[Today’s Guide]
> Information security theme further deepens, homemade financial IC cards chips embrace new opportunities
> Ministry of Commerce mulls policies to support agricultural products e-business, industry has huge development potentials
> Hanwei Electronics to develop smart home, Mechanical & Electrical Industry to produce robot reducer
> Merger and acquisition of Tianze Information obtains unlimited approval, Mys and Feilihua propose high share conversion and dividend
[XFA Focus]
○ Information security theme further deepens, homemade financial IC cards chips embrace new opportunities
------
Various banks invited tenders for financial IC cards recently. XFA learnt that more than ten banks have issued or are issuing financial IC cards. The demand for independent and controllable chips is more than 10 million in the bidding of a major state-owned bank.
Comment: It has been a policy set by the central bank to fully expand the application of financial IC cards. More than 1.2 billion financial IC cards have been issued totally so far. But there are still 3.4 billion magnetic stripe cards to be replaced and there is a huge market. The design of chips is the core and most lucrative process in the financial IC cards chain, which used to be monopolized by NXP and other overseas manufacturers. With the increasing awareness of information security by all walks of life, domestic chips enterprises passed the certification of China UnionPay, including Tongfang Guoxin Electronics Co., Ltd. (002049.SZ), Nationz Technologies Inc. (300077.SZ) and Datang Telecom Technology Co., Ltd. (600198.SH), are embracing development opportunities.
◆China Securities Index Co., Ltd. will release the information security theme index from next month, which will provide key subjects for the investment in the industry.
[XFA Selection]
○ The central bank promotes the Standing Lending Facility (SLF) in all branches across China and offers short-term liquidity supporting to eligible medium and small financial institutes.
○ Various departments will introduce policies to promote the going out of railway equipment with more than ten overseas projects given priorities currently.
○ The Ministry of Industry and Information Technology will facilitate the introduction of the “Regulations on the Management of Rare Metals” and study the promotion of tungsten and molybdenum resources taxation reform.
○ Beijing strives to establish a charging network with an average service radius of five kilometers within 2015. The number of public charging piles will double.
○ A fat finger has caused the plummeting of two option contracts. The fusing mechanism played an active role in leading the returning of prices.
○ The Central Commission for Discipline Inspection of the CPC planned the first inspection in 2015 with 26 central enterprises covered, including China National Nuclear Corporation, PetroChina Company Limited (PTR.NYSE; 00857.HK; 601857.SH), State Development & Investment Corporation, Dongfang Electric Corporation Limited (600875.SH; 01072.HK), China Electronics Technology Group Corporation, China Electronics Corporation Holdings Company Limited (00085.HK), China Power Investment Corporation, China Petroleum & Chemical Corporation (Sinopec, SNP.NYSE; SNP.LSE; 00386.HK; 600028.SH), China Minmetals Corporation, China Huaneng Group, China State Construction Engineering Corporation Limited (601668.SH), China Shipbuilding Industry Corporation, China COSCO Holdings Company Limited (01919.HK; 601919.SH), China National Machinery Industry Corporation, China Datang Corporation, China Guodian Corporation, Baosteel Group Corporation and Wuhan Iron and Steel (Group) Corp.
[Industry Information]
○ Ministry of Commerce mulls policies to support agricultural products e-business, industry has huge development potentials
------
The Ministry of Commerce convened the national agricultural products e-business and rural business services experiences exchange conference on Feb. 11, proposing to improve the top design, prepare the plan on the development of agricultural products e-business, accelerate legislation and criteria setting and promote the progress of the “Law of Electronic Business”.
Comment: The e-business industry witnessed rapid development in recent year. But the online purchasing of agricultural products, which is regarded as the last fertile field in the e-business, is only 10 percent of clothing and digital products. The No. 1 Central Document of this year also indicated that China will make innovations in the circulation of agricultural products and support the establishment of agricultural e-business platforms by enterprises. In terms of companies, the Qianhai Agricultural Products Exchange of Shenzhen Agricultural Products Co., Ltd. (000061.SZ) is planned to develop into a global agricultural trading services platform. The www.16899.com of Jiangsu Huifeng Agrochemical Co., Ltd. (002496.SZ) plans to establish 2,000 stations at the county level this year. Shenzhen Noposion Agrochemicals Co., Ltd. (002215.SZ) proposes to invest in an O2O agricultural materials platform through private placement.
○ Potash fertilizer sees positive supply & demand pattern and might have entered surging cycle
------
The price of muriate of potash increased by 30 yuan per ton or up 2 percent in domestic market on Feb. 11 and it might continue the surging after the Spring Festival. Currently, the import of potash fertilizer accounts for nearly 50 percent in China. As international demand grows steadily, high inventory are consumed gradually and in combination with the permeable accident attacking world largest potash fertilizer producer, the industrial supply and demand pattern will be improved.
As for listed companies, the performance of Qinghai Salt Lake Industry Co., Ltd. (000792.SZ), a leading domestic producer of muriate of potash, in the fourth quarter of last year was far beyond market expectation; both Jinguyuan Holding Co., Ltd. (000408.SZ) and Donlinks Grain & Oil Co., Ltd. (000893.SZ) propose to purchase muriate of potash assets through private placement.
[Announcement Interpretation]
○ Hanwei Electronics to develop smart home
------
Henan Hanwei Electronics Co., Ltd. (300007.SZ) inks a strategic cooperation framework agreement with the Vane Technology Company Limited and plans to comprehensively develop in-depth cooperation in smart home and home safety areas. Hanwei Electronics will develop smart sensor products that can be connected to the Vanelife Cloud platform and perfect the product lines of Vane smart home system. Vane provides Hanwei Electronics with the Cloud access to the Internet of Things and Cloud service, helps Hanwei Electronics to build “Cloud-Pipe-Terminal” comprehensive solutions and enhances the intelligence of the products and service of Hanwei Electronics.
○ Mechanical & Electrical Industry to join hands with Nabtesco Corporation to produce robot reducer
------
A wholly-owned subsidiary of Shanghai Mechanical & Electrical Industry Co., Ltd. (600835.SH) plans to jointly establish the Nabtesco (China) Precision Machinery Co., Ltd. with Nabtesco Corporation to produce robot precision reducers. After the transaction, Mechanical & Electrical Industry will hold 33 percent equities of the joint venture. The joint venture will produce 200,000 precision reducers annually, and the precision reducer products are expected to be officially put into production in Jan., 2016. The precision reducer product of Nabtesco Corporation is a customized core part of industrial robots. Its global market share secures 60 percent and sustains the first rank worldwide.
○ Merger and acquisition of Tianze Information obtains unlimited approval
------
The asset acquisition of Tianze Information Industry Inc. (300209.SZ) is unlimitedly approved by the Merger & Acquisition and Reorganization Committee of the China Securities Regulatory Commission (CSRC) and it resumes trading on Feb. 12. According to the scheme, the company to be purchased mainly provides enterprises with business intelligence system solutions.
○ Beingmate Baby & Child Food sets deadline of tender offer
------
Beingmate Baby & Child Food Co., Ltd. (002570.SZ) discloses the implementation time of the tender offer by Fonterra Diary (Hong Kong) Co., Ltd. as Feb. 12-March 13. According to the scheme disclosed earlier, 204.5 million shares will be purchased, accounting for 20 percent of its total share capital. The substantial shareholder Beingmate Group promises that it will provide the purchaser with at least 8 percent of the company’s shares held by it. The price of the tender offer is 18 yuan per share and its latest stock price is 16.1 yuan per share.
[Financial Reports Express]
○ Mys and Feilihua propose high share conversion and dividend
------
The controlling shareholder of Shenzhen Mys Environmental Protection & Technology Co., Ltd. (002303.SZ) proposes a 10-for-10 conversion of capital surplus into shares in its 2014 annual report. Its latest stock price closed at 16.01 yuan per share; the controlling shareholder of Hubei Feilihua Quartz Glass Co., Ltd. (300395.SZ) proposes a 10-for-10 conversion of capital surplus into shares. Its latest stock price closed at 51.39 yuan per share.
[Trading Trends]
○ Trading deposit sees net inflow in first week of Feb.
------
In the first week of Feb., the securities market sees a net inflow of trading deposit of 68.6 billion yuan. Analysts consider that it can be seen from the statistics of trading deposit and Shanghai-Hong Kong Stock Connect program that A-share market shows attraction to capitals again. The capitals participating in IPOs will be unfrozen gradually in the following days, the tight capital supply before the Spring Festival will be relaxed and liquidity of the stock market will be further supplemented.
[Trading Alarms]
○ Jifeng Auto Parts starts subscription on Feb. 12
------
Ningbo Jifeng Auto Parts Co., Ltd. (732997.SH), principally engaged in parts of car seats, issues shares at 7.97 yuan per share with P/E ratio at 17 times and a limit of 18,000 shares per single account.
> Information security theme further deepens, homemade financial IC cards chips embrace new opportunities
> Ministry of Commerce mulls policies to support agricultural products e-business, industry has huge development potentials
> Hanwei Electronics to develop smart home, Mechanical & Electrical Industry to produce robot reducer
> Merger and acquisition of Tianze Information obtains unlimited approval, Mys and Feilihua propose high share conversion and dividend
[XFA Focus]
○ Information security theme further deepens, homemade financial IC cards chips embrace new opportunities
------
Various banks invited tenders for financial IC cards recently. XFA learnt that more than ten banks have issued or are issuing financial IC cards. The demand for independent and controllable chips is more than 10 million in the bidding of a major state-owned bank.
Comment: It has been a policy set by the central bank to fully expand the application of financial IC cards. More than 1.2 billion financial IC cards have been issued totally so far. But there are still 3.4 billion magnetic stripe cards to be replaced and there is a huge market. The design of chips is the core and most lucrative process in the financial IC cards chain, which used to be monopolized by NXP and other overseas manufacturers. With the increasing awareness of information security by all walks of life, domestic chips enterprises passed the certification of China UnionPay, including Tongfang Guoxin Electronics Co., Ltd. (002049.SZ), Nationz Technologies Inc. (300077.SZ) and Datang Telecom Technology Co., Ltd. (600198.SH), are embracing development opportunities.
◆China Securities Index Co., Ltd. will release the information security theme index from next month, which will provide key subjects for the investment in the industry.
[XFA Selection]
○ The central bank promotes the Standing Lending Facility (SLF) in all branches across China and offers short-term liquidity supporting to eligible medium and small financial institutes.
○ Various departments will introduce policies to promote the going out of railway equipment with more than ten overseas projects given priorities currently.
○ The Ministry of Industry and Information Technology will facilitate the introduction of the “Regulations on the Management of Rare Metals” and study the promotion of tungsten and molybdenum resources taxation reform.
○ Beijing strives to establish a charging network with an average service radius of five kilometers within 2015. The number of public charging piles will double.
○ A fat finger has caused the plummeting of two option contracts. The fusing mechanism played an active role in leading the returning of prices.
○ The Central Commission for Discipline Inspection of the CPC planned the first inspection in 2015 with 26 central enterprises covered, including China National Nuclear Corporation, PetroChina Company Limited (PTR.NYSE; 00857.HK; 601857.SH), State Development & Investment Corporation, Dongfang Electric Corporation Limited (600875.SH; 01072.HK), China Electronics Technology Group Corporation, China Electronics Corporation Holdings Company Limited (00085.HK), China Power Investment Corporation, China Petroleum & Chemical Corporation (Sinopec, SNP.NYSE; SNP.LSE; 00386.HK; 600028.SH), China Minmetals Corporation, China Huaneng Group, China State Construction Engineering Corporation Limited (601668.SH), China Shipbuilding Industry Corporation, China COSCO Holdings Company Limited (01919.HK; 601919.SH), China National Machinery Industry Corporation, China Datang Corporation, China Guodian Corporation, Baosteel Group Corporation and Wuhan Iron and Steel (Group) Corp.
[Industry Information]
○ Ministry of Commerce mulls policies to support agricultural products e-business, industry has huge development potentials
------
The Ministry of Commerce convened the national agricultural products e-business and rural business services experiences exchange conference on Feb. 11, proposing to improve the top design, prepare the plan on the development of agricultural products e-business, accelerate legislation and criteria setting and promote the progress of the “Law of Electronic Business”.
Comment: The e-business industry witnessed rapid development in recent year. But the online purchasing of agricultural products, which is regarded as the last fertile field in the e-business, is only 10 percent of clothing and digital products. The No. 1 Central Document of this year also indicated that China will make innovations in the circulation of agricultural products and support the establishment of agricultural e-business platforms by enterprises. In terms of companies, the Qianhai Agricultural Products Exchange of Shenzhen Agricultural Products Co., Ltd. (000061.SZ) is planned to develop into a global agricultural trading services platform. The www.16899.com of Jiangsu Huifeng Agrochemical Co., Ltd. (002496.SZ) plans to establish 2,000 stations at the county level this year. Shenzhen Noposion Agrochemicals Co., Ltd. (002215.SZ) proposes to invest in an O2O agricultural materials platform through private placement.
○ Potash fertilizer sees positive supply & demand pattern and might have entered surging cycle
------
The price of muriate of potash increased by 30 yuan per ton or up 2 percent in domestic market on Feb. 11 and it might continue the surging after the Spring Festival. Currently, the import of potash fertilizer accounts for nearly 50 percent in China. As international demand grows steadily, high inventory are consumed gradually and in combination with the permeable accident attacking world largest potash fertilizer producer, the industrial supply and demand pattern will be improved.
As for listed companies, the performance of Qinghai Salt Lake Industry Co., Ltd. (000792.SZ), a leading domestic producer of muriate of potash, in the fourth quarter of last year was far beyond market expectation; both Jinguyuan Holding Co., Ltd. (000408.SZ) and Donlinks Grain & Oil Co., Ltd. (000893.SZ) propose to purchase muriate of potash assets through private placement.
[Announcement Interpretation]
○ Hanwei Electronics to develop smart home
------
Henan Hanwei Electronics Co., Ltd. (300007.SZ) inks a strategic cooperation framework agreement with the Vane Technology Company Limited and plans to comprehensively develop in-depth cooperation in smart home and home safety areas. Hanwei Electronics will develop smart sensor products that can be connected to the Vanelife Cloud platform and perfect the product lines of Vane smart home system. Vane provides Hanwei Electronics with the Cloud access to the Internet of Things and Cloud service, helps Hanwei Electronics to build “Cloud-Pipe-Terminal” comprehensive solutions and enhances the intelligence of the products and service of Hanwei Electronics.
○ Mechanical & Electrical Industry to join hands with Nabtesco Corporation to produce robot reducer
------
A wholly-owned subsidiary of Shanghai Mechanical & Electrical Industry Co., Ltd. (600835.SH) plans to jointly establish the Nabtesco (China) Precision Machinery Co., Ltd. with Nabtesco Corporation to produce robot precision reducers. After the transaction, Mechanical & Electrical Industry will hold 33 percent equities of the joint venture. The joint venture will produce 200,000 precision reducers annually, and the precision reducer products are expected to be officially put into production in Jan., 2016. The precision reducer product of Nabtesco Corporation is a customized core part of industrial robots. Its global market share secures 60 percent and sustains the first rank worldwide.
○ Merger and acquisition of Tianze Information obtains unlimited approval
------
The asset acquisition of Tianze Information Industry Inc. (300209.SZ) is unlimitedly approved by the Merger & Acquisition and Reorganization Committee of the China Securities Regulatory Commission (CSRC) and it resumes trading on Feb. 12. According to the scheme, the company to be purchased mainly provides enterprises with business intelligence system solutions.
○ Beingmate Baby & Child Food sets deadline of tender offer
------
Beingmate Baby & Child Food Co., Ltd. (002570.SZ) discloses the implementation time of the tender offer by Fonterra Diary (Hong Kong) Co., Ltd. as Feb. 12-March 13. According to the scheme disclosed earlier, 204.5 million shares will be purchased, accounting for 20 percent of its total share capital. The substantial shareholder Beingmate Group promises that it will provide the purchaser with at least 8 percent of the company’s shares held by it. The price of the tender offer is 18 yuan per share and its latest stock price is 16.1 yuan per share.
[Financial Reports Express]
○ Mys and Feilihua propose high share conversion and dividend
------
The controlling shareholder of Shenzhen Mys Environmental Protection & Technology Co., Ltd. (002303.SZ) proposes a 10-for-10 conversion of capital surplus into shares in its 2014 annual report. Its latest stock price closed at 16.01 yuan per share; the controlling shareholder of Hubei Feilihua Quartz Glass Co., Ltd. (300395.SZ) proposes a 10-for-10 conversion of capital surplus into shares. Its latest stock price closed at 51.39 yuan per share.
[Trading Trends]
○ Trading deposit sees net inflow in first week of Feb.
------
In the first week of Feb., the securities market sees a net inflow of trading deposit of 68.6 billion yuan. Analysts consider that it can be seen from the statistics of trading deposit and Shanghai-Hong Kong Stock Connect program that A-share market shows attraction to capitals again. The capitals participating in IPOs will be unfrozen gradually in the following days, the tight capital supply before the Spring Festival will be relaxed and liquidity of the stock market will be further supplemented.
[Trading Alarms]
○ Jifeng Auto Parts starts subscription on Feb. 12
------
Ningbo Jifeng Auto Parts Co., Ltd. (732997.SH), principally engaged in parts of car seats, issues shares at 7.97 yuan per share with P/E ratio at 17 times and a limit of 18,000 shares per single account.
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