[Today’s Guide]
> Shanghai state-owned capitals suspended trading one after another, SOEs reform fully conducted
> Aligame’s game platform strategy more clear, fuel cells technology achieves breakthroughs
> Venustech to develop information safety, Ancai Hi-Tech to develop gas business
> Substantial shareholder of Kingray New Materials Science & Technology launches mixed ownership reform, three companies see large growth of net profit in 1st quarter
[XFA Focus]
○ Shanghai state-owned capitals suspended trading one after another, SOEs reform fully conducted
------
Various state-owned listed companies in Shanghai suspended trading recently. Shanghai Maling Aquarius Co., Ltd. (600073.SH) announced trading suspension on March 11 evening as its controlling shareholder Bright Food (Group) Co., Ltd. mulls significant matters over the company. Bright Dairy & Food Co., Ltd. (600597.SH) also suspended trading as a result of significant matters last week. In addition, Shanghai Bailian Group Co., Ltd. (600827.SH) also plans to suspend trading for private placement soon. Currently, Double Coin Holdings., Ltd. (600623.SH), which is preparing the assets injection from Shanghai Huayi (Group) Company and Shanghai Chengtou Holding Co., Ltd. (600649.SH), which is involved in the B shares reform of Shanghai Young Sun Investment Co., Ltd (900935.SH), also suspended trading.
Comment: Market participants believe that there are two hotspots in the state-owned capitals reform in Shanghai in short term, namely those have been transferred to the state-owned capitals flow platform possibly plan to conduct mixed ownership reform, such as Bright Food (Group) and those to further advance assets securitization and even for overall listing. Shanghai Electric Group Company Limited (02727.HK; 601727.SH) confirmed that its controlling shareholder will consolidate and inject its own quality assets for overall listing. Investors should pay close attention to the signs of assets consolidation of listed companies, such as the reelection of board of directors or the partnership with well-known strategic investors. For example, Maling Aquarius reelected its board of directors. Chengtou Holding and Shanghai Jinjiang International Hotels Development Co., Ltd. (600754.SH) both were injected by Hony Capital.
[XFA Selection]
○ Chinese Deputy Finance Minister Zhu Guangyao indicated on March 11 that the arrangement allowing local governments to swap 1 trillion yuan of their existing high-interest debts for lower-cost bonds will be unveiled soon.
○ China’s industrial added value above the designated scale grew 6.8 percent and the retail sales of consumer goods climbed 10.7 percent in the first two months.
○ The CeBIT Hannover 2015will be held from March 16 to 20 in Germany. Industry 4.0 application is to catch attention.
○ Hebei Province will conduct a special campaign on upgrading the extra low emission from coal power plants. All coal generator units will be transformed and upgraded.
○ The Federal Reserve’s policy meeting to be held next week may increase the expectation on interest hikes. The U.S. Dollar Index runs towards 100 points after continuous hiking.
[Industry Information]
○ Aligame’s game platform strategy more clear, mobile game developers likely to benefit
------
Sina Technology reported that 9Game.com, known as the “first portal for mobile games downloading”, has preliminarily completed the integration with Aligame. It will announce the new strategy on the mobile game platform on March 16.
Comment: The game industry is dominated by Tencent Holdings Limited (00700.HK), Baidu.com and other platforms currently. The development of the game industry by Alibaba Group Holding Limited (BABA.NYSE) will reshuffle the industry, which will increase the proportion of game developers in the profits and improve their profitability. The mobile game of Jiangsu Phoenix Publishing & Media Corporation Limited (601928.SH) and Chengdu B-ray Media Co., Ltd. (600880.SH) accounts for high proportion in their revenues.
○ China’s SOFC achieves breakthrough, fuel cells to further develop
------
Xinhua News Agency reported that the independent power generation system with 5KW solid oxide fuel cell (SOFC) has been independently developed by Huazhong University of Science and Technology with indigenous technology. It marks a new breakthrough in the independent power generation technology with the SOFC system in China. It is generally qualified for entering into the engineering and productization processes.
Comment: The SOFC can directly generate power with natural gas and other fuels without noble metal catalysts, which is generally considered as a green energy technology in the 21st century. The U.S. Bloom Energy is monopolizing the SOFC industry currently. Among A-share companies, Chaozhou Three-Circle (Group) Co., Ltd. (300408.SZ) and Guangdong Orient Zirconic Ind Sci and Tech Co., Ltd. (002167.SZ) are major suppliers of ceramic diaphragm plates for fuel cells of Bloom Energy.
[Announcement Interpretation]
○ Venustech to acquire two companies to develop information safety
------
Beijing Venustech Inc. (002439.SZ) proposes to acquire 100 percent equities of Anfang Gaoke Electromagnetism Safety Technology (Beijing) Co., Ltd. and 49 percent equities of its subsidiary Hangzhou Unimas Data Technology Co., Ltd. through issuing shares at 19.52 yuan per share and the payment in cash. The total transaction volume is 376 million yuan. Meanwhile, it proposes to raise supporting funds by issuing shares at 21.6 yuan per share to the first phase of employee shareholding plan of Venustech. The counterparty committed that the net profit after extraordinary items of Anfang Gaoke from 2015 to 2017 will be no less than 18.50 million yuan, 21.50 million yuan and 23.60 million yuan, respectively and 63.60 million yuan in total. The net profit of Unimas Data will be no less than 25.00 million yuan, 31.25 million yuan and 36.10 million yuan, respectively.
Anfang Gaoke is principally engaged in electromagnetic shielding engineering and products with Party and government authorities, armies and military enterprises as its major clients. Unimas Data is a professional information safety manufacturer in the big data handling technology and the research and development and sale of safety data exchange products. The company will hold 100 percent equities of 合众数据 after the acquisition. Anfang Gaoke and Unimas Data are leaders in their information safety subdivided industries.
○ Ancai Hi-Tech to develop natural gas business
------
Henan Ancai Hi-Tech Co., Ltd. (600207.SH) announces that its reorganization of major assets will be replaced by the issuance of additional stocks. It plans to raise 685 million yuan by issuing shares at 4.75 yuan per share through private placement. Among which, 480 million yuan will be used to acquire 55 percent equities of Henan Zhongyuan Gas Exploration Co., Ltd. and the rest will be used to supplement working capital. This move of the company will accelerate its business transformation and improve the layout of gas business.
○ Wanma to control Huaguang Cable & Electrical Appliance with RMB180 mln
------
Zhejiang Wanma Co., Ltd. (002276.SZ) plans to acquire 90 percent equities of Jiangsu Huaguang Cable & Electrical Appliance Co., Ltd. with 180 million yuan of its own capital. Huaguang Cable & Electrical Appliance, engaged in the manufacturing and sale of nuclear-class cables, marine cables, electrical penetrations, etc., owns qualifications concerning civilian nuclear equipment design and manufacturing license, marine cable factory certificate, certificate quality system of military products and level-3 confidentiality unit qualifications. The counterparty promises that the net profit of Huaguang Cable & Electrical Appliance will be no less than 20 million yuan in 2015; the net profit in 2016 will be no less than 24 million yuan and growing by no less than 20 percent compared with the figure in 2015; the net profit in 2017 will be no less than 30 million yuan and growing by no less than 25 percent compared with the figure in 2016.
[Companies Hotspot]
○ Substantial shareholder of Kingray New Materials Science & Technology launches pilot mixed ownership reform in employee shareholding
------
XFA learns that Changsha Research Institute of Mining and Metallurgy Co., Ltd., under China Minmetals Corporation, has launched the pilot of mixed ownership in the employee shareholding. Changsha Research Institute of Mining and Metallurgy is the substantial shareholder of Kingray New Materials Science & Technology Co., Ltd. (600390.SH).
Comment: Compared with equity incentive scheme, the employee shareholding plan is more useful for reference since it needs real money and it is usually the premonition of packaged capital operation and a series of business changes. As for SOEs, the employee shareholding can break original system restrictions and contributes to the value return of SOEs.
[Financial Reports Express]
○ Meichen Science & Technology, Silver Age Sci & Tech and Hybio Phar. propose high share dividend, net profit in 1st quarter expects large growth
------
With net profit in 2014 seeing a year-on-year growth of 222 percent, Shandong Meichen Science & Technology Co., Ltd. (300237.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares. The net profit of the company in the first quarter of 2015 expects a growth of 78~107 percent.
With net profit in 2014 seeing a year-on-year growth of 97.31 percent, Guangdong Silver Age Sci & Tech Co., Ltd. (300221.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 0.45 yuan dividend for every 10 shares. The net profit of the company in the first quarter of 2015 expects a growth of 65~95 percent.
With net profit in 2014 seeing a year-on-year growth of 35 percent, Hybio Pharmaceutical Co., Ltd. (300199.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares. The net profit of the company in the first quarter of 2015 expects a growth of 70~90 percent.
[Trading Trends]
○ Structural market goes popular, various capitals enter stock market
------
Latest data from China Securities Investor Protection Fund Corporation Limited shows that the net inflow of securities margin recorded 132.3 billion yuan last week. According to statistics, a total financing capital of 156.7 billion yuan flowed to the A-share market in 10 trading days after the Spring Festival vocation. Moreover, lots of financial funds enter stock market after the Spring Festival and equity funds are also favored by investors. Business departments of securities indicate that the establishment of accounts in the ChiNext Board climbs obviously after growth stocks rise.
Comment: Unlike the “20 percent rise vs 80 percent decrease” market earlier, the recent structural market leads to large surge of many stocks in short term. Obvious money-making effect is the reason why capitals are attracted into the stock market continuously. Research institutions believe that multi factors including the demand of the transformation and upgrading of national economy, the change of major assets allocation, allocation of overseas incremental capital, etc., determine that the stock market will continue to rise.
[Trading Alarms]
○ 11 new stocks including Baofeng Technology start subscription on March 12
------
Beijing Baofeng Technology Co., Ltd. (300431.SZ) issues shares at 7.14 yuan per share with an up-limit of 12,000 shares per account; Changzhou Tronly New Electronic Materials Co., Ltd. (300429.SZ) issues shares at 15.89 yuan per share with an up-limit of 8,000 shares per account; Beibu Gulf Tourism Corporation Limited (732869.SH) issues shares at 5.03 yuan per share with an up-limit of 21,000 shares per account; Anhui Jiuhuashan Tourism Development Co., Ltd. (732199.SH) issues shares at 12.08 yuan per share with an up-limit of 10,000 shares per account; Changzhou Tenglong Auto Parts Co., Ltd. (732158.SH) issues shares at 14.53 yuan per share with an up-limit of 10,000 shares per account; Shanghai Trendzone Construction Decoration Group Co., Ltd. (732030.SH) issues shares at 9.85 yuan per share with an up-limit of 16,000 shares per account; Apple Flavor Fragrance Group Co., Ltd. (732020.SH) issues shares at 20.47 yuan per share with an up-limit of 12,000 shares per account; Shanghai Chuangli Group Co., Ltd. (732012.SH) issues shares at 13.56 yuan per share with an up-limit of 31,000 shares per account; Kunming Longjin Pharmaceutical Co., Ltd. (002750.SZ) issues shares at 21.21 yuan per share with an up-limit of 6,500 shares per account; Sichuan Guoguang Agrochemical Co., Ltd. (002749.SZ) issues shares at 26.92 yuan per share with an up-limit of 7,500 shares per account; Nanjing Estun Automation Co., Ltd. (002747.SZ) issues shares at 6.8 yuan per share with an up-limit of 12,000 shares per account.
Maximum subscription totally needs 1.83 million yuan. Baofeng Technology is widely recommended by institutions since they are optimistic about the advertisement injecting value of Storm Player, an Internet media under Baofeng Technology. Tronly New Electronic Materials, engaged in special chemicals for photoresist, is also recommended by institutions.
> Shanghai state-owned capitals suspended trading one after another, SOEs reform fully conducted
> Aligame’s game platform strategy more clear, fuel cells technology achieves breakthroughs
> Venustech to develop information safety, Ancai Hi-Tech to develop gas business
> Substantial shareholder of Kingray New Materials Science & Technology launches mixed ownership reform, three companies see large growth of net profit in 1st quarter
[XFA Focus]
○ Shanghai state-owned capitals suspended trading one after another, SOEs reform fully conducted
------
Various state-owned listed companies in Shanghai suspended trading recently. Shanghai Maling Aquarius Co., Ltd. (600073.SH) announced trading suspension on March 11 evening as its controlling shareholder Bright Food (Group) Co., Ltd. mulls significant matters over the company. Bright Dairy & Food Co., Ltd. (600597.SH) also suspended trading as a result of significant matters last week. In addition, Shanghai Bailian Group Co., Ltd. (600827.SH) also plans to suspend trading for private placement soon. Currently, Double Coin Holdings., Ltd. (600623.SH), which is preparing the assets injection from Shanghai Huayi (Group) Company and Shanghai Chengtou Holding Co., Ltd. (600649.SH), which is involved in the B shares reform of Shanghai Young Sun Investment Co., Ltd (900935.SH), also suspended trading.
Comment: Market participants believe that there are two hotspots in the state-owned capitals reform in Shanghai in short term, namely those have been transferred to the state-owned capitals flow platform possibly plan to conduct mixed ownership reform, such as Bright Food (Group) and those to further advance assets securitization and even for overall listing. Shanghai Electric Group Company Limited (02727.HK; 601727.SH) confirmed that its controlling shareholder will consolidate and inject its own quality assets for overall listing. Investors should pay close attention to the signs of assets consolidation of listed companies, such as the reelection of board of directors or the partnership with well-known strategic investors. For example, Maling Aquarius reelected its board of directors. Chengtou Holding and Shanghai Jinjiang International Hotels Development Co., Ltd. (600754.SH) both were injected by Hony Capital.
[XFA Selection]
○ Chinese Deputy Finance Minister Zhu Guangyao indicated on March 11 that the arrangement allowing local governments to swap 1 trillion yuan of their existing high-interest debts for lower-cost bonds will be unveiled soon.
○ China’s industrial added value above the designated scale grew 6.8 percent and the retail sales of consumer goods climbed 10.7 percent in the first two months.
○ The CeBIT Hannover 2015will be held from March 16 to 20 in Germany. Industry 4.0 application is to catch attention.
○ Hebei Province will conduct a special campaign on upgrading the extra low emission from coal power plants. All coal generator units will be transformed and upgraded.
○ The Federal Reserve’s policy meeting to be held next week may increase the expectation on interest hikes. The U.S. Dollar Index runs towards 100 points after continuous hiking.
[Industry Information]
○ Aligame’s game platform strategy more clear, mobile game developers likely to benefit
------
Sina Technology reported that 9Game.com, known as the “first portal for mobile games downloading”, has preliminarily completed the integration with Aligame. It will announce the new strategy on the mobile game platform on March 16.
Comment: The game industry is dominated by Tencent Holdings Limited (00700.HK), Baidu.com and other platforms currently. The development of the game industry by Alibaba Group Holding Limited (BABA.NYSE) will reshuffle the industry, which will increase the proportion of game developers in the profits and improve their profitability. The mobile game of Jiangsu Phoenix Publishing & Media Corporation Limited (601928.SH) and Chengdu B-ray Media Co., Ltd. (600880.SH) accounts for high proportion in their revenues.
○ China’s SOFC achieves breakthrough, fuel cells to further develop
------
Xinhua News Agency reported that the independent power generation system with 5KW solid oxide fuel cell (SOFC) has been independently developed by Huazhong University of Science and Technology with indigenous technology. It marks a new breakthrough in the independent power generation technology with the SOFC system in China. It is generally qualified for entering into the engineering and productization processes.
Comment: The SOFC can directly generate power with natural gas and other fuels without noble metal catalysts, which is generally considered as a green energy technology in the 21st century. The U.S. Bloom Energy is monopolizing the SOFC industry currently. Among A-share companies, Chaozhou Three-Circle (Group) Co., Ltd. (300408.SZ) and Guangdong Orient Zirconic Ind Sci and Tech Co., Ltd. (002167.SZ) are major suppliers of ceramic diaphragm plates for fuel cells of Bloom Energy.
[Announcement Interpretation]
○ Venustech to acquire two companies to develop information safety
------
Beijing Venustech Inc. (002439.SZ) proposes to acquire 100 percent equities of Anfang Gaoke Electromagnetism Safety Technology (Beijing) Co., Ltd. and 49 percent equities of its subsidiary Hangzhou Unimas Data Technology Co., Ltd. through issuing shares at 19.52 yuan per share and the payment in cash. The total transaction volume is 376 million yuan. Meanwhile, it proposes to raise supporting funds by issuing shares at 21.6 yuan per share to the first phase of employee shareholding plan of Venustech. The counterparty committed that the net profit after extraordinary items of Anfang Gaoke from 2015 to 2017 will be no less than 18.50 million yuan, 21.50 million yuan and 23.60 million yuan, respectively and 63.60 million yuan in total. The net profit of Unimas Data will be no less than 25.00 million yuan, 31.25 million yuan and 36.10 million yuan, respectively.
Anfang Gaoke is principally engaged in electromagnetic shielding engineering and products with Party and government authorities, armies and military enterprises as its major clients. Unimas Data is a professional information safety manufacturer in the big data handling technology and the research and development and sale of safety data exchange products. The company will hold 100 percent equities of 合众数据 after the acquisition. Anfang Gaoke and Unimas Data are leaders in their information safety subdivided industries.
○ Ancai Hi-Tech to develop natural gas business
------
Henan Ancai Hi-Tech Co., Ltd. (600207.SH) announces that its reorganization of major assets will be replaced by the issuance of additional stocks. It plans to raise 685 million yuan by issuing shares at 4.75 yuan per share through private placement. Among which, 480 million yuan will be used to acquire 55 percent equities of Henan Zhongyuan Gas Exploration Co., Ltd. and the rest will be used to supplement working capital. This move of the company will accelerate its business transformation and improve the layout of gas business.
○ Wanma to control Huaguang Cable & Electrical Appliance with RMB180 mln
------
Zhejiang Wanma Co., Ltd. (002276.SZ) plans to acquire 90 percent equities of Jiangsu Huaguang Cable & Electrical Appliance Co., Ltd. with 180 million yuan of its own capital. Huaguang Cable & Electrical Appliance, engaged in the manufacturing and sale of nuclear-class cables, marine cables, electrical penetrations, etc., owns qualifications concerning civilian nuclear equipment design and manufacturing license, marine cable factory certificate, certificate quality system of military products and level-3 confidentiality unit qualifications. The counterparty promises that the net profit of Huaguang Cable & Electrical Appliance will be no less than 20 million yuan in 2015; the net profit in 2016 will be no less than 24 million yuan and growing by no less than 20 percent compared with the figure in 2015; the net profit in 2017 will be no less than 30 million yuan and growing by no less than 25 percent compared with the figure in 2016.
[Companies Hotspot]
○ Substantial shareholder of Kingray New Materials Science & Technology launches pilot mixed ownership reform in employee shareholding
------
XFA learns that Changsha Research Institute of Mining and Metallurgy Co., Ltd., under China Minmetals Corporation, has launched the pilot of mixed ownership in the employee shareholding. Changsha Research Institute of Mining and Metallurgy is the substantial shareholder of Kingray New Materials Science & Technology Co., Ltd. (600390.SH).
Comment: Compared with equity incentive scheme, the employee shareholding plan is more useful for reference since it needs real money and it is usually the premonition of packaged capital operation and a series of business changes. As for SOEs, the employee shareholding can break original system restrictions and contributes to the value return of SOEs.
[Financial Reports Express]
○ Meichen Science & Technology, Silver Age Sci & Tech and Hybio Phar. propose high share dividend, net profit in 1st quarter expects large growth
------
With net profit in 2014 seeing a year-on-year growth of 222 percent, Shandong Meichen Science & Technology Co., Ltd. (300237.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares. The net profit of the company in the first quarter of 2015 expects a growth of 78~107 percent.
With net profit in 2014 seeing a year-on-year growth of 97.31 percent, Guangdong Silver Age Sci & Tech Co., Ltd. (300221.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 0.45 yuan dividend for every 10 shares. The net profit of the company in the first quarter of 2015 expects a growth of 65~95 percent.
With net profit in 2014 seeing a year-on-year growth of 35 percent, Hybio Pharmaceutical Co., Ltd. (300199.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares. The net profit of the company in the first quarter of 2015 expects a growth of 70~90 percent.
[Trading Trends]
○ Structural market goes popular, various capitals enter stock market
------
Latest data from China Securities Investor Protection Fund Corporation Limited shows that the net inflow of securities margin recorded 132.3 billion yuan last week. According to statistics, a total financing capital of 156.7 billion yuan flowed to the A-share market in 10 trading days after the Spring Festival vocation. Moreover, lots of financial funds enter stock market after the Spring Festival and equity funds are also favored by investors. Business departments of securities indicate that the establishment of accounts in the ChiNext Board climbs obviously after growth stocks rise.
Comment: Unlike the “20 percent rise vs 80 percent decrease” market earlier, the recent structural market leads to large surge of many stocks in short term. Obvious money-making effect is the reason why capitals are attracted into the stock market continuously. Research institutions believe that multi factors including the demand of the transformation and upgrading of national economy, the change of major assets allocation, allocation of overseas incremental capital, etc., determine that the stock market will continue to rise.
[Trading Alarms]
○ 11 new stocks including Baofeng Technology start subscription on March 12
------
Beijing Baofeng Technology Co., Ltd. (300431.SZ) issues shares at 7.14 yuan per share with an up-limit of 12,000 shares per account; Changzhou Tronly New Electronic Materials Co., Ltd. (300429.SZ) issues shares at 15.89 yuan per share with an up-limit of 8,000 shares per account; Beibu Gulf Tourism Corporation Limited (732869.SH) issues shares at 5.03 yuan per share with an up-limit of 21,000 shares per account; Anhui Jiuhuashan Tourism Development Co., Ltd. (732199.SH) issues shares at 12.08 yuan per share with an up-limit of 10,000 shares per account; Changzhou Tenglong Auto Parts Co., Ltd. (732158.SH) issues shares at 14.53 yuan per share with an up-limit of 10,000 shares per account; Shanghai Trendzone Construction Decoration Group Co., Ltd. (732030.SH) issues shares at 9.85 yuan per share with an up-limit of 16,000 shares per account; Apple Flavor Fragrance Group Co., Ltd. (732020.SH) issues shares at 20.47 yuan per share with an up-limit of 12,000 shares per account; Shanghai Chuangli Group Co., Ltd. (732012.SH) issues shares at 13.56 yuan per share with an up-limit of 31,000 shares per account; Kunming Longjin Pharmaceutical Co., Ltd. (002750.SZ) issues shares at 21.21 yuan per share with an up-limit of 6,500 shares per account; Sichuan Guoguang Agrochemical Co., Ltd. (002749.SZ) issues shares at 26.92 yuan per share with an up-limit of 7,500 shares per account; Nanjing Estun Automation Co., Ltd. (002747.SZ) issues shares at 6.8 yuan per share with an up-limit of 12,000 shares per account.
Maximum subscription totally needs 1.83 million yuan. Baofeng Technology is widely recommended by institutions since they are optimistic about the advertisement injecting value of Storm Player, an Internet media under Baofeng Technology. Tronly New Electronic Materials, engaged in special chemicals for photoresist, is also recommended by institutions.
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