[Today's Guide]
> International markets surged during Chinese National Day holiday, bearish factors sprang up
> Agricultural reclamation reform to issue in October, expecting land revaluation
> AVIC consolidates aero-engine assets, chip industry to embrace rapid development
> Qianhai Life Insurance increases shareholding in Jonjee Hi-Tech to 5 pct limit for four times, Global Top E-Commerce to raise RMB2.7 bln through private placement
[SSN Focus]
○ International markets surged during Chinese National Day holiday, bearish factors sprang up
------
International stock markets all went up during China's National Day holiday. The U.S. government released its economic data on employment and exports, which is quite disappointing, raising the market's expectations that the Federal Reserve (Fed) will again delay interest rates hike. The probability of the Fed's raising interest rates in October reflected in the interest rate market has decreased below 10 percent. All major stock indexes in Europe and the U.S. jumped over 5 percent. The Hang Seng China Enterprises Index even surged over 10 percent, the highest level since late August.
In terms of sectors, the energy sector was a standout. PetroChina Company Limited (00857.HK) jumped 17 percent and its prices gained ground on 50 U.S. dollars per barrel as the New York crude oil futures climbed to the new high since August. Signs also showed that major oil producers, including Russia and Saudi Arabia, might further negotiate on supporting the market. According to a monthly report released by U.S. Energy Information Administration, the oil demand growth around the world in 2016 will record new high in six years and the demand growth in the non-OPEC oil producers will stagnate.
Comment: A-share market's decline in late September is mainly out of the market concern over the risks in international market during the long holiday and pressures on capital outflow caused by off-market margin financing clear-up. Yet all bearish factors are disappearing, with bullish factors, such as decreasing interest rate and reform, appearing. As the Thirteenth Five Year plans have been prepared and detailed rules have been released for state-owned enterprises (SOEs) reform, the market will embrace constant investment opportunities.
[TOP]
[SSN Selection]
○ Tu Youyou, William Campbell and Satoshi Omura jointly won the 2015 Nobel Prize in physiology or medicine. Premier Li Keqiang said in a congratulatory letter that Tu's winning the prize marked a great contribution of traditional Chinese medicine to the cause of human health.
○ Sweden's Tomas Lindahl, American Paul Modrich and Turkish-born Aziz Sancar won the 2015 Nobel Prize in chemistry for their work on mapping how cells repair damaged DNA.
○ PMI in manufacturing industry rebounded by 0.1 percentage point to 49.8 percent in September, with investment project of stabile growth greatly promoting large-scale enterprises.
○ Various ministries and commissions decided to lower down-payment proportion of the first house purchased in cities with non-restricted policies, and push out housing fund in different places, beneficial to release rigid demand of real estate market.
○ State Forestry Administration indicated that the "13th 5-year planning" of forestry will focus on deepening the reform to guide the order and standardized movement of forest right.
○ Ministry of Industry and Information Technology of the PRC issued a Guideline on Enhancing Development of Tourism Equipment Manufacturing Industry to support the industrial development in passenger liner, houseboat and cable car.
[Industrial Information]
○ Agricultural reclamation reform to issue in October, expecting land revaluation
------
It is learnt from SSN that relevant departments are striving for implementation of agricultural reclamation reform scheme, which will be issued in October as soon as possible. No. 1 Central Document issued this year has proposed that the issuing of policies and measures should be accelerated to develop agricultural reclamation reform. It is the first time for agricultural reclamation issues to be specified in No. 1 Central Document.
Comment: Land resource is very rich in agricultural reclamation system, recording 650 billion yuan for the total value of output last year. However, it faces low operating efficiency with social enterprises ignored in reclamation areas. Important reform direction is expected to relieve the social burden in agricultural reclamation system, vitalize existing assets, and accelerate land transfer to bring revaluation opportunity for land resource. In terms of listed companies, Heilongjiang Agriculture Company Limited (600598.SH) is the only listed platform for agricultural reclamation in Heilongjiang Province; 10 million mu land belonging to the substantial shareholder of China Hainan Rubber Industry Group Co., Ltd. (601118.SH) and 4 million mu land belonging to the substantial shareholder of Gansu Yasheng Industrial (Group) Co., Ltd. (600108.SH) have not been injected into listed companies yet.
[TOP]
○ AVIC consolidates aero-engine assets, aero-engine industry to see market expansion
------
AVIC Aviation Engine Corporation Plc. (600893.SH), Sichuan Chengfa Aero Science ＆ Technology Co., Ltd. (600391.SH) and AVIC Aero-Engine Controls Co., Ltd. (000738.SZ) all announced that they will carry out trading suspension from Oct. 8 as their actual controller Aviation Industry Corporation of China (AVIC) consolidates assets related to aero-engine.
Comment: The aero-engine was first mentioned in the 2015 report on the work of the government. The report proposes to implement significant projects including aero-engine and gas turbine and strengthen national defense scientific research and hi-tech weaponry construction, which will see breakthroughs in 2025. Driven by the national security strategy and localization replacement, the supporting industries such as engine parts and high temperature alloy are expected to embrace market expansion. Relevant listed companies including Fushun Special Steel Co., Ltd. (600399.SH), Shaanxi Ligeance Mineral Resources Co., Ltd. (000697.SZ), Anhui Yingliu Electromechanical Co., Ltd. (603308.SH) and Hunan Boyun New Materials Co., Ltd. (002297.SZ) will benefit from it.
○ Industry leading authority may join in Tsinghua Unigroup, mainland chip industry to embrace rapid development
------
Gao Qiquan, honored as "godfather of Taiwan DRAM" and general manager of Nanya Technology Corporation announced dimission on Oct. 6. Gao founded and controlled Nanya Technology and Inotera Memories, Inc. for nearly 20 years, which are two giants in the DRAM chip industry in Taiwan. The market predicts that Gao will join in Tsinghua Unigroup Ltd. after his resignation. Impacted by this news, Nanya Technology and Inotera Memories suffered slump in stocks against the market on Oct. 6, while another chip tycoon Micron Technology, Inc. (NASDAQ:MU), which Tsinghua Unigroup had ever intended to purchase, surged in the U.S. stock market at closing hours.
Comment: Chinese government and large enterprises including Tsinghua Unigroup have attached increasing importance to the localization of chips since investment funds of China's integrated circuit industry were established. The participation of Gao Qiquan will further boost the development of chip industry in mainland China. Companies listed in A-share market and engaged in the DRAM chip industry include China Wafer Level CSP Co., Ltd. (603005.SH), Shenzhen Kaifa Technology Co., Ltd. (000021.SZ) and Wuxi Taiji Industry Company Ltd. (600667.SH), etc.
[TOP]
[Announcement Interpretation]
○ Qianhai Life Insurance increases shareholding in Jonjee Hi-Tech to 5 pct limit for four times
------
Jonjee Hi-Tech Industrial and Commercial Holding Co., Ltd. (600872.SH) announced that Qianhai Life Insurance Co., Ltd. increased the shareholding in the company with 39.83 million shares from Sept. 25 to 29, accounting for 5 percent, reaching the 5 percent limit for the fourth time. Qianhai Life Insurance currently holds 20.11 percent shares of Jonjee Hi-Tech. Jonjee Hi-Tech announced on Sept. 8 that it proposed to issue shares to Qianhai Life Insurance through private placement. Qianhai Life Insurance and its parties acting in concert will hold 42.01 percent shares of the company after it is completed. The position of Yao Zhenhua, the actual controller, will be further consolidated.
[TOP]
○ Global Top E-Commerce to raise RMB2.7 bln through private placement to establish cross-border import and export e-business platform
------
Global Top E-Commerce Co., Ltd. (002640.SZ) proposes to raise 2.71 billion yuan by issuing 130 million shares at no less than 20.92 yuan per share through private placement. The proceeds will be used in the construction of a cross-border import e-business platform, a cross-border export e-business B2B comprehensive services platform and the cross-border e-business storage and ancillary transportation construction project as well as the repayment of debts.
○ Nanning Sugar Industry to acquire 75 pct equities of Yuanfeng Sugar Industry with RMB60 mln
------
Nanning Sugar Industry Co., Ltd. (000911.SZ) plans to acquire 75 percent equities of Guangxi Huangjiang Yuanfeng Sugar Industry Co., Ltd. with 60 million yuan to increase its sugar areas. The total sugar cane output of the company will be increased from 500,000 tons to 800,000 tons after the acquisition.
○ Xianfeng New Material and Nanfang Ventilator see shareholding increases
------
Lu Xianfeng, the actual controller of Ningbo Xianfeng New Material Co., Ltd. (300163.SZ), increased the shareholding in the company with 4.74 million shares on Sept. 28 and 30, accounting for 1 percent of its total share capital. Yang Zijiang, the actual controller of Nanfang Ventilator Co., Ltd. (300004.SZ), increased the shareholding in the company with 4.96 million shares on Sept. 30, accounting for 0.97 percent of its total share capital.
○ Shanghai Phar. and DXY to develop phar. e-business
------
Shanghai Pharmaceuticals Holding Co., Ltd. (026.7.HK; 601607.SH) Shanghai Pharmaceuticals Big Health Cloud Commerce Holdings Co., Ltd., a pharmaceuticals e-business platform, as well as DXY will establish a comprehensive strategic partnership in the pharmaceuticals e-business and mobile medical treatment industry to develop market opportunities and business opportunities in the mobile medical treatment industry. DXY is the biggest socialization media and data platform in the medical industry. As at the end of 2014, it has 4.5 million registered users, of which 1.3 million are registered doctors with real-name certification.
Latest comments