[Today's Guide]
○ Fifth Plenary Session issues communique to fully implement two-child policy
○ Ex-factory price of lithium carbonate hikes, satellite industry sees more policy supports
○ Xin Nanyang to strengthen vocational education, JPMF Guangdong to acquire Dongfang Liangcai
○ Kaidi Ecological and Environmental Technology to develop biomass power generation, Nbtm New Materials expands capacity
TOP
[SSN Focus]
○ Fifth Plenary Session issues communique to fully implement two-child policy
------
The Fifth Plenary Session of the 18th Communist Party of China (CPC) Central Committee was held from Oct. 26 to 29 in Beijing. The communique issued after the session proposes to allow all couples to have two children and take active actions in countering aging; promote the construction of a healthy China and deepen the reform of the pharmaceutical and health system; promote the construction of a beautiful China and make new contributions to the global ecological security; implement the cyber power strategy and the "Internet plus" action plans, develop sharing economy and implement the national big data strategy; and implement the military and civil integration and development strategy to establish a development pattern in deep military and civil integration with full factors, multi industries and high benefits.
Comment: The full implementation of the two-child policy is another adjustment to the population policy after it allowed couples to have two children if one of them is an only child in 2013. As the cornerstone for economic growth, the population not only directly concerns the supply of labors but also indirectly affects capital, technology and other economic growth factors. The population dividend has been gradually fading away since 2010. As a result, it is necessary to loosen its population policies. It is estimated that if the two-child policy is fully implemented, it will bring another consumption of 100 billion yuan in the infant-related market. Hubei Jumpcan Pharmaceutical Co., Ltd. (600566.SH) and Yabao Pharmaceutical Group Co., Ltd. (600351.SH) are quite competitive in the children's medicine industry. Xinjiang Western Animal Husbandry Co., Ltd. (300106.SZ) sees rapid growth in the sale of its infant formula milk powder. Vtron technologies Ltd. (002308.SZ) is transforming into Early childhood education.
In addition, with the construction of a healthy China and a beautiful China and the implementation of cyber power, military and civil integration and development strategies, medical services, environmental protection, Internet security and military engineering industries will see opportunities for long-term development.
[SSN Selection]
○ Chinese President Xi Jinping will pay a state visit to Vietnam and Singapore from Nov. 5 to 7.
○ German Chancellor Angela Merkel indicated on Oct. 29 that Germany supports to the inclusion of RMB into the SDR (special drawing rights) basket. Merkel hopes China and the EU will sign a bilateral investment agreement and initiate the feasibility study on the China-EU free trade zone at an early date
○ The officials of the Ministry of Industry and Information Technology (MIIT) disclosed on Oct. 29 that the 13th Five-Year Plan on new materials, including grapheme, is under preparation and will be released soon.
○ The preliminary annualized actual GDP growth in the U.S. in the third quarter hits 1.5 percent, which is below the market expectation.
○ Feng Fei, vice minister of the MIIT, indicated that China shall strive to foster the emergency industry as a new economic growth point based on weaving public security network and the research and development of high-end emergency products and services.
TOP
[Industry Information]
○ Ex-factory price of lithium carbonate hikes, booming cycle increasingly highlights
------
The statistics of the www.100ppi.com show that Sichuan State Lithium Material Co., Ltd. and Blossom Lithium Industrial (Sichuan) Limited raised the ex-factory price of lithium carbonate by 12,000 to 16,000 yuan per ton on Oct. 29 after Jiangxi Ganfeng Lithium Co., Ltd. (002460.SZ) raised the ex-factory price of lithium carbonate by 10,000 yuan per ton on Oct. 28. The highest quoted price has reached 70,000 yuan. The market has saw an overall increase of over 50 percent since the beginning of the year. October witnessed a hike of 27 percent. The current market supply is short and the quoted prices of manufacturers are hiking.
Comment: As a result of the slow progress in new capacity's putting into operation and the significant expansion of the downstream lithium battery projects, the lithium carbonate industry is embracing a round of booming cycle. It is expected to reach the historic high of 80,000 yuan per ton. Besides Ganfeng Lithium, Sichuan Tianqi Lithium Industries, Inc. (002466.SZ) and Sichuan Yahua Industrial Group Co., Ltd. (002497.SZ) also own a huge lithium carbonate capacity.
○ Plan on civil space infrastructure issued, satellite navigation industry sees more policy supports
------
The National Development and Reform Commission released the medium- and long-term plan on civil space infrastructure, proposing fully advancing the scaled and industrialized development in the remote sensing, communication and navigation as well as other space industries. In the satellite navigation industry, it will establish the Beidou Navigation System with 35 satellites in 2020 with a 10-meter location-tracking accuracy, synchronizes clocks with an accuracy of 10 nanoseconds.
Comment: It will bring opportunities for the expansion of the satellite launching, ground equipment manufacturing and satellite services and other industries. China has 139 satellites in orbit in 2014. According to the development targets, it will have over 200 spacecraft in orbit in 2020, which will bring huge orders. In terms of listed companies, Zhuhai Orbita Control Engineering Co., Ltd. (300053.SZ) proposes to increase the investment in the construction of a satellite information platform. The CMOS imaging sensor of Changchun Up Optotech Co., Ltd. (002338.SZ) has been applied in the remote sensing satellite Jilin-1. China Spacesat Co., Ltd. (600118.SH) is leader in the search and production of small satellites in China.
○ Heavy pollution weather likely to hit winter, MEP arranges air pollution prevention
------
The Ministry of Environment Protection (MEP) issued the Notice on Arranging Atmospheric Contamination Prevention Works for This Winter and Next Spring on Oct. 29, which says there's strong opportunities that serious pollution weather will emerge this winter due to high temperature and low rainfall result from El Nino. The MEP calls on the industry sectors to make full pollution prevention works, including requiring the use of gas as alternative fuel or shut down coal-fired boiler, and asking industrial enterprises to carry out upgrading and reconstruction.
Comment: "Green development" is one of the core concepts brought forward in the communique issued after the Fifth Plenary Session of the 18th CPC Central Committee. As northern China has gradually entered heating season, investments in atmospheric contamination prevention woks, including boiler improvement, remains to be enhanced. Companies like Hangzhou Boiler Group Co., Ltd.(002534.SZ), Xuzhou Kerong Environmental Resources Co., Ltd. (300152.SZ) and Kelin Environmental Protection Equipment, Inc. (002499.SZ) ,who are engaged in energy saving and environment protection alteration, will obtain more opportunities.
TOP
[Announcement Interpretation]
○ Xin Nanyang to strengthen K12 and vocational education by raising RMB1 bln
------
Shanghai Xin Nanyang Co., Ltd. (600661.SH) proposes to raise 1 billion yuan by iuusing shares through private placement at 21.65 yuan per share. Its substantial shareholder SJUT Industrial Investment Management (Group) Co., Ltd. will participate in the subscription. 450 million yuan and 250 million yuan of the proceeds will be used for K12 education development project and vocational education project, respectively. Hence Xin Nanyang may expand the number of K12 education center through establishment, M＆A and cooperation, and set up digitalized platform to carry out education upgrading catering digitalization and network, as well as deepen cooperation with vocational education college.
○ JPMF Guangdong to acquire supplier of Xiaomi with RMB1.75 bln through private placing
------
JPMF Guangdong Co., Ltd. (002600.SZ) proposes to acquire the entire equity in Dongfang Liangcai Precision Technology Co., Ltd. through share issue and cash payment at a consideration of 1.75 billion yuan, 70 percent of which is proposed to be paid through private placement at a price of 7.35 yuan per share. Meanwhile, the company will raise a supporting fund of 1,175 million yuan for the payment of cash consideration and supplementing working capital as well as investment projects of subject companies.
Dongfang Liangcai is a supplier of consumer electronics precision structural parts. Its products are primarily used for smart phones. The company's major customers including Xiaomi, OPPO and Gionee. The counterparty committed that its net profits from 2015 to 2017 will not be lower than 115 million yuan, 143 million yuan and 180 million yuan, respectively.
TOP
○ Kaidi Ecological and Environmental Technology to pour investment in biomass power generation through private placement
------
Kaidi Ecological and Environmental Technology Co., Ltd. (000939.SZ) proposes to raise 4,948 million yuan by issuing 600 million shares through private placement. The proceeds will be used to invest in the construction of 14 biomass power generation plants and the forestry ecological civilization as well as repay bank loans. It is estimated that after all the 14 plants are put into operation, their annual gross generation could reach 3,231 million kilowatt hour. Based on the price of 0.75 yuan per kilowatt hour, the company's revenue will increase 2,423 million yuan.
○ Nbtm New Materials expands new energy vehicle business through private placement
------
Nbtm New Materials Group Co., Ltd. (600114.SH) proposes to raise 600 million yuan by issuing 49.00 million shares at no less than 12.16 yuan per share through private placement. The proceeds will be used for the renovation of the automobile power system with newly increased annual production of 12,000 tons, the technology transformation of powder metallurgy new material in the new energy industry, the reconstruction of state-level enterprise technology center and the supplementary of working capital.
○ Layn Natural Ingredients to acquire Niesheng Network Tech. after private placement
------
Guilin Layn Natural Ingredients Corp. (002166.SZ) proposes to raise 1.37 billion yuan by issuing 171 million shares at a price of 8 yuan per share through private placement. 450 million yuan will be used to acquire 100 percent equities of Guangzhou Niesheng Network Technology Co., Ltd.; 220 million yuan for the construction of the research and development center for terminal products; 300 million yuan for loan payment and 400 milion yuan for the supplementing the working capital. Qin Benjun, the company's actual controller, Jiang Xiaoshan, Yi Xin and He Xing from Heaven-Sent Capital Management Group will subscribe the shares.
Niesheng Network Technology is a provider of integrative e-commerce solutions for brand enterprises. It mainly operates in two types of business models: third-party e-commerce operator and proprietary e-commerce operation. The counterparty promises that Niesheng Network Technology will at least obtain a net profit of 30.0 milion yuan, 39.0 million yuan and 50.7 million yuan from 2015 to 2017.
○ Haide Industry to raise RMB4.8 bln through private placement to shift to non-performing asset management
------
Hainan Haide Industry Co., Ltd. (000567.SZ) proposes to raise 4.8 billion yuan by issuing 368 million shares at 13.06 yuan per share to Wintime Investment Holdings, its indirect controlling shareholder. All of the proceeds will be used to investment in its wholly-owned subsidiary Haide Asset Management Co., Ltd. and repay loans lent to establish Haide Asset Management. By taking this opportunity, the company will shift to the non-performing asset management industry to improve its profitability while adjusting its real estate business.
○ Victory Precision Manufacture to raise RMB4.8 bln through private placement for intelligent manufacturing
------
Suzhou Victory Precision Manufacture Co., Ltd. (002426.SZ) proposes to raise 4.8 billion yuan by issuing 290 million shares at a price of 16.54 yuan per share through private placement to construct the manufacturing platform of smart factory and the integration service platform for the intelligent terminal channel and supplement its working capital. Gao Yugen, the company's actual controller, and the company's senior management will subscribed the shares. The company saw its net profit in the first three quarters increase by 58 percent year on year, and it is estimated that its full-year net profit will increase 100 to 136 percent year on year.
○ Media mogul joins Suning Universal to facilitate transformation in cultural industry
------
Suning Universal Co., Ltd. (000718.SZ) plans to establish cultural and sport industry group, health industry group and financial industry group. To accelerate transformation, the company appoints Chen Liang, the founder of Dragon TV and art director at Shanghai Media Group the chief executive officer of the cultural and sport industry group. The company saw its net profit in the first three quarters surge by 2,011 percent year on year.
[Financial Reports Express]
○ BYD forecasts its annual performance more than quadrupled
------
BYD Company Limited (01211.HK; 002594.SZ) forecasts a 435 to 481 percent year-on-year growth of its net profit in the full year. It is estimated that sales of its plug-in hybrid electric vehicles will maintain a high growth rate in the fourth quarter. A great amount of orders in public transportation and special vehicles will be delivered.
TOP
Latest comments