[Today's Guide]
○Fans economy to see more opportunities
○More middle and small-size insurance enterprises seek for listing platform
○Institutes investigate oversold small-cap stocks
○Phosphate fertilizer business of Liuguo Chemical keeps recovering
[SSN View]
Fans economy to see more opportunities
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Based on historical experiences of Europe, the U.S. and Japan, industries to benefit most during economic sluggishness are fans economy, which includes games, sports or film-television industry. The high operation data on relevant industries in China shows that the phenomenon is reproduced in a large scale in China. Market hotspots arising from it are favored by institutional investors in the fourth quarter.
With the hot broadcast of movies and TV programs in the summer vacation and the increasingly popular paid contents with high quality, the buzzword IP (intellectual property, namely literary works can be adapted into films) in Hollywood became known in the film-television industry in China. The upstream and downstream industrial chains based on this have been expanded. Internet-based literary websites, publishers, film and television program producers, game industries and suppliers of derivatives are conducting competitions and cooperation based on their own advantages in order to meet the huge emotional consumption demand of the young generation. All these signs show that it is time for the fans economy. The fans economy is expected to be the next huge opportunity.
Meanwhile, game and electronic sports industries are also greatly promoted by the government, which also belong to the industries with revenues based on fans. Besides the annual China Digital Entertainment Expo, electronic sports is the only internet sporting event among all the sporting events now, which had been officially regarded as the 78th national sport in 2003. Market space of the electronic sports industry will reach about 80 billion yuan according to institutions' measurement and calculation, with game operation, competition operation and game media sharing the market.
Institutional investors highly focus on game and electronic sports industries, mainly thanks to their high incomes and bonuses. Taking the just-ended professional league TI5DOTA for example, a Chinese team undertaking the 2th to 5th places totally obtained the bonuses of over 44 million yuan. Wang Sicong, Chairman of Prometheus Capital Co., Ltd., once tended to hire a live commentator on electronic sports with an annual salary of several millions yuan, making a stir in the industry. High incomes and bonuses are signals to show that game and electronic sports industries are about to break out, but also laterally reflect their huge growth space in the future.
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[Institutions' Movement]
More middle and small-size insurance enterprises seek for listing platform
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Recently, Baotou Huazi Industry Co., Ltd. (600191.SH), a listed company under Tomorrow Holding Limited Company, showed good performance in stock price. The reason behind its surge is that it plans to control 51 percent equities of Huaxia Life Insurance Co., Ltd. and change into a similar-insurance stock. Investigation by SSN suggests that this is not an individual case. In fact, a large number of middle and small-sized insurance companies are seeking for listed object now and hope to achieve indirect "consolidation listing" by being incorporated into a listed company. The reason behind the phenomenon is that the risk-oriented second generation solvency regulatory system for insurance industry will be launched at the beginning of next year. It will bring big pressure on capital supplement to middle and small-sized insurance companies which are engaged in mass sales of financial insurance products. A rapid and sustainable capital supplement channel must be found as soon as possible.
According to investigation, two kinds of listed companies are most interested in. First kind of company is the listed company under the controlling shareholder or actual controller of the middle and small-sized insurance companies. These companies are the best choice either considering controlling stake or the cost of transaction; the other kind of company turns out to be enterprises with main business seeing long-term loss and even faced with bankruptcy. Shareholders of the middle and small-sized insurance companies will coordinate consolidation issues.
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[Data Reference]
Institutes investigate oversold small-cap stocks
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Following the slump of A shares, private funds have intensively investigated listed companies. SSN learnt from the disclosed results on the investigation that institutes have investigated over 160 listed companies since August. Among them, over 140 companies, even including Suzhou New Sea Union Telecom Technology Co., Ltd. (002089.SZ) and Guangdong Dynavolt Power Technology Co., Ltd. (002684.SZ) whose performances show positive signs in the third quarter, saw their free-float market value below 6 billion yuan and underperformed the CSI 500 Index.
New Sea Union Telecom Technology forecast its net profit in the first three quarters increasing by 60 to 90 percent year on year. The company's performs well in the performance growth of private network communication business. Its progress of transforming to an Internet-based provider has become a focus of institutes. It is also learnt that New Sea Union Telecom Technology began to lay out plans in cloud ecological chain since last year. With the improvement of its cloud ecosystem, the company will gradually see increasing profits in the future, which is one of the factors for its performance growth.
Dynavolt Power Technology forecasts its net profit in the first three quarters turning losses to profit. In a recent interview with institutes, Dynavolt Power Technology indicated that as it began to manufacture and sell lithium battery products since June, the revenue in lithium battery (including vehicle battery management system) and energy storage system will be seen in the next half year. It predicts that they will bring massive sales revenue with high profits.
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[Information Radar]
Phosphate fertilizer business of Liuguo Chemical keeps recovering
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Anhui Liuguo Chemical Co., Ltd. (600470.SH) continues to show good operation performance in its principal business phosphate fertilizer in the third quarter. Its featured product diammonium phosphate (DAP) sees booms in both production and sales, whose factory price stands at about 2,700 yuan per ton. Despite the decline in global production capacity of phosphate fertilizer since the beginning of this year, the demand for phosphate fertilizer still increases slightly, improving the supply and demand situation. At the same time, policy on phosphate fertilizer export continues to loose in 2015, which adjusts the annual export tariff to be 100 yuan per ton. The net profit of the company is expected to reach about 52 million yuan in the first half of 2015. The company will turn losses into profits when compared with the same period of 2014 and keep this momentum for the rest of the year.
In addition, Liuguo Chemical announced in early June that its controlling shareholder Tongling Chemical Industry Group Co., Ltd planed mixed ownership reform. Institute believes that as an important capital platform under the group, Liuguo Chemical is expected to play a significant role in the reform.
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