Early Bird

Early Bird 7-Jan-2015

SHENZHEN
2015-01-16 10:15

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 [Today's Guide]
> State Council approves law amendment draft, education enterprises to see major development
> Shanghai FTZ pilots parallel imports of cars, car dealers embrace policy benefit
> Work conference of science, technology and industry for national defense emphasizes military-civil integration, private electronic information enterprises the first to join military procurement
> Two hydropower stations of Qianyuan Power put into operation
 
 [XFA Focus]
○ State Council approves law amendment draft, education enterprises to see major development
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The executive meeting of State Council approved the draft of a package amendment on the Education Law, Higher Education Law and Non-state Education Promotion Law of the People’s Republic of China at its executive meeting on Jan.7, and decided to submit to the Standing Committee of the National People’s Congress for deliberation. The drafts specify classified management of non-state schools and allow running profit-making non-state schools.
Comment: There are few educational companies in A-share market because relevant laws position education as non-profit before. The “Education Law” stipulates that no organization or individuals can run schools or other education organizations for profit. The “Non-state Education Promotion Law” also stipulates that non-state education is for common weal. Profit-making educational enterprises will be rectified as right and proper after this amendment, and quality educational enterprises can be duplicated through multiple ways of financing like being listed, thus to push forward rapid development of the whole industry. Research institutions forecast that the actual scale of China’s educational market will exceed 1 trillion yuan in 2015, among which online education will see faster development. Currently, A-share education-related stocks are as follows: Shanghai Xin Nanyang Co., Ltd. (600661.SH), But'one Information Corporation, Xi'an (600455.SH), Hailun Piano Co., Ltd. (300329.SZ), etc.
 
 [XFA Selection]
○ The National Development and Reform Commission indicates that China will free up a number of prices in two batches, and medicine, medical service and power distribution are all covered in the reform.
○ Guangdong Free Trade Zone (FTZ) is planned to be officially established in March; 366.3 billion yuan are planned to be invested in Binhai New Area, a main territory of the Tianjin FTZ in 2015.
○ The State Administration of Press, Publication, Radio, Film and Television issue guidance on encouraging state-owned publishing enterprise to develop online literature publishing business.
○ Beijing has formally submitted its 2022 Winter Olympic Games official bid, and the International Olympic Committee (IOC) will vote to determine who will win the laurel on July, 31 this year.
○ The State Council approves Jiaxin port to expand opening. Dushan and Haiyan ports obtain official “international permit”.
 
[Industry Information]
○Shanghai FTZ pilots parallel imports of cars, car dealers embrace policy benefit
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Shanghai Municipal Commission of Commerce announced the launch of a pilot program on parallel imports of cars in Shanghai Free Trade Zone (FTZ) on Jan. 7. Car dealers registered in the FTZ can import cars directly from abroad.
Comment: Compared with ordinary channels, the cost of cars exported in parallel can be reduced by 20 to 30 percent, being conducive to breaking the supply monopoly by transnational manufacturers. As anti-monopoly of car industry advances, the pilot scale will expect further expansion later. Among Shanghai local companies, Shanghai Waigaoqiao Free Trade Zone Development Co., Ltd. (600648.SH) announced on Nov. 14 last year the increase investment in its subsidiary to pilot parallel imports of car in FTZ, and its stock price rose by the daily limit of 10 percent at the sound of the announcement; Shanghai Shenhua Holdings Co., Ltd. (600653.SH) mainly focuses in car sales, and has founded a subsidiary in FTZ; Shanghai Jiao Yun Group Co., Ltd. (600676.SH) now possesses 13 4S stores.
 
○ Work conference of science, technology and industry for national defense emphasizes military-civil integration, private electronic information enterprises the first to join military procurement
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Information from the State Administration of Science, Technology and Industry for National Defense says that 2015 work conference of science, technology and industry for national defense was held recently. The Party Central Committee and the State Council released important instructions. The conference proposed to effectively implement national security and military-civil integration strategies, and do the work well in the formulation of the Thirteenth Five-year Plan.
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