment Fund Co., Ltd. held 5.63 million shares of the company up to Aug. 14, accounting for 5.4 percent of the total share capital as the biggest shareholder of the company. Previously, CSC Huitong bought the share of the company through secondary market acquisition to the 5 percent limit. The equity structure of the company is diversified without controlling shareholders or actual controllers.
○ Jetsen Technology to buy equity of Xingjiyuan at RMB325 mln
------
Beijing Jetsen Technology Co., Ltd. (300182.SZ) plans to purchase 25 percent equities of Xingjiyuan Video Cultural and Media Co., Ltd with 325 million yuan from its own capital. After the transaction, it totally holds 30 percent equities in Xingjiyuan. Xingjiyuan once made some classic TV series such as I Am a Special Forces of Fire Phoenix and Special Police Forces. The movie Wolf Warriors recorded a box office of nearly 600 million. The net profit after extra-ordinary items of Xingjiyuan will be no less than 100 million yuan, 130 million yuan and 169 million yuan from 2015 to 2017 with an acquisition P/E ratio of 13 times.
[Financial Reports Express]
○ Jincheng Phar. proposes high share conversion and dividend
------
Shandong Jincheng Pharmaceutical and Chemical Co., Ltd. (300233.SZ) sees a growth of 62 percent in net profit and proposes a 10-for-10 conversion of capital surplus into shares according to its interim report. Yifeng Pharmacy Chain Co., Ltd. (603939.SH) shows an increase of 30 percent in net profit and proposes a 10-for-10 conversion of capital surplus into shares combined with 5 yuan dividend for every 10 shares according to its interim report. Ningbo Medicalsystem Biotechnology Co., Ltd. (300439.SZ) witnesses a growth of 20 percent in net profit and proposes a 20-for-10 conversion of capital surplus into shares according to its interim report.
[Trading Trends]
○ Three institutes buy Lvxin Packing Materials Science Technology
------
The trading volume ranking list on Aug. 20 shows that three institutional seats bought Shanghai Lvxin Packing Materials Science Technology Co., Ltd. (002565.SH) with a total of 190 million yuan, accounting for 30.1 percent of its intraday turnover. At the same time, one institutional seat sold it with 28.16 million yuan.
Comment: The company indicates in answering questions from investors at an interactive platform on Aug. 20 that Central Huijin Investment Ltd. holds 6,995,000 shares in the company, accounting for 1 percent of the total capital share. Ten funds hold 20,874,000 shares through the assets management plan of China Securities Finance Co., Ltd, accounting for 3 percent of the total capital share.
Latest comments