[Today's Guide]
○ Leading Group for Deepening Overall Reform meeting to promote FTA strategy and improve opening-up level
○ U.S. mobile medical summit convenes, medical insurance and expenses control to see rapid development
○ Lead Eastern Investment invests in Jusfoun Wealth Information, Xiaokang Holdings acquires shares of Jinggu Forestry with premiums
○ Special Electric Motor to fully control Joylong Automobile, Newvalue buys shares of Kingswood Printing Ink
[SSN Focus]
○ Leading Group for Deepening Overall Reform meeting to promote FTA strategy and improve opening-up level
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The 18th meeting of the Leading Group for Deepening Overall Reform was held on Nov. 9 and passed the Opinions on Accelerating the Implementation of Free Trade Area Strategy. The meeting proposes gradually constructing a high-standard free trade area (FTA) network which is based on the surrounding, oriented to the world and radiates the "Belt and Road" and improving the openness in good trade and other fields.
Comment: Under the new situation surrounded by the Trans-Pacific Partnership Agreement (TPP), to build FTAs has become an important strategy for China to open wider to the outside and gradually be involved in the process of economic globalization. China-Japan-South Korea FTA negotiations and China-ASEAN FTA upgrading are both key topics in Chinese leaders' recent visits to foreign countries. China's free trade zones in Shanghai, Guangdong Province, Tianjin and Fujiang Province will gradually play a leading role in innovation. Relevant ports, parks and trading companies in coastal provinces and cities are expected to embrace wider development space.
◆ The Leading Group for Deepening Overall Reform also passed the Plan on Promoting the Development of Inclusive Finance (2016-2010), which will enable farmers and small and micro-sized enterprises to get convenient and safe financial services with reasonable prices. The industry is optimistic that small and micro-sized financial institutions, such as privately owned banks, online loan companies and small loan companies, will receive more policy supports. The construction of financial infrastructure, such as credit investigation and payment and clearing system, will speed up.
[TOP]
[SSN Selection]
○ The General Office of the State Council releases a guideline to boost e-commerce business in the country's rural areas and encourage social resources to participate on Nov. 9.
○ SSN learns that the National Development and Reform Commission and other authorities will further enhance policy guidance to promote the construction of the country's carbon trading market.
○ Listed insurance companies generally accomplished their target of 2015 premium in 2015 in advance in October. The premiums are expected to maintain a high growth till the year end.
○ The five listed companies under China Ocean Shipping (Group) Company and China Shipping (Group) Company announce that the two group companies are respectively planning to integrate relevant assets of their subsidiaries.
○ Daheng New Epoch Technology, Inc. (600288.SH) and Wenfeng Great World Chain Development Corporation (601010.SH) announce that the shares held by Zheng Suzhen, Xu Xiang's mother, will be frozen by public security departments for two years.
[Companies Hotspot]
○ Xinjiang Production and Construction Corps to launch PPP projects, Guotong Pipeline to develop ecological treatment
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Qiao Yongxin, deputy director of the Development and Reform Commission of the Xinjiang Production and Construction Corps, indicated on Nov. 9 that the Xinjiang Production and Construction Corps would launch a batch of PPP (public-private partnership) projects in the fields of agricultural water conservancy, interconnectivity, municipal facilities, service industry and ecological and environmental protections. There will be 176 projects with a total investment of 150.4 billion yuan. Due to the fragile ecological environment and water resources shortage in the Xinjiang Uygur Autonomous Region, the idea of giving first priority to environmental protection when developing economy has been included in the Plan.
It will undoubtedly bring development opportunities to Xinjiang Guotong Pipeline Co., Ltd. (002205.SZ), the only water treatment company in Xinjiang Uygur Autonomous Region. The company is transforming from an equipment provider into an ecological and environmental treatment services provider. The chairman of the company indicated that it will participate in the construction of urban underground pipeline through the PPP model. It has adopted the transformation plan, which is expected to become new revenue sources.
[Industry Information]
○ U.S. mobile medical summit convenes, wearable equipment to highlight
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The MHealth Summit is scheduled to be convened on Nov. 10 in the U.S with the theme of innovation and providing better mobile medical treatment and health solutions. It is reported that only 16 percent of the U.S. population own wearable equipment for the monitoring of health and sports data. The number is expected to double in 2018 from 40 million to 87 million. The market is under the initial stage.
Comment: Relevant responsible persons at Qualcomm estimate that the global distant medical treatment monitoring market is 36 billion yuan. The wearable equipment market enjoys a huge market, which also reflects the future development opportunities in the Chinese market. Among listed companies, the wearable equipment introduced by Guangdong Biolight Meditech Co., Ltd. (300246.SZ) in July has been recognized by the market. Institutes estimate that it is likely to achieve profits in the end of the year. Andon Health Co., Ltd. (002432.SZ) proposes to raise 730 million yuan by issuing shares through private placement to develop a cloud platform for health management.
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○ Policies to control unreasonable growth of medical expenses, medical insurance and expenses control to see rapid development
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The National Health and Family Planning Commission and other four ministries and commissions jointly issued the Opinions on Controlling Unreasonable Growth of Medical Expenses in Public Hospitals. It proposes that by the end of 2017, the monitoring and evaluation mechanism on medical expenses control in public hospitals should be gradually established and improved. The proportion of private spending will decrease gradually.
Comment: It shall vigorously promote medical insurance and expenses control to reduce unreasonable medical and pharmaceuticals expenses. Institutes believe that driven by policies, the medical insurance and expenses control will be increasingly popular. The market potential will reach 100 billion yuan. Among listed companies, Searainbow Holding Corp. (000503.SZ) has signed agreements with over 180 municipal medical insurance bureaus on approving medical insurance fees control. Shanghai Kingstar Winning Software Co., Ltd. (300253.SZ) actively develops medical insurance fees control and cooperates with the medical insurance center in Shanxi Province.
[Announcement Interpretation]
○ Lead Eastern Investment invests in Jusfoun Wealth Information
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Lead Eastern Investment Co., Ltd. (000673.SZ) terminates the significant assets reorganization on mulling the acquisition of 51 percent equities of Winners Union (Beijing) Technology Development Co., Ltd. The company introduces an equity incentive plan and will participate in the round B financing of Jusfoun Wealth Information (Beijing) Co., Ltd. with 45 million yuan to obtain 1.5 percent equities of the company. Jusfoun Wealth Information owns data cleaning, modeling, analysis and other leading technologies and strives to be the Netflix in China. The company announced that it has invested in Mission: Impossible - Rogue Nation during trading suspension.
In addition, Beijing Lier High-temperature Materials Co., Ltd. (002392.SZ) terminated the significant assets reorganization on mulling the acquisition of 100 percent equities of Qingdao Huaye Super Refractory Co., Ltd.
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○ Xiaokang Holdings acquires shares of Jinggu Forestry with premiums
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Jinggu Senda State-owned Assets Operation Co., ltd. the substantial shareholder of Yunnan Jinggu Forestry Co., Ltd. (600265.SH), intends to transfer the 32,026,700 shares or 24.67 percent of the share capital of Jinggu Forestry it held at 25.37 yuan per share to Chongqing Xiaokang Holdings Co., Ltd. with a total price of 813 million yuan. The stock price of Jinggu Forestry closed at 19.84 yuan on Nov. 6. Xiaokang Holdings and Beijing LF Capital Management Limited are persons acting in concert. They totally hold 29.67 percent equities of the listed company as its biggest shareholder.
Comment: Xiaokang Holdings was established in 2010 and is principally engaged in vehicles manufacturing and industrial Investment. It ranked 344th in the top 500 private enterprises of China in 2015 with an operation revenue of 13.4 billion yuan in August.
○ Special Electric Motor to fully control Joylong Automobile, aiming at new energy vehicle
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Jiangxi Special Electric Motor Co., Ltd. (002176.SZ) proposes to acquire 18.38 percent equities of Joylong Automobile with 540 million yuan in cash. It also intends to pay another 710 million yuan in cash and issue 79 million shares through private placement at 9.07 yuan per share to acquire 49 percent equities of Joylong Automobile. Upon the completion of the purchase, the company will set foot in lithium battery new energy industry chain capitalizing on quality new energy vehicle manufacturing platform of Joylong Automobile.
Joylong Automobile is a domestic independent brand engaged in developing and selling of commercial vehicle and passenger car and providing related services. The parties committed that net profit of Joylong Automobile after deducting of extraordinary items from 2015 to 2017 will be no less than 200 million yuan, 250 million yuan and 300 million yuan, respectively.
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○ Newvalue buys shares of Kingswood Printing Ink through secondary market acquisition to 5 percent limit
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Suzhou Kingswood Printing Ink Co., Ltd. (300192.SZ) announced that fund under Newvalue had bought shares of the company through secondary market acquisition to the 5 percent limit in total. On 5 Nov., Newvalue increased the shareholding of 1.24 million shares in Kingswood Printing Ink through centralized price bidding, accounting for 0.51 percent of the total share capital in the company. After this increase of shareholding, Newvalue hold altogether 13.31 million shares in the company, representing 5.48 percent of its total equities.
○ A handful of companies resumed trading after private placement
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Lianhe Chemical Technology Co., Ltd. (002250.SZ) proposes to raise 1,450 million yuan through private placement at the floor price of 16.80 yuan per share, and the fundraising will be used for three production expansion projects concerning medical and pesticide intermediates as well as financing working capital. Tianshui Zhongxing Bio-technology Co., Ltd. (002772.SZ) proposes to raise 1,127 million yuan through private placement at the floor price of 32.21 yuan per share to invest in for edible mushroom production expansion projects and repay loans. Guangdong Zhongsheng Pharmaceutical Co., Ltd. (002317.SZ) proposes to issue 88.03 million shares through private placement at the floor price of 11.36 yuan per share to raise 1 billion yuan, which will be used to pay for the second to fourth instalments of the cost of purchasing Xian Qiang Pharmaceutical, invest in cooperative R＆D of 1.1 Small molecule chemical innovation drugs as well as fund working capital.
○ ORG Packaging to accept 27 percent shares in CPMC
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ORG Packaging Co., Ltd. (002701.SZ) proposes to accept 27 percent shares of CPMC Holdings Limited (00906.HK) at 6 Hong Kong dollars per share with self-raised fund of 1,616 million Hong Kong dollars. The latest stock price of CPMC is 5.09 Hong Kong dollars. The company indicated that participating in mix-ownership reform of enterprise under COFCO Corporation may fully exert their advantages and achieve win-win development. Net profit of COFCO Corporation for the first half year amounted to 196 million yuan.
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