[Today's Guide]
> No need to exaggerate impact of accelerated IPOs, Premier focuses on transformation and upgrading during inspection
> Guidance for intelligent power grid to launch, fluorine chemical industry to boom
> Shanghai to invested by CDBC, connected parties to fully subscribe Lingrui Phar.’s private placement
> Eastern Airlines to further develop main business with RMB15 bln, four institutes buy Newcapec Electronics
[XFA Focus]
○ Two batches of new stocks to launched every month, no need to exaggerate impact of gentle control
------
The China Securities Regulatory Commission (CSRC) approves the IPO application of 25 companies on April 23, among which, 10 will be listed in Shanghai Stock Market, 13 will be listed in the Small and Medium-Sized Enterprises Board and 12 will be listed in the ChiNext Board of Shenzhen Stock Market. Xinjiang Xuefeng Sci-Tech (Group) Co., Ltd. will issue no more than 82.35 million shares, the biggest number among this batch of IPOs. CSRC claims that the launch of IPOs will be added to two batches from current one batch every month later.
Comment: Though the pace of stock issuance is quickened, there are no large-cap stocks like Jiangsu Broadcasting Cable Information Network Corporation Limited (600959.SH) and Orient Securities Company Limited (600958.SH), etc. this time, so it is just gentle control. This is in accordance with the attitude of Xiao Gang, head of CSRC, towards the issuance of new stocks during two sessions: new stocks will be supplied at proper amount this year; there is no need for the market to worry about over-quickened expansion of stock market and the number of IPOs approved; the financing size shall be taken into comprehensive consideration.
○ Premier focuses on transformation and upgrading during inspection, “Made in China” 2025 to accelerate
------
Chinese Premier Li Keqiang pays special attentions to the self-dependent innovation during his inspection to Fujian J-Tech CNC Machinery Co., Ltd. in Quanzhou City, Fujian Province on April 23 and indicates that to maintain middle and high economic growth, Chinese economy must move towards high-end and speed up in pushing “Made in China” 2025. Li also inspects Quanzhou Pin Shang E-Commerce Co., Ltd. and indicates that the unknown is far larger than the known of “Internet Plus”. The future development space is limitless.
Comment: Since the release of the government work report, popular entrepreneurship and innovation become hot policy words. The senior management fully understands the necessity of economic transformation and upgrading. At present, the planning for “Made in China” 2025 has been approved by the State Council and might be issued recently. Institutions are optimistic that it will become the commanding height of the new round of manufacturing development in China and drive China’s manufacturing to transform to intelligent manufacturing. As for listed companies, Xuchang Yuandong Drive Shaft Co., Ltd. (002406.SZ) and Xiangyang Automobile Bearing Co., Ltd. (000678.SZ) are involved in “Made in China 2025 Smart Industry Innovation Alliance”; Siasun Robot & Automation Co., Ltd. (300024.SZ) participated in the economy trend forum hosted by the Premier recently.
[XFA Selection]
○ Zhang Gaoli, vice premier of the State Council, emphasized to intensify the ability in preventing and controlling the pollution sources along the South-to-North Water Diversion Project as well as the emergency response to water pollution during his inspection to the project in Henan Province.
○ Four departments and commissions issue guidance on promoting the healthy development of national new district and encouraging reference to the successful experience of Shanghai Free Trade Zone.
○The preliminary Purchasing Managers Index from HSBC Holdings Plc and Markit Economics dropped to a new-low of the year in April. It is learnt that the National Development and Reform Commission (NDRC) will release targeted-controlling investment projects.
○ The data of foreign exchange settlement and sale by banks on behalf of clients shows deficit for 7 consecutive months. The capital outflow mainly lies in that foreign exchange reserves are hold by people and de-leverage of debts.
○ The equities of insurance company are frequently favored by private funds. Substantial shareholder of China Molybdenum Co., Ltd. (603993.SH; 03993.HK) will transfer 50 percent equities of Sino-French Life Insurance Co., Ltd.
○ Mercedes-Benz, a division of the German automobile manufacturer Daimler AG, has been fined 350 million yuan by Jiangsu Province for price fixing, creating the highest anti-monopoly record in car industry. Enforcement of China's Anti-Monopoly Law is fully pushed.
[Industry Information]
○ Guidance for intelligent power grid to launch, trillions-yuan market of energy Internet opened
------
Tong Guangyao, deputy director of the Electricity Department of the National Energy Administration (NEA), discloses on the “energy Internet” industry seminar hosted by China Energy Research Society on April 23 that the Guidance for the Construction of Intelligent Power Grid formulated by NEA will be launched soon and the thirteenth five-year plan for the development of intelligent power grid is also under formulation.
Comment: The State Grid Corporation of China will spare great efforts to build intelligent power grid this year: 1400 intelligent transformer substations will be newly built; 60.6 million intelligent electric energy meters will be installed; the inter-city interconnected quick charging network on high ways will be built. Electricity reform speeds up in 2015. The market-oriented reform of electricity system not only improves operation efficiency but also creates policy conditions for the development of energy internet. NEA previously announced to establish China Energy Internet Alliance. Institutions predict that the capacity of the energy Internet market will be trillions of yuan. As for A-share companies, Acrel Co., Ltd. (300286.SZ) can provides intelligent power grid users with systematic solutions including electricity monitoring, electricity management, etc.; Shenzhen Clou Electronics Co., Ltd. (002121.SZ) acquires 20 percent equities of Shenzhen Electricity Selling Co., Ltd. and enters electricity selling area.
○ Export tariffs cancellation and booming demands to boost fluorine chemical industry
------
According to the catalogue of varieties for the cancellation of export tariffs released by the Ministry of Finance on April 23, the export tariff of hydrofluoric acid has been reduced to 0 from 10 percent following the rare earth and tungsten-molybdenum. It will increase the exports of domestic enterprises and boost the fluorine chemical industry.
Comment: As the demand booms, the prices of R22, R125 and other refrigerant all surged by about 2 percent. According to the report of the World Meteorological Organization released recently, this year may be the hottest in the history due to the El Nino, which will boost the sale of air-conditioners in the downstream refrigerant industry. Based on the provisions of the “Montreal Protocol on Substances that Deplete the Ozone Layer”, the production of R22 refrigerant in China shall cut by 10 percent and 67.5 percent in 2015 and 2025, which will reduce the industrial supply. Driven by the booming demand and the cancellation of export tariffs, is likely to boom. In terms of listed companies, Shanghai 3F New Materials Company Limited (600636.SH) owns a complete industrial chain in the fluorine chemical industry with a capacity of 45,000 tons of R22. Zhejiang Juhua Co., Ltd. (600160.SH) boasts a capacity of 100,000 tons of R22 and is researching and developing the HFO-1234yf high-end refrigerant.
[Announcement Interpretation]
○ Shanghai Bailian to conduct mixed ownership system reform, CDBC and other strategic investors to participate
------
Shanghai Bailian Group Co., Ltd. (600827.SH) proposes to sell 21.17 percent equities of Lianhua Supermarket Holdings Co., Ltd. (00980.HK) held by its subsidiary Shanghai Baiqing Investment Co., Ltd. to Yonghui Superstores Co., Ltd. (601933.SH) at 930 million yuan. Shanghai Bailian will hold a total of 42.73 percent voting right of Lianhua Supermarket and remain its controlling shareholder after the transaction. In addition, the company plans to issue shares at 15.28 yuan per share through private placement according to the plan releases during the trading suspension. Bailian Group, its substantial shareholder, will participate in the subscription with 49 percent equities of Bailian Zhonghuan Commerce Plaza and 51 percent equities of Bailian Chongming Shopping Center priced at 927 million yuan. Four strategic investors, including China Development Bank Capital Corporation Ltd. (CDBC) and Shanghai M&A Fund, will subscribe 3.05 billion yuan in cash. Relevant capitals will be used in the Bailian Outlets Plaza in Nanjing City, Jiangsu Province, the Bailian Chuansha Shopping Center as well as supplementing working capital.
○ Lingrui Phar. to expand marketing network, connected parties to fully subscribe private placement
------
Henan Lingrui Pharmaceutical Co., Ltd. (600285.SH) intends to raise 500 million yuan by issuing share at 8.41 yuan per share through private placement. Lingrui Group, its substantial shareholder, will subscribe 350 million yuan. The remaining subscribers are the directors and senior management of the company and the employee shareholding plan as well as other connected parties. Among the proceeds, 300 million yuan will be used in the establishment of marketing network and the brand promotion and 200 million yuan will supplement working capital.
○ Eastern Airlines to raise RMB15 bln through private placement to further develop main business
------
China Eastern Airlines Corporation Limited (600115.SH) plans to raise 15 billion yuan by issuing 233 million shares at no less than 6.44 yuan per share through private placement. 12 billion yuan will be used in purchasing 23 airplanes and the remaining 3 billion yuan will repay the loans from financial institutes.
○ Grand Agriseeds to establish rice gene company
------
Grand Agriseeds Technology, Inc. (300189.SZ) and five scientific professionals will jointly invest 30 million yuan in the establishment of Bolian Gene in Hainan Province. The company will contribute 20.10 million yuan with its own capital and holds 67 percent equities of Bolian Gene. Bolian Gene will develop a new generation technology for hybrid breeding seed. It will conduct business focusing on such key technologies as recessive male sterility, restoring gene and marker genes distinguishing.
Comment: The establishment of the company will accelerate the research and development and innovation of rice gene technology of the company to achieve the strategic development goal of establishing a strong hybrid rice seed industry.
[Financial Reports Express]
○Brother Enterprises, Xingchang Petro-Chemical and Meisheng Cultural expect growth in interim reports
------
Brother Enterprises Holding Co., Ltd. (002562.SZ) recorded a year-on-year growth of 274 percent in net profit in the first quarter and expects a year-on-year increase of 138 to 188 percent in the net profit from January to June. Yueyang Xingchang Petro-Chemical Co., Ltd. (000819.SZ) expects an increase of 100 percent to 130 percent according to its interim report. Meisheng Cultural & Creative Corp., Ltd. (002699.SZ) recorded a year-on-year growth of 113 percent in net profit in the first quarter and expects a year-on-year increase of 50 to 100 percent in the net profit from January to June.
○ Bluedon Information proposes high share conversion and dividend
------
Bluedon Information Security Technologies Co., Ltd. (300297.SZ) records a year-on-year growth of 10.45 percent in its 2014 net profit and proposes a 12-for-10 conversion of capital surplus into shares combined with 0.1 yuan dividend for every 10 shares. Its net profit in the first quarter surged 1,101 percent from year on year.
[Trading Trends]
○ Institutional investors increase investment in “Internet Plus” theme
------
The first quarter reports of public funds have been released. Statistics show that active stock-leaning funds reduced the position in the Main Board by 20 percent in the first quarter and increased the position in the SME Board and the GEM Board by 10 percent. The four companies newly listed in the top ten bulk holding stocks are all “Internet Plus” concept stocks, including three companies listed on the GEM Board, namely Shanghai Kingstar Winning Software Co., Ltd. (300253.SZ), East Money Information Co., Ltd. (300059.SZ) and Wonders Information Co., Ltd. (300168.SZ). Shenwan Hongyuan Group Co., Ltd. (000166.SZ) believes that the information service industry with the “Internet Plus” as the core may become the new pillar in China’s economy. The business model of certain “Internet Plus” leaders may become increasingly clear this year and becomes models for others. Their market value enjoys huge potential.
○ Four institutes buy Newcapec Electronics
------
The trading volume ranking list on April 23 shows that four institutes bought Newcapec Electronics Co., Ltd. (300248.SZ) with a total of 200 million yuan, accounting for 24 percent of its intraday turnover.
Comment: Institutes believe that the one-card pass of the company occupies one third of college users. It masters the high frequency application access of charging and consumption of campus cards. The company will own huge student consumption records and the student consumption finance, credit evaluation, Internet-based education and subsequent business based on this enjoy huge potential.
> No need to exaggerate impact of accelerated IPOs, Premier focuses on transformation and upgrading during inspection
> Guidance for intelligent power grid to launch, fluorine chemical industry to boom
> Shanghai to invested by CDBC, connected parties to fully subscribe Lingrui Phar.’s private placement
> Eastern Airlines to further develop main business with RMB15 bln, four institutes buy Newcapec Electronics
[XFA Focus]
○ Two batches of new stocks to launched every month, no need to exaggerate impact of gentle control
------
The China Securities Regulatory Commission (CSRC) approves the IPO application of 25 companies on April 23, among which, 10 will be listed in Shanghai Stock Market, 13 will be listed in the Small and Medium-Sized Enterprises Board and 12 will be listed in the ChiNext Board of Shenzhen Stock Market. Xinjiang Xuefeng Sci-Tech (Group) Co., Ltd. will issue no more than 82.35 million shares, the biggest number among this batch of IPOs. CSRC claims that the launch of IPOs will be added to two batches from current one batch every month later.
Comment: Though the pace of stock issuance is quickened, there are no large-cap stocks like Jiangsu Broadcasting Cable Information Network Corporation Limited (600959.SH) and Orient Securities Company Limited (600958.SH), etc. this time, so it is just gentle control. This is in accordance with the attitude of Xiao Gang, head of CSRC, towards the issuance of new stocks during two sessions: new stocks will be supplied at proper amount this year; there is no need for the market to worry about over-quickened expansion of stock market and the number of IPOs approved; the financing size shall be taken into comprehensive consideration.
○ Premier focuses on transformation and upgrading during inspection, “Made in China” 2025 to accelerate
------
Chinese Premier Li Keqiang pays special attentions to the self-dependent innovation during his inspection to Fujian J-Tech CNC Machinery Co., Ltd. in Quanzhou City, Fujian Province on April 23 and indicates that to maintain middle and high economic growth, Chinese economy must move towards high-end and speed up in pushing “Made in China” 2025. Li also inspects Quanzhou Pin Shang E-Commerce Co., Ltd. and indicates that the unknown is far larger than the known of “Internet Plus”. The future development space is limitless.
Comment: Since the release of the government work report, popular entrepreneurship and innovation become hot policy words. The senior management fully understands the necessity of economic transformation and upgrading. At present, the planning for “Made in China” 2025 has been approved by the State Council and might be issued recently. Institutions are optimistic that it will become the commanding height of the new round of manufacturing development in China and drive China’s manufacturing to transform to intelligent manufacturing. As for listed companies, Xuchang Yuandong Drive Shaft Co., Ltd. (002406.SZ) and Xiangyang Automobile Bearing Co., Ltd. (000678.SZ) are involved in “Made in China 2025 Smart Industry Innovation Alliance”; Siasun Robot & Automation Co., Ltd. (300024.SZ) participated in the economy trend forum hosted by the Premier recently.
[XFA Selection]
○ Zhang Gaoli, vice premier of the State Council, emphasized to intensify the ability in preventing and controlling the pollution sources along the South-to-North Water Diversion Project as well as the emergency response to water pollution during his inspection to the project in Henan Province.
○ Four departments and commissions issue guidance on promoting the healthy development of national new district and encouraging reference to the successful experience of Shanghai Free Trade Zone.
○The preliminary Purchasing Managers Index from HSBC Holdings Plc and Markit Economics dropped to a new-low of the year in April. It is learnt that the National Development and Reform Commission (NDRC) will release targeted-controlling investment projects.
○ The data of foreign exchange settlement and sale by banks on behalf of clients shows deficit for 7 consecutive months. The capital outflow mainly lies in that foreign exchange reserves are hold by people and de-leverage of debts.
○ The equities of insurance company are frequently favored by private funds. Substantial shareholder of China Molybdenum Co., Ltd. (603993.SH; 03993.HK) will transfer 50 percent equities of Sino-French Life Insurance Co., Ltd.
○ Mercedes-Benz, a division of the German automobile manufacturer Daimler AG, has been fined 350 million yuan by Jiangsu Province for price fixing, creating the highest anti-monopoly record in car industry. Enforcement of China's Anti-Monopoly Law is fully pushed.
[Industry Information]
○ Guidance for intelligent power grid to launch, trillions-yuan market of energy Internet opened
------
Tong Guangyao, deputy director of the Electricity Department of the National Energy Administration (NEA), discloses on the “energy Internet” industry seminar hosted by China Energy Research Society on April 23 that the Guidance for the Construction of Intelligent Power Grid formulated by NEA will be launched soon and the thirteenth five-year plan for the development of intelligent power grid is also under formulation.
Comment: The State Grid Corporation of China will spare great efforts to build intelligent power grid this year: 1400 intelligent transformer substations will be newly built; 60.6 million intelligent electric energy meters will be installed; the inter-city interconnected quick charging network on high ways will be built. Electricity reform speeds up in 2015. The market-oriented reform of electricity system not only improves operation efficiency but also creates policy conditions for the development of energy internet. NEA previously announced to establish China Energy Internet Alliance. Institutions predict that the capacity of the energy Internet market will be trillions of yuan. As for A-share companies, Acrel Co., Ltd. (300286.SZ) can provides intelligent power grid users with systematic solutions including electricity monitoring, electricity management, etc.; Shenzhen Clou Electronics Co., Ltd. (002121.SZ) acquires 20 percent equities of Shenzhen Electricity Selling Co., Ltd. and enters electricity selling area.
○ Export tariffs cancellation and booming demands to boost fluorine chemical industry
------
According to the catalogue of varieties for the cancellation of export tariffs released by the Ministry of Finance on April 23, the export tariff of hydrofluoric acid has been reduced to 0 from 10 percent following the rare earth and tungsten-molybdenum. It will increase the exports of domestic enterprises and boost the fluorine chemical industry.
Comment: As the demand booms, the prices of R22, R125 and other refrigerant all surged by about 2 percent. According to the report of the World Meteorological Organization released recently, this year may be the hottest in the history due to the El Nino, which will boost the sale of air-conditioners in the downstream refrigerant industry. Based on the provisions of the “Montreal Protocol on Substances that Deplete the Ozone Layer”, the production of R22 refrigerant in China shall cut by 10 percent and 67.5 percent in 2015 and 2025, which will reduce the industrial supply. Driven by the booming demand and the cancellation of export tariffs, is likely to boom. In terms of listed companies, Shanghai 3F New Materials Company Limited (600636.SH) owns a complete industrial chain in the fluorine chemical industry with a capacity of 45,000 tons of R22. Zhejiang Juhua Co., Ltd. (600160.SH) boasts a capacity of 100,000 tons of R22 and is researching and developing the HFO-1234yf high-end refrigerant.
[Announcement Interpretation]
○ Shanghai Bailian to conduct mixed ownership system reform, CDBC and other strategic investors to participate
------
Shanghai Bailian Group Co., Ltd. (600827.SH) proposes to sell 21.17 percent equities of Lianhua Supermarket Holdings Co., Ltd. (00980.HK) held by its subsidiary Shanghai Baiqing Investment Co., Ltd. to Yonghui Superstores Co., Ltd. (601933.SH) at 930 million yuan. Shanghai Bailian will hold a total of 42.73 percent voting right of Lianhua Supermarket and remain its controlling shareholder after the transaction. In addition, the company plans to issue shares at 15.28 yuan per share through private placement according to the plan releases during the trading suspension. Bailian Group, its substantial shareholder, will participate in the subscription with 49 percent equities of Bailian Zhonghuan Commerce Plaza and 51 percent equities of Bailian Chongming Shopping Center priced at 927 million yuan. Four strategic investors, including China Development Bank Capital Corporation Ltd. (CDBC) and Shanghai M&A Fund, will subscribe 3.05 billion yuan in cash. Relevant capitals will be used in the Bailian Outlets Plaza in Nanjing City, Jiangsu Province, the Bailian Chuansha Shopping Center as well as supplementing working capital.
○ Lingrui Phar. to expand marketing network, connected parties to fully subscribe private placement
------
Henan Lingrui Pharmaceutical Co., Ltd. (600285.SH) intends to raise 500 million yuan by issuing share at 8.41 yuan per share through private placement. Lingrui Group, its substantial shareholder, will subscribe 350 million yuan. The remaining subscribers are the directors and senior management of the company and the employee shareholding plan as well as other connected parties. Among the proceeds, 300 million yuan will be used in the establishment of marketing network and the brand promotion and 200 million yuan will supplement working capital.
○ Eastern Airlines to raise RMB15 bln through private placement to further develop main business
------
China Eastern Airlines Corporation Limited (600115.SH) plans to raise 15 billion yuan by issuing 233 million shares at no less than 6.44 yuan per share through private placement. 12 billion yuan will be used in purchasing 23 airplanes and the remaining 3 billion yuan will repay the loans from financial institutes.
○ Grand Agriseeds to establish rice gene company
------
Grand Agriseeds Technology, Inc. (300189.SZ) and five scientific professionals will jointly invest 30 million yuan in the establishment of Bolian Gene in Hainan Province. The company will contribute 20.10 million yuan with its own capital and holds 67 percent equities of Bolian Gene. Bolian Gene will develop a new generation technology for hybrid breeding seed. It will conduct business focusing on such key technologies as recessive male sterility, restoring gene and marker genes distinguishing.
Comment: The establishment of the company will accelerate the research and development and innovation of rice gene technology of the company to achieve the strategic development goal of establishing a strong hybrid rice seed industry.
[Financial Reports Express]
○Brother Enterprises, Xingchang Petro-Chemical and Meisheng Cultural expect growth in interim reports
------
Brother Enterprises Holding Co., Ltd. (002562.SZ) recorded a year-on-year growth of 274 percent in net profit in the first quarter and expects a year-on-year increase of 138 to 188 percent in the net profit from January to June. Yueyang Xingchang Petro-Chemical Co., Ltd. (000819.SZ) expects an increase of 100 percent to 130 percent according to its interim report. Meisheng Cultural & Creative Corp., Ltd. (002699.SZ) recorded a year-on-year growth of 113 percent in net profit in the first quarter and expects a year-on-year increase of 50 to 100 percent in the net profit from January to June.
○ Bluedon Information proposes high share conversion and dividend
------
Bluedon Information Security Technologies Co., Ltd. (300297.SZ) records a year-on-year growth of 10.45 percent in its 2014 net profit and proposes a 12-for-10 conversion of capital surplus into shares combined with 0.1 yuan dividend for every 10 shares. Its net profit in the first quarter surged 1,101 percent from year on year.
[Trading Trends]
○ Institutional investors increase investment in “Internet Plus” theme
------
The first quarter reports of public funds have been released. Statistics show that active stock-leaning funds reduced the position in the Main Board by 20 percent in the first quarter and increased the position in the SME Board and the GEM Board by 10 percent. The four companies newly listed in the top ten bulk holding stocks are all “Internet Plus” concept stocks, including three companies listed on the GEM Board, namely Shanghai Kingstar Winning Software Co., Ltd. (300253.SZ), East Money Information Co., Ltd. (300059.SZ) and Wonders Information Co., Ltd. (300168.SZ). Shenwan Hongyuan Group Co., Ltd. (000166.SZ) believes that the information service industry with the “Internet Plus” as the core may become the new pillar in China’s economy. The business model of certain “Internet Plus” leaders may become increasingly clear this year and becomes models for others. Their market value enjoys huge potential.
○ Four institutes buy Newcapec Electronics
------
The trading volume ranking list on April 23 shows that four institutes bought Newcapec Electronics Co., Ltd. (300248.SZ) with a total of 200 million yuan, accounting for 24 percent of its intraday turnover.
Comment: Institutes believe that the one-card pass of the company occupies one third of college users. It masters the high frequency application access of charging and consumption of campus cards. The company will own huge student consumption records and the student consumption finance, credit evaluation, Internet-based education and subsequent business based on this enjoy huge potential.
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