[Today's Guide]
> State Council plans "going out", nuclear power equipment industry embraces development opportunity
> Energy performance contracting industry to boost, policies support rural e-commerce
> Xi’An Catering to develop catering in northern China, Geo-jade Petroleum to acquire oilfields in KZ
> Youzu Interactive to acquire ShareSDK, Risen Energy to invest in PV power stations
[XFA Focus]
○State Council plans "going out", nuclear power equipment industry embraces development opportunity
------
Premier Li Keqiang held a cooperation conference in Beijing on April 3, requiringaccelerating the going out of China’s equipment and the promotion of international capacity and forming an open economic pattern.
Comment: China’s nuclear power technology is competitiveinternationally now and cooperation agreements have been inked with Pakistan, Argentina, etc. Under the accelerated construction of domestic nuclear power units and the promotion of “going out” strategy, China’s nuclear power equipment enterprises will see rapid growth. It is expected that by 2020, conventional island, nuclear island and auxiliary equipment industries will embrace a market scale of nearly 300 billion yuan. As for listed companies, Zhefu Holding Group Co., Ltd. (002266.SZ) provides control element drive mechanism (CRDM)products for Huanong No.1; Anhui Yingliu Electromechanical Co., Ltd. (603308.SH) cooperates with Chinese Academy of Engineering to develop neutron absorber material; Jiangsu Shentong Valve Co., Ltd. (002438.SZ) occupies over 90 percent market shares of nuclear-level butterfly valves and ball valves needed by domestic under-construction nuclear power projects. Moreover, the “valve for AP1000 third-generation nuclear power station” project undertaken by the company has passed acceptance.
[XFA Selection]
○The State Council approves the implementation of “Development Planning for Urban Agglomerations alongMiddle Reaches of the Yangtze River” and specifies the new growth points of China’s economic development.
○The official launch of securitizationregistration system of credit assets helps to free credits spaces and increase the income of intermediate business of banks.
○CRRC Corporation Limited (CRRC), the merge of CSR Corporation Limited (601766.SH;01766.HK) and China CNR Corporation Limited (601299.SH;06199.HK), has unconditionally passed the review of anti-monopoly investigation and China Securities Regulatory Commission.
○The national e-commerce platform built by the All-China Federation of Supply and Marketing Cooperatives strives to go live in the third quarter and encouragessupply and marketing cooperatives of all levels to cooperate with renowned e-commerce enterprises.
○The non-agricultural employment data of the U.S. in March is much lower than it has been expected by the market. The U.S. dollar drops, while gold and crude oil rebound.
○China Securities Regulatory Commission claimed on April 3 that the margin trading and short selling businesses, etc. of securities companies generally meet the standard. Six securities companies are faced with supervision measures.
[Industry Information]
○Documents of energy-saving standardization released, energy performance contracting industry to boost
------
The Opinions on Intensifying Energy-Saving Standardization Work was issued by the State Council on April 4, aiming to achieve complete coverage of energy consumption quota in high energy consumption industry by 2020 and over 80 percent energy efficiency indexes to reach international advanced level.
Comment: As the basis of national energy-saving system, energy-saving standardis an important means to enhance economic quality and efficiency, and also an effective support to digest excessive capacity and intensify energy conservation and emission reduction. Energy-saving service industry oriented in energy performance contracting expects better development. As for listed companies, Sinoma Energy Conservation Ltd. (603126.SH) is engaged in the professional energy-saving service concerning comprehensive utilization of waste heat and over-bottom pressure; Beijing Dynamic Power Co., Ltd. (600405.SH) issued additional stocks in 2013 to invest in energy performance contracting projects; Shenzhen Clou Electronics Co., Ltd. (002121.SZ) provides energy-saving equipment and solutions based on smart grid technology.
○Rural e-commerce prioritized in e-commerce work this year
------
The Ministry of Commerce (MOFCOM) issued the key work of e-commerce in 2015 on April 3, requiring implementation of "Internet Plus" action plan. It can be seen from the content that “promoting the circulation of agricultural products and the application of rural e-commerce” is put in the first place in key breakthrough area.
Comment: Several days after the executive meeting of the State Council requiringboosting e-commerce, MOFCOM makes planning rapidly, showing great policy support to e-commerce. Rural e-commerce contributes to the expansion of market sales channels and the reduction of circulation cost of the agricultural commodities. It has become an important driver of agricultural modernization. Agricultural material enterprises with brand and offline channels enjoy first-mover advantage. Among A-share companies, Beijing Dabeinong Technology Group Co., Ltd. (002385.SZ) provides breeding and financial whole-chain service via Pig Internet, Zhinong Net and Nongxin Net;Shenzhen Noposion Agrochemicals Co., Ltd. (002215.SZ) launched Nongji Net, an e-commerce platform, in end-March and acquired shares of Shenzhen Nongjinquan Financial Service Co., Ltd., a P2P company.
○Price of butadiene hikes largely
------
According to information from www.100ppi.com, manufacturers in Liaoyang City, Fushun City, etc. raise the price of butadiene by 400 yuan per ton, or 7 percent. Considering that downstream material stocks have been consumed a lot and many devices producing butadiene at home and abroad will be under maintenance later, there is still room for price surge. Among A-share companies, the performance of Zibo QixiangTengda Chemical Co., Ltd. (002408.SZ) and North Huajin Chemical Industries Co., Ltd. (000059.SZ) is closely connected with the price of butadiene.
[Announcement Interpretation]
○Xi’An Catering to acquire Porridge Jiahe and develop catering in northern China
------
Xi’An Catering Co.,Ltd. (000721.SZ) proposes to acquire 100 percent equities of Porridge Jiahe at 411 million yuan by issuing shares at 5 yuan per share. Porridge Jiahe is engaged in chain canteens operation, agricultural products processing and smart catering convenience services and is mainly operating in northern China. It has 66 chain stores and 35 franchisees by the end of 2014.
The acquisition will facilitate Xi’An Catering in expanding its catering coverage from northwestern China to northern China. Based on the commitment on performance, they net profit of Porridge Jiahe from 2015 to 2019 will be 30 million yuan, 42 million yuan, 55 million yuan and 69 million yuan, respectively. Xi’An Catering recorded a net profit of 11 million yuan last year and its stock closed at 6.31 yuan before trading suspension.
○Geo-jade Petroleum to acquire Kozhan LLP and develop oil and gas
------
Geo-jade Petroleum Corporation (600759.SH) plans to buy 100 percent equities of Kozhan LLP at 350 million U.S. dollars. Kozhan holds the 100 percent right to explore three oilfields in Kazakhstan. The acquisition will increase the reserve of oilfield assets and improve the profitability of the company. The net profit of Kozhan from January to October, 2014 is equivalent to 117 million yuan.
○Youzu Interactive to acquire ShareSDK and promote games through big data
------
Youzu Interactive Co.,Ltd. (002174.SZ) intends to acquire 100 percent equities of Guangzhou ShareSDK Network Technology Co., Ltd. at 538 million yuan by issuing shares at 49.49 yuan per share through private placement and in cash. Meanwhile, the company is about to raise a supporting fund of 135 million yuan by issuing shares at 44.55 yuan per share through private placement. ShareSDK is engaged in the big data services in the mobile Internet industry and it is loss-making currently. The book net assets of ShareSDK by the end of 2014 are 13,544,000 yuan.
Comment: The market value of ShareSDK will increase by over 38 times through the acquisition. Youzu Interactive is interested in its big data services to strengthen its ability in promoting its game products. ShareSDK has accumulated various users groups and mobile application data and developed deep data testing technology, complex multi-state data exploration technology as well as other plug-in products, which can establish a complete service platform for mobile developers.
○Risen Energy to raise RMB2.5 bln to develop PV power stations
------
Risen Energy Co.,Ltd. (300118.SZ) proposes to raise 2.5 billion yuan by issuing 293 million shares at 8.54 yuan per share through private placement to four targets, including Lin Haifeng, the actual controller, Donghai Funds-Jinlong Assets Management Plan 16, Suzhou Beiheng Entrepreneurship Investment Partnership and Chen Yaomin. The proceeds will be invested in a 279MW centralized photovoltaic grid-connected power generation project and a 100MW distributed photovoltaic grid-connected power generation project.
○Oceanwide Holdings to develop Internet-based finance
------
Oceanwide Holdings Co.,Ltd. (000046.SZ) intends to invest 1 billion yuan in the establishment of Beijing Minjinsuo Finance Internet Co., Ltd. with its own capitals and 2 billion yuan in establishing Oceanwide Investment Guarantee Co., Ltd. Oceanwide Investment Guarantee will provide guarantees to the products of Minjinsuo Finance Internet after the establishment of the two companies. They will introduce Internet thoughts and technology and achieve the business connectivity and structural improvement based on the trend of Internet development. The company also plans to add investments in the futures of Minsheng Futures and invest in the establishment of Oceanwide Fund Management Co., Ltd. and Oceanwide Assets Management Co., Ltd.
[Financial Reports Express]
○RAAS Blood Products and Huahai Phar. expect high growth in Q1
------
Thanks to the higher investment revenues from Zhejiang Wanfeng Auto Wheel CO.,Ltd. (002085.SZ), Shanghai RAAS Blood Products Co.,Ltd. (002252.SZ) expects its net profit in the first quarter to surge 470 to 480 percent year on year, compared with the original estimation of 360 to 390 percent. Zhejiang Huahai Pharmaceutical Co.,Ltd. (600521.SH)expects its net profit in the first quarter to surge 80 to 100 percent year on year as a result of the significant growth in the sale of Sartans and neurologicalbulk pharmaceutical chemicals.
○Zhenghai Magnetic Material proposes high share conversion and dividend
------
YantaiZhenghai Magnetic Material Co.,Ltd. (300224.SZ) recorded a year-on-year growth of 46 percent in its 2014 net profit and proposes a 10-for-10 conversion of capital surplus into shares combined with 1.5 yuan dividend for every 10 shares. Its net profit in the first quarter of this year will increase 130 to 160 percent year on year mainly attributed to the high growth in products sales.
[Weekly Review]
○Policies continue to boost bullish market
------
With the supporting of various policies, including the Belt and Road Initiative, the relaxing property industry, deposit insurances, hospital reform as well as rural supply and marketing cooperatives reform, major stock indexes continue to surge last week and more investors saw profits in the bullish market. A new fund of 100 billion yuan was reemerged last week and XFA made special coverage on it. Although many investors are clear that there are bubbles, few are willing to exit as more than 100 stocks surge by the daily limit of 10 percent every day. As a majority investors are waiting for greater fools, it is important to judge the peak for the introduction of OTC capitals. Based on historic figures, fund investors are enthusiastic but the craziest opportunities are yet to come. An interesting statistics at the weekend hit many investors, which shows that the chances for making profit to invest all in one stock at the beginning of this year is 98 percent and there are nearly 50 percent and 10 percent to make a profit of 50 percent and 10 percent. It also shows that there are few low-priced stocks. Many wonder what policies will be introduced to get prepared in advance. They are advised to study the government work report and look for themes with policy supporting but yet surge in order to prepare in advance and wait patiently.
> State Council plans "going out", nuclear power equipment industry embraces development opportunity
> Energy performance contracting industry to boost, policies support rural e-commerce
> Xi’An Catering to develop catering in northern China, Geo-jade Petroleum to acquire oilfields in KZ
> Youzu Interactive to acquire ShareSDK, Risen Energy to invest in PV power stations
[XFA Focus]
○State Council plans "going out", nuclear power equipment industry embraces development opportunity
------
Premier Li Keqiang held a cooperation conference in Beijing on April 3, requiringaccelerating the going out of China’s equipment and the promotion of international capacity and forming an open economic pattern.
Comment: China’s nuclear power technology is competitiveinternationally now and cooperation agreements have been inked with Pakistan, Argentina, etc. Under the accelerated construction of domestic nuclear power units and the promotion of “going out” strategy, China’s nuclear power equipment enterprises will see rapid growth. It is expected that by 2020, conventional island, nuclear island and auxiliary equipment industries will embrace a market scale of nearly 300 billion yuan. As for listed companies, Zhefu Holding Group Co., Ltd. (002266.SZ) provides control element drive mechanism (CRDM)products for Huanong No.1; Anhui Yingliu Electromechanical Co., Ltd. (603308.SH) cooperates with Chinese Academy of Engineering to develop neutron absorber material; Jiangsu Shentong Valve Co., Ltd. (002438.SZ) occupies over 90 percent market shares of nuclear-level butterfly valves and ball valves needed by domestic under-construction nuclear power projects. Moreover, the “valve for AP1000 third-generation nuclear power station” project undertaken by the company has passed acceptance.
[XFA Selection]
○The State Council approves the implementation of “Development Planning for Urban Agglomerations alongMiddle Reaches of the Yangtze River” and specifies the new growth points of China’s economic development.
○The official launch of securitizationregistration system of credit assets helps to free credits spaces and increase the income of intermediate business of banks.
○CRRC Corporation Limited (CRRC), the merge of CSR Corporation Limited (601766.SH;01766.HK) and China CNR Corporation Limited (601299.SH;06199.HK), has unconditionally passed the review of anti-monopoly investigation and China Securities Regulatory Commission.
○The national e-commerce platform built by the All-China Federation of Supply and Marketing Cooperatives strives to go live in the third quarter and encouragessupply and marketing cooperatives of all levels to cooperate with renowned e-commerce enterprises.
○The non-agricultural employment data of the U.S. in March is much lower than it has been expected by the market. The U.S. dollar drops, while gold and crude oil rebound.
○China Securities Regulatory Commission claimed on April 3 that the margin trading and short selling businesses, etc. of securities companies generally meet the standard. Six securities companies are faced with supervision measures.
[Industry Information]
○Documents of energy-saving standardization released, energy performance contracting industry to boost
------
The Opinions on Intensifying Energy-Saving Standardization Work was issued by the State Council on April 4, aiming to achieve complete coverage of energy consumption quota in high energy consumption industry by 2020 and over 80 percent energy efficiency indexes to reach international advanced level.
Comment: As the basis of national energy-saving system, energy-saving standardis an important means to enhance economic quality and efficiency, and also an effective support to digest excessive capacity and intensify energy conservation and emission reduction. Energy-saving service industry oriented in energy performance contracting expects better development. As for listed companies, Sinoma Energy Conservation Ltd. (603126.SH) is engaged in the professional energy-saving service concerning comprehensive utilization of waste heat and over-bottom pressure; Beijing Dynamic Power Co., Ltd. (600405.SH) issued additional stocks in 2013 to invest in energy performance contracting projects; Shenzhen Clou Electronics Co., Ltd. (002121.SZ) provides energy-saving equipment and solutions based on smart grid technology.
○Rural e-commerce prioritized in e-commerce work this year
------
The Ministry of Commerce (MOFCOM) issued the key work of e-commerce in 2015 on April 3, requiring implementation of "Internet Plus" action plan. It can be seen from the content that “promoting the circulation of agricultural products and the application of rural e-commerce” is put in the first place in key breakthrough area.
Comment: Several days after the executive meeting of the State Council requiringboosting e-commerce, MOFCOM makes planning rapidly, showing great policy support to e-commerce. Rural e-commerce contributes to the expansion of market sales channels and the reduction of circulation cost of the agricultural commodities. It has become an important driver of agricultural modernization. Agricultural material enterprises with brand and offline channels enjoy first-mover advantage. Among A-share companies, Beijing Dabeinong Technology Group Co., Ltd. (002385.SZ) provides breeding and financial whole-chain service via Pig Internet, Zhinong Net and Nongxin Net;Shenzhen Noposion Agrochemicals Co., Ltd. (002215.SZ) launched Nongji Net, an e-commerce platform, in end-March and acquired shares of Shenzhen Nongjinquan Financial Service Co., Ltd., a P2P company.
○Price of butadiene hikes largely
------
According to information from www.100ppi.com, manufacturers in Liaoyang City, Fushun City, etc. raise the price of butadiene by 400 yuan per ton, or 7 percent. Considering that downstream material stocks have been consumed a lot and many devices producing butadiene at home and abroad will be under maintenance later, there is still room for price surge. Among A-share companies, the performance of Zibo QixiangTengda Chemical Co., Ltd. (002408.SZ) and North Huajin Chemical Industries Co., Ltd. (000059.SZ) is closely connected with the price of butadiene.
[Announcement Interpretation]
○Xi’An Catering to acquire Porridge Jiahe and develop catering in northern China
------
Xi’An Catering Co.,Ltd. (000721.SZ) proposes to acquire 100 percent equities of Porridge Jiahe at 411 million yuan by issuing shares at 5 yuan per share. Porridge Jiahe is engaged in chain canteens operation, agricultural products processing and smart catering convenience services and is mainly operating in northern China. It has 66 chain stores and 35 franchisees by the end of 2014.
The acquisition will facilitate Xi’An Catering in expanding its catering coverage from northwestern China to northern China. Based on the commitment on performance, they net profit of Porridge Jiahe from 2015 to 2019 will be 30 million yuan, 42 million yuan, 55 million yuan and 69 million yuan, respectively. Xi’An Catering recorded a net profit of 11 million yuan last year and its stock closed at 6.31 yuan before trading suspension.
○Geo-jade Petroleum to acquire Kozhan LLP and develop oil and gas
------
Geo-jade Petroleum Corporation (600759.SH) plans to buy 100 percent equities of Kozhan LLP at 350 million U.S. dollars. Kozhan holds the 100 percent right to explore three oilfields in Kazakhstan. The acquisition will increase the reserve of oilfield assets and improve the profitability of the company. The net profit of Kozhan from January to October, 2014 is equivalent to 117 million yuan.
○Youzu Interactive to acquire ShareSDK and promote games through big data
------
Youzu Interactive Co.,Ltd. (002174.SZ) intends to acquire 100 percent equities of Guangzhou ShareSDK Network Technology Co., Ltd. at 538 million yuan by issuing shares at 49.49 yuan per share through private placement and in cash. Meanwhile, the company is about to raise a supporting fund of 135 million yuan by issuing shares at 44.55 yuan per share through private placement. ShareSDK is engaged in the big data services in the mobile Internet industry and it is loss-making currently. The book net assets of ShareSDK by the end of 2014 are 13,544,000 yuan.
Comment: The market value of ShareSDK will increase by over 38 times through the acquisition. Youzu Interactive is interested in its big data services to strengthen its ability in promoting its game products. ShareSDK has accumulated various users groups and mobile application data and developed deep data testing technology, complex multi-state data exploration technology as well as other plug-in products, which can establish a complete service platform for mobile developers.
○Risen Energy to raise RMB2.5 bln to develop PV power stations
------
Risen Energy Co.,Ltd. (300118.SZ) proposes to raise 2.5 billion yuan by issuing 293 million shares at 8.54 yuan per share through private placement to four targets, including Lin Haifeng, the actual controller, Donghai Funds-Jinlong Assets Management Plan 16, Suzhou Beiheng Entrepreneurship Investment Partnership and Chen Yaomin. The proceeds will be invested in a 279MW centralized photovoltaic grid-connected power generation project and a 100MW distributed photovoltaic grid-connected power generation project.
○Oceanwide Holdings to develop Internet-based finance
------
Oceanwide Holdings Co.,Ltd. (000046.SZ) intends to invest 1 billion yuan in the establishment of Beijing Minjinsuo Finance Internet Co., Ltd. with its own capitals and 2 billion yuan in establishing Oceanwide Investment Guarantee Co., Ltd. Oceanwide Investment Guarantee will provide guarantees to the products of Minjinsuo Finance Internet after the establishment of the two companies. They will introduce Internet thoughts and technology and achieve the business connectivity and structural improvement based on the trend of Internet development. The company also plans to add investments in the futures of Minsheng Futures and invest in the establishment of Oceanwide Fund Management Co., Ltd. and Oceanwide Assets Management Co., Ltd.
[Financial Reports Express]
○RAAS Blood Products and Huahai Phar. expect high growth in Q1
------
Thanks to the higher investment revenues from Zhejiang Wanfeng Auto Wheel CO.,Ltd. (002085.SZ), Shanghai RAAS Blood Products Co.,Ltd. (002252.SZ) expects its net profit in the first quarter to surge 470 to 480 percent year on year, compared with the original estimation of 360 to 390 percent. Zhejiang Huahai Pharmaceutical Co.,Ltd. (600521.SH)expects its net profit in the first quarter to surge 80 to 100 percent year on year as a result of the significant growth in the sale of Sartans and neurologicalbulk pharmaceutical chemicals.
○Zhenghai Magnetic Material proposes high share conversion and dividend
------
YantaiZhenghai Magnetic Material Co.,Ltd. (300224.SZ) recorded a year-on-year growth of 46 percent in its 2014 net profit and proposes a 10-for-10 conversion of capital surplus into shares combined with 1.5 yuan dividend for every 10 shares. Its net profit in the first quarter of this year will increase 130 to 160 percent year on year mainly attributed to the high growth in products sales.
[Weekly Review]
○Policies continue to boost bullish market
------
With the supporting of various policies, including the Belt and Road Initiative, the relaxing property industry, deposit insurances, hospital reform as well as rural supply and marketing cooperatives reform, major stock indexes continue to surge last week and more investors saw profits in the bullish market. A new fund of 100 billion yuan was reemerged last week and XFA made special coverage on it. Although many investors are clear that there are bubbles, few are willing to exit as more than 100 stocks surge by the daily limit of 10 percent every day. As a majority investors are waiting for greater fools, it is important to judge the peak for the introduction of OTC capitals. Based on historic figures, fund investors are enthusiastic but the craziest opportunities are yet to come. An interesting statistics at the weekend hit many investors, which shows that the chances for making profit to invest all in one stock at the beginning of this year is 98 percent and there are nearly 50 percent and 10 percent to make a profit of 50 percent and 10 percent. It also shows that there are few low-priced stocks. Many wonder what policies will be introduced to get prepared in advance. They are advised to study the government work report and look for themes with policy supporting but yet surge in order to prepare in advance and wait patiently.
Latest comments