[Today’s Guide]
> OTC capitals enthusiastic about entering market, emerging industries remain institutes’ priority
> Apple’s new product may benefit sapphire industry, acrylic acid products saw prices rises
> Tiancheng Holding to invest in financial services platform, actual controller and employee shareholding plan of Liyuan Precision Manufacturing undertake whole private placement
> Bank of Nanjing bought through three institutional seats, new round of subscription of new stocks starts on March 10
[XFA Focus]
○ OTC capitals enthusiastic about entering market, emerging industries remain institutes’ focuses
------
XFA learnt that OTC capitals have been enthusiastic about entering the market recently. Many fund companies indicated that many clients with high net value invested extra capitals in subscription as their former products recorded excellent profits. According to the latest announcement of AXA SPDB Investment Managers Co., Ltd., one of its mixed funds concluded fundraising on March 10 ahead of schedule as a result of active subscriptions by investors.
Comment: Institutes interviewed believe that the money-making effect of the A-share market is spreading and residents are more motivated to adjust their assets allocation. More capitals will be transferred to investments in stocks from industries, properties and deposits. With the deepening of reform and the transformation vigorously driven by the economy, emerging industries will remain the focus in long term. Investment opportunities dominated by the Internet, including the industrial connectivity, Internet finance, smart medical care and the online operation of traditional industries, will bring revaluation opportunities. In addition, the state-owned enterprises reform, pricing reform and other opportunities bought by policies also need to be paid more attention to.
[XFA Selection]
○ The 10-year treasury bond futures contract will be introduced for trading from next Friday. Banks, insurance and other large institutes are likely to speed up in entering the treasury bond futures market.
○ Wang Yumin, deputy director of the National Energy Administration, recently indicated that the “Certain Opinions on Further Deepening Power System Reform” will be released soon.
○ The general meetings of CSR Corporation Limited (601766.SH; 01766.HK) and China CNR Corporation Limited (06199.HK; 601299.SH) approved the proposal regarding the merger of the two companies. Their stocks will resume trading on March 10.
○ The biggest solar-powered aircraft in the world started to fly around the world on March 9. The plane uses lithium-ion batteries for power storage and is made of carbon fiber.
○ According to a research on 435 hedge funds conducted by Deutsche Bank, 25 percent investors are rosy about the Chinese market, compared with 11 percent of last year.
[Industry Information]
○ Apple to unveil new product soon, sapphire materials may become backstage hero
------
Apple Inc. (AAPL.NASDAQ; ACP.LSE) will hold its first event of this year on the early morning of March 10 Beijing time. The media invitation sent by the company reads simply “Spring Forward”. It is widely expected that the smart watch Apple Watch will highlight the event. It is learnt that certain types of Apple Watch will be equipped with sapphire covers. The major suppliers of the glass in the cover are two Chinese companies.
Comment: The cover of the watch has higher requirements on the thickness of the sapphire materials than other consumer electronic devices. It will bring huge growth opportunities for the sapphire industry in China after the Apple Watch is sold in large volumes. In terms of listed companies, Harbin Aurora Optoelectronics Technology Co., Ltd., a global sapphire leader, plans to achieve backdoor listing through Southwest Pharmaceutical Co., Ltd. (600666.SH). Han’s Laser Technology Industry Group Co., Ltd. (002008.SZ) produces the sapphire cutting equipment. Both of the companies have been part of the supply chain for Apple.
○ Acrylic acid industrial chain sees price hikes, profitability likely to continue improving
------
The quotation in the domestic acrylic acid industrial chain hiked about 5 percent on March 9, of which the acrylic acid has surged by 30 percent since February.
Comment: The market sees a low inventory on the whole currently. With few new overseas production capacities and the increasing expansion of downstream demands for environmental coating and super absorbent resin, the profitability of the industrial chain will continue to improve. In terms of listed companies, Zhejiang Satellite Petrochemical Co., Ltd. (002648.SZ) has a capacity of 480,000 tons of acrylic acid. Its newly established 450,000 tons of propane dehydrogenation project provided further supports for raw materials. Shenyang Chemical Industry Co., Ltd. (000698.SZ) also owns a project with an annual capacity of 130,000 tons of acrylic acid and esters.
[Announcement Interpretation]
○ Tiancheng Holding to invest RMB4.88 bln in financial services platform for small and micro enterprises
------
Guizhou Changzheng Tiancheng Holding Co., Ltd. (600112.SH) proposes to raise 4.88 billion yuan by issuing 400 million shares at 12.2 yuan per share through private placement. The proceeds will be used in the establishment of a small and micro financial services platform based on mobile interconnectivity. Galaxy Group, the controlling shareholder and its wholly-owned subsidiary Galaxy Industrial Company will subscribe a total of 220 million shares. Hugeleaf Wealth and Kechuang Jiayuan will subscribe 100 million and 80 million shares, respectively. The small and micro financial services platform based on mobile interconnectivity aims to serve nearly 55 million small and micro businesses and clients across the country and provide small and micro businesses with mature service solutions and fully meet various financial demands for small loans (Tiancheng Shangdaibao) and small and micro wealth management (Taicheng Daily Profits).
○ Actual controller and employee shareholding plan of Liyuan Precision Manufacturing undertake whole private placement
------
Jilin Liyuan Precision Manufacturing Co., Ltd. (002501.SZ) plans to raise 400 million yuan for paying off loans and supplementing working capital by issuing 17.63 million shares at 22.69 yuan per share through private placement. The purchasers are Wang Min, actual controller of the company, and the employee shareholding plan of Liyuan Precision Manufacturing.
Comment: Liyuan Precision Manufacturing, principally engaged in six areas including rail transit, mechanical manufacturing, electronic power, petrochemical engineering, architectural decoration and military weapons, sees its net profit growing at a compound annual growth rate of 43.67 percent since it was listed in 2010. It approved to invest 4.2 billion yuan in the manufacturing of rail cars and the deep-processing of aluminium profiles in 2014, so the company might demand large capital later.
○ Thvow Technology to develop Internet finance
------
Suzhou Thvow Technology Co., Ltd. (002564.SZ) proposes to invest 40 million yuan in Hangzhou Hengniu Information Technology Co., Ltd., accounting for 20 percent of its equities. Hengniu Information mainly operates “658 financial network” transaction platform (www.658.com), provides folk borrowers and investors with investment and financing services in the means of Internet, and aims to develop Internet finance information service platform.
○ SASAC of Zhang Jia Jie to become actual controller of Zhang Jia Jie Tourism
------
Zhang Jia Jie Tourism Group Co., Ltd. (000430.SZ) recently received a notice from Zhang Jia Jie Economic Development Investment (Group) Co., Ltd., its controlling shareholder, saying that Zhang Jia Jie Tourism Economic Development Zone Administration Committee, former actual controller of the company, has transferred Zhang Jia Jie Economic Development Investment (Group) to the State-owned Assets Supervision and Administration Commission (SASAC) of Zhang Jia Jie City for direct supervision, indicating that the SASAC of Zhang Jia Jie City has become the new actual controller of the company. According to the annual report, the net profit of Zhang Jia Jie Tourism Group hit 60.51 million yuan last year, representing a year-on-year growth of 16 percent.
○ Ultrapower Software to set up three companies to develop Internet industry
------
Beijing Ultrapower Software Co., Ltd. (300002.SZ), together with Tianjin Yunzhong Rongxin Network Technology Partnership, plans to jointly set up three new companies to focus on Internet instant messaging Cloud platform service, cellphone communication product solutions and online vocational education, respectively. Tianjin Yunzhong Rongxin Network Technology is an investment platform founded by the management team of Ultrapower Software. The establishment of three new companies contributes to the stability of the business team of the listed company and the formation of a sound incentive mechanism.
[Financial Reports Express]
○ Guoxin Energy and Huapont-nutrichem see performance growth of 40 pct and plan high share dividend
------
With net profit seeing a year-on-year growth of 41 percent in 2014, Shanxi Guoxin Energy Corporation Limited (600617.SH) proposes a 7-for-10 conversion of capital surplus into shares.
Zhang Songshan, actual controller of Huapont-nutrichem Co., Ltd. (002004.SZ), suggests that the company’s profit distribution scheme in 2014 will be a 15-for-10 conversion of capital surplus into shares combined with 3 yuan dividend for every 10 shares. The company announced earlier that its net profit in 2014 saw a growth of 41 percent year on year.
○ Net profit of Brother Enterprises in first quarter to expect growth of nearly 300 percent
------
Due to surging gross profit margin brought along by the price increase of vitamin products, Brother Enterprises Holding Co., Ltd. (002562.SZ) expects its net profit in the first quarter of 2015 to see a year-on-year growth of 239 to 288 percent.
[Trading Trends]
○ Bank of Nanjing bought through three institutional seats
------
The bank sector saw large surge on March 9. Both Bank of Ningbo Co., Ltd. (002142.SZ) and Bank of Nanjing Co., Ltd. (601009.SH) soared to the daily limit of 10 percent. The trading volume ranking list shows that Bank of Nanjing was bought through three institutional seats with a total of 191 million yuan, accounting for 9 percent of its intraday turnover. The top five seats that bought Bank of Ningbo were all business departments and the total net buying hit 325 million yuan.
Comment: Research institutions believe that two factors led to the surge of bank stocks: regulators’ study on issuing securities and futures licenses to banks; media report about the debt exchange of local governments. Debt is always a big problem impeding the valuation increase of banks. The valuation of the bank industry will be effectively improved if the debts of local government can be solved properly.
[Trading Alarms]
○ New round of subscription of new stocks starts on March 10
------
Lens Technology Co., Ltd. (300433.SZ) is issued at 22.99 yuan per share with an up-limit per account of 19,000 shares on March 10. The company is the main supplier of window protection glass globally and expands to areas like sapphire camera protection lens. Its largest client is Apple, Inc. (AAPL.NASDAQ; ACP.LSE).
Totally, 23 new stocks are going to be issued this week and most of them will be issued on March 11 and 12. Institutions consider that the overall quality of these stocks is good and the issuance of the big-cap Orient Securities Company Limited (730958.SH) on March 11 will lift the overall lot winning rate and advie investors to subscribe actively.
> OTC capitals enthusiastic about entering market, emerging industries remain institutes’ priority
> Apple’s new product may benefit sapphire industry, acrylic acid products saw prices rises
> Tiancheng Holding to invest in financial services platform, actual controller and employee shareholding plan of Liyuan Precision Manufacturing undertake whole private placement
> Bank of Nanjing bought through three institutional seats, new round of subscription of new stocks starts on March 10
[XFA Focus]
○ OTC capitals enthusiastic about entering market, emerging industries remain institutes’ focuses
------
XFA learnt that OTC capitals have been enthusiastic about entering the market recently. Many fund companies indicated that many clients with high net value invested extra capitals in subscription as their former products recorded excellent profits. According to the latest announcement of AXA SPDB Investment Managers Co., Ltd., one of its mixed funds concluded fundraising on March 10 ahead of schedule as a result of active subscriptions by investors.
Comment: Institutes interviewed believe that the money-making effect of the A-share market is spreading and residents are more motivated to adjust their assets allocation. More capitals will be transferred to investments in stocks from industries, properties and deposits. With the deepening of reform and the transformation vigorously driven by the economy, emerging industries will remain the focus in long term. Investment opportunities dominated by the Internet, including the industrial connectivity, Internet finance, smart medical care and the online operation of traditional industries, will bring revaluation opportunities. In addition, the state-owned enterprises reform, pricing reform and other opportunities bought by policies also need to be paid more attention to.
[XFA Selection]
○ The 10-year treasury bond futures contract will be introduced for trading from next Friday. Banks, insurance and other large institutes are likely to speed up in entering the treasury bond futures market.
○ Wang Yumin, deputy director of the National Energy Administration, recently indicated that the “Certain Opinions on Further Deepening Power System Reform” will be released soon.
○ The general meetings of CSR Corporation Limited (601766.SH; 01766.HK) and China CNR Corporation Limited (06199.HK; 601299.SH) approved the proposal regarding the merger of the two companies. Their stocks will resume trading on March 10.
○ The biggest solar-powered aircraft in the world started to fly around the world on March 9. The plane uses lithium-ion batteries for power storage and is made of carbon fiber.
○ According to a research on 435 hedge funds conducted by Deutsche Bank, 25 percent investors are rosy about the Chinese market, compared with 11 percent of last year.
[Industry Information]
○ Apple to unveil new product soon, sapphire materials may become backstage hero
------
Apple Inc. (AAPL.NASDAQ; ACP.LSE) will hold its first event of this year on the early morning of March 10 Beijing time. The media invitation sent by the company reads simply “Spring Forward”. It is widely expected that the smart watch Apple Watch will highlight the event. It is learnt that certain types of Apple Watch will be equipped with sapphire covers. The major suppliers of the glass in the cover are two Chinese companies.
Comment: The cover of the watch has higher requirements on the thickness of the sapphire materials than other consumer electronic devices. It will bring huge growth opportunities for the sapphire industry in China after the Apple Watch is sold in large volumes. In terms of listed companies, Harbin Aurora Optoelectronics Technology Co., Ltd., a global sapphire leader, plans to achieve backdoor listing through Southwest Pharmaceutical Co., Ltd. (600666.SH). Han’s Laser Technology Industry Group Co., Ltd. (002008.SZ) produces the sapphire cutting equipment. Both of the companies have been part of the supply chain for Apple.
○ Acrylic acid industrial chain sees price hikes, profitability likely to continue improving
------
The quotation in the domestic acrylic acid industrial chain hiked about 5 percent on March 9, of which the acrylic acid has surged by 30 percent since February.
Comment: The market sees a low inventory on the whole currently. With few new overseas production capacities and the increasing expansion of downstream demands for environmental coating and super absorbent resin, the profitability of the industrial chain will continue to improve. In terms of listed companies, Zhejiang Satellite Petrochemical Co., Ltd. (002648.SZ) has a capacity of 480,000 tons of acrylic acid. Its newly established 450,000 tons of propane dehydrogenation project provided further supports for raw materials. Shenyang Chemical Industry Co., Ltd. (000698.SZ) also owns a project with an annual capacity of 130,000 tons of acrylic acid and esters.
[Announcement Interpretation]
○ Tiancheng Holding to invest RMB4.88 bln in financial services platform for small and micro enterprises
------
Guizhou Changzheng Tiancheng Holding Co., Ltd. (600112.SH) proposes to raise 4.88 billion yuan by issuing 400 million shares at 12.2 yuan per share through private placement. The proceeds will be used in the establishment of a small and micro financial services platform based on mobile interconnectivity. Galaxy Group, the controlling shareholder and its wholly-owned subsidiary Galaxy Industrial Company will subscribe a total of 220 million shares. Hugeleaf Wealth and Kechuang Jiayuan will subscribe 100 million and 80 million shares, respectively. The small and micro financial services platform based on mobile interconnectivity aims to serve nearly 55 million small and micro businesses and clients across the country and provide small and micro businesses with mature service solutions and fully meet various financial demands for small loans (Tiancheng Shangdaibao) and small and micro wealth management (Taicheng Daily Profits).
○ Actual controller and employee shareholding plan of Liyuan Precision Manufacturing undertake whole private placement
------
Jilin Liyuan Precision Manufacturing Co., Ltd. (002501.SZ) plans to raise 400 million yuan for paying off loans and supplementing working capital by issuing 17.63 million shares at 22.69 yuan per share through private placement. The purchasers are Wang Min, actual controller of the company, and the employee shareholding plan of Liyuan Precision Manufacturing.
Comment: Liyuan Precision Manufacturing, principally engaged in six areas including rail transit, mechanical manufacturing, electronic power, petrochemical engineering, architectural decoration and military weapons, sees its net profit growing at a compound annual growth rate of 43.67 percent since it was listed in 2010. It approved to invest 4.2 billion yuan in the manufacturing of rail cars and the deep-processing of aluminium profiles in 2014, so the company might demand large capital later.
○ Thvow Technology to develop Internet finance
------
Suzhou Thvow Technology Co., Ltd. (002564.SZ) proposes to invest 40 million yuan in Hangzhou Hengniu Information Technology Co., Ltd., accounting for 20 percent of its equities. Hengniu Information mainly operates “658 financial network” transaction platform (www.658.com), provides folk borrowers and investors with investment and financing services in the means of Internet, and aims to develop Internet finance information service platform.
○ SASAC of Zhang Jia Jie to become actual controller of Zhang Jia Jie Tourism
------
Zhang Jia Jie Tourism Group Co., Ltd. (000430.SZ) recently received a notice from Zhang Jia Jie Economic Development Investment (Group) Co., Ltd., its controlling shareholder, saying that Zhang Jia Jie Tourism Economic Development Zone Administration Committee, former actual controller of the company, has transferred Zhang Jia Jie Economic Development Investment (Group) to the State-owned Assets Supervision and Administration Commission (SASAC) of Zhang Jia Jie City for direct supervision, indicating that the SASAC of Zhang Jia Jie City has become the new actual controller of the company. According to the annual report, the net profit of Zhang Jia Jie Tourism Group hit 60.51 million yuan last year, representing a year-on-year growth of 16 percent.
○ Ultrapower Software to set up three companies to develop Internet industry
------
Beijing Ultrapower Software Co., Ltd. (300002.SZ), together with Tianjin Yunzhong Rongxin Network Technology Partnership, plans to jointly set up three new companies to focus on Internet instant messaging Cloud platform service, cellphone communication product solutions and online vocational education, respectively. Tianjin Yunzhong Rongxin Network Technology is an investment platform founded by the management team of Ultrapower Software. The establishment of three new companies contributes to the stability of the business team of the listed company and the formation of a sound incentive mechanism.
[Financial Reports Express]
○ Guoxin Energy and Huapont-nutrichem see performance growth of 40 pct and plan high share dividend
------
With net profit seeing a year-on-year growth of 41 percent in 2014, Shanxi Guoxin Energy Corporation Limited (600617.SH) proposes a 7-for-10 conversion of capital surplus into shares.
Zhang Songshan, actual controller of Huapont-nutrichem Co., Ltd. (002004.SZ), suggests that the company’s profit distribution scheme in 2014 will be a 15-for-10 conversion of capital surplus into shares combined with 3 yuan dividend for every 10 shares. The company announced earlier that its net profit in 2014 saw a growth of 41 percent year on year.
○ Net profit of Brother Enterprises in first quarter to expect growth of nearly 300 percent
------
Due to surging gross profit margin brought along by the price increase of vitamin products, Brother Enterprises Holding Co., Ltd. (002562.SZ) expects its net profit in the first quarter of 2015 to see a year-on-year growth of 239 to 288 percent.
[Trading Trends]
○ Bank of Nanjing bought through three institutional seats
------
The bank sector saw large surge on March 9. Both Bank of Ningbo Co., Ltd. (002142.SZ) and Bank of Nanjing Co., Ltd. (601009.SH) soared to the daily limit of 10 percent. The trading volume ranking list shows that Bank of Nanjing was bought through three institutional seats with a total of 191 million yuan, accounting for 9 percent of its intraday turnover. The top five seats that bought Bank of Ningbo were all business departments and the total net buying hit 325 million yuan.
Comment: Research institutions believe that two factors led to the surge of bank stocks: regulators’ study on issuing securities and futures licenses to banks; media report about the debt exchange of local governments. Debt is always a big problem impeding the valuation increase of banks. The valuation of the bank industry will be effectively improved if the debts of local government can be solved properly.
[Trading Alarms]
○ New round of subscription of new stocks starts on March 10
------
Lens Technology Co., Ltd. (300433.SZ) is issued at 22.99 yuan per share with an up-limit per account of 19,000 shares on March 10. The company is the main supplier of window protection glass globally and expands to areas like sapphire camera protection lens. Its largest client is Apple, Inc. (AAPL.NASDAQ; ACP.LSE).
Totally, 23 new stocks are going to be issued this week and most of them will be issued on March 11 and 12. Institutions consider that the overall quality of these stocks is good and the issuance of the big-cap Orient Securities Company Limited (730958.SH) on March 11 will lift the overall lot winning rate and advie investors to subscribe actively.
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