[Today's Guide]
○ Stocks dive on over-interpretation, positive response hopefully to ease market panic
○ Gates to initiate clean energy R＆D plan, Shanghai to medical IT application
○ Improve Medical Instruments to develop tiered medical treatment, Guoxuan High-tech Power Energy to establish power battery plant
○ Lead Eastern Investment to acquire equities of CRTV International Digital Cinemaline, Minmetals Development to tap into iron e-commerce with Alibaba
[SSN Focus]
○ Stocks dive on over-interpretation, positive response hopefully to ease market panic
------
The SSE Composite Index slumped on Nov. 27 by 5.48 percent, the biggest single-day loss since August. The loss mainly contributes to the ban of financing returns swap, the investigation to three large brokerages, the scrapping of the requirement for brokerages to hold daily net long positions and the upcoming IPOs. Many brokerage stocks even plunged by the daily limit of 10 percent.
The Securities Association of China (SAC) indicated on the weekend that the financing return swap inventory business will carry on according to contracts and offered data:as of Nov.27, the unfinished financing return swap of 30 securities companies has totaled around 78.5 billion yuan; since November, its average daily buy have been around 1.8 billion yuan, a very low proportion in the total market turnover. Citic Securities Company Limited (600030.SH;06030.HK), Guosen Securities Co., Ltd. (002736.SZ) and Haitong Securities Company Limited (600837.SH;06837.HK) all announced that they were investigated by the China Securities Regulatory Commission (CSRC) for violations of rules in margin trading and short selling. It is also reported that an senior official of Guotai Junan Securities Co., Ltd. (601211.SH) noted that the company will continue to fulfill its promise that it will not reduce their shareholding until the market jumps above 4,500 points. Other brokerages also expressed their consensus to keep their promises.
Comment: Authorities have given positive response and clarified the uncertainties that caused the stock plunge, which is expected to ease the panic in the market. As the management intends to support the long-term and sound development of capital market, policy adjustment does not mean changes in the intrinsic operation mechanism of the market. As the market enters a normal state, irrational sell-into-corrections that frequented during the previous market rout will gradually go away. Positive effects brought by the upcoming inclusion of RMB into SDR basket, the accelerating financial opening-up, including Shanghai-London Stock Connect and the interest rates led by the People's Bank of China (PBOC) will gradually emerge.
[SSN Selection]
○ SSN learns that Chinese version 401K pension program will be launched in end-October, likely to speed up the development of endowment insurance.
○ The China Securities Regulatory Commission (CSRC) on Nov. 27 said that preparatory works concerning the reform of registration-based IPO system are proceeding in an orderly manner, and it is studying supporting regulations and rules.
○ The PBOC announced that it pumped 100 billion yuan into the market via medium-term lending facility (MLF) at an interest rate 10 base points lower than that of last month.
○ Ten ministries and commissions joint issued a guidance on promoting in-depth civil-military integration in medical science which make brain science and virtual reality the priorities in the military and civilian integration research.
○ China Business Journal reported that it confirmed that six supporting documents on the electricity reform will be released on the first week of December.
TOP
[Industry Information]
○ Gates to initiate clean energy R＆D plan with billions of U.S. dollars
------
The French government announced on Nov. 27 that Bill Gates, co-founder of Microsoft, will initiate a plan on the research and development of clean energy with billions of U.S. dollars at the 21th UN conference on climate change to be held in Paris. It is reported that Gates and some developing and developed countries will jointly propose the "clean technology initiative". The participants of the initiative will commit that their budget on the research and development of clean energy technologies will double by 2020 and will encourage private investors to invest in the area.
Comment: Photovoltaic technology is one of clean energy technologies that can be promoted easily. If the above initiative is implemented, domestic listed companies with international competitiveness are expected to see more export orders. Among listed companies, Xi'an Longi Silicon Materials Corp. (601012.SH) is principally engaged in silicon single crystal rods and silicon chips with overseas business accounting for 54 percent. The chairman of the company announced the shareholding increase in the company with 8.27 million shares on weekend. Risen Energy Co., Ltd. (300118.SZ) is principally engaged in solar energy battery components and expanded into the downstream photovoltaic power stations. About 50 percent of its products are sold overseas.
○ Shanghai releases 13th Five-year Plan to medical IT application
------
The Shanghai Hospital Information Network Conference was convened on Nov. 27. Shanghai Municipal Health Bureau issued the 13th Five-year Plan on Health Information in Shanghai Municipality, focusing on the establishment of a comprehensive management platform, supporting the comprehensive reform in community health, the establishment of the health bid data center and residents' health cards. It is noteworthy that it requires the establishment of a hospital information system with the electronic medical record as the core and the grass-root health information management system with the electronic health record as the core across the municipality. It strives to make breakthroughs in the application of big data on population health and promote innovations in models and systems.
Comment: In terms of listed companies, Shanghai Yanhua Smartech Group Co., Ltd. (002178.SZ) develops medial IT application through acquiring Chengdu Chengdian Yixing Digital Health Software Co., Ltd. It is a leader in the application of electronic medical record and is actively developing hospitals, health and family planning commissions and other clients to promote the establishment of medical health data platform at the municipal level. Hangzhou Century Co., Ltd. (300078.SZ) is dedicated to cooperating with Class 3A hospitals across China to develop in the high-end medical IT application market. Through the big data analysis, the application of insurance and special electronic medical record, it enjoys a huge market potential.
TOP
[Announcement Interpretation]
○ Improve Medical Instruments to develop tiered medical treatment with RMB900 mln through private placement
------
Guangzhou Improve Medical Instruments Co., Ltd. (300030.SZ) proposes to issue 80 million shares to the actual controllers, including Deng Guanhua, through private placement to raise 900 million yuan. The proceeds will be invested in the renovation (PPP) of the headquarters of Chenzhou Third People's Court, the relocation (PPP) of Yizhang County Traditional Chinese Medicine Hospital, the medical treatment and health industrial park (phase-I) in Chenzhou City and supplementing the working capital.
Improve Medical Instruments indicated that the company will diversify the tiered medical treatment model in private medical treatment through various forms. It can achieve the output of modern management of hospitals and the Internet plus medical services O2O in medical treatment services.
○ Guoxuan High-tech Power Energy and BAIC BJEV to establish power battery plant with 1 bln AH
------
Hefei Guoxuan High-tech Power Energy Co., Ltd., a wholly-owned subsidiary of Guoxuan High-tech Co., Ltd. (002074.SZ), and BAIC BJEV plan to jointly establish a research and development center in Silicon Valley, a power battery plant with an annual capacity of 1 billion AH in Laixi City and a joint venture for battery operation and battery recycling and use. The company indicated that the partnership with BAIC BJEV will promote the development in the whole industrial chain in the new energy vehicles.
TOP
○ Lead Eastern Investment to acquire equities of CRTV International Digital Cinemaline
------
Lead Eastern Investment Co., Ltd. (000673.SZ) intends to acquire 30 percent equities of CRTV International Digital Cinemaline (Beijing) Co., Ltd. with 32.35 million yuan. The latter is engaged in the operation of cinema lines and the film distribution under the State Administration of Press, Publication, Radio, Film and Television with qualifications to distribute films. It has been actively promoting the joining of cinemas in Shanghai, Zhejiang Province, Shandong Province and Chongqing recently.
○ Minmetals Development raises RMB4.2 bln, to tap into iron ecommerce with Alibaba
------
Minmetals Development Co., Ltd. (600058.SH) proposes to raise 4,256 million yuan through private placement, which will be used for five large projects, including metal ecommerce platform. Its controlling shareholder Minmetals Development will subscribe no less than 10 percent. For the purpose of metal ecommerce platform, the company, Ali Venture Capital and Minmetals Development employee incentive platform proposes to contribute 204 million yuan, 317 million yuan and 72 million yuan respectively, representing shareholding of 46 percent, 44 percent and 10 percent.
Comment: Alibaba has huge vendor and buyer bases, and technology to support trillions yuan scale transactions. Upon the complement of the refinancing, Minmetals Development will establish the iron trading ecommerce platform, which will expand its business.
○ Huayi Brothers Media controlling shareholder and general manager increased shareholding
------
Wang Zhongjun and Wang Zhonglei, who are respectively actual controller and general manager of Huayi Brothers Media Corporation (300027.SZ), increased holding of aggregate 6,930,000 shares through trust plan in the company from Nov. 24 to Nov. 27. The increased shareholding accounted for 0.5 percent of the company's share capital.
[Trading Alarms]
○ Kailong High Technology to issue shares on Nov. 30
------
The offering price of Kailong High Technology Co., Ltd. (002783.SZ) is 28.6 yuan per share, representing PE ratio of 23 times, and the upper limit of subscription through a single account is 8,000 shares. This batch of new shares issuance should still comply with the rules applicable in the first half year, namely the subscription amount is determined on the basis of the average of 20 business days preceding the second trading day, and should be paid in full for the shares subscribed.
[Weekly Review]
○ Feeling pulses of the market in calm
------
The stock market has been volatile recently. Influences of news and important policies are weak in one time, and strong in other times, but the general rule of the market is clear. In the long run, influential big events can always catch the attention of the market, which is the direction and cardinal line. In the mid-long term, policy alterations, the supply of money, and previous performance of the market, have combined effect on the market's future performance, which is the concrete anticipation for the foreseeable future.
In the mid-long term, military industry, second child and new energy concepts traced by SSN over the past few weeks continue to hype and are still the major topics of the market. As military meeting will be convened this week, the military industrial theme will come to another important pitch point. It is expected that with the deepening and implementation of military reform measures, the landscape of military industry will see more changes and more room will be expanded for its development. China's military industry has just started to take off.
In the short term, the market will confront many tests from next week. The continuous issuance of new shares will absorb lots of capital at the end of the year, which will impact the liquidity of the market. Meanwhile, attentions should be paid to the impacts from the recent policies and measures concerning financial sectors. As the New Year is coming, institutions become more sensitive. All these short term factors are worth attention, and we will consistently track their movements.
Equity investment requires timely information about the market and analyzing. Investors should keep calm and cope with shifting events by sticking to a fundamental principle to gain profits.
TOP
Latest comments