[Today's Guide]
○ Guideline on SOEs classification issued, SOEs in competitive industries to pioneer in reform
○ MIIT issues measures for lithium battery administration, to boost leaders' market shares
○ 5G technology R＆D to launch, intelligent driving likely to become major application
○ Zhongli Science and Technology to fully hold Zhongli Talesun Solar, Yixintang Pharmaceutical sharply increases its fundraising scale
[SSN Focus]
○ Guideline on SOEs classification issued, SOEs in competitive industries to pioneer in reform
------
The State-owned Assets Supervision and Administration Commission (SASAC), the Ministry of Finance and the National Development and Reform Commission (NDRC) jointly released the Guideline on Defining and Classifying State-Owned Enterprises Functions on Dec. 29, specifying that state-owned enterprises (SOEs) should be classified as for-profit entities and those dedicated to public welfare. SOEs for business engaged in competitive industries should conduct corporate and shareholding systems reform in principle and actively introduce other capitals to diversify their equities. They shall spare no efforts in system reforming and listing and promote overall listing. They should also dispose low-efficient, ineffective and bad assets to improve the market competitiveness.
Comment: It marks that the classification reform, a core part of the SOEs reform, kicks off. Compared with employee shareholding plans, the Guideline mentioned overall listing and the disposal of low-efficient assets, which can immediately improve the profitability. State-owned companies with small market value in textile, electronics, property and other fully competitive industries will catch more attention from institutes. Shangtex Holding Co., Ltd., the substantial shareholder of Shanghai Dragon Corporation (600630.SH), has established the office for transformation to improve the ratio of asset securitization. INESA Group, the substantial shareholder of INESA Electron Co., Ltd. (600602.SH), is actively conducting the construction of smart cities. Lushang Property Co., Ltd. (600223.SH) has established a framework for the coordinated development of property plus health. Qilu Medical University is under its substantial shareholder.
◆ The SASAC also announced on its website on the same day that Sinotrans ＆ CSC Holdings Co., Ltd. is fully merged into China Merchants Group as its fully-owned subsidiary. It is the third merger of central enterprises with similar businesses in the month.
[SSN Selection]
○ The National Development and Reform Commission (NDRC) indicated that the pricing mechanism for refined oil products is soliciting public opinions. The adjustment of the pricing of refined oil products will be suspended until the introduction of the new mechanism.
○ The China Insurance Regulatory Commission (CIRC) held a high-level work conference on the prevention of industry risks on Dec. 29, proposing that equities investment will be an investment priority of insurance capitals for certain time.
○ Shanghai Municipal Government held a press conference, indicating that it is mulling over the launch of Shanghai-London Stock Connect with the China Securities Regulatory Commission (CSRC).
○ The Ministry of Industry and Information Technology (MIIT) releases the new version of the classified catalogue for telecommunication industry, creating conditions for the entry of private capitals by specifying the resale of mobile communication businesses.
○ The 13th Five-year Plan of Liaoning Province proposes to speed up the establishment of Dalian Jinpu New Area and strives for the approval of the establishment of a free trade pilot area in Dalian City.
TOP
[Industry Information]
○ MIIT issues measures for lithium battery administration, to boost leaders' market shares
------
The Ministry of Industry and Information Technology (MIIT) discloses on its website that it has formulated and released the Interim Measures for Administration of Lithium-ion Battery Industry. It proposes some operation and management requirements for manufacturers of anode material, cathode material, membrane, electrolyte and battery pack.
Comment: With the rapidly increasing sales of new energy vehicles, the investment of lithium battery enterprises grows by nearly 100 billion yuan. Institutions predict that battery output will reach 37GWH in 2016, which will be 30GWH more than the demand. This might lead to surplus. In order to guide the industry to develop orderly and improve products quality, the MIIT releasing the document will reduce the non-standardized production and help enhance the market concentration of leading enterprises. In terms of listed companies, the production capacity of lithium battery of Guoxuan High-tech Co., Ltd. (002074.SZ) will reach 1.3 billion AH and the company is actively expanding business to anode material, membrane and battery management system. The revenues of Ningbo Shanshan Co., Ltd. (600884.SH) from lithium battery business account for as high as 81.3 percent of the company's principal business and the company is making deployment in the production and operation of finished automobiles.
TOP
○ 5G technology R＆D to launch, intelligent driving likely to become major application
------
At the 2015 China Communication Industry Conference on Dec. 29, Chen Lidong, deputy director of the Department of Communication Development of the MIIT, disclosed that China will widely motivate the up and downstream of the operating equipment chip industry and fully launch the research and development of 5G technology via industry-university-research cooperation. Miao Wei, the Minister of Industry and Information Technology, said in this March that China Academy of Telecommunication Research was organizing researches on 5G networks. One of its major application will be in intelligent vehicles and Internet-based vehicles.
Comment: The research and development of 5G technology will post new opportunities for telecommunication device suppliers. Hunan Tyen Machinery CO., Ltd. (600498.SH) and Accelink Technologies Co., Ltd. (002281.SZ) may benefit from it. In addition, the 5G technology has higher bandwidth and lower delay, providing possibility for vehicle real-time data interaction and remote cloud services' commanding vehicles. Among listed companies, Jiangsu Protruly Vision Technology Group Co., Ltd. (600074.SH) and Zhejiang Jingu Co., Ltd. (002488.SZ) are engaged in self-driving.
TOP
[Announcement Interpretation]
○ Zhongli Science and Technology to fully hold Zhongli Talesun Solar to integrate photovoltaic power station resources
------
Zhongli Science and Technology Group Co., Ltd. (002309.SZ) plans to acquire 25.19 percent of Zhongli Talesun Solar Co., Ltd. from China Development Bank Capital Co., Ltd. by issuing 68.89 million shares to the China Development Bank Capital at 17.07 yuan per share through private placement. After the deal, Zhongli Talesun Solar will become a wholly-owned company of Zhongli Science and Technology Group. Zhongli Talesun Solar is a Chinese company engaged in the development and construction of photovoltaic power station and the production and sales of photovoltaic module and battery piece.
○Yixintang Pharmaceutical sharply increases its fundraising scale
------
Yunnan Hongxiang Yixintang Pharmaceutical Co., Ltd. (002727.SZ) adjusted its private placement scheme. The proposed total fundraising of 782 million yuan is raised to 2,110 million yuan, and the issuing price will be adjusted from 54.61 yuan to no less than 55.64 yuan. Ruan Hongxian, actual controller of the company, proposes to subscribe 100 million yuan. In terms of the uses of proceeds, 1,500 million yuan will be used for the company owned chain stores and construction of Chinese medicine marketing network, 350 million yuan will be used for" Internet Plus" business pattern upgrading and rebuilding project, 200 million yuan will be used to supplement working capital. Upon completion of private placement, the number of the company's chain stores will increase significantly. The company closed at 62.98 yuan before suspension of trading.
○Longi Silicon Materials to raise nearly RMB3 bln to complete industry chain
------
Xi'an Longi Silicon Materials Corp. (601012.SH) proposes to issue 239 million shares at no less than 12.46 yuan per share to raise 2.98 billion yuan, which will be used for the production of 2GW efficient monocrystalline cells, module project and supplement of working capital.
○Safbon Water Service to raise RMB1.2 bln for environment protection
------
Shanghai Safbon Water Service Co., ltd. (300262.SZ) proposes to issue 96 million shares to raise 1.2 billion yuan, which will be used for phase II of Shuicheng River comprehensive treatment project in Liu Panshui City, Guizhou Province, as well as repay bank borrowings. It is estimated that upon completion of the project, the total profits will amount to 572 million yuan.
○Hengshun Zhongsheng Group's shareholder increases shareholding
------
Qingdao Hengshun Zhongsheng Group Co., ltd. (300208.SZ) announced that its shareholder Qingdao City Construction Investment Group is optimistic about the company's future, and thus increased 8,410,000 shares of the company from Sept. 24 to Dec. 29, accounting for 1.1 percent of its total share capital.
[Financial Reports Express]
○Sunrise Group proposes high share conversion and dividend
------
Xiamen Sunrise Group Co., Ltd. (002593.SZ) proposes a 20-for-10 conversion of capital surplus into shares combined with1 yuan dividend for every 10 shares for its 2015 distribution plan.
○Luzhou Laojiao releases profit warning in annual report
------
Luzhou Laojiao Co., Ltd. (000568.SZ) anticipated that its net profits will grow by 52 percent to 70 percent in 2015 YoY, which primarily attributed to significant increase in revenue and investment income.
[Trading Trends]
○four institutions bought Rongxin Power Electronic
------
The trading volume ranking list on Dec. 29 shows that Rongxin Power Electronic Co., Ltd. was bought by four institutions with a total of 125 million yuan, accounting for 12.55 percent of the intraday trading turnover; another two institutions sold the company with a total of 26,015,900 yuan.
Comment: the company has acquired Montnets this year and formally entered mobile internet operation field. Montnets is a leading mobile information instant messaging service provider whose businesses cover internet, finance and consumer goods areas. Montnets is also an entire network service provider of the three biggest telecommunication operators. Institutions estimated that the company will promote traffic management platform on a large scale at the beginning of next year, to open an all new growth space.
[Trading Alarms]
○IPO of China Merchant Shekou to unveil
------
China Merchant Shekou (001979) will go public on Dec. 30 after it merged with China Merchants Property Development Co., Ltd. (000024.SZ). There's no price limits on the first trading day.
TOP
○ Guideline on SOEs classification issued, SOEs in competitive industries to pioneer in reform
○ MIIT issues measures for lithium battery administration, to boost leaders' market shares
○ 5G technology R＆D to launch, intelligent driving likely to become major application
○ Zhongli Science and Technology to fully hold Zhongli Talesun Solar, Yixintang Pharmaceutical sharply increases its fundraising scale
[SSN Focus]
○ Guideline on SOEs classification issued, SOEs in competitive industries to pioneer in reform
------
The State-owned Assets Supervision and Administration Commission (SASAC), the Ministry of Finance and the National Development and Reform Commission (NDRC) jointly released the Guideline on Defining and Classifying State-Owned Enterprises Functions on Dec. 29, specifying that state-owned enterprises (SOEs) should be classified as for-profit entities and those dedicated to public welfare. SOEs for business engaged in competitive industries should conduct corporate and shareholding systems reform in principle and actively introduce other capitals to diversify their equities. They shall spare no efforts in system reforming and listing and promote overall listing. They should also dispose low-efficient, ineffective and bad assets to improve the market competitiveness.
Comment: It marks that the classification reform, a core part of the SOEs reform, kicks off. Compared with employee shareholding plans, the Guideline mentioned overall listing and the disposal of low-efficient assets, which can immediately improve the profitability. State-owned companies with small market value in textile, electronics, property and other fully competitive industries will catch more attention from institutes. Shangtex Holding Co., Ltd., the substantial shareholder of Shanghai Dragon Corporation (600630.SH), has established the office for transformation to improve the ratio of asset securitization. INESA Group, the substantial shareholder of INESA Electron Co., Ltd. (600602.SH), is actively conducting the construction of smart cities. Lushang Property Co., Ltd. (600223.SH) has established a framework for the coordinated development of property plus health. Qilu Medical University is under its substantial shareholder.
◆ The SASAC also announced on its website on the same day that Sinotrans ＆ CSC Holdings Co., Ltd. is fully merged into China Merchants Group as its fully-owned subsidiary. It is the third merger of central enterprises with similar businesses in the month.
[SSN Selection]
○ The National Development and Reform Commission (NDRC) indicated that the pricing mechanism for refined oil products is soliciting public opinions. The adjustment of the pricing of refined oil products will be suspended until the introduction of the new mechanism.
○ The China Insurance Regulatory Commission (CIRC) held a high-level work conference on the prevention of industry risks on Dec. 29, proposing that equities investment will be an investment priority of insurance capitals for certain time.
○ Shanghai Municipal Government held a press conference, indicating that it is mulling over the launch of Shanghai-London Stock Connect with the China Securities Regulatory Commission (CSRC).
○ The Ministry of Industry and Information Technology (MIIT) releases the new version of the classified catalogue for telecommunication industry, creating conditions for the entry of private capitals by specifying the resale of mobile communication businesses.
○ The 13th Five-year Plan of Liaoning Province proposes to speed up the establishment of Dalian Jinpu New Area and strives for the approval of the establishment of a free trade pilot area in Dalian City.
TOP
[Industry Information]
○ MIIT issues measures for lithium battery administration, to boost leaders' market shares
------
The Ministry of Industry and Information Technology (MIIT) discloses on its website that it has formulated and released the Interim Measures for Administration of Lithium-ion Battery Industry. It proposes some operation and management requirements for manufacturers of anode material, cathode material, membrane, electrolyte and battery pack.
Comment: With the rapidly increasing sales of new energy vehicles, the investment of lithium battery enterprises grows by nearly 100 billion yuan. Institutions predict that battery output will reach 37GWH in 2016, which will be 30GWH more than the demand. This might lead to surplus. In order to guide the industry to develop orderly and improve products quality, the MIIT releasing the document will reduce the non-standardized production and help enhance the market concentration of leading enterprises. In terms of listed companies, the production capacity of lithium battery of Guoxuan High-tech Co., Ltd. (002074.SZ) will reach 1.3 billion AH and the company is actively expanding business to anode material, membrane and battery management system. The revenues of Ningbo Shanshan Co., Ltd. (600884.SH) from lithium battery business account for as high as 81.3 percent of the company's principal business and the company is making deployment in the production and operation of finished automobiles.
TOP
○ 5G technology R＆D to launch, intelligent driving likely to become major application
------
At the 2015 China Communication Industry Conference on Dec. 29, Chen Lidong, deputy director of the Department of Communication Development of the MIIT, disclosed that China will widely motivate the up and downstream of the operating equipment chip industry and fully launch the research and development of 5G technology via industry-university-research cooperation. Miao Wei, the Minister of Industry and Information Technology, said in this March that China Academy of Telecommunication Research was organizing researches on 5G networks. One of its major application will be in intelligent vehicles and Internet-based vehicles.
Comment: The research and development of 5G technology will post new opportunities for telecommunication device suppliers. Hunan Tyen Machinery CO., Ltd. (600498.SH) and Accelink Technologies Co., Ltd. (002281.SZ) may benefit from it. In addition, the 5G technology has higher bandwidth and lower delay, providing possibility for vehicle real-time data interaction and remote cloud services' commanding vehicles. Among listed companies, Jiangsu Protruly Vision Technology Group Co., Ltd. (600074.SH) and Zhejiang Jingu Co., Ltd. (002488.SZ) are engaged in self-driving.
TOP
[Announcement Interpretation]
○ Zhongli Science and Technology to fully hold Zhongli Talesun Solar to integrate photovoltaic power station resources
------
Zhongli Science and Technology Group Co., Ltd. (002309.SZ) plans to acquire 25.19 percent of Zhongli Talesun Solar Co., Ltd. from China Development Bank Capital Co., Ltd. by issuing 68.89 million shares to the China Development Bank Capital at 17.07 yuan per share through private placement. After the deal, Zhongli Talesun Solar will become a wholly-owned company of Zhongli Science and Technology Group. Zhongli Talesun Solar is a Chinese company engaged in the development and construction of photovoltaic power station and the production and sales of photovoltaic module and battery piece.
○Yixintang Pharmaceutical sharply increases its fundraising scale
------
Yunnan Hongxiang Yixintang Pharmaceutical Co., Ltd. (002727.SZ) adjusted its private placement scheme. The proposed total fundraising of 782 million yuan is raised to 2,110 million yuan, and the issuing price will be adjusted from 54.61 yuan to no less than 55.64 yuan. Ruan Hongxian, actual controller of the company, proposes to subscribe 100 million yuan. In terms of the uses of proceeds, 1,500 million yuan will be used for the company owned chain stores and construction of Chinese medicine marketing network, 350 million yuan will be used for" Internet Plus" business pattern upgrading and rebuilding project, 200 million yuan will be used to supplement working capital. Upon completion of private placement, the number of the company's chain stores will increase significantly. The company closed at 62.98 yuan before suspension of trading.
○Longi Silicon Materials to raise nearly RMB3 bln to complete industry chain
------
Xi'an Longi Silicon Materials Corp. (601012.SH) proposes to issue 239 million shares at no less than 12.46 yuan per share to raise 2.98 billion yuan, which will be used for the production of 2GW efficient monocrystalline cells, module project and supplement of working capital.
○Safbon Water Service to raise RMB1.2 bln for environment protection
------
Shanghai Safbon Water Service Co., ltd. (300262.SZ) proposes to issue 96 million shares to raise 1.2 billion yuan, which will be used for phase II of Shuicheng River comprehensive treatment project in Liu Panshui City, Guizhou Province, as well as repay bank borrowings. It is estimated that upon completion of the project, the total profits will amount to 572 million yuan.
○Hengshun Zhongsheng Group's shareholder increases shareholding
------
Qingdao Hengshun Zhongsheng Group Co., ltd. (300208.SZ) announced that its shareholder Qingdao City Construction Investment Group is optimistic about the company's future, and thus increased 8,410,000 shares of the company from Sept. 24 to Dec. 29, accounting for 1.1 percent of its total share capital.
[Financial Reports Express]
○Sunrise Group proposes high share conversion and dividend
------
Xiamen Sunrise Group Co., Ltd. (002593.SZ) proposes a 20-for-10 conversion of capital surplus into shares combined with1 yuan dividend for every 10 shares for its 2015 distribution plan.
○Luzhou Laojiao releases profit warning in annual report
------
Luzhou Laojiao Co., Ltd. (000568.SZ) anticipated that its net profits will grow by 52 percent to 70 percent in 2015 YoY, which primarily attributed to significant increase in revenue and investment income.
[Trading Trends]
○four institutions bought Rongxin Power Electronic
------
The trading volume ranking list on Dec. 29 shows that Rongxin Power Electronic Co., Ltd. was bought by four institutions with a total of 125 million yuan, accounting for 12.55 percent of the intraday trading turnover; another two institutions sold the company with a total of 26,015,900 yuan.
Comment: the company has acquired Montnets this year and formally entered mobile internet operation field. Montnets is a leading mobile information instant messaging service provider whose businesses cover internet, finance and consumer goods areas. Montnets is also an entire network service provider of the three biggest telecommunication operators. Institutions estimated that the company will promote traffic management platform on a large scale at the beginning of next year, to open an all new growth space.
[Trading Alarms]
○IPO of China Merchant Shekou to unveil
------
China Merchant Shekou (001979) will go public on Dec. 30 after it merged with China Merchants Property Development Co., Ltd. (000024.SZ). There's no price limits on the first trading day.
TOP
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