[Today’s Guide]
> Forest industry shifts focus to maintaining ecological safety, listed forestation companies to see opportunities
> Ministry of Commerce supports agricultural e-business, MEP to conduct special inspection on air pollution
> Anke Biotechnology to acquire Soho-Yiming Phar., Jinrui Mineral Development to acquire Mingli Chemical with RMB2.5 bln
> Joyson Electronic to develop intelligent drive, Xinjiang Machinery Research Institute to develop aviation and military industry through private placement
[XFA Focus]
○ Forest industry shifts focus to maintaining ecological safety, listed forestation companies to see opportunities
------
The videophone conference on the reform work at the state-owned forestry farms and areas across the country has been convened on March 17. Chinese Vice-Premier Wang Yang emphasized that it should focus on the strategic positioning of giving play to the ecological functions and maintaining ecological safety, speed up in improving the forestry resources surveillance system, innovate the resources management and protection models and strengthening the supporting policies system to promote the forestry development to transform from timber production to ecological restoration and construction and from seeking economic benefits on forestry to providing ecological services. The conference also made plans on the land greening work in 2015. Xinhua News Agency released the full text of the “Reform Plan on State-owned Forestry Farms” and the “Instructions on the Reform of State-owned Forestry Areas”.
Comment: The transformation of the forestry development from timber production to ecological restoration and construction will bring opportunities to listed forestation companies. Lingnan Landscape Co., Ltd. (002717.SZ) participated in the construction of the protection forest in Tongzhou District, Beijing and other districts. The company entered into a PPP cooperation framework agreement with a value of 5 billion yuan with Feixin County, Hefei City recently. The manmade forest of Fujian Jinsen Forestry Co., Ltd. (002679.SZ) accounts a large proportion, which is in line with the policies encouraging the logging of manmade forest instead of natural forest.
[XFA Selection]
○ The Ministry of Foreign Affairs welcomes more countries to participate in the Asian Infrastructure Investment Bank (AIIB). The number of leaders from various countries to participate in the Boao Forum for Asia 2015 will set a new high.
○ caixin.com reported that the contract on the China-Thailand railway cooperation has been officially signed. China will be responsible for the design, infrastructure construction and equipment.
○ The Securities Association of China proposes to allow securities companies and securities investment consultancy institutes to conduct accounts management business, which means that the wealth management for clients by investment consultants is likely to be approved.
○ The China Food and Drug Administration issued working instructions and plans to strengthening cosmetics production management and requires to achieve the whole-process traceability.
○ China’s third high-capacity airline will be opened for implementation with 32 airports in six provinces, one municipality and two special administrative areas to benefit.
[Industry Information]
○ Internet promotes agricultural modernization, agricultural e-business embraces development opportunities
------
The Ministry of Commerce indicated on March 17 that it will initiate a new special e-business campaign plan this year with the focus on regulating and promoting the e-business development. The major contents are to promote the e-business in rural areas and agricultural products. The Ministry of Commerce is coordinating with other relevant departments on the preparation of the “Instructions on Accelerating the Development of the E-business in Rural Areas”.
Comment: Driven by the “Internet Plus” strategy, the agricultural Internet has become a key driver in promoting the integrated operation and improving the agricultural production and operation efficiency. Leading enterprises with advantages in brands and offline channels are more competitive in the transformation into the Internet model. The online store of Luxi Chemical Group Co., Ltd. (000830.SZ) develops well. Kingenta Ecological Engineering Group Co., Ltd. (002470.SZ) is mulling the online business expansion. Shenzhen Agricultural Products Co., Ltd. (000061.SZ) owns the Qianhai Agriculture Product Exchange (APEx) and preliminarily established a national agricultural products exchange and logistics service platform.
○ Beijing, Tianjin and Hebei to see severe pollution, MEP to conduct special inspection
------
The Ministry of Environmental Protection (MEP) indicated that Beijing, Tianjin Municipality and Hebei Province as well as the surrounding areas are likely to experience severe pollution in late March as the meteorological conditions are not favorable for the dispersion of air pollutants. The MEP will conduct a special inspection on the prevention and control of air pollution in the areas. The results of the inspection will be key criteria for the assessment on local governments.
Comment: Based on past experiences, the industrial dedusting is a key area in inspections, which will force enterprises not meet the emission criteria to invest in dedusting equipment. Among the environmental protection enterprises in Beijing, Tianjin Municipality and Hebei Province, Kelin Environmental Protection Equipment, Inc. (002499.SZ) is a leading dedusting equipment manufacturer. The products of Hebei Sailhero Environmental Protection High-tech Co., Ltd. (300137.SZ) include the online automatic gas surveillance system.
[Companies Hotspot]
○ Hunan TV & Broadcast Intermediary to release details in cooperation with Lions Gate Films
------
XFA learnt that the launching ceremony on the cooperation between Hunan TV & Broadcast Intermediary Co., Ltd. (000917.SZ) and the U.S. Lions Gate Films as well as the global release of the new film will be held on March 18 morning. Both parties will complete the launching ceremony for their cooperation in the following three years and release eight films of Hunan TV & Broadcast Intermediary as well as the first films covered by the Lions Gate Films. Hunan TV & Broadcast Intermediary is advancing towards a comprehensive media and entertainment group. It plans to develop the business model of “Mobile Internet + Big Data + Advertising and Marketing”.
[Announcement Interpretation]
○ Anke Biotechnology to acquire Soho-Yiming Phar. to improve biological medicine product line
------
Anhui Anke Biotechnology (Group) Co., Ltd. (300009.SZ) plans to acquire 100 percent equities of Shanghai Soho-Yiming Pharmaceuticals Co., Ltd. (SHYM-Pharma) with an estimated value of 405 million yuan by issuing shares at 15.09 yuan per share through private placement and in cash. Meanwhile, the company plans to raise 100 million yuan from employee shareholding plan by issuing shares at no less than 15.65 yuan per share. The counterparty promises that the net profit of SHYM-Pharma will be no less than 30 million yuan, 36 million yuan and 43.20 million yuan from 2015 to 2017.
The main products of SHYM-Pharma are raw materials of polypeptide and customized peptide, which are mainly applied in the treatment of hepatopathy, gynecological diseases, growth and development, etc. The reorganization helps the listed company to improve biological medicine product line.
○ Jinrui Mineral Development to acquire Mingli Chemical with RMB2.5 bln to develop phosphorus chemical industry
------
Qinghai Jinrui Mineral Development Co., Ltd. (600714.SH) plans to acquire 100 percent equities of Guangxi Mingli Chemical Co., Ltd. with 2.5 billion yuan by issuing shares at 10.80 yuan per share through private placement and in cash. As a phosphorus chemical enterprise focusing on integrated development, manufacturing and sales of phosphoric acid and phosphate series products, Mingli Chemical estimates that its net profit in 2015 to reach 170 million yuan, representing a large surge compared with 2014.
Comment: Principally engaged in coal industry, the company sees declining profitability. By acquiring Mingli Chemical, the leading domestic phosphoric acid and phosphate manufacturer, it gains new profit growth point.
○ Joyson Electronic to invest RMB500 mln in intelligent drive and car networking
------
Ningbo Joyson Electronic Corp. (600699.SH) will invest 500 million yuan in establishing Joyson Intelligent Car Networking Co., Ltd. to focus on equity investment in enterprises, which are undergoing growth, expansion and mature periods and have good industry development prospect and acquisition value, in global intelligent drive and car networking industry.
Comment: The company will improve its layout in service area and software area including car networking, intelligent drive, automatic drive, etc. through this investment.
○ Xinjiang Machinery Research Institute to acquire Mingri Yuhang Industry with RMB3.6 bln to develop aviation and military industry
------
Xinjiang Machinery Research Institute Co., Ltd. (300159.SZ) plans to acquire 100 percent equities of Shifang Mingri Yuhang Industry Co., Ltd. with 3.64 billion yuan by issuing shares at 10.54 yuan per share through private placement and in cash. Meanwhile, it plans to raise 984 million yuan from Zhou Weihua, actual controller of the company, Wu Yang and the employee shareholding plan of the listed company by issuing shares at 12.73 yuan per share through private placement.
Mingri Yuhang, providing supporting components to several aerospace enterprises in China, mainly produces aircraft structural parts of airplanes, guided missiles, carrier rocket, spaceship, etc. According to performance commitment, the net profit of Mingri Yuhang shall be no less than 170 million yuan, 240 million yuan and 400 million yuan from 2015 to 2017. Since the actual controller of the company is not changed, the acquisition does not lead to back-door listing. Xinjiang Machinery Research Institute also announces that its controlling shareholder suggests its 2014 annual distribution scheme to be a 10-for-10 conversion of capital surplus into shares combined with 0.5 yuan dividend for every 10 shares.
○ Kaier New Materials to invest RMB500 mln in main business through private placement
------
Zhejiang Kaier New Materials Co., Ltd. (300234.SZ) plans to raise 507.5 million yuan by issuing 31.84 million shares at 15.94 yuan per share through private placement to Xing Hanxue, its controlling shareholder, Chu Xiaobo, Conba Group, Shanghai Xunli Investment Co., Ltd., Hangzhou Huahong Haitai Investment Management Partnership to invest in new-type functional enamel material industrialization base construction project, technical modification of enamel steel plate production line producing 0.3 million square meter and to supplement working capital.
[Financial Reports Express]
○ SDL Technology, Kennede Electronics Mfg and Yawei Machine Tool plan high share dividend
------
Due to the performance of orders on hand, the net profit of Beijing SDL Technology Co., Ltd. (002658.SH) sees a year-on-year growth of 48 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. Kennede Electronics Mfg Co., Ltd. (002723.SH) proposes 5-for-10 bonus shares and a 5-for-10 conversion of capital surplus into shares combined with 2 yuan dividend for every 10 shares in its 2014 annual report. Jiangsu Yawei Machine Tool Co., Ltd. (002559.SH) proposes a 10-for-10 conversion of capital surplus into shares combined with 2.5 yuan dividend for every 10 shares in its 2014 annual report.
[Trading Trends]
○ Central bank guides capital rate to go down
------
The central bank carried out 7-day reverse repurchase of 20 billion yuan on March 17 and the amount shrank compared with last Thursday, but the bidding interest rate decreased from 3.75 percent to 3.65 percent.
Comment: Research institutions believe that this move of the central bank tends to guide the capital rate to go down. The capital rate does not go down after the interest-rate cut on March1 and cannot support the decreasing of financial cost and economic recovery. The rate of reverse repurchase might further go down in the future.
[Trading Alarms]
○ Zhongtai Cryogenic Technology launches subscription on March 18
------
Hangzhou Zhongtai Cryogenic Technology Corporation (300435.SZ), principally engaged in cryogenic technology processing equipment, issues shares at 14.73 yuan per share with an up-limit of 8,000 shares per account.
> Forest industry shifts focus to maintaining ecological safety, listed forestation companies to see opportunities
> Ministry of Commerce supports agricultural e-business, MEP to conduct special inspection on air pollution
> Anke Biotechnology to acquire Soho-Yiming Phar., Jinrui Mineral Development to acquire Mingli Chemical with RMB2.5 bln
> Joyson Electronic to develop intelligent drive, Xinjiang Machinery Research Institute to develop aviation and military industry through private placement
[XFA Focus]
○ Forest industry shifts focus to maintaining ecological safety, listed forestation companies to see opportunities
------
The videophone conference on the reform work at the state-owned forestry farms and areas across the country has been convened on March 17. Chinese Vice-Premier Wang Yang emphasized that it should focus on the strategic positioning of giving play to the ecological functions and maintaining ecological safety, speed up in improving the forestry resources surveillance system, innovate the resources management and protection models and strengthening the supporting policies system to promote the forestry development to transform from timber production to ecological restoration and construction and from seeking economic benefits on forestry to providing ecological services. The conference also made plans on the land greening work in 2015. Xinhua News Agency released the full text of the “Reform Plan on State-owned Forestry Farms” and the “Instructions on the Reform of State-owned Forestry Areas”.
Comment: The transformation of the forestry development from timber production to ecological restoration and construction will bring opportunities to listed forestation companies. Lingnan Landscape Co., Ltd. (002717.SZ) participated in the construction of the protection forest in Tongzhou District, Beijing and other districts. The company entered into a PPP cooperation framework agreement with a value of 5 billion yuan with Feixin County, Hefei City recently. The manmade forest of Fujian Jinsen Forestry Co., Ltd. (002679.SZ) accounts a large proportion, which is in line with the policies encouraging the logging of manmade forest instead of natural forest.
[XFA Selection]
○ The Ministry of Foreign Affairs welcomes more countries to participate in the Asian Infrastructure Investment Bank (AIIB). The number of leaders from various countries to participate in the Boao Forum for Asia 2015 will set a new high.
○ caixin.com reported that the contract on the China-Thailand railway cooperation has been officially signed. China will be responsible for the design, infrastructure construction and equipment.
○ The Securities Association of China proposes to allow securities companies and securities investment consultancy institutes to conduct accounts management business, which means that the wealth management for clients by investment consultants is likely to be approved.
○ The China Food and Drug Administration issued working instructions and plans to strengthening cosmetics production management and requires to achieve the whole-process traceability.
○ China’s third high-capacity airline will be opened for implementation with 32 airports in six provinces, one municipality and two special administrative areas to benefit.
[Industry Information]
○ Internet promotes agricultural modernization, agricultural e-business embraces development opportunities
------
The Ministry of Commerce indicated on March 17 that it will initiate a new special e-business campaign plan this year with the focus on regulating and promoting the e-business development. The major contents are to promote the e-business in rural areas and agricultural products. The Ministry of Commerce is coordinating with other relevant departments on the preparation of the “Instructions on Accelerating the Development of the E-business in Rural Areas”.
Comment: Driven by the “Internet Plus” strategy, the agricultural Internet has become a key driver in promoting the integrated operation and improving the agricultural production and operation efficiency. Leading enterprises with advantages in brands and offline channels are more competitive in the transformation into the Internet model. The online store of Luxi Chemical Group Co., Ltd. (000830.SZ) develops well. Kingenta Ecological Engineering Group Co., Ltd. (002470.SZ) is mulling the online business expansion. Shenzhen Agricultural Products Co., Ltd. (000061.SZ) owns the Qianhai Agriculture Product Exchange (APEx) and preliminarily established a national agricultural products exchange and logistics service platform.
○ Beijing, Tianjin and Hebei to see severe pollution, MEP to conduct special inspection
------
The Ministry of Environmental Protection (MEP) indicated that Beijing, Tianjin Municipality and Hebei Province as well as the surrounding areas are likely to experience severe pollution in late March as the meteorological conditions are not favorable for the dispersion of air pollutants. The MEP will conduct a special inspection on the prevention and control of air pollution in the areas. The results of the inspection will be key criteria for the assessment on local governments.
Comment: Based on past experiences, the industrial dedusting is a key area in inspections, which will force enterprises not meet the emission criteria to invest in dedusting equipment. Among the environmental protection enterprises in Beijing, Tianjin Municipality and Hebei Province, Kelin Environmental Protection Equipment, Inc. (002499.SZ) is a leading dedusting equipment manufacturer. The products of Hebei Sailhero Environmental Protection High-tech Co., Ltd. (300137.SZ) include the online automatic gas surveillance system.
[Companies Hotspot]
○ Hunan TV & Broadcast Intermediary to release details in cooperation with Lions Gate Films
------
XFA learnt that the launching ceremony on the cooperation between Hunan TV & Broadcast Intermediary Co., Ltd. (000917.SZ) and the U.S. Lions Gate Films as well as the global release of the new film will be held on March 18 morning. Both parties will complete the launching ceremony for their cooperation in the following three years and release eight films of Hunan TV & Broadcast Intermediary as well as the first films covered by the Lions Gate Films. Hunan TV & Broadcast Intermediary is advancing towards a comprehensive media and entertainment group. It plans to develop the business model of “Mobile Internet + Big Data + Advertising and Marketing”.
[Announcement Interpretation]
○ Anke Biotechnology to acquire Soho-Yiming Phar. to improve biological medicine product line
------
Anhui Anke Biotechnology (Group) Co., Ltd. (300009.SZ) plans to acquire 100 percent equities of Shanghai Soho-Yiming Pharmaceuticals Co., Ltd. (SHYM-Pharma) with an estimated value of 405 million yuan by issuing shares at 15.09 yuan per share through private placement and in cash. Meanwhile, the company plans to raise 100 million yuan from employee shareholding plan by issuing shares at no less than 15.65 yuan per share. The counterparty promises that the net profit of SHYM-Pharma will be no less than 30 million yuan, 36 million yuan and 43.20 million yuan from 2015 to 2017.
The main products of SHYM-Pharma are raw materials of polypeptide and customized peptide, which are mainly applied in the treatment of hepatopathy, gynecological diseases, growth and development, etc. The reorganization helps the listed company to improve biological medicine product line.
○ Jinrui Mineral Development to acquire Mingli Chemical with RMB2.5 bln to develop phosphorus chemical industry
------
Qinghai Jinrui Mineral Development Co., Ltd. (600714.SH) plans to acquire 100 percent equities of Guangxi Mingli Chemical Co., Ltd. with 2.5 billion yuan by issuing shares at 10.80 yuan per share through private placement and in cash. As a phosphorus chemical enterprise focusing on integrated development, manufacturing and sales of phosphoric acid and phosphate series products, Mingli Chemical estimates that its net profit in 2015 to reach 170 million yuan, representing a large surge compared with 2014.
Comment: Principally engaged in coal industry, the company sees declining profitability. By acquiring Mingli Chemical, the leading domestic phosphoric acid and phosphate manufacturer, it gains new profit growth point.
○ Joyson Electronic to invest RMB500 mln in intelligent drive and car networking
------
Ningbo Joyson Electronic Corp. (600699.SH) will invest 500 million yuan in establishing Joyson Intelligent Car Networking Co., Ltd. to focus on equity investment in enterprises, which are undergoing growth, expansion and mature periods and have good industry development prospect and acquisition value, in global intelligent drive and car networking industry.
Comment: The company will improve its layout in service area and software area including car networking, intelligent drive, automatic drive, etc. through this investment.
○ Xinjiang Machinery Research Institute to acquire Mingri Yuhang Industry with RMB3.6 bln to develop aviation and military industry
------
Xinjiang Machinery Research Institute Co., Ltd. (300159.SZ) plans to acquire 100 percent equities of Shifang Mingri Yuhang Industry Co., Ltd. with 3.64 billion yuan by issuing shares at 10.54 yuan per share through private placement and in cash. Meanwhile, it plans to raise 984 million yuan from Zhou Weihua, actual controller of the company, Wu Yang and the employee shareholding plan of the listed company by issuing shares at 12.73 yuan per share through private placement.
Mingri Yuhang, providing supporting components to several aerospace enterprises in China, mainly produces aircraft structural parts of airplanes, guided missiles, carrier rocket, spaceship, etc. According to performance commitment, the net profit of Mingri Yuhang shall be no less than 170 million yuan, 240 million yuan and 400 million yuan from 2015 to 2017. Since the actual controller of the company is not changed, the acquisition does not lead to back-door listing. Xinjiang Machinery Research Institute also announces that its controlling shareholder suggests its 2014 annual distribution scheme to be a 10-for-10 conversion of capital surplus into shares combined with 0.5 yuan dividend for every 10 shares.
○ Kaier New Materials to invest RMB500 mln in main business through private placement
------
Zhejiang Kaier New Materials Co., Ltd. (300234.SZ) plans to raise 507.5 million yuan by issuing 31.84 million shares at 15.94 yuan per share through private placement to Xing Hanxue, its controlling shareholder, Chu Xiaobo, Conba Group, Shanghai Xunli Investment Co., Ltd., Hangzhou Huahong Haitai Investment Management Partnership to invest in new-type functional enamel material industrialization base construction project, technical modification of enamel steel plate production line producing 0.3 million square meter and to supplement working capital.
[Financial Reports Express]
○ SDL Technology, Kennede Electronics Mfg and Yawei Machine Tool plan high share dividend
------
Due to the performance of orders on hand, the net profit of Beijing SDL Technology Co., Ltd. (002658.SH) sees a year-on-year growth of 48 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. Kennede Electronics Mfg Co., Ltd. (002723.SH) proposes 5-for-10 bonus shares and a 5-for-10 conversion of capital surplus into shares combined with 2 yuan dividend for every 10 shares in its 2014 annual report. Jiangsu Yawei Machine Tool Co., Ltd. (002559.SH) proposes a 10-for-10 conversion of capital surplus into shares combined with 2.5 yuan dividend for every 10 shares in its 2014 annual report.
[Trading Trends]
○ Central bank guides capital rate to go down
------
The central bank carried out 7-day reverse repurchase of 20 billion yuan on March 17 and the amount shrank compared with last Thursday, but the bidding interest rate decreased from 3.75 percent to 3.65 percent.
Comment: Research institutions believe that this move of the central bank tends to guide the capital rate to go down. The capital rate does not go down after the interest-rate cut on March1 and cannot support the decreasing of financial cost and economic recovery. The rate of reverse repurchase might further go down in the future.
[Trading Alarms]
○ Zhongtai Cryogenic Technology launches subscription on March 18
------
Hangzhou Zhongtai Cryogenic Technology Corporation (300435.SZ), principally engaged in cryogenic technology processing equipment, issues shares at 14.73 yuan per share with an up-limit of 8,000 shares per account.
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