[Today's Guide]
○ “One Belt and One Road” concept sees actual implementation
○ Renowned privately-offered funds optimistic about SMEs Board and ChiNext Board
○ International Energy Storage Conference to open soon, industrial explosive growth to come
○ Hansen Phar. to see performance improvement in Q2
[XFA View]
“One Belt and One Road” concept sees actual implementation
------
Due to the impact of large surge earlier, stricter regulation, etc., the stock indexes suffered large fluctuation in the past week. The sector related to “One Belt and One Road” concept saw even larger slump. On the contrary to the virtual capital market, the “One Belt and One Road” concept is entering actual implementation. After obtaining corresponding fund guarantee, the construction of firstly-initiated 50 national projects will speed up. They might improve the revenue of relevant enterprises far beyond market expectation.
As disclosed by experts involved in the formulation of the scheme, “One Belt and One Road”, as a transnational economic belt, aims to drive the development of economic belt by connecting key cities. According to relevant planning, 30 to 50 key cities along four preliminarily-defined development axes including Central Asia transnational corridor will be selected to establish agricultural, industrial, tourism, etc. parks on the basis of their own development advantage and functional location to form an economic cooperation structure like “a string of beads”.
Secondly, the list of prioritized cities and urban agglomerations is also under formulation. In China, focuses are mainly laid on the urban agglomeration in the central Shaanxi plain centered by Xi’an City and the urban agglomeration in the northern Xinjiang centered by Urumchi. 50 projects mainly involved in infrastructure construction will be initiated first. The construction of main transnational passageways in the Asian and European road net will be actively promoted. The minibus park in the Gwadar Port, located in Sino- Pakistan economic belt, is one of the sample projects and has been started.
The infrastructure enterprises surveyed by the “One Belt and One Road” special investigation of XFA all indicate that the most obvious change is the improving fund guarantee after the senior management visited Pakistan in April. As China Development Bank, Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China (ABC), Bank of China (BOC) and China Construction Bank (CCB) are successively involved in specific projects, the support on credit and loan increases. It speeds up the commencement and progress of projects. Lots of projects which are orginally planned to be started in the second half of this year or next year are planned to be kicked off recently. It means that the planning of “One Belt and One Road” on paper is now materialized as orders. (Dai Lu)
[Institutions' Movement]
Renowned privately-offered funds optimistic about SMEs Board and ChiNext Board
------
Considering the market structure that the main board suffered big slump, while the Small and Medium Enterprise Board (the SMEs Board) and the ChiNext Board were hot in recent days, the well-known fund managers surveyed by XFA all believe that though the SMEs Board and ChiNext Board might experience possible fluctuation due to rapid surge in the early stage or stricter regulation, etc., the logic behind the economic transformation might results in continuous surge of the SMEs Board and ChiNext Board.
The reason why these renowned privately-offered funds are optimistic about the emerging industries in the SMEs Board and the ChiNext Board while not so interested in the blue-chip industries in the main board is that as Chinese economy transforms from heavy industry to consumption, service and technical innovation, the importance of “resource” and “capital”, decisive factors during the industrialization of heavy industry, is decreasing. However, individual innovation ability and innovation mechanism are becoming increasingly important. Privately-owned listed companies that are truly engaged in consumption, service and technical innovation will see improving position in the whole economy and their capital market value will also be lifted correspondingly. The blue-chip industries favored by capital and policies in the past ten years might see weakening policy, credit and loan support and gradually loss value.
[XFA Viewpoint]
International Energy Storage Conference to open soon, industrial explosive growth to come
------
The 5th China International Energy Storage Conference 2015, sponsored by China Industrial Association of Power Sources, will be convened in Shanghai on May 13. It is learnt that the industrial association, entrusted by National Energy Administration (NEA), is compiling the guideline of the thirteenth five-year plan for national energy storage industry. The New Energy and Renewable Energy Department of NEA will hold a discussion meeting aiming at the guideline in the latter part of May, according to timetable.
As wind power and photovoltaic industry get more developed, domestic new energy industry sees increasing demand on the development of energy storage. Institutions predict that the turning point for the explosive development of domestic energy storage market is coming. The energy storage of power grid has wide-range application and huge market space. It sees a potential market size of hundreds of billions of yuan.
◆ As a leader in the energy storage and micro-grid industries, Beijing Sifang Automation Co., Ltd. (601126.SH) has won the bid for the 10MW photovoltaic energy storage in Ali Prefecture, Tibet Autonomous Region and the state new energy demonstration base micro-grid energy storage project in Turpan, Xinjiang Uygur Autonomous Region and has accumulated various experiences. The power from the rechargeable battery developed by the company has been successfully put into operation. Its 500KW high-frequency plasma transmitting power has reached the advanced international level.
◆ Shandong Sacred Sun Power Sources Co., Ltd. (002580.SZ) is one of the pioneers in the new energy storage battery market in China. Its products include independent photovoltaic and wind and solar energy mutual-complementing power stations and its output and sale rank top three in the industry. Its new energy battery recorded revenue of approximately 530 million yuan last year, accounting for over 40 percent. The lead-carbon battery produced by Sacred Sun Power Sources and Furukawa Electric will put into production by the end of this year. The product has been conducted small-lot production and submitted to downstream clients for trial use.
[Industry Observation]
Sugar price reaches BEP, industry to boom
------
Thanks to the improved supply and demand, the ex-factory price of white sugar continued to hike and currently maintained at 5,500 yuan, far above the average break-even point (BEP) of 5,000 yuan. The domestic sugar price has experienced four declining cycles since July, 2011 and recovered for the first time in the first quarter. Insiders believe that the sugar output will beat the expectation this year and driven by the stable growth of the domestic sugar consumption, the Chinese sugar market will see short supplies and the sugar price will experience a hiking period. In the short term, with the rising temperature in China, the sugar industry will enter the peak season for sale and the price is likely to continue to rise.
The 2014/15 sugar producing period has come to an end and the sugar output declined 22 percent year on year by the end of April. As a result of the declining sugar cane price, the cultivated areas of sugar canes continue to decrease and the sugar output will continue to drop. Meanwhile, the sugar consumption increases stably. With the further decline of output and the increase of rigid demand in the next season for sugar production, the de-stocking will speed up.
In terms of A-share companies, Nanning Sugar Industry Co., Ltd. (000911.SZ) has stripped off the loss-making paper making and other non-sugar businesses. It has an annual sugar production capacity of 650,000 tons with a production cost of approximately 4,900 yuan per ton. The rising sugar price will boost the performance of the company. COFCO Tunhe Co., Ltd. (600737.SH) is the largest sugar importer in China with a sugar import quota of 200,000 tons. Institutes estimate that the sugar import within the quota will bring a net profit of 200 to 300 million yuan as a result of the high price difference at home and abroad. In addition, the company is accelerating the establishment of white sugar industry chain.
[Information Radar]
Hansen Phar. to see performance improvement in Q2
------
With the improvement of old factories of the company and the products sales growth, Hunan Hansen Pharmaceutical Co., Ltd. (002412.SZ) is likely to see performance improvement in the first quarter and the performance is expected to record a double-digit growth this year. Due to the increase of financial expenses and the depreciation of fixed assets and other factors, the company saw a decline of nearly 11 percent in net profit in the first quarter. The terminal prices of Tianma Xingnao capsule and other core products of Yunnan Yongzitang Pharmaceutical Co., Ltd., a subsidiary of Hansen Phar., have been adjusted and the sales of Yongzitang Phar. has recovered based on the data in the first quarter.
Hansen Phar. indicated on an active platform that the company will see more mergers and acquisitions in 2015 and it will continue to seek appropriate investment subjects. The market expects that the company is likely to seek M&A subjects in pharmaceuticals factories with exclusive products and hospitals. In addition, the company also plans to extend the industrial chain and develop the elderly care and rehabilitation industry.
Tongfang Guoxin Electronics to see breakthroughs in overseas certification of IC cards
------
It is reported that the overseas testing of chips for financial IC cards of Tongfang Guoxin Electronics Co., Ltd. (002049.SZ) shows positive feedback and it is likely to obtain the highest safety certification in Europe this year, which will further promote the commercial operation of financial IC cards of the company. The financial IC cards of Tongfang Guoxin Electronics have been replaced with the new generation since the beginning of this year. It has obtained the certification of the China UnionPay in end-January through the improvement and innovation of industrial chains and business models. It has been covered by the purchase category of domestic commercial banks. In addition, Tongfang Guoxin Electronics plays a unique role in trusted computing, state encryption computing and other safety certifications. Its products under mass production are independent and under control and its FPGA products are competitive in the military telecommunication market.
○ “One Belt and One Road” concept sees actual implementation
○ Renowned privately-offered funds optimistic about SMEs Board and ChiNext Board
○ International Energy Storage Conference to open soon, industrial explosive growth to come
○ Hansen Phar. to see performance improvement in Q2
[XFA View]
“One Belt and One Road” concept sees actual implementation
------
Due to the impact of large surge earlier, stricter regulation, etc., the stock indexes suffered large fluctuation in the past week. The sector related to “One Belt and One Road” concept saw even larger slump. On the contrary to the virtual capital market, the “One Belt and One Road” concept is entering actual implementation. After obtaining corresponding fund guarantee, the construction of firstly-initiated 50 national projects will speed up. They might improve the revenue of relevant enterprises far beyond market expectation.
As disclosed by experts involved in the formulation of the scheme, “One Belt and One Road”, as a transnational economic belt, aims to drive the development of economic belt by connecting key cities. According to relevant planning, 30 to 50 key cities along four preliminarily-defined development axes including Central Asia transnational corridor will be selected to establish agricultural, industrial, tourism, etc. parks on the basis of their own development advantage and functional location to form an economic cooperation structure like “a string of beads”.
Secondly, the list of prioritized cities and urban agglomerations is also under formulation. In China, focuses are mainly laid on the urban agglomeration in the central Shaanxi plain centered by Xi’an City and the urban agglomeration in the northern Xinjiang centered by Urumchi. 50 projects mainly involved in infrastructure construction will be initiated first. The construction of main transnational passageways in the Asian and European road net will be actively promoted. The minibus park in the Gwadar Port, located in Sino- Pakistan economic belt, is one of the sample projects and has been started.
The infrastructure enterprises surveyed by the “One Belt and One Road” special investigation of XFA all indicate that the most obvious change is the improving fund guarantee after the senior management visited Pakistan in April. As China Development Bank, Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China (ABC), Bank of China (BOC) and China Construction Bank (CCB) are successively involved in specific projects, the support on credit and loan increases. It speeds up the commencement and progress of projects. Lots of projects which are orginally planned to be started in the second half of this year or next year are planned to be kicked off recently. It means that the planning of “One Belt and One Road” on paper is now materialized as orders. (Dai Lu)
[Institutions' Movement]
Renowned privately-offered funds optimistic about SMEs Board and ChiNext Board
------
Considering the market structure that the main board suffered big slump, while the Small and Medium Enterprise Board (the SMEs Board) and the ChiNext Board were hot in recent days, the well-known fund managers surveyed by XFA all believe that though the SMEs Board and ChiNext Board might experience possible fluctuation due to rapid surge in the early stage or stricter regulation, etc., the logic behind the economic transformation might results in continuous surge of the SMEs Board and ChiNext Board.
The reason why these renowned privately-offered funds are optimistic about the emerging industries in the SMEs Board and the ChiNext Board while not so interested in the blue-chip industries in the main board is that as Chinese economy transforms from heavy industry to consumption, service and technical innovation, the importance of “resource” and “capital”, decisive factors during the industrialization of heavy industry, is decreasing. However, individual innovation ability and innovation mechanism are becoming increasingly important. Privately-owned listed companies that are truly engaged in consumption, service and technical innovation will see improving position in the whole economy and their capital market value will also be lifted correspondingly. The blue-chip industries favored by capital and policies in the past ten years might see weakening policy, credit and loan support and gradually loss value.
[XFA Viewpoint]
International Energy Storage Conference to open soon, industrial explosive growth to come
------
The 5th China International Energy Storage Conference 2015, sponsored by China Industrial Association of Power Sources, will be convened in Shanghai on May 13. It is learnt that the industrial association, entrusted by National Energy Administration (NEA), is compiling the guideline of the thirteenth five-year plan for national energy storage industry. The New Energy and Renewable Energy Department of NEA will hold a discussion meeting aiming at the guideline in the latter part of May, according to timetable.
As wind power and photovoltaic industry get more developed, domestic new energy industry sees increasing demand on the development of energy storage. Institutions predict that the turning point for the explosive development of domestic energy storage market is coming. The energy storage of power grid has wide-range application and huge market space. It sees a potential market size of hundreds of billions of yuan.
◆ As a leader in the energy storage and micro-grid industries, Beijing Sifang Automation Co., Ltd. (601126.SH) has won the bid for the 10MW photovoltaic energy storage in Ali Prefecture, Tibet Autonomous Region and the state new energy demonstration base micro-grid energy storage project in Turpan, Xinjiang Uygur Autonomous Region and has accumulated various experiences. The power from the rechargeable battery developed by the company has been successfully put into operation. Its 500KW high-frequency plasma transmitting power has reached the advanced international level.
◆ Shandong Sacred Sun Power Sources Co., Ltd. (002580.SZ) is one of the pioneers in the new energy storage battery market in China. Its products include independent photovoltaic and wind and solar energy mutual-complementing power stations and its output and sale rank top three in the industry. Its new energy battery recorded revenue of approximately 530 million yuan last year, accounting for over 40 percent. The lead-carbon battery produced by Sacred Sun Power Sources and Furukawa Electric will put into production by the end of this year. The product has been conducted small-lot production and submitted to downstream clients for trial use.
[Industry Observation]
Sugar price reaches BEP, industry to boom
------
Thanks to the improved supply and demand, the ex-factory price of white sugar continued to hike and currently maintained at 5,500 yuan, far above the average break-even point (BEP) of 5,000 yuan. The domestic sugar price has experienced four declining cycles since July, 2011 and recovered for the first time in the first quarter. Insiders believe that the sugar output will beat the expectation this year and driven by the stable growth of the domestic sugar consumption, the Chinese sugar market will see short supplies and the sugar price will experience a hiking period. In the short term, with the rising temperature in China, the sugar industry will enter the peak season for sale and the price is likely to continue to rise.
The 2014/15 sugar producing period has come to an end and the sugar output declined 22 percent year on year by the end of April. As a result of the declining sugar cane price, the cultivated areas of sugar canes continue to decrease and the sugar output will continue to drop. Meanwhile, the sugar consumption increases stably. With the further decline of output and the increase of rigid demand in the next season for sugar production, the de-stocking will speed up.
In terms of A-share companies, Nanning Sugar Industry Co., Ltd. (000911.SZ) has stripped off the loss-making paper making and other non-sugar businesses. It has an annual sugar production capacity of 650,000 tons with a production cost of approximately 4,900 yuan per ton. The rising sugar price will boost the performance of the company. COFCO Tunhe Co., Ltd. (600737.SH) is the largest sugar importer in China with a sugar import quota of 200,000 tons. Institutes estimate that the sugar import within the quota will bring a net profit of 200 to 300 million yuan as a result of the high price difference at home and abroad. In addition, the company is accelerating the establishment of white sugar industry chain.
[Information Radar]
Hansen Phar. to see performance improvement in Q2
------
With the improvement of old factories of the company and the products sales growth, Hunan Hansen Pharmaceutical Co., Ltd. (002412.SZ) is likely to see performance improvement in the first quarter and the performance is expected to record a double-digit growth this year. Due to the increase of financial expenses and the depreciation of fixed assets and other factors, the company saw a decline of nearly 11 percent in net profit in the first quarter. The terminal prices of Tianma Xingnao capsule and other core products of Yunnan Yongzitang Pharmaceutical Co., Ltd., a subsidiary of Hansen Phar., have been adjusted and the sales of Yongzitang Phar. has recovered based on the data in the first quarter.
Hansen Phar. indicated on an active platform that the company will see more mergers and acquisitions in 2015 and it will continue to seek appropriate investment subjects. The market expects that the company is likely to seek M&A subjects in pharmaceuticals factories with exclusive products and hospitals. In addition, the company also plans to extend the industrial chain and develop the elderly care and rehabilitation industry.
Tongfang Guoxin Electronics to see breakthroughs in overseas certification of IC cards
------
It is reported that the overseas testing of chips for financial IC cards of Tongfang Guoxin Electronics Co., Ltd. (002049.SZ) shows positive feedback and it is likely to obtain the highest safety certification in Europe this year, which will further promote the commercial operation of financial IC cards of the company. The financial IC cards of Tongfang Guoxin Electronics have been replaced with the new generation since the beginning of this year. It has obtained the certification of the China UnionPay in end-January through the improvement and innovation of industrial chains and business models. It has been covered by the purchase category of domestic commercial banks. In addition, Tongfang Guoxin Electronics plays a unique role in trusted computing, state encryption computing and other safety certifications. Its products under mass production are independent and under control and its FPGA products are competitive in the military telecommunication market.
Latest comments