[Today's Guide]
>Executive meeting of State Council supports financial leasing, industry expects promising development
>Guidelines on anti-monopoly in automobile maintenance to unveiled, automotive aftermarket sees huge potential
>New national standards for charging piles to launched, multiple companies involved in formulation
>SDL Technology sees shareholding increase, Welltech Automation and Shanghai Tianchen see continuous shareholding increases
[SSN Focus]
○Executive meeting of State Council supports financial leasing, industry expects promising development
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The executive meeting of the State Council, hosted by Chinese premier Li Keqiang on Aug. 26, determines measures on accelerating the development of financial leasing industry so as to better serve real economy, simplifies relevant procedures of equipment financial leasing including ships, agricultural machinery, medical machines, aircrafts and etc., encourages promoting "going out" of equipment through leasing, supports innovative business mode like "Internet plus" and encourages the launch of awards and risk compensation.
Comment: Financial leasing helps enterprises to save working capital and also shorten the time in obtaining equipment, thus production cost can be decreased largely. The market penetration rate of China's financial leasing now only holds line with that of Japan and Germany in early 1980s and the figure might be expanded to 3 to 4 times in the future. The increasing stable growth projects in the future might push forward the development of financial leasing industry. The cuts of interest rates and reserve requirement ratio (RRR) launched by the People's Bank of China will enable financial leasing companies to gain more capital. Bohai Leasing Co., Ltd. (000415.SZ) is a leading financial leasing company in China. Bode Energy Equipment Co., Ltd. (300023.SZ), Ningbo Sanxing Electric Co., Ltd. (601567.SH) and Zhongshan Broad-Ocean Motor Co., Ltd. (002249.SZ) are involved in the leasing business of oil drilling and exploration equipment, medical equipment and new energy vehicle charging equipment via their subsidiaries.
[SSN Selection]
○The Northbound Trading in Shanghai-Hong Kong Stock Connect sees a net inflow of 7.5 billion yuan on Aug. 26 and a total net inflow of nearly 24.0 billion yuan since this week.
○The People's Bank of China (PBOC), China's central bank, carries out short-term liquidity operation (SLO) of 140 billion yuan on Aug. 26. The move is another releasing of short-term liquidity following the 150 billion yuan reverse repo on Aug. 25.
○China Financial Futures Exchange (CFFEX) bans 164 investors from opening positions of stock index futures for one month to curb speculation and control risks.
○Last week the securities margin saw a small net inflow of 4.0 billion yuan, marking the end of a net outflow for four consecutive weeks.
○China Railway Construction Corporation Limited (01186.HK; 601186.SH) indicates that the inter-governmental framework agreement in railway cooperation between China and Thailand is expected to be signed in early September and a commencement ceremony will be held in end-October.
[Industry Information]
○Guidelines on anti-monopoly in automobile maintenance to unveiled, automotive aftermarket sees huge potential
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According to a report on www.eeo.com.cn, the Guidelines on Promoting the Upgrading of Automobile Maintenance Industry and Improving Service Quality will be issued in mid-September and take effect on January 1 of next year. As disclosed by officials from the Ministry of Transport, other policies concerning anti-monopoly in the automobile industry are also under preparation.
Comment: The release and implementation of the guidelines will help end the monopoly of 4S stories authorized by finished vehicle manufacturers in China's automobile maintenance industry, and improve the current situation dominated by enterprises with high maintenance changes. According to data from the National Bureau of Statistics (NBS) and China Automobile Dealers Association (CADA), it is estimated that the automotive aftermarket will maintain a rapid growth of 17 to 20 percent from 2015 to 2020 and come close to 5 trillion yuan in 2020. Listed companies, such as Guangdong Delian Group Co., Ltd. (002666.SZ) and Qingdao Doublestar Co., Ltd. (000599.SZ), have made plans on automotive aftermarket.
○New national standards for charging of electric vehicle to launched at year end at soonest, multiple companies involved in formulation
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Ni Feng, deputy general manager of a subsidiary under Nari Technology, discloses on the 7th China (Shanghai) Battery Technological Innovation Forum ＆ Summit Forum on Charging Technology that the new national standards for the charging of electric vehicle will be reviewed by the commission next month. According to the custom, it takes 3 months before the standard is released after submission and will be launched at year end at soonest.
Comment: Based on the old version of national standards, the new national standards on charging will make it more specific in safety, accuracy, completeness and compatibility, etc. It makes original relatively-vague definition more clear, improves the compatibility of vehicles and piles so as to avoid waste of resources. China Electricity Council takes the lead and enterprises including Nari Technology Co., Ltd. (600406.SH), Shenzhen Auto Electric Power Plant Co., Ltd. (002227.SZ) and BYD Company Limited (002594.SZ; 01211.HK) are all involved in the formulation and discussion of standards.
[Announcement Interpretation]
○ SDL Technology and Titanium Industry see shareholding increases
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As at the press time, over 60 companies on the Shanghai and Shenzhen bourses announced shareholding increases and some see significant increases. The substantial shareholders, directors, supervisors and senior management of Beijing SDL Technology Co., Ltd. (002658) increased the shareholding in the company with 4.93 million shares, accounting for 0.82 percent of the total share capital with an amount of 106 million yuan. Its plan on shareholding increase has been completed. The substantial shareholder of Baoji Titanium Industry Co., Ltd. (600456.SH) increased the shareholding in the company with 8.60 million shares by Aug. 25, accounting for 2 percent of the total share capital. Its plan on shareholding increase has been completed.
The substantial shareholder of Sinotrans Air Transportation Development Co., Ltd. (600270.SH) increased the shareholding with 6.09 million shares on Aug. 25, accounting for 0.67 percent of the total share capital. The substantial shareholder of Changchai Company, Limited (000570.SZ) increased the shareholding with 2.35 million shares from July 16 to Aug. 26. The actual controllers of Zhejiang Haers Vacuum Containers Co., Ltd. (002615.SZ) increased the shareholding with a total of 1.85 million shares on Aug. 24 and 26, accounting for 1.01 percent of the total share capital.
○ Welltech Automation and Shanghai Tianchen see continuous shareholding increases
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Shanghai Welltech Automation Co., Ltd. (002058.SZ) disclosed that Shengji Equities Investment Fund (Shanghai) Co., Ltd. increased the shareholding in the company with 7.17 million shares from Aug. 18 to 26, accounting for 4.98 percent of the total share capital. Shengji Equities holds 14.35 million shares of Welltech Automation after the shareholding increase with a shareholding proportion of over 10 percent. It reached the 5 percent limit again since July 15.
Shanghai Tianchen Co., Ltd. (600620.SH) announced that Guohua Life increased the shareholding in the company with 22.89 million shares from Aug. 19 to 26, accounting for 5 percent of the total share capital. Guohua Life holds 68.67 million shares of Shanghai Tianchen after the shareholding increase with a shareholding proportion of 15 percent. Guohua Life has bought its shares through secondary market acquisition to the 5 percent limit for three times since July 15.
○ Weifu High-Tech repurchases over 2 mln shares
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Weifu High-Technology Group Co., Ltd. (000581.SZ) conducted the first repurchase on Aug. 26 and bought back 2,171,800 shares, accounting for 0.21 percent of its total share capital. The highest buy price is 21.85 yuan and the lowest price is 20.42 yuan. It paid a total of 45.72 million yuan. Based on the repurchase proposal in July, the repurchase price would be no more than 25 yuan per share with a total repurchase amount of 200 to 250 million yuan. If it repurchases with the full amount, it is expected to buy back approximately 10 million shares.
○ Fuchunjiang Environmental Thermoelectric to purchase Qingyuan Ecological Thermoelectric with RMB240 mln
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Zhejiang Fuchunjiang Environmental Thermoelectric Co., Ltd. (002479.SZ) plans to purchase 60 percent equities of Zhejiang Qingyuan Ecological Thermoelectric Co., Ltd. with 240 million yuan. Qingyuan Ecological Thermoelectric is an environmental-friendly and technological enterprise engaged in disposing various sludge and harmless incineration of waste residue. After the acquisition, Fuchunjiang Environmental Thermoelectric is able to dispose up to 6,000 tons of sludge every day, becoming a leading enterprise in sludge incineration and disposal industry in China.
○ Robam Appliances to introduce shareholding plans for management and agents
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Hangzhou Robam Appliances Co., Ltd. (002508.SZ) intends to introduce the first phase of the shareholding plans for its core management team and agents, which involves a ceiling amount of 48 million yuan and 297 million yuan, respectively.
[Financial Reports Express]
○ Hytera Communications proposes high share conversion
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Hytera Communications Corporation Limited (002583.SZ) proposes a 12-for-10 conversion of capital surplus into shares according to its interim report.
[Trading Trends]
○ Three institutional seats buy Wondfo Biotech
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The trading volume ranking list on Aug. 26 shows that three institutional seats bought Guangzhou Wondfo Biotech Co., Ltd. (300482.SZ) with a total of 61.70 million yuan, accounting for 12.07 percent of its intraday turnover. No institutional seat sold it.
Comment: The company is specialized in the R＆D, production and sales of products related to rapid diagnosis. Its core products are tests on pregnancy, infectious disease and poisons, and its new growth point lies in chronic disease test. The compound growth rate of the company has reached 35.69 percent over the last three years. Analysts believe that as marketing channels are available, the products of the company will extend from rapid diagnosis product to downstream health management services so as to explore new room for development.
[Data Speaks]
○ Low-priced stocks with high share conversion and dividend see active trading
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Various low-priced stocks with high share conversion and dividend saw signs of active trading recently. The performance of Zhuzhou Kibing Group Co., Ltd. (601636.SH) and XCMG Construction Machinery Co., Ltd. (000425.SZ), which released plans on high share conversion and dividend on Aug. 24, was better than the market in stock prices and they even surged by the daily limit of 10 percent during the trading hours on Aug. 26. According to statistics by SSN, among nearly 90 companies which have proposed high share conversion and dividend but have not implemented ex-right in their 2015 interim reports, China Molybdenum Co., Ltd. (603993.SH; 03993.HK), Qitaihe Baotailong Coal ＆ Coal Chemicals Public Co., Ltd. (601011.SH) and Jiajia Food Group Co., Ltd. (002650.SZ) have launched a 15-for-10 or above conversion of capital surplus into shares and their ex-right stocks prices will be about 5 yuan per share.
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