[Today's Guide]
○Central gov. to deepen reform on taxation system, e-gov. construction to accelerate
○submarine optical cable enterprises expected to benefit from "going out" of communication industry, domestic titanium dioxide behemoths follows international market to gain
○Wonders Information to expand Internet-based medical treatment, BTG Hotels to acquire Home Inns
○Rising Nonferrous Metals Share increases investment in principal business, several companies propose high share conversion and dividend
[SSN Focus]
○Central gov. to deepen reform on taxation system, e-gov. construction to accelerate
------
General Office of the CPC Central Committee and General Office of the State Council On Dec. 24 jointly issued the proposal on deepening the reform of national and local tax collection and management system, marking the start of China's tax collection and management system reform. The reform proposal aims to tackle defects of existing tax collection and management system, including unclear separation of duties, inconsistent law enforcement, and onerous taxation procedures. The regulators require all VAT invoices to be processed through internet in 2016, all taxation to be basically dealt with on line in 2017, and to build individual tax collection and management system interconnected with other tax collection and management systems by 2018.
Comment: China has been vigorously promoting information-based government administration in recent years, and major information-based projects such as Golden Taxation Project, Golden Gate Project and Government Fiscal Management Information System (GFMIS) have been built in succession. China's e-government ranked the 70th in the world, lagged behind developed countries. With the implementation of online taxation processing policies, e-government related industries expected to embrace a boom period. In A shares, TungKong Inc. (002117.SZ) has first mover advantage in electronic invoice business; Linewell Software Co., Ltd. (603636.SH) is experienced in e-government services.
[SSN Selection]
○PBOC has injected liquidity to the open market for the second week, and tight liquidity is not seen at the year end.
○Construction of Wudongde Hydro-power Station, which attracted nearly hundreds of billion yuan dynamic investment, has commenced on Dec. 24. In the next five years, China's installed hydro power capacity is expected to grow 25 percent.
○National Development and Reform Commission (NDRC) decided to lower benchmark grid purchasing price of wind power and photovoltaic power, which will force these industries to lower costs.
○Share reform plan of China Great Wall Asset Management Corporation has progressed smoothly. It is expected that the company will introduce strategic investments in 2017 and be qualified for listing.
○China Shipping Development Company Limited (600026.SH; 01138.HK), China Shipping Container Lines Company Limited (601866.SH; 02866.HK) and China COSCO Holdings Company Limited (601919.SH; 01919.HK) will resume trading on A share market on Dec. 25. Such companies have resumed trading in Hong Kong on Dec. 14.
TOP
[Industry Information]
○MIIT promotes communication industry to "go out", submarine optical cable enterprises expected to benefit first
------
SSN learnt from the year-end work conference of the Ministry of Industry and Information Technology (MIIT) that MIIT will implement the "Belt and Road" strategy in 2016, to optimize policy environment and solve practical difficulties for enterprises to expand overseas market, and support basic communication enterprises and internet companies to put more efforts in exploiting international market, accelerate deployment and construction of international land-sea cable, international passageway and international POP connection points.
Comment: It is an important means to improve the connectivity of international communication by promoting the construction of the international sea and land cables and communication network. The submarine optical fiber cable almost transmits all of the flow in the whole international network. It is a key carrier in the global information communication and a new growth point of optical fiber enterprises in China. In terms of listed companies, Jiangsu Zhongtian Technology Co., Ltd. (600522.SH) accounts for a market share of 30 to 40 percent of the domestic special cable market. Its submarine optical fiber cable technology is at the leading level in the world. Jiangsu Tongguang Electronic Wire ＆ Cable Co., Ltd. (300265.SZ) owns leading technology in special cables and is a supplier of special cables for national defense and military equipment.
[Information Tracking]
○Domestic enterprises see more orders after international titanium dioxide behemoths raised prices
------
SSN learnt that international titanium dioxide behemoths Hunstman and Chemours announced that titanium dioxide price will be increased worldwide from Jan. 1, 2016, with a range of 150 to 160 U.S. dollar per ton. The domestic titanium dioxide enterprises also started to raise the prices. The price of anatase titanium dioxide hiked 300 yuan per ton or about 4 percent on Dec. 23. Orders from the downstream and for foreign trade have increased significantly. Besides, Lomon Corporation, a leader in the industry, raised the price for foreign trade by 50 U.S. dollars per ton.
Comment: Insiders estimate that with the recovery of the property sales in the downstream and the capacity consolidation as a result of the supply side reform, the titanium dioxide market will see improvement opportunities after long sluggishness. It is reported that the equipment of certain large factories will conduct overhaul in January, which will help reduce the inventory pressure in the market. SSN reported that foreign titanium dioxide behemoths raised the prices on Dec. 22.
◆ The trading volume ranking list on Dec. 24 shows that four institutes bought Henan Billions Chemicals Co., Ltd. (002601.SZ) with 58.85 million yuan, accounting for 9.86 percent of its intraday turnover. Two institutional seats sold it with 23.96 million yuan.
TOP
[Announcement Interpretation]
○Wonders Information to fully control Jiada Information Technology to expand Internet-based medical treatment
------
Wonders Information Co., Ltd. (300168.SZ) proposes to issue 43.24 million shares to the counterparty at 22.99 yuan per share to acquire 99.4 percent equities of Shanghai Jiada Information Technology Co., Ltd at 994 million yuan to fully control it. It also plans to raise a supporting fund of 994 million yuan by issuing shares at the same price through private placement. The proceeds will be invested in the "health cloud" and "medical treatment cloud" projects.
Jiada Information Technology has completed various acquisitions, including the acquisition of equities of Shanghai Siwei Medical Technology Co. Ltd., Shanghai Wonders Full Health Services Co., Ltd. and Shanghai Pharmaceuticals Co., Ltd. Wonders Information will indirectly hold 90 percent equities of Siwei Medical Technology, directly and indirectly hold 100 percent equities of Wonders Full Health Services and indirectly hold 92 percent equities of Shanghai Phar.
○BTG Hotels to acquire Home Inns with RMB10 bln
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BTG Hotels (Group) Co., Ltd. (600258.SH) will acquire 100 percent equities of Homeinns Co., Ltd. in cash through an overseas subsidiary and private placement of the listed company. The transaction will be totaled 11.05 billion yuan with the issue price of 15.69 yuan per share. Meanwhile, the company will raise a supporting fund of 3,874 million yuan at no less than the same price. Homeinns recorded a net profit of 519 million yuan in 2014 and 185 million yuan in the first nine months of 2015. Ctrip Shanghai will become the second biggest shareholder of the company with a shareholding of over 14 percent after the transaction. Shen Nanpeng will also become a shareholder of the company.
TOP
○Rising Nonferrous Metals Share increases investment in principal business, Liu Yiqian and Guohua Life buy shares
------
Rising Nonferrous Metals Share Co., Ltd. (600259.SH) plans to raise 1.36 billion yuan through private placement to invest in three projects including mining expansion of Dapu Xinchengji Industry and Trade Company, Wengyuan Hongling Mining Company and the company's R＆D base construction. The company's substantial shareholder and employee shareholding plan will subscribe shares valued 452 million yuan and 43.76 million yuan respectively, and Liu Yiqian and Guohua Life under Liu Yiqian will subscribe the shares valued 260 million yuan and 500 million yuan respectively.
○State-owned equity transferred at no costs, private enterprise becomes shareholder of Huludao Zinc Industry
------
China Metallurgical Group Corporation (MCC), shareholder of MCC Huludao Nonferrous Metals Group Co., Ltd. and controlling shareholder of Huludao Zinc Industry Co., Ltd. (000751.SZ), transfers its 24 percent equity in MCC Huludao Nonferrous Metals Group to Huludao State-owned Assets Investment Company free of charge, making Huludao Hongyue Group the biggest shareholder of MCC Huludao Nonferrous Metals Group. Yu Hong might be the actual controller of the listed company. It is learnt that Huludao Hongyue Group is a comprehensive private enterprise with the integration of mining development, mining prospective design, industrial gunpowder, explosive chemicals, real estate development, commerce and trade, hotel service, architectural ornament and decoration.
○Sinonet ＆ Xinlong Science ＆ Technology receives big order
------
Beijing Sinonet Science ＆ Technology Co., Ltd., wholly-owned subsidiary of Anhui Sinonet ＆ Xinlong Science ＆ Technology Co., Ltd. (002298.SZ), signed a purchase and sale agreement with Guangxi Godun Security Service Group Co., Ltd. Godun Security Service Group will purchase private cloud boxes and cameras from Beijing Sinonet Science ＆ Technology with the total amount of 1.28 billion yuan, accounting for 135 percent of the its audited operating revenues in 2014.
○IRICO Display Devices to sell production lines at over RMB800 mln
------
Shaanxi Caihong Electronic Glass Co., Ltd., subsidiary of IRICO Display Devices Co., Ltd. (600707.SH), intends to sell the equipment and patented technology related to production lines CX01 and CX03 to IRICO Group Corporation, which will pay the consideration in cash. As the tank furnaces reached their service life, relevant equipment of the above production lines stopped working and were under cold repair in March 2012 and December 2014, respectively.
[Financial Report Express]
○Several companies propose high share conversion and dividend
------
Deng Qinhua, actual controller of Chengdu Tianbao Heavy Industry Co., Ltd. (300362.SZ) proposes a 20-for-10 conversion of capital surplus into shares combined with 3 yuan dividend for every 10 shares in the company's annual profit distribution plan. Uroica Mining Safety Engineering Co., Ltd. (300099.SZ) proposes a 15-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares in the company's annual profit distribution plan.
China National Building Materials Group Corporation (CNBM), controlling shareholder of China Jushi Co., Ltd. (600176.SH) proposes a 12-for-10 conversion of capital surplus into shares combined in the company's annual profit distribution plan. Lin Mingfeng, controlling shareholder of Unilumin Group Co., Ltd. (300232.SZ) proposes a 15-for-10 conversion of capital surplus into shares in the company's annual profit distribution plan.
TOP
○Central gov. to deepen reform on taxation system, e-gov. construction to accelerate
○submarine optical cable enterprises expected to benefit from "going out" of communication industry, domestic titanium dioxide behemoths follows international market to gain
○Wonders Information to expand Internet-based medical treatment, BTG Hotels to acquire Home Inns
○Rising Nonferrous Metals Share increases investment in principal business, several companies propose high share conversion and dividend
[SSN Focus]
○Central gov. to deepen reform on taxation system, e-gov. construction to accelerate
------
General Office of the CPC Central Committee and General Office of the State Council On Dec. 24 jointly issued the proposal on deepening the reform of national and local tax collection and management system, marking the start of China's tax collection and management system reform. The reform proposal aims to tackle defects of existing tax collection and management system, including unclear separation of duties, inconsistent law enforcement, and onerous taxation procedures. The regulators require all VAT invoices to be processed through internet in 2016, all taxation to be basically dealt with on line in 2017, and to build individual tax collection and management system interconnected with other tax collection and management systems by 2018.
Comment: China has been vigorously promoting information-based government administration in recent years, and major information-based projects such as Golden Taxation Project, Golden Gate Project and Government Fiscal Management Information System (GFMIS) have been built in succession. China's e-government ranked the 70th in the world, lagged behind developed countries. With the implementation of online taxation processing policies, e-government related industries expected to embrace a boom period. In A shares, TungKong Inc. (002117.SZ) has first mover advantage in electronic invoice business; Linewell Software Co., Ltd. (603636.SH) is experienced in e-government services.
[SSN Selection]
○PBOC has injected liquidity to the open market for the second week, and tight liquidity is not seen at the year end.
○Construction of Wudongde Hydro-power Station, which attracted nearly hundreds of billion yuan dynamic investment, has commenced on Dec. 24. In the next five years, China's installed hydro power capacity is expected to grow 25 percent.
○National Development and Reform Commission (NDRC) decided to lower benchmark grid purchasing price of wind power and photovoltaic power, which will force these industries to lower costs.
○Share reform plan of China Great Wall Asset Management Corporation has progressed smoothly. It is expected that the company will introduce strategic investments in 2017 and be qualified for listing.
○China Shipping Development Company Limited (600026.SH; 01138.HK), China Shipping Container Lines Company Limited (601866.SH; 02866.HK) and China COSCO Holdings Company Limited (601919.SH; 01919.HK) will resume trading on A share market on Dec. 25. Such companies have resumed trading in Hong Kong on Dec. 14.
TOP
[Industry Information]
○MIIT promotes communication industry to "go out", submarine optical cable enterprises expected to benefit first
------
SSN learnt from the year-end work conference of the Ministry of Industry and Information Technology (MIIT) that MIIT will implement the "Belt and Road" strategy in 2016, to optimize policy environment and solve practical difficulties for enterprises to expand overseas market, and support basic communication enterprises and internet companies to put more efforts in exploiting international market, accelerate deployment and construction of international land-sea cable, international passageway and international POP connection points.
Comment: It is an important means to improve the connectivity of international communication by promoting the construction of the international sea and land cables and communication network. The submarine optical fiber cable almost transmits all of the flow in the whole international network. It is a key carrier in the global information communication and a new growth point of optical fiber enterprises in China. In terms of listed companies, Jiangsu Zhongtian Technology Co., Ltd. (600522.SH) accounts for a market share of 30 to 40 percent of the domestic special cable market. Its submarine optical fiber cable technology is at the leading level in the world. Jiangsu Tongguang Electronic Wire ＆ Cable Co., Ltd. (300265.SZ) owns leading technology in special cables and is a supplier of special cables for national defense and military equipment.
[Information Tracking]
○Domestic enterprises see more orders after international titanium dioxide behemoths raised prices
------
SSN learnt that international titanium dioxide behemoths Hunstman and Chemours announced that titanium dioxide price will be increased worldwide from Jan. 1, 2016, with a range of 150 to 160 U.S. dollar per ton. The domestic titanium dioxide enterprises also started to raise the prices. The price of anatase titanium dioxide hiked 300 yuan per ton or about 4 percent on Dec. 23. Orders from the downstream and for foreign trade have increased significantly. Besides, Lomon Corporation, a leader in the industry, raised the price for foreign trade by 50 U.S. dollars per ton.
Comment: Insiders estimate that with the recovery of the property sales in the downstream and the capacity consolidation as a result of the supply side reform, the titanium dioxide market will see improvement opportunities after long sluggishness. It is reported that the equipment of certain large factories will conduct overhaul in January, which will help reduce the inventory pressure in the market. SSN reported that foreign titanium dioxide behemoths raised the prices on Dec. 22.
◆ The trading volume ranking list on Dec. 24 shows that four institutes bought Henan Billions Chemicals Co., Ltd. (002601.SZ) with 58.85 million yuan, accounting for 9.86 percent of its intraday turnover. Two institutional seats sold it with 23.96 million yuan.
TOP
[Announcement Interpretation]
○Wonders Information to fully control Jiada Information Technology to expand Internet-based medical treatment
------
Wonders Information Co., Ltd. (300168.SZ) proposes to issue 43.24 million shares to the counterparty at 22.99 yuan per share to acquire 99.4 percent equities of Shanghai Jiada Information Technology Co., Ltd at 994 million yuan to fully control it. It also plans to raise a supporting fund of 994 million yuan by issuing shares at the same price through private placement. The proceeds will be invested in the "health cloud" and "medical treatment cloud" projects.
Jiada Information Technology has completed various acquisitions, including the acquisition of equities of Shanghai Siwei Medical Technology Co. Ltd., Shanghai Wonders Full Health Services Co., Ltd. and Shanghai Pharmaceuticals Co., Ltd. Wonders Information will indirectly hold 90 percent equities of Siwei Medical Technology, directly and indirectly hold 100 percent equities of Wonders Full Health Services and indirectly hold 92 percent equities of Shanghai Phar.
○BTG Hotels to acquire Home Inns with RMB10 bln
------
BTG Hotels (Group) Co., Ltd. (600258.SH) will acquire 100 percent equities of Homeinns Co., Ltd. in cash through an overseas subsidiary and private placement of the listed company. The transaction will be totaled 11.05 billion yuan with the issue price of 15.69 yuan per share. Meanwhile, the company will raise a supporting fund of 3,874 million yuan at no less than the same price. Homeinns recorded a net profit of 519 million yuan in 2014 and 185 million yuan in the first nine months of 2015. Ctrip Shanghai will become the second biggest shareholder of the company with a shareholding of over 14 percent after the transaction. Shen Nanpeng will also become a shareholder of the company.
TOP
○Rising Nonferrous Metals Share increases investment in principal business, Liu Yiqian and Guohua Life buy shares
------
Rising Nonferrous Metals Share Co., Ltd. (600259.SH) plans to raise 1.36 billion yuan through private placement to invest in three projects including mining expansion of Dapu Xinchengji Industry and Trade Company, Wengyuan Hongling Mining Company and the company's R＆D base construction. The company's substantial shareholder and employee shareholding plan will subscribe shares valued 452 million yuan and 43.76 million yuan respectively, and Liu Yiqian and Guohua Life under Liu Yiqian will subscribe the shares valued 260 million yuan and 500 million yuan respectively.
○State-owned equity transferred at no costs, private enterprise becomes shareholder of Huludao Zinc Industry
------
China Metallurgical Group Corporation (MCC), shareholder of MCC Huludao Nonferrous Metals Group Co., Ltd. and controlling shareholder of Huludao Zinc Industry Co., Ltd. (000751.SZ), transfers its 24 percent equity in MCC Huludao Nonferrous Metals Group to Huludao State-owned Assets Investment Company free of charge, making Huludao Hongyue Group the biggest shareholder of MCC Huludao Nonferrous Metals Group. Yu Hong might be the actual controller of the listed company. It is learnt that Huludao Hongyue Group is a comprehensive private enterprise with the integration of mining development, mining prospective design, industrial gunpowder, explosive chemicals, real estate development, commerce and trade, hotel service, architectural ornament and decoration.
○Sinonet ＆ Xinlong Science ＆ Technology receives big order
------
Beijing Sinonet Science ＆ Technology Co., Ltd., wholly-owned subsidiary of Anhui Sinonet ＆ Xinlong Science ＆ Technology Co., Ltd. (002298.SZ), signed a purchase and sale agreement with Guangxi Godun Security Service Group Co., Ltd. Godun Security Service Group will purchase private cloud boxes and cameras from Beijing Sinonet Science ＆ Technology with the total amount of 1.28 billion yuan, accounting for 135 percent of the its audited operating revenues in 2014.
○IRICO Display Devices to sell production lines at over RMB800 mln
------
Shaanxi Caihong Electronic Glass Co., Ltd., subsidiary of IRICO Display Devices Co., Ltd. (600707.SH), intends to sell the equipment and patented technology related to production lines CX01 and CX03 to IRICO Group Corporation, which will pay the consideration in cash. As the tank furnaces reached their service life, relevant equipment of the above production lines stopped working and were under cold repair in March 2012 and December 2014, respectively.
[Financial Report Express]
○Several companies propose high share conversion and dividend
------
Deng Qinhua, actual controller of Chengdu Tianbao Heavy Industry Co., Ltd. (300362.SZ) proposes a 20-for-10 conversion of capital surplus into shares combined with 3 yuan dividend for every 10 shares in the company's annual profit distribution plan. Uroica Mining Safety Engineering Co., Ltd. (300099.SZ) proposes a 15-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares in the company's annual profit distribution plan.
China National Building Materials Group Corporation (CNBM), controlling shareholder of China Jushi Co., Ltd. (600176.SH) proposes a 12-for-10 conversion of capital surplus into shares combined in the company's annual profit distribution plan. Lin Mingfeng, controlling shareholder of Unilumin Group Co., Ltd. (300232.SZ) proposes a 15-for-10 conversion of capital surplus into shares in the company's annual profit distribution plan.
TOP
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