[Today’s Guide]
> Zhejiang two sessions highlight state-owned assets reform with port and transportation as breakthroughs
> Heparin sodium price gradually hikes, long-term mechanism on anti-counterfeit seeds to establish
> Tigermed Consulting to acquire Beiyi Renzhi, Nanyang Technology to issue shares to staff through private placement
> Thaihot Group invests RMB4 bln in real estate, Sierte Fertilizer Industry to develop agricultural materials e-business
[XFA Focus]
○ Zhejiang two sessions highlight state-owned assets reform with port and transportation as breakthroughs
-----
Li Qiang, governor of Zhejiang Province, disclosed at the Zhejiang Provincial People’s Congress convened on Jan. 21 that the province will actively promote the state-owned assets and enterprises reforms this year with the port, transportation and other investment operation platforms as breakthroughs in facilitating the consolidation and reorganization of state-owned assets and enterprises.
Comment: Reform will improve the internal operation efficiency of state-owned enterprises and further facilitate the expansion development. The two sessions of various provinces and municipalities this year give priorities to the state-owned assets reform. Many A-share state-owned companies have attracted social capitals or achieved operation transformation. Shenzhen Tagen Group Co., Ltd. (000090.SZ) has been injected by HEAVEN-SENT Capital Management Group Co., Ltd. Guangzhou Friendship Group Co., Ltd. (000987.SZ) is controlled by a local financial company. Guizhou Chitianhua Co., Ltd. (600227.SH) has been invested by Xu Xiang, General Manager of Shanghai Zexi Investment Management. *Lanzhou Sanmao Industrial Co., Ltd. (000779.SZ) has been transferred to be under a provincial state-owned assets management platform. The stock prices of the above companies significantly hiked after resuming trading. In terms state-owned enterprises in Zhejiang Province, Zhejiang Material Industrial Zhongda Yuantong Group Co., Ltd. (600704.SH) has suspended trading for major assets consolidation. Zhejiang Provincial Energy Group Company Ltd. has committed to inject its costal cargo assets into Ningbo Marine Company Limited (600798.SH). Ningbo Port Company Limited (601018.SH) is expected to become a fortress in the rail-sea intermodal transport under the “One Belt and One Road” program.
[XFA Selection]
○ The central bank indicated that it continued and newly added 319.5 billion yuan in total under the medium-term lending facility to meet a seasonal pickup in demand for cash before the Lunar New Year holidays.
○ The State Council issued the task breakdown on promoting the reform and development of the tourism industry. Various supporting policies will be introduced in the first half.
○ The national insurance regulatory work conference will be convened next Monday (Jan. 26). The second-generation solvency regulatory system for the industrial development is likely to be released soon.
○ Shenwan Hongyuan Group Co., Ltd. (000166.SZ) will be listed on Jan. 26. Insiders believe that the securities market will see more mergers in the future.
○ The bird flu outbreak in Taiwan reached the most serious level with the rapidest spreading speed and largest scale in a decade.
[Industry Information]
○ Heparin sodium price gradually hikes, profits of relevant companies likely to improve
-----
The heparin sodium market continued to recover since the beginning of this year. The price of heparin sodium has increased to 11,000 yuan per million units in Jan. from the 9,500 yuan per million units in last Dec, increasing 15 percent. Compared with the lowest level of 6,000 yuan per million units in mid-2014, it has rebounded by 80 percent.
Comment: The heparin sodium market has been sluggish for five years. Research institutes believe that the market will not worsen and the price recovery will promote relevant listed companies improving their profits. Shenzhen Hepalink Pharmaceutical Co., Ltd. (002399.SZ) acquired the U.S. SPL Company last year and became the biggest heparin materials supplier in the world. It has 4.6 billion yuan cash in hand and is motivated in merger and acquisition. The sale of heparin products contributed more than 60 percent of the sales revenue of Changzhou Qianhong Biopharma Co., Ltd. (002550.SZ). The field inspection on the Enoxaparin Sodium Injection with higher gross profit has been completed. The Low-Molecular-Weight Heparins Calcium Injection of Hebei Changshan Biochemical Pharmaceutical Co., Ltd. (300255.SZ) is expected to maintain higher sales growth in the future. The original dalteparin product is also likely to see sales growth.
○ Ministry of Agriculture to establish long-term mechanism on anti-counterfeit seeds, leading enterprises to benefit
-----
Yu Xinrong, vice minister of agriculture, indicated at a video conference on special campaigns against seeds variety right infringement and counterfeit seeds convened on Jan. 21 that it will continue the special campaigns against counterfeit seeds. It will highlight the innovation in regulation mechanism and establish a long-term mechanism. It will also expand the coverage of traceable pilots on seeds quality, facilitate the application of e-business platform and encourage enterprises conducting entrusted operation.
Comment: Research institutes believe that the seed industry in China is experiencing industrial and enterprises transformation as well as a booming industrial prospect. It is likely that winners will dominate the industry. The campaign against infringement and counterfeit seeds will facilitate leading enterprises in expanding their sales. Among listed companies, Shandong Denghai Seeds Co., Ltd. (002041.SZ), a leader in corn seeds, may double the coverage of its major seeds. Based on the central enterprise China National Agricultural Development Group Co., Ltd., Zhongnongfa Seed Industry Group Co., Ltd. (600313.SH) has become the biggest producer of wheat seeds in China through extensive mergers. Yuan Longping High-tech Agriculture Co., Ltd. (000998.SZ) actively implements the strategy of building “a versatile seeds enterprise” and advances into the vegetable seeds industry through acquiring a leading cucumber seeds enterprise.
○ Solar thermal power price to release in H1 with huge potentials as PV power
-----
XFA learnt that the National Development and Reform Commission may introduce the plan on the pricing of the first solar thermal power project in the first half of the year. The power price is expected to be 1.2 yuan to 1.25 yuan per kilowatt-hour. Besides, the 13th Five-Year Energy Plan under preparation will highlight the solar thermal power generation. The size of projects approved this year is likely to reach 1GW.
Comment: Compared with PV power generation, the solar thermal power generation enjoys continuous heat storage and stable power generation. The introduction of power pricing policies will break the development bottlenecks. Institutional investors are rosy about the surging trend of the solar thermal power as the PV and wind power in their fledging days. Among listed companies, Beijing Shouhang Resources Saving Co., Ltd. (002665.SZ) with core technology in parabolic-trough and power-tower plants intends to participate in the project bidding. Zhejiang Supcon Solar Power Technology Co., Ltd., a subsidiary of Hangzhou Boiler Group Co., Ltd. (002534.SZ), has invested in the establishment of the first commercial solar thermal power plant.
[Announcement Interpretation]
○ Tigermed Consulting to acquire Beiyi Renzhi to develop clinical trials
-----
Hangzhou Tigermed Consulting Co., Ltd. (300347.SZ) proposes to issue 18.57 million shares at 26.92 yuan per share to raise 500 million yuan, of which 154 million yuan will be used in acquiring 100 percent equities of Beiyi Renzhi (Beijing) Medical Technology Development Co, Ltd. and 346 million yuan for supplementing working capital. Ye Xiaoping and Cao Xiaochun, the actual controllers of the company, will subscribe 250 million yuan in total. The counterparty committed that the net profit of Beiyi Renzhi for 2015 to 2017 will be 11 million yuan, 13.20 million yuan and 15.84 million yuan, respectively.
Comment: Beiyi Renzhi is based on the clinical trials contract research organization (CRO) and particularly focuses on the academic research organization (ARO). It is a leading ARO company in the cardiovascular industry in China. Tigermed Consulting is principally engaged in the clinical trials CRO and one of the few A-share medical consultancy and service enterprises. It acquired 70 percent equities of Frontage, a U.S. CRO company, with 50 million U.S. dollars in July, 2014.
○ Nanyang Technology to issue shares to staff through private placement to expand principal businesses
-----
Zhejiang Nanyang Technology Co., Ltd. (002389.SZ) proposes to issue 129 million shares at 8.82 yuan per share through private placement to raise 1,138 million yuan, which will be invested in the establishment of a “solar energy battery backing basilemma project with annual output of 50,000 tons” and supplementing its working capital. The participants of the placement include Shao Yixing, the chairman and general manager of the company and son of the actual controller Shao Yutian and the first phase of the employee shareholding plan. The construction of the project will last for two years. It is expected to bring another net profit of 80.86 million yuan every year after achieving the designed capacity.
○ Thaihot Group invests RMB4 bln in real estate and acquires shares of Dongxing Securities
-----
Thaihot Group Co., Ltd. (000732.SZ) proposes to issue 289 million shares at 13.83 yuan per share to raise 4 billion yuan for the development of three projects, including the East Area of Thaihot Plaza at the East Second Ring Road in Fuzhou City, Thaihot Xiamen Courtyard and Thaihot Mangrove in Ningde City as well as the repayment of debts and supplementing the working capital. Fujian Thaihot Investment Co., Ltd., the controlling shareholder of the company, proposes to agree on the transfer of 19.66 percent equities to two connected persons, namely Ye Li and Huangmin, both being immediate relatives of the actual controller Huang Qisen. The equities held by Thaihot Investment in the company will be reduced from 78 percent to 58 percent after the transfer.
Comment: During the trading suspension of Thaihot Group, the IPO of Dongxing Securities has passed the examination of the China Securities Regulatory Commission. The value of the 70 million shares of Dongxing Securities held by the company will significantly increase.
○ Sierte Fertilizer Industry to develop agricultural materials e-business through private placement
-----
Anhui Sierte Fertilizer Industry Ltd., Company (002538.SZ) announced that it proposed to issue 75 million shares at no less than 14.51 yuan per share through private placement to raise 1,028 million yuan, of which 822 million yuan will be invested in the new compound fertilizer project with an annual output of 900,000 tones and 202.6 million yuan will be invested in the establishment of the “O2O” agricultural materials e-business platform. The annual net profits of the project and the platform are expected to be 199 million yuan and 47.81 million yuan, respectively. The participants into the private placement shall be determined through bidding after it is approved.
The company released its annual report at the same time. It recorded a net profit of 144 million yuan in 2014, increasing 29 percent with basic earnings per share of 0.49 yuan. The company proposes a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares.
[Companies Hotspot]
○ Diversified development of Hongda High-Tech progresses well
-----
The diversified development of Hongda High-Tech Holding Co., Ltd. (002144.SZ) by consolidating its principal businesses and exploring the medical and financial industries has been progressing smoothly. The ultraphonic thrombolytic instrument of the company is expected to obtain the registration certificate of medical products in May or June. Many in-vitro diagnostic reagents products will obtain the registration certificates in the first half. The company is also vigorously expanding into the mobile medical industry. Following the introduction of the mobile electrocardiogram equipment last year, the company is expected to cooperate with the BAT and other partners in promoting its products to hospitals and community services through the cloud platform and the Internet. The company also acquired micro-loan companies and may conduct the Internet finance after upgraded and combined with its mobile medical platform.
[Financial Reports Express]
○ Meiya Pico and Yahua Industrial Group propose high share conversion and dividend
-----
Xiamen Meiya Pico Information Co., Ltd. (300188.SZ) proposes a cash dividend of 10 percent of its distributable profit in 2014 and a 10-for-10 conversion of capital surplus into shares. Zheng Rong, the actual controller of Sichuan Yahua Industrial Group Co., Ltd. (002497.SZ), proposes a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares in its 2014 distribution plan.
○ Unifull Industrial Fiber, Beijing Jingxi Culture & Tourism expects performance growth
-----
Zhejiang Unifull Industrial Fiber Co., Ltd. (002427.SZ) revised its 2014 performance growth expectation to 437-472 percent from the 375-425 percent as a result of the production capacity releasing as well as the growth of orders and gross profit. Beijing Jingxi Culture & Tourism Co., Ltd. (000802.SZ) expects its 2014 net profit to increase 156 percent year on year mainly attributed to the revenue from Beilv Square and the current revenue from its new subsidiary Beijing Ferris Wheel Culture Communication Co., Ltd.
> Zhejiang two sessions highlight state-owned assets reform with port and transportation as breakthroughs
> Heparin sodium price gradually hikes, long-term mechanism on anti-counterfeit seeds to establish
> Tigermed Consulting to acquire Beiyi Renzhi, Nanyang Technology to issue shares to staff through private placement
> Thaihot Group invests RMB4 bln in real estate, Sierte Fertilizer Industry to develop agricultural materials e-business
[XFA Focus]
○ Zhejiang two sessions highlight state-owned assets reform with port and transportation as breakthroughs
-----
Li Qiang, governor of Zhejiang Province, disclosed at the Zhejiang Provincial People’s Congress convened on Jan. 21 that the province will actively promote the state-owned assets and enterprises reforms this year with the port, transportation and other investment operation platforms as breakthroughs in facilitating the consolidation and reorganization of state-owned assets and enterprises.
Comment: Reform will improve the internal operation efficiency of state-owned enterprises and further facilitate the expansion development. The two sessions of various provinces and municipalities this year give priorities to the state-owned assets reform. Many A-share state-owned companies have attracted social capitals or achieved operation transformation. Shenzhen Tagen Group Co., Ltd. (000090.SZ) has been injected by HEAVEN-SENT Capital Management Group Co., Ltd. Guangzhou Friendship Group Co., Ltd. (000987.SZ) is controlled by a local financial company. Guizhou Chitianhua Co., Ltd. (600227.SH) has been invested by Xu Xiang, General Manager of Shanghai Zexi Investment Management. *Lanzhou Sanmao Industrial Co., Ltd. (000779.SZ) has been transferred to be under a provincial state-owned assets management platform. The stock prices of the above companies significantly hiked after resuming trading. In terms state-owned enterprises in Zhejiang Province, Zhejiang Material Industrial Zhongda Yuantong Group Co., Ltd. (600704.SH) has suspended trading for major assets consolidation. Zhejiang Provincial Energy Group Company Ltd. has committed to inject its costal cargo assets into Ningbo Marine Company Limited (600798.SH). Ningbo Port Company Limited (601018.SH) is expected to become a fortress in the rail-sea intermodal transport under the “One Belt and One Road” program.
[XFA Selection]
○ The central bank indicated that it continued and newly added 319.5 billion yuan in total under the medium-term lending facility to meet a seasonal pickup in demand for cash before the Lunar New Year holidays.
○ The State Council issued the task breakdown on promoting the reform and development of the tourism industry. Various supporting policies will be introduced in the first half.
○ The national insurance regulatory work conference will be convened next Monday (Jan. 26). The second-generation solvency regulatory system for the industrial development is likely to be released soon.
○ Shenwan Hongyuan Group Co., Ltd. (000166.SZ) will be listed on Jan. 26. Insiders believe that the securities market will see more mergers in the future.
○ The bird flu outbreak in Taiwan reached the most serious level with the rapidest spreading speed and largest scale in a decade.
[Industry Information]
○ Heparin sodium price gradually hikes, profits of relevant companies likely to improve
-----
The heparin sodium market continued to recover since the beginning of this year. The price of heparin sodium has increased to 11,000 yuan per million units in Jan. from the 9,500 yuan per million units in last Dec, increasing 15 percent. Compared with the lowest level of 6,000 yuan per million units in mid-2014, it has rebounded by 80 percent.
Comment: The heparin sodium market has been sluggish for five years. Research institutes believe that the market will not worsen and the price recovery will promote relevant listed companies improving their profits. Shenzhen Hepalink Pharmaceutical Co., Ltd. (002399.SZ) acquired the U.S. SPL Company last year and became the biggest heparin materials supplier in the world. It has 4.6 billion yuan cash in hand and is motivated in merger and acquisition. The sale of heparin products contributed more than 60 percent of the sales revenue of Changzhou Qianhong Biopharma Co., Ltd. (002550.SZ). The field inspection on the Enoxaparin Sodium Injection with higher gross profit has been completed. The Low-Molecular-Weight Heparins Calcium Injection of Hebei Changshan Biochemical Pharmaceutical Co., Ltd. (300255.SZ) is expected to maintain higher sales growth in the future. The original dalteparin product is also likely to see sales growth.
○ Ministry of Agriculture to establish long-term mechanism on anti-counterfeit seeds, leading enterprises to benefit
-----
Yu Xinrong, vice minister of agriculture, indicated at a video conference on special campaigns against seeds variety right infringement and counterfeit seeds convened on Jan. 21 that it will continue the special campaigns against counterfeit seeds. It will highlight the innovation in regulation mechanism and establish a long-term mechanism. It will also expand the coverage of traceable pilots on seeds quality, facilitate the application of e-business platform and encourage enterprises conducting entrusted operation.
Comment: Research institutes believe that the seed industry in China is experiencing industrial and enterprises transformation as well as a booming industrial prospect. It is likely that winners will dominate the industry. The campaign against infringement and counterfeit seeds will facilitate leading enterprises in expanding their sales. Among listed companies, Shandong Denghai Seeds Co., Ltd. (002041.SZ), a leader in corn seeds, may double the coverage of its major seeds. Based on the central enterprise China National Agricultural Development Group Co., Ltd., Zhongnongfa Seed Industry Group Co., Ltd. (600313.SH) has become the biggest producer of wheat seeds in China through extensive mergers. Yuan Longping High-tech Agriculture Co., Ltd. (000998.SZ) actively implements the strategy of building “a versatile seeds enterprise” and advances into the vegetable seeds industry through acquiring a leading cucumber seeds enterprise.
○ Solar thermal power price to release in H1 with huge potentials as PV power
-----
XFA learnt that the National Development and Reform Commission may introduce the plan on the pricing of the first solar thermal power project in the first half of the year. The power price is expected to be 1.2 yuan to 1.25 yuan per kilowatt-hour. Besides, the 13th Five-Year Energy Plan under preparation will highlight the solar thermal power generation. The size of projects approved this year is likely to reach 1GW.
Comment: Compared with PV power generation, the solar thermal power generation enjoys continuous heat storage and stable power generation. The introduction of power pricing policies will break the development bottlenecks. Institutional investors are rosy about the surging trend of the solar thermal power as the PV and wind power in their fledging days. Among listed companies, Beijing Shouhang Resources Saving Co., Ltd. (002665.SZ) with core technology in parabolic-trough and power-tower plants intends to participate in the project bidding. Zhejiang Supcon Solar Power Technology Co., Ltd., a subsidiary of Hangzhou Boiler Group Co., Ltd. (002534.SZ), has invested in the establishment of the first commercial solar thermal power plant.
[Announcement Interpretation]
○ Tigermed Consulting to acquire Beiyi Renzhi to develop clinical trials
-----
Hangzhou Tigermed Consulting Co., Ltd. (300347.SZ) proposes to issue 18.57 million shares at 26.92 yuan per share to raise 500 million yuan, of which 154 million yuan will be used in acquiring 100 percent equities of Beiyi Renzhi (Beijing) Medical Technology Development Co, Ltd. and 346 million yuan for supplementing working capital. Ye Xiaoping and Cao Xiaochun, the actual controllers of the company, will subscribe 250 million yuan in total. The counterparty committed that the net profit of Beiyi Renzhi for 2015 to 2017 will be 11 million yuan, 13.20 million yuan and 15.84 million yuan, respectively.
Comment: Beiyi Renzhi is based on the clinical trials contract research organization (CRO) and particularly focuses on the academic research organization (ARO). It is a leading ARO company in the cardiovascular industry in China. Tigermed Consulting is principally engaged in the clinical trials CRO and one of the few A-share medical consultancy and service enterprises. It acquired 70 percent equities of Frontage, a U.S. CRO company, with 50 million U.S. dollars in July, 2014.
○ Nanyang Technology to issue shares to staff through private placement to expand principal businesses
-----
Zhejiang Nanyang Technology Co., Ltd. (002389.SZ) proposes to issue 129 million shares at 8.82 yuan per share through private placement to raise 1,138 million yuan, which will be invested in the establishment of a “solar energy battery backing basilemma project with annual output of 50,000 tons” and supplementing its working capital. The participants of the placement include Shao Yixing, the chairman and general manager of the company and son of the actual controller Shao Yutian and the first phase of the employee shareholding plan. The construction of the project will last for two years. It is expected to bring another net profit of 80.86 million yuan every year after achieving the designed capacity.
○ Thaihot Group invests RMB4 bln in real estate and acquires shares of Dongxing Securities
-----
Thaihot Group Co., Ltd. (000732.SZ) proposes to issue 289 million shares at 13.83 yuan per share to raise 4 billion yuan for the development of three projects, including the East Area of Thaihot Plaza at the East Second Ring Road in Fuzhou City, Thaihot Xiamen Courtyard and Thaihot Mangrove in Ningde City as well as the repayment of debts and supplementing the working capital. Fujian Thaihot Investment Co., Ltd., the controlling shareholder of the company, proposes to agree on the transfer of 19.66 percent equities to two connected persons, namely Ye Li and Huangmin, both being immediate relatives of the actual controller Huang Qisen. The equities held by Thaihot Investment in the company will be reduced from 78 percent to 58 percent after the transfer.
Comment: During the trading suspension of Thaihot Group, the IPO of Dongxing Securities has passed the examination of the China Securities Regulatory Commission. The value of the 70 million shares of Dongxing Securities held by the company will significantly increase.
○ Sierte Fertilizer Industry to develop agricultural materials e-business through private placement
-----
Anhui Sierte Fertilizer Industry Ltd., Company (002538.SZ) announced that it proposed to issue 75 million shares at no less than 14.51 yuan per share through private placement to raise 1,028 million yuan, of which 822 million yuan will be invested in the new compound fertilizer project with an annual output of 900,000 tones and 202.6 million yuan will be invested in the establishment of the “O2O” agricultural materials e-business platform. The annual net profits of the project and the platform are expected to be 199 million yuan and 47.81 million yuan, respectively. The participants into the private placement shall be determined through bidding after it is approved.
The company released its annual report at the same time. It recorded a net profit of 144 million yuan in 2014, increasing 29 percent with basic earnings per share of 0.49 yuan. The company proposes a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares.
[Companies Hotspot]
○ Diversified development of Hongda High-Tech progresses well
-----
The diversified development of Hongda High-Tech Holding Co., Ltd. (002144.SZ) by consolidating its principal businesses and exploring the medical and financial industries has been progressing smoothly. The ultraphonic thrombolytic instrument of the company is expected to obtain the registration certificate of medical products in May or June. Many in-vitro diagnostic reagents products will obtain the registration certificates in the first half. The company is also vigorously expanding into the mobile medical industry. Following the introduction of the mobile electrocardiogram equipment last year, the company is expected to cooperate with the BAT and other partners in promoting its products to hospitals and community services through the cloud platform and the Internet. The company also acquired micro-loan companies and may conduct the Internet finance after upgraded and combined with its mobile medical platform.
[Financial Reports Express]
○ Meiya Pico and Yahua Industrial Group propose high share conversion and dividend
-----
Xiamen Meiya Pico Information Co., Ltd. (300188.SZ) proposes a cash dividend of 10 percent of its distributable profit in 2014 and a 10-for-10 conversion of capital surplus into shares. Zheng Rong, the actual controller of Sichuan Yahua Industrial Group Co., Ltd. (002497.SZ), proposes a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares in its 2014 distribution plan.
○ Unifull Industrial Fiber, Beijing Jingxi Culture & Tourism expects performance growth
-----
Zhejiang Unifull Industrial Fiber Co., Ltd. (002427.SZ) revised its 2014 performance growth expectation to 437-472 percent from the 375-425 percent as a result of the production capacity releasing as well as the growth of orders and gross profit. Beijing Jingxi Culture & Tourism Co., Ltd. (000802.SZ) expects its 2014 net profit to increase 156 percent year on year mainly attributed to the revenue from Beilv Square and the current revenue from its new subsidiary Beijing Ferris Wheel Culture Communication Co., Ltd.
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