[Today's Guide]
○ Domestic-made airplane to roll off the assembly line and to become another pillar for high-end manufacturing
○ Film industry promotion law to submit for approval, Tourism industry to highlight,
○ Ping An Insurance to partially acquire Jahwa United through offer, Zhongfu Enterprise to supplement working capital through private placement
○ Interchina Watertreatment to expand water business through private placement, Wens Foodstuff Grou to consolidate Dahuanong Animal Health Products for listing
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[SSN Focus]
○ Domestic-made airplane to roll off the assembly line and to become another pillar for high-end manufacturing
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SSN learns that the Commercial Aircraft Corporation of China Ltd. (COMAC) plans to hold a press conference on Nov. 2 to showcase the domestic-made plane C919 which will officially to roll off the assembly line. According to the official weibo of the Global Times, the whole delivery progress will be broadcast live by CCTV News.
Comment: has been included as one of the key major development fields in the Made in China 2025 plan. During his inspection to COMAC Chinese President Xi Jinping urged great efforts to develop airplane and make it play a leading and symbolic role. Recently, the Aviation Industry Corporation of China (AVIC) has integrated the aero-engine businesses of its subsidiaries, marking another step in the domestication of the airplane industry chain. Currently, C919 has received 21 clients who made altogether 514 units of airplane. Institutions predict that the total sales of C919 is likely to reach 2,000 units, valued trillions of yuan. Among A shares, Hunan Boyun New Materials Co., Ltd. (002297.SZ) won the bidding for supplying aircraft wheel and brake systems for C919. The high-temperature alloy products of Beijing Cisri-gaona Materials ＆ Technology Co., Ltd. (300034.SZ) can also meet the needs of C919. AVIC Heavy Machinery Co., Ltd. (600765.SH) is engaged the aerial forging and combustion turbine business.
[SSN Selection]
○ Premier Li Keqiang attended China-Japan-ROK trilateral meeting on Nov. 1 after an over-three-year suspension.
○ RMB spot exchange rate surged 0.62 percent on Oct. 30, hitting a over-two-month high, due to stronger expectations for RMB's inclusion in Special Drawing Rights (SDR) basket.
○ Shanghai Free Trade Zone unveiled the action plan on financial innovtion which will alow qualifeid individuals to buy houses and stocks.
○ The third quarter reforts of listed companies show that the A shares newly acquired by China Securities Finance Corporation Limited (CSF) and Central Huijin Investment Ltd. (Central Huijin) have a current market value of 1.36 trillion yuan. The financial and construction machinery sectors hold the most stocks.
○ Shanghai public security departments uncovred a major criminal case on manuipalating futures market. The general managmer of Yishidun International Trading Co., Ltd. earned over 2 billion yuan illegal profits.
○ The securitization of housing provident fund credit has been on the agenda, which will swap more credit quotas, according to the Chinese Business Journal.
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[Industry Information]
○ Film industry promotion law to submit for approval, industrial demands to grow rapidly
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The Promotion Law of Film Industry of the People's Republic of China (draft) was first submitted to the Standing Committee of the National People's Congress (NPC) for approval on Oct. 30 afternoon, suggesting that the release of the overall law on the film industry was finally on the agenda. The draft focuses on streamlining the censorship of film scrip and soliting public opinions for the standards of film censorship. In recent years, China's film industry has expanded rapidly. The box office has increased from 1.0 billion yuan in 2003 to 29.6 billion yuan in 2014 with an annual average growth rate of more than 36 percent. The box office has maintained high growth since this year and created many records. This year's box office is estimated to hit 40 billion yuan.
Comment: Under the background that policies give great support to cultural demands, the film industry will see even rapid development. Enterprises with high-quality IP resources, excellent production capacity and theatre chains will see opportunities to expand their market shares. As for companies, Beijing Enlight Media Co., Ltd. (300251.SZ) and Zhejiang Huace Film ＆ TV Co., Ltd. (300133.SZ) rank among first in the film production field.
○ Tourism industry to highlight, liostedc companies to enjoy industrial growth benefits
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Chinese Premier Li Keqiang and the Republic of Korea (ROK) National Assembly Speaker Chung Ui-hwa attend the closing ceremony of "China Tourism Year" in Seoul on Nov. 1. Premier Li indicated that the global economic recovery is experiencing difficulties. The development of tourism can not only boost economic growth and create more employment opportunities but also promote consumption and stabilize confidence.
Comment: The tourism has contributed more than 10 percent to the GDP in 2014 with an increasingly important position. Under the background of upgrading consumption and the increase in national income, the tourism is under rapid development, which has been reflected in the performance of listed companies. The net profit of Zhang Jia Jie Tourism Group Co., Ltd. (000430.SZ) in the first three quarters doubled thanks to the significant growth in tourists year on year. The new Yangjiajie ropeway recorded high growth. With the improvement of ancillary projects, it is likely to see strong growth in performance. Huangshan Tourism Development Co., Ltd. (600054.SH) recorded a growth of 37 percent in the performance in the first three quarters thanks to the increasing tourists and renovation of ropeways.
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[Announcement Interpretation]
○ Ping An Insurance to partially acquire Jahwa United through offer
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A fund partnership under Ping An Insurance (Group) Company of China, Ltd. (02318.HK; 601318.SH), the controller of Shanghai Jahwa United Co., Ltd. (600315.SH), plans to issue partial acquisition offer to its shareholders except Shanghai Jahwa (Group) Co., Ltd. and Shanghai Huisheng Industrial Co., Ltd. to increase the shareholding in Jahwa United. The offers plans to acquire 209 million shares at an offer price of 40 yuan per share with 8,358 million yuan, accounting for approximately 31 percent of the share capital. Ping An Insurance will hold a total of 59 percent equities of Jahwa United after the acquisition. The latest stock price of Jahwa United is 34.46 yuan.
Comment: Jahwa United fails to maintain the growth trend in performance and stock price after Ping An Insurance joined four years ago. As the five-year commitment period for no transfer of the shares, Ping An Insurance is unlikely to maintain the stock price of Jahwa United unchanged. The partial offer shows the determination of Ping An Insurance in making Jahwa United bigger and also lays foundation for future capital operation of Jahwa United.
○ Zhongfu Enterprise to raise RMB2.1 bln to supplement working capital through private placement
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Zhuhai Zhongfu Enterprise Co., Ltd. (000659.SZ) intends to raise 2.15 billion yuan by issuing 650 million shares at 3.31 yuan per share through private placement. The proceeds will be used for repaying the borrowing and supplementing working capital. Nine specific targets, including Changzhou Investment, Hefeng Investment, Tiemuzhen Capital and Caitong Fund, will participate in subscription.
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○ Interchina Watertreatment to expand water business through private placement, Jiang Zhaobai to become actual controller
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Heilongjiang Interchina Watertreatment Co., Ltd. (600187.SH) plans to raise 1,357 million yuan by issuing shares to Houkang Industrial and Yongguan Trade at no less than 4.8 yuan per share through placement. The proceeds will be invested in the construction of seven water projects, the repayment of short-term financing and supplementing working capital.
It is noteworthy that Interchina Watertreatment has no actual controllers before the private placement. As Jiang Zhaobai, the controller of Pengxin companies, is also the actual controller of Houkang Industrial and Yongguan Trade. Jiang and Interchina Tianjin, one of his persons acting in concert, will hold 29.35 percent voting right of Interchina Watertreatment. Jiang will become the actual controller of the company.
○ Dahuanong Animal Health Products to delist and convert into Wens Foodstuff Group
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Guangdong Dahuanong Animal Health Products Co., Ltd. (300186.SZ) completed the registration on the equity consolidation with Guangdong Wens Foodstuff Group Co., Ltd. (300498.SZ) on Oct. 30. The stock of Dahuanong Animal Health Products will no longer be listed from Nov. 2. Wens Foodstuff Group after the equity conversion will be listed for trading on the ChiNext Board on the same day. The issue price of Wens Foodstuff Group is 16.15 yuan per share and the conversion price of Dahuanong Animal Health Products is 13.03 yuan per share. Each stock of Dahuanong Animal Health Products can be converted into 0.8070 stocks of Wens Foodstuff Group.
○ Infogem Technologies to raise RMB800 mln to develop Internet-based finance
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Shenzhen Infogem Technologies Co., Ltd. (300085.SZ) proposes to raise 830 million yuan by issuing 27.88 million shares at 29.76 yuan per share through private placement. The proceeds will be invested in the Internet-based financial big data service platform (Phase I). Xinyuan Asset Management, Donghai Funds, Changshi Investment and Shenzhen Founder Union Investment Management Co., Ltd. will participate in the subscription.
○ Anxin Trust to raise RMB5 bln through private placement to supplement capital
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Anxin Trust Co., Ltd. (600816.SH) intends to raise 4,991 million yuan by issuing 350 million shares at 14.26 yuan per share through private placement. The proceeds will be used for supplementing its capital. Shanghai Guihzijie Investment ＆ Development Co., Ltd. proposes to subscribe 90 million shares with a lock-up period of 60 months. Gomngxin Industrial, Hanbo Huixin, Lanbridge Harbor and Xiangcai Securities will participate in subscription with a lock-up period of 36 months.
○ Canature Environmental to raise RMB1 bln through private placement, proposing to enter immune cell store industry
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Shanghai Canature Environmental Products Co., Ltd.(300272.SZ) proposes to issue 60 million shares through private placement at 16.33yuan per share to raise 980 million yuan, to acquire 52.38 percent equities in Cixi Runxin Electric Appliance Co., Ltd, and to increase capital in and acquire 57 percent equities in Shanghai Haitai Pharmacy Co., Ltd. and to acquire deep hypothermic fully automatic biologic sample bank project, invest in research, manufacturing and ancillary facilities related projects for water treatment filter element, as well as supplement its working capital. Jielong Group, Nantong Leyuan Huida Assets Management Co., Ltd., CCB Principal Asset Management and Sanyi Heavy Industry will participate in the subscription.
[Weekly Review]
○ House, car and child
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For many people, big house, private car and smart child are necessary for an ideal life. Home and car purchase and education for the children are major impetus driving China's domestic consumption. Any news concerning such topics, such as home prices, license plate and children's education, will immediately catch tons of attention, and then shock waves in the stock market.
In recent years, shares of companies based in Shanghai has continued active trading. Themes related to Shanghai Free Trade Zone, Shanghai Disney Land and the combination of Zhaibei and Jingan Districts all have promptly stimulated home prices and share prices of relevant companies. This year, sales of new energy car and price of lithium carbonate rise sharply, which could attributed to not only the increasingly prevalent awareness of environment protection in consumers, but also, and to a higher extent, the restrictions on registration of traditional oil-fueled automobiles in various cities. The 13th five-year plan covers every aspects of economic and social life, but only the two-child policy attract the most attention, as it will directly change the lifestyle of millions of homes with new choices.
Whether the one-child policy was right or wrong? Well, what is gone is gone. New policy always brings new investment opportunities. Earlier, SSN has reported that Shanghai Free Trade Zone would be approved and two-child policy would be launched, and its reports on the construction progress of Shanghai Disney Land and its follow-ups on price hike of lithium carbonate also kept ahead of other media. We sincerely hope you can draw conclusions on the roles of house, car and child in people's daily life from reading such investment information, and make right choices in your life.
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