[Today’s Guide]
> Guotai Junan Securities makes progress in listing preparation, companies holding its shares to enjoy equity appreciation
> More nuclear power stations to approved by year-end, water conservancy projects investment expected to speed up
> Infogem Technologies to develop Internet-based finance, Yinhe Industry Investment to invest in High-tech Biomedical
> Yanggu Huatai Chemical to raise RMB500 mln through private placement, Hainan Mining to establish bulk commodities supply chain
[XFA Focus]
○ Guotai Junan Securities makes progress in listing preparation, companies holding its shares to enjoy equity appreciation
------
Guotai Junan Securities Co., Ltd. updated the materials to be disclosed on the website of the China Securities Regulatory Commission (CSRC) on May 21. It proposes to issue no more than 1,525 million shares and recorded earnings per share of 1.11 yuan in 2014. According to the IPO queuing category, Guotai Junan Securities is under the stage of ‘feedbacks given’.
Comment: It is required to update the materials to be disclosed for the IPO listing. Previously, China National Nuclear Power Co., Ltd. updated the materials to be disclosed on April 29 and passed the examination on May 13. Only about 40 enterprises have passed the examination so far. Under the background of continuous surging of stock indexes, the examination on the offering of new big-cap stocks is expected to speed up. Among A-share companies, Dazhong Transportation (Group) Co., Ltd. (600611.SH), Shenzhen Energy Group Co., Ltd. (000027.SZ) and Shanghai Jin Jiang International Industrial Investment Co., Ltd. (600650.SH) hold 154 million, 154 million and 62 million shares of Guotai Junan Securities, respectively. Based on the current average P/E ratio of about 37 times of listed securities companies, the above listed companies are expected to enjoy an equity appreciation of billions of yuan.
[XFA Selection]
○ The financing balance at the Shanghai and Shenzhen bourses hit 2 trillion yuan for the first time on May 20. The SME and the ChiNext are more attractive to financing capitals.
○ The initial offering of new funds totaled 647.5 billion yuan this year, surpassing the record of annual offering in 2012.
○ The CSI 500 Index hiked by over 100 points and set a new high since listing. It shows that participants are optimistic about the expectation on the medium- and small-cap stocks.
○ The trial plan on the integration of service industry in Beijing was unveiled on May 21, proposing to establish Zhongguancun as a technology innovation center with global influence.
○ The Payment & Clearing Association of China issued statistics, showing that the amount of the mobile payment business last year surged by nearly 6 times year on year.
○ The Ministry of Transport issued a document to support the integration of transportation card, which is expected to be achieved in the Beijing-Tianjin-Hebei region in 2017.
[Industry Information]
○ More nuclear power stations to approved by year-end, industry continues to boom
------
The 11th Annual China Nuclear Convention was convened in Beijing on May 21. Xu Yuming, deputy director of the China Nuclear Energy Association, indicated that 2015 will be crucial in the re-initiation of the nuclear power projects in China. China is expected to approve the construction of four to six nuclear power stations and the installed capacity of nuclear power would rise to 30 million KW by the end of 2015.
Comment: Domestic nuclear power tycoons are among the central enterprises with Chinese Premier Li Keqiang during the visit to four countries in Latin America. The nuclear power industry will continue to boom and the orders of nuclear power equipment enterprises will put into production. In terms of listed companies, Yantai Taihaimanuer Nuclear Equipment Co., Ltd. achieved backdoor listing through Sichuan Danfu Compressor Co., Ltd. (002366.SZ), which was bought by institutes with a huge amount in early-May. The company is principally engaged in the research and development of major loop pipelines for nuclear power stations. Shanghai Electric Group Company Limited (02727.HK; 601727.SH) is a supplier of major equipment for nuclear power. It accounts for nearly 90 percent of the reactor internals and control rod drive mechanism.
○ Three ministries to conduct pilot PPP water conservancy projects construction, project investment expected to speed up
------
The National Development and Reform Commission (NDRC), the Ministry of Finance and the Ministry of Water Resources jointly issued a circular recently, choosing 12 projects for the pilot connection at the state level to initiate the trial operation of the first major water conservancy projects construction with the participation of social capitals. China will facilitate the improvement of relevant policies on the public–private partnership (PPP) mechanism in about two years.
Comment: Three ministries encourage the participation of social capitals in water conservancy projects construction through the PPP mechanism, which will relieve the capital pressure on projects and accelerate the investment in projects. Water conservancy projects enterprises will benefit significantly. Anhui Water Resources Development Co., Ltd. (600502.SH) will benefit from the construction of such key projects as the water diversion from the Yangtze River to the Huaihe River. Chongqing Three Gorges Water Conservancy and Electric Power Co., Ltd. (600116.SH) has completed financing through private placement and will increase the input in the construction of hydropower projects.
[Announcement Interpretation]
○ Infogem Technologies to develop Internet-based finance with RMB2.9 bln
------
Shenzhen Infogem Technologies Co., Ltd. (300085.SZ) proposes to raise 2.9 billion yuan by issuing 60 million shares at 48.31 yuan per share through private placement. 1.9 billion yuan of the proceeds will be invested in the establishment of a big data services platform for Internet-based finance. 700 million yuan will be used in the establishment of an Internet-based insurance operation platform and the remaining 250 million yuan will supplement the working capital.
Comment: The establishment of big data services platforms will greatly support the credit business in the overall strategy of the company. It is an important measure of Infogem Technologies in the data analysis process of the big data credit industrial chain and will help the company gain advantages in the Internet-based financial market.
○ Yinhe Industry Investment to invest RMB500 mln in High-tech Biomedical to develop tumor treatment
------
Beihai Yinhe Industry Investment Co., Ltd. (000806.SZ) plans to invest in Nanjing High-tech Biomedical Industrial Innovation Center with 500 million yuan from its own proceeds. It will increase the investment with 180 million yuan to obtain 90 percent equities of the innovation center. 320 million yuan will be used in the establishment of its global sales channels for model animals and the establishment of screening and testing platform for tumor immunity medicines and the platform for the transgenic humanized mice.
Comment: High-tech Biomedical is a platform for the commercial operation of the mice resources in the state genetic engineering. After the successful investment of Yinhe Industry Investment, it will strategically develop the research of tumor medicines and the treatment industry.
○ Yanggu Huatai Chemical to raise RMB500 mln, employee shareholding plan to participate
------
Shandong Yanggu Huatai Chemical Co., Ltd. (300121.SZ) intends to raise 500 million yuan by issuing 49.95 million shares at 10.01 yuan per share through private placement for repaying bank loans and supplementing working capital. Huishen (Tianjin) Equities Investment Fund, Changcheng Jiaxin Yacai No.2 special assets management plan and the phase-I employee shareholding plan of Yanggu Huatai Chemical will subscribe 34,965,000 shares, 9.99 million shares and 4,995,000 shares, respectively.
○ Hainan Mining to establish bulk commodities supply chain services platform
------
Hainan Mining Co., Ltd. (601969.SH) proposes to raise 1.4 billion yuan by issuing 88.05 million shares at 15.9 yuan per share through private placement. 800 million of the proceeds will be invested in the mining and relevant supporting projects in the iron mines in Shilu Town, Hainan Province. 400 million yuan will be invested in comprehensive service project in the supply chain of resources bulk commodities and 200 million yuan will supplement the working capital. The company will transform from a production-oriented enterprise into a comprehensive services-oriented enterprise after the private placement.
○ Wuchangyu to acquire Qianjin Mining with RMB1.3 bln to develop non-ferrous metals
------
Hubei Wuchangyu Co., Ltd. (600275.SH) plans to acquire 100 percent equities of Guizhou Qianjin Mining Co., Ltd. with 1.3 billion yuan by issuing 230 million shares at 5.6 yuan per share through private placement. Meanwhile, it also intends to raise a supporting fund of 795 million yuan by issuing 110 million shares at 7.08 yuan per share to Beijing Zhongrong Dingxin Investment Management Co., Ltd., Shenzhen Golden Age Science & Technology Co., Ltd., Guoying Assets Management Co., Ltd. and other participants. The proceeds will be used in the projects construction, industrial mergers and supplementing the working capital of Qianjin Mining. Qianjin Mining is principally engaged in the mining and sale of nickel and molybdenum ores. Wuchangyu is currently engaged in the cultivation, processing and sale of freshwater fish and other aquatic products.
○ CSRC approves reorganization of Etern and other two companies
------
The stocks issuing and the acquisition of assets with cash for reorganization by Jiangsu Etern Co., Ltd. (600105.SH) and Xi’an Minsheng Group Co., Ltd. (000564.SZ) were unconditionally approved by the China Securities Regulatory Commission (CSRC). Jiangsu Zhonglian Electric Co., Ltd. (002323.SZ) was conditionally approved.
[Trading Trends]
○ Institutes buy 2345 Network
------
The trading volume ranking list on May 21 shows two institutes bought Shanghai 2345 Network Holding Group Co., Ltd. (002195.SZ) with a total of 96.27 million yuan, accounting for 2.5 percent of its intraday turnover.
Comment: The company has been focusing on the research and operation of the Internet access platform. It has 18 Internet-based products, including the 2345 website navigation and the 2345 browser covering a huge amount of users. The company currently focuses on the development of relevant Internet-based finance businesses and the trial operation of products recorded excellent results. The company will become a leading comprehensive services provider based on the Internet platform with the Internet-based information services, the Internet-based financial services and the software outsourcing services as main businesses.
> Guotai Junan Securities makes progress in listing preparation, companies holding its shares to enjoy equity appreciation
> More nuclear power stations to approved by year-end, water conservancy projects investment expected to speed up
> Infogem Technologies to develop Internet-based finance, Yinhe Industry Investment to invest in High-tech Biomedical
> Yanggu Huatai Chemical to raise RMB500 mln through private placement, Hainan Mining to establish bulk commodities supply chain
[XFA Focus]
○ Guotai Junan Securities makes progress in listing preparation, companies holding its shares to enjoy equity appreciation
------
Guotai Junan Securities Co., Ltd. updated the materials to be disclosed on the website of the China Securities Regulatory Commission (CSRC) on May 21. It proposes to issue no more than 1,525 million shares and recorded earnings per share of 1.11 yuan in 2014. According to the IPO queuing category, Guotai Junan Securities is under the stage of ‘feedbacks given’.
Comment: It is required to update the materials to be disclosed for the IPO listing. Previously, China National Nuclear Power Co., Ltd. updated the materials to be disclosed on April 29 and passed the examination on May 13. Only about 40 enterprises have passed the examination so far. Under the background of continuous surging of stock indexes, the examination on the offering of new big-cap stocks is expected to speed up. Among A-share companies, Dazhong Transportation (Group) Co., Ltd. (600611.SH), Shenzhen Energy Group Co., Ltd. (000027.SZ) and Shanghai Jin Jiang International Industrial Investment Co., Ltd. (600650.SH) hold 154 million, 154 million and 62 million shares of Guotai Junan Securities, respectively. Based on the current average P/E ratio of about 37 times of listed securities companies, the above listed companies are expected to enjoy an equity appreciation of billions of yuan.
[XFA Selection]
○ The financing balance at the Shanghai and Shenzhen bourses hit 2 trillion yuan for the first time on May 20. The SME and the ChiNext are more attractive to financing capitals.
○ The initial offering of new funds totaled 647.5 billion yuan this year, surpassing the record of annual offering in 2012.
○ The CSI 500 Index hiked by over 100 points and set a new high since listing. It shows that participants are optimistic about the expectation on the medium- and small-cap stocks.
○ The trial plan on the integration of service industry in Beijing was unveiled on May 21, proposing to establish Zhongguancun as a technology innovation center with global influence.
○ The Payment & Clearing Association of China issued statistics, showing that the amount of the mobile payment business last year surged by nearly 6 times year on year.
○ The Ministry of Transport issued a document to support the integration of transportation card, which is expected to be achieved in the Beijing-Tianjin-Hebei region in 2017.
[Industry Information]
○ More nuclear power stations to approved by year-end, industry continues to boom
------
The 11th Annual China Nuclear Convention was convened in Beijing on May 21. Xu Yuming, deputy director of the China Nuclear Energy Association, indicated that 2015 will be crucial in the re-initiation of the nuclear power projects in China. China is expected to approve the construction of four to six nuclear power stations and the installed capacity of nuclear power would rise to 30 million KW by the end of 2015.
Comment: Domestic nuclear power tycoons are among the central enterprises with Chinese Premier Li Keqiang during the visit to four countries in Latin America. The nuclear power industry will continue to boom and the orders of nuclear power equipment enterprises will put into production. In terms of listed companies, Yantai Taihaimanuer Nuclear Equipment Co., Ltd. achieved backdoor listing through Sichuan Danfu Compressor Co., Ltd. (002366.SZ), which was bought by institutes with a huge amount in early-May. The company is principally engaged in the research and development of major loop pipelines for nuclear power stations. Shanghai Electric Group Company Limited (02727.HK; 601727.SH) is a supplier of major equipment for nuclear power. It accounts for nearly 90 percent of the reactor internals and control rod drive mechanism.
○ Three ministries to conduct pilot PPP water conservancy projects construction, project investment expected to speed up
------
The National Development and Reform Commission (NDRC), the Ministry of Finance and the Ministry of Water Resources jointly issued a circular recently, choosing 12 projects for the pilot connection at the state level to initiate the trial operation of the first major water conservancy projects construction with the participation of social capitals. China will facilitate the improvement of relevant policies on the public–private partnership (PPP) mechanism in about two years.
Comment: Three ministries encourage the participation of social capitals in water conservancy projects construction through the PPP mechanism, which will relieve the capital pressure on projects and accelerate the investment in projects. Water conservancy projects enterprises will benefit significantly. Anhui Water Resources Development Co., Ltd. (600502.SH) will benefit from the construction of such key projects as the water diversion from the Yangtze River to the Huaihe River. Chongqing Three Gorges Water Conservancy and Electric Power Co., Ltd. (600116.SH) has completed financing through private placement and will increase the input in the construction of hydropower projects.
[Announcement Interpretation]
○ Infogem Technologies to develop Internet-based finance with RMB2.9 bln
------
Shenzhen Infogem Technologies Co., Ltd. (300085.SZ) proposes to raise 2.9 billion yuan by issuing 60 million shares at 48.31 yuan per share through private placement. 1.9 billion yuan of the proceeds will be invested in the establishment of a big data services platform for Internet-based finance. 700 million yuan will be used in the establishment of an Internet-based insurance operation platform and the remaining 250 million yuan will supplement the working capital.
Comment: The establishment of big data services platforms will greatly support the credit business in the overall strategy of the company. It is an important measure of Infogem Technologies in the data analysis process of the big data credit industrial chain and will help the company gain advantages in the Internet-based financial market.
○ Yinhe Industry Investment to invest RMB500 mln in High-tech Biomedical to develop tumor treatment
------
Beihai Yinhe Industry Investment Co., Ltd. (000806.SZ) plans to invest in Nanjing High-tech Biomedical Industrial Innovation Center with 500 million yuan from its own proceeds. It will increase the investment with 180 million yuan to obtain 90 percent equities of the innovation center. 320 million yuan will be used in the establishment of its global sales channels for model animals and the establishment of screening and testing platform for tumor immunity medicines and the platform for the transgenic humanized mice.
Comment: High-tech Biomedical is a platform for the commercial operation of the mice resources in the state genetic engineering. After the successful investment of Yinhe Industry Investment, it will strategically develop the research of tumor medicines and the treatment industry.
○ Yanggu Huatai Chemical to raise RMB500 mln, employee shareholding plan to participate
------
Shandong Yanggu Huatai Chemical Co., Ltd. (300121.SZ) intends to raise 500 million yuan by issuing 49.95 million shares at 10.01 yuan per share through private placement for repaying bank loans and supplementing working capital. Huishen (Tianjin) Equities Investment Fund, Changcheng Jiaxin Yacai No.2 special assets management plan and the phase-I employee shareholding plan of Yanggu Huatai Chemical will subscribe 34,965,000 shares, 9.99 million shares and 4,995,000 shares, respectively.
○ Hainan Mining to establish bulk commodities supply chain services platform
------
Hainan Mining Co., Ltd. (601969.SH) proposes to raise 1.4 billion yuan by issuing 88.05 million shares at 15.9 yuan per share through private placement. 800 million of the proceeds will be invested in the mining and relevant supporting projects in the iron mines in Shilu Town, Hainan Province. 400 million yuan will be invested in comprehensive service project in the supply chain of resources bulk commodities and 200 million yuan will supplement the working capital. The company will transform from a production-oriented enterprise into a comprehensive services-oriented enterprise after the private placement.
○ Wuchangyu to acquire Qianjin Mining with RMB1.3 bln to develop non-ferrous metals
------
Hubei Wuchangyu Co., Ltd. (600275.SH) plans to acquire 100 percent equities of Guizhou Qianjin Mining Co., Ltd. with 1.3 billion yuan by issuing 230 million shares at 5.6 yuan per share through private placement. Meanwhile, it also intends to raise a supporting fund of 795 million yuan by issuing 110 million shares at 7.08 yuan per share to Beijing Zhongrong Dingxin Investment Management Co., Ltd., Shenzhen Golden Age Science & Technology Co., Ltd., Guoying Assets Management Co., Ltd. and other participants. The proceeds will be used in the projects construction, industrial mergers and supplementing the working capital of Qianjin Mining. Qianjin Mining is principally engaged in the mining and sale of nickel and molybdenum ores. Wuchangyu is currently engaged in the cultivation, processing and sale of freshwater fish and other aquatic products.
○ CSRC approves reorganization of Etern and other two companies
------
The stocks issuing and the acquisition of assets with cash for reorganization by Jiangsu Etern Co., Ltd. (600105.SH) and Xi’an Minsheng Group Co., Ltd. (000564.SZ) were unconditionally approved by the China Securities Regulatory Commission (CSRC). Jiangsu Zhonglian Electric Co., Ltd. (002323.SZ) was conditionally approved.
[Trading Trends]
○ Institutes buy 2345 Network
------
The trading volume ranking list on May 21 shows two institutes bought Shanghai 2345 Network Holding Group Co., Ltd. (002195.SZ) with a total of 96.27 million yuan, accounting for 2.5 percent of its intraday turnover.
Comment: The company has been focusing on the research and operation of the Internet access platform. It has 18 Internet-based products, including the 2345 website navigation and the 2345 browser covering a huge amount of users. The company currently focuses on the development of relevant Internet-based finance businesses and the trial operation of products recorded excellent results. The company will become a leading comprehensive services provider based on the Internet platform with the Internet-based information services, the Internet-based financial services and the software outsourcing services as main businesses.
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