[Today's Guide]
> Standardization on off-market margin financing not dealt with in simple way, limited impact on market
> MEP strengthens ozone layer protection, fluorine chemical industry to speed up in transformation
> High-end agricultural machinery equipment innovation to initiate, market with RMB500 bln expected...
> New Huang Pu Real Estate bought through secondary market acquisition to 5 pct limit, Haitong Securities bought by CSF with huge amount
[SSN Focus]
○ Standardization on off-market margin financing not dealt with in simple way, limited impact on market
------
China Securities Regulatory Commission (CSRC) releases notice on Sept. 17 evening making it explicit that three kinds of trust product accounts will still be cleaned up strictly. During the process of cleaning up, securities companies should not unilaterally terminate contracts and deal with it in a simple way, but should resort to multiple ways, including non-transaction transfer, manual reconciliation and the utilization of legalized means of transaction, in accordance with laws and regulations through consultation with clients. It is also learnt that China Banking Regulatory Commission (CBRC) also gathers some trust companies for briefing on the same day.
Comment: It suggests that though the process of cleaning up financing will not be suspended, the execution will be slowed down and it provides the objects to be cleaned up with "escape way". Statistics show that among accounts being cleaned up, 85 percent are completed through the adoption of legalized transaction. In this way, investors' interest can be guarded. Industrial insiders believe that the notice is positive on the whole and is defined in an easing way. Considering factors including previous cleaning up process and the sharp plunge in market, the overall scale of umbrella trusts has seen obvious drop. It will have limited impact on the market even if the cleaning-up of financing continues. The recent market fluctuation may be more resulted from psychological panic.
[SSN Selection]
○ Chinese President Xi Jinping indicated on Sept. 17 when meeting with the U.S. representatives that China's economy is possible keep a medium and high speed growth.
○ The Federal Reserve will end the 2-day meeting and issue the policies and resolutions at 2 a.m. on Sep. 18 (Beijing time), announcing whether to raise the interest rates or not.
○ Bloomberg reported that China and the U.S. will establish a joint venture company on high speed rail project to initiate a high speed rail project in the U.S. in September 2016.
○ The State-owned Assets Supervision and Administration Commission issued a document to carry out the guidelines on SOEs reform, requiring the central enterprises intensively studying and formulating their own implementation schemes on deepening the reform.
○ The State Administration of Foreign Exchange stated that there is no large-scale capital flight currently. It did not introduce policies to restrict the purchase and payment on the foreign exchange recently.
○ The merger and reorganization of Taiya Shoes Co., Ltd. (002517.SZ) and Shandong Fin Cnc Machine Co., Ltd. (002270.SZ) have been conditionally approved by the China Securities Regulatory Commission.
[Industry Information]
○ MEP strengthens ozone layer protection, fluorine chemical industry to speed up in transformation
------
Chen Jining, Minister for Environmental Protection, indicated at the international ozone protection conference held on Sept. 16 that the Chinese government attaches great importance on the performance of the Convention for the Protection of the Ozone Layer and has established a system of laws, regulations and policies, including the Law on the Prevention and Control of Atmospheric Pollution and the Ordinance on Administration of Ozone Depleting Substances. At the same time, it implemented the plan on the elimination of ozone depleting substances in the chemical engineering, household appliance and other industries and released the Category of Recommended Key Replacement Technology for HCFC. Chen indicated that China will achieve the target of eliminating the HCFC by 35 percent during the 13th Five-year Period.
Comment: Based on the provisions of the Montreal Protocol, the output of Refrigerant R22 in China will reduce by 10 percent in 2015. Driven by the reduced quota and the protection of the ozone layer, the fluorine chemical industry will speed up in transformation and upgrading. The new generation of refrigerant and other fluorine chemical products will see expansion opportunities, which will improve the competitiveness of industrial leaders. In terms of listed companies, Shanghai 3F New Materials Company Limited (600636.SH) owns the biggest fluorine chemical research and development base in China. Zhejiang Juhua Co., Ltd. (600160.SH) is researching and developing HFO-1234yf to expand into the high-end refrigerant market.
○ High-end agricultural machinery equipment innovation to initiate, market with RMB500 bln expected
------
SSN learnt that the draft of the Plan on the Implementation of Innovation Projects in High-end Equipment for Agricultural Machinery has completed by the China Agricultural Mechanization Association (CAMA). It will arrange the implementation of agricultural machinery equipment innovation and special industrialization programs and key projects and develop certain symbolic and key products and equipment with strong promotion to achieve proprietary research and application. Persons from the CAMA indicated that the agricultural machinery equipment in China is advancing towards the orientation of intelligentization with the information technology as the core and advanced manufacturing.
Comment: Insiders believe that driven by the plan, the agricultural machinery equipment in China will upgrade towards the high-end and the market size is expected to reach 500 billion yuan soon. In terms of listed companies, Zoomlion Heavy Industry Science And Technology Co., Ltd. (01157.HK; 000157.SZ) acquired 67.5 percent shares of Chery Heavy Industry Co., Ltd. last year and its agricultural machinery equipment competitiveness is at the leading level in the industry. Jiangsu Nonghua Intelligent Agriculture Technology Co., Ltd. (000816.SZ) is principally engaged in agricultural machinery and is transforming towards agricultural informatization. First Tractor Company Limited (00038.HK; 601038.SH) is a leading agricultural machinery enterprise in China.
[Announcement Interpretation]
○ New Huang Pu Real Estate, Mingxing Electric Power and Hefei Department Store are bought through secondary market acquisition to 5 pct limit
------
Shanghai New Huang Pu Real Estate Co., Ltd. (600638.SH) is bought by Shanghai Wuniu Hengzun Investment Center (Limited Partnership) through secondary market acquisition to 5 percent limit. The latter totally bought 5 percent of the company's shares from July 14 to Sept. 16 and it is open to further increase shareholding in the company in next 12 months. It can be learnt from announcement and public information that the shareholder of Shanghai Wuniu Hengzun is concerned with Yushang Group Co., Ltd. and Han Xiao, representative of the limited partnership enterprise, happens to be the son of Han Hongwei, head of Yushang Group. Now Yushang Group is still involved in the contest for the controlling stake of Henan Oriental Silver Star Investment Co., Ltd. (600753.SH).
Foresea Life Insurance Co., Ltd. bought the shares of Sichuan Mingxing Electric Power Co., Ltd. (600101.SH) and Hefei Department Store Group Co., Ltd. (000417.SZ) in succession through secondary market acquisition to 5 percent limit. Foresea Life Insurance bought the shares of Mingxing Electric Power in Sept. from 9.9 yuan per share to 12.25 yuan per share and bought the shares of Hefei Department Store from 7.13 yuan per share to 8.65 yuan per share. Foresea Life Insurance bought the shares of the two companies because of their promising development and might further increase shareholding in the companies in the future.
○ Haitong Securities bought by CSF with huge amount
------
Haitong Securities Company Limited (06837.HK; 600837.SH) announced that as at Sept. 14 the second biggest shareholder of the company is China Securities Finance Corporation Limited (CSF), which holds 510 million shares, accounting for 4.44 percent of its total share capital. The tenth biggest shareholder of the company is Central Huijin Investment Ltd., which holds 144 million shares, accounting for 1.26 percent of its total share capital.
Comment: The company introduced a repurchase plan with a huge amount on July 9, proposing to repurchase no more than 1.15 billion A shares of the company with no more than 21.6 billion yuan and a maximum price of 18.80 yuan per share. The latest stock price of the company is 12.84 yuan.
○ Hirisun Technology and other companies see shareholding increases
------
CSC Huitong (Shenzhen) Equities Investment Fund Co., Ltd., a shareholder of Shenzhen Hirisun Technology Incorporated (300277.SZ), increased the shareholding in the company with 2.32 million shares at an average price of 15.35 yuan from Sept. 14 to 15. Tan Songbin, the actual controller of Guangdong Silver Age Sci ＆ Tech Co., Ltd. (300221.SZ), increased the shareholding in the company with 1.60 million shares at an average price of 7.70 yuan on Sept. 15. Qin Lijing, the actual controller of Jinzhou New China Dragon Molybdenum Co., Ltd. (603399.SH), increased the shareholding in the company with 2 million shares at an average price of 8.48 yuan on Sept. 17.
NTGroup, the controlling shareholder of Yunnan Nantian Electronics Information Co., Ltd. (000948.SZ), Yunnan Provincail Industrial Investment Holdings Group Co., Ltd., the actual controller of the company, and the management of the company increased the shareholding in the company with 1.10 million shares at an average price of 15.65 yuan from Sept. 16 to 17. Tang Gongyan, President of Fusin Group, the controlling shareholder of HuBei Fuxing Science and Technology Co., Ltd. (000926.SZ), increased the shareholding in the company with 10.78 million shares from Aug. 31 to Sept. 14.
○ Kingsun Optoelectronic to acquire equities of Philips Lumileds with RMB100 mln
------
Dongguan Kingsun Optoelectronic Co., Ltd. (002638.SZ) intends to indirectly acquire 6.15 percent equities of Philips Lumileds with 100 million U.S. dollars. Philips Lumileds owns nine factories globally with leading technology. Its main products are LED and traditional lighting components. It recorded an income of about 4 billlion U.S. dollars last year. Kingsun Optoelectronic indicates that the acquisition and industrial consolidation can improve and consolidate the leading position of the company in the semi-conductor lighting industry.
> Standardization on off-market margin financing not dealt with in simple way, limited impact on market
> MEP strengthens ozone layer protection, fluorine chemical industry to speed up in transformation
> High-end agricultural machinery equipment innovation to initiate, market with RMB500 bln expected...
> New Huang Pu Real Estate bought through secondary market acquisition to 5 pct limit, Haitong Securities bought by CSF with huge amount
[SSN Focus]
○ Standardization on off-market margin financing not dealt with in simple way, limited impact on market
------
China Securities Regulatory Commission (CSRC) releases notice on Sept. 17 evening making it explicit that three kinds of trust product accounts will still be cleaned up strictly. During the process of cleaning up, securities companies should not unilaterally terminate contracts and deal with it in a simple way, but should resort to multiple ways, including non-transaction transfer, manual reconciliation and the utilization of legalized means of transaction, in accordance with laws and regulations through consultation with clients. It is also learnt that China Banking Regulatory Commission (CBRC) also gathers some trust companies for briefing on the same day.
Comment: It suggests that though the process of cleaning up financing will not be suspended, the execution will be slowed down and it provides the objects to be cleaned up with "escape way". Statistics show that among accounts being cleaned up, 85 percent are completed through the adoption of legalized transaction. In this way, investors' interest can be guarded. Industrial insiders believe that the notice is positive on the whole and is defined in an easing way. Considering factors including previous cleaning up process and the sharp plunge in market, the overall scale of umbrella trusts has seen obvious drop. It will have limited impact on the market even if the cleaning-up of financing continues. The recent market fluctuation may be more resulted from psychological panic.
[SSN Selection]
○ Chinese President Xi Jinping indicated on Sept. 17 when meeting with the U.S. representatives that China's economy is possible keep a medium and high speed growth.
○ The Federal Reserve will end the 2-day meeting and issue the policies and resolutions at 2 a.m. on Sep. 18 (Beijing time), announcing whether to raise the interest rates or not.
○ Bloomberg reported that China and the U.S. will establish a joint venture company on high speed rail project to initiate a high speed rail project in the U.S. in September 2016.
○ The State-owned Assets Supervision and Administration Commission issued a document to carry out the guidelines on SOEs reform, requiring the central enterprises intensively studying and formulating their own implementation schemes on deepening the reform.
○ The State Administration of Foreign Exchange stated that there is no large-scale capital flight currently. It did not introduce policies to restrict the purchase and payment on the foreign exchange recently.
○ The merger and reorganization of Taiya Shoes Co., Ltd. (002517.SZ) and Shandong Fin Cnc Machine Co., Ltd. (002270.SZ) have been conditionally approved by the China Securities Regulatory Commission.
[Industry Information]
○ MEP strengthens ozone layer protection, fluorine chemical industry to speed up in transformation
------
Chen Jining, Minister for Environmental Protection, indicated at the international ozone protection conference held on Sept. 16 that the Chinese government attaches great importance on the performance of the Convention for the Protection of the Ozone Layer and has established a system of laws, regulations and policies, including the Law on the Prevention and Control of Atmospheric Pollution and the Ordinance on Administration of Ozone Depleting Substances. At the same time, it implemented the plan on the elimination of ozone depleting substances in the chemical engineering, household appliance and other industries and released the Category of Recommended Key Replacement Technology for HCFC. Chen indicated that China will achieve the target of eliminating the HCFC by 35 percent during the 13th Five-year Period.
Comment: Based on the provisions of the Montreal Protocol, the output of Refrigerant R22 in China will reduce by 10 percent in 2015. Driven by the reduced quota and the protection of the ozone layer, the fluorine chemical industry will speed up in transformation and upgrading. The new generation of refrigerant and other fluorine chemical products will see expansion opportunities, which will improve the competitiveness of industrial leaders. In terms of listed companies, Shanghai 3F New Materials Company Limited (600636.SH) owns the biggest fluorine chemical research and development base in China. Zhejiang Juhua Co., Ltd. (600160.SH) is researching and developing HFO-1234yf to expand into the high-end refrigerant market.
○ High-end agricultural machinery equipment innovation to initiate, market with RMB500 bln expected
------
SSN learnt that the draft of the Plan on the Implementation of Innovation Projects in High-end Equipment for Agricultural Machinery has completed by the China Agricultural Mechanization Association (CAMA). It will arrange the implementation of agricultural machinery equipment innovation and special industrialization programs and key projects and develop certain symbolic and key products and equipment with strong promotion to achieve proprietary research and application. Persons from the CAMA indicated that the agricultural machinery equipment in China is advancing towards the orientation of intelligentization with the information technology as the core and advanced manufacturing.
Comment: Insiders believe that driven by the plan, the agricultural machinery equipment in China will upgrade towards the high-end and the market size is expected to reach 500 billion yuan soon. In terms of listed companies, Zoomlion Heavy Industry Science And Technology Co., Ltd. (01157.HK; 000157.SZ) acquired 67.5 percent shares of Chery Heavy Industry Co., Ltd. last year and its agricultural machinery equipment competitiveness is at the leading level in the industry. Jiangsu Nonghua Intelligent Agriculture Technology Co., Ltd. (000816.SZ) is principally engaged in agricultural machinery and is transforming towards agricultural informatization. First Tractor Company Limited (00038.HK; 601038.SH) is a leading agricultural machinery enterprise in China.
[Announcement Interpretation]
○ New Huang Pu Real Estate, Mingxing Electric Power and Hefei Department Store are bought through secondary market acquisition to 5 pct limit
------
Shanghai New Huang Pu Real Estate Co., Ltd. (600638.SH) is bought by Shanghai Wuniu Hengzun Investment Center (Limited Partnership) through secondary market acquisition to 5 percent limit. The latter totally bought 5 percent of the company's shares from July 14 to Sept. 16 and it is open to further increase shareholding in the company in next 12 months. It can be learnt from announcement and public information that the shareholder of Shanghai Wuniu Hengzun is concerned with Yushang Group Co., Ltd. and Han Xiao, representative of the limited partnership enterprise, happens to be the son of Han Hongwei, head of Yushang Group. Now Yushang Group is still involved in the contest for the controlling stake of Henan Oriental Silver Star Investment Co., Ltd. (600753.SH).
Foresea Life Insurance Co., Ltd. bought the shares of Sichuan Mingxing Electric Power Co., Ltd. (600101.SH) and Hefei Department Store Group Co., Ltd. (000417.SZ) in succession through secondary market acquisition to 5 percent limit. Foresea Life Insurance bought the shares of Mingxing Electric Power in Sept. from 9.9 yuan per share to 12.25 yuan per share and bought the shares of Hefei Department Store from 7.13 yuan per share to 8.65 yuan per share. Foresea Life Insurance bought the shares of the two companies because of their promising development and might further increase shareholding in the companies in the future.
○ Haitong Securities bought by CSF with huge amount
------
Haitong Securities Company Limited (06837.HK; 600837.SH) announced that as at Sept. 14 the second biggest shareholder of the company is China Securities Finance Corporation Limited (CSF), which holds 510 million shares, accounting for 4.44 percent of its total share capital. The tenth biggest shareholder of the company is Central Huijin Investment Ltd., which holds 144 million shares, accounting for 1.26 percent of its total share capital.
Comment: The company introduced a repurchase plan with a huge amount on July 9, proposing to repurchase no more than 1.15 billion A shares of the company with no more than 21.6 billion yuan and a maximum price of 18.80 yuan per share. The latest stock price of the company is 12.84 yuan.
○ Hirisun Technology and other companies see shareholding increases
------
CSC Huitong (Shenzhen) Equities Investment Fund Co., Ltd., a shareholder of Shenzhen Hirisun Technology Incorporated (300277.SZ), increased the shareholding in the company with 2.32 million shares at an average price of 15.35 yuan from Sept. 14 to 15. Tan Songbin, the actual controller of Guangdong Silver Age Sci ＆ Tech Co., Ltd. (300221.SZ), increased the shareholding in the company with 1.60 million shares at an average price of 7.70 yuan on Sept. 15. Qin Lijing, the actual controller of Jinzhou New China Dragon Molybdenum Co., Ltd. (603399.SH), increased the shareholding in the company with 2 million shares at an average price of 8.48 yuan on Sept. 17.
NTGroup, the controlling shareholder of Yunnan Nantian Electronics Information Co., Ltd. (000948.SZ), Yunnan Provincail Industrial Investment Holdings Group Co., Ltd., the actual controller of the company, and the management of the company increased the shareholding in the company with 1.10 million shares at an average price of 15.65 yuan from Sept. 16 to 17. Tang Gongyan, President of Fusin Group, the controlling shareholder of HuBei Fuxing Science and Technology Co., Ltd. (000926.SZ), increased the shareholding in the company with 10.78 million shares from Aug. 31 to Sept. 14.
○ Kingsun Optoelectronic to acquire equities of Philips Lumileds with RMB100 mln
------
Dongguan Kingsun Optoelectronic Co., Ltd. (002638.SZ) intends to indirectly acquire 6.15 percent equities of Philips Lumileds with 100 million U.S. dollars. Philips Lumileds owns nine factories globally with leading technology. Its main products are LED and traditional lighting components. It recorded an income of about 4 billlion U.S. dollars last year. Kingsun Optoelectronic indicates that the acquisition and industrial consolidation can improve and consolidate the leading position of the company in the semi-conductor lighting industry.
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