[Today's Guide]
○13th five-year plan for lottery industry completed, Internet lottery business to restart
○Amazon to launch "logistics plus" service, MEP launches SEA
○Actual controllers of Huasun Group to buy all shares of private placement, Honggao Creative to raise funds through private placement
○Wolong Electric Group to expand to new energy automobile, Steyr Motors resumes trading, involving in diesel motor project
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[SSN Focus]
○13th five-year plan for lottery industry completed, Internet lottery business to restart
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SSN learns that the thirteenth five-year plan for China's lottery industry has been formulated and is now soliciting opinions from provinces. The plan is expected to be submitted to upper level in middle November. It is suggested in the plan that Internet lottery business can be restarted under the compliance of laws and regulations; more licenses can be issued. www.sporttery.cn and www.500.com, two companies with Internet lottery license, have started website updating and internal testing. Once the plan is nodded, the Internet lottery industry will operate in unified and standard environment.
Comment: Data from the Ministry of Finance shows that the sales of Internet lottery nationwide recorded 85 billion yuan last year, indicating a year-on-year growth of 100 percent and a penetration rate of 22 percent. China's lottery industry has just been initiated. As the sales of lottery grow, the paperless rate increases and the Olympic Games and European Football Championship approach, the sales volume of Internet lottery will amount to 135 billion yuan in 2016. As to listed companies, the paperless lottery business of Hongbo Co., Ltd. (002229.SZ) develops cooperation with Alipay (China) Networking Technology Co., Ltd., gd.qq.com under Tencent, China UnionPay and etc.; Guangdong Guangzhou Daily Media Co., Ltd. (002181.SZ) owns a platform providing lottery information and procurement service; www.okooo.com, 40 percent equities of which is held by People.cn Co., Ltd. (603000.SH), ranks top in terms of market share in Internet lottery.
[SSN Selection]
○The spokesman of the Ministry of National Defense responded to the sailing of a US warship within 12 nautical miles off China's islands in the South China Sea by indicating that a Chinese guided missile destroyer and a patrol ship gave the US warship a warning in accordance with the law.
○China and the Netherlands enter into a memorandum of understanding on civil aviation industry and a cooperation work team joined in by both parties will be established.
○As reported by the China Energy News, the work including the thirteenth five-year plan for energy development will be carried out between March and May next year.
○Media reports that umbrella trust products have almost been cleared by now. Large numbers of structural trust products offer to end their products earlier than expected since they are not compatible with securities traders' PB system.
○Latest weekly report of China Securities Depository and Clearing Corporation Limited (CSDC) shows that the number of new stock accounts saw a month-on-month jump by 12 percent last week, picking up for the second consecutive week.
○The net profit of Alibaba Group records a year-on-year growth of 36 percent in the third quarter with various performance indicators beating the Wall Street's expectation.
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[Industry Information]
○Amazon to launch "logistics plus" service, cross-border e-commerce to see promising future
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Global e-commerce giant Amazon.com Inc. (NASDAQ: AMZN) announced in Shanghai on Oct. 27 that it would launch "Amazon logistics plus" service designated for Chinese enterprises, which provides all-round solution to warehouse logistics. Amazon's vice president Xue Xiaolin indicated that cross-border e-commerce will be one of significant businesses in China.
Comment: Cross-border e-commerce is of great importance in driving exports, increasing trading volume and stimulating domestic consumption potential. China introduced intensive policies in recent years to facilitate the standardization of haitao (buying overseas goods online). The trading volume of Chinese cross-border e-commerce amounted to 2 trillion yuan in the first half of 2015, presenting a year-on-year growth of 43 percent. The advantageous enterprises see huge development opportunities. Among A-share listed companies, Sinotrans Air Transportation Development Co., Ltd. (600270.SH) keeps the highest market share in international air freight agency in China. Better Life Commercial Chain Share Co., Ltd. (002251.SZ) owns platform g.yunhou.com, whose highest order reaches 160,000 in single day. Global Top E-Commerce Co., Ltd. (002640.SZ) intends to build a comprehensive ecosystem for cross-border e-commerce.
○MEP launches SEA in 3 regions to guarantee ecological civilization construction
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Ministry of Environmental Protection (MEP) on Oct. 27 convened a kick-off meeting on strategic environmental assessment (SEA) project in three regions including Beijing-Tianjin-Hebei region, Yangtze River Delta and Pearl River Delta. MEP vice-minister Pan Yue expressed that planning environmental assessment is the security system of ecological civilization construction. MEP will hold on to the warning line of ecological protection, adjust and control development scale and intensity, and distribute and control the total amount of pollutant emission in these three regions.
Comment: Environment assessment is the first line of defense to prevent pollution from source and SEA is its upgrade version. MEP experts introduced that SEA needs increasing investment in environment monitoring and other aspects. As construction of ecological civilization will be concluded in the 13th five-year plan for the first time, this field will draw attention from policies. Among A-share listed companies, Beijing SDL Technology Co., Ltd. (002658.SZ) takes the lead in exploring the commercial model of internet environmental data service. Hebei Sailhero Environmental Protection High-tech Co., Ltd. (300137.SZ) recently signed contracts on air pollution monitoring and warning projects with Baoding City, Hebei Province. Centre Testing International Group Co., Ltd. (300012.SZ) is leading in environmental testing.
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[Announcement Interpretation]
○Huasun Group to raise RMB430 mln to invest in medicine, actual controllers buy all shares of private placement
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Chengdu Huasun Group Inc., Ltd. (000790.SZ) plans to raise 430 million yuan by issuing 50.41 million shares at a price of 8.53 yuan per share through private placement. The fundraising will be invested in project of internationalization of Sanqi Tongshu capsule, construction of marketing network and supplementing working funds. Taihe Group, which is controlled by Huasun Group's actual controllers Wang Renguo and Zhang Bihua couple, will buy all the shares of this private placement. Shares price of the company closed at 10.61 yuan per share before trading suspension.
○Honggao Creative to raise RMB2.4 bln through private placement, substantial shareholder to subscribe over 35 pct
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Beijing Honggao Creative Construction Design Co., Ltd. (002504.SZ) proposes to issue 145 million shares through private placement at 16.51 yuan per share. The raised 2.4 billion yuan will be totally used for supplementing working capital. The substantial shareholder, Beijing Honggao Huimu Investment Co., Ltd., will subscribe the shares with 850 million yuan, accounting for over 35 percent.
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○Wolong Electric Group to expand to new energy automobile industrial chain with RMB740 mln
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Wolong Electric Group Co., Ltd. (600580.SH) proposes to invest in industrialization project of new energy automobile powertrain in Zhejiang Province with 740 million yuan. The project construction will last for 2.5 years, and an annual profit of 190 million yuan can be realized when reaching designed capacity. The company's net profit gained a year-on-year growth of 11 percent in the first three quarters.
○Steyr Motors resumes trading, involving in diesel motor project
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During the suspension of Steyr Motors Corp. (000760.SZ), diesel motor project of its wholly-owned subsidiary, Steyr Power (Changzhou) Motors Co., Ltd., has been officially approved by the National Development and Reform Commission. The controlling shareholder proposed to increase the shareholding in the company with no more than 30 million yuan. Its net profit is expected to gain a year-on-year growth of 3,479 percent in the first three quarters. Meanwhile, the company announced to end the major restructuring plan and resume the trading.
○CSRC approves assets restructuring of several listed companies
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China Securities Regulatory Commission (CSRC) unconditionally approved China Resources Double-crane Pharmaceutical Co., Ltd. (600062.SH) to acquire 100 percent equities of China Resources Saike Pharmaceutical Co., Ltd. Shenzhen Sed Industry Co., Ltd. (000032.SZ) has been conditionally approved to acquire 100 percent equities of wireless communication, Shenzhen Shencai logistics Co., Ltd. and China Elec-Trans International Service Ltd.; and also equities of Ningbo Steel Co., Ltd., Uniscom Environmental Protection Co., Ltd., renewable resources and renewable science ＆ technology are conditionally acquired by Hang Zhou Iron ＆ Steel Co., Ltd. (600126.SH).
[Trading Trends]
○Huagong Tech bought through three institutional seats
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The trading volume ranking list on Oct. 27 shows that Huagong Tech Company Limited (000988.SZ) was bought through three institutional seats with a total of 105 million yuan, accounting for 10.27 percent of its intraday turnover.
Comments: Under the industrial transformation and upgrading of "Made in China 2025", the company clearly aims to create high-end equipment and service platform as its strategic transformation target, and positively make overall arrangement on intelligent manufacturing and Internet of things. Analysts are optimistic that the company can become a leading enterprise of Industry 4.0 in Central China through its rich manufacturing experience in intelligent equipment, which is likely to see growth in both valuation and performance.
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