[Today’s Guide]
> Internet plus intelligent energy plan to release, market with trillions of yuan expected
> Bearish expectations drag down market, institutes rosy about medium- and long-term market
> 5G to bring more opportunities in communication industry, policies support recycling of waste electronic products
> Letong Chemical to develop digital marketing, Speed Wireless Technology to acquire JPT through private placement
[XFA Focus]
○ Internet plus intelligent energy plan to release, market with trillions of yuan expected
------
XFA learnt that the National Energy Administration (NEA) has held four symposiums in recent two months on the preparation of the ‘Internet Plus Intelligent Energy Action Plan’, the top design of the Internet of energy led by it. The plan will be submitted to the State Council in June and an Internet plus intelligent energy industrial alliance will be formed. The top design will give priorities to Internet-based power sale and promote the trading on the recyclable energy market. Institutes estimate that the size of the client power sale in China is about 2.5 trillion yuan. With the investment in construction, the market of the Internet of energy will be above 5 trillion yuan at least.
◆ The public services cloud platform for intelligent energy in Shandong Province with the participation of Integrated Electronic Systems Lab Co., Ltd. (002339.SZ) will be launched in mid-June. The Internet of energy of the company covers intelligent cities, energy-saving consultancy, the development of new energy power stations and cloud platforms. It also owns accesses to intelligent electricity meters with millions of yuan and abundant bid data resources.
◆ Xinjiang Goldwind Science and Technology Co., Ltd. (02208.HK; 002202.SZ) has over 8,000 units connected to the intelligent wind energy management system. It is one of the pioneers in the micro-grid industry. The intelligent micro-grid project at Dafeng City, Jiangsu Province, the first project for commercial operation, has been connected to the grid in March. It is expected to develop industrial-scale complete solutions to intelligent micro-grid.
◆ Xiamen Kehua Hengsheng Co., Ltd. (002335.SZ), a leader in the domestic high-end power industry, is promoting the operation of new energy and the data center. It will establish a centralized monitoring platform with the Internet and the Internet of Things to upgrade the Internet of Things for energy.
[Trading Trends]
○ Bearish expectations drag down market, institutes rosy about medium- and long-term market
------
As a result of the Central Huijin Investment Ltd.’s reduction of A-share holdings in the China Construction Bank Corporation (CCB, 601939.SH) and the Industrial and Commercial Bank of China Limited (ICBC, 01398.HK; 601398.SH) and rumors about target repo by the central bank, the SSE Composite Index ended down 6.5 percent on May 28, the biggest intraday decline in nearly five years after the drop on January 19, 2015. The total value of stocks traded at the Shanghai and Shenzhen bourses reached a record of 2.42 trillion yuan.
Comment: As the SSE Composite Index climbed to 5,000 points, the fundamentals supporting the bullish market changed to the driving of capitals and concerted expectations. The above bearish factors overturned the market expectation on continuous easing liquidity and the consensus on a bullish market by ‘national teams’ during the trading hours on May 28. The market tends to be prudent in short term. Institutes are rosy about the market in the medium and long term after the plunge. The target repo by the central bank meets the demands of financial institutes. It solved the accumulation of capitals, but it never means that the policies will tighten. In the history of A shares, the increase of A-share holdings by substantial shareholders indicated the bottom of the market while the reduction seldom means the top. The market is expected to return hiking after the plunge when the risks are released.
◆ Central Huijin announced on May 28 evening that it has purchased A shares of ICBC, Agricultural Bank of China Limited (ABC, 01288.HK; 601288.SH), Bank of China Limited (BOC, 03988.HK; 601988.SH), CCB as well as other listed financial institutions, and Exchange Traded Funds (ETF), in the secondary market. Recently, Central Huijin sold a part of the purchased shares and ETF. Central Huijin has made information disclosure according to relevant regulatory requirements.
[XFA Selection]
○ Chinese President Xi Jinping underscored that China should make active initiatives based on its advantages when meeting with leading officials from seven regions in east China on May 27.
○ The Shanghai Futures Exchange indicated on May 28 that the preparation for the crude oil futures is advancing steadily. The crude oil futures platform can achieve the free conversion of RMB in the future.
○ The State Administration of Press, Publication, Radio, Film and Television indicated at the symposia held on May 28 that it will build the radio and television network into a household information center.
○ Participants at the 2015 China Wealth Management Summit are optimistic about equity assets. First-tier cities still have chances for investments in property.
○ The average pork price hiked over 4 percent since mid-April across China. The unexpected de-capacity in the breeding industry may drive the pork price even higher.
[Industry Information]
○ White Paper on 5G Internet Technology Structure released, communication industry to see more investments
------
The China Academy of Telecommunication Research (CATR) directly subordinate to the Ministry of Industry and Information Technology (MIIT) convened the 5G summit on May 28 and released the ‘White Paper on 5G Internet Technology Structure’. It indicated that the Chinese mobile communication industry will enter into the 5G era in the following five to ten years.
Comment: The 5G Internet technology will meet the demand for ultrahigh flux density, ultrahigh connection density and ultrahigh mobility. It can provide users with high-definition videos, virtual reality, augmented reality, cloud desktop as well as other apps. The mobile communication industry will see more investments in the future. In terms of listed companies, GCI Science & Technology Co., Ltd. (002544.SZ) provides operators with comprehensive services for the establishment of information networks. Accelink Technologies Co., Ltd. (002281.SZ), a leader in the domestic optical transmission devices, will benefit from more investments in 5G technology.
○ Roadmap for recycling of waste electronic products to launch within this year
------
XFA learns from the Ministry of Industry and Information Technology (MIIT) that the competent department is formulating development action plan and technology roadmap for the recycling industry of waste electronic products. MIIT will mainly focus on the recycling and utilization of waste electronic products, speed up in improving industrial technology and equipment level, develop piloting demonstration, and push forward standardized, professional and scale development of the industry.
Comment: The recycling of waste electronic resources is experiencing high growth. Institutions predict that China has entered the peak period of scrapped household appliances and the size of the waste household appliances dismantling market will exceed 100 billion yuan in next five years. This plan will create a sound development environment for relevant listed companies. As for companies, GEM Co., Ltd. (002340.SZ) has constructed five waste electronics treatment bases in China and actively explores “Internet Plus” cloud recycling mode; Sound Environmental Resources Co., Ltd. (000826.SZ) recently acquires the equities of three renewable resources companies with 130 million yuan to add stakes in the recycling business of waste electronic products.
[Announcement Interpretation]
○ Letong Chemical to develop digital marketing with RMB4.4 bln, Zexi participated in private placement
------
Letong Chemical Co., Ltd. (002319.SZ) plans to raise around 4.4 billion yuan by issuing 490 million shares at 8.98 yuan per share to construct data bank management platform, mobile digital marketing comprehensive service platform, Internet advertisement trading platform, media creative production platform and digital marketing base, supplement working capital, pay off bank loans, etc.; acquire 100 percent equities of Beijing Jiuyu Internet Technology Co., Ltd. and Beijing Perfect Advertisement Co., Ltd., respectively. Jiuyu Internet Technology and Perfect Advertisement are mainly involved in digital marketing business. As for performance commitment, the total profit the two companies from 2015 to 2017 shall be 67.00 million yuan, 87.10 million yuan and 113 million yuan, respectively.
Liu Qiuhua, controlling shareholder of the company, will subscribe 1,932 million yuan; Zhen Suzhen, potential related party of the company and the affiliated person of Shanghai Zexi Investment Management Co., Ltd., will subscribe 1,661 million yuan. The implementation of fundraising projects enables the company to make in-depth planning in digital marketing and become expert in multi-media flow management.
○ Speed Wireless Technology to acquire JPT through private placement to expand industrial chain
------
Huizhou Speed Wireless Technology Co., Ltd. (300322.SZ) plans to acquire 96.40 percent equities of Shenzhen JPT Electronics Co., Ltd. with 460 million yuan by issuing shares at 18.68 yuan per share through private placement and paying in cash. The company also plans to raise a supporting fund of 330 million yuan from Zhu Kunhua, actual controller of the company, and the staff shareholding plan, etc. The fiber laser products and technologies of JPT see wide application in the product manufacturing of wireless communication terminal customers and it complements each other’s advantages in wireless communication terminal antenna business with Speed Wireless Technology.
○ Huafon Microfiber to raise RMB1.5 bln through private placement to add stakes in main business
------
Huafon Microfiber (Shanghai) Co., Ltd. (300180.SZ) plans to raise 1.5 billion yuan by issuing 80.00 million shares through private placement to invest in industrial non-woven microfiber project. An average annual profit of 275 million yuan can be newly added and the company’s capacity of microfiber synthetic leather can be largely lifted when the project reaches designed capacity.
○ Sanquan Food to expand capacity of quick-frozen rice and flour with over RMB1.1 bln
-----
Sanquan Food Co., Ltd. (002216.SZ) plans to raise 1,122 million yuan by issuing 68.12 million shares at 16.47 yuan per share through private placement to invest in the construction of three bases in southern China, southwest China and northern China. Upon completion of the three bases, an average annual net profit of 72.24 million yuan, 31.47 million yuan and 60.10 million yuan will be achieved, respectively. In addition, the company will make planning in the catering O2O market of domestic first-tier cities via the production of Sanquan fresh food production line.
○ Tatfook Technology to develop grapheme with RMB600 mln
------
Shenzhen Tatfook Technology Co., Ltd. (300134.SZ) plans to invest 600 million yuan in establishing a joint venture company with Inner Mongolia Ruisheng New Energy Co., Ltd. to jointly develop and sale graphite application products including grapheme. The company’s shareholding in the joint venture is 49 percent. Ruisheng New Energy is principally engaged in the selecting and purchasing of natural graphite as well as the development, production and sales of graphite new-type material. Ruisheng New Energy and its controlling shareholder promise that the net profit of the joint venture from 2015 to 2017 will be no less than 55.00 million yuan, 92.00 million yuan and 155 million yuan.
○ Forever Technology to launch 2 mln restricted shares for incentive
------
Beijing Forever Technology Co., Ltd. (300365.SZ) plans to award 2 million restricted shares to 137 incentive objects at 17.11 yuan per share. The performance assessment condition is that taking the net profit of 2014 as cardinal number, the net profit growth rate of the company from 2015 to 2017 shall be no less than 20 percent, 40 percent and 60 percent, respectively.
○ Enlight Media signs strategic cooperation agreement with Alibaba
------
Beijing Enlight Media Co., Ltd. (300251.SZ) signs strategic cooperation agreement with Alibaba Group. The company, relying on its large amount of films and television programs, artists, etc., integrates with the digital entertainment industry, e-commerce platform and Internet finance of Alibaba Group to build a brand-new interaction system combining traditional media, Internet, finance, etc. and to gain a win-win situation of content transmission and commercial profit. Both parties aim to establish a long-term strategic cooperation relationship.
[Data Speaks]
○ Stocks with high share conversion favored continuously, relevant companies concerned
------
Statistics from XFA shows that stocks with high share conversion are favored by the market continuously. The stocks of multi companies seeing approaching ex-right surge continuously. According to the rules of stock exchanges, the distribution plan shall be implemented within two months once approved by general meetings. Data shows that the high share conversion plan of Fushun Special Steel Co., Ltd. (600399.SH) has been approved by the general meeting on April 29 and it proposes a 15-for-10 conversion of capital surplus into shares; the distribution plan of CTS International Logistics Corporation Limited (603128.SH) proposes a 10-for-10 conversion of capital surplus into shares and the plan has been approved by the general meeting on April 18.
> Internet plus intelligent energy plan to release, market with trillions of yuan expected
> Bearish expectations drag down market, institutes rosy about medium- and long-term market
> 5G to bring more opportunities in communication industry, policies support recycling of waste electronic products
> Letong Chemical to develop digital marketing, Speed Wireless Technology to acquire JPT through private placement
[XFA Focus]
○ Internet plus intelligent energy plan to release, market with trillions of yuan expected
------
XFA learnt that the National Energy Administration (NEA) has held four symposiums in recent two months on the preparation of the ‘Internet Plus Intelligent Energy Action Plan’, the top design of the Internet of energy led by it. The plan will be submitted to the State Council in June and an Internet plus intelligent energy industrial alliance will be formed. The top design will give priorities to Internet-based power sale and promote the trading on the recyclable energy market. Institutes estimate that the size of the client power sale in China is about 2.5 trillion yuan. With the investment in construction, the market of the Internet of energy will be above 5 trillion yuan at least.
◆ The public services cloud platform for intelligent energy in Shandong Province with the participation of Integrated Electronic Systems Lab Co., Ltd. (002339.SZ) will be launched in mid-June. The Internet of energy of the company covers intelligent cities, energy-saving consultancy, the development of new energy power stations and cloud platforms. It also owns accesses to intelligent electricity meters with millions of yuan and abundant bid data resources.
◆ Xinjiang Goldwind Science and Technology Co., Ltd. (02208.HK; 002202.SZ) has over 8,000 units connected to the intelligent wind energy management system. It is one of the pioneers in the micro-grid industry. The intelligent micro-grid project at Dafeng City, Jiangsu Province, the first project for commercial operation, has been connected to the grid in March. It is expected to develop industrial-scale complete solutions to intelligent micro-grid.
◆ Xiamen Kehua Hengsheng Co., Ltd. (002335.SZ), a leader in the domestic high-end power industry, is promoting the operation of new energy and the data center. It will establish a centralized monitoring platform with the Internet and the Internet of Things to upgrade the Internet of Things for energy.
[Trading Trends]
○ Bearish expectations drag down market, institutes rosy about medium- and long-term market
------
As a result of the Central Huijin Investment Ltd.’s reduction of A-share holdings in the China Construction Bank Corporation (CCB, 601939.SH) and the Industrial and Commercial Bank of China Limited (ICBC, 01398.HK; 601398.SH) and rumors about target repo by the central bank, the SSE Composite Index ended down 6.5 percent on May 28, the biggest intraday decline in nearly five years after the drop on January 19, 2015. The total value of stocks traded at the Shanghai and Shenzhen bourses reached a record of 2.42 trillion yuan.
Comment: As the SSE Composite Index climbed to 5,000 points, the fundamentals supporting the bullish market changed to the driving of capitals and concerted expectations. The above bearish factors overturned the market expectation on continuous easing liquidity and the consensus on a bullish market by ‘national teams’ during the trading hours on May 28. The market tends to be prudent in short term. Institutes are rosy about the market in the medium and long term after the plunge. The target repo by the central bank meets the demands of financial institutes. It solved the accumulation of capitals, but it never means that the policies will tighten. In the history of A shares, the increase of A-share holdings by substantial shareholders indicated the bottom of the market while the reduction seldom means the top. The market is expected to return hiking after the plunge when the risks are released.
◆ Central Huijin announced on May 28 evening that it has purchased A shares of ICBC, Agricultural Bank of China Limited (ABC, 01288.HK; 601288.SH), Bank of China Limited (BOC, 03988.HK; 601988.SH), CCB as well as other listed financial institutions, and Exchange Traded Funds (ETF), in the secondary market. Recently, Central Huijin sold a part of the purchased shares and ETF. Central Huijin has made information disclosure according to relevant regulatory requirements.
[XFA Selection]
○ Chinese President Xi Jinping underscored that China should make active initiatives based on its advantages when meeting with leading officials from seven regions in east China on May 27.
○ The Shanghai Futures Exchange indicated on May 28 that the preparation for the crude oil futures is advancing steadily. The crude oil futures platform can achieve the free conversion of RMB in the future.
○ The State Administration of Press, Publication, Radio, Film and Television indicated at the symposia held on May 28 that it will build the radio and television network into a household information center.
○ Participants at the 2015 China Wealth Management Summit are optimistic about equity assets. First-tier cities still have chances for investments in property.
○ The average pork price hiked over 4 percent since mid-April across China. The unexpected de-capacity in the breeding industry may drive the pork price even higher.
[Industry Information]
○ White Paper on 5G Internet Technology Structure released, communication industry to see more investments
------
The China Academy of Telecommunication Research (CATR) directly subordinate to the Ministry of Industry and Information Technology (MIIT) convened the 5G summit on May 28 and released the ‘White Paper on 5G Internet Technology Structure’. It indicated that the Chinese mobile communication industry will enter into the 5G era in the following five to ten years.
Comment: The 5G Internet technology will meet the demand for ultrahigh flux density, ultrahigh connection density and ultrahigh mobility. It can provide users with high-definition videos, virtual reality, augmented reality, cloud desktop as well as other apps. The mobile communication industry will see more investments in the future. In terms of listed companies, GCI Science & Technology Co., Ltd. (002544.SZ) provides operators with comprehensive services for the establishment of information networks. Accelink Technologies Co., Ltd. (002281.SZ), a leader in the domestic optical transmission devices, will benefit from more investments in 5G technology.
○ Roadmap for recycling of waste electronic products to launch within this year
------
XFA learns from the Ministry of Industry and Information Technology (MIIT) that the competent department is formulating development action plan and technology roadmap for the recycling industry of waste electronic products. MIIT will mainly focus on the recycling and utilization of waste electronic products, speed up in improving industrial technology and equipment level, develop piloting demonstration, and push forward standardized, professional and scale development of the industry.
Comment: The recycling of waste electronic resources is experiencing high growth. Institutions predict that China has entered the peak period of scrapped household appliances and the size of the waste household appliances dismantling market will exceed 100 billion yuan in next five years. This plan will create a sound development environment for relevant listed companies. As for companies, GEM Co., Ltd. (002340.SZ) has constructed five waste electronics treatment bases in China and actively explores “Internet Plus” cloud recycling mode; Sound Environmental Resources Co., Ltd. (000826.SZ) recently acquires the equities of three renewable resources companies with 130 million yuan to add stakes in the recycling business of waste electronic products.
[Announcement Interpretation]
○ Letong Chemical to develop digital marketing with RMB4.4 bln, Zexi participated in private placement
------
Letong Chemical Co., Ltd. (002319.SZ) plans to raise around 4.4 billion yuan by issuing 490 million shares at 8.98 yuan per share to construct data bank management platform, mobile digital marketing comprehensive service platform, Internet advertisement trading platform, media creative production platform and digital marketing base, supplement working capital, pay off bank loans, etc.; acquire 100 percent equities of Beijing Jiuyu Internet Technology Co., Ltd. and Beijing Perfect Advertisement Co., Ltd., respectively. Jiuyu Internet Technology and Perfect Advertisement are mainly involved in digital marketing business. As for performance commitment, the total profit the two companies from 2015 to 2017 shall be 67.00 million yuan, 87.10 million yuan and 113 million yuan, respectively.
Liu Qiuhua, controlling shareholder of the company, will subscribe 1,932 million yuan; Zhen Suzhen, potential related party of the company and the affiliated person of Shanghai Zexi Investment Management Co., Ltd., will subscribe 1,661 million yuan. The implementation of fundraising projects enables the company to make in-depth planning in digital marketing and become expert in multi-media flow management.
○ Speed Wireless Technology to acquire JPT through private placement to expand industrial chain
------
Huizhou Speed Wireless Technology Co., Ltd. (300322.SZ) plans to acquire 96.40 percent equities of Shenzhen JPT Electronics Co., Ltd. with 460 million yuan by issuing shares at 18.68 yuan per share through private placement and paying in cash. The company also plans to raise a supporting fund of 330 million yuan from Zhu Kunhua, actual controller of the company, and the staff shareholding plan, etc. The fiber laser products and technologies of JPT see wide application in the product manufacturing of wireless communication terminal customers and it complements each other’s advantages in wireless communication terminal antenna business with Speed Wireless Technology.
○ Huafon Microfiber to raise RMB1.5 bln through private placement to add stakes in main business
------
Huafon Microfiber (Shanghai) Co., Ltd. (300180.SZ) plans to raise 1.5 billion yuan by issuing 80.00 million shares through private placement to invest in industrial non-woven microfiber project. An average annual profit of 275 million yuan can be newly added and the company’s capacity of microfiber synthetic leather can be largely lifted when the project reaches designed capacity.
○ Sanquan Food to expand capacity of quick-frozen rice and flour with over RMB1.1 bln
-----
Sanquan Food Co., Ltd. (002216.SZ) plans to raise 1,122 million yuan by issuing 68.12 million shares at 16.47 yuan per share through private placement to invest in the construction of three bases in southern China, southwest China and northern China. Upon completion of the three bases, an average annual net profit of 72.24 million yuan, 31.47 million yuan and 60.10 million yuan will be achieved, respectively. In addition, the company will make planning in the catering O2O market of domestic first-tier cities via the production of Sanquan fresh food production line.
○ Tatfook Technology to develop grapheme with RMB600 mln
------
Shenzhen Tatfook Technology Co., Ltd. (300134.SZ) plans to invest 600 million yuan in establishing a joint venture company with Inner Mongolia Ruisheng New Energy Co., Ltd. to jointly develop and sale graphite application products including grapheme. The company’s shareholding in the joint venture is 49 percent. Ruisheng New Energy is principally engaged in the selecting and purchasing of natural graphite as well as the development, production and sales of graphite new-type material. Ruisheng New Energy and its controlling shareholder promise that the net profit of the joint venture from 2015 to 2017 will be no less than 55.00 million yuan, 92.00 million yuan and 155 million yuan.
○ Forever Technology to launch 2 mln restricted shares for incentive
------
Beijing Forever Technology Co., Ltd. (300365.SZ) plans to award 2 million restricted shares to 137 incentive objects at 17.11 yuan per share. The performance assessment condition is that taking the net profit of 2014 as cardinal number, the net profit growth rate of the company from 2015 to 2017 shall be no less than 20 percent, 40 percent and 60 percent, respectively.
○ Enlight Media signs strategic cooperation agreement with Alibaba
------
Beijing Enlight Media Co., Ltd. (300251.SZ) signs strategic cooperation agreement with Alibaba Group. The company, relying on its large amount of films and television programs, artists, etc., integrates with the digital entertainment industry, e-commerce platform and Internet finance of Alibaba Group to build a brand-new interaction system combining traditional media, Internet, finance, etc. and to gain a win-win situation of content transmission and commercial profit. Both parties aim to establish a long-term strategic cooperation relationship.
[Data Speaks]
○ Stocks with high share conversion favored continuously, relevant companies concerned
------
Statistics from XFA shows that stocks with high share conversion are favored by the market continuously. The stocks of multi companies seeing approaching ex-right surge continuously. According to the rules of stock exchanges, the distribution plan shall be implemented within two months once approved by general meetings. Data shows that the high share conversion plan of Fushun Special Steel Co., Ltd. (600399.SH) has been approved by the general meeting on April 29 and it proposes a 15-for-10 conversion of capital surplus into shares; the distribution plan of CTS International Logistics Corporation Limited (603128.SH) proposes a 10-for-10 conversion of capital surplus into shares and the plan has been approved by the general meeting on April 18.
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