[Today’s Guide]
> Low unemployment rate drives U.S. dollars high, three industries may benefit from strong U.S. dollars
> MEP concerns soil pollution, plan for campaign on soil pollution prevention and control under preparation
> Gehua CATV to invest in cloud services, Gangtai Holding to invest in Internet gold and jewelry
> IRTOUCH Systems proposes 8-for-10 share dividend, some stocks with high share dividend expect ex-right soon
[XFA Focus]
○ Low unemployment rate drives U.S. dollars high, three industries may benefit from strong U.S. dollars
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According to the data released by the U.S. Department of Labor on March 6, the unemployment rate slipped to 5.5 percent in February, which is close to the normal of 5.2 percent to 5.5 percent in the long term estimated by the Federal Reserve officials. The U.S. Dollar Index surged to a new high since September, 2003 on the same day.
Comment: The market expects that the Federal Reserve will cast the “keep patient” from the forward guidance on the interest rate in the regular monetary policy meeting in March and discuss whether to prepare for the interest rate hike in June. Various research institutes believe that the U.S. dollars will continue to strengthen in 2015. Considering the bargaining power, trade structure, debts and other factors under the background of strong U.S. dollars, the textile and clothing, electric equipment, vehicles and other industries in the A-share market are likely to benefit.
[XFA Selection]
○ China’s total imports and exports fell 2 percent year on year in the first two months, of which the exports saw a year-on-year growth of 15.3 percent.
○ The plan on the operation of pension investment is expected to be issued in 2015, which proposes to allow provinces and cities with pension surplus to entrust professional market-oriented investment institutes to operate.
○ The ChiNext Board Index will adjust samples stocks on April 1, taking in six companies, including Beijing Lanxum Technology Co., Ltd. (300010.SZ), Hithink RoyalFlush Information Network Co., Ltd. (300033.SZ) and Shenzhen InfoTech Technologies Co., Ltd. (300085.SZ).
○ Guo Shuqing, governor of Shandong Province, indicated that Qingdao City has submitted the working plan on the application for the third batch of free trade zone pilots.
○ China National Building Materials Group Corporation has submitted the restructuring plan on scientific research institutes with senior management and scientific and technical staff to hold more than 30 percent of shares.
[Industry Information]
○ MEP concerns soil pollution, plans for campaigns on soil pollution prevention and control under preparation
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The Environmental Protection Minister Chen Jining answered questions from Chinese and foreign media about hotspots related to the “comprehensively strengthening environmental protection” on March 7. Chen indicated that the Ministry of Environmental Protection (MEP) is drafting the law on the prevention and control of soil pollution and preparing the plan for the campaign on the prevention and control of soil pollution. It will cooperate with relevant departments in conducting detailed soil pollution investigation and master the conditions to better manage and control the pollution sources.
Comment: Statistics show that the point of the total soil exceeds the rate of 16.1 percent in China and some places have serious soil pollution. Institutes believe that the soil pollution treatment is still in the fledging days. With the issuing and implementation of relevant technic criteria and campaign plans, the huge market for soil pollution treatment will be opened. Inner Mongolia Hotision & Monsod Drought-resistance Greening Co., Ltd. (300355.SZ) and Shenzhen Techand Ecology & Environment Co., Ltd. (300197.SZ) have a solid market position in the industry.
[Announcement Interpretation]
○ Gehua CATV to invest RMB3.3 bln in copyright and Cloud services
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Beijing Gehua CATV Network Co., Ltd. (600037) proposes to raise 3.3 billion yuan by issuing 220 million shares at 14.95 yuan per share through private placement. The proceeds will be invested in the establishment of a platform for quality contents with copyrights and the upgrading of the Cloud services platform and application expansion. The controlling shareholders of Gehua CATV and its connected parties, including Beijing All Media Investment Center, Beijing Broadcasting Corporation, Central Pictures Corporation, Bestv New Media Co., Ltd. (600637.SH) and Jiangxi Radio & TV Network Corporation will participate in the private placement.
The company also entered into a strategic cooperation agreement with Tianjin Broadcast and TV Network Co., Ltd. and Hebei Television Broadcasts and Information Network Group. Co., Ltd. on the broadcasting and television cable network area in Beijing, Tianjin Municipality and Hebei Province.
○ Gangtai Holding to invest in Internet gold and jewelry, Tencent to participate in private placement
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Gansu Gangtai Holding (Group) Co., Ltd. (600687.SH) intends to raise 3,295 million yuan by issuing 188 million shares at 17.57 yuan per share through private placement. The proceeds will be used in acquiring 100 percent equities of Shanghai Kelan Trading Company, 100 percent equities of Beijing Reach-Gloria Media Co., Ltd. and the O2O marketing channels. Gangtai Group, the actual controller of the company, plans to subscribe 45.53 million shares with 800 million yuan. The Changxin-Gangtai-Juli No. 1 asset management plan, established by the directors, supervisors, senior management and cadre employees of the company, will subscribe 11.38 million shares with 200 million yuan. Shenzhen Tencent Computer Systems Company Limited will subscribe 10,244,700 shares.
○ Lu Thai Textile to invest USD150 mln in constructing factory in Vietnam
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Lu Thai Textile (Hong Kong) Co., Ltd., a fully-owned subsidiary of Lu Thai Textile Co., Ltd. (000726.SZ), plans to set up Lu Thai Textile (Vietnam) Co., Ltd. in Vietnam to construct production lines producing 60,000 spindles of spinning and 30 million meters of yarn dyed fabric annually. The total investment of the project is estimated to be 150 million U.S. dollars.
Comment: This move helps the company make use of the relatively low labor cost in surrounding countries, avoid the impact of potential trade barriers and maintain its leading role in global textile industry.
○ Hokai Medical Instruments to set up medical information subsidiary with RMB1 mln
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Zhuhai Hokai Medical Instruments Co., Ltd. (300273.SZ) plans to invest 1 million yuan in setting up Zhuhai Hokai Medical Information Industry Co., Ltd., a fully-owned subsidiary. The supposed main business of the subsidiary covers new-generation hospital information management system, smart hospital EPR solutions, supply chain management system of medical industry and the information management system of regional public medical service.
[Financial Reports Express]
○ Systems proposes high share conversion and dividend
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Beijing IRTOUCH Systems Co., Ltd. (300282.SZ) proposes a 5-for-10 conversion of capital surplus into shares and 3-for-10 bonus share combined with 0.16 yuan dividend for every 10 shares for 2014.
[Data Speaks]
○ Stocks with high share dividend favored, attentions to three companies with stagflation and ex-right recently
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Recently, listed companies with high share dividend and possibility of resuming the stock price before ex-right are popular. Anhui Sierte Fertilizer Industry Co., Ltd. (002538.SZ) sees a total surge of 25 percent after the implementation of 10-for-10 conversion of capital surplus into shares. Listed companies with approved share dividend schemes all see the surge of daily 10 percent limit. It can be seen from the actual situation last year that the implementation speed of share dividend of companies in the ChiNext Board and the SME Board, averagely one month after the shareholders meeting, is faster than that of the main board. According to the statistics of XFA, Zhejiang Yonggui Electric Equipment Co., Ltd. (300351.SZ) proposing 12-for-10 conversion of capital surplus into shares as well as Hunan Er-Kang Pharmaceutical Co., Ltd. (300267.SZ) and Shenzhen Sunlord Electronics Co., Ltd. (002138.SZ) proposing 10-for-10 conversion of capital surplus into shares did not soar much after the Spring Festival. Their annual shareholders meetings are all going to be convened in the latter part of this month.
[Weekly Review]
○ Brilliant dream in ordinary world
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The capital market creates new myth of the richest when the wealth stories of Tencent Holdings Limited (00700.HK) and Alibaba Group Holding Limited (BABA.NYSE) are not ended yet. Along with the broadcasting of the advertisement as “bigger Hanergy, less haze”, the stock price of Hanergy Thin Film Power Group Limited (00566.HK) surges rapidly to hit a market value of more than 200 billion HK dollars. The sharp rise not only drives the solar energy sector in A-share market to surge too but also incurs numerous critical articles.
Actually, hot myth and clam doubt exist since the stock market comes into the world. There are always wealth lying ahead, but it is risky to get them. The birth and failure of dreams bring rounds of bullish and bearish market. In the Chinese stock market in recent years, new energy and Internet are always the lasting dream headstream, while the dreams do not simply repeat.
Take the Internet theme after the Spring Festival as an example, Ourpalm Co., Ltd. (300315.SZ) drives the online game sector to boom; the fight of red envelops benefits the mobile payment sector; the suggestions of several bosses of Internet giants on two sessions drive the mobile medical service sector to surge. Though Internet is not completely unquestionable, one can still make money on it. On the contrary, if you keep doubting on it and stand in a bear position or buy at high prices after it goes popular, it would be quite possible that you will miss the rally or be held up.
Dreams are always brilliant while the world is always ordinary, but people’s life goes better and better due to the existence of dreams. XFA will continue to expand thought and help you to win in the new waves of technology.
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