[Today's Guide]
○China greatly supports robot industry, national funds likely to approve
○Ningbo Baosi Energy Equipment to acquire Ahno (Suzhou) Cutting Tools, Delisi to acquire Australian beef firm
○Yongli Belting to purchase Plastec International Holdings, Shaoneng Group to develop new energy vehicle and robot
○Beijing-Tianjin-Hebei region establishes emergency mechanism for heavy pollution, Toyou Feiji Electronics bought through four institutional seats
[SSN Focus]
○China greatly supports robot industry, national funds likely to approve
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China Association for Science and Technology announced in the press conference on Nov. 16 that 2015 World Robot Conference will open on Nov. 23. It will be the first time for China to host this conference, and hundreds of famous enterprises home and abroad will attend the conference. Chinese President Xi Jinping once pointed out last year that robot is crucial in manufacturing industry, like the bright pearl on the top of crown; therefore, China should improve the robot level. The Ministry of Industry and Information Technology recently indicated that "13th Five-year Plan" on robot is likely to issue within this year; it will positively apply for specialized construction funds from China Development Bank, and pay key attention to intellectualized reform of petrochemical industry.
Comments: With increasing labor cost and manufacturing industrial upgrading, robot industry faces huge growth space. China Development Funds established not long ago has already become a new tool for China to support the real economy, with its investment focusing on transformation and upgrading projects to reinforce core competitiveness of manufacturing industry, which is likely to push the industry. In terms of listed companies, Ken Holding Co., Ltd. (300126.SZ) plans to product 800 to 1,000 robot control systems next year; Shenzhen Sunwin Intelligent Co., Ltd. (300044.SZ) is carrying out specialized robot researches, such as underwater robot; Jiangsu Yawei Machine Tool Co., Ltd. (002559.SZ) cooperates with KUKA Robot Group, and begins to deliver the orders; Shanghai STEP Electric Corporation (002527.SZ) proposes to merge and acquire two companies through private placement to expand robot business.
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[SSN Selection]
○Guangdong Province held the promotion meeting on deepening the reform of state-owned assets and enterprises on Nov. 16, requiring that it should stick to adjust and restructure the state-owned capital deployment.
○The IPO application of First Capital Securities Co., Ltd. proposes to be discussed in the meeting of China Securities Regulatory Commission on Nov. 20, and substantial shareholders of Beijing Capital Co., Ltd. (600008.SH) and Zhejiang Hangmin Co., Ltd. (600987.SH) hold the company's equities.
○China (Shanghai) Pilot Free Trade Zone Administration indicates that it will comprehensively take over the construction of Shanghai Technology Innovation Center to build up the best science and technology zone based on Zhangjiang Innopark.
○Xinjiang's implementation scheme on the strategy of "Made in China 2025" will be issued soon, and TBEA Co., Ltd. (600089.SH) indicated in the Tianshan Economic Forum that it will comprehensively enhance the intelligent manufacturing.
○Based on report of www.chinanews.com, domestic demonstration units of "Hualong No. 1" is likely to be kicked off recently, which is a reference power plant of Bradwell B project of the UK.
[Announcement Interpretation]
○Ningbo Baosi Energy Equipment to acquire Ahno (Suzhou) Cutting Tools to extend industrial chain
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Ningbo Baosi Energy Equipment Co., Ltd. (300441.SZ) plans to issue 6.62 million shares to its counterparty at 20.76 yuan per share (after a proposal of 10-for-10 conversion of capital surplus into shares in the company's interim report) through private placement and pay about 263 million yuan in cash to buy 100 percent equity of Ahno (Suzhou) Cutting Tools Co., Ltd., whose assets is expected to worth 400 million yuan. The company will also raise 372 million yuan by issuing shares at the same price to its controlling shareholder Yinuo Baosi Group and Shenzhen Taihe Dongfang Automation Investment Center through private placement. Ahno (Suzhou) Cutting Tools is principally engaged in designing, manufacturing and selling high-efficient hard alloy cutter for numerically-controlled machine tool, and provides cutter repair service. It is a leading provider of overall solution to metal cutting.
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○Delisi to acquire Australian beef firm at AUD140 mln
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Shandong Delisi Food Co., Ltd. (002330.SZ) plans to acquire 45 percent equity of Yolarno in cash and increasing investment in the company to become its biggest shareholder. This deal will totally cost it 140 million Australian dollars. This acquisition will help Delisi enter a high-end beef market with plentiful product category and will also open channels for the company's products to access to overseas market. Yolarno is a large beef enterprise in Australia and supplies products to more than 320 clients from 50 countries and regions.
○Yongli Belting to purchase Plastec International Holdings at RMB1.45 mln
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Shanghai Yongli Belting Co., Ltd. (300230.SZ) plans to raise 1.45 billion yuan by issuing 120 million shares through private placement, of which 1.25 billion yuan will be used to buy 100 percent equity of Plastec International Holdings Limited and the others to supplement working capital. The company's controlling shareholder Shi Peihao will subscribe 200 million yuan of shares. Plastec International Holdings is engaged in plastic parts and components and its products are widely applied in such fields as consumer electronics, precision toys, telecommunication and computer. The counterparty promises its net profit after extraordinary gains and losses will be 134 million Hong Kong dollars, 161 million Hong Kong dollars, 177 million Hong Kong dollars and 195 million Hong Kong dollars from 2015 to 2018.
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○Shaoneng Group to raise RMB3.2 bln to develop new energy vehicle and robot
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Guangdong Shaoneng Group Co., Ltd. (000601.SZ) plans to raise 3.2 billion yuan through private placement to construct products including biomass power generation project in Xinfeng, Guangdong Province, powertrain and drivetrain system of new energy vehicle, precision RV reducer of industrial robot and intelligent charging system of electric vehicle. The private placement targets Qian Hai Life Insurance Co., Ltd. and Ju Shenghua, its person acting in concert. After the private placement is done, Qian Hai Life Insurance and Ju Shenghua may totally hold more than 30 percent equity of the company.
○Grandblue Environment, Noposion Agrochemicals and Wanhua Chemical propose private placement
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Grandblue Environment Co., Ltd. (600323.SH) plans to raise 930 million yuan by issuing 77.82 million shares at a price of 11.95 yuan per share through private placement. 386 million yuan of the fundraising will be used to purchase 30 percent equity of Foshan Nanhai Gas Development Co., Ltd. and the remaining will be used for municipal solid waste (msw) incineration generation project and debt payment. Nanhai Gas Development saw 89 million yuan and 31.54 million yuan of net profit in 2014 and January-September of 2015 respectively.
Shenzhen Noposion Agrochemicals Co., Ltd. (002215.SZ) intends to raise 1.7 billion yuan by issuing 113 million shares at a price of 15.16 yuan per share through private placement for the off-line operation system construction based on the internet ecosystem called "Tiantian Quan", pesticide-patent compound, and the R＆D and registration projects of newly-manufactured preparation product.
Wanhua Chemical Group Co., Ltd. (600309.SH) plans to raise 2.5 billion yuan through private placement by issuing 156 million shares at no less than 16.06 yuan per share. 1.4 billion yuan of the raised fund will be invested in the polycarbonate project with annual production of 200,000 ton, while the rest will be used to pay off loans, supplement working capital and etc.
[Industry Information]
○Beijing-Tianjin-Hebei region establishes emergency mechanism for heavy pollution, environmental monitoring network calls for urgent enhancement
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As reported by Xinhuanet, the second version of the work scheme on the joint forecasting, consultation and emergency for heavy air pollution in the core area of Beijing-Tianjin-Hebei region was released on Nov. 16 to solicit opinions. Beijing, Tianjin, Tangshan City, Langfang City, Baoding City and Cangzhou City will be the first to pilot the scheme, and the pilot will gradually extend to the whole area of the Beijing-Tianjin-Hebei region. Zhang Gong, vice mayor of Beijing, indicates that the highest-level of emergency emission reduction will be launched together when heavy air pollution comes so as to control large-scale and long-playing heavy pollution.
Comment: The development of joint emergency work proposes higher requirement on the construction of ecological environment monitoring network. The General Office of the State Council distributed and printed a scheme earlier, requiring constructing a national environment quality monitoring network covering factors including air, water and soil. It will benefit suppliers of environment monitoring systems, including Beijing SDL Technology Co., Ltd. (002658.SZ). Besides, companies involved in de-dusting, desulfurization and denitrification, such as Fujian Longking Co., Ltd. (600388.SH) and Xiamen Savings Environmental Co., Ltd. (300056.SZ), will also benefit from air contaminant treatment in the long run.
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○Agricultural reclamation reform to boost agricultural modernization, industry to see rapid development
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Chinese Vice-premier Wang Yang released an article on People's Daily on Nov. 16, indicating that China should strengthen the leading role of agricultural reclamation in agricultural modernization. The meeting of the Leading Group for Overall Reform convened on Oct. 13 deliberated and passed the Opinions on Further Advancing Agricultural Reclamation Reform and Development. The meeting pointed out that it should stably promote agricultural reclamation, focus on the integration of reclamation areas and the enterprise reform of farms, rely on innovation and accelerate the transformation of economic growth models and advance resources and assets consolidation and industrial optimization and upgrading as well as give full play to the leading role of the development of modern agriculture.
The current agricultural reclamation system owns abundant resources. But it also faces low operation efficiency and unclear division between the society and enterprises. As a result, following reform will focus on reducing the social burden in the agricultural reclamation system, vitalizing inventory assets and speeding up the transfer of lands. With great policy supports, the agricultural reclamation industry will embrace rapid development opportunities. As to listed companies, Heilongjiang Agriculture Company Limited (600598.SH), China Hainan Rubber Industry Group Co., Ltd. (601118.SH) and Gansu Yasheng Industrial (Group) Co., Ltd. (600108.SH) are the only listed platform in the agricultural reclamation system in Heilongjiang, Hainan and Gansu provinces.
[Trading Trends]
○Toyou Feiji Electronics bought through four institutional seats
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The trading volume ranking list on Nov. 16 shows that Toyou Feiji Electronics Co., Ltd. (300302.SZ) was bought through four institutional seats with a total of 110 million yuan, accounting for 32 percent of its intraday turnover. Another two institutional seats sold the stock with 10.11 million yuan.
Comment: Institutions believe that Toyou Feiji Electronics, as the only professional storage company listed on the A-share market, will obviously benefit from the independence and controllability of storage industry. The domestication of storage industry will bring a market of billions of yuan. Besides, Toyou Feiji Electronics has been incorporated into the index for companies related to military industry and it is one of the few storage companies with military qualification.
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