[Today’s Guide]
> NEEQ to lower threshold below RMB1 mln, more parties to benefit from active trading
>“One Belt and One Road” planning report to release, telecommunication equipment may become new highlight
> DZH to acquire Xiangcai Securities and transform into Internet financial services provider
> Maxonic Automation Control fully controls Action Electronics to develop gas detection
[XFA Focus]
○ NEEQ to lower threshold below RMB1 mln, more parties to benefit from active trading
-----
The National Equities Exchange and Quotations (NEEQ), commonly known as the New Three Board and similar to OTCBB in the U.S. market, will introduce a series of reform measures in 2015. The market index will be released in Feb. It also proposes to study the interior hierarchy of the market and set the trading patterns, information disclosure and appropriate thresholds for investors based on different hierarchies. According to the current work ideas, the appropriate thresholds for investors on the NEEQ will be lowered to below 1 million yuan.
Comment: The current investment threshold of 5 million yuan on the NEEQ is relatively high, resulting in relatively few participants and inactive trading. With the lowering of the threshold and the introduction of various reform measures in the future, enterprises will be more enthusiastic about listing on the NEEQ. New and high-tech parks enjoy preferential policies, ancillary services, aggregation effect as well as other advantages in connecting the NEEQ. They will increase the revenue through buying equities of enterprises in the park and providing financing and law services, and will obviously benefit from the development of the NEEQ. According to the statistics of securities companies, Beijing Centergate Technologies (Holding) Co., Ltd. (000931.SZ), Shanghai Zhangjiang Hi-tech Park Development Co., Ltd. (600895.SH), Wuhan East Lake High Technology Group Co., Ltd. (600133.SH) and Suzhou New District Hi-Tech Industrial Co., Ltd. (600736.SH) respectively have 300, 68, 59 and 11 enterprises listed on the NEEQ.
[XFA Selection]
○ Premier Li Keqiang indicated that China will facilitate the development of the inclusive finance and gradually lower the leverage ratio of enterprises through the development of the capital market and direct financing.
○ The State Council issued the “Certain Opinions on the Establishment of the Governor Responsibility System on Sound Food Security”, requiring to further deepen the reform of state-owned food enterprises.
○ The State Administration of Foreign Exchange will highlight the capital account convertibility and increasingly facilitate the convenience of investment and trade in 2015.
○ The profits of state-owned enterprises in 2014 increased 3.4 percent year on year. The automobile, medical and trade industries recorded positive profit growth.
○ WeChat will test commercial advertising on the Moments from Jan. 22, which will greatly evoke the awareness of entrepreneurs on “digital marketing”.
[Industry Information]
○ “One Belt and One Road” planning report to release, telecommunication equipment may become new highlight
-----
XFA learnt from authorities participated in the preparation of the “One Belt and One Road” planning report that the report has been approved for finalization. As nearly 60 countries participated in the program, the report will be translated into various languages and will be released soon. In addition, China’s Premier Li Keqiang indicated at the World Economic Forum in Davos, Switzerland that China will make innovations in foreign investments and promote the high-speed rail, nuclear power, airline, telecommunication and other advantageous industries to go out. China Securities Index Co., Ltd. announced that it will release the “One Belt and One Road” themed index from Feb. 16.
Comment: The “One Belt and One Road” initiatives have drawn the attention of international communities and brought investment hotspots in the capital market. The telecommunication equipment industry has been deemed as another industry with world leading technology in the “One Belt and One Road” strategy. Among A-share companies, ZTE Corporation (00763.HK; 000063.SZ) and Fiberhome Telecommunication Technologies Co., Ltd. (600498.SH) enjoy global competitiveness in major communication equipment. Accelink Technologies Co., Ltd. (002281.SZ) and Huagong Tech Company Limited (000988.SZ) have made breakthroughs in optical communication devices.
○ Rare earth work conference to convene, various good news to promote industry boom
-----
According to the notice of the Ministry of Industry and Information Technology (MIIT) on Jan. 22, it is determined to convene the work conference of key rare earth provinces and enterprises on Jan. 28 to follow the spirit of the State Council on the sustainable and healthy development of the rare earth industry. It is also learnt that the rare earth market did not slowdown in its slack season. The prices rebounded this week with the maximum growth of nearly 8 percent. The inventory of the overall market is relatively low.
Comment: The plan on the consolidation of six major rare earth groups has been filed at the MIIT. Together with the unprecedented crackdown in the rare earth industry, the Ministry of Commerce determined to cancel the tariffs on rare earth exports. The move shows that China attaches great importance on the value of rare earth and will boost the recovery and rapid development of the rare earth market fallen to the bottom. Among listed companies, Shenghe Resources Holding Co., Ltd. (600392.SH), principally engaged in the rare earth metallurgy, is vigorously participating into the integration of rare earth resources in Sichuan Province. China Northern Rare Earth (Group) High-tech Co., Ltd. (600111.SH) is a leader in the light rare earth industry. Rising Nonferrous Metals Share Co., Ltd. (600259.SH) has a relatively high heavy rare earth reserve.
[Announcement Interpretation]
○ DZH to acquire Xiangcai Securities and transform into Internet financial services provider
-----
Shanghai DZH Limited (601519.SH) proposes to acquire 96.5 percent shares of Xiangcai Securities by issuing 1,356 million shares to 16 companies including Xinhu Zhongbao Co., Ltd. (600208.SH), Hunan Huasheng Co., Ltd. (600156.SH) and Kingray New Materials Science & Technology Co., Ltd. (600390.SH) and other shareholders at 6.05 yuan per share. Shanghai DZH Financial Data Technology Co., Ltd., a wholly-owned subsidiary of DZH, proposes to buy 3.5 percent shares of Xiangcai Securities held by Xinhu Holdings Co., Ltd. with 298 million yuan in cash. The 100 percent shares of Xiangcai Securities are priced at 8.5 billion in total. DZH proposes to issue 495 million shares at 5.45 yuan per share through private placement to raise a supporting fund of 2.7 billion yuan for increasing the capital base and supplementing working capital of Xiangcai Securities. Xiangcai Securities recorded business revenue of 900 million yuan with a net profit of 297 million yuan in the first three quarters of 2014.
DZH will transform into an Internet financial services provider offering Internet financial information, data analysis and professional financial services to investors after the transaction. Zhang Changhong, his sister Zhang Ting and his brother Zhang Zhihong will totally hold 33 percent shares of the company and Xinhu Holdings and Xinhu Zhongbao will hold 26 percent shares of the company together.
Comment: The effect of the transaction on the current net profit of Kingray New Materials Science & Technology is expected to be 4.31 million yuan. Its effects on Huasheng and Xinhu Zhongbao are expected to be about 146 million yuan and 888 million yuan, respectively. Besides, GreatWall Information Industry Co., Ltd. (000748.SZ) also holds 3.3 million shares of Xiangcai Securities.
○ Substantial shareholder of High Hope Corporation wholly listed, Jiangsu SOEs reform warms up
------
Jiangsu High Hope Corporation (600981.SH) plans to issue 1,884 million shares at 4.11 yuan per share to Jiangsu Suhui Asset Management Co., Ltd. for merging its controlling shareholder Jiangsu High Hope International Group by consolidation. The predicted value of High Hope International Group is 7,740 million yuan. Since the equities held by High Hope International Group in the listed company will be cancelled accordingly after the consolidation is completed, 1,609 million shares will be newly added to the market. At the meantime, High Hope Corporation will issue shares at the same offering price to its strategic investors like Bosera Asset Management Co., Ltd., Shanghai Guoyao Shengli Equity Investment Fund Limited Partnership, etc. to raise 2 billion yuan.
After the transaction, the asset size of High Hope Corporation will be expanded to 33.5 billion yuan, representing a 5-times increase. The State-owned Assets Supervision and Administration Commission (SASAC) of Jiangsu Province will remain its actual controller. High Hope Corporation indicated that main businesses of High Hope International Group, namely commerce, real estate, investment, etc., will be listed in a whole thereafter.
Comment: Jiangsu state-owned assets reform will model the overall listing of High Hope International Group. Detailed rules of Jiangsu state-owned assets reform were launched last August, requiring reorganization of functional provincial SOEs and market-based circulation of state-owned equities of competitive enterprises. Relevant listed companies include XCMG Construction Machinery Co., Ltd. (000425.SZ), Jiangsu Phoenix Property Investment Company Limited (600716.SH), Jiangsu Sainty Corp., Ltd. (600287.SH), etc.
○ Maxonic Automation Control fully controls Action Electronics to develop gas detection
------
Shenzhen Maxonic Automation Control Co., Ltd. (300112.SZ) plans to purchase 100 percent equities of Chengdu Action Electronics Joint-stock Co., Ltd. in cash and by issuing shares. The transaction costs 223 million yuan with 72 million yuan paid in cash and the rest paid by issuing 15.10 million shares at 10.01 yuan per share. At the meantime, the company plans to raise a supporting fund of 55.79 million yuan from its senior management at the same offering price. The counterparty committed that the net profit of Action Electronics from 2014 to 2017 will be no less than 18 million, 21.60 million, 25.92 million and 31.10 million yuan, respectively.
Action Electronics, mainly producing gas detection instruments including gas alarm controller, gas detector, etc., can diversify the current product structure of Maxonic Automation Control and accords with its strategic goal of turning into a leading domestic industrial automation instruments enterprise.
○ Dayu Water-Saving Group and Batian Ecotypic Engineering develop ecological agriculture, land transfer fevers again
------
Gansu Dayu Water-Saving Group Co., Ltd. (300021.SZ) plans to invest 20 million yuan in establishing Black Matrimony Vine Agricultural Technology Company to serve the special demonstration agriculture and efficient ecological agriculture of Gansu Province. This move is of great strategic significance to the company’s deeper exploration in land contracting and transferring operation in the future.
Shenzhen Batian Ecotypic Engineering Co., Ltd. (002170.SZ) has inked a strategic cooperation agreement with Nanning Zhenqi Agricultural Technology Development Co., Ltd. to jointly build a pitaya informatization, Internet of Things and data platform. Under Guangxi Zhuang Autonomous Region’s planning of planting pitaya by millions of mu, both parties will jointly construct the demonstration base through land transfer.
Comment: The suggestions on guiding the healthy development of rural property right transfer market, printed and distributed by the General Office of the State Council, explicitly regulate that the transaction covers eight categories, including, operation rights of land contracted by farmers, forest right, the right of using “barren mountain, barren slope, barren hillock and barren beach”, rural collective operational assets, agricultural production equipment, the right of using small-scale water conservancy facilities, agricultural intellectual property rights. Stocks related to land transfer may stage a comeback, and relevant listed companies include Anhui Huilong Agricultural Means Of Production CO., Ltd. (002556.SZ), China Hainan Rubber Industry Group Co., Ltd. (601118.SH), Gansu Yasheng Industrial (Group) Co., Ltd. (600108.SH), Xinjiang Talimu Agriculture Development Co., Ltd. (600359.SH), Grand Agriseeds Technology, Inc. (300189.SZ), etc.
[Financial Reports Express]
○ Hareon Solar Technology, Yonggui Electric Equipment and Dirui Industrial propose high share conversion and dividend
------
The three largest shareholders of Hareon Solar Technology Co., Ltd. (600401.SH) propose a 20-for-10 conversion of capital surplus into shares in its annual report. Thanks to the rapid income growth of connectors, Zhejiang Yonggui Electric Equipment Co., Ltd. (300351.SZ) expects its net profit in 2014 to see a year-on-year growth of 60 to 80 percent and proposes a 12-for-10 conversion of capital surplus into shares combined with 2.5 yuan dividend for every 10 shares in its annual report. Dirui Industrial Co., Ltd. (300396.SZ) proposes a 15-for-10 conversion of capital surplus into shares combined with 5 yuan dividend for every 10 shares in its annual report.
○ Haitong Securities and Sealand Securities expect large net profit growth in 2014
------
The net profit of Haitong Securities Company Limited (600837.SH; 06837.HK) sees a year-on-year growth of 89 percent in 2014, while Sealand Securities Co., Ltd. (000750.SZ) expects its net profit in 2014 to grow by 123 percent year on year. Both securities companies attribute their performance growth to the vitality in securities market, and the income growth of securities brokerage business, credit transaction business and self-operated business. Besides, the profit of investment bank and assets management business of Haitong Securities grows largely in 2014. By purchasing Hengxin Financial Group, the company largely increased its overseas asset scale and income.
○ Net profit of Jointo Energy and V V Food & Beverage to multiply
------
Thanks to the completion of major assets reorganization, decreased fuel cost and increased generating capacity, Hebei Jointo Energy Investment Co., Ltd. (000600.SZ) expects its net profit in 2014 to see a year-on-year growth of 178 percent with earnings per share at 1.25 yuan. The large growth in the net profit of trading financial assets, commercial operation as well as food & beverage operation of V V Food & Beverage Co., Ltd. (600300.SH) contributes to its year-on-year growth of 150 percent in 2014.
[Trading Trends]
○ Reverse repurchase re-launched one year later, central bank releases easing signal
------
The central bank re-launched the 7-day reverse repurchase with a scale of 50 billion yuan and the bid-winning interest rate at 3.85 percent after one year on Jan. 22.
Comment: Insiders believe that it is a usual practice for the central bank to inject liquidity before the Spring Festival. Especially under the current background that the counterpart of foreign exchange reserves maintains a periodical low level and fundamentals of the economy go downward, the re-implementation of the reverse repurchase of the central bank not only supplements basic currency, the more important thing is that the decreased reverse repurchase interest rate releases price signal, and more easing polices can be expected.
> NEEQ to lower threshold below RMB1 mln, more parties to benefit from active trading
>“One Belt and One Road” planning report to release, telecommunication equipment may become new highlight
> DZH to acquire Xiangcai Securities and transform into Internet financial services provider
> Maxonic Automation Control fully controls Action Electronics to develop gas detection
[XFA Focus]
○ NEEQ to lower threshold below RMB1 mln, more parties to benefit from active trading
-----
The National Equities Exchange and Quotations (NEEQ), commonly known as the New Three Board and similar to OTCBB in the U.S. market, will introduce a series of reform measures in 2015. The market index will be released in Feb. It also proposes to study the interior hierarchy of the market and set the trading patterns, information disclosure and appropriate thresholds for investors based on different hierarchies. According to the current work ideas, the appropriate thresholds for investors on the NEEQ will be lowered to below 1 million yuan.
Comment: The current investment threshold of 5 million yuan on the NEEQ is relatively high, resulting in relatively few participants and inactive trading. With the lowering of the threshold and the introduction of various reform measures in the future, enterprises will be more enthusiastic about listing on the NEEQ. New and high-tech parks enjoy preferential policies, ancillary services, aggregation effect as well as other advantages in connecting the NEEQ. They will increase the revenue through buying equities of enterprises in the park and providing financing and law services, and will obviously benefit from the development of the NEEQ. According to the statistics of securities companies, Beijing Centergate Technologies (Holding) Co., Ltd. (000931.SZ), Shanghai Zhangjiang Hi-tech Park Development Co., Ltd. (600895.SH), Wuhan East Lake High Technology Group Co., Ltd. (600133.SH) and Suzhou New District Hi-Tech Industrial Co., Ltd. (600736.SH) respectively have 300, 68, 59 and 11 enterprises listed on the NEEQ.
[XFA Selection]
○ Premier Li Keqiang indicated that China will facilitate the development of the inclusive finance and gradually lower the leverage ratio of enterprises through the development of the capital market and direct financing.
○ The State Council issued the “Certain Opinions on the Establishment of the Governor Responsibility System on Sound Food Security”, requiring to further deepen the reform of state-owned food enterprises.
○ The State Administration of Foreign Exchange will highlight the capital account convertibility and increasingly facilitate the convenience of investment and trade in 2015.
○ The profits of state-owned enterprises in 2014 increased 3.4 percent year on year. The automobile, medical and trade industries recorded positive profit growth.
○ WeChat will test commercial advertising on the Moments from Jan. 22, which will greatly evoke the awareness of entrepreneurs on “digital marketing”.
[Industry Information]
○ “One Belt and One Road” planning report to release, telecommunication equipment may become new highlight
-----
XFA learnt from authorities participated in the preparation of the “One Belt and One Road” planning report that the report has been approved for finalization. As nearly 60 countries participated in the program, the report will be translated into various languages and will be released soon. In addition, China’s Premier Li Keqiang indicated at the World Economic Forum in Davos, Switzerland that China will make innovations in foreign investments and promote the high-speed rail, nuclear power, airline, telecommunication and other advantageous industries to go out. China Securities Index Co., Ltd. announced that it will release the “One Belt and One Road” themed index from Feb. 16.
Comment: The “One Belt and One Road” initiatives have drawn the attention of international communities and brought investment hotspots in the capital market. The telecommunication equipment industry has been deemed as another industry with world leading technology in the “One Belt and One Road” strategy. Among A-share companies, ZTE Corporation (00763.HK; 000063.SZ) and Fiberhome Telecommunication Technologies Co., Ltd. (600498.SH) enjoy global competitiveness in major communication equipment. Accelink Technologies Co., Ltd. (002281.SZ) and Huagong Tech Company Limited (000988.SZ) have made breakthroughs in optical communication devices.
○ Rare earth work conference to convene, various good news to promote industry boom
-----
According to the notice of the Ministry of Industry and Information Technology (MIIT) on Jan. 22, it is determined to convene the work conference of key rare earth provinces and enterprises on Jan. 28 to follow the spirit of the State Council on the sustainable and healthy development of the rare earth industry. It is also learnt that the rare earth market did not slowdown in its slack season. The prices rebounded this week with the maximum growth of nearly 8 percent. The inventory of the overall market is relatively low.
Comment: The plan on the consolidation of six major rare earth groups has been filed at the MIIT. Together with the unprecedented crackdown in the rare earth industry, the Ministry of Commerce determined to cancel the tariffs on rare earth exports. The move shows that China attaches great importance on the value of rare earth and will boost the recovery and rapid development of the rare earth market fallen to the bottom. Among listed companies, Shenghe Resources Holding Co., Ltd. (600392.SH), principally engaged in the rare earth metallurgy, is vigorously participating into the integration of rare earth resources in Sichuan Province. China Northern Rare Earth (Group) High-tech Co., Ltd. (600111.SH) is a leader in the light rare earth industry. Rising Nonferrous Metals Share Co., Ltd. (600259.SH) has a relatively high heavy rare earth reserve.
[Announcement Interpretation]
○ DZH to acquire Xiangcai Securities and transform into Internet financial services provider
-----
Shanghai DZH Limited (601519.SH) proposes to acquire 96.5 percent shares of Xiangcai Securities by issuing 1,356 million shares to 16 companies including Xinhu Zhongbao Co., Ltd. (600208.SH), Hunan Huasheng Co., Ltd. (600156.SH) and Kingray New Materials Science & Technology Co., Ltd. (600390.SH) and other shareholders at 6.05 yuan per share. Shanghai DZH Financial Data Technology Co., Ltd., a wholly-owned subsidiary of DZH, proposes to buy 3.5 percent shares of Xiangcai Securities held by Xinhu Holdings Co., Ltd. with 298 million yuan in cash. The 100 percent shares of Xiangcai Securities are priced at 8.5 billion in total. DZH proposes to issue 495 million shares at 5.45 yuan per share through private placement to raise a supporting fund of 2.7 billion yuan for increasing the capital base and supplementing working capital of Xiangcai Securities. Xiangcai Securities recorded business revenue of 900 million yuan with a net profit of 297 million yuan in the first three quarters of 2014.
DZH will transform into an Internet financial services provider offering Internet financial information, data analysis and professional financial services to investors after the transaction. Zhang Changhong, his sister Zhang Ting and his brother Zhang Zhihong will totally hold 33 percent shares of the company and Xinhu Holdings and Xinhu Zhongbao will hold 26 percent shares of the company together.
Comment: The effect of the transaction on the current net profit of Kingray New Materials Science & Technology is expected to be 4.31 million yuan. Its effects on Huasheng and Xinhu Zhongbao are expected to be about 146 million yuan and 888 million yuan, respectively. Besides, GreatWall Information Industry Co., Ltd. (000748.SZ) also holds 3.3 million shares of Xiangcai Securities.
○ Substantial shareholder of High Hope Corporation wholly listed, Jiangsu SOEs reform warms up
------
Jiangsu High Hope Corporation (600981.SH) plans to issue 1,884 million shares at 4.11 yuan per share to Jiangsu Suhui Asset Management Co., Ltd. for merging its controlling shareholder Jiangsu High Hope International Group by consolidation. The predicted value of High Hope International Group is 7,740 million yuan. Since the equities held by High Hope International Group in the listed company will be cancelled accordingly after the consolidation is completed, 1,609 million shares will be newly added to the market. At the meantime, High Hope Corporation will issue shares at the same offering price to its strategic investors like Bosera Asset Management Co., Ltd., Shanghai Guoyao Shengli Equity Investment Fund Limited Partnership, etc. to raise 2 billion yuan.
After the transaction, the asset size of High Hope Corporation will be expanded to 33.5 billion yuan, representing a 5-times increase. The State-owned Assets Supervision and Administration Commission (SASAC) of Jiangsu Province will remain its actual controller. High Hope Corporation indicated that main businesses of High Hope International Group, namely commerce, real estate, investment, etc., will be listed in a whole thereafter.
Comment: Jiangsu state-owned assets reform will model the overall listing of High Hope International Group. Detailed rules of Jiangsu state-owned assets reform were launched last August, requiring reorganization of functional provincial SOEs and market-based circulation of state-owned equities of competitive enterprises. Relevant listed companies include XCMG Construction Machinery Co., Ltd. (000425.SZ), Jiangsu Phoenix Property Investment Company Limited (600716.SH), Jiangsu Sainty Corp., Ltd. (600287.SH), etc.
○ Maxonic Automation Control fully controls Action Electronics to develop gas detection
------
Shenzhen Maxonic Automation Control Co., Ltd. (300112.SZ) plans to purchase 100 percent equities of Chengdu Action Electronics Joint-stock Co., Ltd. in cash and by issuing shares. The transaction costs 223 million yuan with 72 million yuan paid in cash and the rest paid by issuing 15.10 million shares at 10.01 yuan per share. At the meantime, the company plans to raise a supporting fund of 55.79 million yuan from its senior management at the same offering price. The counterparty committed that the net profit of Action Electronics from 2014 to 2017 will be no less than 18 million, 21.60 million, 25.92 million and 31.10 million yuan, respectively.
Action Electronics, mainly producing gas detection instruments including gas alarm controller, gas detector, etc., can diversify the current product structure of Maxonic Automation Control and accords with its strategic goal of turning into a leading domestic industrial automation instruments enterprise.
○ Dayu Water-Saving Group and Batian Ecotypic Engineering develop ecological agriculture, land transfer fevers again
------
Gansu Dayu Water-Saving Group Co., Ltd. (300021.SZ) plans to invest 20 million yuan in establishing Black Matrimony Vine Agricultural Technology Company to serve the special demonstration agriculture and efficient ecological agriculture of Gansu Province. This move is of great strategic significance to the company’s deeper exploration in land contracting and transferring operation in the future.
Shenzhen Batian Ecotypic Engineering Co., Ltd. (002170.SZ) has inked a strategic cooperation agreement with Nanning Zhenqi Agricultural Technology Development Co., Ltd. to jointly build a pitaya informatization, Internet of Things and data platform. Under Guangxi Zhuang Autonomous Region’s planning of planting pitaya by millions of mu, both parties will jointly construct the demonstration base through land transfer.
Comment: The suggestions on guiding the healthy development of rural property right transfer market, printed and distributed by the General Office of the State Council, explicitly regulate that the transaction covers eight categories, including, operation rights of land contracted by farmers, forest right, the right of using “barren mountain, barren slope, barren hillock and barren beach”, rural collective operational assets, agricultural production equipment, the right of using small-scale water conservancy facilities, agricultural intellectual property rights. Stocks related to land transfer may stage a comeback, and relevant listed companies include Anhui Huilong Agricultural Means Of Production CO., Ltd. (002556.SZ), China Hainan Rubber Industry Group Co., Ltd. (601118.SH), Gansu Yasheng Industrial (Group) Co., Ltd. (600108.SH), Xinjiang Talimu Agriculture Development Co., Ltd. (600359.SH), Grand Agriseeds Technology, Inc. (300189.SZ), etc.
[Financial Reports Express]
○ Hareon Solar Technology, Yonggui Electric Equipment and Dirui Industrial propose high share conversion and dividend
------
The three largest shareholders of Hareon Solar Technology Co., Ltd. (600401.SH) propose a 20-for-10 conversion of capital surplus into shares in its annual report. Thanks to the rapid income growth of connectors, Zhejiang Yonggui Electric Equipment Co., Ltd. (300351.SZ) expects its net profit in 2014 to see a year-on-year growth of 60 to 80 percent and proposes a 12-for-10 conversion of capital surplus into shares combined with 2.5 yuan dividend for every 10 shares in its annual report. Dirui Industrial Co., Ltd. (300396.SZ) proposes a 15-for-10 conversion of capital surplus into shares combined with 5 yuan dividend for every 10 shares in its annual report.
○ Haitong Securities and Sealand Securities expect large net profit growth in 2014
------
The net profit of Haitong Securities Company Limited (600837.SH; 06837.HK) sees a year-on-year growth of 89 percent in 2014, while Sealand Securities Co., Ltd. (000750.SZ) expects its net profit in 2014 to grow by 123 percent year on year. Both securities companies attribute their performance growth to the vitality in securities market, and the income growth of securities brokerage business, credit transaction business and self-operated business. Besides, the profit of investment bank and assets management business of Haitong Securities grows largely in 2014. By purchasing Hengxin Financial Group, the company largely increased its overseas asset scale and income.
○ Net profit of Jointo Energy and V V Food & Beverage to multiply
------
Thanks to the completion of major assets reorganization, decreased fuel cost and increased generating capacity, Hebei Jointo Energy Investment Co., Ltd. (000600.SZ) expects its net profit in 2014 to see a year-on-year growth of 178 percent with earnings per share at 1.25 yuan. The large growth in the net profit of trading financial assets, commercial operation as well as food & beverage operation of V V Food & Beverage Co., Ltd. (600300.SH) contributes to its year-on-year growth of 150 percent in 2014.
[Trading Trends]
○ Reverse repurchase re-launched one year later, central bank releases easing signal
------
The central bank re-launched the 7-day reverse repurchase with a scale of 50 billion yuan and the bid-winning interest rate at 3.85 percent after one year on Jan. 22.
Comment: Insiders believe that it is a usual practice for the central bank to inject liquidity before the Spring Festival. Especially under the current background that the counterpart of foreign exchange reserves maintains a periodical low level and fundamentals of the economy go downward, the re-implementation of the reverse repurchase of the central bank not only supplements basic currency, the more important thing is that the decreased reverse repurchase interest rate releases price signal, and more easing polices can be expected.
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