[Today’s Guide]
> Premier Li and departments boost revitalization of N.E. China, military and civil integration to boost military industry
> Railway construction to strengthen, cinema companies to benefit from Fast & Furious 7
> Dragon Corporation and Shanghai Shenda announced transfer of state-owned equities, SDG Information to develop military industry through acquisition
> Geron to develop stainless steel decorative, Join-cheer Software to acquire Chinasys Technology through private placement
[XFA Focus]
○ Premier Li and departments boost revitalization of N.E. China, follow-up policies expected
------
Chinese Premier Li Keqiang inspected the infrastructure construction and major equipment manufacturing enterprises recently during his visit to Changchun City, Jilin Province. Premier Li chaired a symposium on the economic conditions in the three provinces in Northeastern China on April 10 and paid special attention to the economic growth in the region. Premier Li indicated that the region faces more downward pressure on economic growth and has to launch several infrastructure projects. The region has to increase the input in transportation, water conservancy and urban underground pipelines to achieve the economic and social development goals of this year.
Comment: Statistics show that 11 officials above the ministerial level from the National Development and Reform Commission (NDRC), the Ministry of Industry and Information Technology (MIIT), the Ministry of Finance and other departments accompanied Premier Li during the visit. Follow-up detailed policies are expected to be introduced. Local media reported at the beginning of the year that the new ten-year plan on the revitalization of Northeastern China will be introduced. Among A-share companies in the region, Jilin Yatai (Group) Co., Ltd. (600881.SH) is one of the 12 large cement groups with priorities in receiving state supports and its new medicine Vicagrel will conduct clinical test soon, which enjoys a market of 10 billion yuan. Longjian Road & Bridge Co., Ltd. (600853.SH) is principally engaged in the construction of roads and Changchun Jingkai (Group) Co., Ltd. (600215.SH) has undertaken many municipal construction and rundown urban areas renovation projects.
○ Policies on military and civil integration issued, military industry to see golden opportunities
------
Driven by the state strategy of the military and civil integration, relevant supporting policies have been introduced recently. The Ministry of National Defense issued the special campaign plan on the military and civil integration in 2015 and set out 27 tasks with priorities for the year and proposed the participation in military projects by non-governmental capitals for the first time. The MIIT also introduced special plans on the military and civil integration and it will also convene a kick-off meeting for the special campaign on military and civil integration.
Comment: China has established the pattern on accelerating the development military industries. As major emerging forces, private enterprises will see huge development and companies made plans in advance are expected to have preemptive advantages. Integrated Electronic Systems Lab Co., Ltd. (002339.SZ) and Beijing Jiuyuan Trade Co., Ltd. jointly established a fund of 1.5 billion yuan for mergers in the military industry and following acquisitions are expected. Sichuan Haite High-Tech Co., Ltd. (002023.SZ) has developed the helicopter ECU controlling system, military chips and other products. Asd a leader in military communications, Guangzhou Haige Communications Group Incorporated Company (002465.SZ) received orders for BeiDou Navigation Satellite System from the military.
[XFA Selection]
○ The holding position limit for the future of CSI 300 index was raised to 5,000 lots from 1,200 lots, which is expected to be more favorable to long positions that cannot hedge for their profit in the market.
○ China Securities Depository and Clearing Corporation Limited (CSDC) issued the instructions on the securities accounts business (revised), which cancelled the limitation on one account for an individual on April 13.
○ Officials of the Ministry of Commerce indicated that it may release the Internet Plus Circulation campaign plan soon at the China (Yiwu) World E-commerce Conference convened on April 12.
○ China Merchants Bank Co., Ltd. (03968.HK; 600036.SH) propose to raise 6 billon yuan by issuing shares through private placement to introduce staff shareholding plans. The Economic Observer reported that China Merchants Property Development Co., Ltd. (000024.SZ) may consolidate the industrial zone at Shekou, Shenzhen City.
○ The reform plans for three major policy banks were approved and the financing channels are expected to be more liberalized.
○ Apple Watch sold out immediately after opening for booking. Apple Inc. (AAPL.NASDAQ; ACP.LSE) has determined to postpone the delivery.
[Industry Information]
○ Premier Li requires more railway construction, railway equipment industry in China to boom
------
The work conference on the railway construction in certain areas has been convened in Chongqing Municipality on April 11. Li Keqiang, Premier of the State Council, indicated that China will strengthen the construction of key railway projects with the Central and Western regions as priorities. It shall make innovations in the mechanisms for investments and financing and attract more private capitals.
Comment: The railway construction is a key driver in maintaining economic growth in China and various supporting policies have been introduced. China will invest over 800 billion yuan in railway construction and open over 8,000 kilometers of railways to traffic this year. The railway equipment industry will boom and the performance of a majority of relevant railway construction companies will continue to hike. In terms of listed companies, Bosun Tools Co., Ltd. (002282.SZ) is speeding up in the industrialization of high-speed rail brake pads, which enjoys a market of more than 10 billion yuan and will bring additional revenues growth in the future. Gem-Year Industrial Co., Ltd. (601002.SH) is a leading enterprise for railway fasteners and recorded a performance growth of 60 to 70 percent last year.
○ Fast & Furious 7 set many new records, cinema companies to benefit
------
The Fast & Furious 7 hit the cinemas in mainland China at 00:00, April 12, 2015 and set many new records. The box office for the show at 00:00 recorded nearly 50 million yuan, outpacing the 21 million yuan set for the Transformers: Age of Extinction last year. The box office for the Fast & Furious 7 by 18:00, April 12 has succeeded 310 million yuan, setting a new record for a new movie in a single day. It is estimated that the total box office will be over 1.5 billion yuan.
Comment: Hollywood blockbusters have been play important roles in the domestic box office. CCTV reported that the total box office in China has reached 10.2 billion yuan by April 6, setting a new record for more than 10 billion yuan in 100 days. The total box office for domestic cinemas in 2014 increased 36 percent year on year in 2014. The high growth in the domestic box office will directly benefit companies with cinemas. Wanda Cinema Line Co., Ltd. (002739.SZ) recorded a box office of 4.1 billion yuan in 2014, ranking first among all cinemas in China. Shimao Cinema of Shanghai Shimao Co., Ltd. (600823.SH) saw an increase of nearly 60 percent in business revenues in 2014 and its 148 screens in 17 cinemas have opened for operation.
○ Titanium dioxide leader raises price, improved supply and demand to boost profit growth
------
XFA learnt from insiders that Sichuan Lomon Corporation, a leading enterprise in China, raised the price for titanium dioxide by 600 yuan per ton or approximately 5 percent on April 10. So far, the titanium dioxide price in the domestic market has surpassed 12,000 yuan per ton.
Comment: The price rise by the leading enterprise has confirmed the market conditions for titanium dioxide in short term. The stricter policies on energy consumption and environmental protection introduced by the government accelerated the consolidation in the titanium dioxide industry. The exit of medium and small capacities improved the supply and demand in the market. Leading enterprises will benefit from the boom with the advantages in the size. In terms of listed companies, CNNC Hua Yuan Titanium Dioxide Co., Ltd. (002145.SZ) has doubled its titanium dioxide production capacity to 300,000 tons after the assets reorganization. Jilin Gpro Titanium Industry Co., Ltd. (000545.SZ) owns a titanium dioxide capacity of 100,000 tons and the project in Xuzhou City with a capacity of 80,000 tons will put into operation by end-June.
[Announcement Interpretation]
○ Dragon Corporation and Shanghai Shenda announced free transfer of state-owned equities, state capital and state-owned assets reform in Shanghai continue progressing
------
Shanghai Dragon Corporation (600630.SH) and Shanghai Shenda Co., Ltd. (600626.SH) announced that the 49 percent equities held by Shangtex Group, their controlling shareholder, have been transferred for free to Shanghai Guosheng (Group) Co., Ltd. by the State-owned Assets Supervision and Administration Commission of Shanghai Municipal Government (Shanghai SASAC). The move is to optimize the resources allocation based on the overall plan on the state capital and state-owned assets reform in Shanghai. The market estimates that the equities transfer will facilitate the overall listing of Shangtex Group.
Comment: The state capital and state-owned assets reform in Shanghai have been progressing since the beginning of the year. After the assets injection into Double Coin Holdings., Ltd. (600623.SH) from Shanghai Huayi (Group) Company, Bright Dairy & Food Co., Ltd. (600597.SH) also suspended trading as its mulls significant events after its equities transferred to Shanghai Guosheng (Group) Co., Ltd., the state-owned assets flow platform in Shanghai. SAIC Motor Corporation Limited (600104.SH), Shanghai Haibo Co., Ltd. (600708.SH) and Shanghai Jinfeng Wine Company Limited (600616.SH) also announced the free transfer of state-owned equities earlier.
○ SDG Information to develop military industry through acquisition
------
Shenzhen SDG Information Co., Ltd. (000070.SZ) plans to acquire 100 percent equities of Shenzhen Torch Technology Co., Ltd. and Chengdu Fuliye Electronic Technology Co., Ltd with 190 million yuan and 250 million yuan, respectively, through private placement and in cash. Meanwhile, it plans to raise a supporting fund of 110 million yuan at the offering price of 9.55 yuan per share from Zhixiang No.1, the company’s mid-level and senior employee shareholding fund.
Torch Technology mainly produces passive optical network (PON) terminal, wireless router, etc., while Fuliye Electronic Technology is principally engaged in the production of military air communication device, data recorder and missile-borne computer. According to performance commitment, the net profit of Torch Technology shall reach 37.50 million yuan, 46.88 million yuan and 58.60 million yuan from 2015 to 2017. The net profit of Fuliye Electronic Technology shall reach 22.00 million yuan, 30.00 million yuan and 35.00 million yuan from 2015 to 2017.
○ Geron to acquire Senda Decorative Material to develop stainless steel decorative
------
Geron Co., Ltd. (002722.SZ) plans to acquire 100 percent equities of Haimen Senda Decorative Material Co., Ltd. with 940 million yuan by issuing shares and in cash. According to the scheme, the offering price of the private placement is 22.54 yuan per share, higher than its stock price of 21.16 yuan per share before trading suspension. 60 percent of the transaction will be paid through private placement and the rest 40 percent will be paid in cash. The counterparty promises that the net profit of Senda Decorative Material will be no less than 77.49 million yuan, 80.53 million yuan and 83.35 million yuan from 2015 to 2017. The net profit of Geron in 2014 records 33.94 million yuan.
Senda Decorative Material always aims at the development of various stainless steel decorative materials and is engaged in stainless steel decorative material plates. Its downstream client list covers elevator industry, kitchen and bath industry and household appliance industry.
○ Join-cheer Software to acquire Chinasys Technology with RMB600 mln
------
Beijing Join-cheer Software Co., Ltd. (002279.SZ) plans to acquire 100 percent equities of Beijing Chinasys Technology Co., Ltd. with 600 million yuan by issuing shares at 32 yuan per share through private placement and paying 90 million yuan in cash. Meanwhile, the company plans to raise a supporting fund of 100 million yuan by issuing shares at 32.26 yuan per share through private placement. Chinasys Technology promises that its net profit will be no less than 40.00 million yuan, 56.00 million yuan and 78.00 million yuan from 2015 to 2017.
Chinasys Technology provides digital hearing products and solutions to users in public security organs, and provides users in governments and large-scale enterprises with intelligent video products and solutions as well as internet and video system construction services.
○ Tsinghua Holdings to actually control Sound Environmental Resources
------
Sound Group, the controlling shareholder of Sound Environmental Resources Co., Ltd. (000826.SZ), plans to transfer 252 million shares (accounting for 29.8 percent of the company’s total share capital) at 27.72 yuan per share to Tsinghua Holdings Co., Ltd. and its persons acting in concert which are Tus-Technology Service Co., Ltd., Tsinghua Holding Asset Management Co., Ltd. and Beijing Jinxin Huachuang Equity Investment Center (Limited Partnership). The transaction is priced at 6,991 million yuan. Upon completion, Tus-Technology Service will become the largest shareholder of the company; Tsinghua Holdings replaces Wen Yibo to become actual controller of the company; Sound Group still holds 15.01 percent equities of the company.
Comment: Tsinghua Holdings is responsible for managing all technology enterprises under Tsinghua University and it is the conversion platform and incubator for the scientific and technological achievements of Tsinghua University. The A-share companies, whose shares are directly or indirectly held by Tsinghua Holdings by over 5 percent, include Tsinghua Tongfang Co., Ltd. (600100.SH), Chengzhi Shareholding Co., Ltd. (000990.SZ), Unisplendour Corporation Limited (000938.SZ), Sinolink Securities Co., Ltd. (600109.SH), Shenzhen Huakong Seg Co., Ltd. (000068.SZ), Tellhow Sci-Tech Co., Ltd. (600590.SH), Tongfang Guoxin Electronics Co., Ltd. (002049.SZ), Unisplendour Guhan Group Corporation Limited (000590.SZ) and China TransInfo Technology Co., Ltd. (002373.SZ). According to the development strategy of Tsinghua Holdings, it will strive to develop environmental protection business in accordance with the transformation and upgrading of national industries and effectively integrate the resources within environmental protection industry via the platform of listed companies.
○ Creative Distribution Automation to upgrade main business with RMB450 mln through private placement
------
Beijing Creative Distribution Automation Co., Ltd. (002350.SZ) plans to raise 450 million yuan from Zhang Xinyu, actual controller of the company, and several senior management of the company, etc. by issuing 37.00 million shares at 12.17 yuan per share to invest in projects like the production expansion and technology modification of intelligent power distribution equipment, etc. and to supplement working capital. The company indicates that the private placement will promote its upgrading towards intellectualization, automation and environmental protection as well as enrich its current product lines.
[Financial Reports Express]
○ Jushi, Sieyuan Electric and Infotmic see large surge of net profit in Q1
------
Thanks to the large sales growth and price hike, China Jushi Co., Ltd. (600176.SH) expects its net profit in the first quarter to see a year-on-year growth of 630 ~ 680 percent; due to the investment income achieved from salable asset, Sieyuan Electric Co., Ltd. (002028.SZ) expects its net profit in the first quarter of 2015 to see a year-on-year growth of 500 ~550 percent, which is previously estimated as 250 ~350 percent; with the sales income of Infotmic (Shanghai) Co., Ltd., a fully-owned subsidiary of Infotmic Co., Ltd. (000670.SZ), seeing year-on-year growth, Infotmic expects its net profit in the first quarter to see a year-on-year growth of 188 percent.
○ Western Securities, SPC Environment Protection Tech and Yiling Phar. propose high share conversion and dividend
------
Western Securities Co., Ltd. (002673.SZ) proposes a 5-for-10 bonus shares and a 5-for-10 conversion of capital surplus into shares combined with 1.5 yuan dividend for every 10 shares in its 2014 annual report; with net profit in 2014 seeing a year-on-year growth of 50.3 percent, Beijing SPC Environment Protection Tech Co., Ltd. (002573.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 2 yuan dividend for every 10 shares; with net profit in 2014 seeing a year-on-year growth of 45.11 percent, Shijiazhuang Yiling Pharmaceutical Co., Ltd. (002603.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares.
[Trading Trends]
○ Thaihot Group bought through four institutional seats
------
The trading volume ranking list on April 10 shows that Thaihot Group Co., Ltd. (000732.SZ) was bought through four institutional seats with a total of 158 million yuan, accounting for 18 percent of its intraday turnover.
Comment: Thaihot Group is involved in multi areas including the development of housing and commercial real estate, financial securities, chemicals, biological medicine, etc. Multi projects of the company took the title of sales champion in local market and the company was shortlisted as top 30 national real estate enterprises in terms of sales in 2014. Institutions believe that the company’s competitiveness in brand, layout, products, operation, etc. enables it to enjoy potential of continuous high growth.
[Trading Alarms]
○ Hanbang Technology starts subscription on April 13
------
Beijing Hanbang Technology Corp. (300449.SZ), principally engaged in digital video monitoring system, launches subscription at the price of 17.76 yuan per share with an up-limit per account of 7,000 shares. 15 stocks, 9 stocks and 5 stocks will be launched from April 14 to 16, respectively, according to the released prospectus.
[Weekly Review]
○ New highs normalized, slow bullish market to last for long time
------
The Shanghai Composite Index (SCI) was expected to reach 4,000 points after the Tomb-sweeping Day. After sharp fluctuation of over 100 points for consecutive trading days, the SCI finally overcame 4,000 points. The ChiNext Board also picked up after breath-taking fluctuation. The A-share market boomed last Friday and the B-share market also showed signs of booming.
Looking back at the four trading days last week, the People's Daily issued articles to fuel the fight towards 4,000 points. It explicitly pointed out that the economy is faced with large downtrend pressure and the support from the stock market is needed, highlighting stock market’s role in supporting Chinese economic transformation to an all-time high. At present, it is widely expected by the market that currency will keep relaxing to support economy and a slow bullish market will contribute to economic reform, transformation and upgrading.
XFA reported new energy industry last week. Segmented sectors including new clear power station, wind power, photovoltaic power, charging piles, etc. are covered and topics like the upgrading and transformation of coal industry are included too, while state-owned asset and SOEs reforms are concerned as usual. As for sectors, securities stocks are strongly recommended due to their good performance and their market performance turn out to be no disappointment. As for individual stocks, multi stocks see continuous soar by the daily 10 percent limit.
> Premier Li and departments boost revitalization of N.E. China, military and civil integration to boost military industry
> Railway construction to strengthen, cinema companies to benefit from Fast & Furious 7
> Dragon Corporation and Shanghai Shenda announced transfer of state-owned equities, SDG Information to develop military industry through acquisition
> Geron to develop stainless steel decorative, Join-cheer Software to acquire Chinasys Technology through private placement
[XFA Focus]
○ Premier Li and departments boost revitalization of N.E. China, follow-up policies expected
------
Chinese Premier Li Keqiang inspected the infrastructure construction and major equipment manufacturing enterprises recently during his visit to Changchun City, Jilin Province. Premier Li chaired a symposium on the economic conditions in the three provinces in Northeastern China on April 10 and paid special attention to the economic growth in the region. Premier Li indicated that the region faces more downward pressure on economic growth and has to launch several infrastructure projects. The region has to increase the input in transportation, water conservancy and urban underground pipelines to achieve the economic and social development goals of this year.
Comment: Statistics show that 11 officials above the ministerial level from the National Development and Reform Commission (NDRC), the Ministry of Industry and Information Technology (MIIT), the Ministry of Finance and other departments accompanied Premier Li during the visit. Follow-up detailed policies are expected to be introduced. Local media reported at the beginning of the year that the new ten-year plan on the revitalization of Northeastern China will be introduced. Among A-share companies in the region, Jilin Yatai (Group) Co., Ltd. (600881.SH) is one of the 12 large cement groups with priorities in receiving state supports and its new medicine Vicagrel will conduct clinical test soon, which enjoys a market of 10 billion yuan. Longjian Road & Bridge Co., Ltd. (600853.SH) is principally engaged in the construction of roads and Changchun Jingkai (Group) Co., Ltd. (600215.SH) has undertaken many municipal construction and rundown urban areas renovation projects.
○ Policies on military and civil integration issued, military industry to see golden opportunities
------
Driven by the state strategy of the military and civil integration, relevant supporting policies have been introduced recently. The Ministry of National Defense issued the special campaign plan on the military and civil integration in 2015 and set out 27 tasks with priorities for the year and proposed the participation in military projects by non-governmental capitals for the first time. The MIIT also introduced special plans on the military and civil integration and it will also convene a kick-off meeting for the special campaign on military and civil integration.
Comment: China has established the pattern on accelerating the development military industries. As major emerging forces, private enterprises will see huge development and companies made plans in advance are expected to have preemptive advantages. Integrated Electronic Systems Lab Co., Ltd. (002339.SZ) and Beijing Jiuyuan Trade Co., Ltd. jointly established a fund of 1.5 billion yuan for mergers in the military industry and following acquisitions are expected. Sichuan Haite High-Tech Co., Ltd. (002023.SZ) has developed the helicopter ECU controlling system, military chips and other products. Asd a leader in military communications, Guangzhou Haige Communications Group Incorporated Company (002465.SZ) received orders for BeiDou Navigation Satellite System from the military.
[XFA Selection]
○ The holding position limit for the future of CSI 300 index was raised to 5,000 lots from 1,200 lots, which is expected to be more favorable to long positions that cannot hedge for their profit in the market.
○ China Securities Depository and Clearing Corporation Limited (CSDC) issued the instructions on the securities accounts business (revised), which cancelled the limitation on one account for an individual on April 13.
○ Officials of the Ministry of Commerce indicated that it may release the Internet Plus Circulation campaign plan soon at the China (Yiwu) World E-commerce Conference convened on April 12.
○ China Merchants Bank Co., Ltd. (03968.HK; 600036.SH) propose to raise 6 billon yuan by issuing shares through private placement to introduce staff shareholding plans. The Economic Observer reported that China Merchants Property Development Co., Ltd. (000024.SZ) may consolidate the industrial zone at Shekou, Shenzhen City.
○ The reform plans for three major policy banks were approved and the financing channels are expected to be more liberalized.
○ Apple Watch sold out immediately after opening for booking. Apple Inc. (AAPL.NASDAQ; ACP.LSE) has determined to postpone the delivery.
[Industry Information]
○ Premier Li requires more railway construction, railway equipment industry in China to boom
------
The work conference on the railway construction in certain areas has been convened in Chongqing Municipality on April 11. Li Keqiang, Premier of the State Council, indicated that China will strengthen the construction of key railway projects with the Central and Western regions as priorities. It shall make innovations in the mechanisms for investments and financing and attract more private capitals.
Comment: The railway construction is a key driver in maintaining economic growth in China and various supporting policies have been introduced. China will invest over 800 billion yuan in railway construction and open over 8,000 kilometers of railways to traffic this year. The railway equipment industry will boom and the performance of a majority of relevant railway construction companies will continue to hike. In terms of listed companies, Bosun Tools Co., Ltd. (002282.SZ) is speeding up in the industrialization of high-speed rail brake pads, which enjoys a market of more than 10 billion yuan and will bring additional revenues growth in the future. Gem-Year Industrial Co., Ltd. (601002.SH) is a leading enterprise for railway fasteners and recorded a performance growth of 60 to 70 percent last year.
○ Fast & Furious 7 set many new records, cinema companies to benefit
------
The Fast & Furious 7 hit the cinemas in mainland China at 00:00, April 12, 2015 and set many new records. The box office for the show at 00:00 recorded nearly 50 million yuan, outpacing the 21 million yuan set for the Transformers: Age of Extinction last year. The box office for the Fast & Furious 7 by 18:00, April 12 has succeeded 310 million yuan, setting a new record for a new movie in a single day. It is estimated that the total box office will be over 1.5 billion yuan.
Comment: Hollywood blockbusters have been play important roles in the domestic box office. CCTV reported that the total box office in China has reached 10.2 billion yuan by April 6, setting a new record for more than 10 billion yuan in 100 days. The total box office for domestic cinemas in 2014 increased 36 percent year on year in 2014. The high growth in the domestic box office will directly benefit companies with cinemas. Wanda Cinema Line Co., Ltd. (002739.SZ) recorded a box office of 4.1 billion yuan in 2014, ranking first among all cinemas in China. Shimao Cinema of Shanghai Shimao Co., Ltd. (600823.SH) saw an increase of nearly 60 percent in business revenues in 2014 and its 148 screens in 17 cinemas have opened for operation.
○ Titanium dioxide leader raises price, improved supply and demand to boost profit growth
------
XFA learnt from insiders that Sichuan Lomon Corporation, a leading enterprise in China, raised the price for titanium dioxide by 600 yuan per ton or approximately 5 percent on April 10. So far, the titanium dioxide price in the domestic market has surpassed 12,000 yuan per ton.
Comment: The price rise by the leading enterprise has confirmed the market conditions for titanium dioxide in short term. The stricter policies on energy consumption and environmental protection introduced by the government accelerated the consolidation in the titanium dioxide industry. The exit of medium and small capacities improved the supply and demand in the market. Leading enterprises will benefit from the boom with the advantages in the size. In terms of listed companies, CNNC Hua Yuan Titanium Dioxide Co., Ltd. (002145.SZ) has doubled its titanium dioxide production capacity to 300,000 tons after the assets reorganization. Jilin Gpro Titanium Industry Co., Ltd. (000545.SZ) owns a titanium dioxide capacity of 100,000 tons and the project in Xuzhou City with a capacity of 80,000 tons will put into operation by end-June.
[Announcement Interpretation]
○ Dragon Corporation and Shanghai Shenda announced free transfer of state-owned equities, state capital and state-owned assets reform in Shanghai continue progressing
------
Shanghai Dragon Corporation (600630.SH) and Shanghai Shenda Co., Ltd. (600626.SH) announced that the 49 percent equities held by Shangtex Group, their controlling shareholder, have been transferred for free to Shanghai Guosheng (Group) Co., Ltd. by the State-owned Assets Supervision and Administration Commission of Shanghai Municipal Government (Shanghai SASAC). The move is to optimize the resources allocation based on the overall plan on the state capital and state-owned assets reform in Shanghai. The market estimates that the equities transfer will facilitate the overall listing of Shangtex Group.
Comment: The state capital and state-owned assets reform in Shanghai have been progressing since the beginning of the year. After the assets injection into Double Coin Holdings., Ltd. (600623.SH) from Shanghai Huayi (Group) Company, Bright Dairy & Food Co., Ltd. (600597.SH) also suspended trading as its mulls significant events after its equities transferred to Shanghai Guosheng (Group) Co., Ltd., the state-owned assets flow platform in Shanghai. SAIC Motor Corporation Limited (600104.SH), Shanghai Haibo Co., Ltd. (600708.SH) and Shanghai Jinfeng Wine Company Limited (600616.SH) also announced the free transfer of state-owned equities earlier.
○ SDG Information to develop military industry through acquisition
------
Shenzhen SDG Information Co., Ltd. (000070.SZ) plans to acquire 100 percent equities of Shenzhen Torch Technology Co., Ltd. and Chengdu Fuliye Electronic Technology Co., Ltd with 190 million yuan and 250 million yuan, respectively, through private placement and in cash. Meanwhile, it plans to raise a supporting fund of 110 million yuan at the offering price of 9.55 yuan per share from Zhixiang No.1, the company’s mid-level and senior employee shareholding fund.
Torch Technology mainly produces passive optical network (PON) terminal, wireless router, etc., while Fuliye Electronic Technology is principally engaged in the production of military air communication device, data recorder and missile-borne computer. According to performance commitment, the net profit of Torch Technology shall reach 37.50 million yuan, 46.88 million yuan and 58.60 million yuan from 2015 to 2017. The net profit of Fuliye Electronic Technology shall reach 22.00 million yuan, 30.00 million yuan and 35.00 million yuan from 2015 to 2017.
○ Geron to acquire Senda Decorative Material to develop stainless steel decorative
------
Geron Co., Ltd. (002722.SZ) plans to acquire 100 percent equities of Haimen Senda Decorative Material Co., Ltd. with 940 million yuan by issuing shares and in cash. According to the scheme, the offering price of the private placement is 22.54 yuan per share, higher than its stock price of 21.16 yuan per share before trading suspension. 60 percent of the transaction will be paid through private placement and the rest 40 percent will be paid in cash. The counterparty promises that the net profit of Senda Decorative Material will be no less than 77.49 million yuan, 80.53 million yuan and 83.35 million yuan from 2015 to 2017. The net profit of Geron in 2014 records 33.94 million yuan.
Senda Decorative Material always aims at the development of various stainless steel decorative materials and is engaged in stainless steel decorative material plates. Its downstream client list covers elevator industry, kitchen and bath industry and household appliance industry.
○ Join-cheer Software to acquire Chinasys Technology with RMB600 mln
------
Beijing Join-cheer Software Co., Ltd. (002279.SZ) plans to acquire 100 percent equities of Beijing Chinasys Technology Co., Ltd. with 600 million yuan by issuing shares at 32 yuan per share through private placement and paying 90 million yuan in cash. Meanwhile, the company plans to raise a supporting fund of 100 million yuan by issuing shares at 32.26 yuan per share through private placement. Chinasys Technology promises that its net profit will be no less than 40.00 million yuan, 56.00 million yuan and 78.00 million yuan from 2015 to 2017.
Chinasys Technology provides digital hearing products and solutions to users in public security organs, and provides users in governments and large-scale enterprises with intelligent video products and solutions as well as internet and video system construction services.
○ Tsinghua Holdings to actually control Sound Environmental Resources
------
Sound Group, the controlling shareholder of Sound Environmental Resources Co., Ltd. (000826.SZ), plans to transfer 252 million shares (accounting for 29.8 percent of the company’s total share capital) at 27.72 yuan per share to Tsinghua Holdings Co., Ltd. and its persons acting in concert which are Tus-Technology Service Co., Ltd., Tsinghua Holding Asset Management Co., Ltd. and Beijing Jinxin Huachuang Equity Investment Center (Limited Partnership). The transaction is priced at 6,991 million yuan. Upon completion, Tus-Technology Service will become the largest shareholder of the company; Tsinghua Holdings replaces Wen Yibo to become actual controller of the company; Sound Group still holds 15.01 percent equities of the company.
Comment: Tsinghua Holdings is responsible for managing all technology enterprises under Tsinghua University and it is the conversion platform and incubator for the scientific and technological achievements of Tsinghua University. The A-share companies, whose shares are directly or indirectly held by Tsinghua Holdings by over 5 percent, include Tsinghua Tongfang Co., Ltd. (600100.SH), Chengzhi Shareholding Co., Ltd. (000990.SZ), Unisplendour Corporation Limited (000938.SZ), Sinolink Securities Co., Ltd. (600109.SH), Shenzhen Huakong Seg Co., Ltd. (000068.SZ), Tellhow Sci-Tech Co., Ltd. (600590.SH), Tongfang Guoxin Electronics Co., Ltd. (002049.SZ), Unisplendour Guhan Group Corporation Limited (000590.SZ) and China TransInfo Technology Co., Ltd. (002373.SZ). According to the development strategy of Tsinghua Holdings, it will strive to develop environmental protection business in accordance with the transformation and upgrading of national industries and effectively integrate the resources within environmental protection industry via the platform of listed companies.
○ Creative Distribution Automation to upgrade main business with RMB450 mln through private placement
------
Beijing Creative Distribution Automation Co., Ltd. (002350.SZ) plans to raise 450 million yuan from Zhang Xinyu, actual controller of the company, and several senior management of the company, etc. by issuing 37.00 million shares at 12.17 yuan per share to invest in projects like the production expansion and technology modification of intelligent power distribution equipment, etc. and to supplement working capital. The company indicates that the private placement will promote its upgrading towards intellectualization, automation and environmental protection as well as enrich its current product lines.
[Financial Reports Express]
○ Jushi, Sieyuan Electric and Infotmic see large surge of net profit in Q1
------
Thanks to the large sales growth and price hike, China Jushi Co., Ltd. (600176.SH) expects its net profit in the first quarter to see a year-on-year growth of 630 ~ 680 percent; due to the investment income achieved from salable asset, Sieyuan Electric Co., Ltd. (002028.SZ) expects its net profit in the first quarter of 2015 to see a year-on-year growth of 500 ~550 percent, which is previously estimated as 250 ~350 percent; with the sales income of Infotmic (Shanghai) Co., Ltd., a fully-owned subsidiary of Infotmic Co., Ltd. (000670.SZ), seeing year-on-year growth, Infotmic expects its net profit in the first quarter to see a year-on-year growth of 188 percent.
○ Western Securities, SPC Environment Protection Tech and Yiling Phar. propose high share conversion and dividend
------
Western Securities Co., Ltd. (002673.SZ) proposes a 5-for-10 bonus shares and a 5-for-10 conversion of capital surplus into shares combined with 1.5 yuan dividend for every 10 shares in its 2014 annual report; with net profit in 2014 seeing a year-on-year growth of 50.3 percent, Beijing SPC Environment Protection Tech Co., Ltd. (002573.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 2 yuan dividend for every 10 shares; with net profit in 2014 seeing a year-on-year growth of 45.11 percent, Shijiazhuang Yiling Pharmaceutical Co., Ltd. (002603.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares.
[Trading Trends]
○ Thaihot Group bought through four institutional seats
------
The trading volume ranking list on April 10 shows that Thaihot Group Co., Ltd. (000732.SZ) was bought through four institutional seats with a total of 158 million yuan, accounting for 18 percent of its intraday turnover.
Comment: Thaihot Group is involved in multi areas including the development of housing and commercial real estate, financial securities, chemicals, biological medicine, etc. Multi projects of the company took the title of sales champion in local market and the company was shortlisted as top 30 national real estate enterprises in terms of sales in 2014. Institutions believe that the company’s competitiveness in brand, layout, products, operation, etc. enables it to enjoy potential of continuous high growth.
[Trading Alarms]
○ Hanbang Technology starts subscription on April 13
------
Beijing Hanbang Technology Corp. (300449.SZ), principally engaged in digital video monitoring system, launches subscription at the price of 17.76 yuan per share with an up-limit per account of 7,000 shares. 15 stocks, 9 stocks and 5 stocks will be launched from April 14 to 16, respectively, according to the released prospectus.
[Weekly Review]
○ New highs normalized, slow bullish market to last for long time
------
The Shanghai Composite Index (SCI) was expected to reach 4,000 points after the Tomb-sweeping Day. After sharp fluctuation of over 100 points for consecutive trading days, the SCI finally overcame 4,000 points. The ChiNext Board also picked up after breath-taking fluctuation. The A-share market boomed last Friday and the B-share market also showed signs of booming.
Looking back at the four trading days last week, the People's Daily issued articles to fuel the fight towards 4,000 points. It explicitly pointed out that the economy is faced with large downtrend pressure and the support from the stock market is needed, highlighting stock market’s role in supporting Chinese economic transformation to an all-time high. At present, it is widely expected by the market that currency will keep relaxing to support economy and a slow bullish market will contribute to economic reform, transformation and upgrading.
XFA reported new energy industry last week. Segmented sectors including new clear power station, wind power, photovoltaic power, charging piles, etc. are covered and topics like the upgrading and transformation of coal industry are included too, while state-owned asset and SOEs reforms are concerned as usual. As for sectors, securities stocks are strongly recommended due to their good performance and their market performance turn out to be no disappointment. As for individual stocks, multi stocks see continuous soar by the daily 10 percent limit.
Latest comments