[Today's Guide]
○China to advance construction of world-class universities, university-hold enterprises see large room of securitization
○Shuang Long Chemical acquires Huikang Biotechnology, Tongfang Guoxin Electronics to raise fund to develop chips
○SAIC to develop new energy vehicle, performance of listed securities companies surges in Oct.
○Robot industry to highlight, commencement of projects brings orders to extra-high voltage
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[SSN Focus]
○China to advance construction of world-class universities, university-hold enterprises see large room of securitization
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The State Council on Nov.5 issues the circular on the overall plan on promoting the construction of world-class universities and disciplines, requiring that certain universities and disciplines will be among the best in the world and certain disciplines will reach the world-class level in 2020; a power of higher education will be basically built by the middle of this century. Responsible person of the Ministry of Education responds to journalist that the integration of industry and teaching will be deepened; the contribution rate of universities to industrial upgrading will be improved; the cooperation mode among universities, industries and enterprises will be improved rapidly.
Comment: Universities are important carriers of China's innovation-driven development strategy. At present, the assets of university-hold enterprises nationwide reach 450 billion yuan, suggesting huge space of securitization. The three platforms under Tsinghua Holdings Co., Ltd. conducted massive acquisition in overseas market since this year and the stock prices of relevant companies all have outstanding performance. As to other listed companies under universities, Huagong Tech Company Limited (000988.SZ) actively makes planning in intelligent manufacturing and the Internet of Things; China Hi-Tech Group Co., Ltd. (600730.SH) is an integration platform of the Peking University's education asset; Insigma Technology Co., Ltd. (600797.SH) owns competitive advantage in intelligent city area; Shanghai Fudan Forward Science ＆ Technology Co., Ltd. (600624.SH) owns state-level Shanghai Fuhua Hi-tech Technology Park.
[SSN Selection]
○Chinese President Xi Jinping arrives at Vietnam on Nov. 5 for state visit and publishes signed article on the Vietnamese media proposing to jointly advance the construction of the "Belt and Road" and the "Two Corridors and One Ring".
○Spokesman of the Ministry of Industry and Information Technology (MIIT) claims that deeper reform on the telecommunications industry is under consideration. At present, no work is developed concerning the combination of the top three telecommunications operators.
○Hunan Province requires accelerating the strategic reorganization and integration of provincial state-owned enterprises. Enterprises starting to separate social functions, including XEMC, will pilot first.
○The launching ceremony of the foundation engineering construction of Beijing Universal Park and holiday resort is inaugurated on Nov.5 in Tongzhou District, Beijing.
○As reported by Caijing.com, domestic third-generation nuclear power projects including CAP1400 and Hualong No.1 will all be kicked off soon.
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[Announcement Interpretation]
○Shuang Long Chemical acquires Huikang Biotechnology to develop medicine
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Tong Hua Shuang Long Chemical Industry Co., Ltd. (300108.SZ) plans to raise 830 million yuan through private placement. 750 million yuan of the raised fund will be used to acquire 100 percent equities of Tonghua Huikang Biotechnology Co., Ltd., 60 million yuan will be used to acquire 2.3 percent equities of Jilin Jinbao Pharmaceutical Co., Ltd., and the rest 20 million yuan will be used to supplement working capital. Lu Zhongkui, controlling shareholder of the company, Sun Jun, president of the company, and Liu Xiaopeng, president of Huikang Biotechnology will subscribe the entire private placement.
Huikang Biotechnology is engaged in the manufacturing and sales of small-volume injection and freeze-dried powder injection. The counterparty promises that its net profit from 2016 to 2018 will be no less than 50 million yuan, 60 million yuan and 72 million yuan, respectively. Shuang Long Chemical was originally engaged in white carbon black industry and saw weak prosperity. The company acquired 97.7 percent equities of Jinbao Phar. last year to explore medicine area.
○Tongfang Guoxin Electronics to raise RMB80 bln through private placement to develop chips
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Tongfang Guoxin Electronics Co., Ltd. (002049.SZ) plans to raise 80 billion yuan by issuing 2,959 million shares to eight associated objects and Beijing Guoyan Baoye Investment Management Co., Ltd. at 27.04 yuan per share. The company indicates that the private placement helps to improve the company's leading advantage in main business and cut into more high-end and promising product market.
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○SAIC to develop new energy vehicle by private placement
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SAIC Motor Corporation Limited (600104.SH) plans to raise 15 billion yuan by issuing 964 million shares at a price no less than 15.56 yuan per share through private placement. The fundraising will be used for investment in new energy vehicle, intelligentized mass customization, forward-looking technology and telematics, and automobile service and automobile finance projects. Its controlling shareholder Shanghai Automotive Industry Corporation (Group) and the company's employee shareholding plan will purchase shares valued at 3 billion yuan and 1.17 billion yuan respectively.
Comment: SAIC's capital operation reveals that it hopes to realize the transformation from traditional vehicle to new energy vehicle, ordinary manufacturing to intelligentized manufacturing and from vehicle selling to automobile service.
○Tianyuan Dic Information Technology to develop big data with Tencent Cloud Computing
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Shenzhen Tianyuan Dic Information Technology Co., Ltd. (300047.SZ) will conduct strategic cooperation with Tencent Cloud Computing (Beijing) Co., Ltd. to jointly explore big data and cloud computing projects in governments and enterprises nationwide. Tencent cloud is a public cloud platform developed by Tencent Holdings Ltd. (00700.HK) targeting the governments, enterprises and individuals. Tianyuan Dic Information Technology began to develop cloud computing from 2012 and its clients cover telecommunication operators and Shenzhen Stock Exchange. It owns technology resources such as police service cloud, big data platform, data integration platform and bazaar market in public security field in several provinces.
○Vanfund Urban Investment ＆ Development to develop internet-based medical treatment with Sichuan
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Vanfund Urban Investment ＆ Development Co., Ltd. (000638.SH) signed agreements on strategic cooperation with Health and Family Planning Commission of Sichuan Province to jointly promote the provincial informatization platform establishment, unblocked hospital information project, treatment service platform through internet and construction of His, a medical cloud on WeChat. The company will also take the lead to set up innovation and venture capital investment funds for medical and health care informatization, which will be utilized in significant fields and regions with urgent need in Sichuan. After acquiring Beijing Boren Yongtai Medical Devices Co. Ltd. in September 2012, the company, which was principally engaged in trade and real estate industry, set foot in medical devices and participated in www.screson.com this year, a medical treatment internet company.
[Financial Reports Express]
○Performance of listed securities companies surges in Oct.
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According to statistics of SSN, 23 listed securities companies which have released October financial reports totally gained 9,631 million yuan of net profits in October, up by 82.69 percent when compared with September, beating the market expectation.
Comment: On the one hand, it was contributed by the market trading slightly picking up as a result of recovery in market sentiment in October. On the other hand, it was due to the lower base number in September. Haitong Securities believed that the negative effects of deleverage on securities companies are gradually absorbed. The market enters a stable period after the stock disaster. If restarted in the future again, the financial innovation is expected to stimulate the securities companies.
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[Industry Information]
○MIIT to focus on three areas during 13th five-year plan period, robot to play an important role
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Miao Wei, Minister of the Ministry of Industry and Information Technology (MIIT), indicates on Nov.5 that the MIIT will focus on three key fields: the high-end equipment manufacturing industry, the strategic emerging industry and the upgrading of traditional industries during the 13th Five-Year Plan period. It will formulate a series of plans, action plans or specific measures and policies to boost the development of key sectors and fields to accelerate in building China as a manufacturing power.
Comment: Robot industry will play an important role in the three key areas. SSN also learns that the thirteenth five-year plan for robot industry has been drafted and might be released by year end. Meanwhile, the plan also makes top-level design for the development of service robot industry with a conservatively estimated market space of over 100 billion yuan. As to listed companies, Siasun Robot ＆ Automation Co., Ltd. (300024.SZ) is a leading enterprise in the industry and masters core technology of components including controller and servo system; Harbin Boshi Automation Co., Ltd. (002698.SZ), developing robots for minimally invasive surgery, might benefit from the policy.
○UHVDC with largest transmission capacity approved, companies of industrial chain to see opportunities
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According to the Xinhua News Agency, National Development and Reform Commission recently examined and approved construction scheme of Xilingol League-Taizhou, Jiangsu Ultra High Voltage Direct Current (UHVDC) project. It totals at 1,619 km, is the longest one among the four UHVDC channels starting from Inner Mongolia, and also the one with largest transmission capacity in domestic UHVDC projects.
Comments: Constructions for Xilingol League-Shandong and Western Inner Mongolia-Southern Tianjin UHVDC projects are currently started, examination and approval work for planned Shanghaimiao-Linyi, Shandong UHVDC project are promoted, which will bring substantial orders for UHV-related enterprises. Among listed companies, China XD Electric Co., Ltd. (601179.SH) and XJ Electric Co., Ltd. (000400.SZ) have won the biddings of UHV-product orders for many times.
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