[Today's Guide]
> Down payment of second house deals through public housing fund decreased to 20 pct, real estate policies keep loosening
> Farming industry to see policy benefits, shale gas exploration sees breakthroughs
> Various companies listed on Main Board see shareholding increases, Jinfu New Material resumes trading, actual controllers to increase shareholdings
> Insight Investment and Hengshun Zhongsheng see shareholding increases, Five institutional seats buy shares of Wuyang Technology
[SSN Focus]
○ Down payment of second house deals through public housing fund decreased to 20 pct, real estate policies keep loosening
------
The Ministry of Housing and Urban-Rural Development, the Ministry of Finance and the People's Bank of China (PBOC) jointly release notice that for households holding only 1 house and having paid off the loans for purchasing house, the minimum ratio of down payment will be decreased from 30 percent to 20 percent if they apply for public housing fund loans for purchasing house to improve housing conditions. Beijing, Shanghai, Guangzhou and Shenzhen can determine the minimum ratio of down payment by themselves according to local situations.
Comment: The investment in real estate contributes a lot to the investment in fixed asset and might play a greater role under the context of achieving stable growth. Loose policies for real estate industry, such as the new policy released on March 30 which largely decreases the ratio of down payment of the second house with commercial loans, the increase of loan limit through public housing fund, the relaxation on restricting foreign capital in purchasing real estate, are launched intensively this year. The interest rate and reserve requirement ratio (RRR) cuts launched this year by PBOC also bring continuous improvement of financial environment to the real estate industry. The trading has obviously picked up in first-tier cities' real estate market in recent months. Upstream and downstream industries of the real estate industry, including construction ＆ construction materials, decoration, household appliances, etc., will all benefit from it.
[SSN Selection]
○ Chinese President Xi Jinping held talks with Kazakhstan President on promoting the integration of the Silk Road Economic Belt construction and Kazakhstan's "Path of Light" economic strategy.
○ Ten ministries, including the Ministry of Commerce, jointly issued the development plan for the national agricultural products market, proposing to promote the informatization of agricultural product circulation.
○ The National Energy Administration (NEA) issued the action plan on the renovation of power distribution grid, requiring that at least 2 trillion yuan should be invested in the renovation from 2015 to 2020.
○ The draft of the thirteenth five-year plan for the plastics processing industry has been completed. 3D printing plastic materials are defined as prioritized products.
○ China Construction Bank Corporation (601939.SH;00939.HK) indicates it will issue preferred stocks within China next year and has loaned 148.0 billion yuan to China Securities Finance Corporation Limited (CSF).
[Industry Information]
○ Agricultural reform to speed up, farming industry to see policy benefits
------
According to the information sorted out by SSN, various policies supporting agricultural development have been introduced since Aug. The State Council initiated the pilot mortgage loan with the operation right on contracted land in rural areas and the residence property right of farmers recently. The Ministry of Agriculture issued opinions on deepening reform in technology system. The No. 1 Central Document of this year mentioned agricultural reclamation for the first time, requiring accelerating the introduction of policy measures on advancing agricultural reclamation development and deepening the reform of agricultural farms, group of reclamation area and diversified equities. With the approaching of the fourth quarter, the market has a high expectation on the agricultural reclamation reform.
Comment: Currently, despite rich land resource, the agricultural reclamation system has a low efficiency and sets no classifications for social enterprises in reclamation areas. Therefore, to lessen the social burden in the agricultural reclamation system, vitalize asset inventories and accelerate land circulation will become a key focus of the future reform. With remarkable policy support, the agricultural reclamation industry sees opportunities of rapid growth. Listed companies engaged in the agricultural reclamation system, such as Gansu Yasheng Industrial (Group) Co., Ltd. (600108.SH), China Hainan Rubber Industry Group Co., Ltd. (601118.SH) and Heilongjiang Agriculture Company Limited (600598.SH), will see more policy benefits.
○ Shale gas exploration sees breakthroughs, industry to witness rapid development
------
As disclosed at the website of the China National Petroleum Corporation (CNPC) on Aug. 31, it has explored shale gas reserve in three areas in Sichuan Basin recently with a geological reserve of 163,531 million cubic meters. This is the first time that the CNPC has released the explored geological reserve, which is significance in promoting the rapid development of the natural gas industry in China and guaranteeing the national energy safety.
Comment: The chairman of China Petroleum ＆ Chemical Corporation (Sinopec, SNP.NYSE; SNP.LSE; 00386.HK; 600028.SH) indicated that the shale gas will bring new profits to the company in the following years. Institute estimate that the acceleration in the development of the shale gas will bring a market with 100 billion yuan to oil services equipment enterprises. In terms of listed companies, Sinopec Oilfield Equipment Corporation (000852.SZ) is principally engaged in petroleum drill heads. It has completed the acquisition of SJ Petroleum Machinery Co., Sinopec and other quality assets and enjoys a leading position in the domestic shale gas equipment market. Shandong Molong Petroleum Machinery Co., Ltd. (00568.HK; 002490.SZ) manufactures products covering set machinery equipment covering oil drilling and exploitation and key components. Certain of its products are used in the exploitation of shale gas.
[Announcement Interpretation]
○ Various companies listed on Main Board see shareholding increases
------
China Iron ＆ Steel Research Institute Group, the actual controller of Beijing AriTime Intelligent Control Co., Ltd. (600560.SH), increased the shareholding in the company with over 2.25 million shares on Aug. 31, accounting for 1.01 percent of its total share capital. The Automation Research and Design Institute of Metallurgical Industry increased the shareholding in the company with 1.08 million shares on the same day, accounting for 0.48 percent of its total share capital. The directors, supervisors and senior management of Fujian Newland Computer Co., Ltd. (000997.SZ) increased the shareholding in the company with 5.15 million shares from Aug. 25 to 28, accounting for 0.55 percent of its total share capital. It increased the shareholding at a cost of 19.36 yuan per share with a total amount of 99,766,000 yuan.
Beijing Hongtu Changli Invetsment Fund Management Center (Limited Partnership), a company under China National Chemical Corporation, the actual controller of Heilongjiang Heihua Co., Ltd. (600179.SH), increased the shareholding in the company with 4.90 million shares from Aug. 28 to 31, accounting for 1.26 percent of its total share capital. BAIC Group, the controlling shareholder of Beiqi Foton Motor Co., Ltd. (600166.SH), increased the shareholding in the company with 10 million shares on Aug. 27. Leng Tianhui, the actual controller of Sichuan Hejia Co., Ltd. (600093.SH) increased the shareholding in the company with 2 million shares on Aug. 31.
○ Jinfu New Material resumes trading, actual controllers to increase shareholdings
------
Fu Guoping and Yang Xiaowei, actual controllers of Suzhou Jinfu New Material Co., Ltd. (300128.SZ), propose to increase the shareholding in the company with no less than 25,295,500 yuan in the next six months. Meanwhile, the company announced the termination of major assets restructuring.
○ Tsinghua Unigroup bought shares of Insight Investment to 5 pct limit
------
Xiamen Insight Investment Co., Ltd. (000526.SZ) announced that Tsinghua Unisplendour Group under Tsinghua Holdings Co., Ltd. and its subsidiaries bought 5.75 million shares of the company with 208 million yuan, accounting for 5.98 percent of its total share capital, reaching the 5 percent limit in secondary market acquisition for the first time.
Comment: The company announced on Aug. 10 that it proposed to raise 5.5 billion by issuing shares to Tibet Unisplendour Talents Education Investment Co., Ltd. through private placement for the acquisition of 100 equities of Xueda Education Group (XUE.NYSE), the establishment of an international education school investment company and the establishment an online education platform. Tsinghua Holdings will be the new actual controller of the company.
○ City Construction Investment Finance Holdings bought share of Hengshun Zhongsheng to 5 pct limit
------
Qingdao City Construction Investment Finance Holdings Co., Ltd., the shareholder of Qingdao Hengshun Zhongsheng Group Co., Ltd. (300208.SZ), increased the shareholding in the company with 575,000 shares at an average price of 45.17 yuan on Aug. 31. After that, City Construction Investment Finance Holdings totally holds 5 percent equities of the company as its the fourth largest shareholder.
○ O-film Tech to launch phase-IV employee shareholding plan
------
Shenzhen O-film Tech Co., Ltd. (002456.SZ) released the Phase-IV employee shareholding plan with an upper ceiling of 100 million yuan. It plans to raise funds in a proportion of 1:1.5 to make an asset management plan with no more than 250 million yuan for buying the company's stocks. The duration of plan is 18 months and the lock-up period for the stock is 12 months.
Comment: The company recently has implemented a series of shareholding increase plan for employees, controlling shareholders, shareholders and senior management.
[Trading Trends]
○ Five institutional seats buy shares of Wuyang Technology
------
The trading volume ranking list on Aug. 31 shows that five institutional seats bought Xuzhou Wuyang Technology Co., Ltd. (300420.SZ) with a total of 32.56 million yuan, accounting for 36.32 percent of its intraday turnover. No institutional seat sold it.
Comment: Major products of the company are core devices and equipment of bulk cargo hauling. The general meeting of shareholders recently approved a private placement plan for purchasing 100 percent equities of Shenzhen Weichuang Automatization Equipment Co., Ltd. Market participants believed that this transaction will enrich the product portfolio of the company and enlarge market space, helping the company be leading in technology of industry 4.0.
> Down payment of second house deals through public housing fund decreased to 20 pct, real estate policies keep loosening
> Farming industry to see policy benefits, shale gas exploration sees breakthroughs
> Various companies listed on Main Board see shareholding increases, Jinfu New Material resumes trading, actual controllers to increase shareholdings
> Insight Investment and Hengshun Zhongsheng see shareholding increases, Five institutional seats buy shares of Wuyang Technology
[SSN Focus]
○ Down payment of second house deals through public housing fund decreased to 20 pct, real estate policies keep loosening
------
The Ministry of Housing and Urban-Rural Development, the Ministry of Finance and the People's Bank of China (PBOC) jointly release notice that for households holding only 1 house and having paid off the loans for purchasing house, the minimum ratio of down payment will be decreased from 30 percent to 20 percent if they apply for public housing fund loans for purchasing house to improve housing conditions. Beijing, Shanghai, Guangzhou and Shenzhen can determine the minimum ratio of down payment by themselves according to local situations.
Comment: The investment in real estate contributes a lot to the investment in fixed asset and might play a greater role under the context of achieving stable growth. Loose policies for real estate industry, such as the new policy released on March 30 which largely decreases the ratio of down payment of the second house with commercial loans, the increase of loan limit through public housing fund, the relaxation on restricting foreign capital in purchasing real estate, are launched intensively this year. The interest rate and reserve requirement ratio (RRR) cuts launched this year by PBOC also bring continuous improvement of financial environment to the real estate industry. The trading has obviously picked up in first-tier cities' real estate market in recent months. Upstream and downstream industries of the real estate industry, including construction ＆ construction materials, decoration, household appliances, etc., will all benefit from it.
[SSN Selection]
○ Chinese President Xi Jinping held talks with Kazakhstan President on promoting the integration of the Silk Road Economic Belt construction and Kazakhstan's "Path of Light" economic strategy.
○ Ten ministries, including the Ministry of Commerce, jointly issued the development plan for the national agricultural products market, proposing to promote the informatization of agricultural product circulation.
○ The National Energy Administration (NEA) issued the action plan on the renovation of power distribution grid, requiring that at least 2 trillion yuan should be invested in the renovation from 2015 to 2020.
○ The draft of the thirteenth five-year plan for the plastics processing industry has been completed. 3D printing plastic materials are defined as prioritized products.
○ China Construction Bank Corporation (601939.SH;00939.HK) indicates it will issue preferred stocks within China next year and has loaned 148.0 billion yuan to China Securities Finance Corporation Limited (CSF).
[Industry Information]
○ Agricultural reform to speed up, farming industry to see policy benefits
------
According to the information sorted out by SSN, various policies supporting agricultural development have been introduced since Aug. The State Council initiated the pilot mortgage loan with the operation right on contracted land in rural areas and the residence property right of farmers recently. The Ministry of Agriculture issued opinions on deepening reform in technology system. The No. 1 Central Document of this year mentioned agricultural reclamation for the first time, requiring accelerating the introduction of policy measures on advancing agricultural reclamation development and deepening the reform of agricultural farms, group of reclamation area and diversified equities. With the approaching of the fourth quarter, the market has a high expectation on the agricultural reclamation reform.
Comment: Currently, despite rich land resource, the agricultural reclamation system has a low efficiency and sets no classifications for social enterprises in reclamation areas. Therefore, to lessen the social burden in the agricultural reclamation system, vitalize asset inventories and accelerate land circulation will become a key focus of the future reform. With remarkable policy support, the agricultural reclamation industry sees opportunities of rapid growth. Listed companies engaged in the agricultural reclamation system, such as Gansu Yasheng Industrial (Group) Co., Ltd. (600108.SH), China Hainan Rubber Industry Group Co., Ltd. (601118.SH) and Heilongjiang Agriculture Company Limited (600598.SH), will see more policy benefits.
○ Shale gas exploration sees breakthroughs, industry to witness rapid development
------
As disclosed at the website of the China National Petroleum Corporation (CNPC) on Aug. 31, it has explored shale gas reserve in three areas in Sichuan Basin recently with a geological reserve of 163,531 million cubic meters. This is the first time that the CNPC has released the explored geological reserve, which is significance in promoting the rapid development of the natural gas industry in China and guaranteeing the national energy safety.
Comment: The chairman of China Petroleum ＆ Chemical Corporation (Sinopec, SNP.NYSE; SNP.LSE; 00386.HK; 600028.SH) indicated that the shale gas will bring new profits to the company in the following years. Institute estimate that the acceleration in the development of the shale gas will bring a market with 100 billion yuan to oil services equipment enterprises. In terms of listed companies, Sinopec Oilfield Equipment Corporation (000852.SZ) is principally engaged in petroleum drill heads. It has completed the acquisition of SJ Petroleum Machinery Co., Sinopec and other quality assets and enjoys a leading position in the domestic shale gas equipment market. Shandong Molong Petroleum Machinery Co., Ltd. (00568.HK; 002490.SZ) manufactures products covering set machinery equipment covering oil drilling and exploitation and key components. Certain of its products are used in the exploitation of shale gas.
[Announcement Interpretation]
○ Various companies listed on Main Board see shareholding increases
------
China Iron ＆ Steel Research Institute Group, the actual controller of Beijing AriTime Intelligent Control Co., Ltd. (600560.SH), increased the shareholding in the company with over 2.25 million shares on Aug. 31, accounting for 1.01 percent of its total share capital. The Automation Research and Design Institute of Metallurgical Industry increased the shareholding in the company with 1.08 million shares on the same day, accounting for 0.48 percent of its total share capital. The directors, supervisors and senior management of Fujian Newland Computer Co., Ltd. (000997.SZ) increased the shareholding in the company with 5.15 million shares from Aug. 25 to 28, accounting for 0.55 percent of its total share capital. It increased the shareholding at a cost of 19.36 yuan per share with a total amount of 99,766,000 yuan.
Beijing Hongtu Changli Invetsment Fund Management Center (Limited Partnership), a company under China National Chemical Corporation, the actual controller of Heilongjiang Heihua Co., Ltd. (600179.SH), increased the shareholding in the company with 4.90 million shares from Aug. 28 to 31, accounting for 1.26 percent of its total share capital. BAIC Group, the controlling shareholder of Beiqi Foton Motor Co., Ltd. (600166.SH), increased the shareholding in the company with 10 million shares on Aug. 27. Leng Tianhui, the actual controller of Sichuan Hejia Co., Ltd. (600093.SH) increased the shareholding in the company with 2 million shares on Aug. 31.
○ Jinfu New Material resumes trading, actual controllers to increase shareholdings
------
Fu Guoping and Yang Xiaowei, actual controllers of Suzhou Jinfu New Material Co., Ltd. (300128.SZ), propose to increase the shareholding in the company with no less than 25,295,500 yuan in the next six months. Meanwhile, the company announced the termination of major assets restructuring.
○ Tsinghua Unigroup bought shares of Insight Investment to 5 pct limit
------
Xiamen Insight Investment Co., Ltd. (000526.SZ) announced that Tsinghua Unisplendour Group under Tsinghua Holdings Co., Ltd. and its subsidiaries bought 5.75 million shares of the company with 208 million yuan, accounting for 5.98 percent of its total share capital, reaching the 5 percent limit in secondary market acquisition for the first time.
Comment: The company announced on Aug. 10 that it proposed to raise 5.5 billion by issuing shares to Tibet Unisplendour Talents Education Investment Co., Ltd. through private placement for the acquisition of 100 equities of Xueda Education Group (XUE.NYSE), the establishment of an international education school investment company and the establishment an online education platform. Tsinghua Holdings will be the new actual controller of the company.
○ City Construction Investment Finance Holdings bought share of Hengshun Zhongsheng to 5 pct limit
------
Qingdao City Construction Investment Finance Holdings Co., Ltd., the shareholder of Qingdao Hengshun Zhongsheng Group Co., Ltd. (300208.SZ), increased the shareholding in the company with 575,000 shares at an average price of 45.17 yuan on Aug. 31. After that, City Construction Investment Finance Holdings totally holds 5 percent equities of the company as its the fourth largest shareholder.
○ O-film Tech to launch phase-IV employee shareholding plan
------
Shenzhen O-film Tech Co., Ltd. (002456.SZ) released the Phase-IV employee shareholding plan with an upper ceiling of 100 million yuan. It plans to raise funds in a proportion of 1:1.5 to make an asset management plan with no more than 250 million yuan for buying the company's stocks. The duration of plan is 18 months and the lock-up period for the stock is 12 months.
Comment: The company recently has implemented a series of shareholding increase plan for employees, controlling shareholders, shareholders and senior management.
[Trading Trends]
○ Five institutional seats buy shares of Wuyang Technology
------
The trading volume ranking list on Aug. 31 shows that five institutional seats bought Xuzhou Wuyang Technology Co., Ltd. (300420.SZ) with a total of 32.56 million yuan, accounting for 36.32 percent of its intraday turnover. No institutional seat sold it.
Comment: Major products of the company are core devices and equipment of bulk cargo hauling. The general meeting of shareholders recently approved a private placement plan for purchasing 100 percent equities of Shenzhen Weichuang Automatization Equipment Co., Ltd. Market participants believed that this transaction will enrich the product portfolio of the company and enlarge market space, helping the company be leading in technology of industry 4.0.
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