[Today's Guide]
>Long March-6 achieves multiple breakthrough, aviation and military industry attract increased attentions
>Integrate circuit industry to establish commercial leasing company to promote industrial development
>Decimalization of aviation aluminium supported, Sk Petroleum ＆ Chemical Equipment bought through secondary market acquisition to 5 pct limit
>Xiamen Overseas Chinese Electronic to control Apple Information Consulting, NetPosa Technologies bought by five institutes
[SSN Focus]
○Long March-6 achieves multiple breakthrough, aviation and military industry attract increased attentions
------
A new model of China's carrier rocket Long March-6 was launched successfully on Sept 20. It put 20 micro-satellites researched and developed by Aviation Dongfanghong Satellite Information Technology Limited Company, Shenzhen Aviation Dongfanghong Haite Satellite Limited Company together with multiple universities into orbit, setting a record of the largest number of satellites carried by one rocket in Asia. The engine of Long March-6 first uses a high technology developed by the Sixth Institute of China Aerospace Science ＆ Industry Corporation. On that same day, Long March-5 carrier rocket set out to jointly develop training task with the Phase III launching site of moon probe projects.
Comment: Aviation Dongfanghong Satellite Information Technology and Shenzhen Aviation Dongfanghong Haite Satellite are both subsidiaries under China Spacesat Co., Ltd. (600118.SH), while the Sixth Institute of China Aerospace Science ＆ Industry Corporation is the substantial shareholder of Shaanxi Aerospace Power Hi-Tech Co., Ltd. (600343.SH). Space flight and aviation equipment has been listed as one of the 10 key development areas of "Made in China 2025." Cutting troops by 300,000 helps to improve China's equipment level. Japan passed the contentious security bills on Sept. 19, showing increasingly complicated regional situation, and it will again force China to spare more efforts in building strong army. At present, the securitization rates of China Aerospace Science and Technology Corporation and China Aerospace Science ＆ Industry Corporation record only 14 percent and 17 percent, respectively. Institutions are optimistic that the reform on research institutes will make breakthroughs before the 5th Plenary Session of the 18th CPC Central Committee and bring expectation on asset injection. Small listed companies under large groups, such as Beijing Aerospace Changfeng Co., Ltd. (600855.SH) and Guizhou Space Appliance Co., Ltd. (002025.SZ), will be concerned.
[SSN Selection]
○China Securities Regulatory Commission (CSRC) plans to impose a tripled fine on five new-type manipulation cases and indicates that anyone who impacts prices and trading volume through illegal means might be regarded as involved in manipulative behavior.
○National Development and Reform Commission (NDRC) recently convened a special meeting on reform, requiring developing demonstrations of mixed-ownership reform in various areas in combination with the reforms in power, petroleum, military industry, etc.
○Vice Premier of Laos indicated on Sept. 18 on the China-ASEAN Exposition that the China-Laos railway might start construction within the year.
○China Railway Group Limited (601390.SH; 00390.HK) plans to exchange its equity of subsidiaries' involved in industrial manufacturing sector for the current asset and business owned by China Railway Erju Co., Ltd. (600528.SH).
○The asset acquisition applications of Beijing Join-cheer Software Co., Ltd. (002279.SZ) and Guang Dong Fenghua Advanced Technology (Holding) Co., Ltd. (000636.SZ) are unconditionally approved by China Securities Regulatory Commission (CSRC), while Zhejiang Transfar Co., Ltd. (002010.SZ) and Insigma Technology Co., Ltd. (600797.SH) are nodded with conditions.
○The Economic Observer reports that COFCO Corporation will split off or integrate 11 listed companies according to the classifications as grain and oil, food, real estate, finance and etc.
[Industry Information]
○Integrate circuit industry to establish commercial leasing company to promote industrial development
------
China's first commercial leasing company in the integrate circuit industry incorporated by the national investment fund for integrated circuit industry officially opened on Sept. 20, and signed agreement of intent on the strategic cooperation in commercial leasing valued at 65 billion yuan with the China Development Bank Shanghai Branch and others. The commercial leasing company will lead equipment suppliers to contact with the demand side, lease relevant equipment, break the bottleneck in investment and leasing and reduce the production cost of integrate circuit manufacturers.
Comment: The integrate circuit industry requires huge equipment input. The establishment of the commercial leasing company will remarkably ease the investment burdens of enterprises and promote the development of China's integrate circuit industry. Shanghai Sinyang Semiconductor Materials Co., Ltd. (300236.SZ), Nationz Technologies Inc. (300077.SZ) and Tianshui Huatian Technology Co., Ltd.(002185.SZ) are respectively engaged in the material, design and packaging ＆ test of the integrate circuit.
○MIIT pushes decimalization of aviation aluminium, more supporting policies expected
------
The Ministry of Industry and Information Technology (MIIT) recently hold the first working conference on the cooperative mechanism between the upstream and downstream of aluminium for civil aircraft. Commercial Aircraft Corporation of China Limited (COMAC), Aluminum Corporation Of China Limited (601600.SH) and Shandong Nanshan Aluminium Co., Ltd.(600219.SH) attended the conference. The conference stressed vigorously promoting the fully independent supply of aviation aluminium, establishing self-dependent innovative material and equipment technology system, enhancing supports for the development and platform construction of key aircraft and encouraging the mutual promotion between state-owned enterprises and private-owned enterprises and the military-civil integration.
Comment: As the domestic made aircraft C919 will be assembled and delivered within the year and the feeder liner ARJ21 will be rapidly popularized, the demand for aviation aluminium will explode in China. According to statistics, orders for C919 have increased to 514. The following delivery will substantially push up the demands in the aviation aluminium market.
[Announcement Interpretation]
○Sk Petroleum ＆ Chemical Equipment bought by Yexiang Investment Management through secondary market acquisition to 5 pct limit
------
Shanghai Yexiang Investment Management Co., Ltd., the potential substantial shareholder of Shanghai Sk Petroleum ＆ Chemical Equipment Corporation Ltd. (002278.SZ), acquired 18.20 million shares of the company at an average price of 10.51 yuan per share from Sept 14 to 17, accounting for 5 percent of the company's total share capital. Previously, Yexiang Investment Management has signed agreement with seven natural person shareholders of the company under which 8 percent equities and 15 percent right to voting trust will be transferred to Yexiang Investment Management at a unit price of 13.5 yuan per share. Yexiang Investment Management becomes the new actual controller of the company. The latest stock price of the company closed at 10.12 yuan per share.
○Xiamen Overseas Chinese Electronic to control Apple Information Consulting, engaged in third-party payment
------
Xiamen Overseas Chinese Electronic Co., Ltd. (600870.SH) proposes to raise 506 million yuan through private placement of 70.47 million shares at 7.18 yuan per share. Among the total amount of fundraising, 106 million yuan will be used for purchasing 26.5 percent equities of Beijing Apple Information Consulting Co., Ltd., another 200 million yuan for increasing shareholding in the company, and the remaining 200 million yuan for supplementing circulating fund for listed companies. It will hold 51 percent equity in Apple Information Consulting.
Apple Information Consulting is a financial payment service firm with comprehensive payment service capability. Xiamen Overseas Chinese Electronic promises that the total net profits of Apple Information Consulting from 2016 to 2018 will reach 175 million yuan. The stock price of the company closed at 7.46 yuan per share before trading suspension.
○CNNC Hua Yuan Titanium Dioxide to launch employee shareholding plan to raise RMB240 mln
------
CNNC Hua Yuan Titanium Dioxide Co., Ltd. (002145.SZ) released a draft for employee shareholding plan, which intends to raise 120 million yuan at most and buy the company's shares at no more than 240 million yuan with proportion of 1:1. Based on the company's latest stock price at 9.76 yuan per share, this plan may purchase 24.59 million shares of the company, accounting for 5.34 percent of the total share capital.
○Xinhai Electric saw shareholding increase
------
The actual controller, directors, supervisors and management of Ningbo Xinhai Electric Co., Ltd. (002120.SZ) increased the shareholding in the company by 1.15 million shares at an average price of 13.86 yuan per share during Sept. 17-18, accounting for 0.77 percent of the total share capital. The market value of the company stands at 2.08 billion yuan at present. Shanghai RAAS Blood Products Co., Ltd. (002252.SZ), the shareholder of Zhejiang Fuchunjiang Environmental Thermoelectric Co., Ltd. (002479.SZ), bought 20 million shares of the company at an average price of 9 yuan per share through block trading on Sept. 17, which was totally valued at 180 million yuan. Previously, RAAS Blood Products purchased 10 million shares of the company at 198 million yuan on June 11.
Tianjin Datong Investment Group Co., Ltd., the controlling shareholder of Sichuan Datong Gas Development Co., Ltd. (000593.SZ), increased the shareholding in the company by 1,114,000 shares at an average price of 9.18 yuan per share from July 10 to Sept. 17, accounting for 0.4 percent of the total share capital. The market value of the company stands at about 2.2 billion yuan at present. Wang Mingwang, the actual controller of Sunwoda Electronic Co., Ltd. (300207.SZ), increased the shareholding in the company by 1.36 million shares at an average price of 22.03 yuan per share on Sept. 18. According to its plan for shareholding increase, the amount of the shareholding increase in the company will be more than 230 million yuan in the next six months starting from July 20.
[Trading Trends]
○NetPosa Technologies bought by five institutes
------
The trading volume ranking list on Sep. 18 shows that five institutes bought NetPosa Technologies, Ltd. (300367.SZ) with a total of 131 million yuan, accounting for 31 percent of its intraday turnover. The company's merger and acquisition with Beijing Cankau Intelligent Technologies Co. Ltd. and Guangzhou Smartspyeye Technologies Co. Ltd. have been approved by China Securities Regulatory Commission recently. Institutions believed that the company will accelerate the extended expansion to strengthen the advantages to enter the security market for household and small and medium enterprises. Institutions are especially optimistic towards its transformation to comprehensive security and protection services operator based on the video from the video supervision supplier.
[Weekly Review]
○No macro worries but medium and micro opportunities
------
The market presented a fluctuation within a wide range last week. Investors experienced two-side extremes with 1,000 stocks soared or plummeted by the daily limit of 10 percent. The ChiNext board soared by 7.16 percent on Wednesday, setting a new high in intraday increase, which showed that risk preference of the overall market increased. The trading volume ranking list on Friday also showed that individual stocks of small and medium start-up enterprises were bought through more institutional seats.
It is fair to say that as investors form a stable expectation on the clean-up of off-market margin financing and the Federal Reserve temporarily maintained the interest rate unchanged, the market is forming a situation without macro worries and with medium and micro opportunities. The market with fluctuation which is familiar with many investors may come. The index may see no significant hike but the medium and micro opportunities driven by events and themes will crop out one after another.
Under such background, SSN focused in key issues and closely followed the process of the clean-up of off-market margin financing for investors on the one hand. On the other, we maintained the forward-looking report on industry information and professional interpretation of company information and select targets for investors to achieve recovery. Both the information security, lithium carbonate and fluorine chemical sectors reported last week and the state-owned assets reform in Shanghai and the big data sector reported earlier are pioneers in the market recovery.
In addition, with the end of the third quarter approaches, the market will pay more attention on results. Individual stocks with falling stock prices but improved fundamentals will be more attractive after the plunge in the previous stage. In other words, investors will prefer companies with stable growth after the universal hiking conditions.
>Long March-6 achieves multiple breakthrough, aviation and military industry attract increased attentions
>Integrate circuit industry to establish commercial leasing company to promote industrial development
>Decimalization of aviation aluminium supported, Sk Petroleum ＆ Chemical Equipment bought through secondary market acquisition to 5 pct limit
>Xiamen Overseas Chinese Electronic to control Apple Information Consulting, NetPosa Technologies bought by five institutes
[SSN Focus]
○Long March-6 achieves multiple breakthrough, aviation and military industry attract increased attentions
------
A new model of China's carrier rocket Long March-6 was launched successfully on Sept 20. It put 20 micro-satellites researched and developed by Aviation Dongfanghong Satellite Information Technology Limited Company, Shenzhen Aviation Dongfanghong Haite Satellite Limited Company together with multiple universities into orbit, setting a record of the largest number of satellites carried by one rocket in Asia. The engine of Long March-6 first uses a high technology developed by the Sixth Institute of China Aerospace Science ＆ Industry Corporation. On that same day, Long March-5 carrier rocket set out to jointly develop training task with the Phase III launching site of moon probe projects.
Comment: Aviation Dongfanghong Satellite Information Technology and Shenzhen Aviation Dongfanghong Haite Satellite are both subsidiaries under China Spacesat Co., Ltd. (600118.SH), while the Sixth Institute of China Aerospace Science ＆ Industry Corporation is the substantial shareholder of Shaanxi Aerospace Power Hi-Tech Co., Ltd. (600343.SH). Space flight and aviation equipment has been listed as one of the 10 key development areas of "Made in China 2025." Cutting troops by 300,000 helps to improve China's equipment level. Japan passed the contentious security bills on Sept. 19, showing increasingly complicated regional situation, and it will again force China to spare more efforts in building strong army. At present, the securitization rates of China Aerospace Science and Technology Corporation and China Aerospace Science ＆ Industry Corporation record only 14 percent and 17 percent, respectively. Institutions are optimistic that the reform on research institutes will make breakthroughs before the 5th Plenary Session of the 18th CPC Central Committee and bring expectation on asset injection. Small listed companies under large groups, such as Beijing Aerospace Changfeng Co., Ltd. (600855.SH) and Guizhou Space Appliance Co., Ltd. (002025.SZ), will be concerned.
[SSN Selection]
○China Securities Regulatory Commission (CSRC) plans to impose a tripled fine on five new-type manipulation cases and indicates that anyone who impacts prices and trading volume through illegal means might be regarded as involved in manipulative behavior.
○National Development and Reform Commission (NDRC) recently convened a special meeting on reform, requiring developing demonstrations of mixed-ownership reform in various areas in combination with the reforms in power, petroleum, military industry, etc.
○Vice Premier of Laos indicated on Sept. 18 on the China-ASEAN Exposition that the China-Laos railway might start construction within the year.
○China Railway Group Limited (601390.SH; 00390.HK) plans to exchange its equity of subsidiaries' involved in industrial manufacturing sector for the current asset and business owned by China Railway Erju Co., Ltd. (600528.SH).
○The asset acquisition applications of Beijing Join-cheer Software Co., Ltd. (002279.SZ) and Guang Dong Fenghua Advanced Technology (Holding) Co., Ltd. (000636.SZ) are unconditionally approved by China Securities Regulatory Commission (CSRC), while Zhejiang Transfar Co., Ltd. (002010.SZ) and Insigma Technology Co., Ltd. (600797.SH) are nodded with conditions.
○The Economic Observer reports that COFCO Corporation will split off or integrate 11 listed companies according to the classifications as grain and oil, food, real estate, finance and etc.
[Industry Information]
○Integrate circuit industry to establish commercial leasing company to promote industrial development
------
China's first commercial leasing company in the integrate circuit industry incorporated by the national investment fund for integrated circuit industry officially opened on Sept. 20, and signed agreement of intent on the strategic cooperation in commercial leasing valued at 65 billion yuan with the China Development Bank Shanghai Branch and others. The commercial leasing company will lead equipment suppliers to contact with the demand side, lease relevant equipment, break the bottleneck in investment and leasing and reduce the production cost of integrate circuit manufacturers.
Comment: The integrate circuit industry requires huge equipment input. The establishment of the commercial leasing company will remarkably ease the investment burdens of enterprises and promote the development of China's integrate circuit industry. Shanghai Sinyang Semiconductor Materials Co., Ltd. (300236.SZ), Nationz Technologies Inc. (300077.SZ) and Tianshui Huatian Technology Co., Ltd.(002185.SZ) are respectively engaged in the material, design and packaging ＆ test of the integrate circuit.
○MIIT pushes decimalization of aviation aluminium, more supporting policies expected
------
The Ministry of Industry and Information Technology (MIIT) recently hold the first working conference on the cooperative mechanism between the upstream and downstream of aluminium for civil aircraft. Commercial Aircraft Corporation of China Limited (COMAC), Aluminum Corporation Of China Limited (601600.SH) and Shandong Nanshan Aluminium Co., Ltd.(600219.SH) attended the conference. The conference stressed vigorously promoting the fully independent supply of aviation aluminium, establishing self-dependent innovative material and equipment technology system, enhancing supports for the development and platform construction of key aircraft and encouraging the mutual promotion between state-owned enterprises and private-owned enterprises and the military-civil integration.
Comment: As the domestic made aircraft C919 will be assembled and delivered within the year and the feeder liner ARJ21 will be rapidly popularized, the demand for aviation aluminium will explode in China. According to statistics, orders for C919 have increased to 514. The following delivery will substantially push up the demands in the aviation aluminium market.
[Announcement Interpretation]
○Sk Petroleum ＆ Chemical Equipment bought by Yexiang Investment Management through secondary market acquisition to 5 pct limit
------
Shanghai Yexiang Investment Management Co., Ltd., the potential substantial shareholder of Shanghai Sk Petroleum ＆ Chemical Equipment Corporation Ltd. (002278.SZ), acquired 18.20 million shares of the company at an average price of 10.51 yuan per share from Sept 14 to 17, accounting for 5 percent of the company's total share capital. Previously, Yexiang Investment Management has signed agreement with seven natural person shareholders of the company under which 8 percent equities and 15 percent right to voting trust will be transferred to Yexiang Investment Management at a unit price of 13.5 yuan per share. Yexiang Investment Management becomes the new actual controller of the company. The latest stock price of the company closed at 10.12 yuan per share.
○Xiamen Overseas Chinese Electronic to control Apple Information Consulting, engaged in third-party payment
------
Xiamen Overseas Chinese Electronic Co., Ltd. (600870.SH) proposes to raise 506 million yuan through private placement of 70.47 million shares at 7.18 yuan per share. Among the total amount of fundraising, 106 million yuan will be used for purchasing 26.5 percent equities of Beijing Apple Information Consulting Co., Ltd., another 200 million yuan for increasing shareholding in the company, and the remaining 200 million yuan for supplementing circulating fund for listed companies. It will hold 51 percent equity in Apple Information Consulting.
Apple Information Consulting is a financial payment service firm with comprehensive payment service capability. Xiamen Overseas Chinese Electronic promises that the total net profits of Apple Information Consulting from 2016 to 2018 will reach 175 million yuan. The stock price of the company closed at 7.46 yuan per share before trading suspension.
○CNNC Hua Yuan Titanium Dioxide to launch employee shareholding plan to raise RMB240 mln
------
CNNC Hua Yuan Titanium Dioxide Co., Ltd. (002145.SZ) released a draft for employee shareholding plan, which intends to raise 120 million yuan at most and buy the company's shares at no more than 240 million yuan with proportion of 1:1. Based on the company's latest stock price at 9.76 yuan per share, this plan may purchase 24.59 million shares of the company, accounting for 5.34 percent of the total share capital.
○Xinhai Electric saw shareholding increase
------
The actual controller, directors, supervisors and management of Ningbo Xinhai Electric Co., Ltd. (002120.SZ) increased the shareholding in the company by 1.15 million shares at an average price of 13.86 yuan per share during Sept. 17-18, accounting for 0.77 percent of the total share capital. The market value of the company stands at 2.08 billion yuan at present. Shanghai RAAS Blood Products Co., Ltd. (002252.SZ), the shareholder of Zhejiang Fuchunjiang Environmental Thermoelectric Co., Ltd. (002479.SZ), bought 20 million shares of the company at an average price of 9 yuan per share through block trading on Sept. 17, which was totally valued at 180 million yuan. Previously, RAAS Blood Products purchased 10 million shares of the company at 198 million yuan on June 11.
Tianjin Datong Investment Group Co., Ltd., the controlling shareholder of Sichuan Datong Gas Development Co., Ltd. (000593.SZ), increased the shareholding in the company by 1,114,000 shares at an average price of 9.18 yuan per share from July 10 to Sept. 17, accounting for 0.4 percent of the total share capital. The market value of the company stands at about 2.2 billion yuan at present. Wang Mingwang, the actual controller of Sunwoda Electronic Co., Ltd. (300207.SZ), increased the shareholding in the company by 1.36 million shares at an average price of 22.03 yuan per share on Sept. 18. According to its plan for shareholding increase, the amount of the shareholding increase in the company will be more than 230 million yuan in the next six months starting from July 20.
[Trading Trends]
○NetPosa Technologies bought by five institutes
------
The trading volume ranking list on Sep. 18 shows that five institutes bought NetPosa Technologies, Ltd. (300367.SZ) with a total of 131 million yuan, accounting for 31 percent of its intraday turnover. The company's merger and acquisition with Beijing Cankau Intelligent Technologies Co. Ltd. and Guangzhou Smartspyeye Technologies Co. Ltd. have been approved by China Securities Regulatory Commission recently. Institutions believed that the company will accelerate the extended expansion to strengthen the advantages to enter the security market for household and small and medium enterprises. Institutions are especially optimistic towards its transformation to comprehensive security and protection services operator based on the video from the video supervision supplier.
[Weekly Review]
○No macro worries but medium and micro opportunities
------
The market presented a fluctuation within a wide range last week. Investors experienced two-side extremes with 1,000 stocks soared or plummeted by the daily limit of 10 percent. The ChiNext board soared by 7.16 percent on Wednesday, setting a new high in intraday increase, which showed that risk preference of the overall market increased. The trading volume ranking list on Friday also showed that individual stocks of small and medium start-up enterprises were bought through more institutional seats.
It is fair to say that as investors form a stable expectation on the clean-up of off-market margin financing and the Federal Reserve temporarily maintained the interest rate unchanged, the market is forming a situation without macro worries and with medium and micro opportunities. The market with fluctuation which is familiar with many investors may come. The index may see no significant hike but the medium and micro opportunities driven by events and themes will crop out one after another.
Under such background, SSN focused in key issues and closely followed the process of the clean-up of off-market margin financing for investors on the one hand. On the other, we maintained the forward-looking report on industry information and professional interpretation of company information and select targets for investors to achieve recovery. Both the information security, lithium carbonate and fluorine chemical sectors reported last week and the state-owned assets reform in Shanghai and the big data sector reported earlier are pioneers in the market recovery.
In addition, with the end of the third quarter approaches, the market will pay more attention on results. Individual stocks with falling stock prices but improved fundamentals will be more attractive after the plunge in the previous stage. In other words, investors will prefer companies with stable growth after the universal hiking conditions.
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