[Today’s Guide]
> Flood control and drought relief situation not optimistic, water conservancy construction demands expected to surge
> NEA requires conducting wind power grid connection and consumption, wind power sustainable development to see policy supports
> More policies to support new energy vehicles, ethanediol industry likely to boom
> Landing Holding to transform to Cloud computing, Friendship & Apollo Commercial to invest RMB1.5 bln in O2O
[XFA Focus]
○ Flood control and drought relief situation not optimistic, water conservancy construction demands expected to surge
------
The State Flood Control and Drought Relief Headquarters held the first work conference of this year on April 7 in Beijing. Chinese Vice-Premier Wang Yang pointed out that the overall meteorological conditions are relatively unfavorable this year and the situation on flood control, drought relief and typhoons control is nor optimistic. It should make preparation for the flood in advance, eliminate potential hazards and consolidate flood control constructions, repair the constructions hit by flood and earthquakes as well as establish emergency projects for drought relief. It should spare more efforts on promoting water-saving technologies, steadfastly press ahead with the water pricing and water right system reforms and establish a new water-saving system.
Comment: Based on the analysis of the World Meteorological Organization (WMO), a majority of meteorological models estimate that the El Nino phenomenon will hit the world in mid-2015. The catastrophic flood hit Chile in end-March shows that the chances for the El Nino phenomenon are increasing. Under the serious situation in flood control and drought relief, the water conservancy construction, urban waterlogging fighting, water-saving irrigation and other demands in China are likely to surge significantly. Among A-share companies, Anhui Water Resources Development Co., Ltd. (600502.SH), a leader in the water conservancy construction in Anhui Province, will benefit from the construction of major projects in the water diversion from the Yangtze River to the Huaihe River and other projects. Gansu Dayu Water-Saving Group Co., Ltd. (300021.SZ) is principally engaged in water-saving materials and the construction of water-saving projects. The company saw more projects initiated construction in the first quarter than the corresponding period of last year.
[XFA Selection]
○ Chinese Premier Li Keqiang indicated on April 7 that China will encourage Chinese enterprises to participate in the construction of special economic zones in South Africa. It will promote the ports, oil and gas resources exploration, fishing and other maritime economic cooperation.
○ The bid-winning rate for the seven-day reverse repo launched by the central bank dropped another 10 percentage points on April 7, showing its intention to lead the trend of downward interest rates on capitals.
○ China will channel great efforts into the implementation of new policies on public culture and services. 25 central departments will assume 113 tasks in reform.
○ The National Development and Reform Commission (NDRC) and other two ministries and commissions released various announcements on energy efficiency labels and encourage enterprises to attach quick respond codes on the energy efficiency labels.
○ Shenzhen City plans to install electronic labels on motor vehicles in the first half of 2016 to recognize the real identities of vehicles.
[Industry Information]
○ NEA requires conducting wind power grid connection and consumption, wind power sustainable development to see policy supports
------
The National Energy Administration (NEA) issued an extremely urgent notice on April 7, requiring conducting the wind power grid connection and consumption in 2015 and guaranteeing the priority in grid connection and full acquisition for wind power and other clean energy.
Comment: The wind power and other clean energy received various policy supports from the government work report to the new power reform plan. It is reported that the tender amount for wind power generators in the fourth quarter of last year hit a record high of about 10.1GW. A large scale of wind power farms initiated construction recently and the industry is likely to remain booming. In terms of listed companies, Jiangsu SINOJIT Wind Energy Technology Co., Ltd. (601218.SH) is principally engaged in wind power castings. Its production and sale both hiked since last year. Xinjiang Goldwind Science and Technology Co., Ltd. (02208.HK; 002202.SZ) owns nearly 12GW orders by the end of last year and is likely to see sustainable growth.
○ More policies to support new energy vehicles, charging piles construction to highlight
------
The General Office of Anhui Provincial People’s Government released the instructions on the implementation of accelerating new energy vehicle industry development and promoting application on April 7. It proposes to establish a total of 35,000 charging piles in 2017 and generally complete a charging facilities service network covering the whole province. Jiangxi Daily reported on the same day that Nanchang City requires that every five parking spaces will have one charging pile in newly established communities.
Comment: Institutes estimate that the investment in charging piles along roads, in cities and for household use will reach 1 trillion and the huge results in the charging piles industry is highly expected. In terms of listed companies, Zhejiang Wanma Co., Ltd. (002276.SZ) will extend from the charging equipment manufacturing to services through the establishment of the “Zhejiang Aichong Network Technology Co., Ltd.”. Zhongyeda Electric Co., Ltd. (002441.SZ) indicated that its research and development of charging piles has been completed and can conduct mass production.
○ Zhangzhou PX blasts effect ferments, ethanediol industry likely to boom
------
Although the fire caused by the blasts of at a paraxylene (PX) chemical plant in Gulei Town, Zhangzhou City, Fujian Province has been put out, its subsequent effects are continue to ferment. The main contracts of PTA futures surged to the daily limit of 10 percent on April 7. The market prices of the ethanediol jumped by 100 to 200 yuan per ton on the same day, representing an increase of approximately 3 percent.
Comment: The PTA and the ethanediol are raw materials for the downstream terylene products. The hike of PTA prices will drive more manufacturers to use more terylene. As the prices of upstream materials for the terylene remain sluggish, the industry is likely to boom. Among A-share companies, Danhua Chemical Technology Co., Ltd. (600844.SH) and Shandong Hualu-Hengsheng Chemical Co., Ltd. (600426.SH) both own production capacities for the terylene.
[Announcement Interpretation]
○ Landing Holding to acquire Gosun Technology to transform to Cloud computing
------
Hubei Landing Holding Co., Ltd. (000971.SZ) plans to acquire 100 percent equities of Jilin Gosun Technology Co., Ltd. with 1.5 billion yuan, indicating a value-added ratio of 2142 percent. 105 million shares will be issued at 8.56 yuan per share through private placement to five natural person shareholders of Gosun Technology, and meanwhile, the company plans to raise 375 million yuan from Beijing Yuchi Ruide Investment Co., Ltd., under the control of the actual controller of Landing Holding, by issuing 42.47 million shares at 8.83 yuan per share through private placement to pay for the cash needed by the transaction. The original shareholders promise that the total net profit of Gosun Technology from 2015 to 2017 will be no less than 330 million yuan. The net profit of the company in 2014 is 4.10 million yuan.
Comment: Gosun Technology, engaged in IDC, CDN and APM services, is a Cloud-based service provider providing Cloud storage, Cloud computing and Cloud service. It has inked IDC computer room cooperation agreements with the major three telecom operators in China and multi Internet enterprises. The company will expand to promising Cloud-based service industries like IDC, CDN, etc. from traditional textile industry after reorganization.
○ Friendship & Apollo Commercial to invest RMB1.5 bln in O2O, etc. through private placement
------
Hunan Friendship & Apollo Commercial Co., Ltd. (002277.SZ) proposes to raise 1.5 billion yuan from targets including Hunan Friendship & Apollo Holdings Co., Ltd., controlling shareholder of the company, by issuing 100 million shares at no less than 14.99 yuan per share through private placement to invest in the O2O all-channel operation platform project, Chenzhou Friendship & Apollo International Plaza Project and Changde Shuixie Huacheng Friendship & Apollo Commercial Plaza project, pay off bank loans and supplement working capital. Friendship & Apollo Holdings will subscribe 15 to 45 percent of the total issuance. The company indicates that the private placement will help the company to expand its market share in the retailing market of prefecture-level cities, achieve online-offline integration and drive the growth of current retailing business.
○ Liantronics to acquire media assets again to occupy mobile Internet market
------
Shenzhen Liantronics Co., Ltd. (300269.SZ) plans to acquire 28.4 percent equities of Shenzhen AIMMEDIA Co., Ltd. with its own 76.68 million yuan and acquire 5 percent equities of AirMedia Group Inc. (NASDAQ: AMCN) with 150 million yuan. The equity acquisition of AIMMEDIA helps the company to occupy mobile Internet market, increase mobile interactive marketing, mobile advertisement putting service and huge customer resources; AirMedia, principally engaged in electronic media advertisement, LED screens at the security checks of main airports in China, and etc., promises that its net profit in 2015 to reach 200 million yuan. The equity acquisition of AirMedia helps to shore up the company's competitiveness in airport outdoor advertisement area.
○ Liaison Interactive Information Technology to layout intelligent hardware and Internet financial with RMB6 bln
------
Hangzhou Liaison Interactive Information Technology Co., Ltd. (002280.SZ) plans to raise 6 billion yuan by issuing 154 million shares at no less than 38.88 yuan per share through private placement to invest in intelligent hardware, liaison financial service platform and channel construction and to supplement working capital. The company indicates that the implementation of the project helps to shore up its industrial competitiveness in mobile Internet and complete its industrial layout. After the issuance, the actual controller of the company remains unchanged. The company proposes a 15-for-10 conversion of capital surplus into shares combined with 2 yuan dividend during trading suspension. The ex-right date is April 7.
[Financial Reports Express]
○ Shandong Haihua, Times New Material Technology and Yongda Group expect large Q1 performance growth
------
Thanks to the sales growth of sodium carbonate and cost reduction, Shandong Haihua Company Limited (000822.SZ) expects its net profit in the first quarter to see a year-on-year growth of 462 to 556 percent; due to the business growth of rail transit, wind power, etc., Zhuzhou Times New Material Technology Co., Ltd. (600458.SH) expects its net profit in the first quarter to see a year-on-year growth of 450 to 500 percent; resulted by the performance correction of the Bank of Fushun, Jilin Yongda Group Co., Ltd. (002622.SZ) expects its net profit in the first quarter to see a year-on-year growth of 190 to 200 percent.
○ NanFang Bearing and Bohui Paper Industry plan high share conversion and dividend
------
With its net profit in 2014 seeing a year-on-year growth of 38 percent, Jiangsu NanFang Bearing Co., Ltd. (002553.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 2 yuan dividend. Shandong Bohui Paper Industry Co., Ltd. (600966.SH) turns loss into gains in 2014 and proposes a 10-for-10 conversion of capital surplus into shares.
[Data Speaks]
○ Shareholders of 4 companies drop obviously, attentions paid to following move
------
According to the statistics of XFA, based on the shareholder data five trading days before the disclosure of the 2014 annual report, the number of shareholders of several companies drops largely in the first quarter and shares are concentrated rapidly. The number of shareholders of Wuhu Conch Profiles and Science Co., Ltd. (000619.SZ) and Fujian Cement Inc. (600802.SH) drop by 20 percent and 24 percent, respectively, and the surge of their stock prices just equals to the surge of Shanghai Composite Index; the number of shareholders of AVIC Real Estate Holding Company Limited (000043.SZ) and Liaoning Cheng Da Co., Ltd. (600739.SH) drop by 23 percent and 28 percent, respectively, while the surge of their stock prices largely exceeds the surge of Shanghai Composite Index.
The number of shareholders is important information of financial report. XFA reported the rapid drop of the number of shareholders of Yango Group Co., Ltd. (000671.SZ), Fujian Sunnada Communication Co., Ltd. (002417.SZ) and Zhe Jiang Kangsheng Co., Ltd. (002418.SZ) in last Sep. The first two companies have suspended trading due to the planning of significant issues, while Kangsheng sees its stock price doubled.
[Trading Trends]
○ Golden Dragon Development sees net buying from institutional seats
------
The trading volume ranking list on April 7 shows that Guangdong Golden Dragon Development Inc. (000712.SZ) was bought through four institutional seats with a total of 674 million yuan, accounting for 27 percent of its intraday turnover. Meanwhile, another two institutions totally sold 68.95 million yuan.
Comment: Research institutions believe that the Internet strategy of Zhongshan Securities Co., Ltd., controlled by Golden Dragon Development, is clear. With the decontrolling of multi accounts held by one person, the accounts opening and trading volume of the company might surge largely. Moreover, Golden Dragon Development holds 40 percent equities of Dongguan Securities Co., Ltd. and the investment profit might be achieved through selling mechanism when Dongguan Securities gets listed.
> Flood control and drought relief situation not optimistic, water conservancy construction demands expected to surge
> NEA requires conducting wind power grid connection and consumption, wind power sustainable development to see policy supports
> More policies to support new energy vehicles, ethanediol industry likely to boom
> Landing Holding to transform to Cloud computing, Friendship & Apollo Commercial to invest RMB1.5 bln in O2O
[XFA Focus]
○ Flood control and drought relief situation not optimistic, water conservancy construction demands expected to surge
------
The State Flood Control and Drought Relief Headquarters held the first work conference of this year on April 7 in Beijing. Chinese Vice-Premier Wang Yang pointed out that the overall meteorological conditions are relatively unfavorable this year and the situation on flood control, drought relief and typhoons control is nor optimistic. It should make preparation for the flood in advance, eliminate potential hazards and consolidate flood control constructions, repair the constructions hit by flood and earthquakes as well as establish emergency projects for drought relief. It should spare more efforts on promoting water-saving technologies, steadfastly press ahead with the water pricing and water right system reforms and establish a new water-saving system.
Comment: Based on the analysis of the World Meteorological Organization (WMO), a majority of meteorological models estimate that the El Nino phenomenon will hit the world in mid-2015. The catastrophic flood hit Chile in end-March shows that the chances for the El Nino phenomenon are increasing. Under the serious situation in flood control and drought relief, the water conservancy construction, urban waterlogging fighting, water-saving irrigation and other demands in China are likely to surge significantly. Among A-share companies, Anhui Water Resources Development Co., Ltd. (600502.SH), a leader in the water conservancy construction in Anhui Province, will benefit from the construction of major projects in the water diversion from the Yangtze River to the Huaihe River and other projects. Gansu Dayu Water-Saving Group Co., Ltd. (300021.SZ) is principally engaged in water-saving materials and the construction of water-saving projects. The company saw more projects initiated construction in the first quarter than the corresponding period of last year.
[XFA Selection]
○ Chinese Premier Li Keqiang indicated on April 7 that China will encourage Chinese enterprises to participate in the construction of special economic zones in South Africa. It will promote the ports, oil and gas resources exploration, fishing and other maritime economic cooperation.
○ The bid-winning rate for the seven-day reverse repo launched by the central bank dropped another 10 percentage points on April 7, showing its intention to lead the trend of downward interest rates on capitals.
○ China will channel great efforts into the implementation of new policies on public culture and services. 25 central departments will assume 113 tasks in reform.
○ The National Development and Reform Commission (NDRC) and other two ministries and commissions released various announcements on energy efficiency labels and encourage enterprises to attach quick respond codes on the energy efficiency labels.
○ Shenzhen City plans to install electronic labels on motor vehicles in the first half of 2016 to recognize the real identities of vehicles.
[Industry Information]
○ NEA requires conducting wind power grid connection and consumption, wind power sustainable development to see policy supports
------
The National Energy Administration (NEA) issued an extremely urgent notice on April 7, requiring conducting the wind power grid connection and consumption in 2015 and guaranteeing the priority in grid connection and full acquisition for wind power and other clean energy.
Comment: The wind power and other clean energy received various policy supports from the government work report to the new power reform plan. It is reported that the tender amount for wind power generators in the fourth quarter of last year hit a record high of about 10.1GW. A large scale of wind power farms initiated construction recently and the industry is likely to remain booming. In terms of listed companies, Jiangsu SINOJIT Wind Energy Technology Co., Ltd. (601218.SH) is principally engaged in wind power castings. Its production and sale both hiked since last year. Xinjiang Goldwind Science and Technology Co., Ltd. (02208.HK; 002202.SZ) owns nearly 12GW orders by the end of last year and is likely to see sustainable growth.
○ More policies to support new energy vehicles, charging piles construction to highlight
------
The General Office of Anhui Provincial People’s Government released the instructions on the implementation of accelerating new energy vehicle industry development and promoting application on April 7. It proposes to establish a total of 35,000 charging piles in 2017 and generally complete a charging facilities service network covering the whole province. Jiangxi Daily reported on the same day that Nanchang City requires that every five parking spaces will have one charging pile in newly established communities.
Comment: Institutes estimate that the investment in charging piles along roads, in cities and for household use will reach 1 trillion and the huge results in the charging piles industry is highly expected. In terms of listed companies, Zhejiang Wanma Co., Ltd. (002276.SZ) will extend from the charging equipment manufacturing to services through the establishment of the “Zhejiang Aichong Network Technology Co., Ltd.”. Zhongyeda Electric Co., Ltd. (002441.SZ) indicated that its research and development of charging piles has been completed and can conduct mass production.
○ Zhangzhou PX blasts effect ferments, ethanediol industry likely to boom
------
Although the fire caused by the blasts of at a paraxylene (PX) chemical plant in Gulei Town, Zhangzhou City, Fujian Province has been put out, its subsequent effects are continue to ferment. The main contracts of PTA futures surged to the daily limit of 10 percent on April 7. The market prices of the ethanediol jumped by 100 to 200 yuan per ton on the same day, representing an increase of approximately 3 percent.
Comment: The PTA and the ethanediol are raw materials for the downstream terylene products. The hike of PTA prices will drive more manufacturers to use more terylene. As the prices of upstream materials for the terylene remain sluggish, the industry is likely to boom. Among A-share companies, Danhua Chemical Technology Co., Ltd. (600844.SH) and Shandong Hualu-Hengsheng Chemical Co., Ltd. (600426.SH) both own production capacities for the terylene.
[Announcement Interpretation]
○ Landing Holding to acquire Gosun Technology to transform to Cloud computing
------
Hubei Landing Holding Co., Ltd. (000971.SZ) plans to acquire 100 percent equities of Jilin Gosun Technology Co., Ltd. with 1.5 billion yuan, indicating a value-added ratio of 2142 percent. 105 million shares will be issued at 8.56 yuan per share through private placement to five natural person shareholders of Gosun Technology, and meanwhile, the company plans to raise 375 million yuan from Beijing Yuchi Ruide Investment Co., Ltd., under the control of the actual controller of Landing Holding, by issuing 42.47 million shares at 8.83 yuan per share through private placement to pay for the cash needed by the transaction. The original shareholders promise that the total net profit of Gosun Technology from 2015 to 2017 will be no less than 330 million yuan. The net profit of the company in 2014 is 4.10 million yuan.
Comment: Gosun Technology, engaged in IDC, CDN and APM services, is a Cloud-based service provider providing Cloud storage, Cloud computing and Cloud service. It has inked IDC computer room cooperation agreements with the major three telecom operators in China and multi Internet enterprises. The company will expand to promising Cloud-based service industries like IDC, CDN, etc. from traditional textile industry after reorganization.
○ Friendship & Apollo Commercial to invest RMB1.5 bln in O2O, etc. through private placement
------
Hunan Friendship & Apollo Commercial Co., Ltd. (002277.SZ) proposes to raise 1.5 billion yuan from targets including Hunan Friendship & Apollo Holdings Co., Ltd., controlling shareholder of the company, by issuing 100 million shares at no less than 14.99 yuan per share through private placement to invest in the O2O all-channel operation platform project, Chenzhou Friendship & Apollo International Plaza Project and Changde Shuixie Huacheng Friendship & Apollo Commercial Plaza project, pay off bank loans and supplement working capital. Friendship & Apollo Holdings will subscribe 15 to 45 percent of the total issuance. The company indicates that the private placement will help the company to expand its market share in the retailing market of prefecture-level cities, achieve online-offline integration and drive the growth of current retailing business.
○ Liantronics to acquire media assets again to occupy mobile Internet market
------
Shenzhen Liantronics Co., Ltd. (300269.SZ) plans to acquire 28.4 percent equities of Shenzhen AIMMEDIA Co., Ltd. with its own 76.68 million yuan and acquire 5 percent equities of AirMedia Group Inc. (NASDAQ: AMCN) with 150 million yuan. The equity acquisition of AIMMEDIA helps the company to occupy mobile Internet market, increase mobile interactive marketing, mobile advertisement putting service and huge customer resources; AirMedia, principally engaged in electronic media advertisement, LED screens at the security checks of main airports in China, and etc., promises that its net profit in 2015 to reach 200 million yuan. The equity acquisition of AirMedia helps to shore up the company's competitiveness in airport outdoor advertisement area.
○ Liaison Interactive Information Technology to layout intelligent hardware and Internet financial with RMB6 bln
------
Hangzhou Liaison Interactive Information Technology Co., Ltd. (002280.SZ) plans to raise 6 billion yuan by issuing 154 million shares at no less than 38.88 yuan per share through private placement to invest in intelligent hardware, liaison financial service platform and channel construction and to supplement working capital. The company indicates that the implementation of the project helps to shore up its industrial competitiveness in mobile Internet and complete its industrial layout. After the issuance, the actual controller of the company remains unchanged. The company proposes a 15-for-10 conversion of capital surplus into shares combined with 2 yuan dividend during trading suspension. The ex-right date is April 7.
[Financial Reports Express]
○ Shandong Haihua, Times New Material Technology and Yongda Group expect large Q1 performance growth
------
Thanks to the sales growth of sodium carbonate and cost reduction, Shandong Haihua Company Limited (000822.SZ) expects its net profit in the first quarter to see a year-on-year growth of 462 to 556 percent; due to the business growth of rail transit, wind power, etc., Zhuzhou Times New Material Technology Co., Ltd. (600458.SH) expects its net profit in the first quarter to see a year-on-year growth of 450 to 500 percent; resulted by the performance correction of the Bank of Fushun, Jilin Yongda Group Co., Ltd. (002622.SZ) expects its net profit in the first quarter to see a year-on-year growth of 190 to 200 percent.
○ NanFang Bearing and Bohui Paper Industry plan high share conversion and dividend
------
With its net profit in 2014 seeing a year-on-year growth of 38 percent, Jiangsu NanFang Bearing Co., Ltd. (002553.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 2 yuan dividend. Shandong Bohui Paper Industry Co., Ltd. (600966.SH) turns loss into gains in 2014 and proposes a 10-for-10 conversion of capital surplus into shares.
[Data Speaks]
○ Shareholders of 4 companies drop obviously, attentions paid to following move
------
According to the statistics of XFA, based on the shareholder data five trading days before the disclosure of the 2014 annual report, the number of shareholders of several companies drops largely in the first quarter and shares are concentrated rapidly. The number of shareholders of Wuhu Conch Profiles and Science Co., Ltd. (000619.SZ) and Fujian Cement Inc. (600802.SH) drop by 20 percent and 24 percent, respectively, and the surge of their stock prices just equals to the surge of Shanghai Composite Index; the number of shareholders of AVIC Real Estate Holding Company Limited (000043.SZ) and Liaoning Cheng Da Co., Ltd. (600739.SH) drop by 23 percent and 28 percent, respectively, while the surge of their stock prices largely exceeds the surge of Shanghai Composite Index.
The number of shareholders is important information of financial report. XFA reported the rapid drop of the number of shareholders of Yango Group Co., Ltd. (000671.SZ), Fujian Sunnada Communication Co., Ltd. (002417.SZ) and Zhe Jiang Kangsheng Co., Ltd. (002418.SZ) in last Sep. The first two companies have suspended trading due to the planning of significant issues, while Kangsheng sees its stock price doubled.
[Trading Trends]
○ Golden Dragon Development sees net buying from institutional seats
------
The trading volume ranking list on April 7 shows that Guangdong Golden Dragon Development Inc. (000712.SZ) was bought through four institutional seats with a total of 674 million yuan, accounting for 27 percent of its intraday turnover. Meanwhile, another two institutions totally sold 68.95 million yuan.
Comment: Research institutions believe that the Internet strategy of Zhongshan Securities Co., Ltd., controlled by Golden Dragon Development, is clear. With the decontrolling of multi accounts held by one person, the accounts opening and trading volume of the company might surge largely. Moreover, Golden Dragon Development holds 40 percent equities of Dongguan Securities Co., Ltd. and the investment profit might be achieved through selling mechanism when Dongguan Securities gets listed.
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