[Today's Guide]
> Ma Kai investigates new energy vehicle industry, construction of charging facilities to achieve breakthrough
> Medical device exhibition shows industrial promising profit, oil and gas reform expected to speed up
> Hesheng Special Material to invest in supply chain and financial management, Kangxin New Material to achieve backdoor listing through Beida Jade Bird Huaguang Technology
> Apex Technology to develop core electronic device through private placement, Beijing Capital to acquire leading solid waste enterprise in New Zealand
[XFA Focus]
○ Ma Kai investigates new energy vehicle industry, construction of charging facilities to achieve breakthrough
------
Vice-premier of the State Council Ma Kai recently investigated the promotion and application of new energy vehicle in Changzhou City and hosted relevant forum. Ma indicated that the construction of charging facilities apparently lags behind the industrial development and has impeded the promotion and application of new energy vehicle. The problem must be solved as soon as possible; the state will focus on this issue this year and move towards the goal that “charging is much cheaper than refueling but is as convenient as refueling”.
Comment: By the end of last year, the matching ratio between China’s charging facilities and electric vehicles is only 1:4, while standard matching ratio is 1:1. The shortage of charging facilities is long-standing. Due to policy support and the periodical low of oil price since this year, the sale of new energy vehicles is still seeing multiplied growth. Institutions are optimistic that the market size of charging facilities will be hundreds of billions of yuan. As for listed companies, XJ Electric Co., Ltd. (000400.SZ) and Nari Technology Co., Ltd. (600406.SH) take up 90 percent orders of domestic charging piles; the charging pile products of Shenzhen Kstar Science & Technology Co., Ltd. (002518.SZ) have been sold overseas.
◆The trading volume ranking list on May 15 showed that Shenzhen Desay Battery Technology Co., Ltd. (000049.SZ) was bought by four institutions with a total of 216 million yuan, accounting for 18 percent of its intraday turnover. The company announced adding stakes in the power battery business of new vehicles and resuming trading on that same day.
[XFA Selection]
○ China Securities Regulatory Commission (CSRC) explicitly indicated on May 15 that the rumor of “communicating with fund companies” is groundless; it has carried out all-round investigation on Longmaster Information & Technology Co., Ltd. (300288.SZ), Zhejiang Busen Garments Co., Ltd. (002569.SZ), etc.
○ Xiao Gang, head of CSRC, replied to the question from investors that the impact of the increased supply of new stocks on market by saying that the issuance of new stocks cannot determine the surge and drop of stock indexes.
○ The Ministry of Commerce releases “Internet plus circulation”, the first special action plan to fulfill “Internet Plus”, pushing e-commerce to enter rural areas and communities.
○ The Ministry of Education convened a press conference introducing the progress of education informatization on May 15; international education informatization conference will be convened from May 23 in Qingdao City.
○ WeBank, China's first Internet-based bank, launches its first loan product “Weilidai” which mainly focuses on the individual credit loan based on big data credit investigation.
○ The position holding data in the first quarter shows that Buffett adds stakes in IBM and Wells Fargo Bank. Multiple foreign institutions favor the stocks of Alibaba Group Holding Limited (NYSE: BABA) and JD.com, Inc. (NASDAQ:JD), etc.
[Industry Information]
○ Shanghai medical device exhibition quite popular, general health industry to see promising profit
------
The 3-day China International Medical Equipment Fair, the largest and most high-end domestic medical devices exhibition, was opened in Shanghai on May 15. According to media report, attendees of the exhibition far exceed expectation and lead to traffic jam and full hotels. Many enterprises attending the exhibition indicate that the popularity goes beyond their expectation.
Comment: The demand of modern people on medical health care is increasing continuously. The general health industry has developed into a potential emerging industry with promising profit. Companies making planning in medical health care business will see huge development space. Shanghai kinetic medical Co., Ltd. (300326.SZ) attends the exhibition with its latest research results. The company has completed several merger & acquisitions and has made planning in high-value medical devices areas including orthopedics department, angiocarpy, sport medicine, etc.; Zhuhai Hokai Medical Instruments Co., Ltd. (300273.SZ) focuses on medical health service area. The equipment and technology for minimally-invasive tumor treatment of the company are advanced.
○ Economic System Reform Work Conference convened, oil and gas reform expected to speed up
------
The 2015 National Economic System Reform Work Conference wrapped up on May 16. It requires emphasizing on the implementation of previously released reform policies and introduce new reform measures based on new circumstances. It also proposes to speed up in preparing plans on the oil and gas reform.
Comment: The chairmen of three major oil groups, namely PetroChina Company Limited (PTR.NYSE; 00857.HK; 601857.SH), China Petroleum & Chemical Corporation (Sinopec, SNP.NYSE; SNP.LSE; 00386.HK; 600028.SH) and China National Offshore Oil Corporation (00883.HK), reshuffled in early May. The conference requires accelerating in preparing plans on the oil and gas reform. Both show that the oil and gas reform in China will further speed up this year. Currently, the downstream sale and the midstream pipeline distribution in the oil and gas industrial chains are open to social capitals. The oil and gas exploration and exploitation in the upstream of the industrial chains will accelerate in attracting social capitals. Private enterprises will significantly benefit from the reform. In terms of listed companies, Xinjiang Haoyuan Natural Gas Co., Ltd. (002700.SZ) has signed a long-term gas supply contract with PetroChina and is increasing investments in oil and gas projects. Guangzheng Group Co., Ltd. (002524.SZ) has transformed into oil and gas development and signed strategic cooperation agreements with subsidiaries of PetroChina
[Announcement Interpretation]
○ China Create to control Hesheng Special Material, RMB2.9 bln to invest in supply chain and financial management
------
Suzhou Hesheng Special Material Co., Ltd. (002290.SZ) proposes to raise 2.9 billion yuan by issuing shares at 11.97 yuan per share to China Create Finance Holdings Group Co., Ltd. and other participants through private placement. The proceeds will be invested in the establishment of an Internet-based supply chain and financial management information platform for big data, the commercial factoring establishment as well as financing and leasing establishment. Previously, China Create has been transferred 27.12 million shares of Hesheng Special Material. China Create will become the substantial shareholder of Hesheng Special Material with 31.81 percent equities and the actual controller will be Zhang Wei.
Comment: After injecting into Hesheng Special Material, China Create will develop supply chain management and financial business in the supply chain on the original business of the listed company. China Create, established by Zhang Wei, also directly or indirectly holds equities of Hangzhou TianMuShan Pharmaceutical Enterprise Co., Ltd. (600671.SH) and Shanghai New Huang Pu Real Estate Co., Ltd. (600638.SH), but it is not controlling the two companies currently.
○ Kangxin New Material to achieve backdoor listing through Beida Jade Bird Huaguang Technology and develop baseplate for containers
------
Weifang Beida Jade Bird Huaguang Technology Co., Ltd. (600076.SH) intends to exchange all its assets and debts with the equivalent equities of Kangxin New Material Science and Technology Stock Co., Ltd. The assets to be exchanged in are preliminarily valued at 3.45 billion yuan while those to be exchanged out are valued at 170 million yuan. The shortfall will be purchased by the company through issuing 556 million shares at 5.9 yuan per share to the counterparty. Meanwhile, the company is about to raise a supporting fund of 1 billion yuan for the baseplate for the new containers of Kangxin New Material amd supplementing working capital.
Beida Jade Bird Huaguang Technology will become a listed company principally engaged in the production of the baseplate for containers after the reorganization. The net profit of the company in 2014 was 188 million yuan.
○ Apex Technology to develop core electronic device through private placement, National Integrated Circuit Industry Investment Fund to participate
------
Apex Technology Co., Ltd. (002180.SZ) plans to acquire the assets for the consumables of Zhuhai Seine Technology Co., Ltd., its controlling shareholder, by issuing shares at 20.49 yuan per share (ex-dividend) through private placement. The total price of the transaction is 2.25 billion yuan. The subject business includes general cartridges, toner, general ink boxed, ink and colored tapes. The committed results for 2015 to 2017 are 152 million yuan, 185 million yuan and 230 million yuan, respectively.
The company also intends to raise a supporting fund of 750 million yuan by issuing shares at the same price through private placement to the National Integrated Circuit Industry Investment Fund Co., Ltd. and other particular investors. The proceeds will be invested in the SoC project for the innovative application of CPUs with core electronic device, high-end general chips and basic software products. In addition, the company proposes to acquire 100 percent equities of Static Control Components (SCC) with 62.97 million U.S. dollars. SCC is principally engaged in the production of chips for general printing consumables and general and components for recyclable printing consumables.
○ Beijing Capital to acquire leading solid waste enterprise in New Zealand with RMB1.8 bln
------
Beijing Capital (Hong Kong) Co., Ltd., a wholly-owned subsidiary of Beijing Capital Co., Ltd. (600008.SH), will acquire 65 percent equities of BCG NZ held by BCG Chinastar International Investment Limited, a subsidiary of the controlling shareholder, with 293 million U.S. dollars (approximately 1,793 million yuan).
BCG NZ is principally engaged in the collection and treatment of solid and liquid waste. It fully holds the WMNL, a leading company in the waste treatment industry in New Zealand. WMNL conducts the whole industrial chain, including the collection, treatment, selection and landfilling of waste, construction waste, biogas power generation, liquid waste treatment, the design and maintenance of special vehicles for environmental protection. It operates in major cities of New Zealand.
> Ma Kai investigates new energy vehicle industry, construction of charging facilities to achieve breakthrough
> Medical device exhibition shows industrial promising profit, oil and gas reform expected to speed up
> Hesheng Special Material to invest in supply chain and financial management, Kangxin New Material to achieve backdoor listing through Beida Jade Bird Huaguang Technology
> Apex Technology to develop core electronic device through private placement, Beijing Capital to acquire leading solid waste enterprise in New Zealand
[XFA Focus]
○ Ma Kai investigates new energy vehicle industry, construction of charging facilities to achieve breakthrough
------
Vice-premier of the State Council Ma Kai recently investigated the promotion and application of new energy vehicle in Changzhou City and hosted relevant forum. Ma indicated that the construction of charging facilities apparently lags behind the industrial development and has impeded the promotion and application of new energy vehicle. The problem must be solved as soon as possible; the state will focus on this issue this year and move towards the goal that “charging is much cheaper than refueling but is as convenient as refueling”.
Comment: By the end of last year, the matching ratio between China’s charging facilities and electric vehicles is only 1:4, while standard matching ratio is 1:1. The shortage of charging facilities is long-standing. Due to policy support and the periodical low of oil price since this year, the sale of new energy vehicles is still seeing multiplied growth. Institutions are optimistic that the market size of charging facilities will be hundreds of billions of yuan. As for listed companies, XJ Electric Co., Ltd. (000400.SZ) and Nari Technology Co., Ltd. (600406.SH) take up 90 percent orders of domestic charging piles; the charging pile products of Shenzhen Kstar Science & Technology Co., Ltd. (002518.SZ) have been sold overseas.
◆The trading volume ranking list on May 15 showed that Shenzhen Desay Battery Technology Co., Ltd. (000049.SZ) was bought by four institutions with a total of 216 million yuan, accounting for 18 percent of its intraday turnover. The company announced adding stakes in the power battery business of new vehicles and resuming trading on that same day.
[XFA Selection]
○ China Securities Regulatory Commission (CSRC) explicitly indicated on May 15 that the rumor of “communicating with fund companies” is groundless; it has carried out all-round investigation on Longmaster Information & Technology Co., Ltd. (300288.SZ), Zhejiang Busen Garments Co., Ltd. (002569.SZ), etc.
○ Xiao Gang, head of CSRC, replied to the question from investors that the impact of the increased supply of new stocks on market by saying that the issuance of new stocks cannot determine the surge and drop of stock indexes.
○ The Ministry of Commerce releases “Internet plus circulation”, the first special action plan to fulfill “Internet Plus”, pushing e-commerce to enter rural areas and communities.
○ The Ministry of Education convened a press conference introducing the progress of education informatization on May 15; international education informatization conference will be convened from May 23 in Qingdao City.
○ WeBank, China's first Internet-based bank, launches its first loan product “Weilidai” which mainly focuses on the individual credit loan based on big data credit investigation.
○ The position holding data in the first quarter shows that Buffett adds stakes in IBM and Wells Fargo Bank. Multiple foreign institutions favor the stocks of Alibaba Group Holding Limited (NYSE: BABA) and JD.com, Inc. (NASDAQ:JD), etc.
[Industry Information]
○ Shanghai medical device exhibition quite popular, general health industry to see promising profit
------
The 3-day China International Medical Equipment Fair, the largest and most high-end domestic medical devices exhibition, was opened in Shanghai on May 15. According to media report, attendees of the exhibition far exceed expectation and lead to traffic jam and full hotels. Many enterprises attending the exhibition indicate that the popularity goes beyond their expectation.
Comment: The demand of modern people on medical health care is increasing continuously. The general health industry has developed into a potential emerging industry with promising profit. Companies making planning in medical health care business will see huge development space. Shanghai kinetic medical Co., Ltd. (300326.SZ) attends the exhibition with its latest research results. The company has completed several merger & acquisitions and has made planning in high-value medical devices areas including orthopedics department, angiocarpy, sport medicine, etc.; Zhuhai Hokai Medical Instruments Co., Ltd. (300273.SZ) focuses on medical health service area. The equipment and technology for minimally-invasive tumor treatment of the company are advanced.
○ Economic System Reform Work Conference convened, oil and gas reform expected to speed up
------
The 2015 National Economic System Reform Work Conference wrapped up on May 16. It requires emphasizing on the implementation of previously released reform policies and introduce new reform measures based on new circumstances. It also proposes to speed up in preparing plans on the oil and gas reform.
Comment: The chairmen of three major oil groups, namely PetroChina Company Limited (PTR.NYSE; 00857.HK; 601857.SH), China Petroleum & Chemical Corporation (Sinopec, SNP.NYSE; SNP.LSE; 00386.HK; 600028.SH) and China National Offshore Oil Corporation (00883.HK), reshuffled in early May. The conference requires accelerating in preparing plans on the oil and gas reform. Both show that the oil and gas reform in China will further speed up this year. Currently, the downstream sale and the midstream pipeline distribution in the oil and gas industrial chains are open to social capitals. The oil and gas exploration and exploitation in the upstream of the industrial chains will accelerate in attracting social capitals. Private enterprises will significantly benefit from the reform. In terms of listed companies, Xinjiang Haoyuan Natural Gas Co., Ltd. (002700.SZ) has signed a long-term gas supply contract with PetroChina and is increasing investments in oil and gas projects. Guangzheng Group Co., Ltd. (002524.SZ) has transformed into oil and gas development and signed strategic cooperation agreements with subsidiaries of PetroChina
[Announcement Interpretation]
○ China Create to control Hesheng Special Material, RMB2.9 bln to invest in supply chain and financial management
------
Suzhou Hesheng Special Material Co., Ltd. (002290.SZ) proposes to raise 2.9 billion yuan by issuing shares at 11.97 yuan per share to China Create Finance Holdings Group Co., Ltd. and other participants through private placement. The proceeds will be invested in the establishment of an Internet-based supply chain and financial management information platform for big data, the commercial factoring establishment as well as financing and leasing establishment. Previously, China Create has been transferred 27.12 million shares of Hesheng Special Material. China Create will become the substantial shareholder of Hesheng Special Material with 31.81 percent equities and the actual controller will be Zhang Wei.
Comment: After injecting into Hesheng Special Material, China Create will develop supply chain management and financial business in the supply chain on the original business of the listed company. China Create, established by Zhang Wei, also directly or indirectly holds equities of Hangzhou TianMuShan Pharmaceutical Enterprise Co., Ltd. (600671.SH) and Shanghai New Huang Pu Real Estate Co., Ltd. (600638.SH), but it is not controlling the two companies currently.
○ Kangxin New Material to achieve backdoor listing through Beida Jade Bird Huaguang Technology and develop baseplate for containers
------
Weifang Beida Jade Bird Huaguang Technology Co., Ltd. (600076.SH) intends to exchange all its assets and debts with the equivalent equities of Kangxin New Material Science and Technology Stock Co., Ltd. The assets to be exchanged in are preliminarily valued at 3.45 billion yuan while those to be exchanged out are valued at 170 million yuan. The shortfall will be purchased by the company through issuing 556 million shares at 5.9 yuan per share to the counterparty. Meanwhile, the company is about to raise a supporting fund of 1 billion yuan for the baseplate for the new containers of Kangxin New Material amd supplementing working capital.
Beida Jade Bird Huaguang Technology will become a listed company principally engaged in the production of the baseplate for containers after the reorganization. The net profit of the company in 2014 was 188 million yuan.
○ Apex Technology to develop core electronic device through private placement, National Integrated Circuit Industry Investment Fund to participate
------
Apex Technology Co., Ltd. (002180.SZ) plans to acquire the assets for the consumables of Zhuhai Seine Technology Co., Ltd., its controlling shareholder, by issuing shares at 20.49 yuan per share (ex-dividend) through private placement. The total price of the transaction is 2.25 billion yuan. The subject business includes general cartridges, toner, general ink boxed, ink and colored tapes. The committed results for 2015 to 2017 are 152 million yuan, 185 million yuan and 230 million yuan, respectively.
The company also intends to raise a supporting fund of 750 million yuan by issuing shares at the same price through private placement to the National Integrated Circuit Industry Investment Fund Co., Ltd. and other particular investors. The proceeds will be invested in the SoC project for the innovative application of CPUs with core electronic device, high-end general chips and basic software products. In addition, the company proposes to acquire 100 percent equities of Static Control Components (SCC) with 62.97 million U.S. dollars. SCC is principally engaged in the production of chips for general printing consumables and general and components for recyclable printing consumables.
○ Beijing Capital to acquire leading solid waste enterprise in New Zealand with RMB1.8 bln
------
Beijing Capital (Hong Kong) Co., Ltd., a wholly-owned subsidiary of Beijing Capital Co., Ltd. (600008.SH), will acquire 65 percent equities of BCG NZ held by BCG Chinastar International Investment Limited, a subsidiary of the controlling shareholder, with 293 million U.S. dollars (approximately 1,793 million yuan).
BCG NZ is principally engaged in the collection and treatment of solid and liquid waste. It fully holds the WMNL, a leading company in the waste treatment industry in New Zealand. WMNL conducts the whole industrial chain, including the collection, treatment, selection and landfilling of waste, construction waste, biogas power generation, liquid waste treatment, the design and maintenance of special vehicles for environmental protection. It operates in major cities of New Zealand.
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