[Today’s Guide]
> State Council supports equipment export, competitive industries to enjoy priority
> Apple to develop gene sequencing, Hualong One model project to initiate construction
> Youli Investment Holding to develop games, Citic Heavy Industries to acquire Tangshan Kaicheng through private placement
> Leo Group to acquire Internet asset, China Jushi to invest in “One Belt and One Road”
[XFA Focus]
○ State Council supports equipment export, competitive industries to enjoy priority
------
Chinese Premier Li Keqiang chaired the executive meeting of the State Council convened on May 6 and made plans on the international cooperation on capacity and equipment manufacturing. The meeting required that it will facilitate the equipment export through investment, engineering construction, technological cooperation and other means in industries with comparative advantages, such as railway, power, telecommunication, building materials and engineering machinery. In terms of supporting measures, it will expand channels for the use of foreign exchange reserve, improve the guarantee of export credit insurance and establish foreign cooperation platforms for governments and enterprises.
Comment: Chinese leaders and those along the One Belt and One Road made frequent mutual visits recently. The railway and other equipment operation made an important role. Chinese President Xi Jinping will visit Russia from May 8 and the bid for the design of the Moscow-Kazan high-speed railway was won by a Chinese-Russian consortium. Indian Prime Minister Narendra Modi will visit China from May 14 and he once raised a plan on the establishment of a diamond-shaped quadrilateral high-speed railway network. Driven by a domestic investment of 800 billion yuan and potential overseas orders, the railway equipment industry is expected to remain prosperous. In terms of listed companies, Nanjing Kangni Mechanical & Electrical Co., Ltd. (603111.SH) has signed various contracts on the sale of train doors with Alstom and Bombardier Inc. and its products have been exported to European and American countries. The products of Jiangyin Haida Rubber and Plastic Co., Ltd. (300320.SZ) occupy a market share of over 40 percent in the watertight sealing in shield tunnels and railway vehicles. It proposes a 12-for-10 conversion of capital surplus into shares combined according to its annual report.
◆ The executive meeting of the State Council also determined to further streamline administration and delegate more powers and cancel the review on non-administrative approvals. It also plans to pilot on granting preferential individual income tax on purchasing commercial health insurance.
[XFA Selection]
○ Institutes surveyed expect that the CPI in April to be released on weekend will be below 2 percent, which will leave space for loose monetary policies.
○ The Shenzhen Stock Exchange held a symposium on the Internet industry recently, proposing setting conditions for differentiated listing to support the development of Internet-based enterprises.
○ The Ministry of Commerce determined to establish a connection system for 100 commodity exchange markets with an annual turnover of over 10 billion yuan. It will accumulate big business data to facilitate the market transformation and upgrading.
○ Securities saw a net margin deposits outflow of 63.8 billion yuan last week, which is the first time in three months after excluding the IPO factors.
○ Fu Chengyu, former Chairman of China Petroleum & Chemical Corporation (Sinopec, SNP.NYSE; SNP.LSE; 00386.HK; 600028.SH), indicated that “it is completely erroneous that insiders have been informed of the consolidation of PetroChina Company Limited (PTR.NYSE; 00857.HK; 601857.SH) and Sinopec. Dongfeng Automobile Co., Ltd. (600006.SH) denied any information about merger.
[Industry Information]
○ Apple to develop gene sequencing, industry to see rapid development
------
The tech.sina.com.cn reported on May 6 that Apple Inc. (AAPL.NASDAQ; ACP.LSE) and many U.S. research institutes are cooperating in the development of apps to collect the genetic data of users. It is reported that Apple will offer opportunities to all iPhone users to help them in genetic testing. Insiders disclosed that Apple is expected to release the new genetic app in the Worldwide Developers Conference (WWDC) in June.
Comment: China is mulling the precision medical care plan, which is expected to be covered in the key technological campaigns of the state during the “13th Five-Year” period. Institutes estimate that the investment in the precision medical care will reach 60 billion yuan by 2030 and it will promote the development of the industry. As a key part of the precision medical care plan, genetic testing will see rapid development. In terms of listed companies, Da An Gene Co., Ltd. of Sun Yat-Sen University (002030.SZ) is a leader in molecular diagnosis and it has established a key technical platform for genetic diagnosis and immune diagnosis. Beijing Beilu Pharmaceutical Co., Ltd. (300016.SZ) has acquired 20 percent equities of Geneseeq Technology Inc. to develop the cancer gene sequencing.
○ Hualong One model project to initiate construction, nuclear power equipment enterprises to benefit
------
The China National Nuclear Corporation (CNNC) released at a press conference held on May 6 that the Unit No. 5 of Hualong One of the CNNC in Fuqing City, a model project in China’s independent third-generation nuclear technology, will initiate construction on May 7. Qian Zhimin, general manager of the CNNC, said that it has signed contracts on the purchase of major equipment and more than 85 percent are homemade equipment.
Comment: The National Energy Administration (NEA) has set Hualong One as a model to “go global” and develop overseas markets. The cost of each Hualong One unit is about 30 billion yuan, which will greatly boost the going out of the equipment manufacturing industry. It is also likely to conduct mass production in China and the demand for nuclear power equipment will continue to grow. In terms of listed companies, Sichuan Danfu Compressor Co., Ltd. (002366.SZ) is a supplier of major pipes and its assets reorganization has been approved by the China Securities Regulatory Commission (CSRC). China First Heavy Industries (601106.SH) provides reactor pressure vessels and voltage stabilizers.
[Announcement Interpretation]
○ Zhongqing Longtu to achieve back-door listing via Youli Investment Holding
------
Jiangsu Youli Investment Holding Co., Ltd. (000584.SZ) plans to exchange out all asset and debts except currency capital and exchange in all equities of Zhongqing Longtu Network Co., Ltd. with 9.6 billion yuan. As for the balance after asset exchange, the company will issue around 1,654 million shares at 5.26 yuan per share through private placement to acquire asset from Yang Shenghui, Beijing Ultrapower Software Co., Ltd., etc., shareholders of Zhongqing Longtu. The transaction is defined as backdoor-listing. Upon completion, Yang Shenghui, controlling shareholder of Zhongqing Longtu, will become the actual controller of Youli Investment Holding.
Zhongqing Longtu, principally engaged in the development and operation of web games, mobile games, etc., acts as the agent of Dotachuanqi, a mobile game, etc. The net profit of the company in 2014 records 348 million yuan, and over 90 percent of that comes from Dotachuanqi. The net profit in the 2015 Jan-March period of the company records 158 million yuan.
○ Citic Heavy Industries to acquire Tangshan Kaicheng with RMB800 mln to explore intelligent manufacturing
------
Citic Heavy Industries Co., Ltd. (601608.SH) plans to acquire 80 percent equities of Tangshan Kaicheng Electronic Control Equipment Group Co., Ltd. with estimated 848 million yuan through private placement and in cash. Part of the transaction will be paid by issuing 50.64 million shares at 6.28 yuan per share through private placement to original shareholders, and 530 million yuan will be paid in cash. The company also plans to raise a supporting fund of 848 million yuan at no less than 6.28 yuan per share.
Tangshan Kaicheng is a leading domestic coal mine intelligent safety equipment manufacturer and also the only enterprise achieving the production qualification of coal mine safety production and rescue robots. Relying on mature technology and experience concerning mine robot, etc., the company will rapidly enter domestic mine explosion-proof, improving, controlling, rescuing, etc. equipment areas and will grow into world advanced large-scale mine intelligent whole-set equipment provider.
○ Leo Group to acquire Internet asset with over RMB2.9 bln yuan
------
Leo Group Co., Ltd. (002131.SZ) plans to acquire 100 percent equities of Jiangsu Wansheng Weiye Network Technology Co., Ltd. and Beijing Miage Advertisement Co., Ltd. by issuing shares and in cash. The transaction will be priced at 2.9 billion yuan by issuing 78.58 million shares at 22.77 yuan and paying 1,123 million yuan in cash, according to the scheme. A supporting fund of 1,758 million yuan will also be raised at no less than 23.78 yuan per share.
Wansheng Weiye and Miage are engaged in digital marketing service and have established long-term cooperation relationship with Baidu, Tencent, 360, Taobao, etc. The counterparty promises that from 2015 to 2017, the net profit of Wansheng Weiye will be no less than 148 million yuan, 185 million yuan and 231 million yuan, respectively; the net profit of Miage will be no less than 60.00 million yuan, 72.00 million yuan and 93.60 million yuan.
○ China Jushi to invest in “One Belt and One Road” with RMB5 bln through private placement
------
China Jushi Co., Ltd. plans to raise 5 billion yuan by issuing shares at 243 million shares at no less than 20.58 yuan per share to newly build a production line of alkali-free glass fiber pool kiln wiredrawing with annual production of 80,000 tons and a production line of high-performance glass fiber pool kiln wiredrawing with annual production of 40,000 tons, and to pay off bank loans. The company will improve its international popularity and overseas market occupancy through the market demand brought by areas along the “One Belt and One Road”.
[Trading Alarms]
○ Five new stocks including Goldensea Environment Technology start subscription on May 7
------
Zhejiang Goldensea Environment Technology Co., Ltd. (732311.SH) issues shares at 5.39 yuan per share with an up-limit per account of 21,000 shares; Nantong Acetic Acid Chemical Co., Ltd. issues shares at 19.58 yuan per share with an up-limit per account of 10,000 shares; Hunan Aihua Group Co., Ltd. issues shares at 20.74 yuan per share with an up-limit per account of 20,000 shares; Pulike Biological Engineering Inc. issues shares at 15.52 yuan per share with an up-limit per account of 16,000 shares; Shanxi Yongdong Chemistry Industry Co., Ltd. issues shares at 13.56 yuan per share with an up-limit per account of 9,500 shares. Maximum subscription needs 1.10 million yuan. Institutions recommend Goldensea Environment Technology, principally engaged in environment-friendly filter new material, as the first choice.
> State Council supports equipment export, competitive industries to enjoy priority
> Apple to develop gene sequencing, Hualong One model project to initiate construction
> Youli Investment Holding to develop games, Citic Heavy Industries to acquire Tangshan Kaicheng through private placement
> Leo Group to acquire Internet asset, China Jushi to invest in “One Belt and One Road”
[XFA Focus]
○ State Council supports equipment export, competitive industries to enjoy priority
------
Chinese Premier Li Keqiang chaired the executive meeting of the State Council convened on May 6 and made plans on the international cooperation on capacity and equipment manufacturing. The meeting required that it will facilitate the equipment export through investment, engineering construction, technological cooperation and other means in industries with comparative advantages, such as railway, power, telecommunication, building materials and engineering machinery. In terms of supporting measures, it will expand channels for the use of foreign exchange reserve, improve the guarantee of export credit insurance and establish foreign cooperation platforms for governments and enterprises.
Comment: Chinese leaders and those along the One Belt and One Road made frequent mutual visits recently. The railway and other equipment operation made an important role. Chinese President Xi Jinping will visit Russia from May 8 and the bid for the design of the Moscow-Kazan high-speed railway was won by a Chinese-Russian consortium. Indian Prime Minister Narendra Modi will visit China from May 14 and he once raised a plan on the establishment of a diamond-shaped quadrilateral high-speed railway network. Driven by a domestic investment of 800 billion yuan and potential overseas orders, the railway equipment industry is expected to remain prosperous. In terms of listed companies, Nanjing Kangni Mechanical & Electrical Co., Ltd. (603111.SH) has signed various contracts on the sale of train doors with Alstom and Bombardier Inc. and its products have been exported to European and American countries. The products of Jiangyin Haida Rubber and Plastic Co., Ltd. (300320.SZ) occupy a market share of over 40 percent in the watertight sealing in shield tunnels and railway vehicles. It proposes a 12-for-10 conversion of capital surplus into shares combined according to its annual report.
◆ The executive meeting of the State Council also determined to further streamline administration and delegate more powers and cancel the review on non-administrative approvals. It also plans to pilot on granting preferential individual income tax on purchasing commercial health insurance.
[XFA Selection]
○ Institutes surveyed expect that the CPI in April to be released on weekend will be below 2 percent, which will leave space for loose monetary policies.
○ The Shenzhen Stock Exchange held a symposium on the Internet industry recently, proposing setting conditions for differentiated listing to support the development of Internet-based enterprises.
○ The Ministry of Commerce determined to establish a connection system for 100 commodity exchange markets with an annual turnover of over 10 billion yuan. It will accumulate big business data to facilitate the market transformation and upgrading.
○ Securities saw a net margin deposits outflow of 63.8 billion yuan last week, which is the first time in three months after excluding the IPO factors.
○ Fu Chengyu, former Chairman of China Petroleum & Chemical Corporation (Sinopec, SNP.NYSE; SNP.LSE; 00386.HK; 600028.SH), indicated that “it is completely erroneous that insiders have been informed of the consolidation of PetroChina Company Limited (PTR.NYSE; 00857.HK; 601857.SH) and Sinopec. Dongfeng Automobile Co., Ltd. (600006.SH) denied any information about merger.
[Industry Information]
○ Apple to develop gene sequencing, industry to see rapid development
------
The tech.sina.com.cn reported on May 6 that Apple Inc. (AAPL.NASDAQ; ACP.LSE) and many U.S. research institutes are cooperating in the development of apps to collect the genetic data of users. It is reported that Apple will offer opportunities to all iPhone users to help them in genetic testing. Insiders disclosed that Apple is expected to release the new genetic app in the Worldwide Developers Conference (WWDC) in June.
Comment: China is mulling the precision medical care plan, which is expected to be covered in the key technological campaigns of the state during the “13th Five-Year” period. Institutes estimate that the investment in the precision medical care will reach 60 billion yuan by 2030 and it will promote the development of the industry. As a key part of the precision medical care plan, genetic testing will see rapid development. In terms of listed companies, Da An Gene Co., Ltd. of Sun Yat-Sen University (002030.SZ) is a leader in molecular diagnosis and it has established a key technical platform for genetic diagnosis and immune diagnosis. Beijing Beilu Pharmaceutical Co., Ltd. (300016.SZ) has acquired 20 percent equities of Geneseeq Technology Inc. to develop the cancer gene sequencing.
○ Hualong One model project to initiate construction, nuclear power equipment enterprises to benefit
------
The China National Nuclear Corporation (CNNC) released at a press conference held on May 6 that the Unit No. 5 of Hualong One of the CNNC in Fuqing City, a model project in China’s independent third-generation nuclear technology, will initiate construction on May 7. Qian Zhimin, general manager of the CNNC, said that it has signed contracts on the purchase of major equipment and more than 85 percent are homemade equipment.
Comment: The National Energy Administration (NEA) has set Hualong One as a model to “go global” and develop overseas markets. The cost of each Hualong One unit is about 30 billion yuan, which will greatly boost the going out of the equipment manufacturing industry. It is also likely to conduct mass production in China and the demand for nuclear power equipment will continue to grow. In terms of listed companies, Sichuan Danfu Compressor Co., Ltd. (002366.SZ) is a supplier of major pipes and its assets reorganization has been approved by the China Securities Regulatory Commission (CSRC). China First Heavy Industries (601106.SH) provides reactor pressure vessels and voltage stabilizers.
[Announcement Interpretation]
○ Zhongqing Longtu to achieve back-door listing via Youli Investment Holding
------
Jiangsu Youli Investment Holding Co., Ltd. (000584.SZ) plans to exchange out all asset and debts except currency capital and exchange in all equities of Zhongqing Longtu Network Co., Ltd. with 9.6 billion yuan. As for the balance after asset exchange, the company will issue around 1,654 million shares at 5.26 yuan per share through private placement to acquire asset from Yang Shenghui, Beijing Ultrapower Software Co., Ltd., etc., shareholders of Zhongqing Longtu. The transaction is defined as backdoor-listing. Upon completion, Yang Shenghui, controlling shareholder of Zhongqing Longtu, will become the actual controller of Youli Investment Holding.
Zhongqing Longtu, principally engaged in the development and operation of web games, mobile games, etc., acts as the agent of Dotachuanqi, a mobile game, etc. The net profit of the company in 2014 records 348 million yuan, and over 90 percent of that comes from Dotachuanqi. The net profit in the 2015 Jan-March period of the company records 158 million yuan.
○ Citic Heavy Industries to acquire Tangshan Kaicheng with RMB800 mln to explore intelligent manufacturing
------
Citic Heavy Industries Co., Ltd. (601608.SH) plans to acquire 80 percent equities of Tangshan Kaicheng Electronic Control Equipment Group Co., Ltd. with estimated 848 million yuan through private placement and in cash. Part of the transaction will be paid by issuing 50.64 million shares at 6.28 yuan per share through private placement to original shareholders, and 530 million yuan will be paid in cash. The company also plans to raise a supporting fund of 848 million yuan at no less than 6.28 yuan per share.
Tangshan Kaicheng is a leading domestic coal mine intelligent safety equipment manufacturer and also the only enterprise achieving the production qualification of coal mine safety production and rescue robots. Relying on mature technology and experience concerning mine robot, etc., the company will rapidly enter domestic mine explosion-proof, improving, controlling, rescuing, etc. equipment areas and will grow into world advanced large-scale mine intelligent whole-set equipment provider.
○ Leo Group to acquire Internet asset with over RMB2.9 bln yuan
------
Leo Group Co., Ltd. (002131.SZ) plans to acquire 100 percent equities of Jiangsu Wansheng Weiye Network Technology Co., Ltd. and Beijing Miage Advertisement Co., Ltd. by issuing shares and in cash. The transaction will be priced at 2.9 billion yuan by issuing 78.58 million shares at 22.77 yuan and paying 1,123 million yuan in cash, according to the scheme. A supporting fund of 1,758 million yuan will also be raised at no less than 23.78 yuan per share.
Wansheng Weiye and Miage are engaged in digital marketing service and have established long-term cooperation relationship with Baidu, Tencent, 360, Taobao, etc. The counterparty promises that from 2015 to 2017, the net profit of Wansheng Weiye will be no less than 148 million yuan, 185 million yuan and 231 million yuan, respectively; the net profit of Miage will be no less than 60.00 million yuan, 72.00 million yuan and 93.60 million yuan.
○ China Jushi to invest in “One Belt and One Road” with RMB5 bln through private placement
------
China Jushi Co., Ltd. plans to raise 5 billion yuan by issuing shares at 243 million shares at no less than 20.58 yuan per share to newly build a production line of alkali-free glass fiber pool kiln wiredrawing with annual production of 80,000 tons and a production line of high-performance glass fiber pool kiln wiredrawing with annual production of 40,000 tons, and to pay off bank loans. The company will improve its international popularity and overseas market occupancy through the market demand brought by areas along the “One Belt and One Road”.
[Trading Alarms]
○ Five new stocks including Goldensea Environment Technology start subscription on May 7
------
Zhejiang Goldensea Environment Technology Co., Ltd. (732311.SH) issues shares at 5.39 yuan per share with an up-limit per account of 21,000 shares; Nantong Acetic Acid Chemical Co., Ltd. issues shares at 19.58 yuan per share with an up-limit per account of 10,000 shares; Hunan Aihua Group Co., Ltd. issues shares at 20.74 yuan per share with an up-limit per account of 20,000 shares; Pulike Biological Engineering Inc. issues shares at 15.52 yuan per share with an up-limit per account of 16,000 shares; Shanxi Yongdong Chemistry Industry Co., Ltd. issues shares at 13.56 yuan per share with an up-limit per account of 9,500 shares. Maximum subscription needs 1.10 million yuan. Institutions recommend Goldensea Environment Technology, principally engaged in environment-friendly filter new material, as the first choice.
Latest comments