[Today's Guide]
○ Authoritative media reported military reform in advance, higher operating efficiency of military related enterprises expected
○ Smart cities to see achievements in 13th Five-year Plan period, World Robot Conference kicks off
○ Shenghe Resources to develop rare industry, CTS International Logistics to control China Special Article Logistics
○ Anke Biotechnology to explore in DNA detection, Mesnac to expand intelligent munufacturing
[SSN Focus]
○ Authoritative media reported military reform in advance, higher operating efficiency of military related enterprises expected
------
SSN learnt that as military reform will be started, management system of military and civilian integration will be adjusted, aiming to rationalize and improve the efficiency of China's military and civic industry integration. Recently, People's Daily and PLA Daily successively published articles, which said: "We should adhering to the development of military and civic integration with Chinese characteristics, and strive to fundamentally achieve the goal of national defense and military reform; deepening reform of military reform with unprecedented width and depth will be substantially carried out
Comment: research team at Essence Securities believed that strengthened efforts in national defense construction, determination demonstrated by the national will and frequent reports by military newspapers might be a sign that the formal issuance of top-level plan of military reform moves closer. Recently institutions has closely researched listed companies related to military and civic integration. Chengdu CORPRO Technology Co., Ltd. (300101.SZ) ,which engaged in Beidou Navigation Satellite System, and Leyard Optoelectronic Co., Ltd., which has obtained three military-related qualifications, are among the targets. Institutions are optimistic about business growth of private enterprises after they are awarded military related qualifications, and operating efficiency of military enterprises is expected to benefit from incentive mechanism and see improvements
◆ The State Council on Nov.23 announced instructions on supporting new consumption forms such as general aviation, and proposed to accelerate the opening of low-altitude airspace. SSN learnt that the latest program on low-altitude airspace reform has been submitted and will be implemented within the reminder of year at the soonest. CITIC Offshore Helicopter Co., Ltd (000099.SZ) and Sichuan Jiuzhou Electronic Co., ltd. (000801.SZ) are likely to be benefit from the development of general aviation market.
[TOP]
[SSN Selection]
○ The CPC Politburo on Nov.23 convened a meeting, which emphasized the role of reform in making breakthroughs and providing guidance for the sustainable development of SOEs.
○ Premier Li Keqiang held a talk with Malaysian premier, and indicated to actively probe into cooperation on infrastructures, including Malaysia-Singapore high-speed railway.
○ 11 Chinese, Japanese and South Korean cities have signed the Yantai Declaration, which proposes to initially build a free trade demonstration area among the three countries.
○ The disclosure of Q3 results on US market has come to an end, statistics show that telecommunications and healthcare stocks have demonstrated the highest percentage of revenue growth.
○ China Securities Regulatory Commission (CSRC) has approved the reorganizations of China Merchants Property Development Co., Ltd. (000024.SZ), Citic Heavy Industries Co., Ltd. (601608.SH) and Jiangsu Jiujiujiu Technology Co., Ltd. (002411.SZ).
[Industry Information]
○ Smart cities to see achievements in 13th Five-year Plan period, many provinces to release plan
------
Media reported that the China Center for Urban Development (CCUD) under the National Development and Reform Commission (NDRC) and the U.S. Smart Cities Council (SCC) signed the Framework Agreement on Sino-U.S. Provinces and States and Local Cities Smart Partnership. The two sides will conduct overall strategic partnership on the pairing of smart cities in China and the U.S., the Innovation incubation center for smart city industries and cooperation on smart cities technology.
Comment: The proposal on the 13th Five-year Plan indicated that it will boost the building of green cities, smart cities and forest cities as well as the connectivity inter-city infrastructure. Currently, the preparation of the first draft of the 13th Five-year Plan on smart cities in Tianjin and Shandong Province has been completed and will be released soon. Among A-share companies, Beijing E-Hualu Info Technology Co., Ltd. (300212.SZ) has signed contracts for more than 50 projects on smart cities. Hakim Information Technology Co., Ltd. (300300.SZ) is principally engaged in providing intelligent and comprehensive solutions to smart cities. Guangdong Anjubao Digital Technology Co., Ltd. (300155.SZ) is principally engaged in security products for communities.
○ World Robot Conference kicks off, industry to see huge growth potential
------
The 2015 World Robot Conference kicks off in Beijing on Nov. 23. Chinese President Xi indicated in the congratulatory message that the robust emerging of intelligent industries represented by robot technology has become a key mark in modern technological innovation with the increasing integration of IT application and industrialization. Chinese Premier Li Keqiang indicated that the convening of the World Robot Conference will have significance in facilitating the robot technology and industry development in China and the world as a whole. Officials from the Ministry of Industry and Information Technology disclosed at the conference that the preliminary draft of the 13th Five-year Plan on robots has been completed. The target is that the number of industrial robots in China will reach 800,000 in 2020.
Comment: Driven by the hiking labor costs and the upgrading of manufacturing industry, the robot industry embraces huge growth potential. Among listed companies, Zhejiang Dun'an Artificial Environment Co., Ltd. (002011.SZ) proposes to establish a high-end industrial automatic manufacturing system with "control components plus MEMS pressure transducers plus industrial robots". The company releases the OUR i5 human-machine cooperative robot at the conference. Harbin Boshi Automation Co., Ltd. (002698.SZ) announced in May that it would invest in minimal invasive surgery robots and intelligent machinery projects.
[TOP]
[Announcement Interpretation]
○ Shenghe Resources to acquire three companies with RMB3 bln to develop rare earth industry
------
Shenghe Resources Holding Co., Ltd. (600392.SH) proposes to acquire 100 percent equities of Ganzhou Chenguang Rare Earths New Material Co., Ltd., 71.43 percent equities of Sichuan Leshan Kebairui New Materials Co., Ltd. and 100 percent equities of Hainan Wensheng New Materials Technology Co., Ltd. totally priced at 3,039 million yuan by issuing 330 million shares at 8.5349 yuan per share (after conversion in the interim report) through private placement and a cash payment of 222 million yuan. It will fully control the three companies after reorganization. Meanwhile, it will raise a supporting fund of 1,536 million yuan by issuing shares at the same price through private placement.
The company's smelting separation capacity on rare earth oxide will be significantly improved after the acquisitions. The rare earth metal smelting business and the downstream rare earth waste recovery and comprehensive use will increase. Based on the performance commitment, the net profit of the subject assets will be no less than 230 million yuan. The accumulated profits will be no less than 528 million yuan in 2016 and 2017 and the total net profit for 2016 to 2018 will be no less than 889 million yuan.
○ CTS International Logistics to fully control China Special Article Logistics with RMB1.2 bln
------
CTS International Logistics Corporation Limited (603128.SH) plans to acquire 100 percent equities of China Special Article Logistics Co., Ltd. with a total price of 1.2 billion yuan by issuing shares through private placement and in cash. It will pay partial consideration by issuing 66.45 million shares at 9.03 yuan per share through private placement and the remaining will be paid with 600 million yuan in cash. Besides, the company will raise a supporting fund of 1.2 billion yuan by issuing shares at no less than 9.03 yuan per share to pay the cash consideration and supplement the working capital.
China Special Article Logistics is a large special logistics group with domestic projects logistics as its biggest revenue source. Based on the commitment, the net profit of China Special Article Logistics will be no less than 90 million yuan in 2016-2016 and the total net profit from 2015 to 2017 will be no less than 300 million yuan.
[TOP]
○ Anke Biotechnology to acquire AGCU ScienTech to explore in DNA detection
------
Anhui Anke Biotechnology (Group) Co.,Ltd. (300009.SZ) proposes to acquire 100 percent equities of AGCU ScienTech Inc., a leader in nucleic acid testing, with 450 million yuan in cash. AGCU ScienTech has independently developed the most complete forensic DNA detection kit in the world, breaking the monopoly of foreign large companies and making a leap forward in products and application. The counterpart promised that the net profit of the underlying company will be no less than 20 million, 26 million and 33.80 million yuan from 2015 to 2017.
○ Mesnac to raise fund through private placement to expand intelligent tire and robot business
------
Mesnac Co., Ltd. (002073.SZ) plans to raise about 1.27 billion yuan by issuing 89.17 million shares at prices no less than 14.23 yuan per share through private placement. The proceeds will be invested in the intelligent manufacturing base of tire equipment, phase II of the industrial base of industrial robots and intelligent logistics system, intelligent tire research center and applied technology center of intelligent tire.
[TOP]
○ Yuneng Holdings to pour RMB 5bln in power companies
------
Henan Yuneng Holdings Co., Ltd. (001896.SZ) plans to acquire shares in three thermal power generation companies: 97.15 percent equities of Hebi Tongli Power Generation Co., Ltd., 50 percent equities of Hebi Fenghe Power Generation Co., Ltd. and 35 percent equities of Huaneng Qinbei Power Plant held by their controlling shareholder investment groups, with 5.0 billion yuan among which 2.5 billion yuan will be raised by issuing 215 million yuan at 11.65 yuan per share through private and the other 2.5 billion yuan will be paid in cash. The company will also raise 2.5 billion yuan supporting funds through private placement to pay the consideration. The controlling shareholder investment groups promised that the total net profit of the underlying assets will reach 481 million yuan, 423 million yuan and 426 million yuan from 2016 to 2018.
○ Jingsheng Mechanical ＆ Electrical signs big deal
------
Zhejiang Jingsheng Mechanical ＆ Electrical Co., Ltd. (300316.SZ) signed a deal with Inner Mongolia Zhonghuan Solar Photovoltaic Material Co., Ltd. on providing TDR105S-ZJS full-automatic single crystal furnace as well as DSW03C-ZJS crystal-bar unifilar guillotine shear to the latter. The total price of the two deals is 243 bilion yuan among which 231 million yuan is from the former contract and 11.76 million yuan from the latter, accounting for 99.14 percent of the company's audited operating revenue in 2014.
○ Meisheng Cultural ＆ Creative Corp. to invest RMB 20mln in VR
------
Hangzhou Meisheng Erciyuan Cultural Development Co., Ltd., subsidiary of Meisheng Cultural ＆ Creative Corp., Ltd. (002699.SZ), plans to inject 20 million yuan in Guangzhou Chuanghuan Digital Technology Co., Ltd. and will hold 35 percent equities of Chuanghuan Digital Technology. Chuanghuan Digital Technology will use the fund mainly for the development of its augmented reality (AR) and virtual reality businesses. Chuanghuan Digital Technology owns an app named "Chaociyuan", a content platform app providing AR and VR products and games. The app now has more than 400,000 registered users in the vertical sub-sector of quadratic element (over 70 percent of them would pay for the app). Its terminal sales volume throughout the market exceeds 30 million yuan.
[Financial Reports Express]
○ Xixia Automobile Water Pump proposes high share conversion and dividend
------
Henan Wanxi Holdings Company, the controlling shareholder of Henan Province Xixia Automobile Water Pump Co., Ltd. (002536.SZ), proposes a 20-for-10 conversion of capital surplus into shares combined with 2 yuan dividend for every 10 shares in its dividend distribution plan for 2015.
[Trading Trends]
○ Three institutes buy FSPG Hi-Tech
------
The trading volume ranking list on Nov. 23 shows that three institutes bought FSPG Hi-Tech Co., Ltd. (000973.SZ) with a total of 272 million yuan, accounting for 24 percent of its intraday turnover. No institutional seat sold it.
Comment: Brokerages believe that the company owns the only plot in the bonded area within the free-trade zone in Nansha, Guangzhou which is a really scarce and unduplicable resource. As its substantial shareholder Guangdong Guangxin Holdings Group Co., Ltd. is a pioneer in state-owned enterprise (SOE) reforms in Guangdong Province, the company is also expected to reform in the future.
Latest comments