[Today's Guide]
> China ＆ U.S. made joint statement on climate change to highlight low carbon
> Reform on scientific research institutes and universities to speed up, asset securitization to quicken
> Wutong Communications to explore intelligent parcel delivery locker, Changshan Textile acquires software companies
> Softto to buy smart city assets, Xi'an Tourism saw increase in shareholding
[SSN Focus]
○China ＆ U.S. made joint statement on climate change to highlight low carbon
------
According to a joint statement on climate change issued by Chinese and American presidents on Sept. 25, China will channel 20 billion yuan ($3.14 billion) for setting up the China South-South Climate Cooperation Fund to help developing countries combat climate change. China will launch a national emission trading system in 2017. China also commits to promote low-carbon buildings and transportation, with the share of green buildings reaching 50 percent in newly built buildings in cities and towns by 2020 and the share of public transport in motorized travel reaching 30 percent in big- and medium-sized cities by 2020.
Comment: Low carbon is a key word of the joint statement. China will lower carbon dioxide emissions per unit of GDP by 60-65 percent from the 2005 level by 2030, which will force China's carbon emission reduction market to launch. The market will reach a 100 billion scale. Among listed companies, Hunan Kaimeite Gases Co., Ltd. (002549.SZ) collaborates with Hunan University in research of carbon capture technology which is one of major methods to tackle climate change. Involved in the fluorine chemical industry which has benefited from shrinking capacity resulted from carbon emission reduction, Zhejiang Juhua Co., Ltd. (600160.SH) is among the first to trade carbon emission permits in the industry. Shanghai Zhixin Electric Co., Ltd. (600517.SH) plans to build its carbon asset management subsidiary into a leading provider of carbon emission trading in China.
◆Chinese and the U.S. presidents also reached a consensus on the Bilateral Investment Treaty (BIT). The movie will significantly unleash the two countries' potential in mutual investment and facilitate China's reform and structural adjustment.
[TOP]
[SSN Selection]
○ The spokesperson of the China Securities Regulatory Commission indicated that about 70 percent of margin financing accounts have been cleared up, and an index-breaker system will be implemented after all preparing works are finished.
○The State Council issued a guideline on Sep. 26 to accelerate the establishment of a new platform to support business start-up and innovation for the public.
○ The State Council gave an official and written reply to approve Outline on Cooperative Development in Bohai Sea Region, requiring an intensively-established cooperation and coordination mechanism leaded by Beijing.
○ Lian Weiliang, deputy director of the National Development and Reform Commission, indicated that unsuitable measures will not be implemented for unsuitable enterprises during the mixed ownership system reform of state-owned enterprises, encouraging private capital involved in mixed ownership system reform through various modes.
○The controlling shareholder of Guangxi Wuzhou Zhongheng Group Co., Ltd. (600252.SH) is unable to repay collateral margin trading loan of 370 million yuan of Zhongrong International Trust Co., Ltd., which is likely to perform the pledging right on 186 million shares of Zhongheng Group held by the controlling shareholder.
[Industry Information]
○Reform on scientific research institutes and universities to speed up, asset securitization to quicken
------
The General Office of the Central Committee and the General Office of the State Council recently jointly printed and distributed the implementation scheme on deepening reform on technology system, requiring achieving breakthroughs in key areas and critical links of the technology system reform. The scheme emphasizes to build a more efficient scientific research system, deepening classification reform on research institutes and implement leading action plan by Chinese Academy of Sciences. Meanwhile, the scientific research system of the institutions of higher education should be improved and the construction of world class universities and subjects must be pushed forward.
Comment: Under the promotion of innovation-driven development strategy, scientific research institutes and universities, as an important part, will see quickened reform. Institutions believe that in nature, the reform of universities is the reform of state-owned enterprises (SOEs). At present, the assets of university enterprises reaches 450 billion yuan and potential size could exceed one trillion yuan. Therefore, there is large room for securitization. In addition, thanks to the reform in scientific research institutes and the integration of military and civil industry, the integration of military scientific research institute will also speed up. China Hi-Tech Group Co., Ltd. (600730.SH) and Founder Technology Group Co., Ltd. (600601.SH) are two listed companies under Peking University. Scientific institutes under the actual controller of China Avionics Systems Co., Ltd. (600372.SH) and Glarun Technology Co., Ltd. (600562.SH) have high expectation on asset injection.
[TOP]
[Announcement Interpretation]
○Wutong Communications to raise RMB1.2 bln through private placement to explore intelligent parcel delivery locker
------
Jiangsu Wutong Communications Co., Ltd. (300292.SZ) plans to raise 1,175 million yuan through private placement by issuing 46.42 million shares to invest in the development and industrialization project of intelligent parcel delivery locker. The construction of the project will last for two years and 24,000 sets of intelligent parcel delivery locker will be produced annually once the designed capacity is reached, resulting in an average annual net profit of 198 million yuan. The project aims at coping with the "last mile" problem brought by the rapid development of e-commerce and express industry.
○Changshan Textile acquires four software companies with over RMB400 mln to facilitate strategic transformation
------
Beiming Software Co., Ltd., a fully-owned subsidiary of Shijiazhuang Changshan Textile Company Limited (000158.SZ), plans to acquire 100 percent equities of SuccWare (Beijing) Software System Co., Ltd., Beijing Tianshi Future Automation Engineering Technology Co., Ltd., Shandong Success Information Technology Co., Ltd. and Ming Technology Co., Ltd. with 118 million yuan, 228 million yuan, 45.17 million yuan and 42.60 million yuan, respectively. These four companies are all complementary and cooperative with Beiming Software in business. They commit a net profit of 37.52 million yuan, 46.78 million yuan, 58.43 million yuan and 72.88 million yuan, respectively, during 2015-2018 period.
Comment: Changshan Textile is principally engaged in textile and garment. It acquired Beiming Software with over 2.1 billion yuan in July, kicking of its strategic transformation towards software industry.
[TOP]
○ Softto to buy smart city assets at RMB250 mln
------
Softto Co., Ltd. (000662.SZ) plans to purchase 100 percent equity and creditor's rights of Beijing Zhongyu Smart Information Technology Service Co., Ltd. at 245 million yuan. Zhongyu Smart Information Technology Service is specialized in security and protection video surveillance information collection and the development and sales of its supporting equipment. Its business mainly includes the derived business from 41.37 percent equity of Yaan Tech. Co., Ltd. Tianjin China. The net profit of Zhongyu Smart Information Technology Service is predicted to be no less than 20.68 million yuan and 26 million yuan in 2016 and 2017 respectively, and that of Yaan Tech. to be no less than 40 million yuan, 50 million yuan and 63.6 million yuan from 2015 to 2017 respectively.
Comment: The company is now engaged in cosmetics and will turn to business related to smart city after purchasing Teamax Technology Group in September.
○ Xi'an Tourism and Digital China Information Service saw increase in shareholding
------
Xi'an Tourism Group, controlling shareholder of Xi'an Tourism Co., Ltd. (000610.SZ), increased shareholding in the company by 3.48 million shares totally on Sept. 15, 23 and 24. Kunshang Shenchang Technology Co., Ltd., shareholder of Digital China Information Service Company Ltd. (000555.SZ) increased shareholding in the company by 3.49 million shares from Sept. 23 to 25.
○ Zhangjiang Hi-tech Park Development to introduce Pudong Kechuang Investment (Group) as strategic investor
------
Zhangjiang Hi-Tech Park, controlling shareholder of Shanghai Zhangjiang Hi-tech Park Development Co., Ltd. (600895.SH), transfers its 10 percent equity in the company to Shanghai Pudong Kechuang Investment (Group) Co., Ltd, which is under preparation. It plans to make the group as its strategic investor to improve its investment capability in hi-tech industry.
[TOP]
[Weekly Review]
○ Make investment based on calendar
------
The calendar of September is highly expected with many preparing for the Mid-Autumn Day and the National Day holidays. The stock market in September was dominated by major events on the financial calendar, including the V-Day parade on Sept. 3, the top design on the state-owned enterprises (SOEs) reform on Sept. 13, the releasing of the Hangzhou City's winning of the bid for the Asian Games on Sept. 16, the cyber security mentioned by President Xi on his U.S. visit, the free trade negotiation among China, Japan and South Korea on Sept. 24 and the debut of the Lost in Hong Kong on Sept. 25. Relevant stocks surged before such important days while many fell after the official realization of such bullish news.
Is it the key to successful investment to determine trading opportunities based on the calendar? It is not all the cases. Sept. 1 marks the 60th anniversary of the establishment of Tibet Autonomous Region. But stocks related Tibet have been declining since late August. Stocks proposing high conversion and dividends have been surging in July and August every year while such stocks stood out only in mid-September.
As a matter of fact, each investment mode has its own applicable environment. When such policies on an investment of 4 trillion yuan and free trade zone are introduced, local governments are enthusiastic in making investments and choosing stocks based on the map often works. Where the prices of resources continued to hike, choosing stocks based on the periodic table of elements often outperform. When new investors enter into the market during the bullish market, choosing stocks with low prices usually achieve unexpected results. As at this September, the stock indexes have been fluctuating with smaller turnover after two rounds of plunges. Many institutes escaped earlier own sufficient capitals. It has become their common choices based on the calendar for short-term recovery.
Besides the judging of the market environment, how to select events with higher importance and individual stocks to benefit more are also key in making investments based on the calendar. SSN will continue to give play to its own advantages and provide you with valuable information.
> China ＆ U.S. made joint statement on climate change to highlight low carbon
> Reform on scientific research institutes and universities to speed up, asset securitization to quicken
> Wutong Communications to explore intelligent parcel delivery locker, Changshan Textile acquires software companies
> Softto to buy smart city assets, Xi'an Tourism saw increase in shareholding
[SSN Focus]
○China ＆ U.S. made joint statement on climate change to highlight low carbon
------
According to a joint statement on climate change issued by Chinese and American presidents on Sept. 25, China will channel 20 billion yuan ($3.14 billion) for setting up the China South-South Climate Cooperation Fund to help developing countries combat climate change. China will launch a national emission trading system in 2017. China also commits to promote low-carbon buildings and transportation, with the share of green buildings reaching 50 percent in newly built buildings in cities and towns by 2020 and the share of public transport in motorized travel reaching 30 percent in big- and medium-sized cities by 2020.
Comment: Low carbon is a key word of the joint statement. China will lower carbon dioxide emissions per unit of GDP by 60-65 percent from the 2005 level by 2030, which will force China's carbon emission reduction market to launch. The market will reach a 100 billion scale. Among listed companies, Hunan Kaimeite Gases Co., Ltd. (002549.SZ) collaborates with Hunan University in research of carbon capture technology which is one of major methods to tackle climate change. Involved in the fluorine chemical industry which has benefited from shrinking capacity resulted from carbon emission reduction, Zhejiang Juhua Co., Ltd. (600160.SH) is among the first to trade carbon emission permits in the industry. Shanghai Zhixin Electric Co., Ltd. (600517.SH) plans to build its carbon asset management subsidiary into a leading provider of carbon emission trading in China.
◆Chinese and the U.S. presidents also reached a consensus on the Bilateral Investment Treaty (BIT). The movie will significantly unleash the two countries' potential in mutual investment and facilitate China's reform and structural adjustment.
[TOP]
[SSN Selection]
○ The spokesperson of the China Securities Regulatory Commission indicated that about 70 percent of margin financing accounts have been cleared up, and an index-breaker system will be implemented after all preparing works are finished.
○The State Council issued a guideline on Sep. 26 to accelerate the establishment of a new platform to support business start-up and innovation for the public.
○ The State Council gave an official and written reply to approve Outline on Cooperative Development in Bohai Sea Region, requiring an intensively-established cooperation and coordination mechanism leaded by Beijing.
○ Lian Weiliang, deputy director of the National Development and Reform Commission, indicated that unsuitable measures will not be implemented for unsuitable enterprises during the mixed ownership system reform of state-owned enterprises, encouraging private capital involved in mixed ownership system reform through various modes.
○The controlling shareholder of Guangxi Wuzhou Zhongheng Group Co., Ltd. (600252.SH) is unable to repay collateral margin trading loan of 370 million yuan of Zhongrong International Trust Co., Ltd., which is likely to perform the pledging right on 186 million shares of Zhongheng Group held by the controlling shareholder.
[Industry Information]
○Reform on scientific research institutes and universities to speed up, asset securitization to quicken
------
The General Office of the Central Committee and the General Office of the State Council recently jointly printed and distributed the implementation scheme on deepening reform on technology system, requiring achieving breakthroughs in key areas and critical links of the technology system reform. The scheme emphasizes to build a more efficient scientific research system, deepening classification reform on research institutes and implement leading action plan by Chinese Academy of Sciences. Meanwhile, the scientific research system of the institutions of higher education should be improved and the construction of world class universities and subjects must be pushed forward.
Comment: Under the promotion of innovation-driven development strategy, scientific research institutes and universities, as an important part, will see quickened reform. Institutions believe that in nature, the reform of universities is the reform of state-owned enterprises (SOEs). At present, the assets of university enterprises reaches 450 billion yuan and potential size could exceed one trillion yuan. Therefore, there is large room for securitization. In addition, thanks to the reform in scientific research institutes and the integration of military and civil industry, the integration of military scientific research institute will also speed up. China Hi-Tech Group Co., Ltd. (600730.SH) and Founder Technology Group Co., Ltd. (600601.SH) are two listed companies under Peking University. Scientific institutes under the actual controller of China Avionics Systems Co., Ltd. (600372.SH) and Glarun Technology Co., Ltd. (600562.SH) have high expectation on asset injection.
[TOP]
[Announcement Interpretation]
○Wutong Communications to raise RMB1.2 bln through private placement to explore intelligent parcel delivery locker
------
Jiangsu Wutong Communications Co., Ltd. (300292.SZ) plans to raise 1,175 million yuan through private placement by issuing 46.42 million shares to invest in the development and industrialization project of intelligent parcel delivery locker. The construction of the project will last for two years and 24,000 sets of intelligent parcel delivery locker will be produced annually once the designed capacity is reached, resulting in an average annual net profit of 198 million yuan. The project aims at coping with the "last mile" problem brought by the rapid development of e-commerce and express industry.
○Changshan Textile acquires four software companies with over RMB400 mln to facilitate strategic transformation
------
Beiming Software Co., Ltd., a fully-owned subsidiary of Shijiazhuang Changshan Textile Company Limited (000158.SZ), plans to acquire 100 percent equities of SuccWare (Beijing) Software System Co., Ltd., Beijing Tianshi Future Automation Engineering Technology Co., Ltd., Shandong Success Information Technology Co., Ltd. and Ming Technology Co., Ltd. with 118 million yuan, 228 million yuan, 45.17 million yuan and 42.60 million yuan, respectively. These four companies are all complementary and cooperative with Beiming Software in business. They commit a net profit of 37.52 million yuan, 46.78 million yuan, 58.43 million yuan and 72.88 million yuan, respectively, during 2015-2018 period.
Comment: Changshan Textile is principally engaged in textile and garment. It acquired Beiming Software with over 2.1 billion yuan in July, kicking of its strategic transformation towards software industry.
[TOP]
○ Softto to buy smart city assets at RMB250 mln
------
Softto Co., Ltd. (000662.SZ) plans to purchase 100 percent equity and creditor's rights of Beijing Zhongyu Smart Information Technology Service Co., Ltd. at 245 million yuan. Zhongyu Smart Information Technology Service is specialized in security and protection video surveillance information collection and the development and sales of its supporting equipment. Its business mainly includes the derived business from 41.37 percent equity of Yaan Tech. Co., Ltd. Tianjin China. The net profit of Zhongyu Smart Information Technology Service is predicted to be no less than 20.68 million yuan and 26 million yuan in 2016 and 2017 respectively, and that of Yaan Tech. to be no less than 40 million yuan, 50 million yuan and 63.6 million yuan from 2015 to 2017 respectively.
Comment: The company is now engaged in cosmetics and will turn to business related to smart city after purchasing Teamax Technology Group in September.
○ Xi'an Tourism and Digital China Information Service saw increase in shareholding
------
Xi'an Tourism Group, controlling shareholder of Xi'an Tourism Co., Ltd. (000610.SZ), increased shareholding in the company by 3.48 million shares totally on Sept. 15, 23 and 24. Kunshang Shenchang Technology Co., Ltd., shareholder of Digital China Information Service Company Ltd. (000555.SZ) increased shareholding in the company by 3.49 million shares from Sept. 23 to 25.
○ Zhangjiang Hi-tech Park Development to introduce Pudong Kechuang Investment (Group) as strategic investor
------
Zhangjiang Hi-Tech Park, controlling shareholder of Shanghai Zhangjiang Hi-tech Park Development Co., Ltd. (600895.SH), transfers its 10 percent equity in the company to Shanghai Pudong Kechuang Investment (Group) Co., Ltd, which is under preparation. It plans to make the group as its strategic investor to improve its investment capability in hi-tech industry.
[TOP]
[Weekly Review]
○ Make investment based on calendar
------
The calendar of September is highly expected with many preparing for the Mid-Autumn Day and the National Day holidays. The stock market in September was dominated by major events on the financial calendar, including the V-Day parade on Sept. 3, the top design on the state-owned enterprises (SOEs) reform on Sept. 13, the releasing of the Hangzhou City's winning of the bid for the Asian Games on Sept. 16, the cyber security mentioned by President Xi on his U.S. visit, the free trade negotiation among China, Japan and South Korea on Sept. 24 and the debut of the Lost in Hong Kong on Sept. 25. Relevant stocks surged before such important days while many fell after the official realization of such bullish news.
Is it the key to successful investment to determine trading opportunities based on the calendar? It is not all the cases. Sept. 1 marks the 60th anniversary of the establishment of Tibet Autonomous Region. But stocks related Tibet have been declining since late August. Stocks proposing high conversion and dividends have been surging in July and August every year while such stocks stood out only in mid-September.
As a matter of fact, each investment mode has its own applicable environment. When such policies on an investment of 4 trillion yuan and free trade zone are introduced, local governments are enthusiastic in making investments and choosing stocks based on the map often works. Where the prices of resources continued to hike, choosing stocks based on the periodic table of elements often outperform. When new investors enter into the market during the bullish market, choosing stocks with low prices usually achieve unexpected results. As at this September, the stock indexes have been fluctuating with smaller turnover after two rounds of plunges. Many institutes escaped earlier own sufficient capitals. It has become their common choices based on the calendar for short-term recovery.
Besides the judging of the market environment, how to select events with higher importance and individual stocks to benefit more are also key in making investments based on the calendar. SSN will continue to give play to its own advantages and provide you with valuable information.
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