[Today's Guide]
○State Council requires accelerating reform on coal power plant, reducing emission and saving energy
○Transaction of real estate market in Hangzhou sets new record, Strong lithium battery demand boosts lithium hexafluorophosphate price
○Zhongchang Marine to acquires Boya Tech., Greattown Holdings invests more in real estate industry
○Twin Tower Aluminum Oxide to acquire NdFeB assets, Zhongzhi Rongyun to hold shares in Shenzhen Success Electronics
[SSN Focus]
○State Council requires accelerating reform on coal power plant, reducing emission and saving energy
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The executive meeting of the State Council held on Dec. 2 decided to fully implement the reform on ultralow emission and energy conservation of coal-fired units before 2020. Those with lagged capacities or not meeting the compulsory standards will be definitely cleared out or shut down; the middle and eastern regions of China have to reach the standard in 2017 and 2018 in advance.
Comment: Atmospheric purification in next stage is possibly based on clean and effective utilization of coal, combining emission reduction and lowering coal consumption. Along with improving profits of thermal power plants during recent two years, they are more capable to invest the technical upgrading and transformation. In terms of listed companies, Tiandi Science＆Technology Co., Ltd. (600582.SH) proposes to acquire the assets of its substantial shareholder related to clean coal utilization; Keda Clean Energy Co., Ltd. (600499.SH) has gained a large number of orders for its gasification equipment of clean powdered coal; Beijing SPC Environment Protection Tech Co., Ltd. (002573.SZ) independently researches and develops a deep purification technology with single tower for desulfurization and dust extraction; Yantai Longyuan Power Technology Co., Ltd. (300105.SZ) is a technical leader in the plasma ignition equipment industry for pulverized coal boiler.
◆The meeting also decided to carry out pilot financial reform and innovation based on classifications in a series of regions with mature condition. A pilot zone will be constructed for financial service reform and innovation of small and micro businesses in Taizhou City of Zhejiang Province.
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[SSN Selection]
○Ministry of Commerce on Dec. 2 indicated that it will copy and popularize the successful experience of comprehensive pilot zone for Hangzhou cross-border e-commerce.
○National Development and Reform Commission issued a document to lower the requirements for the enterprises to issue bonds, likely to cut their financing costs.
○State Administration of Press, Publication, Radio Film and Television issued Several Opinions on Greatly Enhancing China's Music Industrial Development, proposing to realize an output of 300 billion yuan at the end of "13th Five-year Plan" period.
○Hangzhou issued guidelines on reform of taxi industry, determining not to charge the operation right to ease the burden of taxi drivers.
○BYD Company Limited (002594.SZ) revealed its development plan of new energy automobile for next year on the SZSE EasyIR that it is possibly to release the cars of SUV Song, compact SUV Yuan and small MPV Shang.
[Industry Information]
○Transaction of real estate market in Hangzhou sets new record, pressure on destocking eases obviously
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As reported by www.xinhuanet.com, more than 110,000 new houses in the downtown of Hangzhou City, Zhejiang province are transacted as of end-November, representing an amount of 187.7 billion yuan. Both the figures beat the records set by the real estate market of Hangzhou in 2009. Though the stocking is still high as a whole, the increasing stocking of houses has been reversed. The number of available houses in the downtown takes up a declining share of the total stocking for 17 months straightly.
Comment: The leaders of the country frequently make remarks on the high stocking of the real estate market in recent period, and the market strongly expects the launch of new easing policies. Many first-tier and second-tier cities including Hangzhou with continuous net inflow of people will see growth in both the price and the sales volume of houses. The net profit of Hangzhou Binjiang Real Estate Group Co., Ltd. (002244.SZ) climbs by 20 percent year on year in the first three quarters of this year. Binjiang Real Estate also forecasts an annual performance growth of 20-50 percent; some other middle and small-sized real estate enterprises actively explore diversified means of development. Sundy Land Investment Co., Ltd. (600077.SH) established Sundy New General Health Management Co., Ltd. in August this year, a move transforming towards physical examination center and community medical care; Cosmos Group Co., Ltd. (002133.SZ) is intensively inspected by institutions recently. Its project of medical imaging diagnostic center is deeply concerned.
◆The trading volume ranking list shows that China Vanke Co., Ltd. (000002.SZ; 02202.HK) was bought by a business department in Shenzhen with more than 2.1 billion yuan. The said business department totally bought China Vanke with 3.5 billion yuan in recent two days. The announcement on Nov. 20 shows that Baoneng Group and China Resources (Holdings) Co., Ltd. hold 15.04 percent and 15.29 percent equities of China Vanke, respectively, representing little gap between them. Besides, Poly Real Estate Group Co., Ltd. (600048.SH) was bought through an institutional seat with more than 4 billion yuan in recent three days.
○Strong lithium battery demand boosts lithium hexafluorophosphate price
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Driven by the huge demand for power lithium battery, the price of lithium hexafluorophosphate, the core raw material of electrolyte, has been soaring and the latest quoted price is 150,000 yuan per ton, representing a hike of 100 percent this year. Insiders estimate that as the lithium hexafluorophosphate accounts for a low proportion of the lithium battery cost, downstream enterprise can accept its price hike. The market price will reach nearly 200,000 yuan per ton by the end of the year and will continue to hike next year.
Comment: Boosting the development of energy saving and new energy vehicle has been defined as a key measure to advance green development and foster new economic growth point. November and December usually see big surge of sales. It is expected that more than 300,000 new energy vehicles will be sold this year, helping to improve the demand of the whole industrial chain with lithium hexafluorophosphate included. Listed companies including Jiangsu Jiujiujiu Technology Co., Ltd. (002411.SZ), Do-Fluoride Chemicals Co., Ltd. (002407.SZ) and Guangzhou Tinci Materials Technology Co., Ltd. (002709.SZ) all own an annual capacity of several thousands of tons of lithium hexafluorophosphate.
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[Announcement Interpretation]
○Zhongchang Marine to acquires Boya Tech. to focus on internet marketing
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Zhongchang Marine Company Limited (600242.SH) plans to purchase 100 percent equity of Boya Technology Co., Ltd. at 870 million yuan by issuing shares at a price of 8.64 yuan per share through private placement. The company will raise 600 million yuan of supporting funds by issuing shares at a price of no less than 8.64 yuan per share. Boya Technology is specialized in searching engine marketing service and has conducted long-term cooperation with some major searching engine platforms such as Baidu Inc. (NASDAQ: BIDU) and Qihu 360 Software Co,. Ltd. The counterparty promises that the profits of Boya Technology will be more than 60 million yuan in 2016. Share price of Zhongchang Marine closed at 7.82 yuan per share before trading suspension.
○Greattown Holdings invests more in real estate industry
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Greattown Holdings Ltd. (600094.SH) intends to raise 4.8 billion yuan by issuing shares at a price of no less than 10.32 yuan per share through private placement for a real estate project in Lanzhou City, Gansu Province. The company's share price ended at 11.44 yuan per share before trading suspension, during which the real estate sector surged significantly.
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○Twin Tower Aluminum Oxide to acquire NdFeB assets and invest in new energy vehicle industrial chain
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Taiyuan Twin Tower Aluminum Oxide Co., Ltd. (000795.SZ) is going to raise 613 million yuan by issuing shares at a price of 10.02 yuan per share through private placement to acquire 100 percent equity of Ganzhou Dongci Rare Earth Co., Ltd. and assets related to neodymium iron boron (NdFeB) held by the company's biggest shareholder. The counterparty promises that net profits of Dongci Rear Earth will be no less than 46,748,100 yuan in 2016. The company plans to raise another 613 million yuan by issuing shares at the same price through private placement to invest in fire-fighting robot project and project of driving system of new energy vehicles. The company's share price closed at 11.99 yuan per share before trading suspension
○Zhongzhi Rongyun to hold shares in Shenzhen Success Electronics
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The actual controller of Shenzhen Success Electronics Co., Ltd. (002289.SZ) plans to transfer his shareholding 6,526,500 shares in the company at a price of 25 yuan per share to Zhongzhi Rongyun (Beijing) Investment Co., Ltd. and fully entrust the voting power of the remaining 19,579,400 shares to Zhongzhi Rongyun, which is irrevocably. After that, Xie Zhikun will replace Wei Liansu to be the new actual controller of Shenzhen Success Electronics, whose latest share price is 27.56 yuan per share.
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○Yinghe Technology to expand production capacity of lithium-ion batteries
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Shenzhen Yinghe Technology Co., Ltd. (300457.SZ) plans to raise 889 million yuan by private placement to invest in production capacity construction project of automatically lithium-ion batteries. After reaching the designed production capacity, the project is expected to gain 885 million yuan of sales revenue every year, while the operating revenue of the company recorded 225 million yuan last year.
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