[Today's Guide]
○ Central conference proposes agricultural supply-side reform to reduce cost through large-scale production
○ Panasonic to establish power lithium battery plant in China, materials demand to surge
○ Gohigh Data Networks to fully control Gohigh Dingheng, CITIC Guoan to invest in Qihoo 360's privatization
○ Jiahua Energy Chemical to develop photovoltaic power generation, Shengda Mining to buy two mining firms through private placement
[SSN Focus]
○ Central conference proposes agricultural supply-side reform to reduce cost through large-scale production
------
The Central Rural Work Conference was held in Beijing to arrange the work on agriculture and rural areas in 2016 and the 13th Five-year Plan period. The conference pushed forward supply-side structural reform in agriculture for the first time. It also emphasized improving the quality and efficiency in the agricultural supply system and giving full play to the leading role of various types of large-scale agricultural production in the structural reform.
Comment: Compared with imported agricultural products, Chinese agriculture is less competitive in price. The high labor cost is the main obstacle in large-scale agricultural production. Experts from the Chinese Academy of Social Sciences advise to guide the joint stock partnership in land and replace labors with machinery to reduce the labor cost. Institutes are rosy about investment opportunities in the agricultural machinery, seeding and trade areas based on large-scale agricultural operation. Among A-share agricultural machinery companies, Jiangsu Nonghua Intelligent Agriculture Technology Co., Ltd. (000816.SZ) is speeding up in agricultural IT application. The sales of large tractor of First Tractor Company Limited (00038.HK; 601038.SH) is bullish this year. Xingguang Agricultural Machinery Co., Ltd. (603789.SH) is actively promoting products expansion vertically.
[SSN Selection]
○ The China Securities Regulatory Commission (CSRC) indicated that it will introduce various key reforms next year. The Board of Strategic Emerging Industries of the Shanghai Stock Exchange (SSE) and the pilot Shenzhen-Hong Kong Stock Connect will also be implemented.
○ The CSRC, the China Banking Regulatory Commission (CBRC) and the China Insurance Regulatory Commission (CIRC) is verifying and studying the shareholding increase in China Vanke Co., Ltd. (02202.HK; 000002.SZ) by Baoneng Group through secondary market acquisition to the 5 percent limit to maintain a market with "justice, fairness, and openness"
○ The registration-based IPO system on stock issuance will be implemented on March 1, 2016, providing explicit legal basis to the implementation of the registration-based IPO system.
○ The central bank issues a document to allow the remote accounts opening by banks, which will greatly promote the business transformation of commercial banks and the Internet-based financial innovation.
○ The 8th Chinese Military-Civilian Integration Annual Meeting was held from Dec. 26 to 27 with sessions covering civil participation in military, industry and finance synergy and special robots.
TOP
[Industry Information]
○Panasonic to establish power lithium battery plant in China, materials demand to surge
------
Foreign media reported that Panasonic Corp. proposes to invest 412 million U.S. dollars to establish a power lithium battery plant with Chinese partners in Dalian City, Liaoning province. It is expected to put into production in 2017. The new plant will be the first plant of Panasonic Corp. especially for the production of batteries for electronic vehicles with a capacity meeting the demands of 200,000 power vehicles. BYD Company Limited (01211.HK; 002594.SZ), Sichuan Chengfei Integration Technology Corp. Ltd. (002190.SZ) and FDG Electric Vehicles Limited (00729.HK) have increased their investments in lithium battery this year and the total investment in the industry is expected to reach 100 billion yuan.
Comment: Only considering the demand for power batteries and consumption batteries, the demand for lithium battery will reach 54GWh and 72GWh in 2018 and 2020. The power battery will see the highest growth and the demand for materials will surge. In terms of listed companies, Shenzhen Capchem Technology Co., Ltd. (300037.SZ) is a leader in the domestic electrolyte industry with a capacity of 20,000 tons and Panasonic and Samsung SDI as its clients. Kingray New Materials Science ＆ Technology Co., Ltd. (600390.SH) provides Panasonic with precursor products, cathode materials for lithium battery. Shandong Shida Shenghua Chemical Group Co., Ltd. (603026.SH) is currently the only enterprise providing five electrolyte solvents for lithium battery in China.
○ New breakthroughs in subsea Christmas tree technology facilitates development of oil-gas exploration
------
SSN learnt that the key technology and supporting equipment of subsea Christmas tree in the National 863 Program jointly undertaken by Sinopec Oilfield Equipment Corporation (000852.SZ) and Offshore Oil Engineering Co., Ltd. (600583.SH) recently were accepted by the Ministry of Science and Technology. The project developed China's first deep-water horizontal Christmas tree sample, filling up the technical gap in the country.
Comment: Currently, the design, manufacturing, installation and maintenance of subsea Christmas tree are dominated by foreign companies and may cost lots of money. The research of Christmas tree technology breaks the monopoly of foreign companies, which will facilitate China to develop deep sea oil and gas field and provide important support for its sea power strategy. In addition, China National Petroleum Corporation (CNPC) disclosed on the 2015 annual meeting of oil and gas field development held from Dec. 22 to 24 that it will strive to make new discoveries and breakthroughs in oil and gas exploration and improve exploration efficiency to provide a favorable environment for the promotion of subsea Christmas tree technology.
TOP
[Announcement Interpretation]
○ Gohigh Data Networks to hold 100 pct stake in Gohigh Dingheng through private placement
------
Gohigh Data Networks Technology Co., Ltd. (000851.SZ) plans to purchase 41.77 percent equities of Gohigh Dingheng Information Technology Co., Ltd. with 320 million yuan by issuing shares at 11.60 yuan per share through private placement. It also plans to raise 310 million yuan supporting fund by issuing shares at 11.60 yuan per share through private placement to construct intelligent storage logistic platform of Gohigh Dingheng and supplement the listed company's working capital. After the deal, the listed company will hold 100 percent equities of Gohigh Dingheng.
Based on its commitment on performance, the net profit of Gohigh Dingheng after tax will be no less than 50 million yuan, 61 million yuan, 71 million yuan and 81 million yuan from 2016 to 2018. Gohigh Dingheng is mainly engaged in the IT products sales and its overall supporting services.
○ CITIC Guoan to pour USD400 mln in Qihoo 360's privatization
------
CITIC Guoan Information Industry Co., Ltd. (000839.SZ) plans to participate the privatization of Qihoo 360 Technology Co. Ltd. (QIHU,NYSE) with 400 million U.S. dollars, accounting for 4.3 percent of the total cash consideration (about 9.3 billion U.S. dollars) in the latter's privatization. In addition, the company announced plans to acquire no more than 30 percent equities in cable TV network companies with about 2 billion yuan.
TOP
○ Jiahua Energy Chemical to raise RMB1.8 bln through private placement to develop photovoltaic
------
Zhejiang Jiahua Energy Chemical Industry Co., Ltd. (600273.SH) plans to purchase 100 percent equities of Jingjin Solar Photovoltaic Co., Ltd. and other four solar photovoltaic companies with 1.82 billion yuan by issuing 184 million shares at prices no less than 9.89 yuan per share through private placement. Its controlling shareholder Jiahua Chemical Group will subscribe 10 to 30 percent of the total shares.
○ Shengda Mining to buy two mining firms with over RMB1.6 bln
------
Shengda Mining Co., Ltd. (000603.SZ) plans to respectively acquire 100 percent equities of Inner Mongolia Guangda Mining Co., Ltd. and Chifeng Jindu Mining Co., Ltd. with a total of 1.66 billion yuan by issuing shares to Sanhe Huaguan Resource Technology Co., Ltd. a related party of the listed company's actual controller and its controlling shareholder Shengda Group. Mongolia Guangda Mining and Chifeng Jindu Mining have large amount of lead, zinc and silver reserves.
In addition, the company proposes to raise 1,255 million yuan Shengda Group through private placement for the said deal and loan payment. According to their performance commitment, the net profit of the undying assets will reach 161 million yuan, 210 million yuan and 109 million yuan, respectively from 2017 to 2019.
○Zhongrong Life Insurance bought shares of several companies through secondary market acquisition to the 5 percent threshold
------
Beijing Transtrue Technology Inc. (002771.SZ) announced that Zhongrong Life Insurance Co., Ltd. has increased holding 4 million shares of the company from Oct. 27 to Dec, 25, accounting for 5 percent of the entire equity of the company. The average price for the acquisition is 102.46 yuan per share. The latest price of the company is 128.98 yuan per share.
Guangzhou Great Power Energy＆Technology Co., Ltd. (300438.SZ) announced that as of Dec. 25, Zhongrong Life Insurance has bought 4.2 million shares of the company, equivalent to 5 percent of the entire equity of the company.
○Tongrun Equipment to resume trading
------
Jiangsu Tongrun Equipment Technology Co.,Ltd. (002150.SZ) terminated assets restructuring, and will resume trading on Dec.28.
[Trading Trends]
○Five institutions bought Hongli Opto-Electronic
------
The trading volume ranking list on Dec. 25 shows that Guangzhou Hongli Opto-Electronic Co., Ltd. (300219.SZ) was bought by five institutions with a total of 215 million yuan, representing 41.55 percent of intraday total trading turnover. On the same day, LED lighting sector soared, and Hongli Opto-Electronic has climbed by the daily 10 percent limit.
Comment: institutions indicated that the company has been expanding its main business, and by the same time actively deploying "LED Cloud Finance Car Network". LED is one of the strategic emerging industries with the most development potential. The industry has received much attention from the government, due to its advancement and widespread use, in particular its contribution to energy conservation and emission reduction. It is estimated that by 2018, global LED lighting market will reach a size 36 billion U.S. dollars and penetration of 54 percent, with the four-year compound annual growth rate of 16 percent.
[Weekly Review]
○Following the clue to the right stock
------
In ancient times in China, people all want a swift horse. Bo Le, who is experienced in judging horse, wrote a book about how to choose the best horses. He believed that a good horse should have physical characteristics such as high forehead, bright eyes and big hoof. But his son, who mistook his ideas, ended up with finding a toad according to the book. In the investment market today, everybody wants to find "dark-horse stocks", and books summed up the laws of ups and downs of the market could be seen everywhere. We should learn the lesson of Bo Le's son when selecting stocks.
The conflict between Baoneng Group and Vanke is the hot topic on A share market now. Earlier, from the perspectives of assets shortage and new regulations on insurance industry, SSN pointed out that those blue-chip companies which attracted 5 percent limit acquisitions on secondary market are expected to be bought continuously by insurance funds. In fact, in the first stage when the whole market was soaring, 5 percent limit acquisition on the secondary market is a sufficient condition for a share to surge. But from last Tuesday, the market has entered the second stage where performance of stocks varied. It is not to find that companies struggling for equities still surge, such as Chang Chun Eurasia Group Co. ,Ltd., whose biggest shareholder increased shareholding; companies that takes no action to increase shareholding pulled back.
Lithium price rise is an investment topic hyped for the longest time this year. After price the overall lithium stocks nearly doubled, investors are keen to find the other potential stocks. But due to economy slowdown, fewer products are likely to have strong downstream demand as lithium. Last week, from the perspectives of price hike of international leading players and improvement of domestic capacity concentration, SSN provide its unique insight of titanium dioxide sector. Thought the sector is not so shining now, but under certain circumstances, it has the potential to surge.
TOP
○ Central conference proposes agricultural supply-side reform to reduce cost through large-scale production
○ Panasonic to establish power lithium battery plant in China, materials demand to surge
○ Gohigh Data Networks to fully control Gohigh Dingheng, CITIC Guoan to invest in Qihoo 360's privatization
○ Jiahua Energy Chemical to develop photovoltaic power generation, Shengda Mining to buy two mining firms through private placement
[SSN Focus]
○ Central conference proposes agricultural supply-side reform to reduce cost through large-scale production
------
The Central Rural Work Conference was held in Beijing to arrange the work on agriculture and rural areas in 2016 and the 13th Five-year Plan period. The conference pushed forward supply-side structural reform in agriculture for the first time. It also emphasized improving the quality and efficiency in the agricultural supply system and giving full play to the leading role of various types of large-scale agricultural production in the structural reform.
Comment: Compared with imported agricultural products, Chinese agriculture is less competitive in price. The high labor cost is the main obstacle in large-scale agricultural production. Experts from the Chinese Academy of Social Sciences advise to guide the joint stock partnership in land and replace labors with machinery to reduce the labor cost. Institutes are rosy about investment opportunities in the agricultural machinery, seeding and trade areas based on large-scale agricultural operation. Among A-share agricultural machinery companies, Jiangsu Nonghua Intelligent Agriculture Technology Co., Ltd. (000816.SZ) is speeding up in agricultural IT application. The sales of large tractor of First Tractor Company Limited (00038.HK; 601038.SH) is bullish this year. Xingguang Agricultural Machinery Co., Ltd. (603789.SH) is actively promoting products expansion vertically.
[SSN Selection]
○ The China Securities Regulatory Commission (CSRC) indicated that it will introduce various key reforms next year. The Board of Strategic Emerging Industries of the Shanghai Stock Exchange (SSE) and the pilot Shenzhen-Hong Kong Stock Connect will also be implemented.
○ The CSRC, the China Banking Regulatory Commission (CBRC) and the China Insurance Regulatory Commission (CIRC) is verifying and studying the shareholding increase in China Vanke Co., Ltd. (02202.HK; 000002.SZ) by Baoneng Group through secondary market acquisition to the 5 percent limit to maintain a market with "justice, fairness, and openness"
○ The registration-based IPO system on stock issuance will be implemented on March 1, 2016, providing explicit legal basis to the implementation of the registration-based IPO system.
○ The central bank issues a document to allow the remote accounts opening by banks, which will greatly promote the business transformation of commercial banks and the Internet-based financial innovation.
○ The 8th Chinese Military-Civilian Integration Annual Meeting was held from Dec. 26 to 27 with sessions covering civil participation in military, industry and finance synergy and special robots.
TOP
[Industry Information]
○Panasonic to establish power lithium battery plant in China, materials demand to surge
------
Foreign media reported that Panasonic Corp. proposes to invest 412 million U.S. dollars to establish a power lithium battery plant with Chinese partners in Dalian City, Liaoning province. It is expected to put into production in 2017. The new plant will be the first plant of Panasonic Corp. especially for the production of batteries for electronic vehicles with a capacity meeting the demands of 200,000 power vehicles. BYD Company Limited (01211.HK; 002594.SZ), Sichuan Chengfei Integration Technology Corp. Ltd. (002190.SZ) and FDG Electric Vehicles Limited (00729.HK) have increased their investments in lithium battery this year and the total investment in the industry is expected to reach 100 billion yuan.
Comment: Only considering the demand for power batteries and consumption batteries, the demand for lithium battery will reach 54GWh and 72GWh in 2018 and 2020. The power battery will see the highest growth and the demand for materials will surge. In terms of listed companies, Shenzhen Capchem Technology Co., Ltd. (300037.SZ) is a leader in the domestic electrolyte industry with a capacity of 20,000 tons and Panasonic and Samsung SDI as its clients. Kingray New Materials Science ＆ Technology Co., Ltd. (600390.SH) provides Panasonic with precursor products, cathode materials for lithium battery. Shandong Shida Shenghua Chemical Group Co., Ltd. (603026.SH) is currently the only enterprise providing five electrolyte solvents for lithium battery in China.
○ New breakthroughs in subsea Christmas tree technology facilitates development of oil-gas exploration
------
SSN learnt that the key technology and supporting equipment of subsea Christmas tree in the National 863 Program jointly undertaken by Sinopec Oilfield Equipment Corporation (000852.SZ) and Offshore Oil Engineering Co., Ltd. (600583.SH) recently were accepted by the Ministry of Science and Technology. The project developed China's first deep-water horizontal Christmas tree sample, filling up the technical gap in the country.
Comment: Currently, the design, manufacturing, installation and maintenance of subsea Christmas tree are dominated by foreign companies and may cost lots of money. The research of Christmas tree technology breaks the monopoly of foreign companies, which will facilitate China to develop deep sea oil and gas field and provide important support for its sea power strategy. In addition, China National Petroleum Corporation (CNPC) disclosed on the 2015 annual meeting of oil and gas field development held from Dec. 22 to 24 that it will strive to make new discoveries and breakthroughs in oil and gas exploration and improve exploration efficiency to provide a favorable environment for the promotion of subsea Christmas tree technology.
TOP
[Announcement Interpretation]
○ Gohigh Data Networks to hold 100 pct stake in Gohigh Dingheng through private placement
------
Gohigh Data Networks Technology Co., Ltd. (000851.SZ) plans to purchase 41.77 percent equities of Gohigh Dingheng Information Technology Co., Ltd. with 320 million yuan by issuing shares at 11.60 yuan per share through private placement. It also plans to raise 310 million yuan supporting fund by issuing shares at 11.60 yuan per share through private placement to construct intelligent storage logistic platform of Gohigh Dingheng and supplement the listed company's working capital. After the deal, the listed company will hold 100 percent equities of Gohigh Dingheng.
Based on its commitment on performance, the net profit of Gohigh Dingheng after tax will be no less than 50 million yuan, 61 million yuan, 71 million yuan and 81 million yuan from 2016 to 2018. Gohigh Dingheng is mainly engaged in the IT products sales and its overall supporting services.
○ CITIC Guoan to pour USD400 mln in Qihoo 360's privatization
------
CITIC Guoan Information Industry Co., Ltd. (000839.SZ) plans to participate the privatization of Qihoo 360 Technology Co. Ltd. (QIHU,NYSE) with 400 million U.S. dollars, accounting for 4.3 percent of the total cash consideration (about 9.3 billion U.S. dollars) in the latter's privatization. In addition, the company announced plans to acquire no more than 30 percent equities in cable TV network companies with about 2 billion yuan.
TOP
○ Jiahua Energy Chemical to raise RMB1.8 bln through private placement to develop photovoltaic
------
Zhejiang Jiahua Energy Chemical Industry Co., Ltd. (600273.SH) plans to purchase 100 percent equities of Jingjin Solar Photovoltaic Co., Ltd. and other four solar photovoltaic companies with 1.82 billion yuan by issuing 184 million shares at prices no less than 9.89 yuan per share through private placement. Its controlling shareholder Jiahua Chemical Group will subscribe 10 to 30 percent of the total shares.
○ Shengda Mining to buy two mining firms with over RMB1.6 bln
------
Shengda Mining Co., Ltd. (000603.SZ) plans to respectively acquire 100 percent equities of Inner Mongolia Guangda Mining Co., Ltd. and Chifeng Jindu Mining Co., Ltd. with a total of 1.66 billion yuan by issuing shares to Sanhe Huaguan Resource Technology Co., Ltd. a related party of the listed company's actual controller and its controlling shareholder Shengda Group. Mongolia Guangda Mining and Chifeng Jindu Mining have large amount of lead, zinc and silver reserves.
In addition, the company proposes to raise 1,255 million yuan Shengda Group through private placement for the said deal and loan payment. According to their performance commitment, the net profit of the undying assets will reach 161 million yuan, 210 million yuan and 109 million yuan, respectively from 2017 to 2019.
○Zhongrong Life Insurance bought shares of several companies through secondary market acquisition to the 5 percent threshold
------
Beijing Transtrue Technology Inc. (002771.SZ) announced that Zhongrong Life Insurance Co., Ltd. has increased holding 4 million shares of the company from Oct. 27 to Dec, 25, accounting for 5 percent of the entire equity of the company. The average price for the acquisition is 102.46 yuan per share. The latest price of the company is 128.98 yuan per share.
Guangzhou Great Power Energy＆Technology Co., Ltd. (300438.SZ) announced that as of Dec. 25, Zhongrong Life Insurance has bought 4.2 million shares of the company, equivalent to 5 percent of the entire equity of the company.
○Tongrun Equipment to resume trading
------
Jiangsu Tongrun Equipment Technology Co.,Ltd. (002150.SZ) terminated assets restructuring, and will resume trading on Dec.28.
[Trading Trends]
○Five institutions bought Hongli Opto-Electronic
------
The trading volume ranking list on Dec. 25 shows that Guangzhou Hongli Opto-Electronic Co., Ltd. (300219.SZ) was bought by five institutions with a total of 215 million yuan, representing 41.55 percent of intraday total trading turnover. On the same day, LED lighting sector soared, and Hongli Opto-Electronic has climbed by the daily 10 percent limit.
Comment: institutions indicated that the company has been expanding its main business, and by the same time actively deploying "LED Cloud Finance Car Network". LED is one of the strategic emerging industries with the most development potential. The industry has received much attention from the government, due to its advancement and widespread use, in particular its contribution to energy conservation and emission reduction. It is estimated that by 2018, global LED lighting market will reach a size 36 billion U.S. dollars and penetration of 54 percent, with the four-year compound annual growth rate of 16 percent.
[Weekly Review]
○Following the clue to the right stock
------
In ancient times in China, people all want a swift horse. Bo Le, who is experienced in judging horse, wrote a book about how to choose the best horses. He believed that a good horse should have physical characteristics such as high forehead, bright eyes and big hoof. But his son, who mistook his ideas, ended up with finding a toad according to the book. In the investment market today, everybody wants to find "dark-horse stocks", and books summed up the laws of ups and downs of the market could be seen everywhere. We should learn the lesson of Bo Le's son when selecting stocks.
The conflict between Baoneng Group and Vanke is the hot topic on A share market now. Earlier, from the perspectives of assets shortage and new regulations on insurance industry, SSN pointed out that those blue-chip companies which attracted 5 percent limit acquisitions on secondary market are expected to be bought continuously by insurance funds. In fact, in the first stage when the whole market was soaring, 5 percent limit acquisition on the secondary market is a sufficient condition for a share to surge. But from last Tuesday, the market has entered the second stage where performance of stocks varied. It is not to find that companies struggling for equities still surge, such as Chang Chun Eurasia Group Co. ,Ltd., whose biggest shareholder increased shareholding; companies that takes no action to increase shareholding pulled back.
Lithium price rise is an investment topic hyped for the longest time this year. After price the overall lithium stocks nearly doubled, investors are keen to find the other potential stocks. But due to economy slowdown, fewer products are likely to have strong downstream demand as lithium. Last week, from the perspectives of price hike of international leading players and improvement of domestic capacity concentration, SSN provide its unique insight of titanium dioxide sector. Thought the sector is not so shining now, but under certain circumstances, it has the potential to surge.
TOP
Latest comments