[Today's Guide]
> State Council executive meeting to promote industrial integration and development in rural areas and foster new types of business
> Intelligent manufacturing implementation plan to release soon, Leshi unveils VR strategy
> Tianyin Electromechanical to hold 100 pct stake in Huaqing Ruida Technology, Feilo Acoustics to buy European lighting firms
> Yunnan Tourism to expand tourism and cultural business, multiple companies propose high share conversion and dividend
[SSN Focus]
○State Council executive meeting to promote industrial integration and development in rural areas and foster new types of business
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The executive meeting of the State Council convened on Dec. 23 made arrangements on the integrated development of the primary, secondary and tertiary industries in rural areas and will strengthen and benefit agriculture through structural reform. The meeting proposes that it will develop field trusteeship, agricultural products processing, storage and logistics as well as other market services. It will promote the deep integration of agriculture with tourism and health and elderly care and foster e-business in rural areas, customized agricultural products and other "Internet plus" and new types of business.
Comment: Extending the industrial chains and improving the value chain are inevitable choices in the transformation and development of agriculture and rural areas in China under the new normal. E-business in rural areas in particular has received more policy supports recently. Based on the guidance issued by the General Office of the State Council, China will preliminarily establish a unified and open e-business market system in rural areas in 2020. The online purchase in rural areas in China reached about 180 billion yuan last year, only accounting for about 5 percent of the social consumption in rural areas. It is expected to see rapid growth in the future. Among A-share companies, Shindoo Chemi-industry Co., Ltd. (002539.SZ) established the Haha Farm O2O platform. The www.16899.com of Jiangsu Huifeng Agrochemical Co., Ltd. (002496.SZ) recorded sales of 140 million yuan after being introduced one year ago. The big data on agricultural assets established by Shenzhen Batian Ecotypic Engineering Co., Ltd. (002170.SZ) has been completed.
◆ The State Council executive meeting also determined measures on further raising the proportion of direct financing, including the establishment of the strategic and emerging board on the Shanghai Stock Exchange and the pilot of transfer from the National Equities Exchange and Quotations (NEEQ) to the ChiNext Board. It determined to cut the on-grid power prices of coal-fueled power generation to reduce the burden of enterprises.
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[SSN Selection]
○China Insurance Regulatory Commission requires insurance companies disclosing the sources of funds when they increase the shareholding in listed companies through secondary market acquisition to the 5 percent limit. They shall list the balance on the account and the cash flow if the insurance premium is utilized.
○Effective on January 2016, the closing time for interbank foreign exchange market will be extended to 23:30. RMB is speeding up in embracing the global market.
○The General Administration of Sport proposed the plan on the development of winter sports, which has shown a trend of big development.
○China Vanke Co., Ltd. (02202.HK; 000002.SZ) indicated that it does not welcome Baoneng Group to control the company, but it is willing to conduct dialogue with it.
○The IPO application of the Bank of Guiyang has been approved, making it another city commercial bank approved for IPO after the Bank of Jiangsu.
[Industry Information]
○Intelligent manufacturing implementation plan to release by year-end
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SSN learnt that the plan on the implementation of intelligent manufacturing (2016-2020) prepared by the Ministry of Industry and Information Technology will be released by the end of the year at the soonest. The plan requires accelerating in the establishment of a standard system of intelligent manufacturing and an information security guarantee system and establishing an Internet-based system platform for intelligent manufacturing. The IT application in key manufacturing industries will be improved significantly by 2020 and a full IT application will be achieved in key manufacturing industries by 2025.
Comment: The releasing and implementation of the plan will provide guidance to the sustainable and healthy development of intelligent manufacturing. Among listed companies, Shanghai STEP Electric Corporation (002527.SZ) proposes to fully control Shanghai Huitong Automation Technology Development Co., Ltd. and Shanghai Show-Kyoel Automative Equipment Co., Ltd. by issuing shares through private placement to improve its strategic development in the robot and motion control businesses. Jiangsu Yawei Machine Tool Co., Ltd. (002559.SZ) cooperates with Kuka in robot business. Qinchuan Machine Tool ＆ Tool Group Share Co., Ltd. (000837.SZ) can produce joint reducers for robots.
○Leshi unveils VR strategy, VR to lead boom of consumer electronics
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Leshi Internet Information ＆ Technology Corp. (300104.SZ) on Dec. 23 afternoon officially unveiled its VR (virtual reality) strategy and launched LeVR COOL1, a handset VR helmet which will be sold at 149 yuan. In addition, its VR mobile app also made an appearance and will be on the market in the first quarter next year. Leshi announced that it will cooperate both domestic and foreign content providers to create China's largest VR content app in the fields of TV, film, music, sports, tourism, education, game and documentary.
Comment: Leshi's VR products are rather affordable for the people. By taking uses of its channel and ecological advantages, the products are expected to be popularized soon. With Sony and Facebook to launch their VR products next year, VR will cause a new boom of consumer electronics. Among listed companies, Ningbo Cixing Co., Ltd. (300307.SZ) owns Beijing Interjoy Technology Co., Ltd. Which is mainly engaged the research and development of intelligent interaction and VR technology and products. Daoming Optics ＆ Chemical Co., Ltd. (002632.SZ) proposes to buy shares in MDTP Optics Co., Ltd. that produce products for VR and AR (augmented reality) helmets. Shenzhen Fenda Technology Co., Ltd. (002681.SZ) holds shares in Alto Tech Co., Ltd. which launched AR products in this September.
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○Food and drug regulation to receive policy supports, to highlight informatization
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SSN learnt that the China Food and Drug Administration (SFDA) held a meeting on IT application in Guizhou Province recently. It discussed the guidance on the cyberspace security and IT application in the food and pharmaceutical industries during the 13th Five-year Plan period and conducted field inspections on the big data application demonstration center and food safety cloud. Sun Xianze, deputy director of the SFDA, indicated that it has become a trend to promote innovation in food and pharmaceuticals regulation. It should fight in the battle of IT application and facilitate the reform in food and pharmaceuticals regulation.
Comment: Institutes believe that as integral parts in the food and pharmaceuticals regulation, food testing, food traceability and other IT application instruments will see more policy supports and bring a market with 10 billion yuan. In terms of listed companies, Centre Testing International Group Co., Ltd. (300012.SZ) is a leader in the domestic third-party testing and is quite competitive in the food and other consumables testing market. Thunisoft Credit (Beijing) Software Co., Ltd., a subsidiary of Beijing Thunisoft Co., Ltd. (300271.SZ), is a leader in the domestic food safety and IT application market.
[Announcement Interpretation]
○Tianyin Electromechanical to hold 100 pct stake in Huaqing Ruida Technology to expand in military industry
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Changshu Tianyin Electromechanical Co., Ltd. (300342.SZ) plans to acquire 49 percent equities of Beijing Huaqing Ruida Technology Co., Ltd. with 257 million yuan by issuing 11.94 million shares at 21.52 yuan per share. After the deal, the company will hold 100 percent equities of Huaqing Ruida Technology. It will also raise 240 million yuan supporting fund by issuing shares through private placement to its controlling shareholder Hangzhou Heng Construction Investment Management Co., Ltd. and others. The supporting funds will be used for the development of new generation radar target and electronic warfare simulator and other three projects.
Huaqing Ruida Technology is mainly involved in the research, development, production and sale of radar RF (radio frequency) simulation system, electronic warfare simulation system, avionics module and high-speed signal acquisition treatment and storage system. Its clients mainly are scientific research institutions under major military groups in China.
○Feilo Acoustics to buy European lighting firms with 149 mln euros
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Shanghai Feilo Acoustics Co., Ltd. (600651.SH) proposes to indirectly acquire 80 percent stake in Havells Malta with 138 million euros cash. It also proposes to acquire 80 percent stake in Exim with 10.4 million euros in cash. The total consideration of the two acquisitions is 149 million euros, or 1.05 billion yuan. The underlying assets are well-known lighting technology enterprises in Europe. The acquisition marks Feilo Acoustics' first step in exploring global market. The listed company will gradually build itself as a global lighting enterprises through extensive expansion.
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○Yunnan Tourism to expand tourism and cultural business
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Yunnan Tourism Co., Ltd. (002059.SZ) proposes to issue 129 million shares through private placement at 10.63 yuan per share to raise 1,370 million yuan, which will be used for "Story of Kunming" project, setting up wedding-celebration company, "Mingfeng Neighborhood" project at Kunming Expo Eco-town and supplementing working capital.
The controlling shareholder Yunnan Expo Tourism Group Holdings., Ltd participates in private placement subscription with the entire equity in tourism cultural company held by it. Yunnan Expo Advertisement, related party of Yunnan Expo Tourism Group, participates in subscription with cash of 130 million yuan.
○Assets acquisition of several companies approved by CSRC
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Tongwei Co., Ltd. (600438.SH) proposes to acquire 100 percent equity in Tongwei New Energy and Sichuan Yongxiang Co., Ltd respectively with 2.05 billion yuan, and raise 2 billion fund to promote several projects such as "photovoltaic fishery", "photovoltaic agriculture" and "rural rooftop photovoltaic power station". The company has obtained approval from the China Securities Regulatory Commission (CSRC).
Xinjiang Tianye Co., Ltd. (600075.SH) proposes to acquire 63 percent equity of Tianwei Chemical and four parcels of land on which Tianwei operates at the consideration of 1.85 billion yuan. Meanwhile, the company plans to raise matching fund of 1.8 billion yuan. The company has obtained approval from CSRC.
[Financial Reports Express]
○Multiple companies propose high share conversion and dividend
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Hangzhou Zhongtai Cryogenic Technology Corporation (300435.SZ) plans a 20-for-10 conversion of capital surplus into shares combined with 2 yuan dividend for 10 shares according to its annual report; Sichuan Maker Biotechnology Co., ltd. (300463.SZ) plans a 20-for-10 conversion of capital surplus into shares combined with cash dividend according to its annual report; Jiangsu Hongdou Industrial Co., Ltd. (600400.SH) plans a 10-for-10 conversion of capital surplus into shares combined with 0.5 yuan dividend for ten shares according to its annual report; Suzhou Sushi Testing Instrument Co., Ltd. (300416.SZ) plans 10-for-10 conversion of capital surplus into shares combined with 2 yuan dividend for 10 shares according to its annual report.
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[Trading Trends]
○Five institutions bought Fuxing Science and Technology
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The trading volume ranking list on Dec. 23 shows that HuBei Fuxing Science and Technology Co., Ltd. (000926.SZ) was bought by five institutions with total net capital inflow of 278 million yuan, accounting for 35.89 percent of the total trading turnover on the same day; other two instructional seats have sold the company with a total of 17,440,000 yuan.
Comment: the company has previously disclosed its strategic planning outline on comprehensively promoting smart community life service industry. Institutions believe that areas the company's future property management will increase significantly, and the value of its platform will be further exploited, which make the company a unique subject on the A share market. Besides, the biggest shareholder Fuxing Group has seven industry clusters. In addition to Yinhu Holding, which has already been injected into Fuxing Science and Technology, other biological pharmaceutical, ecological agricultural and financial assets are likely to be integrated by the company to assist its transformation and development.
[Trading Alarms]
○Gaoke Petrochemical IPO on Dec. 24
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Issuing price of Jiangsu Gaoke Petrochemical Co., Ltd. (002778.SZ) is determined at 8.45 yuan per share, with the upper limit subscription of 8,500 shares for a single account. The company's PE ratio is 23 times. The company is primarily engaged in the manufacturing of industrial lubricant.
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