[Today's Guide]
> Rapid growth expectable, online tourism sector surges largely in US
> New round of financial reform launched in Wenzhou, UAVs consumption market in full swing
> Yabao Phar. to expand capacity through private placement, Lontrue to invest in IDC establishment
> Citychamp Dartong to establish P2P platform, Sinodata to invest in establishing Internet financial Cloud center
[XFA Focus]
○ Rapid growth expectable, online tourism sector surges largely in US
------
Stock price of Ctrip.com International Ltd. (NASDAQ:CTRP) surged by 25 percent on March 20. The financial report released by Ctrip.com International on that day shows that its hotel booking saw a year-on-year growth of 53 percent in the fourth quarter of last year and traffic ticket booking saw a year-on-year increase of 102 percent. Qunar Cayman Islands Limited (NASDAQ:QUNR) also released its financial report several days ago with both its revenue and cost control better than expected by the Wall Street and its stock price hitting the highest record since listed.
Comment: Online tourism is one development direction of “Internet +”. The penetration rate of online transaction in tourism area is relatively low now. Institutions predict that it will see doubled-growth in three years. As for listed companies, China CYTS Tours Holding Co., Ltd. (600138.SH) just convened a press conference on March 20, saying that it will build new tourism ecology of “Aoyou.com+” on the basis of its online tourism website Aoyou.com; Besttone Holding Co., Ltd. (600640.SH) is a hotel and travel service platform under China Telecom Corp. Ltd. (NYSE:CHA; 00728.HK) and China Telecom is inclined to launch mixed ownership reform; Beijing UTour International Travel Service Co., Ltd., principally engaged in outbound travel, has basically established e-commerce platform.
[XFA Selection]
○ News spokesman of China Securities Regulatory Commission pointed out on March 20 that the consecutive surge of the stock market is inevitable and reasonable to some extent.
○ The number of sample stocks of the Compositional Index of Shenzhen Stock Market will be expanded from 40 to 500 and the new index will go online two months later.
○ The Shanghai securities composite index50 and CSINDEX500 futures index will appear on market on April 16 to meet the risk management demand of investors investing in small and medium-cap stocks.
○ The Ministry of Industry and Information Technology proposes to quicken the pace of merger and reorganization of steel industry to build three to five ultra-large steel groups by 2025.
○ The US dollar index dropped to 97.858 on March 20, while the prices of gold, crude oil and base metal surged largely on the same day.
[Industry Information]
○ New round of financial reform launched in Wenzhou, first privately-owned bank to open soon
------
The comprehensive financial reform trial area in Wenzhou City, Zhejiang Province will celebrate its third anniversary on March 28. XFA learns that it has submitted the scheme of a new round of reform to encourage the development of privately-owned banks, accelerate steps of private capital in establishing securities and insurance companies and support the development of third party payment and equity-based crowd-funding via Internet finance. Myshare Bank of Wenzhou plans to hold opening ceremony on March 26 and it might become the first privately-owned bank to start business.
Comment: The purpose of the financial reform in Wenzhou is to standardize folk lending and to make it more transparent and legal. Financial institutions including privately-owned banks play a core role in this process. Zhejiang Huafon Spandex Co., Ltd. (002064.SZ), ZheJiang AoKang Shoes Co., Ltd. (603001.SH) and Wenzhou Hongfeng Electrical Alloy Co., Ltd. (300283.SZ) recently announced that the Myshare Bank of Wenzhou, launched by them, is approved to start business.
○ American regulators relax limitations on UAVs, consumption market in full swing
------
As reported by Reuters, the Federal Aviation Administration (FAA) of the U.S.A will soon publish new measures to relax the limitation on the specific operation of unmanned aerial vehicles (UAVs) used by enterprises. FAA has approved Amazon.com Inc. (NASDAQ:AMZN), e-commerce giant, to develop testing service of UAV express. In China, under the promotion of military-civil integration, a series of policies supporting the low altitude reform will be launched soon to provide policy support to UAV market.
Comment: Several celebrities in the technological circle and entertainment circle have paid attention to the express and aerial photograph functions of UAVs this year. Institutions predict that this year will be the first year of the UAV consumption era and the market scale might be hundreds of billions. As for listed companies, the UAV product jointly developed by Tsinghua University and Loncin Motor Co., Ltd. (603766.SH) once appeared on China International Aviation & Aerospace Exhibition, held in Zhuhai City, Guangdong Province; Sunward Intelligent Equipment Co., Ltd. (002097.SZ) is pushing forward the development of military UAVs.
[Companies Hotspot]
○ New electricity reform brings demand on cost reduction, YGSOFT to develop relevant products
------
XFA confirms that the overall scheme of new electricity reform has been distributed internally last week and it will be released officially soon. Contestable power generation and sales links will be decontrolled. The decontrol on electricity price will intensify the profit differentiation in thermal power industry and push power plants to improve energy efficiency. Service enterprises that can help power enterprises to reduce cost will get more business.
YGSOFT INC. (002063.SZ) is researched by multi institutions recently. The company is speeding up in planning for fuel intellectualization and will launch new products in May or June. Mobile-application-based “Smart Work”, its enterprise Internet community product, has started trial operation in provincial companies of China Guodian Corporation. Depending on the trial progress in the future, comprehensive promotion will be launched in Guodian.
[Announcement Interpretation]
○ Yabao Phar. to expand capacity through private placement, controlling shareholder to subscribe half
------
Yabao Pharmaceutical Group Co. Ltd. (600351.SH) proposes to issue 93 million shares at 8.38 yuan per share through private placement. Shanxi Yabao Investment Co., Ltd., its controlling shareholder, will subscribe 45 million shares or nearly 50 percent. The 779 million yuan to be raised will be invested in the expansion of two medical patches projects, the establishment of the storage and logistics center, the construction of the patch and oral liquid production lines, the establishment of the marketing network as well as supplementing working capital.
Comment: The company’s navel patch for children accounts for more than 90 percent of the market share of the antidiarrheal patches for children in China. It faces more demands than supplies and is urgent for expanding production. It is really a big brand of traditional Chinese medicine.
○ Lontrue to invest RMB2.3 bln in IDC establishment
------
Lontrue Co., Ltd. (30017.SZ) plans to raise about 2.3 billion yuan by issuing 245 million shares through private placement, of which 1.8 billion yuan will be invested in the establishment of the Internet data center (IDC) of Shanghai Hengyu Data Technology Co., Ltd. and 500 million yuan will supplement working capital. The IDC will be invested and constructed by Hengyu Data Technology, whose 90 percent equities are held by the company. It is expected that about 14,000 cabinets will be completed by end-June, 2017. The annual rental income is expected to be approximately 840 million yuan with an operating profit of 276 million yuan after completion.
Comment: Lontrue is principally engaged in fresh fruit and foods with a net profit of 88.26 million yuan in 2014.
○ Citychamp Dartong to establish P2P platform and further transform into financial business
------
Citychamp Dartong Co., Ltd. (600067.SH) and Rongshang (Beijing) Investment Co., Ltd. intend to jointly invest 50 million yuan in the establishment of Citychamp Ruifu to be engaged in the P2P Internet loans platform business. Citychamp Dartong will hold 70 percent equities of the new company. The move is to consolidate the financial resources through the mobile Internet to promote industrial transformation and upgrading and develop new profit growth opportunities.
Comment: Citychamp Dartong is transforming into a comprehensive financial company from a property company. The company has invested 1.21 billion yuan to hold 10.53 percent equities of Fudian Bank as its third largest shareholder. The company also invested in various small amount loans companies, including Huaxing small amount loans companies in Licheng District, Putian Ciry, Wuyishan City, Changtai County, Xiangcheng District, Zhangzhou City in Fujian Province. It also holds the shares of Fuzhou Longda Pawn Co., Ltd. as its second largest shareholder.
○ Sinodata to invest in establishing Internet financial Cloud center through private placement
------
Sinodata Co., Ltd. (002657.SZ) is about to raise 972 million yuan by issuing shares at an ex-price of no less than 37.89 yuan per share through private placement. The proceeds will be used in the Internet Cloud center, more investments in AHCOF Futures, the research and development center of the intelligent bank and other projects as well as supplementing working capital. Zhu Yedong, one of the controllers of the company, will subscribe with 50 million yuan.
The company also announced that it proposes to invest no more than 30 million yuan in the equity capital increase of the Dalian Financial Assets Exchange Co., Ltd. It has submitted the intention for registration and the project is under negotiation.
[Financial Reports Express]
○ Dongjiang Environmental and Jinxi Axle propose high share conversion and dividend
------
Dongjiang Environmental Company Limited (00895.HK; 002672.SZ) proposes a 15-for-10 conversion of capital surplus into shares combined with 1.5 yuan dividend for every 10 shares according to its 2014 annual report. It was estimated that the net profit of the company in 2014 would increase 21 percent year on year. Jinxi Axle Company Limited (600495.SH) proposes a 8-for-10 conversion of capital surplus into shares combined with 0.65 yuan dividend for every 10 shares. It net profit in 2014 increases 23 percent year on year.
[Weekly Review]
○ Be alert in the booming stock market
------
The A-share market saw quantity and price hikes last week with the SSE Composite Index reaching nearly 3,600 points. The hike in eight consecutive trading days witnessed short squeezes and set a new high in seven years. With more capitals flowing into the market and more enthusiastic investors, the turnover exceeded 1 trillion yuan for four trading days. The securities companies stocks surged after a long time of silence last Friday (March 20), showing the signal of recovery.
XFA remained at the frontier of the stock market last week. It predicated the surging of Internet finance from the aero engines campaign to smart manufacturing in China, from the Internet agriculture to agricultural e-business and the financing of the Lufax.com. In terms of individual stocks, Beijing Water Business Doctor Co., Ltd. (300055.SZ) and Beijing Toread Outdoor Products Co., Ltd. (300005.SZ) displayed the opportunities for profits. Shenzhen Hongtao Decoration Co., Ltd. (002325.SZ), Net263 Ltd. (002467.SZ), Pubang Landscape Architecture Co., Ltd. (002663.SZ), Anhui Anke Biotechnology (Group) Co., Ltd. (300009.SZ) and Xinjiang Machinery Research Institute Co., Ltd. (300159.SZ) surged by the daily limit of 10 percent one after another.
With the surging of the A-share market, the China Securities Regulatory Commission (CSRC) supported the stock market on weekend, indicating that the strong stock market shows the recognition of the financial risks controllability. It also reflected various other factors and is reasonable. The market saw various stocks to make profits and may fluctuate after surging high during the week. But the adjustment in short term will not reverse the bullish trend. The market also has sectors with sufficient adjustment and the Davis double-killing effect in the fundamentals, such as securities companies stocks. Investors are advised to read XFA information and continue to enjoy the feast of the bullish market.
> Rapid growth expectable, online tourism sector surges largely in US
> New round of financial reform launched in Wenzhou, UAVs consumption market in full swing
> Yabao Phar. to expand capacity through private placement, Lontrue to invest in IDC establishment
> Citychamp Dartong to establish P2P platform, Sinodata to invest in establishing Internet financial Cloud center
[XFA Focus]
○ Rapid growth expectable, online tourism sector surges largely in US
------
Stock price of Ctrip.com International Ltd. (NASDAQ:CTRP) surged by 25 percent on March 20. The financial report released by Ctrip.com International on that day shows that its hotel booking saw a year-on-year growth of 53 percent in the fourth quarter of last year and traffic ticket booking saw a year-on-year increase of 102 percent. Qunar Cayman Islands Limited (NASDAQ:QUNR) also released its financial report several days ago with both its revenue and cost control better than expected by the Wall Street and its stock price hitting the highest record since listed.
Comment: Online tourism is one development direction of “Internet +”. The penetration rate of online transaction in tourism area is relatively low now. Institutions predict that it will see doubled-growth in three years. As for listed companies, China CYTS Tours Holding Co., Ltd. (600138.SH) just convened a press conference on March 20, saying that it will build new tourism ecology of “Aoyou.com+” on the basis of its online tourism website Aoyou.com; Besttone Holding Co., Ltd. (600640.SH) is a hotel and travel service platform under China Telecom Corp. Ltd. (NYSE:CHA; 00728.HK) and China Telecom is inclined to launch mixed ownership reform; Beijing UTour International Travel Service Co., Ltd., principally engaged in outbound travel, has basically established e-commerce platform.
[XFA Selection]
○ News spokesman of China Securities Regulatory Commission pointed out on March 20 that the consecutive surge of the stock market is inevitable and reasonable to some extent.
○ The number of sample stocks of the Compositional Index of Shenzhen Stock Market will be expanded from 40 to 500 and the new index will go online two months later.
○ The Shanghai securities composite index50 and CSINDEX500 futures index will appear on market on April 16 to meet the risk management demand of investors investing in small and medium-cap stocks.
○ The Ministry of Industry and Information Technology proposes to quicken the pace of merger and reorganization of steel industry to build three to five ultra-large steel groups by 2025.
○ The US dollar index dropped to 97.858 on March 20, while the prices of gold, crude oil and base metal surged largely on the same day.
[Industry Information]
○ New round of financial reform launched in Wenzhou, first privately-owned bank to open soon
------
The comprehensive financial reform trial area in Wenzhou City, Zhejiang Province will celebrate its third anniversary on March 28. XFA learns that it has submitted the scheme of a new round of reform to encourage the development of privately-owned banks, accelerate steps of private capital in establishing securities and insurance companies and support the development of third party payment and equity-based crowd-funding via Internet finance. Myshare Bank of Wenzhou plans to hold opening ceremony on March 26 and it might become the first privately-owned bank to start business.
Comment: The purpose of the financial reform in Wenzhou is to standardize folk lending and to make it more transparent and legal. Financial institutions including privately-owned banks play a core role in this process. Zhejiang Huafon Spandex Co., Ltd. (002064.SZ), ZheJiang AoKang Shoes Co., Ltd. (603001.SH) and Wenzhou Hongfeng Electrical Alloy Co., Ltd. (300283.SZ) recently announced that the Myshare Bank of Wenzhou, launched by them, is approved to start business.
○ American regulators relax limitations on UAVs, consumption market in full swing
------
As reported by Reuters, the Federal Aviation Administration (FAA) of the U.S.A will soon publish new measures to relax the limitation on the specific operation of unmanned aerial vehicles (UAVs) used by enterprises. FAA has approved Amazon.com Inc. (NASDAQ:AMZN), e-commerce giant, to develop testing service of UAV express. In China, under the promotion of military-civil integration, a series of policies supporting the low altitude reform will be launched soon to provide policy support to UAV market.
Comment: Several celebrities in the technological circle and entertainment circle have paid attention to the express and aerial photograph functions of UAVs this year. Institutions predict that this year will be the first year of the UAV consumption era and the market scale might be hundreds of billions. As for listed companies, the UAV product jointly developed by Tsinghua University and Loncin Motor Co., Ltd. (603766.SH) once appeared on China International Aviation & Aerospace Exhibition, held in Zhuhai City, Guangdong Province; Sunward Intelligent Equipment Co., Ltd. (002097.SZ) is pushing forward the development of military UAVs.
[Companies Hotspot]
○ New electricity reform brings demand on cost reduction, YGSOFT to develop relevant products
------
XFA confirms that the overall scheme of new electricity reform has been distributed internally last week and it will be released officially soon. Contestable power generation and sales links will be decontrolled. The decontrol on electricity price will intensify the profit differentiation in thermal power industry and push power plants to improve energy efficiency. Service enterprises that can help power enterprises to reduce cost will get more business.
YGSOFT INC. (002063.SZ) is researched by multi institutions recently. The company is speeding up in planning for fuel intellectualization and will launch new products in May or June. Mobile-application-based “Smart Work”, its enterprise Internet community product, has started trial operation in provincial companies of China Guodian Corporation. Depending on the trial progress in the future, comprehensive promotion will be launched in Guodian.
[Announcement Interpretation]
○ Yabao Phar. to expand capacity through private placement, controlling shareholder to subscribe half
------
Yabao Pharmaceutical Group Co. Ltd. (600351.SH) proposes to issue 93 million shares at 8.38 yuan per share through private placement. Shanxi Yabao Investment Co., Ltd., its controlling shareholder, will subscribe 45 million shares or nearly 50 percent. The 779 million yuan to be raised will be invested in the expansion of two medical patches projects, the establishment of the storage and logistics center, the construction of the patch and oral liquid production lines, the establishment of the marketing network as well as supplementing working capital.
Comment: The company’s navel patch for children accounts for more than 90 percent of the market share of the antidiarrheal patches for children in China. It faces more demands than supplies and is urgent for expanding production. It is really a big brand of traditional Chinese medicine.
○ Lontrue to invest RMB2.3 bln in IDC establishment
------
Lontrue Co., Ltd. (30017.SZ) plans to raise about 2.3 billion yuan by issuing 245 million shares through private placement, of which 1.8 billion yuan will be invested in the establishment of the Internet data center (IDC) of Shanghai Hengyu Data Technology Co., Ltd. and 500 million yuan will supplement working capital. The IDC will be invested and constructed by Hengyu Data Technology, whose 90 percent equities are held by the company. It is expected that about 14,000 cabinets will be completed by end-June, 2017. The annual rental income is expected to be approximately 840 million yuan with an operating profit of 276 million yuan after completion.
Comment: Lontrue is principally engaged in fresh fruit and foods with a net profit of 88.26 million yuan in 2014.
○ Citychamp Dartong to establish P2P platform and further transform into financial business
------
Citychamp Dartong Co., Ltd. (600067.SH) and Rongshang (Beijing) Investment Co., Ltd. intend to jointly invest 50 million yuan in the establishment of Citychamp Ruifu to be engaged in the P2P Internet loans platform business. Citychamp Dartong will hold 70 percent equities of the new company. The move is to consolidate the financial resources through the mobile Internet to promote industrial transformation and upgrading and develop new profit growth opportunities.
Comment: Citychamp Dartong is transforming into a comprehensive financial company from a property company. The company has invested 1.21 billion yuan to hold 10.53 percent equities of Fudian Bank as its third largest shareholder. The company also invested in various small amount loans companies, including Huaxing small amount loans companies in Licheng District, Putian Ciry, Wuyishan City, Changtai County, Xiangcheng District, Zhangzhou City in Fujian Province. It also holds the shares of Fuzhou Longda Pawn Co., Ltd. as its second largest shareholder.
○ Sinodata to invest in establishing Internet financial Cloud center through private placement
------
Sinodata Co., Ltd. (002657.SZ) is about to raise 972 million yuan by issuing shares at an ex-price of no less than 37.89 yuan per share through private placement. The proceeds will be used in the Internet Cloud center, more investments in AHCOF Futures, the research and development center of the intelligent bank and other projects as well as supplementing working capital. Zhu Yedong, one of the controllers of the company, will subscribe with 50 million yuan.
The company also announced that it proposes to invest no more than 30 million yuan in the equity capital increase of the Dalian Financial Assets Exchange Co., Ltd. It has submitted the intention for registration and the project is under negotiation.
[Financial Reports Express]
○ Dongjiang Environmental and Jinxi Axle propose high share conversion and dividend
------
Dongjiang Environmental Company Limited (00895.HK; 002672.SZ) proposes a 15-for-10 conversion of capital surplus into shares combined with 1.5 yuan dividend for every 10 shares according to its 2014 annual report. It was estimated that the net profit of the company in 2014 would increase 21 percent year on year. Jinxi Axle Company Limited (600495.SH) proposes a 8-for-10 conversion of capital surplus into shares combined with 0.65 yuan dividend for every 10 shares. It net profit in 2014 increases 23 percent year on year.
[Weekly Review]
○ Be alert in the booming stock market
------
The A-share market saw quantity and price hikes last week with the SSE Composite Index reaching nearly 3,600 points. The hike in eight consecutive trading days witnessed short squeezes and set a new high in seven years. With more capitals flowing into the market and more enthusiastic investors, the turnover exceeded 1 trillion yuan for four trading days. The securities companies stocks surged after a long time of silence last Friday (March 20), showing the signal of recovery.
XFA remained at the frontier of the stock market last week. It predicated the surging of Internet finance from the aero engines campaign to smart manufacturing in China, from the Internet agriculture to agricultural e-business and the financing of the Lufax.com. In terms of individual stocks, Beijing Water Business Doctor Co., Ltd. (300055.SZ) and Beijing Toread Outdoor Products Co., Ltd. (300005.SZ) displayed the opportunities for profits. Shenzhen Hongtao Decoration Co., Ltd. (002325.SZ), Net263 Ltd. (002467.SZ), Pubang Landscape Architecture Co., Ltd. (002663.SZ), Anhui Anke Biotechnology (Group) Co., Ltd. (300009.SZ) and Xinjiang Machinery Research Institute Co., Ltd. (300159.SZ) surged by the daily limit of 10 percent one after another.
With the surging of the A-share market, the China Securities Regulatory Commission (CSRC) supported the stock market on weekend, indicating that the strong stock market shows the recognition of the financial risks controllability. It also reflected various other factors and is reasonable. The market saw various stocks to make profits and may fluctuate after surging high during the week. But the adjustment in short term will not reverse the bullish trend. The market also has sectors with sufficient adjustment and the Davis double-killing effect in the fundamentals, such as securities companies stocks. Investors are advised to read XFA information and continue to enjoy the feast of the bullish market.
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