[Today's Guide]
○China's brain plan to embrace policy support, helping to occupy technological commanding height
○Profitability of aviation industry keeps improving, research on quantum memory achieves breakthrough
○Guo Taiming to involved in private placement of Ancai Hi-Tech, DEA General Aviation Holding to develop general aviation
○Shanghai Mechanical ＆ Electrical Industry to acquire CTU to involved in environmental protection, Tianyu Information Industry conducts business cooperation with Qualcomm Incorporated
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[SSN Focus]
○China's brain plan to embrace policy support, helping to occupy technological commanding height
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2015 Pujiang Innovation Forum, jointly hosted by the Ministry of Science and Technology and the People's Government of Shanghai Municipality, will be convened on Oct. 27 and 28. "Brain science and artificial intelligence" might become an important topic of the forum. It is also learnt by SSN that under the context that the State strives to promote innovation-driven development, China's human brain plan might gain policy support. The plan, a proposal by Baidu CEO Li Yanhong during the National People's Congress and Chinese People's Political Consultative Conference, suggests establishing national-level brain plan to facilitate the development of artificial intelligence. The U.S. invested 3 billion U.S. dollar in building a brain fund plan following the investment of 1 billion U.S. dollar by the European Union (EU) in the human brain plan.
Comment: Institutions predict that under the promotion of policies, enterprises involved in the technologies and equipment concerning intelligent human-computer interaction, natural language processing and computer vision might occupy the new technological commanding height. As to listed companies, the HMI human-automobile interaction system developed by Ningbo Joyson Electronic Corp. (600699.SH), principally engaged in automotive electronics, has been widely applied in intelligent driving area; the machine vision products developed by Daheng New Epoch Technology, Inc. (600288.SH) enjoy strong competitiveness in areas including industrial detection and intelligent transport; Shanghai Fudan Forward Science ＆ Technology Co., Ltd. (600624.SH) was favored in the speculation on artificial brain in the past.
◆The trading volume ranking list on Oct. 20 shows that Iflytek Co., Ltd. (002230.SZ) is bought by two institutional seats with a total of 88.68 million yuan, accounting for 5 percent of its intraday turnover. Institutions hold that the company takes up over 60 percent of the voice market. An advanced forward-looking project focusing on artificial intelligence launched by the company enables it to occupy the commanding height of artificial intelligence technology and the entrance of intelligent search.
[SSN Selection]
○Spokesperson of the Ministry of Commerce indicated that Chinese President Xi Jinping will reach a string of important agreements in economy and trading with the UK during his visit there. China and the UK will see huge potential in their cooperation in infrastructure.
○The king of the Netherlands will have his state visit to China from Oct. 25 to 29. The cooperation of the two countries will fall on agriculture, e-commerce and etc.
○Latest weekly report of China Securities Depository and Clearing Corporation Limited (CSDC) shows that the number of newly-added accounts recorded 295,500 last week, ending the consecutive drop in four weeks.
○The total retail sales of consumer goods in the first three quarters of this year records a year-on-year growth of 10.5 percent, while the online retail sales nationwide in the same period records a year-on-year growth of 36.2 percent.
○The Ministry of Environmental Protection on Oct. 20 afternoon reports to the media that Beijing, Tianjin and Hebei Province as well as some surrounding cities might suffer heavy air pollution from Oct. 23 to 25.
○Latest announcement of Shanghai Shyndec Pharmaceutical Co., Ltd. (600420.SH) and China National Accord Medicines Corporation Ltd. (000028.SZ) reports trading suspension of their stocks from Oct. 21 due to that China National Pharmaceutical Group Corporation is planning significant issues concerning their business.
[Companies Hotspot]
○Controlling shareholder of Hengyuan Coal Industry and Electricity Power to begin to increase shareholding
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Wanbei Coal Electricity Group Co., Ltd., the controlling shareholder of Anhui Hengyuan Coal Industry and Electricity Power Co., Ltd. (600971.SH), previously committed that it would increase the shareholding in the latter with no less than 110 million yuan from July 9, 2015 to Jan. 8, 2016. Yet Wanbei Coal Electricity Group has not started to increase shareholding as it is now in the window phrase for the third quarterly report. The market expects that Wanbei Coal Electricity Group may start to increase shareholding after the window phrase. Hengyuan Coal Industry and Electricity Power will disclose its third quarterly report in Oct. 31.
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[Industry Information]
○Growing passenger throughput and policy supports bring more benefits to aviation industry
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According to statistics released by Jiangsu Statistics Bureau on Oct. 20, the passenger throughput in Jiangsu Province in the first nine month posted a year-on-year increase of 16.2 percent, 5.2 percentage points higher than that of the same period last year. On other hand, interconnectivity, transportation first and air transportation have played an important role in the "Belt and Road" initiative. The Civil Aviation Administration of China (CAAC), the 13th Five-Year Plan on civil aviation, which is under preparation, will increase efforts in the airport construction, scientifically plan airline network and encourage aviation enterprises to participate in the construction of aerial economic zone.
Comment: The aviation industry is expected to continue to boom with multiple support. Since the beginning of this year, the industry's revenue indexes, including load factor and ticket price, has shown an upward momentum. As outbound travel becomes more popular, international airlines have significantly improved. In addition to the decreasing oil prices, airlines, such as Air China Limited (601111.SH; 00753.HK) and China Southern Airlines Company Limited (600029.SH; 01055.HK), predict their net profits for the first three quarters to double.
○Research on quantum memory achieves breakthrough to help information safety construction
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The research team of University of Science and Technology of China (USTC) led by Li Chuanfeng successfully developed the multi-mode solid quantum memory for single photon, which was the first case in the world, hitting the world's record in terms of numbers of storage modes, Xinhua News' reported on Oct. 20.
Comment: Quantum communication, as the only technology that can absolutely prevent information to being intercepted, has great application values and promising future in the information safety in the military, defense and financial fields. Quantum memory is key to build remote quantum communication system. China has built and opened the first Beijing-Shanghai trunk line of quantum communication security in the world. China is now at the international advanced level in the field. Among A-share companies, Digital China Information Service Company Ltd. (000555.SZ) has undertaken the system integration project along the Beijing-Shanghai trunk line. Jiangsu Zhongtian Technology Co., Ltd. (600522.SH) donated quantum communication components to USTC Shanghai Research Institute.
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[Announcement Interpretation]
○Ancai Hi-Tech introduces Hon Hai Precision Industry through private placement, Guo Taimin to involved in A-share market
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Henan Ancai Hi-Tech Co., Ltd. (600207.SH) proposes to raise 1.1 billion yuan by issuing 173 million shares through private placement at 6.36 yuan per share to repay loans and supplement working capital. Fuding Electronics Technology (Jiashan) Co., Ltd. and Zhengzhou Investment Holding Limited will subscribe 147 million shares and 25,943,400 shares in cash, respectively. Fuding Electronics Technology is mainly engaged in new electromechanical component, numerically-controlled machine tool, automatic check equipment and robots. Ancai Hi-Tech closed at 5.94 yuan per share before its trading suspension.
Comment: The actual controller of Fuding Electronics is a Taiwan-listed company Hon Hai Precision Industry Company Ltd, which is controlled by Guo Taiming, the richest man in Taiwan. After the private placement, Fuding Electronics will hold 17.04 percent equity of Ancai Hi-Tech, making it the second largest shareholder of the company. Guo indicated in June that Hon Hai Precision Industry may spin off its mainland business and will be listed in Shanghai and Shenzhen stock exchanges. Zhengzhou Investment Holdings is a sole corporation of the State-owned Assets Supervision and Administration Commission of Zhengzhou Municipal People's Government.
○DEA General Aviation Holding to develop general aviation through private placement
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DEA General Aviation Holding Co., Ltd. (002260.SZ) plans to raise 4.9 billion yuan by issuing 278 million shares at 17.59 yuan per share through private placement to Zhejiang Canxiang Industrial Investment Co., Ltd. and other firms. The fundraising will be used for optimization and R＆D project of helicopter with co-axial rotor and spool aero-engine, unmanned aerial vehicle operation and service project, construction of modernization industrial base and debt payment. The modernization industrial base project will consist of four bases in Germany, Russia, Switzerland and Nantong City, Jiangsu Province, which will complete the company's global deployment in general aviation industry. After the private placement is finished, Canxiang Industrial Investment will hold 23 percent equity in DEA General Aviation Holding to become a shareholder of the company. Xue Qingfeng will be its new actual controller.
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○Shanghai Mechanical ＆ Electrical Industry to acquire CTU to involved in environmental protection
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Shanghai Mechanical ＆ Electrical Industry Co., Ltd. (600835.SH) intends to acquire the entire equity of Clean Technology Universe AG (CTU) at 24.4 million yuan. CTU is a world-leading service provider engaged in engineering design of environmental protection technology and equipment assembly. Its businesses cover the design and assembly of harmful waste incineration facilities and air purification facilities, R＆D and design of biomass energy facilities (for instance, refining combustible gas from wood), and design and assembly of facilities recycling and disposing vehicle garbage (for example, assembling pyrolysis device of old tires), etc.
Comment: With the whole ecological environment getting better in Europe since the 21st century, CTU expands its businesses from the traditional Europe market to the developing ones including China.
○Tianyu Information Industry conducts business cooperation with Qualcomm Incorporated
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Wuhan Guohe Technology Co., Ltd. a holding subsidiary of Wuhan Tianyu Information Industry Co., Ltd. (300205.SZ), and Qualcomm Technologies, Inc., a wholly-owned subsidiary of Qualcomm Incorporated, signed a business cooperation agreement on making joint effort to promote the company's solution to mobile terminal security.
According to the agreement, Qualcomm Technologies provides Guohe Technology with technological support, thus allowing the latter to develop the solution to mobile terminal security based on Qualcomm chip platform and apply it in the mobile terminals which are equipped with Qualcomm chips. The two companies will make investment, expand the market and gain profits together in the mobile terminal security business based on the Trusted Executive Environment (TEE) framework.
○Future Technology sees big order
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Guangxi Future Technology Co., Ltd. (600556.SH) obtained the main contract on smart city construction in Taixing prefecture, Jiangsu Province. The total amount of the project is no less than 1 billion yuan. Investment for the construction project will be no less than 500 million yuan both from 2015 to late 2017 and from 2018 to the end of 2019. The company's operating revenues recorded 47.37 million yuan in 2014.
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