[Today's Guide]
○Insurance funds vigorously buy shares of listed companies to 5pct limit, blue-chip stocks greatly favored
○BGI proposes to list on ChiNext Board, likely to enhance industrial development
○China UnionPay announces partnership with Apple and Samsung, mobile payment to see market expansion
○Qinghai Gelatin proposes to acquire Shenzhou Eqiao with RMB1 bln, Tiansheng New Materials to expand to third-party payment
[SSN Focus]
○Insurance funds vigorously buy shares of listed companies to 5pct limit, blue-chip stocks greatly favored
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Xinjiang Goldwind Science and Technology Co., Ltd. (002202.SZ; 02208.HK) announced that, up to Dec. 18, a series of subsidiaries under Anbang Insurance Group have bought its shares through secondary market acquisition to 10 percent. Only ten days have passed since Anbang Insurance Group bought its shares through secondary market acquisition to 5 percent limit for the first time. According to this announcement, Anbang Insurance Group still continues to buy the shares of Dashang Co., Ltd. (600694.SH), accounting for 6.74 percent accumulatively, only seven days from the share acquisition to 5 percent limit last time; its shareholding in Gemdale Corporation (600383.SH) also increases compared with that in previous week.
Comment: As the year end comes, it becomes increasingly common that insurance funds greatly buy the blue-chip stocks through secondary market acquisition to 5 percent limit, due to assets shortage under the low interest rates and also new regulatory policies for insurance industry. Insurance companies can put the investment under the items of "long-term equity investment" after the corresponding shareholding proportion exceeds 20 percent; compared with small-cap stocks, blue-chips stocks in the main sectors suffer less risks and are more beneficial for improving the solvency margin ratio of insurance companies. Blue-chip stocks, such as Chang Chun Eurasia Group Co., Ltd. (600697), Beijing Tongrentang Co., Ltd. (600085.SH), China CYTS Tours Holding Co., Ltd. (600138.SH) and He Bei Cheng De LoLo Company Limited (000848.SZ), have already been bought through secondary market acquisition to 5 percent limit but still not over 20 percent yet, which might be bought constantly by the insurance funds.
◆China Securities Regulatory Commission responded on the event of China Vanke Co., Ltd. (000002.SZ) acquired by a series of subsidiaries under Baoneng Holding (China) Co. Ltd., and indicated that acquisition is market behavior, and it will not intervene as long as they are legal. China Vanke has suspended and planned to issue shares, and it announces to disclose restructuring scheme before Jan. 18, 2016.
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[SSN Selection]
○The first batch of seven funds has finished the registration to be recognized in both Mainland China and Hong Kong, initiating a new channel for two-way openness of capital market.
○Sino-Korea and Sino-Australia free trade agreements officially take into effect on Dec. 20, and will greatly promote the deep integration of economy and trade for the Asian-Pacific region.
○Chinese Academy of Sciences has researched and developed an electrode material for supercapacitor with high-performance which can make the e-mobile driving for 35 km by charging for seven seconds.
○Qihoo 360 Technology Co. Ltd. (NYSE: QIHU) has reached a privatization agreement of 9.3 billion U.S. dollars, likely to become the largest scale among the Chinese concept stocks backing to A-share market.
○Based on book office data of piaofang.maoyan.com, accumulative book office of The Ghouls exceeds 500 million yuan since it was run three days ago.
[Industry Information]
○BGI proposes to list on ChiNext Board, likely to enhance industrial development
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The website of China Securities Regulatory Commission on Dec. 18 pre-announced the IPO application of Beijing Genomics Institute (BGI). The company proposes to list on the ChiNext Board to raise 1,732 million yuan and issue no less than 40 million shares, and its fundraising projects include cloud-service ecosystem construction system, platform upgrading projects for medical examination solutions and precision medicine service, and etc. The company is a leading enterprise in the industry, mainly engaged in gene detection and service. Its revenues in 2013 and 2014 were 1,047 million yuan and 1,131 million yuan, respectively, and its corresponding net profit were 172 million yuan and 59 million yuan, respectively.
Comment: Relying on its own edges and capital operation, BGI might grow bigger and stronger and further advance industrial development after entering the capital market. As to listed companies, United Electronics Co., Ltd. (002642.SZ) provides BGI with biology cloud computing service and holds 0.26 percent of BGI's equities; companies including Beijing Beilu Pharmaceutical Co., Ltd. (300016.SZ), Boai Nky Pharmaceuticals Ltd. (300109.SZ) and Da An Gene Co., Ltd. of Sun Yat-Sen University (002030.SZ) are involved in gene sequencing and might be favored by the market.
[TOP]
○China UnionPay announces partnership with Apple and Samsung, mobile payment to see market expansion
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China UnionPay announced a partnership on Dec. 18 with Apple Inc. (NASDAQ: AAPL) and Samsung Electronics Co., Ltd. to bring Apple Pay and Samsung Pay to Chinese customers in early 2016, a move trying to further expand the coverage of cloud QuickPass. Cloud QuickPass, centering on contactless payment technology, is a new sign of China UnionPay's mobile payment and applies various new payment technologies including NFC, HCE, TSM and Token. China UnionPay together with more than 20 commercial banks jointly unveiled "Cloud QuickPass" on Dec. 12.
Comment: China's mobile payment develops rapidly. Statistics from the People's Bank of China (PBOC) shows that the amount of China's mobile payment experienced a year-on-year growth of nearly 200 percent in the third quarter of 2015. The partnership between China UnionPay and Apple and Samsung will boost the development of mobile payment industrial chain. Enterprises engaged in chip manufacturing and POS machines will embrace opportunity for market expansion. As to listed companies, Wuhan Tianyu Information Industry Co., Ltd. (300205.SZ) is specialized in intelligent cards of telecommunication and financial IC; SWP-SIM card and TSM platform under HengBao Co., Ltd. (002104.SZ) will benefit from the introduction of Apple Pay. mPos product has passed the test of China UnionPay.
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[Announcement Interpretation]
○Qinghai Gelatin proposes to acquire Shenzhou Eqiao with RMB1 bln
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Qinghai Gelatin Company Limited (000606.SZ) plans to acquire 100 percent equities of Shenzhou Eqiao (Beijing) Finance and Taxation Technology Co., Ltd. with 1 billion yuan by issuing 147 million shares through private placement at 6.81 yuan per share. Qinghai Gelatin also plans to raise a supporting fund of 1 billion yuan through private placement at the same offering price to invest in the construction of underlying company's intelligent enterprise incubation cloud platform and enterprise big data center platform.
Shenzhou Eqiao owns various software products involved in finance and taxation service. Shenzhou Eqiao promises a net profit of no less than 80 million yuan, 94 million yuan and 107 million yuan from 2016 to 2018, respectively.
○Tiansheng New Materials acquires Harvest Electronic Technology with RMB710 mln to expand to third-party payment industry
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Changzhou Tiansheng New Materials Co., Ltd. (300169.SZ) plans to acquire 100 percent equities of Shanghai Harvest Electronic Technology (Group) Co., Ltd. with 710 million yuan by issuing 18.02 million shares through private placement at 11.82 yuan per share and paying 497 million yuan in cash. In the meantime, Tiansheng New Materials plans to raise a supporting fund of 710 million yuan through private placement at 7.53 yuan per share.
Shanghai Harvest Network Technology Co., Ltd. and Shanghai Deyi Network Technology Co., Ltd., two companies under Harvest Electronic Technology, are leading service providers of bankcard acceptance business and distributors of handy payment service for the public in China. The counterparty promises that the net profit of the two companies will be no less than 40 million yuan, 52 million yuan and 70 million yuan from 2016 to 2018, respectively.
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○Comfort Science ＆ Technology Group to acquire MEDISANA to develop health industry
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Comfort Enterprise (Germany) GmbH, a wholly-owned subsidiary of Xiamen Comfort Science ＆ Technology Group Co., Ltd. (002614.SZ), plans to receive 75.31 percent equity transferred from MEDISANA. It also shows its intention of voluntarily and public purchasing the remaining 24.69 percent from the company's shareholders. The offer price and resale price agreed by major shareholders are both 2.8 euros per share. If the purchase is done, the company will pay 26.22 million euros (equivalent to 185 million yuan) in cash.
MEDISANA is a leading provider of family health products and services in Germany. Its products cover healthy household, household medical product, and mobile health.
○Oriental Pearl Media conducts strategic cooperation with Qihoo 360 Software
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Shanghai Oriental Pearl Media Co., Ltd. (600637.SH) plans to conduct strategic cooperation with Qihoo 360 Software Co., Ltd. (NYSE:QIHU) in such fields as internet film and entertainment business, game business, advertisement business and e-commerce purchase business. SSN reported on Dec. 18 that Oriental Pearl Media partnered with Qihoo 360 Software to push forward mobile client.
[Weekly Review]
○Expected bad news: not unfavorable anyway
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China's stock market surged significantly on Dec. 17 after the U.S. Fed decided to raise interest rate, which proved again that the expected bad news was not unfavorable anyway. Afterwards, a lot of investors found many reasons for the rise. But a week ago, many investors might think they should buy stocks after the Fed's decision to hike the interest rates; otherwise, it is difficult to explain the increasing turnover on last Thursday.
Now as the IPOs resumed, the registration-based IPO system was released and the Fed raised the interest rate, the A-share market seems to manage through difficulties. Lately there is still a general bad news that a ban prohibiting major shareholders from reducing shareholding will be lifted in January 2016. Theoretically, increasing supply will lead to a price decline. But statistics show that stock prices of relevant companies usually will see positive equity returns in a short period after the ban is lifted. In fact, it is easy to understand that the major shareholders have to give some benefits if they want to get a good price of the stocks. Under the asset scarcity, not many major shareholders are willing to give up controlling power, and the big shareholders of company A are likely to use the money from decreasing shareholding to buy a fund B, which might be finally invested in a listed company C.
Besides new stocks, some stocks experiencing assets restructuring such as Chang Jiang Shipping Group Phoenix Co., Ltd. (000520.SZ), Zhejiang IDC Fluid Control Co., Ltd. (002468.SZ) and Shenyang Commercial City Co., Ltd. (600306.SH) rank ahead in weekly increase. It is no doubt that such stocks see remarkable increase, because it is hard to predict what the restructuring will be and when it will happen. Maybe you buy the stocks of Chongqing New Century Cruise Co., Ltd. (002558.SZ), which is very outstanding, but there are also many examples of restructuring failure or no restructuring.
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