[Today’s Guide]
> No. 1 Central Document issued with agricultural reclamation reform covered for first time.
> Establishment of One Belt and One Road initiates, veterinary drugs concentration expected to improve.
> Huiyuan Optical Communications to develop environmental protection, Huasu Holdings to invest in construction materials
> Dinghan Technology to elbow into rail transportation air-conditioning market, real estate stocks bought through institutional seats
[XFA Focus]
○ No. 1 Central Document issued with agricultural reclamation reform covered for first time
------
Xinhua News Agency broadcasted the full text of the “Certain Opinions on Strengthening Reforms and Innovation to Accelerate Agricultural Modernization”, the No. 1 Central Document of 2015, on Feb. 1. It indicated that China will speed up the preparation of policies on advancing agricultural reclamation reform and deepen the reform of farmland enterprization, conglomeration of reclamation areas and diversification of equities.
Comment: It is the first time that the agricultural reclamation reform has been covered in the No. 1 Central Document, which highlights the importance attached to the agricultural reclamation by the Party Central Committee and the state. Experts believe that state-owned farmlands cover vast areas with a high degree of commodity grain plantation and modernization. It can be developed as the pilot base for agricultural modernization and the “going out” of agriculture through the introduction of industrial and commercial capitals as well as mechanism reforms. Listed companies in the agricultural reclamation industry include Gansu Yasheng Industrial (Group) Co., Ltd. (600108.SH), Heilongjiang Agriculture Company Limited (600598.SH) and China Hainan Rubber Industry Group Co., Ltd. (601118.SH).
◆The Bureau of State Farms and Land Reclamation of the Ministry of Agriculture and Peking University jointly initiated the research on key strategic issues on the reform and development of agricultural reclamation on Jan. 31. It will focus on the reform of reclamation areas and state-owned farms, the transformation of the reclamation economic development mode and the construction of new urbanization in reclamation areas, explore the establishment of international grain dealers and seek specific paths in achieving the great-leap-forward development of agricultural reclamation.
[XFA Selection]
○ The China Securities Regulatory Commission (CSRC) approved the IPO application of 24 enterprises, including Dongxing Securities Co., Ltd. (601198.SH), on Jan. 30, which met the previous market expectation.
○ The manufacturing purchasing managers’ index (PMI) posted at 49.8 percent in Jan., lower than the corresponding period of past years, which is mainly attributed to the continuous decrease of bulk commodities prices.
○ Shanghai and Shenzhen stock exchanges amended the ancillary rules of delisting and the threshold for purchasing stocks on the Shanghai Stock Exchange during the delisting preparation period was set at 500,000 yuan.
○ The China Small Loan Companies Association was established on Jan. 30, which will prepare the unified industrial standards and business rules.
Mao Xiaofeng, President of China Minsheng Banking Corp., Ltd. (01988.HK; 600016.SH), has resigned for personal reasons. The chairman and other senior management of the bank pacified institutional investors on Feb. 1.
[Industry Information]
○ Establishment of “One Belt and One Road” initiates, China-Pakistan economic corridor enjoys priority
------
Chinese Premier Li Keqiang met with Pakistan’s National Assembly Speaker on Jan. 30, pointing out that the development of the China-Pakistan economic corridor had provided a strategic framework for the two countries to carry out practical cooperation. The work conference on the promotion of the establishment of the “One Belt and One Road” was held on Feb. 1 in Beijing, which would plan the key issues and work in the promotion of the establishment of the “One Belt and One Road” in 2015 and the following periods. It is also learnt from the conference recently convened by the Commission of Development and Reform of the Xinjiang Production and Construction Corps (XPCC) that it would facilitate the participation of the XPCC in the development of the China-Pakistan economic corridor.
Comment: It is estimated that China’s export to regions along the One Belt and One Road is expected to rise to one third of its total exports in the following decade and the total investment may reach 1.6 trillion U.S. dollars. The China-Pakistan economic corridor is a key project mostly likely to reap first in Asia. Listed companies in XPCC, including Xinjiang Beixin Road & Bridge Group Co., Ltd. (002307.SZ) and Xinjiang Qingsong Building Materials and Chemicals (Group) Co., Ltd. (600425.SH), are likely to play more important roles.
○ Ministry of Agriculture requires full traceability of veterinary drugs, industry concentration expected to improve
------
The Ministry of Agriculture issued a document on Jan. 30, stipulating that it will implement the electronic tracking and labeling system for veterinary drugs. Veterinary drugs without the unified QR codes will be prohibited from selling in the market from July 1, 2016.
Comment: The veterinary drugs industry enjoys a low industry concentration in China. The top ten enterprises account for only about 15 percent of the market share, far below the 70 percent in developed countries. The Ministry of Agriculture has introduced the GMP verification and strengthened the review of approval documents and other policies in recent years to advocate industry reshuffle in recent years. Among A-share veterinary drugs companies, China Animal Husbandry Industry Co., Ltd. (600195.SH), affiliated to the central enterprise China National Agricultural Development Group Co., Ltd., is a designated production enterprise for bird flu and aphtha vaccines. The H5 bird flu inactivated vaccine of Xinjiang Tecon Animal Husbandry Bio-Technology Co., Ltd. (002100.SZ) is likely to obtain the certificate for new veterinary drugs within one month.
[Announcement Interpretation]
○ Huiyuan Optical Communications to acquire Fengye Technology & Environment at RMB3 bln for back-door listing to develop environmental protection
------
Sichuan Huiyuan Optical Communications Co., Ltd. (000586.SZ) proposes to sell all of its assets and debts at 250 million yuan to the counterparty Xu Defu. At the same time, the company proposes to acquire 100 percent equities of Jiangsu Fengye Technology & Environment Group Corporation Limited at 3 billion yuan by issuing 367 million shares at 8.26 yuan per share. The company also proposes to raise a supporting fund of 700 million yuan at the same price for the production of denitration catalysts, the improvement of desulfurizers and the franchised operation of desulfurizers. The total equity of the company will increase to 646 million shares from 193 million shares after the transaction and the actual controllers of the company will be Xu Defu, Yu Wanqin and Xu Feng.
Fengye Technology & Environment is principally engaged in the manufacturing of and services for desulfurizers and denitration devices. The counterparty committed that its net profit after extraordinary items for 2015 to 2017 shall be no less than 207 million yuan, 261 million yuan and 336 million yuan, respectively.
○ Huasu Holdings to upgrade its construction materials operation with RMB2 bln
------
Huasu Holdings Co., Ltd. (000509.SZ) proposes to raise 2,088 million yuan by issuing 450 million shares at 4.64 yuan per share, of which 1 billion yuan will be used in the establishment of its aluminum profile project, 500 million yuan in the production line of energy-saving glass with low emissivity and 588 million yuan for supplementing working capital. Chengdu Maitian Investment Co., Ltd., the controlling shareholder of the company, Shenzhen Longyuan Weiye Investment Co., Ltd, a company controlled by its actual controller Li Zhong and Guo Hongjie, Chairman of the Board of the company, will subscribe 35 million shares, 90 million shares and 10 million shares in cash, respectively. The aluminum profile and energy-saving glass projects will achieve an annual average sales revenue of 1.9 billion yuan and 630 million yuan after the establishment.
○ Dinghan Technology to elbow into rail transportation air-conditioning market with RMB360 mln
------
Beijing Dinghan Technology Co., Ltd. (300011.SZ) proposes to acquire 100 percent equities of Guangzhou Zhongche Rail Way Vehicles Equipment Joint-stock Co., Ltd. with 360 million yuan. The target company is principally engaged in the production, sale and repairing of the rail transportation air-conditioning system. It is the only large private enterprise with the production qualification for rail transportation air-conditioners in Southern China. Dinghan Technology will break the technology bottleneck and advance into the domestic vehicle air-conditioning market through the acquisition. The net profit of the company in the first quarter is expected to increase by 119-147 percent.
○ Baling Technology to invest RMB600 mln in cultural performance
------
Nanning Baling Technology Co., Ltd. (002592.SZ) proposes to issue 33.8 million shares at 17.47 yuan per share to four natural persons, including the spouse of the actual controller, to raise 591 million yuan. The proceeds will be mainly invested in the “Passing Dinosaurs”, a large science fiction performance and the “Impression: Shajiabang”, a live-action performance.
The annual average net profits of the two projects are expected to be 108 million yuan and 52.55 million yuan after achieving the designed capacity. The company also announced that it terminated the major asset reorganization on the acquiring the operational entity of the “Impression: Liu Sanjie”. The company is principally engaged in auto radiators and fan heaters and recorded a net profit of 90 million yuan in 2013.
○ Railway benchmark freight rate raised, Daqin Railway and other railway transportation stocks to benefit
------
As the National Development and Reform Commission (NDRC) lifted the railway benchmark freight rate, Daqin Railway Co., Ltd. (601006.SH) announced that it will see an increase of 2.41 billion yuan in its business revenue, accounting for 4.7 percent of its total business revenue in 2013.
Comment: The NDRC unified the railway freight rate to 15.51 cents per ton each kilometer from the previous 14.51 cents and allowed a maximum floating range of 10 percent from Feb. 1. The railway freight rate in China has been rising year since 2002 with an increase of 10 percent, 13 percent and 11.53 percent in 2012, 2013 and 2014, respectively. Besides Daqin Railway, other railway transportation stocks include China Railway Tielong Container Logistics Co., Ltd. (600125.SH) and Guangshen Railway Company Limited (00525.HK; 601333.SH).
[Financial Reports Express]
○ Dima Industry and Zhongding Sealing Parts expect high performance growth in annual reports
------
Chongqing Dima Industry Co., Ltd. (600565.SH) expects its 2014 net profit to grow 1,615-1,830 percent year on year. Compared with the beginning of the proposed adjustment period after the reorganization, its net profit will increase 100-125 percent, which is mainly attributed to the significant growth in the sales of real estate in 2014.
Anhui Zhongding Sealing Parts Co., Ltd. (000887.SZ) expects its 2014 net profit to see a year-on-year increase of 40-60 percent. It is mainly attributed to the increase of its principal business, the decrease of prices of raw materials and higher performance brought by overseas mergers and acquisitions.
○ Huadong Heavy Machinery proposes high share conversion and dividend
------
The controlling shareholder of Wuxi Huadong Heavy Machinery Co., Ltd. (002685.SZ) proposes an 18-for-10 conversion of capital surplus into shares combined with 0.25 yuan dividend for every 10 shares according to its 2014 profit distribution plan. The company announced in Dec., 2014 that it would issue shares to its controlling shareholder, Shanghai Zexi Investment Management Co., Ltd. and a fund of GF Securities comprised of some senior management of the company through private placement.
[Trading Trends]
○ Real estate stocks bought through institutional seats
------
The trading volume ranking list on Jan. 30 shows that many real estate stocks surged by the daily limit of 10 percent were favored by institutional seats. Among them, four institutes bought Thaihot Group Co., Ltd. (000732.SZ) at 144 million yuan, accounting for 25 percent of its intraday turnover. Two institutes bought Baoan Hongji Real Estate Group Co., Ltd. (000040.SZ) at 37.95 million yuan, accounting for 31 percent of its intraday turnover. Two institutes bought China Calxon Group Co., Ltd. (000918.SZ) at 26.07 million yuan, accounting for 6.55 percent of its intraday turnover.
Comment: The Shanghai and Shenzhen bourses closed falling last Friday (Jan. 30) while the real estate sector surged against the expectation on interest rate cuts. Institutional investors believe that the monetary policy in 2015 is more likely to further loosen and there are still chances of interest rate and RRR cuts. As a sector with high sensitivity to the interest rate, the real estate industry will be one of those to benefit most from loose liquidity.
[Weekly Review]
○ True events, true performance and true trends
------
The financial news in recent days are quite complicated, covering the fake products sold on Taobao.com, the false news of interest rate cut, the seemingly incomprehensible but terrific anti-corruption campaign in the financial industry and the going out of high-speed rail with detours. The trend of the stock market also shifted quickly. The market dropped for four consecutive days after a five-day hike. Besides the new stocks soared by the daily limit of 10 percent for days, there are nothing new in the weekly growth ranking list, which confused people used to following hotspots.
It shall be admitted that “pigs standing on a wind hole” can fly high, but investments are still determined by the individual performance of specific companies. XFA has offered you various investment thoughts with certain performances on the basis of truth after combining daily news. Before Thaihot Group Co., Ltd. (000732.SZ) resumed trading, we hinted that it holds the stakes of Dongxing Securities and has hidden value. During its trading suspension, the IPO of Dongxing Securities has passed the examination of the CSRC. Thaihot Group has been setting new highs after resuming trading and soared by the daily limit of 10 percent on Friday (Jan. 30) against the market trend.
There are two key words in Jan. of each year, namely the annual reports and the No. 1 Central Document. Despite the complicated market trend this year, XFA has never ignored the two themes. The “Data Speaks” on Jan. 20 analyzed public information and indicated that the 2014 performance of Guangxi Guidong Electric Power Co., Ltd. (600310.SH) and Shanghai Lansheng Corporation (600826.SH) would multiply and their stock prices outperformed the market after that. In terms of the agricultural sector, we focused on price rises of fertilizers, irrigation and water conservancy as well as subsidies on agricultural machinery. No matter what are covered in the No. 1 Central Document, the prosperity of such sectors rose. Shenzhen Batian Ecotypic Engineering Co., Ltd. (002170.SZ), First Tractor Company Limited (00038.HK; 601038.SH) and other relevant companies are recognized by the market. It is learnt that some carbamide enterprises have received orders for mid-Feb. and the trend of price rising is expected to last after the Spring Festival.
> No. 1 Central Document issued with agricultural reclamation reform covered for first time.
> Establishment of One Belt and One Road initiates, veterinary drugs concentration expected to improve.
> Huiyuan Optical Communications to develop environmental protection, Huasu Holdings to invest in construction materials
> Dinghan Technology to elbow into rail transportation air-conditioning market, real estate stocks bought through institutional seats
[XFA Focus]
○ No. 1 Central Document issued with agricultural reclamation reform covered for first time
------
Xinhua News Agency broadcasted the full text of the “Certain Opinions on Strengthening Reforms and Innovation to Accelerate Agricultural Modernization”, the No. 1 Central Document of 2015, on Feb. 1. It indicated that China will speed up the preparation of policies on advancing agricultural reclamation reform and deepen the reform of farmland enterprization, conglomeration of reclamation areas and diversification of equities.
Comment: It is the first time that the agricultural reclamation reform has been covered in the No. 1 Central Document, which highlights the importance attached to the agricultural reclamation by the Party Central Committee and the state. Experts believe that state-owned farmlands cover vast areas with a high degree of commodity grain plantation and modernization. It can be developed as the pilot base for agricultural modernization and the “going out” of agriculture through the introduction of industrial and commercial capitals as well as mechanism reforms. Listed companies in the agricultural reclamation industry include Gansu Yasheng Industrial (Group) Co., Ltd. (600108.SH), Heilongjiang Agriculture Company Limited (600598.SH) and China Hainan Rubber Industry Group Co., Ltd. (601118.SH).
◆The Bureau of State Farms and Land Reclamation of the Ministry of Agriculture and Peking University jointly initiated the research on key strategic issues on the reform and development of agricultural reclamation on Jan. 31. It will focus on the reform of reclamation areas and state-owned farms, the transformation of the reclamation economic development mode and the construction of new urbanization in reclamation areas, explore the establishment of international grain dealers and seek specific paths in achieving the great-leap-forward development of agricultural reclamation.
[XFA Selection]
○ The China Securities Regulatory Commission (CSRC) approved the IPO application of 24 enterprises, including Dongxing Securities Co., Ltd. (601198.SH), on Jan. 30, which met the previous market expectation.
○ The manufacturing purchasing managers’ index (PMI) posted at 49.8 percent in Jan., lower than the corresponding period of past years, which is mainly attributed to the continuous decrease of bulk commodities prices.
○ Shanghai and Shenzhen stock exchanges amended the ancillary rules of delisting and the threshold for purchasing stocks on the Shanghai Stock Exchange during the delisting preparation period was set at 500,000 yuan.
○ The China Small Loan Companies Association was established on Jan. 30, which will prepare the unified industrial standards and business rules.
Mao Xiaofeng, President of China Minsheng Banking Corp., Ltd. (01988.HK; 600016.SH), has resigned for personal reasons. The chairman and other senior management of the bank pacified institutional investors on Feb. 1.
[Industry Information]
○ Establishment of “One Belt and One Road” initiates, China-Pakistan economic corridor enjoys priority
------
Chinese Premier Li Keqiang met with Pakistan’s National Assembly Speaker on Jan. 30, pointing out that the development of the China-Pakistan economic corridor had provided a strategic framework for the two countries to carry out practical cooperation. The work conference on the promotion of the establishment of the “One Belt and One Road” was held on Feb. 1 in Beijing, which would plan the key issues and work in the promotion of the establishment of the “One Belt and One Road” in 2015 and the following periods. It is also learnt from the conference recently convened by the Commission of Development and Reform of the Xinjiang Production and Construction Corps (XPCC) that it would facilitate the participation of the XPCC in the development of the China-Pakistan economic corridor.
Comment: It is estimated that China’s export to regions along the One Belt and One Road is expected to rise to one third of its total exports in the following decade and the total investment may reach 1.6 trillion U.S. dollars. The China-Pakistan economic corridor is a key project mostly likely to reap first in Asia. Listed companies in XPCC, including Xinjiang Beixin Road & Bridge Group Co., Ltd. (002307.SZ) and Xinjiang Qingsong Building Materials and Chemicals (Group) Co., Ltd. (600425.SH), are likely to play more important roles.
○ Ministry of Agriculture requires full traceability of veterinary drugs, industry concentration expected to improve
------
The Ministry of Agriculture issued a document on Jan. 30, stipulating that it will implement the electronic tracking and labeling system for veterinary drugs. Veterinary drugs without the unified QR codes will be prohibited from selling in the market from July 1, 2016.
Comment: The veterinary drugs industry enjoys a low industry concentration in China. The top ten enterprises account for only about 15 percent of the market share, far below the 70 percent in developed countries. The Ministry of Agriculture has introduced the GMP verification and strengthened the review of approval documents and other policies in recent years to advocate industry reshuffle in recent years. Among A-share veterinary drugs companies, China Animal Husbandry Industry Co., Ltd. (600195.SH), affiliated to the central enterprise China National Agricultural Development Group Co., Ltd., is a designated production enterprise for bird flu and aphtha vaccines. The H5 bird flu inactivated vaccine of Xinjiang Tecon Animal Husbandry Bio-Technology Co., Ltd. (002100.SZ) is likely to obtain the certificate for new veterinary drugs within one month.
[Announcement Interpretation]
○ Huiyuan Optical Communications to acquire Fengye Technology & Environment at RMB3 bln for back-door listing to develop environmental protection
------
Sichuan Huiyuan Optical Communications Co., Ltd. (000586.SZ) proposes to sell all of its assets and debts at 250 million yuan to the counterparty Xu Defu. At the same time, the company proposes to acquire 100 percent equities of Jiangsu Fengye Technology & Environment Group Corporation Limited at 3 billion yuan by issuing 367 million shares at 8.26 yuan per share. The company also proposes to raise a supporting fund of 700 million yuan at the same price for the production of denitration catalysts, the improvement of desulfurizers and the franchised operation of desulfurizers. The total equity of the company will increase to 646 million shares from 193 million shares after the transaction and the actual controllers of the company will be Xu Defu, Yu Wanqin and Xu Feng.
Fengye Technology & Environment is principally engaged in the manufacturing of and services for desulfurizers and denitration devices. The counterparty committed that its net profit after extraordinary items for 2015 to 2017 shall be no less than 207 million yuan, 261 million yuan and 336 million yuan, respectively.
○ Huasu Holdings to upgrade its construction materials operation with RMB2 bln
------
Huasu Holdings Co., Ltd. (000509.SZ) proposes to raise 2,088 million yuan by issuing 450 million shares at 4.64 yuan per share, of which 1 billion yuan will be used in the establishment of its aluminum profile project, 500 million yuan in the production line of energy-saving glass with low emissivity and 588 million yuan for supplementing working capital. Chengdu Maitian Investment Co., Ltd., the controlling shareholder of the company, Shenzhen Longyuan Weiye Investment Co., Ltd, a company controlled by its actual controller Li Zhong and Guo Hongjie, Chairman of the Board of the company, will subscribe 35 million shares, 90 million shares and 10 million shares in cash, respectively. The aluminum profile and energy-saving glass projects will achieve an annual average sales revenue of 1.9 billion yuan and 630 million yuan after the establishment.
○ Dinghan Technology to elbow into rail transportation air-conditioning market with RMB360 mln
------
Beijing Dinghan Technology Co., Ltd. (300011.SZ) proposes to acquire 100 percent equities of Guangzhou Zhongche Rail Way Vehicles Equipment Joint-stock Co., Ltd. with 360 million yuan. The target company is principally engaged in the production, sale and repairing of the rail transportation air-conditioning system. It is the only large private enterprise with the production qualification for rail transportation air-conditioners in Southern China. Dinghan Technology will break the technology bottleneck and advance into the domestic vehicle air-conditioning market through the acquisition. The net profit of the company in the first quarter is expected to increase by 119-147 percent.
○ Baling Technology to invest RMB600 mln in cultural performance
------
Nanning Baling Technology Co., Ltd. (002592.SZ) proposes to issue 33.8 million shares at 17.47 yuan per share to four natural persons, including the spouse of the actual controller, to raise 591 million yuan. The proceeds will be mainly invested in the “Passing Dinosaurs”, a large science fiction performance and the “Impression: Shajiabang”, a live-action performance.
The annual average net profits of the two projects are expected to be 108 million yuan and 52.55 million yuan after achieving the designed capacity. The company also announced that it terminated the major asset reorganization on the acquiring the operational entity of the “Impression: Liu Sanjie”. The company is principally engaged in auto radiators and fan heaters and recorded a net profit of 90 million yuan in 2013.
○ Railway benchmark freight rate raised, Daqin Railway and other railway transportation stocks to benefit
------
As the National Development and Reform Commission (NDRC) lifted the railway benchmark freight rate, Daqin Railway Co., Ltd. (601006.SH) announced that it will see an increase of 2.41 billion yuan in its business revenue, accounting for 4.7 percent of its total business revenue in 2013.
Comment: The NDRC unified the railway freight rate to 15.51 cents per ton each kilometer from the previous 14.51 cents and allowed a maximum floating range of 10 percent from Feb. 1. The railway freight rate in China has been rising year since 2002 with an increase of 10 percent, 13 percent and 11.53 percent in 2012, 2013 and 2014, respectively. Besides Daqin Railway, other railway transportation stocks include China Railway Tielong Container Logistics Co., Ltd. (600125.SH) and Guangshen Railway Company Limited (00525.HK; 601333.SH).
[Financial Reports Express]
○ Dima Industry and Zhongding Sealing Parts expect high performance growth in annual reports
------
Chongqing Dima Industry Co., Ltd. (600565.SH) expects its 2014 net profit to grow 1,615-1,830 percent year on year. Compared with the beginning of the proposed adjustment period after the reorganization, its net profit will increase 100-125 percent, which is mainly attributed to the significant growth in the sales of real estate in 2014.
Anhui Zhongding Sealing Parts Co., Ltd. (000887.SZ) expects its 2014 net profit to see a year-on-year increase of 40-60 percent. It is mainly attributed to the increase of its principal business, the decrease of prices of raw materials and higher performance brought by overseas mergers and acquisitions.
○ Huadong Heavy Machinery proposes high share conversion and dividend
------
The controlling shareholder of Wuxi Huadong Heavy Machinery Co., Ltd. (002685.SZ) proposes an 18-for-10 conversion of capital surplus into shares combined with 0.25 yuan dividend for every 10 shares according to its 2014 profit distribution plan. The company announced in Dec., 2014 that it would issue shares to its controlling shareholder, Shanghai Zexi Investment Management Co., Ltd. and a fund of GF Securities comprised of some senior management of the company through private placement.
[Trading Trends]
○ Real estate stocks bought through institutional seats
------
The trading volume ranking list on Jan. 30 shows that many real estate stocks surged by the daily limit of 10 percent were favored by institutional seats. Among them, four institutes bought Thaihot Group Co., Ltd. (000732.SZ) at 144 million yuan, accounting for 25 percent of its intraday turnover. Two institutes bought Baoan Hongji Real Estate Group Co., Ltd. (000040.SZ) at 37.95 million yuan, accounting for 31 percent of its intraday turnover. Two institutes bought China Calxon Group Co., Ltd. (000918.SZ) at 26.07 million yuan, accounting for 6.55 percent of its intraday turnover.
Comment: The Shanghai and Shenzhen bourses closed falling last Friday (Jan. 30) while the real estate sector surged against the expectation on interest rate cuts. Institutional investors believe that the monetary policy in 2015 is more likely to further loosen and there are still chances of interest rate and RRR cuts. As a sector with high sensitivity to the interest rate, the real estate industry will be one of those to benefit most from loose liquidity.
[Weekly Review]
○ True events, true performance and true trends
------
The financial news in recent days are quite complicated, covering the fake products sold on Taobao.com, the false news of interest rate cut, the seemingly incomprehensible but terrific anti-corruption campaign in the financial industry and the going out of high-speed rail with detours. The trend of the stock market also shifted quickly. The market dropped for four consecutive days after a five-day hike. Besides the new stocks soared by the daily limit of 10 percent for days, there are nothing new in the weekly growth ranking list, which confused people used to following hotspots.
It shall be admitted that “pigs standing on a wind hole” can fly high, but investments are still determined by the individual performance of specific companies. XFA has offered you various investment thoughts with certain performances on the basis of truth after combining daily news. Before Thaihot Group Co., Ltd. (000732.SZ) resumed trading, we hinted that it holds the stakes of Dongxing Securities and has hidden value. During its trading suspension, the IPO of Dongxing Securities has passed the examination of the CSRC. Thaihot Group has been setting new highs after resuming trading and soared by the daily limit of 10 percent on Friday (Jan. 30) against the market trend.
There are two key words in Jan. of each year, namely the annual reports and the No. 1 Central Document. Despite the complicated market trend this year, XFA has never ignored the two themes. The “Data Speaks” on Jan. 20 analyzed public information and indicated that the 2014 performance of Guangxi Guidong Electric Power Co., Ltd. (600310.SH) and Shanghai Lansheng Corporation (600826.SH) would multiply and their stock prices outperformed the market after that. In terms of the agricultural sector, we focused on price rises of fertilizers, irrigation and water conservancy as well as subsidies on agricultural machinery. No matter what are covered in the No. 1 Central Document, the prosperity of such sectors rose. Shenzhen Batian Ecotypic Engineering Co., Ltd. (002170.SZ), First Tractor Company Limited (00038.HK; 601038.SH) and other relevant companies are recognized by the market. It is learnt that some carbamide enterprises have received orders for mid-Feb. and the trend of price rising is expected to last after the Spring Festival.
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