EARLYBIRD
14-Jan-2015
[Today's Guide]
> Xi Jipin pays high attention to the bidding for Winter Olympics, sports fever expect
> The executive meeting of the State Council decides to set up National Emerging Industry Venture Capital Guidance Funds and focus on innovative enterprises at start-up phase.
> No.1 Central Document to release in end-Jan. with focus on rural reform
> Changjiang & Jinggong Steel Building proposes high share dividend
[XFA Focus]
○ Xi Jipin pays high attention to the bidding for Winter Olympics, sports fever expect
------
Chinese President Xi Jinpin met SheikhAhmadAl-FahadAl-Sabah, President of the Association of National Olympic Committees (ANOC) and the Olympic Council of Asia, on Jan. 14 in the Great Hall of the People. Xi indicated that Chinese government consistently attaches importance to sports undertakings and the important role of Olympic Games in social development. Xi emphasized that to promote the development of Olympic Games and winter sports in China, both Beijing and Zhangjiakou City have applied to host the 24th Olympic Winter Games in 2022, and Chinese government attaches highly importance to that.
Comment: The high attention from state leaders is an important guarantee for sports industry to gain rapid development in the future. The “Suggestions on Accelerating the Development of Sports Industry and Promoting Sports Consumption” released by the State Council last Oct. definitely proposes that the overall scale of sports industry will be expanded to 5 trillion yuan by 2025. Research institutions believe that 2015 will be the first year to enjoy reform benefit. Sub-industries like sports goods, sports lotteries, sports operation, etc. will benefit from the booming of sports industry. Furthermore, Chinese Men's National Football Team wins for two consecutive games in Asian Cup, indicating a victory in group games. It will attract more Chinese to follow the game in the short term. Among A-share companies, Sainty Group, the substantial shareholder of Jiangsu Sainty Corp., Ltd. (600287.SH), is the main investor of Sainty Football Club. The two scores won by the national team on Jan.14 were all done by players from Sainty Football Club. Tsingtao Brewery Company Limited (600600.SH; 00168.HK) always insists to sports marketing. XuanHua Construction Machinery Co., Ltd. (000923.SZ) is the only listed company whose registration place is Zhangjiakou City.
[XFA Selection]
○ The executive meeting of the State Council decides to set up National Emerging Industry Venture Capital Guidance Funds and focus on innovative enterprises at start-up phase.
○ The dual pension system has reached its final stage. This will expand more development space for commercial insurances and bring more potential capital for the stock market.
○ China issues its first “Nuclear Safety Culture Policy Statement” which is of great significance to the promotion of the continuous development of nuclear power and nuclear technology application.
○ Hunan Friendship & Apollo Commercial Co., Ltd. (002277.SZ) signs strategic cooperation agreement with Kweichow Moutai Co., Ltd. (600519.SH). Senior management of the company indicates the hope to join the mix ownership reform of Kweichow Moutai.
[Industry Information]
○ PBoC Technology Work Conference emphasizes information security, financial IT embraces new opportunities
------
Latest disclosure on the website of the People’s Bank of China (PBoC) on Jan.14 indicates that it is about to hold 2015 Technology Work Conference recently. Li Dongrong, deputy President of the bank, emphasizes that the bottom line of security must be insisted; top-level design must be strengthened; foreseeability of science and technology must be enhanced. At the same time, projects that have been verified must be implemented soon to lay a solid software and hardware foundation for the technology work. It is noteworthy that several awards of 2014 National Science and Technology Award Conference are related to achievements in information area, indicating that under the background of pushing out IOE - the moniker in China for Western tech giants IBM, Oracle and EMC, the government attaches great importance to information security.
Comment: In the “Instructions on the Application of Secure and Controllable IT” published by China Banking Regulatory Commission (CBRC) earlier, it is proposed that the utilization ratio of secure and controllable IT in banking industry shall reach 75 percent by 2019. Institutions forecast that the market size of IT solutions in China’s banking industry will reach 32.44 billion yuan by 2017, representing an average compound growth rate of more than 20 percent. Among listed companies, Shanghai Amarsoft Information & Technology Co., Ltd. (300380.SZ) is a leading enterprise in domestic bank credit and risk management system business. Shenzhen Sunline Tech Co., Ltd. (300348.SZ) mainly focuses on the IT system of small and mid-sized banks and has won the bid of the core system of Shenzhen Qianhai WeBank.
○ No.1 Central Document to release in end-Jan. with focus on rural reform
------
XFA learns that the No.1 Central Document of 2015 is expected to be released in end-Jan. At present, the document has been distributed internally and work has been divided among ministries and commissions. Priorities will be given to two aspects which are agricultural modernization and land-system-reform-centered rural reform. As for agricultural modernization, the document mainly emphasizes agricultural technology, agriculture industrialization, etc. As for rural reform, the document mainly aims at guiding orderly transfer of land management rights; developing agricultural operation at a proper scale; expanding pilot scope of the verification, registration and certification of land contracted management rights; pushing forward the reform of rural collective property rights.
Comment: Agricultural modernization will effectively drive the demand of agricultural machinery. National Agricultural Machinery Work Conference was held in Nanning City, Guangxi Zhuang Autonomous Region from Jan. 13 to 14. It is emphasized on the meeting that the comprehensive mechanization level of national farming shall be above 62 percent this year. Among listed companies, Gifore Agricultural Machinery Chain Co., Ltd. (300022.SZ) is the largest homegrown agricultural machinery chains. Moreover, Anhui Huilong Agricultural Means Of Production CO., Ltd. (002556.SZ), set foot in large-scale land transfer earlier, is expected to benefit in future rural reform.
◆ XFA learns from the rural work conference of Xinjiang autonomous region party committee held on Jan. 14 that Xinjiang will comprehensively deepen rural reform, push forward the reform of rural property rights system, accelerate the pilot in establishing land-transfer-service-centered rural property transfer trading platform in 2015. This move can realize the preservation or increase of value during rural land transfer, and vitalize precious rural land resource. Among local listed companies, Xinjiang Korla Pear Co., Ltd. (600506.SH) owns 27 thousand mu (a unit of area, =0.0667 hectares) lands. Cofco Tunhe Co., Ltd. (600737.SH) owns 32 thousand mu farmlands in Xinjiang and leased 15 thousand mu lands in 2014. Xinjiang Guannong Fruit & Antler Group Co., Ltd. (600251.SH) owns arable land for 1.05 million mu and woodland for 1.37 million mu. Xinjiang Western Animal Husbandry Co., Ltd. (300106.SZ) owns natural rangeland of 800 thousand mu.
[Announcement Interpretation]
○ Changchun Department Jituan Store to re-start major assets reorganization with approval of Ministry of Commerce
------
With the approval of the Ministry of Commerce, Changchun Department Jituan Store Company Limited (600856.SH) will soon apply for resuming the review of major assets reorganization to China Securities Regulatory Commission (CSRC). The reorganization planning previously published by the company indicates that the company plans to purchase 100 percent equities of Qingdao Zhongtian Energy Ltd. and raise supporting funds through private placement with all of its assets and debts. Changchun Department Jituan Store will turn itself into an energy enterprise from a department retailing company after the reorganization.
○ Actual controller of Yankon Group increases shareholding
------
Chen Senjie, actual controller of Zhejiang Yankon Group Co., Ltd. (600261.SH), adds stake in the company by buying 12.5 million shares at 8.3 yuan per share, representing 1.29 percent, through block trading on Jan. 14. His total shareholding of the company together with persons acting in concert, increased to 41.53 percent from 40.24 percent. He plans to increase shareholding by not more than 2 percent in the coming year.
○ Zhongheng Electric to jointly establish nuclear power business company
------
Zhongheng Borui Digital Power Technology Co., Ltd., a wholly-owned Subsidiary of Hangzhou Zhongheng Electric Co., Ltd. (002364.SZ), together with six natural persons jointly founded Beijing Zhongheng Ruixiang Energy Technology Co., Ltd. whose target market is thermal power and nuclear power. Zhongheng Borui Digital Power Technology will invest 12 million yuan in cash, accounting for 60 percent. Zhongheng Electric indicates that the newly established company will assist it to expand business in international power market.
○ Haite High-Tech invest RMB1.67 bln in “military-civil” project through private placement
------
Sichuan Haite High-Tech Co., Ltd (002023.SZ) plans to issue 79.15 million shares at not less than 21.1 yuan per share to raise 1.67 billion yuan for the investment in its main business and the supplement of working capital. Once finished, the company will enhance and expand abilities concerning complete machine maintenance, development and production of aerodynamic control system, aero-engine maintenance and aero-training business. Meanwhile, the company will cooperate with the 29th institution of China Electronics Technology Group Corporation in areas like aircraft airborne equipment, etc.
[Financial Reports Express]
○ Changjiang & Jinggong Steel Building proposes high share dividend
------
Controlling shareholder of Changjiang & Jinggong Steel Building（Group）Co., Ltd. (600496.SH) proposes a 12-for-10 conversion of capital surplus into shares in its annual report.
○ Wohua Phar. proposes high share dividend and estimates large growth in Q1
------
The first annual report is launched this year. Thanks to continuous increase of operation revenue, the net profit of Shandong Wohua Pharmaceutical Co., Ltd. (002107.SZ) increases by 244 percent year on year from 2014. It proposes a 12-for-10 conversion of capital surplus into shares combined with 2.1 yuan dividend for 10 shares in its annual report. The company estimates that its net profit in the first quarter of 2015 will see a year-on-year increase of 560 to 610 percent.
[Trading Trends]
○ Net buying of Pret by institutional seats
------
The trading volume ranking list on Jan. 14 shows that Shanghai Pret Composites Co., Ltd (002324.SZ) was bought by three institutions with a total of 85.6 million yuan, accounting for 19 percent of its intraday turnover. At the meantime, two institutions totally sold 22.21 million yuan, accounting for 5 percent of its intraday turnover.
Comment: Jan. 14 is the first trading day after Pret announced planning on major assets reorganization. Research institutions believe that Pret has become the largest domestic automotive trim modified plastics supplier. By purchasing American WRP Company, the company takes its first step of internationalization, and further explores growth space.
[Trading Alarms]
○ Six new stocks including M&G Stationery launch subscription on Jan.15
------
Shanghai M&G Stationery INC. (732899.SH) issues shares at 13.15 yuan per share with an acquiring up-limit per account at 18 thousand shares; Fulongma Sanitation Equipment Ltd. (732686.SH) issues shares at 14.86 yuan per share with an acquiring up-limit per account at 13 thousand shares; Zhejiang UE Furniture Co., Ltd. (732558.SH) issues shares at 10.22 yuan per share with an acquiring up-limit per account at 10 thousand shares; Zhejiang Jasan Holding Group Co., Ltd. (732558.SH) issues shares at 19.25 yuan per share with an acquiring up-limit per account at 8 thousand shares; Beijing Interact Technology Co., Ltd. (300419.SZ) issues shares at 28.81 yuan per share with an acquiring up-limit per account at 4 thousand shares; Suzhou Sushi Testing Instrument Co., Ltd. (300416.SZ) issues shares at 11.48 yuan per share with an acquiring up-limit per account at 6 thousand shares.
Full subscription of all stocks needs 870 thousand yuan. Institutions recommend M&G Stationery as the first choice. Guotai Junan Securities Co., Ltd. is optimistic about its advantage and growth in brand, channels, etc. The issuance P/E ratio of M&G Stationery is 23 times, compared with the P/E ratio of Shenzhen Comix Group Co., Ltd. (002301.SZ), which is in the same industry with M&G Stationery, is 88 times based on its performance forecast in 2014.
14-Jan-2015
[Today's Guide]
> Xi Jipin pays high attention to the bidding for Winter Olympics, sports fever expect
> The executive meeting of the State Council decides to set up National Emerging Industry Venture Capital Guidance Funds and focus on innovative enterprises at start-up phase.
> No.1 Central Document to release in end-Jan. with focus on rural reform
> Changjiang & Jinggong Steel Building proposes high share dividend
[XFA Focus]
○ Xi Jipin pays high attention to the bidding for Winter Olympics, sports fever expect
------
Chinese President Xi Jinpin met SheikhAhmadAl-FahadAl-Sabah, President of the Association of National Olympic Committees (ANOC) and the Olympic Council of Asia, on Jan. 14 in the Great Hall of the People. Xi indicated that Chinese government consistently attaches importance to sports undertakings and the important role of Olympic Games in social development. Xi emphasized that to promote the development of Olympic Games and winter sports in China, both Beijing and Zhangjiakou City have applied to host the 24th Olympic Winter Games in 2022, and Chinese government attaches highly importance to that.
Comment: The high attention from state leaders is an important guarantee for sports industry to gain rapid development in the future. The “Suggestions on Accelerating the Development of Sports Industry and Promoting Sports Consumption” released by the State Council last Oct. definitely proposes that the overall scale of sports industry will be expanded to 5 trillion yuan by 2025. Research institutions believe that 2015 will be the first year to enjoy reform benefit. Sub-industries like sports goods, sports lotteries, sports operation, etc. will benefit from the booming of sports industry. Furthermore, Chinese Men's National Football Team wins for two consecutive games in Asian Cup, indicating a victory in group games. It will attract more Chinese to follow the game in the short term. Among A-share companies, Sainty Group, the substantial shareholder of Jiangsu Sainty Corp., Ltd. (600287.SH), is the main investor of Sainty Football Club. The two scores won by the national team on Jan.14 were all done by players from Sainty Football Club. Tsingtao Brewery Company Limited (600600.SH; 00168.HK) always insists to sports marketing. XuanHua Construction Machinery Co., Ltd. (000923.SZ) is the only listed company whose registration place is Zhangjiakou City.
[XFA Selection]
○ The executive meeting of the State Council decides to set up National Emerging Industry Venture Capital Guidance Funds and focus on innovative enterprises at start-up phase.
○ The dual pension system has reached its final stage. This will expand more development space for commercial insurances and bring more potential capital for the stock market.
○ China issues its first “Nuclear Safety Culture Policy Statement” which is of great significance to the promotion of the continuous development of nuclear power and nuclear technology application.
○ Hunan Friendship & Apollo Commercial Co., Ltd. (002277.SZ) signs strategic cooperation agreement with Kweichow Moutai Co., Ltd. (600519.SH). Senior management of the company indicates the hope to join the mix ownership reform of Kweichow Moutai.
[Industry Information]
○ PBoC Technology Work Conference emphasizes information security, financial IT embraces new opportunities
------
Latest disclosure on the website of the People’s Bank of China (PBoC) on Jan.14 indicates that it is about to hold 2015 Technology Work Conference recently. Li Dongrong, deputy President of the bank, emphasizes that the bottom line of security must be insisted; top-level design must be strengthened; foreseeability of science and technology must be enhanced. At the same time, projects that have been verified must be implemented soon to lay a solid software and hardware foundation for the technology work. It is noteworthy that several awards of 2014 National Science and Technology Award Conference are related to achievements in information area, indicating that under the background of pushing out IOE - the moniker in China for Western tech giants IBM, Oracle and EMC, the government attaches great importance to information security.
Comment: In the “Instructions on the Application of Secure and Controllable IT” published by China Banking Regulatory Commission (CBRC) earlier, it is proposed that the utilization ratio of secure and controllable IT in banking industry shall reach 75 percent by 2019. Institutions forecast that the market size of IT solutions in China’s banking industry will reach 32.44 billion yuan by 2017, representing an average compound growth rate of more than 20 percent. Among listed companies, Shanghai Amarsoft Information & Technology Co., Ltd. (300380.SZ) is a leading enterprise in domestic bank credit and risk management system business. Shenzhen Sunline Tech Co., Ltd. (300348.SZ) mainly focuses on the IT system of small and mid-sized banks and has won the bid of the core system of Shenzhen Qianhai WeBank.
○ No.1 Central Document to release in end-Jan. with focus on rural reform
------
XFA learns that the No.1 Central Document of 2015 is expected to be released in end-Jan. At present, the document has been distributed internally and work has been divided among ministries and commissions. Priorities will be given to two aspects which are agricultural modernization and land-system-reform-centered rural reform. As for agricultural modernization, the document mainly emphasizes agricultural technology, agriculture industrialization, etc. As for rural reform, the document mainly aims at guiding orderly transfer of land management rights; developing agricultural operation at a proper scale; expanding pilot scope of the verification, registration and certification of land contracted management rights; pushing forward the reform of rural collective property rights.
Comment: Agricultural modernization will effectively drive the demand of agricultural machinery. National Agricultural Machinery Work Conference was held in Nanning City, Guangxi Zhuang Autonomous Region from Jan. 13 to 14. It is emphasized on the meeting that the comprehensive mechanization level of national farming shall be above 62 percent this year. Among listed companies, Gifore Agricultural Machinery Chain Co., Ltd. (300022.SZ) is the largest homegrown agricultural machinery chains. Moreover, Anhui Huilong Agricultural Means Of Production CO., Ltd. (002556.SZ), set foot in large-scale land transfer earlier, is expected to benefit in future rural reform.
◆ XFA learns from the rural work conference of Xinjiang autonomous region party committee held on Jan. 14 that Xinjiang will comprehensively deepen rural reform, push forward the reform of rural property rights system, accelerate the pilot in establishing land-transfer-service-centered rural property transfer trading platform in 2015. This move can realize the preservation or increase of value during rural land transfer, and vitalize precious rural land resource. Among local listed companies, Xinjiang Korla Pear Co., Ltd. (600506.SH) owns 27 thousand mu (a unit of area, =0.0667 hectares) lands. Cofco Tunhe Co., Ltd. (600737.SH) owns 32 thousand mu farmlands in Xinjiang and leased 15 thousand mu lands in 2014. Xinjiang Guannong Fruit & Antler Group Co., Ltd. (600251.SH) owns arable land for 1.05 million mu and woodland for 1.37 million mu. Xinjiang Western Animal Husbandry Co., Ltd. (300106.SZ) owns natural rangeland of 800 thousand mu.
[Announcement Interpretation]
○ Changchun Department Jituan Store to re-start major assets reorganization with approval of Ministry of Commerce
------
With the approval of the Ministry of Commerce, Changchun Department Jituan Store Company Limited (600856.SH) will soon apply for resuming the review of major assets reorganization to China Securities Regulatory Commission (CSRC). The reorganization planning previously published by the company indicates that the company plans to purchase 100 percent equities of Qingdao Zhongtian Energy Ltd. and raise supporting funds through private placement with all of its assets and debts. Changchun Department Jituan Store will turn itself into an energy enterprise from a department retailing company after the reorganization.
○ Actual controller of Yankon Group increases shareholding
------
Chen Senjie, actual controller of Zhejiang Yankon Group Co., Ltd. (600261.SH), adds stake in the company by buying 12.5 million shares at 8.3 yuan per share, representing 1.29 percent, through block trading on Jan. 14. His total shareholding of the company together with persons acting in concert, increased to 41.53 percent from 40.24 percent. He plans to increase shareholding by not more than 2 percent in the coming year.
○ Zhongheng Electric to jointly establish nuclear power business company
------
Zhongheng Borui Digital Power Technology Co., Ltd., a wholly-owned Subsidiary of Hangzhou Zhongheng Electric Co., Ltd. (002364.SZ), together with six natural persons jointly founded Beijing Zhongheng Ruixiang Energy Technology Co., Ltd. whose target market is thermal power and nuclear power. Zhongheng Borui Digital Power Technology will invest 12 million yuan in cash, accounting for 60 percent. Zhongheng Electric indicates that the newly established company will assist it to expand business in international power market.
○ Haite High-Tech invest RMB1.67 bln in “military-civil” project through private placement
------
Sichuan Haite High-Tech Co., Ltd (002023.SZ) plans to issue 79.15 million shares at not less than 21.1 yuan per share to raise 1.67 billion yuan for the investment in its main business and the supplement of working capital. Once finished, the company will enhance and expand abilities concerning complete machine maintenance, development and production of aerodynamic control system, aero-engine maintenance and aero-training business. Meanwhile, the company will cooperate with the 29th institution of China Electronics Technology Group Corporation in areas like aircraft airborne equipment, etc.
[Financial Reports Express]
○ Changjiang & Jinggong Steel Building proposes high share dividend
------
Controlling shareholder of Changjiang & Jinggong Steel Building（Group）Co., Ltd. (600496.SH) proposes a 12-for-10 conversion of capital surplus into shares in its annual report.
○ Wohua Phar. proposes high share dividend and estimates large growth in Q1
------
The first annual report is launched this year. Thanks to continuous increase of operation revenue, the net profit of Shandong Wohua Pharmaceutical Co., Ltd. (002107.SZ) increases by 244 percent year on year from 2014. It proposes a 12-for-10 conversion of capital surplus into shares combined with 2.1 yuan dividend for 10 shares in its annual report. The company estimates that its net profit in the first quarter of 2015 will see a year-on-year increase of 560 to 610 percent.
[Trading Trends]
○ Net buying of Pret by institutional seats
------
The trading volume ranking list on Jan. 14 shows that Shanghai Pret Composites Co., Ltd (002324.SZ) was bought by three institutions with a total of 85.6 million yuan, accounting for 19 percent of its intraday turnover. At the meantime, two institutions totally sold 22.21 million yuan, accounting for 5 percent of its intraday turnover.
Comment: Jan. 14 is the first trading day after Pret announced planning on major assets reorganization. Research institutions believe that Pret has become the largest domestic automotive trim modified plastics supplier. By purchasing American WRP Company, the company takes its first step of internationalization, and further explores growth space.
[Trading Alarms]
○ Six new stocks including M&G Stationery launch subscription on Jan.15
------
Shanghai M&G Stationery INC. (732899.SH) issues shares at 13.15 yuan per share with an acquiring up-limit per account at 18 thousand shares; Fulongma Sanitation Equipment Ltd. (732686.SH) issues shares at 14.86 yuan per share with an acquiring up-limit per account at 13 thousand shares; Zhejiang UE Furniture Co., Ltd. (732558.SH) issues shares at 10.22 yuan per share with an acquiring up-limit per account at 10 thousand shares; Zhejiang Jasan Holding Group Co., Ltd. (732558.SH) issues shares at 19.25 yuan per share with an acquiring up-limit per account at 8 thousand shares; Beijing Interact Technology Co., Ltd. (300419.SZ) issues shares at 28.81 yuan per share with an acquiring up-limit per account at 4 thousand shares; Suzhou Sushi Testing Instrument Co., Ltd. (300416.SZ) issues shares at 11.48 yuan per share with an acquiring up-limit per account at 6 thousand shares.
Full subscription of all stocks needs 870 thousand yuan. Institutions recommend M&G Stationery as the first choice. Guotai Junan Securities Co., Ltd. is optimistic about its advantage and growth in brand, channels, etc. The issuance P/E ratio of M&G Stationery is 23 times, compared with the P/E ratio of Shenzhen Comix Group Co., Ltd. (002301.SZ), which is in the same industry with M&G Stationery, is 88 times based on its performance forecast in 2014.
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