[Today’s Guide]
> State Council executive meeting requires promoting oil products improvement, isooctane enjoys huge market potential
> Investment revenue boosts insurance profit surge, graphene enjoys priority in new material
> Liu Yiqian to become largest shareholder of Changjiang Securities with billions of yuan, Roshow Technology to acquire MIKI Communication through private placement
> Taiji Group revises reorganization scheme, Great Star Industrial to raise RMB1 bln through private placement to add stake in robot
[XFA Focus]
○ State Council executive meeting requires promoting oil products improvement, isooctane enjoys huge market potential
------
Chinese Premier Li Keqiang chaired an executive meeting of the State Council on April 28, proposing to speed up in the production and supply of clean oil products and strive to accomplish the upgrading of oil quality ahead of schedule. It will expand the supply coverage of automotive gasoline and diesel with the National V standard from January, 2016 and the national supply of gasoline and diesel with the standard will start from January, 2017 compared with the previous January, 2018. Oil refining enterprises will invest about 68 billion yuan in technological improvement to complete the above tasks.
Comment: The previous oil products improvements emphasized the sulphur content and the requirements on arene and other toxic matters are not strict, which is a key factor in the serious exhaust pollution in China. Based on the experiences of other countries, the upgrading of oil products is achieved by adding isooctane and MTBE while maintaining the octane content. It is estimated that the potential demand for isooctane will be 8 million tons to meet the international standard, which is 4 times of the current capacity. It is reported that the price of isooctane has hiked nearly 10 percent in April in China. In terms of listed companies, Zibo Qixiang Tengda Chemical Co., Ltd. (002408.SZ) owns a capacity of 200,000 tons of isooctane. About 90 percent of its capacity is under production and a capacity of 350,000 tons of MTBE is also planned to put into production this year. Zhejiang Haiyue Co., Ltd. (600387.SH) owns production facilities to produce 600,000 tons of isooctane.
◆ The meeting also planned to improve relevant policies on the import and export of consumer products. It will conduct the pilot on reducing the import tariff by the end of June. It also determined to adjust the resources tax on rare earth, tungsten and molybdenum without increasing the tax burdens of enterprises from May 1.
[XFA Selection]
○ The Ministry of Finance issued documents and urged local governments accelerating the issuance of bonds. Experts of the central bank indicated that it has various adjustment tools to maintain a reasonable liquidity.
○ The China Securities Regulatory Commission (CSRC) released the questions and answers on surging new investors and risks on mass investment in the stock market on April 28 noon, reminding investors to make reasonable investments.
○ The intraday sale of new fund under the E Fund Management Co., Ltd. reached nearly 15 billion yuan. More than 4 million A-share accounts were opened last week, setting a new high.
○ The total installed capacity of the fifth batch of wind power projects during the 12th Five-year Period approved by the National Energy Administration (NEA) is 34 million kilowatt, which is consistent with the report of XFA on April 20.
○ Officials of the National Development and Reform Commission (NDRC) indicated that it is actively promote the implementation of special fund channels for military-civil integration and will consider the establishment of military-civil integration and development investment fund.
○Tencent Holdings Limited (00700.HK) issued the “TOS Plus” strategy and it will open its platform resources to connect with smart watches and other smart hardware development teams.
[Industry Information]
○ Investment revenue boosts insurance profit surge
------
The China Insurance Regulatory Commission (CIRC) issued statistics on April 28, showing that the insurance industry recorded an original premium income of 84.25 billion yuan in the first quarter, representing a growth of 20 percent year on year. It expects a total profit of 87.1 billion yuan, increasing 143 percent year on year. Life insurance companies saw higher growth of 221 percent.
China Life Insurance Company Limited (02628.HK; 601628.SH) released the first quarterly report on April 28 evening. It recorded a year-on-year growth of 70 percent in net profit thanks to the investment revenue increase. Other insurance companies, including Ping An Insurance (Group) Company Of China, Ltd. (02318.HK; 601318.SH), China Pacific Insurance (Group) Co., Ltd. (02601.HK; 601601.SH) and New China Life Insurance Company Ltd. (01336.HK; 601336.SH) will release the firstly quarterly report on April 29 evening.
○ MIIT prepares instructions on new materials development, graphene to enjoy priority
------
XFA learnt that the Ministry of Industry and Information Technology (MIIT) is preparing the “Instructions on Promoting the Sound Development of the New Material Industry”. Graphene will be determined as one of the key new materials.
Comment: Graphene is considered as the thinnest, most transparent and strongest material in the world. It can be applied in the battery manufacturing, medical scanning equipment, photoelectric detection and other industries. The new composite materials based on graphene also enjoys prospectus in military application. Insiders believe that the industrial revolution of the graphene material is on the eve of breakthroughs. The introduction of the instructions by the MIIT will clear barriers for its sound development. Among A-share companies, China Baoan Group Co., Ltd. (000009.SZ) enjoys abundant reserve of graphene ores and resources. Its subsidiary BTR is studying the application of graphene in batteries. Shenzhen Jiawei Photovoltaic Lighting Co., Ltd. (300317.SZ) has cooperated with Tsinghua University in the research and development of graphene solar batteries technology.
○ Planning for “Made in China 2025” to unveil soon, multiple manufacturing companies participate actively
------
Wang Liming, news spokesman of the Ministry of Industry and Information Technology (MIIT), indicated during his introduction about the development of industrial communications in the first quarter on April 28 that the planning for “Made in China 2025” will be released as soon as possible. In-depth integration of Internet and manufacturing industry will be promoted and new growth points will be built by implementing “Made in China 2025” strategy and increasing support in strategic emerging industries.
Multiple listed companies also have attached great importance to the “Made in China 2025” proposed by Chinese Premier Li Keqiang in their annual reports: Shanghai STEP Electric Corporation (002527.SZ) claims that it occupies a leading position in domestic robot application technology and will prioritize the development of industrial robot and elevator Internet of Things business; Huagong Tech Company Limited (000988.SZ) indicates that it will focus on “smart factory”, the study of smart production system and the realization of networking distributed production facilities.
[Announcement Interpretation]
○ Largest shareholder of Changjiang Securities changes, Haier Investment replaced by Liu Yiqian
------
Qingdao Haier Investment Development Co., Ltd., the largest shareholder of Changjiang Securities Company Limited (000783.SZ), plans to transfer 698 million shares of the company, accounting for 14.72 percent of the company’s total share capital, to Xinliyi Group Co., Ltd., controlled by Liu Yiqian, with 10 billion yuan. Xinliyi Group will become the largest shareholder of Changjiang Securities. Xinliyi Group has previously exchanged 51 percent equities of Guohua Life Insurance Co., Ltd. into Tianmao Group, a listed company.
○ Roshow Technology to acquire MIKI Communication
------
Roshow Technology Co., Ltd. (002617.SZ) plans to acquire 100 percent equities of Shenzhen MIKI Communication Technology Co., Ltd. with 1.15 billion yuan, among which 172.5 million yuan will be paid in cash and the rest will be paid by issuing around 42.24 million shares at 23.14 yuan per share. At the same time, the company plans to raise a supporting fund of no more than 320 million yuan by issuing shares at 20.52 yuan per share through private placement from four institutions including its substantial shareholder Roshow Group. MIKI Communication, principally engaged in providing tablet computer and smartphone design and production service, sees an ownership interest of 185 million yuan by the end of the first quarter, a revenue of 1,536 million yuan and a net profit of 73.32 million yuan in 2014. Original shareholders promise that its net profit from 2015 to 2017 will be no less than 100 million yuan, 115million yuan and 132 million yuan, respectively.
○ Taiji Group revises reorganization scheme to expand and intensify medicine business
------
Chongqing Taiji Industry (Group) Co., Ltd. (600129.SH) announces revised draft of significant asset reorganization. According to the scheme, the significant asset reorganization covers three transaction links including that Chongqing Tongjunge Pharmaceutical Factory Co., Ltd., a subsidiary of Taiji Group, conducts asset exchange, Tongjunge acquires asset through non-public share issuance and Taiji Group transfers the equities of Tongjunge to acquire the exchanged-out asset. Upon completion, Taiji Group will undertake all the assets and liabilities of Tongjunge. The company indicates that this move will help the company to reduce related party transaction, achieve scale operation, improve continuous profitability, and expand and intensify its medicine business. During trading suspension of the company, the stock market surged obviously.
○ Great Star Industrial to raise RMB1 bln through private placement to add stake in robot
------
Hang Zhou Great Star Industrial Co., Ltd. (002444.SZ) plans to raise 1.03 billion yuan by issuing no more than 65.11 million shares at no less than 15.87 yuan per share to invest in the intelligent robot intelligent cloud service platform project, acquire 65 percent equities of Changzhou Huada Kejie Opto-Electro Instrument Co., Ltd., invest in e-commerce sales platform and automatic warehousing logistics system construction project, and supplement working capital.
○ Yuyuan Tourist Mart to raise billions of yuan through private placement to develop Internet platform
------
Shanghai Yuyuan Tourist Mart Co., Ltd. (600655.SH) plans to raise 10 billion yuan by issuing 720 million shares at 13.87 yuan per share, among which, 8 billion yuan will be used to build a whole-industrial-chain Internet platform of gold and jewelry and the rest 2 billion yuan will be used to supplement working capital. The whole-industrial-chain Internet platform of gold and jewelry to be built this time will achieve highly efficient integration of industrial commerce, logistics, capital flow and information flow, strengthen the popularity and influence of “Laomiao Gold” and “Yayi Jewelry”, two brands under the company.
○ Shanghai Industrial Development to raise RMB6 bln through private placement
------
Shanghai Industrial Development Co., Ltd. (600748.SH) proposes to raise 6 billion yuan from nine specific targets including Shanghai Shangtou Asset Operation Co., Ltd., the related party, Cao Wenlong, etc. by issuing shares at 11.7 yuan per share to acquire 100 percent equities of Shanghai Shangtou Holding Co., Ltd., invest in the Phase II and Phase III construction of Qingdao International Beer City Modification Project, acquire 42.35 percent equities of Shanghai Longchuang Eco-Energy Systems Co., Ltd., increase capital investment in Longchuang Eco-Energy Systems, pay off bank loans and supplement working capital. The company indicates that this move will remove horizontal competition and benefit diversified layout.
[Financial Reports Express]
○ Sinodata, Hi-tech Control System, etc. expect performance growth in semiyearly report
------
With net profit in the first quarter seeing a year-on-year growth of 361 percent, Sinodata Co., Ltd. (002657.SZ) expects its net profit in the first half year to grow by 110~160 percent from year on year; with net profit in the first quarter seeing a year-on-year growth of 245 percent, Shanghai Hi-tech Control System Co., Ltd. (002184.SZ) expects its net profit in the first half year to grow by 150~200 percent from year on year; with net profit in the first quarter seeing a year-on-year growth of 126 percent, China Nonferrous Metal Industry's Foreign Engineering and Construction Co., Ltd. (000758.SZ) expects its net profit in the first half year to grow by 150~200 percent from year on year; Guangdong Dynavolt Power Technology Co., Ltd. (002684.SZ) turns losses into gains in the first quarter and expects its net profit in the first half year to grow by 187~238 percent from year on year;
○ Delian Group plan high share conversion and dividend
------
With net profit in 2014 seeing a year-on-year growth of 1 percent, Guangdong Delian Group Co., Ltd. (002666.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 1.2 yuan dividend.
> State Council executive meeting requires promoting oil products improvement, isooctane enjoys huge market potential
> Investment revenue boosts insurance profit surge, graphene enjoys priority in new material
> Liu Yiqian to become largest shareholder of Changjiang Securities with billions of yuan, Roshow Technology to acquire MIKI Communication through private placement
> Taiji Group revises reorganization scheme, Great Star Industrial to raise RMB1 bln through private placement to add stake in robot
[XFA Focus]
○ State Council executive meeting requires promoting oil products improvement, isooctane enjoys huge market potential
------
Chinese Premier Li Keqiang chaired an executive meeting of the State Council on April 28, proposing to speed up in the production and supply of clean oil products and strive to accomplish the upgrading of oil quality ahead of schedule. It will expand the supply coverage of automotive gasoline and diesel with the National V standard from January, 2016 and the national supply of gasoline and diesel with the standard will start from January, 2017 compared with the previous January, 2018. Oil refining enterprises will invest about 68 billion yuan in technological improvement to complete the above tasks.
Comment: The previous oil products improvements emphasized the sulphur content and the requirements on arene and other toxic matters are not strict, which is a key factor in the serious exhaust pollution in China. Based on the experiences of other countries, the upgrading of oil products is achieved by adding isooctane and MTBE while maintaining the octane content. It is estimated that the potential demand for isooctane will be 8 million tons to meet the international standard, which is 4 times of the current capacity. It is reported that the price of isooctane has hiked nearly 10 percent in April in China. In terms of listed companies, Zibo Qixiang Tengda Chemical Co., Ltd. (002408.SZ) owns a capacity of 200,000 tons of isooctane. About 90 percent of its capacity is under production and a capacity of 350,000 tons of MTBE is also planned to put into production this year. Zhejiang Haiyue Co., Ltd. (600387.SH) owns production facilities to produce 600,000 tons of isooctane.
◆ The meeting also planned to improve relevant policies on the import and export of consumer products. It will conduct the pilot on reducing the import tariff by the end of June. It also determined to adjust the resources tax on rare earth, tungsten and molybdenum without increasing the tax burdens of enterprises from May 1.
[XFA Selection]
○ The Ministry of Finance issued documents and urged local governments accelerating the issuance of bonds. Experts of the central bank indicated that it has various adjustment tools to maintain a reasonable liquidity.
○ The China Securities Regulatory Commission (CSRC) released the questions and answers on surging new investors and risks on mass investment in the stock market on April 28 noon, reminding investors to make reasonable investments.
○ The intraday sale of new fund under the E Fund Management Co., Ltd. reached nearly 15 billion yuan. More than 4 million A-share accounts were opened last week, setting a new high.
○ The total installed capacity of the fifth batch of wind power projects during the 12th Five-year Period approved by the National Energy Administration (NEA) is 34 million kilowatt, which is consistent with the report of XFA on April 20.
○ Officials of the National Development and Reform Commission (NDRC) indicated that it is actively promote the implementation of special fund channels for military-civil integration and will consider the establishment of military-civil integration and development investment fund.
○Tencent Holdings Limited (00700.HK) issued the “TOS Plus” strategy and it will open its platform resources to connect with smart watches and other smart hardware development teams.
[Industry Information]
○ Investment revenue boosts insurance profit surge
------
The China Insurance Regulatory Commission (CIRC) issued statistics on April 28, showing that the insurance industry recorded an original premium income of 84.25 billion yuan in the first quarter, representing a growth of 20 percent year on year. It expects a total profit of 87.1 billion yuan, increasing 143 percent year on year. Life insurance companies saw higher growth of 221 percent.
China Life Insurance Company Limited (02628.HK; 601628.SH) released the first quarterly report on April 28 evening. It recorded a year-on-year growth of 70 percent in net profit thanks to the investment revenue increase. Other insurance companies, including Ping An Insurance (Group) Company Of China, Ltd. (02318.HK; 601318.SH), China Pacific Insurance (Group) Co., Ltd. (02601.HK; 601601.SH) and New China Life Insurance Company Ltd. (01336.HK; 601336.SH) will release the firstly quarterly report on April 29 evening.
○ MIIT prepares instructions on new materials development, graphene to enjoy priority
------
XFA learnt that the Ministry of Industry and Information Technology (MIIT) is preparing the “Instructions on Promoting the Sound Development of the New Material Industry”. Graphene will be determined as one of the key new materials.
Comment: Graphene is considered as the thinnest, most transparent and strongest material in the world. It can be applied in the battery manufacturing, medical scanning equipment, photoelectric detection and other industries. The new composite materials based on graphene also enjoys prospectus in military application. Insiders believe that the industrial revolution of the graphene material is on the eve of breakthroughs. The introduction of the instructions by the MIIT will clear barriers for its sound development. Among A-share companies, China Baoan Group Co., Ltd. (000009.SZ) enjoys abundant reserve of graphene ores and resources. Its subsidiary BTR is studying the application of graphene in batteries. Shenzhen Jiawei Photovoltaic Lighting Co., Ltd. (300317.SZ) has cooperated with Tsinghua University in the research and development of graphene solar batteries technology.
○ Planning for “Made in China 2025” to unveil soon, multiple manufacturing companies participate actively
------
Wang Liming, news spokesman of the Ministry of Industry and Information Technology (MIIT), indicated during his introduction about the development of industrial communications in the first quarter on April 28 that the planning for “Made in China 2025” will be released as soon as possible. In-depth integration of Internet and manufacturing industry will be promoted and new growth points will be built by implementing “Made in China 2025” strategy and increasing support in strategic emerging industries.
Multiple listed companies also have attached great importance to the “Made in China 2025” proposed by Chinese Premier Li Keqiang in their annual reports: Shanghai STEP Electric Corporation (002527.SZ) claims that it occupies a leading position in domestic robot application technology and will prioritize the development of industrial robot and elevator Internet of Things business; Huagong Tech Company Limited (000988.SZ) indicates that it will focus on “smart factory”, the study of smart production system and the realization of networking distributed production facilities.
[Announcement Interpretation]
○ Largest shareholder of Changjiang Securities changes, Haier Investment replaced by Liu Yiqian
------
Qingdao Haier Investment Development Co., Ltd., the largest shareholder of Changjiang Securities Company Limited (000783.SZ), plans to transfer 698 million shares of the company, accounting for 14.72 percent of the company’s total share capital, to Xinliyi Group Co., Ltd., controlled by Liu Yiqian, with 10 billion yuan. Xinliyi Group will become the largest shareholder of Changjiang Securities. Xinliyi Group has previously exchanged 51 percent equities of Guohua Life Insurance Co., Ltd. into Tianmao Group, a listed company.
○ Roshow Technology to acquire MIKI Communication
------
Roshow Technology Co., Ltd. (002617.SZ) plans to acquire 100 percent equities of Shenzhen MIKI Communication Technology Co., Ltd. with 1.15 billion yuan, among which 172.5 million yuan will be paid in cash and the rest will be paid by issuing around 42.24 million shares at 23.14 yuan per share. At the same time, the company plans to raise a supporting fund of no more than 320 million yuan by issuing shares at 20.52 yuan per share through private placement from four institutions including its substantial shareholder Roshow Group. MIKI Communication, principally engaged in providing tablet computer and smartphone design and production service, sees an ownership interest of 185 million yuan by the end of the first quarter, a revenue of 1,536 million yuan and a net profit of 73.32 million yuan in 2014. Original shareholders promise that its net profit from 2015 to 2017 will be no less than 100 million yuan, 115million yuan and 132 million yuan, respectively.
○ Taiji Group revises reorganization scheme to expand and intensify medicine business
------
Chongqing Taiji Industry (Group) Co., Ltd. (600129.SH) announces revised draft of significant asset reorganization. According to the scheme, the significant asset reorganization covers three transaction links including that Chongqing Tongjunge Pharmaceutical Factory Co., Ltd., a subsidiary of Taiji Group, conducts asset exchange, Tongjunge acquires asset through non-public share issuance and Taiji Group transfers the equities of Tongjunge to acquire the exchanged-out asset. Upon completion, Taiji Group will undertake all the assets and liabilities of Tongjunge. The company indicates that this move will help the company to reduce related party transaction, achieve scale operation, improve continuous profitability, and expand and intensify its medicine business. During trading suspension of the company, the stock market surged obviously.
○ Great Star Industrial to raise RMB1 bln through private placement to add stake in robot
------
Hang Zhou Great Star Industrial Co., Ltd. (002444.SZ) plans to raise 1.03 billion yuan by issuing no more than 65.11 million shares at no less than 15.87 yuan per share to invest in the intelligent robot intelligent cloud service platform project, acquire 65 percent equities of Changzhou Huada Kejie Opto-Electro Instrument Co., Ltd., invest in e-commerce sales platform and automatic warehousing logistics system construction project, and supplement working capital.
○ Yuyuan Tourist Mart to raise billions of yuan through private placement to develop Internet platform
------
Shanghai Yuyuan Tourist Mart Co., Ltd. (600655.SH) plans to raise 10 billion yuan by issuing 720 million shares at 13.87 yuan per share, among which, 8 billion yuan will be used to build a whole-industrial-chain Internet platform of gold and jewelry and the rest 2 billion yuan will be used to supplement working capital. The whole-industrial-chain Internet platform of gold and jewelry to be built this time will achieve highly efficient integration of industrial commerce, logistics, capital flow and information flow, strengthen the popularity and influence of “Laomiao Gold” and “Yayi Jewelry”, two brands under the company.
○ Shanghai Industrial Development to raise RMB6 bln through private placement
------
Shanghai Industrial Development Co., Ltd. (600748.SH) proposes to raise 6 billion yuan from nine specific targets including Shanghai Shangtou Asset Operation Co., Ltd., the related party, Cao Wenlong, etc. by issuing shares at 11.7 yuan per share to acquire 100 percent equities of Shanghai Shangtou Holding Co., Ltd., invest in the Phase II and Phase III construction of Qingdao International Beer City Modification Project, acquire 42.35 percent equities of Shanghai Longchuang Eco-Energy Systems Co., Ltd., increase capital investment in Longchuang Eco-Energy Systems, pay off bank loans and supplement working capital. The company indicates that this move will remove horizontal competition and benefit diversified layout.
[Financial Reports Express]
○ Sinodata, Hi-tech Control System, etc. expect performance growth in semiyearly report
------
With net profit in the first quarter seeing a year-on-year growth of 361 percent, Sinodata Co., Ltd. (002657.SZ) expects its net profit in the first half year to grow by 110~160 percent from year on year; with net profit in the first quarter seeing a year-on-year growth of 245 percent, Shanghai Hi-tech Control System Co., Ltd. (002184.SZ) expects its net profit in the first half year to grow by 150~200 percent from year on year; with net profit in the first quarter seeing a year-on-year growth of 126 percent, China Nonferrous Metal Industry's Foreign Engineering and Construction Co., Ltd. (000758.SZ) expects its net profit in the first half year to grow by 150~200 percent from year on year; Guangdong Dynavolt Power Technology Co., Ltd. (002684.SZ) turns losses into gains in the first quarter and expects its net profit in the first half year to grow by 187~238 percent from year on year;
○ Delian Group plan high share conversion and dividend
------
With net profit in 2014 seeing a year-on-year growth of 1 percent, Guangdong Delian Group Co., Ltd. (002666.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 1.2 yuan dividend.
Latest comments