[Today's Guide]
○ President Xi interprets 13th Five-year Plan, aircraft engine to see key projects
○ CAC to advance cyberspace safety law, demands in the industry to fully release
○ Private placement of Shinva Medical to wholly subscribed in-house, Hualu Baina Film ＆ TV to raise RMB 2.2bln through private placement to expand main businesses
○ Meisheng Cultural ＆ Creative to create cultural platform, CSC Huitong becomes biggest shareholder of Hirisun Tech.
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[SSN Focus]
○ President Xi interprets 13th Five-year Plan, aircraft engine to see key projects
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Xinhua News Agency releases the explanation of Chinese President Xi Jinping on the draft of the CPC Central Committee's Proposal on Formulating the Thirteenth Five-year Plan (2016-2020) on National Economic and Social Development on Nov. 3. Xi pointed out that on the basis of the current 16 national key technological projects, China will develop other significantly technological projects showing the China's strategic intentions in aircraft engine, quantum communication, intelligent manufacturing and robots, deep-space and deep-sea exploration, key new materials, brain science, health security and other industries.
Comment: The aircraft engine is called the "pearl on the crown" in the high-end manufacturing industry. The C919 rolled off the production line recently, which caught the attention of national leaders. The localization of aircraft engines will be the nest target. Among A-share companies, AVIC Heavy Machinery Co., Ltd. (600765.SH) and AVIC Aero-Engine Controls Co., Ltd. (000738.SZ) will be adopted into the newly established China National Aero-Engine Corporation. The study on human brain is a key task of global scientists. Supporting policies on the brain plan in China will be introduced soon. Pci-suntek Technology Co., Ltd. (600728.SH) owns core technologies in face recognition and video analysis industries. The substantial shareholder of Shanghai Fudan Forward Science ＆ Technology Co., Ltd. (600624.SH) is a leader in brain science.
◆ As for economic growth, Xi said that the country's annual growth rate should be no less than 6.5 percent in the 13th Five-year Plan period. As for the financial system reform, the Proposal overhauls the issuance and trading mechanism of stocks and bonds, encourages direct financing and lowers leverage ratio. The Proposal also advises to deregulate the price competition in electricity, petroleum, natural gas, transportation and telecommunication as well as other industries.
[SSN Selection]
○ Premier Li Keqiang meets French President Francois Hollande on Nov. 3. The two sides will continue to implement the cooperation on nuclear power, energy saving, environmental protection and other industries.
○ The national e-commerce platform established by All China Federation of Supply and Marketing Cooperatives will be introduced on Nov. 5, marking another progress in the development of e-commerce in rural areas under the support of China.
○ The State-owned Assets Supervision and Administration Commission of the People's Government of Guangdong Province issued a document on strengthening the capital operation of provincial enterprises, proposing to establish three to four listed companies with a market value of 100 billion yuan in 2017.
○ 46 pilot intelligent manufacturing projects of the Ministry of Industry and Information Technology debut at the China International Industry Fair. The BX robot joint reducers of Qinchuan Machine Tool ＆ Tool Group Share Co., Ltd. (000837.SZ) will reach the designed capacity of 5,000 units a month within 2016.
○ Ningbo Zhongbai Co., Ltd. (600857.SH) responds to the Xu Xiang incident, saying that it cannot reach Xu Jun, director of the company and Xu Bailiang, the actual controller of the company.
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[Industry Information]
○ CAC to advance cyberspace safety law, demands in the industry to fully release
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The first China Cyberspace Safety Leader Summit was held on 3,Oct., three major BAT leading internet safety directors and listed companies, including Venustech Group Inc.（002439.SZ）, Nsfocus Information Technology Co.,Ltd.（300369.SZ）have attended the meeting. Wang Xiujun, deptuty director of the Office of the Central Leading Group for Cyberspace Affairs indicated that Cyberspace Administration of China(CAC) will promote the formulation of cyberspace safety law and standards, pushing forward the construction of internet safety security system. Besides, insiders revealed that internet information safety standard system is under construction.
Comment: draft of internet safety law has prescribed main responsibility and regulations on punishment. Combination of
compliance and mandatory measures will result in more efforts to be put into network safety, demands of the industry and government investment are expected to fully release.
○ Information safety requirements drive technologic advancement, China made server see market share increase
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CCID on 3 Oct. released China OpenPOWER Industrial Ecology Development White Paper, which pointed out that as manufactures like Inspur, Huawei, Lenovo and Sugon rose in recent years, domestic sever manufacturers' market share surpassed that of foreign manufacturers, with shipments take up 65 percent of the total.
Comment: analyses in the white paper suggested that such growth is on one hand due to China has attached increasingly importance to information safety, and on the other hand it shows that the technique of China made server has been advanced, and the quality has improved significantly. Listed companies, such as Inspur Electronic Information Industry Co.,ltd (000977.SZ), Dawning Information Industry Co.,Ltd.(603019.SH), have higher market share in domestic market.
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[Announcement Interpretation]
○ Shinva Medical to raise RMB3 bln, private placement to wholly subscribed in-house
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Shinva Medical Instrument Co.,Ltd(600587.SH) proposes to issue 112 million shares to various companies(including Shanneng Healthcare) at 26.14 yuan per share through private placement, to raise 2,936 miillion yuan. Proceeds will be used to invest in high temperature sterilization consumable items, new medical equipment products research and development and traditional Chinese medicine trials, and repay a portion of its borrowings as well as supplement its working capital. The first employee share option scheme of Shinva Medical proposes to subscribe 271 milion yuan; Shanneng Healthcare, a entity proposed to be set up for subscription by the company's indirect shareholder Shandong Energy Group and its wholly owned subsidiary, will subscribe 980 milion yuan.
○ Hualu Baina Film ＆ TV to raise RMB2.2 bln through private placement to expand main businesses, actual controller ＆ star funds to subscribe
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Beijing Hualu Baina Film ＆ TV Inc. (300291.SZ) proposes to raise 2.2 billion yuan by issuing 104 million shares at a price of 21.16 yuan per share through private placement. Its actual controller China Hualu Group Co., Ltd. will subscribe 26 million shares, and Bosera Asset Management Co., Ltd., Bosera Capital Co., Ltd., SWS MU Fund Management Co., Ltd. and China Great Wall Asset Management Corporation will also participate in the subscription. The proceeds will be invested for the production of film, TV series and variety show, operation of sports events and centralized purchasing of media resources.
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○ Meisheng Cultural ＆ Creative to raise RMB3 bln through private placement to create cultural platform
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Meisheng Cultural ＆ Creative Corp., Ltd. (002699.SZ) proposes to raise 3.03 billion yuan by issuing 90 million shares through private placement to its actual controller Zhao Xiaoqiang and others for the construction of its IP cultural ecosystem and acquisition of 100 percent equities of Hangzhou Joyreach Network Technology Co., Ltd. Joyreach Network Technology is a platform providing light game services and services for mobile ad delivery with a turnover of 930 million yuan. Its former shareholder promised that the net profit of Joyreach Network Technology from 2015 to 2018 will reach 60 million yuan, 78 million yuan, 95 million yuan and 114 million yuan, respectively.
○ CSC Huitong becomes biggest shareholder of Hirisun Tech.
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Kong Biao and Xing Wenbiao, the second and third largest shareholder of Shenzhen Hirisun Technology Incorporated (300277.SZ), propose to respectively transfer 18.68 and 1.89 percent of their equities in the company to CSC Huitong (Shenzhen) Equities Investment Fund Co., Ltd. by agreement. In addition of its existing equities, CSC Huitong will altogether hold 27.31 percent equities of the company after the transfer, overtaking Zhang Feng who holds 27.26 percent equities as the biggest shareholder of the company. Meanwhile, Zhang Feng is no longer a person acting in concert with Kong Biao and Xing Wenbiao. CSC Huitong indicates that it would like to further improve the company's management ability by optimizing its equity structure, and might continue to increase the shareholding in the company in the coming year.
○ Kehua Bio-Engineering to involve in in-vitro diagnostics
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Kehua Hong Kong, subsidiary of Shanghai Kehua Bio-Engineering Co., Ltd. (002022.SZ), proposes to set up a joint venture Kehua Italy with Altergon Italia. Kehua Hong Kong will contribute 28.80 euros, accounting for 80 percent equities of the company; while Altergon Italia will inject Kehua Italy with its diagnosis business, accounting for 20 percent equities of the company. Kehua Italy will acquire 100 percent equities of TGS, a company engaged in the development, production and sale of diagnostic reagent.
○ Siasun Robot ＆ Automation to build digitized factory with Siemens
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Siasun Robot ＆ Automation Co., Ltd. (300024.SZ) signed a strategic partnership agreement with Siemens China, under which the two parties agree to establish strategic partnership in the digitized manufacturing field, discuss the construction of digitized factory and jointly promote ti to clients in the manufacturing industry after its completion. The cooperation is a reflection of the integration of Made in China 2025 plan and the Industry 4.0 initiative as well as an epitome for the strategic partnership between China and Germany.
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