[Today's Guide]
○ Sales of passenger cars surge, components enterprises to benefit
○ Beijing to make huge investment in air pollution treatment, environmental treatment industry to see more orders
○ Chuying Agro-Pastoral to invest in Weikede to boost electric competition and Internet-based businesses
○ Kangmei Phar. to raise fund through private placement, four institutes buy GI Technologies
[SSN Focus]
○ Sales of passenger cars surge, components enterprises to benefit
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Based on the latest data released by the China Association of Automobile Manufacturers, the output and sales of vehicles in China exceeded 2.50 million vehicles in Nov., hitting a new high and representing a year-on-year growth of 17.74 percent and 19.99 percent, respectively. As the policies on half purchase tax on passenger cars with low emission began to implement from Oct. 1, the sales volume of passenger cars reversed the downward trend. It even recorded rapid growth recently.
Comment: Vehicles manufacturing is one of pillar industries in China's economy. China introduced policies on reducing the purchase tax in 2009, driving the sales volume of passenger cars surging 50 percent in the year. Considering the low vehicles penetration rate and the huge rigid demand potential, the policies on tax reduction are highly expected to boost the vehicles industry. Some vehicle components enterprises are actively developing intelligent vehicles and automotive aftermarket, which will bring more profits. Changzhou Xingyu Automotive Lighting Systems Co., Ltd. (601799.SH) proposes to aped up in the research and development of new electronic products, sensor technology as well as other technologies through private placement. Beijing WKW Automotive Parts Co., Ltd. (002662.SZ) plans to acquire Shenzhen Wuzhoulong Motors Group, a new energy passenger car enterprise. Anhui Zhongding Sealing Parts Co., Ltd. (000887.SZ) is actively investing in e-commerce platforms in the automotive aftermarket and "Internet plus" funds.
[SSN Selection]
○ Chinese research institutes issued a report at the Paris climate conference, estimating that the climate financing demand in China will reach a peak of 2.56 trillion yuan in 2020.
○ Baidu Inc. announced that its self-driving car has completed driving tests. Its core technologies cover high precision maps, positioning, sensors as well as intelligent decision-making and controlling.
○ China Robot Industry Alliance released relevant statistics, showing that the sales volume of home-made robots surged 76.8 percent year on year in the first half.
○ The General Affairs Department of the State Administration of Foreign Exchange indicated that the moderate reduction in foreign exchange reserves is within tolerance. The policies on mutual recognition of funds in mainland and Hong Kong have been implemented.
○ Caixin.com reported that Guo Guangchang, chairman of Fosun Group, has been out of touch.
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[Industry Information]
○ Beijing to invest RMB770 bln in air pollution treatment, environmental treatment industry to see more orders
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Li Shixiang, Executive Vice Mayor of Beijing Municipality, indicated on Dec. 10 that it will specify 84 key tasks in four aspects, including reducing industrial pollution, with a total investment of 770 billion yuan. Meanwhile, it will strengthen environmental monitoring and the number of monitoring stations will be doubled from the current 36 and form a monitoring network. On the same day, the mayor of Dezhou City, Shandong Province was summoned by the Ministry of Environmental Protection for ineffective response to severe smog.
Comment: Driven by the red alert on smog and the target in emission reduction, various new policies on environmental protection are speeding up in advancing. Officials of the Ministry of Commerce indicated that the investment in energy saving and environmental protection during the 13th Five-year Plan period is expected to reach 17 trillion yuan. It means that orders of environmental protection enterprises will continue to hike. In terms of listed companies, Beijing SDL Technology Co., Ltd. (002658.SZ) is engaged in air testing equipment manufacturing and operation. Its net profit for the whole year is expected to increase 30 to 50 percent year on year. Zhejiang Feida Environmental Science ＆ Technology Co., Ltd. (600526.SH) is principally engaged in desulfurization, denitration and dust-cleaning equipment. It will speed up in advancing the extra low emission for coal-fueled power generation.
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[Announcement Interpretation]
○ Chuying Agro-Pastoral to invest in Weikede to boost electric competition and Internet-based businesses
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Chuying Agro-Pastoral Group Co., Ltd. (002477.SZ) plans to contribute to the capital increase of Weikede (Beijing) Information Technology Co., Ltd., a subsidiary of the company, with 26.01 million yuan. Its shareholding proportion the subsidiary will remain 51 percent. As a platform of the electric competition and Internet-based businesses of the company, Weikede integrates investment, games design, competitive industries, online stores and fans as well as other relevant industries. The company also indicated that the target shareholders should be well-known enterprise in the Internet industry with influence and strong ability in resources consolidation.
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○ Kangmei Phar. to raise fund through private placement, largest shareholder to participate
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Kangmei Pharmaceutical Co., Ltd. (600518.SH) proposes to raise 810 million yuan through private placement at the issuing price of 15.47 yuan per share. The proceeds will be used to supplement working capital and repay bank loans. The largest shareholder and employee stock ownership plan will subscribe 3,200 million yuan and 100 million yuan, respectively. During the suspension period, the company also announced that it had entered into "Internet plus" community health service center strategic cooperative agreement with Galaxy Group. The company closed at 18.61 yuan per share before suspension of trading.
○ Nsfocus Information Technology Co., Ltd. (300369.SZ) entered into cooperative framework agreement with Tencent Cloud Computing, aiming to collaborate with its partner in cloud computing safety protection area.
[Trading Trends]
○ Four institutes buy GI Technologies
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The trading volume ranking list on Dec. 10 shows that GI Technologies (Beijing) Co., Ltd. (300309.SZ) was bought through four institutional seats with total amount of 89.06 million yuan, accounting for 20.07 percent of the intraday trading turnover; no institution sold the company.
Comment: institutions believed that the launch of the company's LWD products will fill the blank of the Chinese market; the Tajikistan refinery plant project will complete soon, which will bring massive profits to the company, and its performance will be stronger with future production output expected to improve. Besides, completion of M＆A of Tajikistan refinery plant project will also enhance the company's performance.
[Trading Alarms]
○ Fushine Phar. to subscribe on Dec. 11
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Jiangxi Fushine Pharmaceutical Co., Ltd. (300497.SZ) will start its IPO at the issuing price of 15.33 yuan per share with an upper subscription limit of 7,000 shares. The P/E ratio of the company is 22 times.
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