[Today's Guide]
> Xi Jinping to visit three countries including Russia, cooperation in energy and traffic areas expected
> Methanol industry meeting to discuss 13th five-year plan, development of intelligent traffic industry speeds up
> Das Intellitech to acquire JiuXinMediclern,ShunrongSanqi to fully control Sanqi Interactive Entertainment
> NetPosa Technologies to acquire Huaqi Intelligent Technology and Smart Spyeye, Chj Industry to raise RMB1.5 bln
[XFA Focus]
○Xi Jinping to visit three countries including Russia, cooperation in energy and traffic areas expected
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The Ministry of Foreign Affairs discloses that Chinese President Xi Jinping will begin his visit to Kazakhstan on May 7, visit Russia from May 8 to 10 and attend the ceremony to commemorate the 70th anniversary of victory of the Great Patriotic War in Moscow, and visit Byelorussia from May 10 to 12.Vice-Foreign Minister Cheng Guoping said on the press conference that the heads of the two countries will sign cooperation documents in energy, aerospace, taxation, finance, investment areas, etc.
Comment: Xi visited countries along the “One Belt and One Road”in quick succession this year. During his visit to Pakistan last month, A-share companies related to hydropower and the “going out” of nuclear power all surged. Energy cooperation is a strategic area of Sino-Russia bilateral ties. Russia has become the fourth largest crude oil source of China’s import and the gas supply will be further expanded in the future. Transport equipment provider including Zhejiang Kingland Pipeline and Technologies Co.,Ltd. (002443.SZ), Jiangsu ChangbaoSteeltube Co., Ltd. (002478.SZ), etc. will see benefit. The cooperation between China and Kazakhstan is highlighted in traffic area. Xinjiang Beixin Road & Bridge Group Co., Ltd. (002307.SZ) once won the bidding of road modification project in Kazakhstan.
○PMI shows weak recovery, easing policy might launched
------
The HSBC/MarkitPurchasing Managers’ Index (PMI) for China's manufacturing sector in April stood at 48.9, being under the boom-bust line for two consecutive months and setting a new low in a year. The National Bureau of Statisticswill start to release the main economic indicators of April from this week.As estimated by institutions, PPI will continueto see negative year-on-year growth, investment and consumption growth will hard to see any improvement, and the industrial growth rate will strugglebelow 6 percent. Under such circumstances, easing policy might be further launched and the central bank might cut interest rate again this month.
[XFA Selection]
○Chinese President Xi Jinping meets Zhu Lilun, President of China’s Nationalist Party, and indicates that Taiwan and the Mainland can make sound arrangement for Taiwan to participate in regional economic cooperation.
○Chinese Premier Li Keqiang meets the president of Malaysia’s Land Way Public Traffic Committee and indicates that Chinese joint venture will be supported to participate in Malaysia- Singapore high-speed rail project.
○Haitong Securities Company Limited (600837.SH; 06837.SZ),HuataiSecurities Co., Ltd. (601688.SH), etc. all increase the proportion of margin requirement of margin trading and short selling, adding a throttle to the incremental capital of A-share market.
○The leaders of three oil companies are all adjusted. Wang Yilin, originally manages China National Offshore Oil Corporation (00883.HK; NYSE:CEO), is appointed as the president of PetroChina Company Limited (601857.SH; 00857.HK; NYSE:PTR).
○The trading volume of newly built commodity housing in April in Shanghai sets a single-month new high in nearly five years. “Booming May” might see steady trading growth.
[Industry Information]
○Methanol industry meeting to discuss 13th five-year plan, improving supply-demand structure to boost industrial prosperity
------
XFA learns that the 2015 China Methanol Industry Meeting will be held on May 20, focusing on the 13th five-year plan of methanol industry. Meanwhile, departments including the National Development and Reform Commission (NDRC) will jointly release the frontrunner list concerning the energy efficiencyof methanol and launch supporting encouragement policies.
Comment: The price of methanol futures hikes 20 percent since this year. The driver behind the surge is the continuously improving supply-demand relationship in methanol industry. Domestic Methanol-To-Olefin (MTO)capacity grew rapidly since last year, effectively driving the demand on methanol, while new methanolcapacity sees obvious decrease this year, improved supply-demand structure pushes up price and the profitability of methanol industry might see continuous improvement. As for listed companies, with a total capacity of 1.35 million tons, Inner Mongolia Yuan Xing Energy Company Limited (000683.SZ) is the largest domestic natural-gas-produced methanolenterprise; Enn Ecological Holdings Co., Ltd. (600803.SH), principally engaged in methanol production from coal, sees its equity capacity reaching nearly 1 million tons; as a leading domestic coal chemical enterprise, Shandong Hualu-Hengsheng Chemical Co.,Ltd. (600426.SH) annuallyproduces 320,000 tons of methanol.
○Ministry of Transport kicks off networking of transport administration system, development of intelligent traffic industry speeds up
------
The General Office of the Ministry of Transport distributed notice on developing the interconnection of national road transport administration information system on May 4, requiring fully starting the construction and networking of transport administration system from May, 2015 and achieving national, provincial, city-level and county-level comprehensive coordination of transport administrationbusiness before end-2016.
Comment: As comprehensive networking of national transport administration system to be realized, intelligent traffic industry will embrace development opportunity and it also lays foundation for the launch of national intelligent traffic system planning. Intelligent traffic is involved with high technologies including IT, data communication transmission technology, electronic control technology, etc. Institutions estimate that by end-2015, China’s intelligent traffic industry might reach a market size of billions of yuan. As for A-share companies, United Electronics Co., Ltd. (002642.SZ) acquires 75 percent equities of Beijing Carsmart Technology Co., Ltd. and plans to add stakes in car networking business by 440 million yuan at the beginning of the year; Tianze Information Industry Inc. (300209.SZ) provides car remote management information service and “Yuntongtu”, its Internet product, sees continuously increasing number of users.
[Announcement Interpretation]
○Das Intellitech to acquire JiuXin Mediclern to develop hospital cleaning system
------
Shenzhen Das Intellitech Co., Ltd. (002421.SZ) plans to acquire 100 percent equities of Jiangsu JiuXin Mediclern Technology Co., Ltd. by issuing 20.88 million shares at 26.18 yuan per share and paying 325 million yuan in cash. Meanwhile, the company also plans to raise a supporting fund of 247 million yuan from Liu Pang, actual controller of the company, and several top managers to pay the cash needed by the transaction and increase capital in JiuXin Mediclern.
JiuXin Mediclern is a domestic expert in providing integrated solutions for hospital clean rooms including digital operating room, clean operating room, etc. Its business forms an important link of digital hospital construction and intelligent medical industry chain. The counterparty promises that the net profit of JiuXin Mediclern will be no less than 60.00 million yuan, 72.00 million yuan and 86.40 million yuan, respectively, from 2015 to 2017.
○ShunrongSanqi to fully control Sanqi Interactive Entertainment, institutions participate in private placement
------
Wuhu ShunrongSanqi Interactive Entertainment Network Technology Co., Ltd. (002555.SZ) plans to raise 3.2 billion yuan by issuing 69.82 million shares at 45.83 yuan per share through private placement, among which, 2.8 billion yuan will be used to acquire the rest 40 percent equities of Sanqi Interactive Entertainment (Shanghai) Technology Co., Ltd. and the rest funds will be used to supplement working capital. China Universal Asset Management Company Limited subscribes half of the private placement, while the staff shareholdings plan of ShunrongSanqi, Mango Media Co., Ltd. and the subsidiary of Guangdong Alpha Animation and Culture Co., Ltd. are all participants.
The company acquired 60 percent equities of Sanqi Interactive Entertainment with 1.92 billion yuan in Oct., 2014 and Sanqi Interactive Entertainment was estimated at around 3.2 billion yuan. For the acquisition of the rest equity, the overall estimated value of the company has rocketed to 7 billion yuan. As the largest operation service provider in web-game joint-operation market, the net profit of Sanqi Interactive Entertainmentrecorded 360 million yuan last year, indicating a year-on-year growth of 47 percent. According to performance commitment, its net profit from 2015 to 2017 will be no less than 500 million yuan, 6 million yuan and 720 million yuan, respectively.
○NetPosa Technologies to acquire Huaqi Intelligent Technology and Smart Spyeyewith over RMB900 mln
------
NetPosa Technologies Co., Ltd. (300367.SZ) plans to acquire 100 percent equities of Suzhou Huaqi Intelligent Technology Co., Ltd. and Guangzhou Smart Spyeye Co., Ltd. with estimated 713 million yuan and 200 million yuan, respectively, by issuing shares and in cash. According to the scheme, the offering price of the acquisition is 92.23 yuan per share and the offering price of the supporting funds being raised is 107.6 yuan per share.
Products of Huaqi Intelligent Technology are applied in the passenger information system (PIS) of rail transit including high-speed rail, urban rail transit vehicle, etc., while Smart Spyeye provides the users of public security system with video detection tool products and technical service which are mainly software product. The counterparty promises that the net profit of Huaqi Intelligent Technology from 2015 to 2017 will be 52.00 million yuan, 65.00 million yuan and 80.00 million yuan, respectively; the net profit of Smart Spyeye from 2015 to 2017 will be 17.30 million yuan, 22.00 million yuan and 28.33 million yuan.
○Chj Industry to raise RMB1.5 bln through private placement
------
Guangdong Chj Industry Co., Ltd. (002345.SZ) plans to raise 1.5 billion yuan by issuing shares at 12.28 yuan per share through private placement from Liao Chuangbin, president and general manager of the company, the asset management plan of the company’s staff shareholdings plan, fashion consumption asset management plan, beautiful life asset management plan, etc. so as to pay off bank loans and supplement working capital.
[Data Speaks]
○Multiple companies see low stock price after ex-right
------
Since the beginning of this round of bullish market, low price stocks are decreasing to even hard to see. Along with the implementation of 2014 annual profit distribution and thescheme on share capital increase from accumulation fund, etc., a new batch of low price stocks will emerge and will attract market attentions again. According to statistics by XFA, calculated from last trading day’s closing price, the stock prices of 28 listed companies will be under 10 yuan after the implementation of 2014 annual profit distribution and the scheme on share capital increase from accumulation fund, among which, the stock prices of Hareon Solar Technology Co., Ltd. (600401.SH), Pangda Automobile Trade Co., Ltd. (601258.SH), Shandong Bohui Paper Industry Co., Ltd. (600966.SH),Dalian Rubber & Plastics Machinery Co., Ltd. (600346.SH) and TonglingJingda Special Magnet Wire Co., Ltd. (600577.SH) will all be lower than 7 yuan after ex-right.
[Trading Alarms]
○9 stocks including B-soft to start subscription on May 5
------
B-soft Co., Ltd. (300451.SZ)issues shares at 14.02 yuan per share with an up-limit per account of 6,500 shares; Anhui Sunhere Pharmaceutical Excipients Co., Ltd. (300452.SZ)issues shares at14.96 yuan per share with an up-limit per account of 4,500 shares; Anhui Guangxin Agrochemical Co.,Ltd. (732599.SH)issues shares at16.11 yuan per share with an up-limit per account of 18,000 shares; Kingclean Electric Co.,Ltd. (732355.SH)issues shares at19.08 yuan per share with an up-limit per account of 12,000 shares; Guangdong Failong Crystal Technology Co., Ltd. (300460.SZ)issues shares at6.43 yuan per share with an up-limit per account of 15,500 shares; Zhejiang Jinke Peroxides Co.,Ltd. (300459.SZ)issues shares at7.84 yuan per share with an up-limit per account of 10,500 shares; Shenzhen Yinghe Technology Co., Ltd. (300457.SZ)issues shares at12.41 yuan per share with an up-limit per account of 7,500 shares; Sichuan Zhongguang Lightning Protection Technologies Co., Ltd. (300414.SZ)issues shares at14.74 yuan per share with an up-limit per account of 8,000 shares; Yongxing Special Stainless Steel Co., Ltd. (002756.SZ)issues shares at21.74 yuan per share with an up-limit per account of 20,000 shares.
Maximum subscription of all stocks needs 1.51 million yuan. Institutions recommend B-soft, principally engaged in medical informatization, as first choice. The P/E ratio of companies of same kind in A-share market is more than 100 times. Sunhere Pharmaceutical Excipients, involved in pharmaceutical excipient industry, is also recommended.
> Xi Jinping to visit three countries including Russia, cooperation in energy and traffic areas expected
> Methanol industry meeting to discuss 13th five-year plan, development of intelligent traffic industry speeds up
> Das Intellitech to acquire JiuXinMediclern,ShunrongSanqi to fully control Sanqi Interactive Entertainment
> NetPosa Technologies to acquire Huaqi Intelligent Technology and Smart Spyeye, Chj Industry to raise RMB1.5 bln
[XFA Focus]
○Xi Jinping to visit three countries including Russia, cooperation in energy and traffic areas expected
------
The Ministry of Foreign Affairs discloses that Chinese President Xi Jinping will begin his visit to Kazakhstan on May 7, visit Russia from May 8 to 10 and attend the ceremony to commemorate the 70th anniversary of victory of the Great Patriotic War in Moscow, and visit Byelorussia from May 10 to 12.Vice-Foreign Minister Cheng Guoping said on the press conference that the heads of the two countries will sign cooperation documents in energy, aerospace, taxation, finance, investment areas, etc.
Comment: Xi visited countries along the “One Belt and One Road”in quick succession this year. During his visit to Pakistan last month, A-share companies related to hydropower and the “going out” of nuclear power all surged. Energy cooperation is a strategic area of Sino-Russia bilateral ties. Russia has become the fourth largest crude oil source of China’s import and the gas supply will be further expanded in the future. Transport equipment provider including Zhejiang Kingland Pipeline and Technologies Co.,Ltd. (002443.SZ), Jiangsu ChangbaoSteeltube Co., Ltd. (002478.SZ), etc. will see benefit. The cooperation between China and Kazakhstan is highlighted in traffic area. Xinjiang Beixin Road & Bridge Group Co., Ltd. (002307.SZ) once won the bidding of road modification project in Kazakhstan.
○PMI shows weak recovery, easing policy might launched
------
The HSBC/MarkitPurchasing Managers’ Index (PMI) for China's manufacturing sector in April stood at 48.9, being under the boom-bust line for two consecutive months and setting a new low in a year. The National Bureau of Statisticswill start to release the main economic indicators of April from this week.As estimated by institutions, PPI will continueto see negative year-on-year growth, investment and consumption growth will hard to see any improvement, and the industrial growth rate will strugglebelow 6 percent. Under such circumstances, easing policy might be further launched and the central bank might cut interest rate again this month.
[XFA Selection]
○Chinese President Xi Jinping meets Zhu Lilun, President of China’s Nationalist Party, and indicates that Taiwan and the Mainland can make sound arrangement for Taiwan to participate in regional economic cooperation.
○Chinese Premier Li Keqiang meets the president of Malaysia’s Land Way Public Traffic Committee and indicates that Chinese joint venture will be supported to participate in Malaysia- Singapore high-speed rail project.
○Haitong Securities Company Limited (600837.SH; 06837.SZ),HuataiSecurities Co., Ltd. (601688.SH), etc. all increase the proportion of margin requirement of margin trading and short selling, adding a throttle to the incremental capital of A-share market.
○The leaders of three oil companies are all adjusted. Wang Yilin, originally manages China National Offshore Oil Corporation (00883.HK; NYSE:CEO), is appointed as the president of PetroChina Company Limited (601857.SH; 00857.HK; NYSE:PTR).
○The trading volume of newly built commodity housing in April in Shanghai sets a single-month new high in nearly five years. “Booming May” might see steady trading growth.
[Industry Information]
○Methanol industry meeting to discuss 13th five-year plan, improving supply-demand structure to boost industrial prosperity
------
XFA learns that the 2015 China Methanol Industry Meeting will be held on May 20, focusing on the 13th five-year plan of methanol industry. Meanwhile, departments including the National Development and Reform Commission (NDRC) will jointly release the frontrunner list concerning the energy efficiencyof methanol and launch supporting encouragement policies.
Comment: The price of methanol futures hikes 20 percent since this year. The driver behind the surge is the continuously improving supply-demand relationship in methanol industry. Domestic Methanol-To-Olefin (MTO)capacity grew rapidly since last year, effectively driving the demand on methanol, while new methanolcapacity sees obvious decrease this year, improved supply-demand structure pushes up price and the profitability of methanol industry might see continuous improvement. As for listed companies, with a total capacity of 1.35 million tons, Inner Mongolia Yuan Xing Energy Company Limited (000683.SZ) is the largest domestic natural-gas-produced methanolenterprise; Enn Ecological Holdings Co., Ltd. (600803.SH), principally engaged in methanol production from coal, sees its equity capacity reaching nearly 1 million tons; as a leading domestic coal chemical enterprise, Shandong Hualu-Hengsheng Chemical Co.,Ltd. (600426.SH) annuallyproduces 320,000 tons of methanol.
○Ministry of Transport kicks off networking of transport administration system, development of intelligent traffic industry speeds up
------
The General Office of the Ministry of Transport distributed notice on developing the interconnection of national road transport administration information system on May 4, requiring fully starting the construction and networking of transport administration system from May, 2015 and achieving national, provincial, city-level and county-level comprehensive coordination of transport administrationbusiness before end-2016.
Comment: As comprehensive networking of national transport administration system to be realized, intelligent traffic industry will embrace development opportunity and it also lays foundation for the launch of national intelligent traffic system planning. Intelligent traffic is involved with high technologies including IT, data communication transmission technology, electronic control technology, etc. Institutions estimate that by end-2015, China’s intelligent traffic industry might reach a market size of billions of yuan. As for A-share companies, United Electronics Co., Ltd. (002642.SZ) acquires 75 percent equities of Beijing Carsmart Technology Co., Ltd. and plans to add stakes in car networking business by 440 million yuan at the beginning of the year; Tianze Information Industry Inc. (300209.SZ) provides car remote management information service and “Yuntongtu”, its Internet product, sees continuously increasing number of users.
[Announcement Interpretation]
○Das Intellitech to acquire JiuXin Mediclern to develop hospital cleaning system
------
Shenzhen Das Intellitech Co., Ltd. (002421.SZ) plans to acquire 100 percent equities of Jiangsu JiuXin Mediclern Technology Co., Ltd. by issuing 20.88 million shares at 26.18 yuan per share and paying 325 million yuan in cash. Meanwhile, the company also plans to raise a supporting fund of 247 million yuan from Liu Pang, actual controller of the company, and several top managers to pay the cash needed by the transaction and increase capital in JiuXin Mediclern.
JiuXin Mediclern is a domestic expert in providing integrated solutions for hospital clean rooms including digital operating room, clean operating room, etc. Its business forms an important link of digital hospital construction and intelligent medical industry chain. The counterparty promises that the net profit of JiuXin Mediclern will be no less than 60.00 million yuan, 72.00 million yuan and 86.40 million yuan, respectively, from 2015 to 2017.
○ShunrongSanqi to fully control Sanqi Interactive Entertainment, institutions participate in private placement
------
Wuhu ShunrongSanqi Interactive Entertainment Network Technology Co., Ltd. (002555.SZ) plans to raise 3.2 billion yuan by issuing 69.82 million shares at 45.83 yuan per share through private placement, among which, 2.8 billion yuan will be used to acquire the rest 40 percent equities of Sanqi Interactive Entertainment (Shanghai) Technology Co., Ltd. and the rest funds will be used to supplement working capital. China Universal Asset Management Company Limited subscribes half of the private placement, while the staff shareholdings plan of ShunrongSanqi, Mango Media Co., Ltd. and the subsidiary of Guangdong Alpha Animation and Culture Co., Ltd. are all participants.
The company acquired 60 percent equities of Sanqi Interactive Entertainment with 1.92 billion yuan in Oct., 2014 and Sanqi Interactive Entertainment was estimated at around 3.2 billion yuan. For the acquisition of the rest equity, the overall estimated value of the company has rocketed to 7 billion yuan. As the largest operation service provider in web-game joint-operation market, the net profit of Sanqi Interactive Entertainmentrecorded 360 million yuan last year, indicating a year-on-year growth of 47 percent. According to performance commitment, its net profit from 2015 to 2017 will be no less than 500 million yuan, 6 million yuan and 720 million yuan, respectively.
○NetPosa Technologies to acquire Huaqi Intelligent Technology and Smart Spyeyewith over RMB900 mln
------
NetPosa Technologies Co., Ltd. (300367.SZ) plans to acquire 100 percent equities of Suzhou Huaqi Intelligent Technology Co., Ltd. and Guangzhou Smart Spyeye Co., Ltd. with estimated 713 million yuan and 200 million yuan, respectively, by issuing shares and in cash. According to the scheme, the offering price of the acquisition is 92.23 yuan per share and the offering price of the supporting funds being raised is 107.6 yuan per share.
Products of Huaqi Intelligent Technology are applied in the passenger information system (PIS) of rail transit including high-speed rail, urban rail transit vehicle, etc., while Smart Spyeye provides the users of public security system with video detection tool products and technical service which are mainly software product. The counterparty promises that the net profit of Huaqi Intelligent Technology from 2015 to 2017 will be 52.00 million yuan, 65.00 million yuan and 80.00 million yuan, respectively; the net profit of Smart Spyeye from 2015 to 2017 will be 17.30 million yuan, 22.00 million yuan and 28.33 million yuan.
○Chj Industry to raise RMB1.5 bln through private placement
------
Guangdong Chj Industry Co., Ltd. (002345.SZ) plans to raise 1.5 billion yuan by issuing shares at 12.28 yuan per share through private placement from Liao Chuangbin, president and general manager of the company, the asset management plan of the company’s staff shareholdings plan, fashion consumption asset management plan, beautiful life asset management plan, etc. so as to pay off bank loans and supplement working capital.
[Data Speaks]
○Multiple companies see low stock price after ex-right
------
Since the beginning of this round of bullish market, low price stocks are decreasing to even hard to see. Along with the implementation of 2014 annual profit distribution and thescheme on share capital increase from accumulation fund, etc., a new batch of low price stocks will emerge and will attract market attentions again. According to statistics by XFA, calculated from last trading day’s closing price, the stock prices of 28 listed companies will be under 10 yuan after the implementation of 2014 annual profit distribution and the scheme on share capital increase from accumulation fund, among which, the stock prices of Hareon Solar Technology Co., Ltd. (600401.SH), Pangda Automobile Trade Co., Ltd. (601258.SH), Shandong Bohui Paper Industry Co., Ltd. (600966.SH),Dalian Rubber & Plastics Machinery Co., Ltd. (600346.SH) and TonglingJingda Special Magnet Wire Co., Ltd. (600577.SH) will all be lower than 7 yuan after ex-right.
[Trading Alarms]
○9 stocks including B-soft to start subscription on May 5
------
B-soft Co., Ltd. (300451.SZ)issues shares at 14.02 yuan per share with an up-limit per account of 6,500 shares; Anhui Sunhere Pharmaceutical Excipients Co., Ltd. (300452.SZ)issues shares at14.96 yuan per share with an up-limit per account of 4,500 shares; Anhui Guangxin Agrochemical Co.,Ltd. (732599.SH)issues shares at16.11 yuan per share with an up-limit per account of 18,000 shares; Kingclean Electric Co.,Ltd. (732355.SH)issues shares at19.08 yuan per share with an up-limit per account of 12,000 shares; Guangdong Failong Crystal Technology Co., Ltd. (300460.SZ)issues shares at6.43 yuan per share with an up-limit per account of 15,500 shares; Zhejiang Jinke Peroxides Co.,Ltd. (300459.SZ)issues shares at7.84 yuan per share with an up-limit per account of 10,500 shares; Shenzhen Yinghe Technology Co., Ltd. (300457.SZ)issues shares at12.41 yuan per share with an up-limit per account of 7,500 shares; Sichuan Zhongguang Lightning Protection Technologies Co., Ltd. (300414.SZ)issues shares at14.74 yuan per share with an up-limit per account of 8,000 shares; Yongxing Special Stainless Steel Co., Ltd. (002756.SZ)issues shares at21.74 yuan per share with an up-limit per account of 20,000 shares.
Maximum subscription of all stocks needs 1.51 million yuan. Institutions recommend B-soft, principally engaged in medical informatization, as first choice. The P/E ratio of companies of same kind in A-share market is more than 100 times. Sunhere Pharmaceutical Excipients, involved in pharmaceutical excipient industry, is also recommended.
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