Today’s Guide]
> Nanjing state-owned capitals review highlights reform, expectation on assets integration to further strengthen
> Transportation to highlight One Belt and One Road, general airports to attract huge investment
> Saunaking proposes to fully control Jiugong Jianye, Zhengbang Technology to acquire Zhengbang Bio-chemical to develop pesticide
> Hongtao Decoration to acquire education asset, Net263 to increase investment in communication services
[XFA Focus]
○ Nanjing state-owned capitals review highlights reform, expectation on assets integration to further strengthen
------
According to the information released on the official website of the State-owned Assets Supervision and Administration Commission of Jiangsu Provincial Government (Jiangsu SASAC) on March 13, the State-owned Assets Supervision and Administration Commission of Nanjing Municipal Government (Nanjing SASAC) revised the contents and criteria of the review with the transformation of the mixed ownership system and the exit of state-owned enterprises (SOEs) from general competitive areas. For such industrial groups as Nanjing New Industrial Investment Group Co., Ltd., Nanjing Zijin Investment Group Co., Ltd., Nanjing Business & Tourism Group and Nanjing New Agriculture and Rural Area Development Group Co., Ltd., the review will focus on the growth of results and shareholders’ value as well as the integration of operating assets and resources.
Comment: Nanjing City has taken various measures on the stat-owned capitals reform. Nanjing Zhongbei (Group) Co., Ltd. (000421.SZ) was injected with gas assets. Nanjing Securities will achieve back-door listing through Nanjing Textiles Import & Export Corp., Ltd. (600250.SG). The inclusion of the reform and shareholders’ value growth in the review criteria of the Nanjing SASAC will increase the expectation on the assets integration of listed companies in Nanjing City. Information shows that listed companies under New Industrial Investment include Nanjing Pharmaceutical Company Limited (600713.SH), Jinling Pharmaceutical Company Limited (000919.SZ) and Nanjing Chemical Fibre Co., Ltd. (600889.SH). Zijin Investment Group is the biggest shareholder of Bank of Nanjing Co., Ltd. (601009.SH).
[XFA Selection]
○ Chinese Premier Li Keqiang indicated on March 15 that the tailwind generated by the Internet Plus strategy will take the Chinese economy to a higher growth path.
○ The information spokesperson of the China Securities Regulatory Commission (CSRC) said on March 13 that it will vigorously coordinate relevant departments in improving relevant systems on the operation of pension investment.
○ China will establish a unified and efficient national food safety information platform for resources sharing to accelerate the informationization in the food safety supervision.
○ Eight Internet platforms jointly issued the “Statement on Protection of Original Copyright” to reverse the trend of “high profits with low risks” of plagiarists.
○ Fan Changlong, vice-chairman of the Central Military Commission, said in an emergency telephone conversation with the commander-in-chief of the Myanmar Defense Services that China will take decisive measures if Myanmar’s warplanes flow across China-Myanmar border again.
[Industry Information]
○ Transportation construction to highlight One Belt and One Road, projects list to unveil soon
------
Correspondents at XFA learnt that the divided plan on transportation will be included in the One Belt and One Road national program to be unveiled soon. A detailed list of major projects will be released simultaneously with hundreds of major projects involved. The Phase-II China-Tajikistan Road, the Karakoram Highway and the Gwadar port will strive to commence construction in 2015.
Comment: The “road connectivity” plays a key role in the five “communications” of the One Belt and One Road strategy. The construction of coastal ports and the connectivity with the Central Asia is directly to benefit. In terms of listed companies, Jiangsu Lianyungang Port Co., Ltd. (601008.SH) is establishing the China-Tajikistan logistics base. The Xinjiang Production and Construction Corps (XPCC) expressed its support for the participation of Xinjiang Beixin Road & Bridge Group Co., Ltd. in the construction of national projects along the road.
◆ Ningbo City is mulling the construction of the economic circle around the port. It proposes to construct the Yongjin Railway and Hangzhou Bay Railway Bridge to increase the port logistics services capacity.
○ General airports blueprint to release and may attract huge investments
------
Xinhua reported on March 14 that Li Jiaxiang, director of the Civil Aviation Administration of China, said on the forum on the general aviation development strategies under the One Belt and One Road strategy that the approval of general airports has been authorized to local governments to promote the construction of general airports as soon as possible. China has more than 2,800 towns and if each town constructs one airport, the investment scale will reach one hundred billion yuan, which will greatly boost economic growth.
Comment: Series of industrial chains, including navigation services, transportation and logistics as well as culture and tourism, will be established around the general aviation. Many deputies and members at the two sessions proposed that China should improve the construction of navigation industrial chains through legislation. Enterprises engaged in ground infrastructure and equipment are likely to benefit first. Weihai Guangtai Airport Equipment Co., Ltd. (002111.SZ) is the biggest navigation ground equipment manufacturer in China. The substantial shareholder of Sichuan Jiuzhou Electronic Co., Ltd. (000801.SZ) is a large military engineering enterprise engaged in secondary radar systems and equipment as well as air control systems and equipment.
○ CNTA supports construction of Hainan tourism island, BFA might become propaganda window
------
Hainan Daily reported on March 15 that the 2015 annual conference of Boao Forum for Asia (BFA) will be convened from March 26 to 29. Relevant service assurance is under intense preparation. It is also learnt that Li Jinzao, head of the China National Tourism Administration (CNTA), met Liu Cigui, governor of Hainan Province, on March 13 and indicated to continue to support the tourism development of Hainan Province and the construction of international tourism island.
Comment: According to past experience, leaders of China and other Asian countries all will attend BFA. The forum plays an important role in the upgrading of infrastructure and tourism in Hainan Province. As for listed companies, Hainan Strait Shipping Co., Ltd. (002320.SZ) is increasing investments in the tourism route to Large Paracel Island; the substantial shareholder of Hainan Island Construction Co., Ltd. (600515.SH), under Hainan Airlines Group, enjoys advantage in land resource.
[Companies Hotspot]
○ Internet platform of Delian Group to go live soon
------
Guangdong Delian Group Co., Ltd. (002666.SZ) recently indicates during institutional survey that its Internet platform and APP platform are expected to go live around June. The plan will give consideration to both the demand of vehicle maintenance shops and end consumers, combine online and offline demand, simplify links and benefit the expansion of brand influence and market channels. The company also indicates that it has established preliminary business connection with car manufacturers in Japan and Korea.
[Announcement Interpretation]
○ Saunaking to fully control Jiugong Jianye with RMB810 mln
------
Anhui Saunaking Co., Ltd. (300247.SZ) plans to purchase 100 percent equities of Anhui Jiugong Jianye Co., Ltd., a massage apparatus producer, with 810 million yuan through private placement at 9 yuan per share and in cash. Meanwhile, a supporting fund of 200 million yuan will be raised through private placement. Jiugong Jianye, engaged in the manufacturing and sales of massage apparatus, mainly produces massage armchairs. According to the performance commitment, the net profit of Jiugong Jianye shall reach 52.80 million yuan, 66.10 million yuan and 76.10 million yuan from 2015 to 2017.
Comment: This is another extensional expansion by Saunaking recently. The main products of the company are household far-infrared physical therapy room and portable products. The transaction helps Saunaking to transform from a single household sauna health care equipment manufacturer to a health system service provider.
○ Zhengbang Technology to acquire Zhengbang Bio-chemical to develop pesticide
------
Jiangxi Zhengbang Technology Co., Ltd. (002157.SZ) plans to acquire 100 percent equities of Jiangxi Zhengbang Bio-chemical Co., Ltd. under its actual controller via Zhengbang (Hong Kong) Trading Company Ltd. with 621 million yuan. Jiangxi Zhengbang Bio-chemical Co., Ltd., mainly engaged in pesticide business, saw an revenue of 402 million yuan and a net profit of around 35 million yuan in the first three quarters of last year, while Zhengbang Technology saw a loss of around 116 million yuan in the same corresponding period. According to performance commitment, the total net profit of Zhengbang Bio-chemical shall reach 165 million yuan from 2015 to 2017.
Comment: The company, principally engaged in fodder, sees continuous performance loss in recent years. It will have pesticide business as its new profit growth point after acquiring Zhengbang Bio-chemical.
○ Hongtao Decoration to acquire 70 pct equities of Kuakao Education
------
Shenzhen Hongtao Decoration Co., Ltd. (002325.SZ) plans to acquire 70 percent equities of Kuakao Education Group with 235 million yuan. The counterparty promises that the net profit of Kuakao Education will be no less than 35 million yuan, 46 million yuan and 60 million yuan from 2015 to 2017.
Kuakao Education works on education technology development, etc., focuses on postgraduate-entrance examination training and aims to provide college students with overall high-end education and profession improvement solutions. It is an education group with nearly one thousand full-time faculty and staff, and it has constructed two full-time teaching bases, five websites and two online education live platforms.
Comment: Principally engaged in architectural decoration and finishing, the company will see its industry drop along with the slowing growth of real estate industry. The company announced to control Zhongzhuang Xinwang Technology (Beijing) Co., Ltd. to develop online vocational education in March, 2014.
○ Net263 to invest in communication service business with RMB780 mln
------
Net263 Ltd. (002467.SZ) plans to raise 784 million yuan by issuing 50.68 million shares at no less than 15.47 yuan per share through private placement to invest in “global Chinese mobile telecommunication service project” and “enterprise Cloud unified telecommunication service project”.
[Financial Reports Express]
○ Net profit of Sanju Environmental Protection & New Materials expects growth of 200 pct in Q1
------
The net profit of Beijing Sanju Environmental Protection & New Materials Co., Ltd. (300072.SZ) sees a year-on-year growth of 96 percent in 2014. It proposes a 3-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares. Due to the rapid growth of energy purification comprehensive service business, it expects its net profit in the first quarter of 2015 to see a year-on-year growth of 202 to 225 percent.
○ Wangsu Science & Technology proposes high share dividend, net profit in Q1 expects growth of over 50 pct
------
The net profit of Wangsu Science & Technology Co., Ltd. (300017.SZ) sees a year-on-year growth of 104 percent in 2014. It proposes a 12-for-10 conversion of capital surplus into shares combined with 1.5 yuan dividend for every 10 shares. Due to the steady growth of its main business and the increase of gross profit rate, it expects its net profit in the first quarter of 2015 to see a year-on-year growth of 50 to 75 percent.
> Nanjing state-owned capitals review highlights reform, expectation on assets integration to further strengthen
> Transportation to highlight One Belt and One Road, general airports to attract huge investment
> Saunaking proposes to fully control Jiugong Jianye, Zhengbang Technology to acquire Zhengbang Bio-chemical to develop pesticide
> Hongtao Decoration to acquire education asset, Net263 to increase investment in communication services
[XFA Focus]
○ Nanjing state-owned capitals review highlights reform, expectation on assets integration to further strengthen
------
According to the information released on the official website of the State-owned Assets Supervision and Administration Commission of Jiangsu Provincial Government (Jiangsu SASAC) on March 13, the State-owned Assets Supervision and Administration Commission of Nanjing Municipal Government (Nanjing SASAC) revised the contents and criteria of the review with the transformation of the mixed ownership system and the exit of state-owned enterprises (SOEs) from general competitive areas. For such industrial groups as Nanjing New Industrial Investment Group Co., Ltd., Nanjing Zijin Investment Group Co., Ltd., Nanjing Business & Tourism Group and Nanjing New Agriculture and Rural Area Development Group Co., Ltd., the review will focus on the growth of results and shareholders’ value as well as the integration of operating assets and resources.
Comment: Nanjing City has taken various measures on the stat-owned capitals reform. Nanjing Zhongbei (Group) Co., Ltd. (000421.SZ) was injected with gas assets. Nanjing Securities will achieve back-door listing through Nanjing Textiles Import & Export Corp., Ltd. (600250.SG). The inclusion of the reform and shareholders’ value growth in the review criteria of the Nanjing SASAC will increase the expectation on the assets integration of listed companies in Nanjing City. Information shows that listed companies under New Industrial Investment include Nanjing Pharmaceutical Company Limited (600713.SH), Jinling Pharmaceutical Company Limited (000919.SZ) and Nanjing Chemical Fibre Co., Ltd. (600889.SH). Zijin Investment Group is the biggest shareholder of Bank of Nanjing Co., Ltd. (601009.SH).
[XFA Selection]
○ Chinese Premier Li Keqiang indicated on March 15 that the tailwind generated by the Internet Plus strategy will take the Chinese economy to a higher growth path.
○ The information spokesperson of the China Securities Regulatory Commission (CSRC) said on March 13 that it will vigorously coordinate relevant departments in improving relevant systems on the operation of pension investment.
○ China will establish a unified and efficient national food safety information platform for resources sharing to accelerate the informationization in the food safety supervision.
○ Eight Internet platforms jointly issued the “Statement on Protection of Original Copyright” to reverse the trend of “high profits with low risks” of plagiarists.
○ Fan Changlong, vice-chairman of the Central Military Commission, said in an emergency telephone conversation with the commander-in-chief of the Myanmar Defense Services that China will take decisive measures if Myanmar’s warplanes flow across China-Myanmar border again.
[Industry Information]
○ Transportation construction to highlight One Belt and One Road, projects list to unveil soon
------
Correspondents at XFA learnt that the divided plan on transportation will be included in the One Belt and One Road national program to be unveiled soon. A detailed list of major projects will be released simultaneously with hundreds of major projects involved. The Phase-II China-Tajikistan Road, the Karakoram Highway and the Gwadar port will strive to commence construction in 2015.
Comment: The “road connectivity” plays a key role in the five “communications” of the One Belt and One Road strategy. The construction of coastal ports and the connectivity with the Central Asia is directly to benefit. In terms of listed companies, Jiangsu Lianyungang Port Co., Ltd. (601008.SH) is establishing the China-Tajikistan logistics base. The Xinjiang Production and Construction Corps (XPCC) expressed its support for the participation of Xinjiang Beixin Road & Bridge Group Co., Ltd. in the construction of national projects along the road.
◆ Ningbo City is mulling the construction of the economic circle around the port. It proposes to construct the Yongjin Railway and Hangzhou Bay Railway Bridge to increase the port logistics services capacity.
○ General airports blueprint to release and may attract huge investments
------
Xinhua reported on March 14 that Li Jiaxiang, director of the Civil Aviation Administration of China, said on the forum on the general aviation development strategies under the One Belt and One Road strategy that the approval of general airports has been authorized to local governments to promote the construction of general airports as soon as possible. China has more than 2,800 towns and if each town constructs one airport, the investment scale will reach one hundred billion yuan, which will greatly boost economic growth.
Comment: Series of industrial chains, including navigation services, transportation and logistics as well as culture and tourism, will be established around the general aviation. Many deputies and members at the two sessions proposed that China should improve the construction of navigation industrial chains through legislation. Enterprises engaged in ground infrastructure and equipment are likely to benefit first. Weihai Guangtai Airport Equipment Co., Ltd. (002111.SZ) is the biggest navigation ground equipment manufacturer in China. The substantial shareholder of Sichuan Jiuzhou Electronic Co., Ltd. (000801.SZ) is a large military engineering enterprise engaged in secondary radar systems and equipment as well as air control systems and equipment.
○ CNTA supports construction of Hainan tourism island, BFA might become propaganda window
------
Hainan Daily reported on March 15 that the 2015 annual conference of Boao Forum for Asia (BFA) will be convened from March 26 to 29. Relevant service assurance is under intense preparation. It is also learnt that Li Jinzao, head of the China National Tourism Administration (CNTA), met Liu Cigui, governor of Hainan Province, on March 13 and indicated to continue to support the tourism development of Hainan Province and the construction of international tourism island.
Comment: According to past experience, leaders of China and other Asian countries all will attend BFA. The forum plays an important role in the upgrading of infrastructure and tourism in Hainan Province. As for listed companies, Hainan Strait Shipping Co., Ltd. (002320.SZ) is increasing investments in the tourism route to Large Paracel Island; the substantial shareholder of Hainan Island Construction Co., Ltd. (600515.SH), under Hainan Airlines Group, enjoys advantage in land resource.
[Companies Hotspot]
○ Internet platform of Delian Group to go live soon
------
Guangdong Delian Group Co., Ltd. (002666.SZ) recently indicates during institutional survey that its Internet platform and APP platform are expected to go live around June. The plan will give consideration to both the demand of vehicle maintenance shops and end consumers, combine online and offline demand, simplify links and benefit the expansion of brand influence and market channels. The company also indicates that it has established preliminary business connection with car manufacturers in Japan and Korea.
[Announcement Interpretation]
○ Saunaking to fully control Jiugong Jianye with RMB810 mln
------
Anhui Saunaking Co., Ltd. (300247.SZ) plans to purchase 100 percent equities of Anhui Jiugong Jianye Co., Ltd., a massage apparatus producer, with 810 million yuan through private placement at 9 yuan per share and in cash. Meanwhile, a supporting fund of 200 million yuan will be raised through private placement. Jiugong Jianye, engaged in the manufacturing and sales of massage apparatus, mainly produces massage armchairs. According to the performance commitment, the net profit of Jiugong Jianye shall reach 52.80 million yuan, 66.10 million yuan and 76.10 million yuan from 2015 to 2017.
Comment: This is another extensional expansion by Saunaking recently. The main products of the company are household far-infrared physical therapy room and portable products. The transaction helps Saunaking to transform from a single household sauna health care equipment manufacturer to a health system service provider.
○ Zhengbang Technology to acquire Zhengbang Bio-chemical to develop pesticide
------
Jiangxi Zhengbang Technology Co., Ltd. (002157.SZ) plans to acquire 100 percent equities of Jiangxi Zhengbang Bio-chemical Co., Ltd. under its actual controller via Zhengbang (Hong Kong) Trading Company Ltd. with 621 million yuan. Jiangxi Zhengbang Bio-chemical Co., Ltd., mainly engaged in pesticide business, saw an revenue of 402 million yuan and a net profit of around 35 million yuan in the first three quarters of last year, while Zhengbang Technology saw a loss of around 116 million yuan in the same corresponding period. According to performance commitment, the total net profit of Zhengbang Bio-chemical shall reach 165 million yuan from 2015 to 2017.
Comment: The company, principally engaged in fodder, sees continuous performance loss in recent years. It will have pesticide business as its new profit growth point after acquiring Zhengbang Bio-chemical.
○ Hongtao Decoration to acquire 70 pct equities of Kuakao Education
------
Shenzhen Hongtao Decoration Co., Ltd. (002325.SZ) plans to acquire 70 percent equities of Kuakao Education Group with 235 million yuan. The counterparty promises that the net profit of Kuakao Education will be no less than 35 million yuan, 46 million yuan and 60 million yuan from 2015 to 2017.
Kuakao Education works on education technology development, etc., focuses on postgraduate-entrance examination training and aims to provide college students with overall high-end education and profession improvement solutions. It is an education group with nearly one thousand full-time faculty and staff, and it has constructed two full-time teaching bases, five websites and two online education live platforms.
Comment: Principally engaged in architectural decoration and finishing, the company will see its industry drop along with the slowing growth of real estate industry. The company announced to control Zhongzhuang Xinwang Technology (Beijing) Co., Ltd. to develop online vocational education in March, 2014.
○ Net263 to invest in communication service business with RMB780 mln
------
Net263 Ltd. (002467.SZ) plans to raise 784 million yuan by issuing 50.68 million shares at no less than 15.47 yuan per share through private placement to invest in “global Chinese mobile telecommunication service project” and “enterprise Cloud unified telecommunication service project”.
[Financial Reports Express]
○ Net profit of Sanju Environmental Protection & New Materials expects growth of 200 pct in Q1
------
The net profit of Beijing Sanju Environmental Protection & New Materials Co., Ltd. (300072.SZ) sees a year-on-year growth of 96 percent in 2014. It proposes a 3-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares. Due to the rapid growth of energy purification comprehensive service business, it expects its net profit in the first quarter of 2015 to see a year-on-year growth of 202 to 225 percent.
○ Wangsu Science & Technology proposes high share dividend, net profit in Q1 expects growth of over 50 pct
------
The net profit of Wangsu Science & Technology Co., Ltd. (300017.SZ) sees a year-on-year growth of 104 percent in 2014. It proposes a 12-for-10 conversion of capital surplus into shares combined with 1.5 yuan dividend for every 10 shares. Due to the steady growth of its main business and the increase of gross profit rate, it expects its net profit in the first quarter of 2015 to see a year-on-year growth of 50 to 75 percent.
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