[Today’s Guide]
> Technology innovation injects new impetus into economic growth, emerging industries to catch attention
> New energy vehicles may boom, NEA promotes CBM development
> Aoyang Technology to transform into medical health industry, Inner Mongolia Junzheng increases investment in Tianhong Asset Management
> United Electronics further invests in biological Cloud computing and car networking, Xintai Electric to merge
[XFA Focus]
○ Technology innovation injects new impetus into economic growth, emerging industries to catch attention
------
Major economic data in Jan. has been released with an increasing growth decline from the PMI in early Jan. to the latest released sales. Xinhua News Agency issued the “New Features of the Economic Growth under New Normal Based on January Data”, indicating that the dynamic mechanism of economic growth in China is under unprecedented changes with an increasing effect of structural improvement and new growth momentums coming into being. Chinese President Xi Jinping highlighted that it shall implement the innovation-driven development strategies and build an innovative country on a tour of Xi’an City. The trend is also reflected in the A-share market with various emerging industries continuing to be favored in the market.
◆ Internet marketing: With the “red-envelope war” in full swing, the shop of Jiangsu Sunrain Solar Energy Co., Ltd. (603366.SH) at Jingdong.com, one of China’s largest online marketplaces, saw an increase of four times in the daily page view with its red envelope marketing strategy. The total box office of new films of Huayi Brothers Media Corporation (300027.SZ) reached more than 400 million yuan. The Internet marketing sector in the A-share market is expanding rapidly. Beijing Tensyn Digital Marketing Technology Joint Stock Company (300392.SZ) edged into the industry through an IPO. Guangbo Group Stock Co., Ltd. (002103.SZ) and Keda Group Co., Ltd. (600986.SH) also expanded into the industry through mergers and acquisitions. The trading volume ranking lists saw buying of above stocks by institutes recently.
◆ Internet financing: According to the latest research of XFA, private funds tend to hold stocks during the Spring Festival holiday. The Internet financing is most noteworthy in the year. It is expected to set new highs driven by the technology innovation and policies, the mobile payment and P2P in particular.
[XFA Selection]
○ Chinese President Xi Jinping proposed to encourage social capitals to invest in the construction of old revolutionary base areas. The State Council approved the plan on the rejuvenation of Zuoyoujiang old revolutionary base area.
○ Chinese Premier Li Keqiang inspected Guian New Area in Guizhou Province, hoping that Guizhou Province will foster a new growth pole in Western China.
○ The State Council determined to establish a ministerial joint conference system for the free trade zone (FTZ) work to coordinate the pilot FTZs across the country.
○ The operation of the platform for state-owned assets in Shanghai saw new moves with certain equities of Bright Food (Group) Co., Ltd. and Shanghai Construction Group Co., Ltd. (600170.SH) transferred to Shanghai Guosheng (Group) Co., Ltd.
○ The period for the release of financial reports by U.S.-share companies is coming to an end. Such industries as construction and materials, industrial transportation and electrical equipment recorded outstanding performances.
○ The Brent crude oil hiked to 62 U.S. dollars per barrel, setting a new high in two months. Kuwaiti Oil Minister said that the current global supply glut is decreasing.
[Industry Information]
○ MOST issues special plan for new energy vehicles, industry may boom
------
The Ministry of Science and Technology (MOST) issued a special plan on the research and development of new energy vehicles on Feb. 16, proposing that it will establish and improve the technology system and industrial chains for the dynamical system of power vehicles by 2020 to provide technical supporting to the target of 5 million new energy vehicles.
Comment: The sale of new energy vehicles in China in 2014 reached 70,000 units, which means that the industry will boom in the following years. The trading volume ranking lists showed that four institutional seats bought BYD Company Limited (01211.HK; 002594.SZ), which soared by the daily limit of 10 percent on Feb. 16, with a total of 217 million yuan. Three institutional seats bought Cangzhou MingZhu Plastic Co., Ltd. (002108.SZ) with a total of 44.90 million yuan. Such subdivided industries as complete vehicles, lithium batteries, motors and charging piles are likely to benefit in the development.
○ CBM development to accelerate, industrialization bases to construct across China
------
The National Energy Administration (NEA) issued the “Plan on the Exploration and Development of Coalbed Methane” on its website on Feb. 16, proposing that the exploration of coalbed methane (CBM) will reach 40 billion cubic meters by 2020. It will establish three to four CBM industrialization bases and encourage social capitals participating in the exploration and development of CBM and the construction of pipelines and other infrastructure.
Among A-share companies, Sichuan Tianyi Science & Technology Co., Ltd. (600378.SH) owns the pressure gas separation technology, a key technology in the integrated use of CBN. Shanxi Guoxin Energy Corporation Limited (600617.SH) is engaged in the sale of natural gas and CBM. Anyuan Coal Industry Group Co., Ltd. (600397.SH) contributed to the establishment of Jiangxi Coalbed Methane Development & Utilization Co., Ltd.
[Announcement Interpretation]
○ Aoyang Technology to transform into medical health industry
------
Jiangsu Aoyang Technology Corporation Limited (002172.SZ) plans to purchase 100 percent equities of Jiangsu Aoyang Health Industrial Investment Holdings Ltd. with 650 million yuan by issuing shares at 5.41 yuan per share through private placement. It also plans to raise supporting funds by issuing shares at no less than 6.37 yuan per share. The business of Aoyang Health Industrial Investment covers medical service and medicine circulation and its Aoyang Hospital develops stably. The company will also transform from fibranne industry to medical health industry. The counterparty committed that the net profit of Aoyang Health Industrial Investment will be no less than 50 million yuan in 2015 with a corresponding acquisition P/E ratio at 13 times. The stock price of the company closed at 6.82 yuan per share before trading suspension.
○ Inner Mongolia Junzheng increases investment in Tianhong Asset Management after dispute settled
------
Inner Mongolia Junzheng Energy & Chemical Industry Co., Ltd. (601216.SH) and old shareholders of Tianhong Asset Management Co., Ltd. reached an agreement with Ant Financial Service Group. Each party agreed that the net profit of Tianhong Asset Management from July 1, 2013 to the end of 2014 is owned by old shareholders before capital increase according to respective equity proportion. Ant Financial decreases the proportion of Yu’e Bao technical service fees charged fromTianhong Asset Management and undertakes corresponding marketing fees. Relevant work of the capital increase and equity expansion of Tianhong Asset Management continues. The company has paid increased capital and resumed trading on Feb. 17.
○ United Electronics further invests in biological Cloud computing and car networking
------
United Electronics Co., Ltd. (002642.SZ) plans to issue shares at no less than 29.86 yuan per share through private placement to raise 1 billion yuan for investing in biological Cloud computing project and comprehensive operation service system project based on multiple-dimensional big data of car networking. The all-in-one biological information machine to be developed is expected to drastically decrease the sequencing time of a whole genome (50 times coverage). The stock price of the company closed at 36.65 yuan per share before trading suspension.
○ Xintai Electric to enter bidding system of State Grid through acquisition
------
Dandong Xintai Electric Co., Ltd. (300372.SZ) proposes to purchase 100 percent equities of Shanghai Tayee Electric Co., Ltd. and Beijing BANNER Electric Manufacturing Corporation with 1.42 billion yuan by issuing shares at 23.81 yuan per share through private placement and in cash, and it also plans to raise supporting funds. The main product of Tayee Electric is low voltage electric equipment, while the electric products of BANNER Electric Manufacturing cover various smart electric energy meters. After this acquisition, the company can further enrich product lines and enter the bidding system of the State Grid Corporation of China and China Southern Power Grid. The counterparties committed that the net profits of the subject companies will be no less than 25.20 million yuan and 80 million yuan. The stock price of the company closed at 27.05 yuan per share before trading suspension.
○ Kingdom Technology joins hands with Sealand Securities to build Internet finance platform
------
Shenzhen Kingdom Technology Co., Ltd. (600446.SH) inks a strategic cooperation agreement with Sealand Securities Co., Ltd. (000750.SZ) to jointly build a comprehensive financial platform and internet finance service platform aiming at the integration of securities trading, financial service and marketing. Both parties also plan to jointly develop innovative financial service products, and study and implement flexible means of charging closely connected to business expansion to earn profit and grow together.
[Financial Reports Express]
○ Xingyuan Environment plans high share conversion and dividend
------
The actual controller of Xingyuan Environment Technology Co., Ltd. (300266.SZ) proposes a 15-for-10 conversion of capital surplus into shares in its 2014 annual report. Its latest stock price is 54.37 yuan per share.
[Trading Trends]
○ Medical health theme fevers, funds invest in medical devices and informatization
------
XFA learns through investigation that medical health theme is regarded as the most promising opportunity of the year by publicly offered funds. Large-scale fund management companies including Harvest Fund Management Limited, E Fund Management Co., Ltd., Bosera Asset Management Co., Ltd., Fullgoal Fund Management Co., Ltd., etc. all invest in medical devices, medical service and medical informatization. Funds indicate that medical service and medical informatization are expected to make breakthrough in “chronic diseases” like hepar, angiocarpy and diabetes, etc. As for medical devices, attentions are mainly paid to its domestication progress.
According to statistics, new funds have raised nearly hundreds of billions of yuan, and medical health theme funds are the most favored with a fundraising of 15 billion yuan. And more than 20 similar funds are registered for issuance later.
[Publication Suspension]
○ According to the holiday business suspension arrangement of Shanghai and Shenzhen stock exchanges, this product will suspend publication from Feb. 17 and resumes on Feb. 24. Wish you a happy new year!
> Technology innovation injects new impetus into economic growth, emerging industries to catch attention
> New energy vehicles may boom, NEA promotes CBM development
> Aoyang Technology to transform into medical health industry, Inner Mongolia Junzheng increases investment in Tianhong Asset Management
> United Electronics further invests in biological Cloud computing and car networking, Xintai Electric to merge
[XFA Focus]
○ Technology innovation injects new impetus into economic growth, emerging industries to catch attention
------
Major economic data in Jan. has been released with an increasing growth decline from the PMI in early Jan. to the latest released sales. Xinhua News Agency issued the “New Features of the Economic Growth under New Normal Based on January Data”, indicating that the dynamic mechanism of economic growth in China is under unprecedented changes with an increasing effect of structural improvement and new growth momentums coming into being. Chinese President Xi Jinping highlighted that it shall implement the innovation-driven development strategies and build an innovative country on a tour of Xi’an City. The trend is also reflected in the A-share market with various emerging industries continuing to be favored in the market.
◆ Internet marketing: With the “red-envelope war” in full swing, the shop of Jiangsu Sunrain Solar Energy Co., Ltd. (603366.SH) at Jingdong.com, one of China’s largest online marketplaces, saw an increase of four times in the daily page view with its red envelope marketing strategy. The total box office of new films of Huayi Brothers Media Corporation (300027.SZ) reached more than 400 million yuan. The Internet marketing sector in the A-share market is expanding rapidly. Beijing Tensyn Digital Marketing Technology Joint Stock Company (300392.SZ) edged into the industry through an IPO. Guangbo Group Stock Co., Ltd. (002103.SZ) and Keda Group Co., Ltd. (600986.SH) also expanded into the industry through mergers and acquisitions. The trading volume ranking lists saw buying of above stocks by institutes recently.
◆ Internet financing: According to the latest research of XFA, private funds tend to hold stocks during the Spring Festival holiday. The Internet financing is most noteworthy in the year. It is expected to set new highs driven by the technology innovation and policies, the mobile payment and P2P in particular.
[XFA Selection]
○ Chinese President Xi Jinping proposed to encourage social capitals to invest in the construction of old revolutionary base areas. The State Council approved the plan on the rejuvenation of Zuoyoujiang old revolutionary base area.
○ Chinese Premier Li Keqiang inspected Guian New Area in Guizhou Province, hoping that Guizhou Province will foster a new growth pole in Western China.
○ The State Council determined to establish a ministerial joint conference system for the free trade zone (FTZ) work to coordinate the pilot FTZs across the country.
○ The operation of the platform for state-owned assets in Shanghai saw new moves with certain equities of Bright Food (Group) Co., Ltd. and Shanghai Construction Group Co., Ltd. (600170.SH) transferred to Shanghai Guosheng (Group) Co., Ltd.
○ The period for the release of financial reports by U.S.-share companies is coming to an end. Such industries as construction and materials, industrial transportation and electrical equipment recorded outstanding performances.
○ The Brent crude oil hiked to 62 U.S. dollars per barrel, setting a new high in two months. Kuwaiti Oil Minister said that the current global supply glut is decreasing.
[Industry Information]
○ MOST issues special plan for new energy vehicles, industry may boom
------
The Ministry of Science and Technology (MOST) issued a special plan on the research and development of new energy vehicles on Feb. 16, proposing that it will establish and improve the technology system and industrial chains for the dynamical system of power vehicles by 2020 to provide technical supporting to the target of 5 million new energy vehicles.
Comment: The sale of new energy vehicles in China in 2014 reached 70,000 units, which means that the industry will boom in the following years. The trading volume ranking lists showed that four institutional seats bought BYD Company Limited (01211.HK; 002594.SZ), which soared by the daily limit of 10 percent on Feb. 16, with a total of 217 million yuan. Three institutional seats bought Cangzhou MingZhu Plastic Co., Ltd. (002108.SZ) with a total of 44.90 million yuan. Such subdivided industries as complete vehicles, lithium batteries, motors and charging piles are likely to benefit in the development.
○ CBM development to accelerate, industrialization bases to construct across China
------
The National Energy Administration (NEA) issued the “Plan on the Exploration and Development of Coalbed Methane” on its website on Feb. 16, proposing that the exploration of coalbed methane (CBM) will reach 40 billion cubic meters by 2020. It will establish three to four CBM industrialization bases and encourage social capitals participating in the exploration and development of CBM and the construction of pipelines and other infrastructure.
Among A-share companies, Sichuan Tianyi Science & Technology Co., Ltd. (600378.SH) owns the pressure gas separation technology, a key technology in the integrated use of CBN. Shanxi Guoxin Energy Corporation Limited (600617.SH) is engaged in the sale of natural gas and CBM. Anyuan Coal Industry Group Co., Ltd. (600397.SH) contributed to the establishment of Jiangxi Coalbed Methane Development & Utilization Co., Ltd.
[Announcement Interpretation]
○ Aoyang Technology to transform into medical health industry
------
Jiangsu Aoyang Technology Corporation Limited (002172.SZ) plans to purchase 100 percent equities of Jiangsu Aoyang Health Industrial Investment Holdings Ltd. with 650 million yuan by issuing shares at 5.41 yuan per share through private placement. It also plans to raise supporting funds by issuing shares at no less than 6.37 yuan per share. The business of Aoyang Health Industrial Investment covers medical service and medicine circulation and its Aoyang Hospital develops stably. The company will also transform from fibranne industry to medical health industry. The counterparty committed that the net profit of Aoyang Health Industrial Investment will be no less than 50 million yuan in 2015 with a corresponding acquisition P/E ratio at 13 times. The stock price of the company closed at 6.82 yuan per share before trading suspension.
○ Inner Mongolia Junzheng increases investment in Tianhong Asset Management after dispute settled
------
Inner Mongolia Junzheng Energy & Chemical Industry Co., Ltd. (601216.SH) and old shareholders of Tianhong Asset Management Co., Ltd. reached an agreement with Ant Financial Service Group. Each party agreed that the net profit of Tianhong Asset Management from July 1, 2013 to the end of 2014 is owned by old shareholders before capital increase according to respective equity proportion. Ant Financial decreases the proportion of Yu’e Bao technical service fees charged fromTianhong Asset Management and undertakes corresponding marketing fees. Relevant work of the capital increase and equity expansion of Tianhong Asset Management continues. The company has paid increased capital and resumed trading on Feb. 17.
○ United Electronics further invests in biological Cloud computing and car networking
------
United Electronics Co., Ltd. (002642.SZ) plans to issue shares at no less than 29.86 yuan per share through private placement to raise 1 billion yuan for investing in biological Cloud computing project and comprehensive operation service system project based on multiple-dimensional big data of car networking. The all-in-one biological information machine to be developed is expected to drastically decrease the sequencing time of a whole genome (50 times coverage). The stock price of the company closed at 36.65 yuan per share before trading suspension.
○ Xintai Electric to enter bidding system of State Grid through acquisition
------
Dandong Xintai Electric Co., Ltd. (300372.SZ) proposes to purchase 100 percent equities of Shanghai Tayee Electric Co., Ltd. and Beijing BANNER Electric Manufacturing Corporation with 1.42 billion yuan by issuing shares at 23.81 yuan per share through private placement and in cash, and it also plans to raise supporting funds. The main product of Tayee Electric is low voltage electric equipment, while the electric products of BANNER Electric Manufacturing cover various smart electric energy meters. After this acquisition, the company can further enrich product lines and enter the bidding system of the State Grid Corporation of China and China Southern Power Grid. The counterparties committed that the net profits of the subject companies will be no less than 25.20 million yuan and 80 million yuan. The stock price of the company closed at 27.05 yuan per share before trading suspension.
○ Kingdom Technology joins hands with Sealand Securities to build Internet finance platform
------
Shenzhen Kingdom Technology Co., Ltd. (600446.SH) inks a strategic cooperation agreement with Sealand Securities Co., Ltd. (000750.SZ) to jointly build a comprehensive financial platform and internet finance service platform aiming at the integration of securities trading, financial service and marketing. Both parties also plan to jointly develop innovative financial service products, and study and implement flexible means of charging closely connected to business expansion to earn profit and grow together.
[Financial Reports Express]
○ Xingyuan Environment plans high share conversion and dividend
------
The actual controller of Xingyuan Environment Technology Co., Ltd. (300266.SZ) proposes a 15-for-10 conversion of capital surplus into shares in its 2014 annual report. Its latest stock price is 54.37 yuan per share.
[Trading Trends]
○ Medical health theme fevers, funds invest in medical devices and informatization
------
XFA learns through investigation that medical health theme is regarded as the most promising opportunity of the year by publicly offered funds. Large-scale fund management companies including Harvest Fund Management Limited, E Fund Management Co., Ltd., Bosera Asset Management Co., Ltd., Fullgoal Fund Management Co., Ltd., etc. all invest in medical devices, medical service and medical informatization. Funds indicate that medical service and medical informatization are expected to make breakthrough in “chronic diseases” like hepar, angiocarpy and diabetes, etc. As for medical devices, attentions are mainly paid to its domestication progress.
According to statistics, new funds have raised nearly hundreds of billions of yuan, and medical health theme funds are the most favored with a fundraising of 15 billion yuan. And more than 20 similar funds are registered for issuance later.
[Publication Suspension]
○ According to the holiday business suspension arrangement of Shanghai and Shenzhen stock exchanges, this product will suspend publication from Feb. 17 and resumes on Feb. 24. Wish you a happy new year!
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