[Today's Guide]
> Executive meeting of State Council emphasizes to go with “Internet Plus” and prioritize ten areas
> Standing Committee of NPC concerned about vocational education, document deepening reform on SMCs to release
> Longsheng Auto Parts to invest in metamaterials intelligent structure, Zhongyuan Huadian Science & Technology to acquire medical informationization company
> Rongxin Power Electronic to develop mobile Internet, Health 100 to achieve backdoor listing through Jiangsu Sanyou
[XFA Focus]
○ Executive meeting of State Council emphasizes to go with “Internet Plus” and prioritize ten areas
------
The executive meeting of the State Council, convened on March 25, emphasized to go with the development trend of “Internet Plus”, center around the in-depth integration of informatization and industrialization, prioritize the development of ten areas including new-generation information technology, upscale numerically-controlled machine tool and robot, aerospace equipment, ocean engineering equipment and hi-tech ship, advanced rail transit equipment, energy conservation and new energy vehicle, electronic equipment, new material, biological medicine and high-powered medical devices as well as agriculture machinery equipment, strengthen basic industrial abilities, enhance technological level and product quality, and promote intelligent and green manufacturing.
Comment: Under vigorous promotion by the government, more and more listed companies will embrace Internet to seek for reform on commercial mode, industrial upgrading, efficiency enhancement and great value increase. Research institutions consider that various industries see different integration with Internet. Currently, retail, media, etc. are relatively developed; finance, education and medical service, etc. just started out, while areas like manufacturing, energy, agriculture, etc. are under latent development period. In terms of evaluation, there are still many listed companies with low PE ratio in retail, medicine, car, machinery, chemical industries, etc., their stocks might surge a lot after these companies embrace Internet.
◆ Actively interact with Internet, Qingdao Doublestar favored by institutions
------
The trading volume ranking list on March 25 shows that Qingdao Doublestar Co., Ltd. (000599.SZ) was bought through four institutional seats with a total of 356 million yuan, accounting for 24 percent of its intraday turnover
Comment: As a traditional tire manufacturing enterprise originally, the company actively builds tire sales through O2O mode and after-sales service E2E mode after new management assumes office. It provides customers with services like “unified online order, quick offline delivery and rapid mobile payment”. Multi research institutions believe that the company will rise rapidly again in the car market.
[XFA Selection]
○ Social security funds indicated on March 25 that it will expand stock-entrusted core asset that tracks CSI 800 index as main benchmark.
○ The departure of capital for IPOs resulted in the net outflow of 508.3 billion yuan securities margin last week. 503.5 billion yuan of the net inflow of securities margin after the Spring Festival remains in the market.
○ XFA learns on March 25 that the progress of military research academies and institutes reform, shareholding reform and asset injection will be quickened.
○ Rural land system reform pilot starts implementation. It will accelerate the rights verification, registration and certification of rural collective construction land and homestead.
○ Deputy Director of the State Administration of Press, Publication, Radio, Film and Television indicated on March 25 that “Intelligent press, publication, radio, film and television” will become a significant goal of its transformation and upgrading.
○ National standardization for road transport vehicles GPS might be implemented within the year. “Internet Plus” will be resorted to improve security control ability.
[Industry Information]
○ Standing Committee of NPC launches law enforcement examination, vocational education to play greater role
------
The first law enforcement examination by the Standing Committee of NPC of 2015 is determined to be carried out in vocational education area. The first plenary session of the vocational education law enforcement examination team was convened on March 25, proposing that attentions shall be paid to prominent problems impacting and impeding the development of vocational education as well as the weak links of the implementation of vocational education law so as to improve law system.
Comment: The development of vocational education is the root measure to guarantee the improvement of people's livelihood, assure full employment, overcome poverty and achieve prosperity. Current vocational education law was published in 1996 and no longer fully adapts to the industry now. Some representatives of two sessions propose to revise the law to guarantee the legal status of vocational education and improve supporting measures. Among A-share companies, Shanghai Xin Nanyang Co., Ltd. (600661.SH) acquired Shanghai Onlyedu Technology Co., Ltd. last year and plans to initiate the establishment of education industry investment funds recently; the Northwestern Polytechnical University Ming De College, controlled by Shaanxi Jinye Science Technology And Education Group Co., Ltd. (000812.SZ), has edged into the classification of second-tier colleges.
○ Document deepening reform on SMCs to release, SMCs to play platform role
------
XFA learns from the annual work meeting of China CO-OP Group convened recently that the central government will soon release document deepening the comprehensive reform of supply and marketing cooperatives (SMCs); the Group will seize policy opportunities, push the enterprise to accelerate transformation and upgrading, and play a leading role. According to relevant planning, the formation of SMCs shall be based on the new normal of economic development and planning shall be made in areas like e-commerce, the construction of agricultural products wholesale market, the development of cold chain logistics.
Comment: SMCs are transforming from pure procurement and sales service to rural comprehensive service platform. The actual controllers of Anhui Huilong Agricultural Means Of Production Co., Ltd. (002556.SZ) and Huangshan Novel Co., Ltd. (002014.SZ) are the SMCs of Anhui Province and Huangshan City, respectively. These two companies might undertake greater responsibility in rural reform in the future.
○ NEA promotes safe coal mining, industrial mechanization and intellectualization to speed up
------
The National Energy Administration (NEA) disclosed guidance on the scientific development of coal industry on March 25 requiring to promote safe and green mining of coal, strengthen the development of automatic, digital and intelligent technical equipment and improve coal mine safety. Yang Dongliang, head of State Administration of Work Safety, indicated during two sessions that he once dreamt that robots were mining coal.
Comment: Under the reversed promotion of intelligent manufacturing strategy and safety production, the mechanization and intellectualization process of China’s coal industry might speed up. Coal mining machinery equipment companies that have made planning in industrial robot enjoy advantages. Linzhou Heavy Machinery Group Co., Ltd. (002535.SZ) cooperated with Chinese Academy of Sciences in developing intelligent equipment product including industrial robots, machine vision, manless working face system of underground mining, etc.; Zhengzhou Coal Mining Machinery Group Co., Ltd. (601717.SH) is speeding up the transformation of high-end equipment.
[Announcement Interpretation]
○ Longsheng Auto Parts to invest RMB7.2 bln in metamaterials intelligent structure
------
Zhejiang Longsheng Auto Parts Co., Ltd. (002625.SZ) proposes to raise 7.2 billion yuan by issuing 1,007 million shares at 7.15 yuan per share to ten targeted investors, including Tibet Dazi Yingbang Industrial Development Co., Ltd., Shenzhen Guangqi Space Technology Co., Ltd. and Dazi Pengxin Global Resources Investment Co., Ltd. The proceeds will be invested in the metamaterials intelligent structure and equipment industrialization program and the establishment of a metamaterials intelligent structure and equipment research and development center. The controlling shareholder of the company will be Dazi Yingbang and the actual controller will be Liu Ruopeng after the issuance. The Yu family, the former substantive shareholder of the company, will transfer 38,825,000 shares to the actual controller of Pengxin Resources with their shareholding reduced to below 30 percent.
Comment: The company will achieve business transformation and industrial upgrading through this private placement and seize the initiatives in the “Intelligent Plus” time.
○ Zhongyuan Huadian Science & Technology to acquire medical informationization company with RMB690 mln
------
Wuhan Zhongyuan Huadian Science & Technology Co., Ltd. (300018) and its wholly-owned electronic equipment subsidiary plan to acquire 100 percent equities of Jiangsu Sesan Technology Co., Ltd. at 690 million yuan by issuing shares and in cash. They propose to issue 45.42 million shares at 11.67 yuan per share to pay the consideration of 530 million yuan and the 160 million yuan will be paid in cash. Sesan Technology is professionally engaged in the informationization, digitalization and the research and development of software in the medical treatment and health care industry. The counterparty committed that its net profit from 2015 to 2017 will be 46.88 million yuan, 58.59 million yuan and 73.24 million yuan, respectively.
○ Rongxin Power Electronic to acquire Montnets Technology to develop mobile Internet
------
Rongxin Power Electronic Co., Ltd. (002123.SZ) intends to purchase 100 percent equities of Montnets Technology by issuing shares and in cash. The subject asset is priced at 2,905 million yuan on the whole. The company also plans to raise supporting funds. It will conduct the mobile Internet operation supporting services after the transaction. The company plans to issue 280 million shares at 7.94 yuan per share through private placement and pay a consideration of 690 million yuan in cash. Meanwhile, it will issue 78.44 million shares at 9.16 yuan per share through private placement to raise a supporting fund of 720 million yuan to pay the consideration in cash and relevant expenses.
Montnets Technology is a leading provider of mobile Internet operation supporting services and principally engaged in providing operation supporting platforms to various B2C applications on the mobile Internet. It provides enterprises with mobile and instant communication services through such platforms. The counterparty committed that the net profit of Montnets Technology in 2015 will be no less than 164 million yuan and the total net profits for 2015 and 2016 will be no less than 400 million yuan.
Comment: The company will be principally engaged in the mobile Internet operation supporting services after the transaction. With the previous electric and the electronic equipment, the company will operate in the model with dual main businesses.
○ Health 100 to achieve backdoor listing through Jiangsu Sanyou
------
Jiangsu Sanyou Group Co., Ltd. (002044.SZ) is about to exchange all of its asset and debts with the equivalent shares of Health 100 held by all of its shareholders. Meanwhile, the company will issue shares to all shareholders of Health 100 to purchase the remaining shares and Health 100 will achieve backdoor listing. The price of the 100 percent equities of Health 100 will be 5.54 billion yuan and 731 million shares will be issued at 6.92 yuan per share through private placement to purchase the asset. At the same time, the company plans to raise a supporting fund of 400 million yuan by issuing 48.66 million shares at no less than 8.22 yuan per share through private placement. Yu Rong, the shareholder of Health 100, will become the actual controller of the company after the private placement. The company will transform into a health checkup services enterprise from a clothes processing enterprise. The relevant party committed that the estimated net profit after extraordinary items of Health 100 from 2015 to 2018 will be 223 million yuan, 331 million yuan, 424 million yuan and 488 million yuan, respectively.
○ Kaiser (China) Holding to acquire Huanwen Technology in developing Internet cluture
------
Kaiser (China) Holding Co., Ltd. (002425.SZ) proposes to purchase 100 percent equities of Hangzhou Huanwen Technology Co., Ltd. with 540 million yuan in cash. The transferor promised that the net profit of Huanwen Technology for 2015 to 2017 will be no less than 40 million yuan, 50 million and 62.50 million yuan, respectively.
Huanwen Technology is a leading intellectual property rights operation company in China. It has signed contracts for the derivative copyrights for massive best-selling literary and animation works. It is principally engaged in the operation of the literature online reading platform and cooperates with or authorize game companies to develop mobilephone and Internet games with the right to reproducing and developing literary works to receive the corresponding revenues on copyrights or share of profits. Huanwen Technology recorded a business revenue of 21.35 million yuan in 2014 with a net profit of 5.32 million yuan.
○ SZZT Electronics to acquire equities of Cloud DCS
------
SZZT Electronics Co., Ltd. (002197.SZ) plans to acquire 70 percent equities of Guangzhou Cloud DCS Ltd. with 63.56 million yuan to develop in the Cloud infrastructure services market. The Cloud DCS is principally engaged in the Cloud computing data center and owns the IDC data machine room in Nansha District, Guangzhou City. 1,280 data center frames and their ancillary facilities and environment have been established in the first phase. A total of 2,400 business equipment cabinets in the second phase of the IDC have kicked off.
[Financial Reports Express]
○ Sanlian Hope and Huafon Microfibre propose high share conversion and dividend in annual reports
------
Beijing Sanlian Hope Shin-Gosen Technical Service Co., Ltd. (300384.SZ) proposes an 18-for-10 conversion of capital surplus into shares combined with 10 yuan dividend for every 10 shares with an excepted net profit growth of 51 percent to 62 percent in the first quarter and an increase of 36 percent in net profit year on year according to its annual report. Huafon Microfibre (Shanghai) Co., Ltd. (300180.SZ) proposes a 15-for-10 conversion of capital surplus into shares combined with 0.8 yuan dividend for every 10 shares with an excepted net profit growth of 27 percent in 2014.
○ Pret Composites to see significant increase in Q1 results
------
The net profit of Shanghai Pret Composites Co., Ltd. (002324.SZ) in the first quarter will increase 70 percent to 100 percent year on year. It is mainly attributed to the rapid growth in the orders and sales as well as the consolidation of the operation results of the acquired U.S. WPR company.
> Executive meeting of State Council emphasizes to go with “Internet Plus” and prioritize ten areas
> Standing Committee of NPC concerned about vocational education, document deepening reform on SMCs to release
> Longsheng Auto Parts to invest in metamaterials intelligent structure, Zhongyuan Huadian Science & Technology to acquire medical informationization company
> Rongxin Power Electronic to develop mobile Internet, Health 100 to achieve backdoor listing through Jiangsu Sanyou
[XFA Focus]
○ Executive meeting of State Council emphasizes to go with “Internet Plus” and prioritize ten areas
------
The executive meeting of the State Council, convened on March 25, emphasized to go with the development trend of “Internet Plus”, center around the in-depth integration of informatization and industrialization, prioritize the development of ten areas including new-generation information technology, upscale numerically-controlled machine tool and robot, aerospace equipment, ocean engineering equipment and hi-tech ship, advanced rail transit equipment, energy conservation and new energy vehicle, electronic equipment, new material, biological medicine and high-powered medical devices as well as agriculture machinery equipment, strengthen basic industrial abilities, enhance technological level and product quality, and promote intelligent and green manufacturing.
Comment: Under vigorous promotion by the government, more and more listed companies will embrace Internet to seek for reform on commercial mode, industrial upgrading, efficiency enhancement and great value increase. Research institutions consider that various industries see different integration with Internet. Currently, retail, media, etc. are relatively developed; finance, education and medical service, etc. just started out, while areas like manufacturing, energy, agriculture, etc. are under latent development period. In terms of evaluation, there are still many listed companies with low PE ratio in retail, medicine, car, machinery, chemical industries, etc., their stocks might surge a lot after these companies embrace Internet.
◆ Actively interact with Internet, Qingdao Doublestar favored by institutions
------
The trading volume ranking list on March 25 shows that Qingdao Doublestar Co., Ltd. (000599.SZ) was bought through four institutional seats with a total of 356 million yuan, accounting for 24 percent of its intraday turnover
Comment: As a traditional tire manufacturing enterprise originally, the company actively builds tire sales through O2O mode and after-sales service E2E mode after new management assumes office. It provides customers with services like “unified online order, quick offline delivery and rapid mobile payment”. Multi research institutions believe that the company will rise rapidly again in the car market.
[XFA Selection]
○ Social security funds indicated on March 25 that it will expand stock-entrusted core asset that tracks CSI 800 index as main benchmark.
○ The departure of capital for IPOs resulted in the net outflow of 508.3 billion yuan securities margin last week. 503.5 billion yuan of the net inflow of securities margin after the Spring Festival remains in the market.
○ XFA learns on March 25 that the progress of military research academies and institutes reform, shareholding reform and asset injection will be quickened.
○ Rural land system reform pilot starts implementation. It will accelerate the rights verification, registration and certification of rural collective construction land and homestead.
○ Deputy Director of the State Administration of Press, Publication, Radio, Film and Television indicated on March 25 that “Intelligent press, publication, radio, film and television” will become a significant goal of its transformation and upgrading.
○ National standardization for road transport vehicles GPS might be implemented within the year. “Internet Plus” will be resorted to improve security control ability.
[Industry Information]
○ Standing Committee of NPC launches law enforcement examination, vocational education to play greater role
------
The first law enforcement examination by the Standing Committee of NPC of 2015 is determined to be carried out in vocational education area. The first plenary session of the vocational education law enforcement examination team was convened on March 25, proposing that attentions shall be paid to prominent problems impacting and impeding the development of vocational education as well as the weak links of the implementation of vocational education law so as to improve law system.
Comment: The development of vocational education is the root measure to guarantee the improvement of people's livelihood, assure full employment, overcome poverty and achieve prosperity. Current vocational education law was published in 1996 and no longer fully adapts to the industry now. Some representatives of two sessions propose to revise the law to guarantee the legal status of vocational education and improve supporting measures. Among A-share companies, Shanghai Xin Nanyang Co., Ltd. (600661.SH) acquired Shanghai Onlyedu Technology Co., Ltd. last year and plans to initiate the establishment of education industry investment funds recently; the Northwestern Polytechnical University Ming De College, controlled by Shaanxi Jinye Science Technology And Education Group Co., Ltd. (000812.SZ), has edged into the classification of second-tier colleges.
○ Document deepening reform on SMCs to release, SMCs to play platform role
------
XFA learns from the annual work meeting of China CO-OP Group convened recently that the central government will soon release document deepening the comprehensive reform of supply and marketing cooperatives (SMCs); the Group will seize policy opportunities, push the enterprise to accelerate transformation and upgrading, and play a leading role. According to relevant planning, the formation of SMCs shall be based on the new normal of economic development and planning shall be made in areas like e-commerce, the construction of agricultural products wholesale market, the development of cold chain logistics.
Comment: SMCs are transforming from pure procurement and sales service to rural comprehensive service platform. The actual controllers of Anhui Huilong Agricultural Means Of Production Co., Ltd. (002556.SZ) and Huangshan Novel Co., Ltd. (002014.SZ) are the SMCs of Anhui Province and Huangshan City, respectively. These two companies might undertake greater responsibility in rural reform in the future.
○ NEA promotes safe coal mining, industrial mechanization and intellectualization to speed up
------
The National Energy Administration (NEA) disclosed guidance on the scientific development of coal industry on March 25 requiring to promote safe and green mining of coal, strengthen the development of automatic, digital and intelligent technical equipment and improve coal mine safety. Yang Dongliang, head of State Administration of Work Safety, indicated during two sessions that he once dreamt that robots were mining coal.
Comment: Under the reversed promotion of intelligent manufacturing strategy and safety production, the mechanization and intellectualization process of China’s coal industry might speed up. Coal mining machinery equipment companies that have made planning in industrial robot enjoy advantages. Linzhou Heavy Machinery Group Co., Ltd. (002535.SZ) cooperated with Chinese Academy of Sciences in developing intelligent equipment product including industrial robots, machine vision, manless working face system of underground mining, etc.; Zhengzhou Coal Mining Machinery Group Co., Ltd. (601717.SH) is speeding up the transformation of high-end equipment.
[Announcement Interpretation]
○ Longsheng Auto Parts to invest RMB7.2 bln in metamaterials intelligent structure
------
Zhejiang Longsheng Auto Parts Co., Ltd. (002625.SZ) proposes to raise 7.2 billion yuan by issuing 1,007 million shares at 7.15 yuan per share to ten targeted investors, including Tibet Dazi Yingbang Industrial Development Co., Ltd., Shenzhen Guangqi Space Technology Co., Ltd. and Dazi Pengxin Global Resources Investment Co., Ltd. The proceeds will be invested in the metamaterials intelligent structure and equipment industrialization program and the establishment of a metamaterials intelligent structure and equipment research and development center. The controlling shareholder of the company will be Dazi Yingbang and the actual controller will be Liu Ruopeng after the issuance. The Yu family, the former substantive shareholder of the company, will transfer 38,825,000 shares to the actual controller of Pengxin Resources with their shareholding reduced to below 30 percent.
Comment: The company will achieve business transformation and industrial upgrading through this private placement and seize the initiatives in the “Intelligent Plus” time.
○ Zhongyuan Huadian Science & Technology to acquire medical informationization company with RMB690 mln
------
Wuhan Zhongyuan Huadian Science & Technology Co., Ltd. (300018) and its wholly-owned electronic equipment subsidiary plan to acquire 100 percent equities of Jiangsu Sesan Technology Co., Ltd. at 690 million yuan by issuing shares and in cash. They propose to issue 45.42 million shares at 11.67 yuan per share to pay the consideration of 530 million yuan and the 160 million yuan will be paid in cash. Sesan Technology is professionally engaged in the informationization, digitalization and the research and development of software in the medical treatment and health care industry. The counterparty committed that its net profit from 2015 to 2017 will be 46.88 million yuan, 58.59 million yuan and 73.24 million yuan, respectively.
○ Rongxin Power Electronic to acquire Montnets Technology to develop mobile Internet
------
Rongxin Power Electronic Co., Ltd. (002123.SZ) intends to purchase 100 percent equities of Montnets Technology by issuing shares and in cash. The subject asset is priced at 2,905 million yuan on the whole. The company also plans to raise supporting funds. It will conduct the mobile Internet operation supporting services after the transaction. The company plans to issue 280 million shares at 7.94 yuan per share through private placement and pay a consideration of 690 million yuan in cash. Meanwhile, it will issue 78.44 million shares at 9.16 yuan per share through private placement to raise a supporting fund of 720 million yuan to pay the consideration in cash and relevant expenses.
Montnets Technology is a leading provider of mobile Internet operation supporting services and principally engaged in providing operation supporting platforms to various B2C applications on the mobile Internet. It provides enterprises with mobile and instant communication services through such platforms. The counterparty committed that the net profit of Montnets Technology in 2015 will be no less than 164 million yuan and the total net profits for 2015 and 2016 will be no less than 400 million yuan.
Comment: The company will be principally engaged in the mobile Internet operation supporting services after the transaction. With the previous electric and the electronic equipment, the company will operate in the model with dual main businesses.
○ Health 100 to achieve backdoor listing through Jiangsu Sanyou
------
Jiangsu Sanyou Group Co., Ltd. (002044.SZ) is about to exchange all of its asset and debts with the equivalent shares of Health 100 held by all of its shareholders. Meanwhile, the company will issue shares to all shareholders of Health 100 to purchase the remaining shares and Health 100 will achieve backdoor listing. The price of the 100 percent equities of Health 100 will be 5.54 billion yuan and 731 million shares will be issued at 6.92 yuan per share through private placement to purchase the asset. At the same time, the company plans to raise a supporting fund of 400 million yuan by issuing 48.66 million shares at no less than 8.22 yuan per share through private placement. Yu Rong, the shareholder of Health 100, will become the actual controller of the company after the private placement. The company will transform into a health checkup services enterprise from a clothes processing enterprise. The relevant party committed that the estimated net profit after extraordinary items of Health 100 from 2015 to 2018 will be 223 million yuan, 331 million yuan, 424 million yuan and 488 million yuan, respectively.
○ Kaiser (China) Holding to acquire Huanwen Technology in developing Internet cluture
------
Kaiser (China) Holding Co., Ltd. (002425.SZ) proposes to purchase 100 percent equities of Hangzhou Huanwen Technology Co., Ltd. with 540 million yuan in cash. The transferor promised that the net profit of Huanwen Technology for 2015 to 2017 will be no less than 40 million yuan, 50 million and 62.50 million yuan, respectively.
Huanwen Technology is a leading intellectual property rights operation company in China. It has signed contracts for the derivative copyrights for massive best-selling literary and animation works. It is principally engaged in the operation of the literature online reading platform and cooperates with or authorize game companies to develop mobilephone and Internet games with the right to reproducing and developing literary works to receive the corresponding revenues on copyrights or share of profits. Huanwen Technology recorded a business revenue of 21.35 million yuan in 2014 with a net profit of 5.32 million yuan.
○ SZZT Electronics to acquire equities of Cloud DCS
------
SZZT Electronics Co., Ltd. (002197.SZ) plans to acquire 70 percent equities of Guangzhou Cloud DCS Ltd. with 63.56 million yuan to develop in the Cloud infrastructure services market. The Cloud DCS is principally engaged in the Cloud computing data center and owns the IDC data machine room in Nansha District, Guangzhou City. 1,280 data center frames and their ancillary facilities and environment have been established in the first phase. A total of 2,400 business equipment cabinets in the second phase of the IDC have kicked off.
[Financial Reports Express]
○ Sanlian Hope and Huafon Microfibre propose high share conversion and dividend in annual reports
------
Beijing Sanlian Hope Shin-Gosen Technical Service Co., Ltd. (300384.SZ) proposes an 18-for-10 conversion of capital surplus into shares combined with 10 yuan dividend for every 10 shares with an excepted net profit growth of 51 percent to 62 percent in the first quarter and an increase of 36 percent in net profit year on year according to its annual report. Huafon Microfibre (Shanghai) Co., Ltd. (300180.SZ) proposes a 15-for-10 conversion of capital surplus into shares combined with 0.8 yuan dividend for every 10 shares with an excepted net profit growth of 27 percent in 2014.
○ Pret Composites to see significant increase in Q1 results
------
The net profit of Shanghai Pret Composites Co., Ltd. (002324.SZ) in the first quarter will increase 70 percent to 100 percent year on year. It is mainly attributed to the rapid growth in the orders and sales as well as the consolidation of the operation results of the acquired U.S. WPR company.
Latest comments