[Today's Guide]
> China’s Traffic 2050 to launch, related ports to play greater role
> Fourth-generation nuclear power technology achieves breakthrough, investment increased in farmland pollution control
> Employees of Baiyang Aquatic to fully subscribe private placement, Slac Precision Equipment to develop high-end manufacturing
> Two companies to introduce employee shareholding plans, Haid Group to acquire Chuanghong Biotechnology
[XFA Focus]
○ China’s Traffic 2050 to launch, related ports to play greater role
------
National Development and Reform Commission (NDRC) issued the “Opinions on Better Play Traffic Transportation’s Role in Supporting Social and Economic Development at Current Stage” on May 27. It will launch the study on China’s modern traffic development strategy (China’s Traffic 2050) at proper time and actively promote three major strategic projects including “One Belt and One Road”, coordinated development of Beijing-Tianjin-Hebei area and Yangtze River Economic Zone. To Build a coastal-port-oriented maritime Silk Road corridor; construct several rail transit lines including Beijing-Tangshang line in Beijing-Tianjin-Hebei area; conduct systematic treatment in multiple sectors in the golden waterway of Yangtze River.
Comment: Chinese President Xi Jinping made important instructions on the development of traffic transportation for multiple times. He explicitly pointed out to take traffic integration as a pioneering area when planning for “three major strategies” including the coordinated development of Beijing-Tianjin-Hebei area. Chinese Premier Li Keqiang also mentioned in this year’s government work report to make traffic the real pioneer of development. A prosperous port promotes a prosperous city. The important impact of ports on economic development becomes more and more obvious. Fujian Province has proposed to build the core area of maritime Silk Road earlier. Xiamen Port Development Co., Ltd. (000905.SZ) located in Fujian Province, Tangshan Port Group Co., Ltd. (601000.SH) located in Beijing-Tianjin-Hebei area, Nanjing Port Co., Ltd. (0002040.SZ) located along the Yangtze River, etc. will benefit continuously.
[XFA Selection]
○ Chinese President Xi Jinping had an interview with military leaders of Zhejiang Province on May 26. He emphasized that effective measures and real efforts shall be input to achieve the goal of building a strong army.
○ The securities trading deposit saw a net inflow of 565.2 billion yuan and the average daily balance has been increased from 1.16 trillion yuan at the beginning of the year to 2.43 trillion yuan.
○ Several RQFII A Share ETF see large amount of purchase. The South A50 alone sees a net inflow of 700 million yuan in recent two days.
○ Profits of Chinese industrial businesses in the first four months saw a year-on-year drop of 1.3 percent. The profit growth of electronic information and electricity industries is in the lead.
○ Three ministries release document to make planning in the comprehensive improvement of national land and rivers, promoting the comprehensive treatment and coordinated protection of resources and environment in watersheds.
○ The Merger & Acquisition and reorganization applications of Qingdao Soda Ash Industrial Company Limited (600229.SH), Suzhou Victory Precision Manufacture Co., Ltd. (002426.SZ), Anhui Guotong Hi-Tech Pipes Industry Co., Ltd. (600444.SH) have been approved and they resume trading on May 28.
[Industry Information]
○ Fourth-generation nuclear power technology achieves breakthrough, nuclear power equipment enterprises to see increasing demand
------
As disclosed by China National Nuclear Corporation, China’s fourth-generation nuclear power technology has achieved breakthrough. The preliminary feasibility study report of Jiangxi Ruijin nuclear power project with 600,000-KW high temperature reactor (HTR) has been approved by experts, laying solid foundation for the smooth development of the first commercial HTR in China.
Comment: High temperature gas-cooled reactor, as the fourth-generation advanced nuclear power technology, enjoys very high level of security and China owns completely independent intellectual property rights on it. High temperature gas-cooled reactor will enjoy priority in China’s “going out” strategy on nuclear power industry. The upgrading of nuclear power technology and the accelerated launch of nuclear power projects will bring billions of yuan of market demand to equipment enterprises. As for listed companies, Harbin Electric Corporation Jiamusi Electric Machine Co., Ltd. (000922.SZ) has achieved significant breakthrough in the development of the primary helium circulator of high temperature gas-cooled reactor and it will benefit from the construction of the fourth-generation nuclear power projects; Shanghai Electric Group Company Limited (601727.SH; 02727.HK) has signed equipment supply agreement with the high temperature gas-cooled reactor in Ruijin, Jiangxi Province.
○ Planning on sustainable agricultural development launched, investment in preventing and controlling farmland pollution increased
------
The Ministry of Agriculture released National Agricultural Sustainable Development Planning (2015-2030) on May 27, making it a programmatic document guiding agricultural sustainable development in the following period. Improving the environment of agriculture and rural areas and remediating agricultural ecology are the key tasks of future agriculture development.
Comment: The quality of farmland environment is an important foundation of agricultural sustainable development. Agricultural environment pollution becomes a growing problem in recent years and heavy metal pollution in farmland soil is particularly serious. The soil pollution prevention and control action plan led by the Ministry of Environmental Protection is under formulation and it will bring an investment of trillions of yuan. Yonker Environmental Protection Co., Ltd. (300187.SZ) has undertaken several soil remediation projects; Dongjiang Environmental Company Limited (002672.SZ; 00895.HK) expands to soil remediation area by increasing capital in Jiangsu Suntime Environmental Remediation Co., Ltd.
○ 13th five-year plan for software to highlight industrial Internet
------
The 19th China International Software and Information Service Fair was held on May 27. Miao Wei, Minister of Industry and Information Technology, disclosed that China will prepare and implement the 13th five-year plan for the software and big data industry. The industrial software, industrial controlling system and industrial operating systems will see more supports.
Comment: The Made in China 2025 strategy has been released. As an important part of intelligent manufacturing, the software industry will receive more supporting policies. The software industry recorded a business revenue growth of 20 percent in 2014 and will continue to keep high growth in the following years. In terms of listed companies, YGSOFT Inc. (002063.SZ), benefiting from the power system reform, is actively developing intelligent fuels system. Business-intelligence of Oriental Nations Corporation Ltd. (300166.SZ) is vigorously developing the big data and industrial Internet-based businesses.
[Announcement Interpretation]
○ Baiyang Aquatic to raise RMB350 mln, actual controller and senior management to subscribe private placement
------
Baiyang Aquatic Group, Inc. (002696.SZ) proposes to raise 350 million yuan by issuing 23.76 million shares at 14.76 yuan per share through private placement. The proceeds will be used in repaying bank borrowings and supplementing working capital. Sun Zhongyi, the controlling shareholder of the company, Yang Sihua and other three senior management of the company, the employee shareholding plan and Guoyao Shengli will subscribe the private placement. All lock-up periods are 36 months.
○ Slac Precision Equipment to raise RMB1.1 bln to develop high-end manufacturing
------
Suzhou Slac Precision Equipment Co., Ltd. (300382.SZ) plans to raise 1,105 million yuan by issuing 10 million shares through private placement. The proceeds will be invested in key equipment for pop-top cans and the automatic production line manufacturing project, the distant production data collection system and intelligent components manufacturing project, the high-speed precision automatic punching machine manufacturing project and the manufacturing of equipment for high-speed digital printing cans. The four projects will bring another after-tax net profit of 100 million yuan, 78.75 million yuan, 54.72 million yuan and 58.14 million yuan (totally 298 million yuan) after reaching the designed capacity.
○ Oxiranchem and Yonggui Electric Equipment to introduce employee shareholding plans
------
Liao Ning Oxiranchem, Inc. (300082.SZ) will introduce an employee shareholding plan with no more than 300 participants to subscribe 30 million yuan. The directors, supervisors and senior management of the company will contribute 7.50 million yuan. It can be purchased from the shares held by the controlling shareholders to be transferred or in the secondary market through bulk transactions. The validity period will be 24 months and the lock-up period will be 12 months. The stock of the company closed at 10.82 yuan before trading suspension.
Zhejiang Yonggui Electric Equipment Co., Ltd. (300351.SZ) intends to launch the No. 1 employee shareholding plan. It will be mainly purchased in the secondary market with an upper limit of 88.60 million yuan and no more than 110 subscribers (including three directors, supervisors and senior management). The validity period will be 24 months.
○ Haid Group to acquire Chuanghong Biotechnology to develop animal vaccine
------
Guangdong Haid Group Co., Ltd. (002311.SZ) proposes to acquire 67 percent equities of Chengdu Chuanghong Biotechnology Co., Ltd. with 107 million yuan from its own capital. Chuanghong Biotechnology is a modern high-tech biological products for veterinary use providing breeders with professional technology services. It owns eight veterinary drug production lines in inactivated vaccine and live vaccine workshops. The gross profit margin of animal protection industry, including the vaccine and veterinary drugs, are much higher than that of the animal feed.
○ Jiajia Food to introduce 7.49 mln stock incentive plans
------
Jiajia Food Group Co., Ltd. (002650.SZ) plans to grant 7.49 million stock options, accounting for 1.63 percent of the total share capital of the company, to 174 incentive subjects. The exercise price of the options is 18.93 yuan per share. The target for the performance evaluation is that the net profit will increase by no less than 15 percent, 30 percent and 45 percent from 2015 to 2017 based on the data of 2014.
○ Huifeng Agrochemical to fully control Confident Biochemical Technology to develop main business
------
Jiangsu Huifeng Agrochemical Co., Ltd. (002496.SZ) intends to acquire 48.78 percent equities of Yancheng Confident Biochemical Technology Co., Ltd. with 210 million yuan. The company will hold 100 percent equities of Confident Biochemical Technology after the acquisition. The company is principally engaged in the manufacturing of pesticide intermediates (bitertanol) and the wholesale of dangerous chemicals. The company committed to achieve a total performance of no less than 214 million yuan from 2015 to 2018.
[Trading Trends]
○ Institutes buy YLZ Information Technology
------
The trading volume ranking list on May 27 shows that four institutes bought YLZ Information Technology Co., Ltd. (300096.SZ) with 283 million yuan, accounting for 15.5 percent of its intraday turnover.
Comment: The company is currently engaged in social insurance, medical treatment, IC cards, terminal products and living information services and products with the business covering over 100 cities in 19 provinces and serving more than 300 million people. Institutes believe that the social insurance cards enjoy a high coverage in Fujian Province and Shanxi Province, the target market of the company. Guangxi Zhuang Autonomous Region, Anhui Province and Hunan Province have a relatively low coverage of social insurance cards. The huge potential market will support the stable growth of the social insurance business of the company.
> China’s Traffic 2050 to launch, related ports to play greater role
> Fourth-generation nuclear power technology achieves breakthrough, investment increased in farmland pollution control
> Employees of Baiyang Aquatic to fully subscribe private placement, Slac Precision Equipment to develop high-end manufacturing
> Two companies to introduce employee shareholding plans, Haid Group to acquire Chuanghong Biotechnology
[XFA Focus]
○ China’s Traffic 2050 to launch, related ports to play greater role
------
National Development and Reform Commission (NDRC) issued the “Opinions on Better Play Traffic Transportation’s Role in Supporting Social and Economic Development at Current Stage” on May 27. It will launch the study on China’s modern traffic development strategy (China’s Traffic 2050) at proper time and actively promote three major strategic projects including “One Belt and One Road”, coordinated development of Beijing-Tianjin-Hebei area and Yangtze River Economic Zone. To Build a coastal-port-oriented maritime Silk Road corridor; construct several rail transit lines including Beijing-Tangshang line in Beijing-Tianjin-Hebei area; conduct systematic treatment in multiple sectors in the golden waterway of Yangtze River.
Comment: Chinese President Xi Jinping made important instructions on the development of traffic transportation for multiple times. He explicitly pointed out to take traffic integration as a pioneering area when planning for “three major strategies” including the coordinated development of Beijing-Tianjin-Hebei area. Chinese Premier Li Keqiang also mentioned in this year’s government work report to make traffic the real pioneer of development. A prosperous port promotes a prosperous city. The important impact of ports on economic development becomes more and more obvious. Fujian Province has proposed to build the core area of maritime Silk Road earlier. Xiamen Port Development Co., Ltd. (000905.SZ) located in Fujian Province, Tangshan Port Group Co., Ltd. (601000.SH) located in Beijing-Tianjin-Hebei area, Nanjing Port Co., Ltd. (0002040.SZ) located along the Yangtze River, etc. will benefit continuously.
[XFA Selection]
○ Chinese President Xi Jinping had an interview with military leaders of Zhejiang Province on May 26. He emphasized that effective measures and real efforts shall be input to achieve the goal of building a strong army.
○ The securities trading deposit saw a net inflow of 565.2 billion yuan and the average daily balance has been increased from 1.16 trillion yuan at the beginning of the year to 2.43 trillion yuan.
○ Several RQFII A Share ETF see large amount of purchase. The South A50 alone sees a net inflow of 700 million yuan in recent two days.
○ Profits of Chinese industrial businesses in the first four months saw a year-on-year drop of 1.3 percent. The profit growth of electronic information and electricity industries is in the lead.
○ Three ministries release document to make planning in the comprehensive improvement of national land and rivers, promoting the comprehensive treatment and coordinated protection of resources and environment in watersheds.
○ The Merger & Acquisition and reorganization applications of Qingdao Soda Ash Industrial Company Limited (600229.SH), Suzhou Victory Precision Manufacture Co., Ltd. (002426.SZ), Anhui Guotong Hi-Tech Pipes Industry Co., Ltd. (600444.SH) have been approved and they resume trading on May 28.
[Industry Information]
○ Fourth-generation nuclear power technology achieves breakthrough, nuclear power equipment enterprises to see increasing demand
------
As disclosed by China National Nuclear Corporation, China’s fourth-generation nuclear power technology has achieved breakthrough. The preliminary feasibility study report of Jiangxi Ruijin nuclear power project with 600,000-KW high temperature reactor (HTR) has been approved by experts, laying solid foundation for the smooth development of the first commercial HTR in China.
Comment: High temperature gas-cooled reactor, as the fourth-generation advanced nuclear power technology, enjoys very high level of security and China owns completely independent intellectual property rights on it. High temperature gas-cooled reactor will enjoy priority in China’s “going out” strategy on nuclear power industry. The upgrading of nuclear power technology and the accelerated launch of nuclear power projects will bring billions of yuan of market demand to equipment enterprises. As for listed companies, Harbin Electric Corporation Jiamusi Electric Machine Co., Ltd. (000922.SZ) has achieved significant breakthrough in the development of the primary helium circulator of high temperature gas-cooled reactor and it will benefit from the construction of the fourth-generation nuclear power projects; Shanghai Electric Group Company Limited (601727.SH; 02727.HK) has signed equipment supply agreement with the high temperature gas-cooled reactor in Ruijin, Jiangxi Province.
○ Planning on sustainable agricultural development launched, investment in preventing and controlling farmland pollution increased
------
The Ministry of Agriculture released National Agricultural Sustainable Development Planning (2015-2030) on May 27, making it a programmatic document guiding agricultural sustainable development in the following period. Improving the environment of agriculture and rural areas and remediating agricultural ecology are the key tasks of future agriculture development.
Comment: The quality of farmland environment is an important foundation of agricultural sustainable development. Agricultural environment pollution becomes a growing problem in recent years and heavy metal pollution in farmland soil is particularly serious. The soil pollution prevention and control action plan led by the Ministry of Environmental Protection is under formulation and it will bring an investment of trillions of yuan. Yonker Environmental Protection Co., Ltd. (300187.SZ) has undertaken several soil remediation projects; Dongjiang Environmental Company Limited (002672.SZ; 00895.HK) expands to soil remediation area by increasing capital in Jiangsu Suntime Environmental Remediation Co., Ltd.
○ 13th five-year plan for software to highlight industrial Internet
------
The 19th China International Software and Information Service Fair was held on May 27. Miao Wei, Minister of Industry and Information Technology, disclosed that China will prepare and implement the 13th five-year plan for the software and big data industry. The industrial software, industrial controlling system and industrial operating systems will see more supports.
Comment: The Made in China 2025 strategy has been released. As an important part of intelligent manufacturing, the software industry will receive more supporting policies. The software industry recorded a business revenue growth of 20 percent in 2014 and will continue to keep high growth in the following years. In terms of listed companies, YGSOFT Inc. (002063.SZ), benefiting from the power system reform, is actively developing intelligent fuels system. Business-intelligence of Oriental Nations Corporation Ltd. (300166.SZ) is vigorously developing the big data and industrial Internet-based businesses.
[Announcement Interpretation]
○ Baiyang Aquatic to raise RMB350 mln, actual controller and senior management to subscribe private placement
------
Baiyang Aquatic Group, Inc. (002696.SZ) proposes to raise 350 million yuan by issuing 23.76 million shares at 14.76 yuan per share through private placement. The proceeds will be used in repaying bank borrowings and supplementing working capital. Sun Zhongyi, the controlling shareholder of the company, Yang Sihua and other three senior management of the company, the employee shareholding plan and Guoyao Shengli will subscribe the private placement. All lock-up periods are 36 months.
○ Slac Precision Equipment to raise RMB1.1 bln to develop high-end manufacturing
------
Suzhou Slac Precision Equipment Co., Ltd. (300382.SZ) plans to raise 1,105 million yuan by issuing 10 million shares through private placement. The proceeds will be invested in key equipment for pop-top cans and the automatic production line manufacturing project, the distant production data collection system and intelligent components manufacturing project, the high-speed precision automatic punching machine manufacturing project and the manufacturing of equipment for high-speed digital printing cans. The four projects will bring another after-tax net profit of 100 million yuan, 78.75 million yuan, 54.72 million yuan and 58.14 million yuan (totally 298 million yuan) after reaching the designed capacity.
○ Oxiranchem and Yonggui Electric Equipment to introduce employee shareholding plans
------
Liao Ning Oxiranchem, Inc. (300082.SZ) will introduce an employee shareholding plan with no more than 300 participants to subscribe 30 million yuan. The directors, supervisors and senior management of the company will contribute 7.50 million yuan. It can be purchased from the shares held by the controlling shareholders to be transferred or in the secondary market through bulk transactions. The validity period will be 24 months and the lock-up period will be 12 months. The stock of the company closed at 10.82 yuan before trading suspension.
Zhejiang Yonggui Electric Equipment Co., Ltd. (300351.SZ) intends to launch the No. 1 employee shareholding plan. It will be mainly purchased in the secondary market with an upper limit of 88.60 million yuan and no more than 110 subscribers (including three directors, supervisors and senior management). The validity period will be 24 months.
○ Haid Group to acquire Chuanghong Biotechnology to develop animal vaccine
------
Guangdong Haid Group Co., Ltd. (002311.SZ) proposes to acquire 67 percent equities of Chengdu Chuanghong Biotechnology Co., Ltd. with 107 million yuan from its own capital. Chuanghong Biotechnology is a modern high-tech biological products for veterinary use providing breeders with professional technology services. It owns eight veterinary drug production lines in inactivated vaccine and live vaccine workshops. The gross profit margin of animal protection industry, including the vaccine and veterinary drugs, are much higher than that of the animal feed.
○ Jiajia Food to introduce 7.49 mln stock incentive plans
------
Jiajia Food Group Co., Ltd. (002650.SZ) plans to grant 7.49 million stock options, accounting for 1.63 percent of the total share capital of the company, to 174 incentive subjects. The exercise price of the options is 18.93 yuan per share. The target for the performance evaluation is that the net profit will increase by no less than 15 percent, 30 percent and 45 percent from 2015 to 2017 based on the data of 2014.
○ Huifeng Agrochemical to fully control Confident Biochemical Technology to develop main business
------
Jiangsu Huifeng Agrochemical Co., Ltd. (002496.SZ) intends to acquire 48.78 percent equities of Yancheng Confident Biochemical Technology Co., Ltd. with 210 million yuan. The company will hold 100 percent equities of Confident Biochemical Technology after the acquisition. The company is principally engaged in the manufacturing of pesticide intermediates (bitertanol) and the wholesale of dangerous chemicals. The company committed to achieve a total performance of no less than 214 million yuan from 2015 to 2018.
[Trading Trends]
○ Institutes buy YLZ Information Technology
------
The trading volume ranking list on May 27 shows that four institutes bought YLZ Information Technology Co., Ltd. (300096.SZ) with 283 million yuan, accounting for 15.5 percent of its intraday turnover.
Comment: The company is currently engaged in social insurance, medical treatment, IC cards, terminal products and living information services and products with the business covering over 100 cities in 19 provinces and serving more than 300 million people. Institutes believe that the social insurance cards enjoy a high coverage in Fujian Province and Shanxi Province, the target market of the company. Guangxi Zhuang Autonomous Region, Anhui Province and Hunan Province have a relatively low coverage of social insurance cards. The huge potential market will support the stable growth of the social insurance business of the company.
Latest comments