[Today's Guide]
> Ministry of Commerce supports real store plus Internet, O2O brings broad prospect
> CPI officially merges with SNPTC, price of lithium carbonate surges again
> Tatwah Smartech to acquire Internet-based TV provider, Insigma Technology to couduct mergers
> Central China Land Media to fully control Dinv Ares Film & Media, Jinlong Machinery & Electronic to expand production through private placement
[XFA Focus]
○ Ministry of Commerce supports real store plus Internet, O2O brings broad prospect
------
Wang Shouwen, vice-minister of the Ministry of Commerce, indicated on the State Council’s regular press conference convened on May 29 to encourage accelerating online/offline integrated development; especially encourage the cooperation between traditional stores and online store enterprises and e-commerce to realize O2O trading mode; start the formulation of the thirteenth five-year plan of retailing industry and e-commerce. As for specific measures, joint efforts with relevant authorities will be spared to break policy restrictions; support will be given to real stores in the construction of informatization.
Comment: Since the Political Bureau of the Central Committee made it definite to “pay high attention to the pressure of economic downturn” one month ago, policies aiming to maintain stable growth see intensive launch and e-commerce gains major policy support. Retailing industry covers a complete process of information flow and commodities flow. Internet enterprises like Alibaba Group are making planning in offline stores, while some traditional retailers are also developing online stores to expand development space. Hunan Friendship & Apollo Commercial Co., Ltd. (002277.SZ) plans to invest in projects like O2O whole-channel operation platform, etc. through private placement; the cross-border e-commerce platform of Haining China Leather Market Co., Ltd. (002344.SZ) is expected to go live in July; Beijing Wangfujing Department Store (Group) Co., Ltd. (600859.SH), with the expectation of state-owned assets reform, is favored by institutions.
[XFA Selection]
○ Spokesman of China Securities Regulatory Commission indicates that close communications will be done with international indexes companies to make it convenient for long-term funds to enter A-share market.
○ The China Financial Stability Report (2015) released by the central bank proposes that the monetary policy of this year will maintain a more appropriate degree.
○ Central Huijin Investment Ltd. announced personnel appointment and removal information on May 29 that Xie Zhichun will no longer hold the position of executive director and general manager of the company.
○ The IPO application of Guotai Junan Securities Co., Ltd. will be reviewed by China Securities Regulatory Commission on June 3. Its financing volume might reach 30 billion yuan.
○ Nanfang Daily reported on May 31 that the reform scheme of Guangzhou state-owned assets and state-owned enterprises is launched. Competitive enterprises will all be listed within five years.
○ The first imported Middle East Respiratory Syndrome (MERS) patient of China is in stable condition now; the number of confirmed MERS-infected patients in South Korea has climbed to 12 by May 30.
[Industry Information]
○ CPI officially merges with SNPTC, nuclear power industry to see accelerated development
------
The website of China Power Investment Corporation (CPI) disclosed on May 29 that it has officially merged with State Nuclear Power Technology Corporation (SNPTC). The asset scale of the newly established State Power Investment Corporation will exceed 660 billion yuan. Wang Binghua, former chairman of SNPTC, is appointed as the chairman of the new corporation.
Comment: Under the promotion of the implementation of “One Belt and One Road” strategy, high-speed rail and nuclear power assets will see large-scale integration. This will contribute to the enhancement of their competitiveness in international market. Combined with the accelerated launch of domestic nuclear power projects, segmented markets including nuclear island, conventional island and auxiliary equipment will see materialization of orders. Listed companies under CPI include Shanghai Electric Power Co., Ltd. (600021.SH), CPI Yuanda Environmental—Protection (Group) Co., Ltd. (600292.SH), Shijiazhuang Dongfang Energy Co., Ltd. (000958.SZ), etc.
○ Supply of lithium battery falls short of demand, price of lithium carbonate continues to surge
------
XFA learns that pushed by great downstream demand on lithium battery, etc., some lithium carbonate enterprises lifted their quoted price on May 29: the price of lithium carbonate for battery increased by 5000 yuan per ton, indicating a surge of nearly 10 percent and recording a new high of this year.
Comment: Statistics show that under the support of a series of domestic policies, the output of new energy cars in the first four months sees a year-on-year growth of more than 300 times. Multiple companies including Do-Fluoride Chemicals Co., Ltd. (002407.SZ) indicate on irm.cninfo.com that the supply of lithium battery products falls short of demand. The industry predicts that under the push of limited supply of lithium resource resulted by flood in Chile and the booming downstream demand on new energy cars, domestic lithium carbonate price will continue to surge. As for listed companies, Jiangxi Ganfeng Lithium Co., Ltd. (002460.SZ) is principally engaged in the processing of lithium salt and its total capacity of lithium carbonate reaches nearly 10,000 tons; Rongda Lithium Industry Company under Luxiang Co., Ltd. (002192.SZ) owns abundant lithium resource reserves.
[Announcement Interpretation]
○ Tatwah Smartech to acquire Internet-based TV provider with RMB722 mln
------
Tatwah Smartech Co., Ltd. (002512.SZ) proposes to acquire 100 percent equities of Shenzhen Cultraview valued at 722 million yuan by issuing shares at 15.72 yuan per share through private placement. In addition, the company also intends to raise a supporting fund of 680 million yuan by issuing shares at 17.91 yuan per share. Cai Xiaoru, chairman of the company, Chen Rongsheng, CEO of the company, and the employee shareholding plan will subscribe the shares.
Cultraview is principally engaged in the research and development, design and sale of analog and digital television, the main panel of Internet-based television and the Internet-based set top boxes. It is a leading provider of comprehensive video and audio solutions across the world. The counterparty committed that the net profit of Cultraview from 2015 to 2017 will be no less than 66 million yuan, 75.90 million yuan and 87.29 million yuan, respectively.
○ Insigma Technology to develop ‘Internet plus urban services’ through mergers
------
Insigma Technology Co., Ltd. (600797.SH) plans to acquire 72 percent equities of Zhejiang Insigma Electric Technology Co., Ltd., 100 percent equities of Zhejiang Insigma Information Technology Co., Ltd., 24.47 percent equities of Zhejiang Insigma Enpu Software Co., Ltd. and 78.26 percent equities of Hangzhou Puji Investment Management Co., Ltd. by issuing shares at 7.43 yuan per share through private placement and in cash. The subject assets are totally valued at 550 million yuan. The company also plans to raise a supporting fund of 200 million yuan by issuing shares at 7.81 yuan per share to pay the consideration of the above transactions in cash and invest in the research and development of big data and cloud computing platforms.
The target of the above transactions is the ‘Internet plus urban services’. The business of the subject companies to be acquired will diversify the solutions of Insigma Technology in intelligent social insurance, intelligent transportation, intelligent conventions and exhibitions, intelligent parks, intelligent health and other vertical areas.
○ Central China Land Media to fully control Dinv Ares Film & Media with RMB625 mln
------
Central China Land Media Co., Ltd. (000719.SZ) intends to acquire 100 percent equities of Dinv Ares Film & Media via issuing shares and in cash. The latter is preliminarily valued at 625 million yuan. The company plans to pay 190 million yuan in cash and issue 29.99 million shares at 14.59 yuan per share through private placement. Meanwhile, Central China Land Media proposes to raise a supporting fund of 625 million yuan by issuing shares at no less than 14.85 yuan per share. The proceeds will be invested in the platform for the video IP incubation transactions and supplementing the working capital of Dinv Ares Film & Media. The counterparty committed that the net profit of Dinv Ares Film & Media from 2015 to 2017 will be no less than 49 million yuan, 61.25 million yuan and 78 million yuan, respectively.
○ Jinlong Machinery & Electronic to raise RMB2.5 bln through private placement to expand production
------
Jinlong Machinery & Electronic Co., Ltd. (300032.SZ) proposes to raise 2.5 billion yuan by issuing 200 million shares to Jinlong Group, the controlling shareholder of the company, and other specific targets through private placement. The proceeds will be invested in the intelligent terminal linear motor and tactile feedback integration, driving motor, components and the construction of terminal electronic products production line, the intelligent terminal touch-display integration project as well as the improvement and reconstruction of the research and development center for new technology of micro & special motors and supplementing the working capital.
○ Rising Nonferrous Metals to consolidate rare earth with RMB2.2 bln, Liu Yiqian to participate in private placement
------
Rising Nonferrous Metals Share Co., Ltd. (600259.SH) plans to raise 2.2 billion yuan by issuing 40.38 million shares at 54.48 yuan per share through private placement. The proceeds will be invested in the exploration of mining resources, research and development projects as well as repaying debts. Guangdong Rising Assets Management Co., Ltd., the controlling shareholder of the company will subscribe 13.40 million shares. Guohua Life and Liu Yiqian will subscribe 15 million shares and 8.78 million shares, respectively. The GF Assets Management established by certain directors, supervisors, senior management and other employees of the company will subscribe 1.20 million shares through the assets management plan. The private placement will boost the development and utilization of the rare earth and tungsten ore resources of the company and expand the resources reserves.
○ Dahu Aquaculture to raise RMB550 mln to develop aquatic products industry chain
------
Dahu Aquaculture Co., Ltd. (600257.SH) intends to raise 550 million yuan by issuing 54.19 million shares at 10.15 yuan per share through private placement. The proceeds will be used in supplementing the working capital and repaying debts. Ni Zhengdong, founder of Zero2IPO Ventures, and Xie Shihuang, vice president of Alibaba Group, are among the participants of the private placement.
[Weekly Review]
○ Proper adjustment to sustain market in long term
------
The stock market plunged by over 300 points on Thursday and recovered on Friday last week. But the short position recovered in closing hours and the SSE Composite Index declined. The ChiNext Board closed jumping 3.20 percent against the trend. Since the slump on May 19, the market sentiment has been excited and investors with huge profits in short term exit after they made profits, which results in the disaster on May 28. The market attributes it to the Central Huijin Investment Ltd.’s reduction of A-share holdings in the major four banks as well as the IPO of big-cap blue-chip companies represented by China Nuclear Power Engineering Co., Ltd.
XFA mentioned the regulatory measures on the umbrella trust and the HOMS of Hundsun Technologies Inc. (600570.SH) introduced by regulatory authorities on May 24 and indicated that the new round of regulatory moves will affect the market in short term. The crazy bullish market forces regulatory authorities to introduce more effective measures to cool down the market, such as the reduction of A-share holdings by Central Huijin Investment and the acceleration in the IPO of big-cap stocks. The moves are to cool down the market and achieve a moderately bullish market for a long term.
After the storm of adjustments, the market should be pacifies and avoid hypercorrection. XFA pointed out on May 28 that institutes are rosy about medium- and long-term markets. The Xinhua News Agency also released a paper, indicating that proper adjustment can help the long-term performance of the market. It shows the target of a ‘moderately bullish market’ of the regulatory authorities.
Currently, the market sentiment is prudent. The computer and military industry recovered first last Friday, which has been focused by the XFA recently. What will be the market conditions in June? Investors are advised to read the XFA information. We would like to share the saying of Buffet with investors. ‘Be fearful when others are greedy, and be greedy when others are fearful.’
> Ministry of Commerce supports real store plus Internet, O2O brings broad prospect
> CPI officially merges with SNPTC, price of lithium carbonate surges again
> Tatwah Smartech to acquire Internet-based TV provider, Insigma Technology to couduct mergers
> Central China Land Media to fully control Dinv Ares Film & Media, Jinlong Machinery & Electronic to expand production through private placement
[XFA Focus]
○ Ministry of Commerce supports real store plus Internet, O2O brings broad prospect
------
Wang Shouwen, vice-minister of the Ministry of Commerce, indicated on the State Council’s regular press conference convened on May 29 to encourage accelerating online/offline integrated development; especially encourage the cooperation between traditional stores and online store enterprises and e-commerce to realize O2O trading mode; start the formulation of the thirteenth five-year plan of retailing industry and e-commerce. As for specific measures, joint efforts with relevant authorities will be spared to break policy restrictions; support will be given to real stores in the construction of informatization.
Comment: Since the Political Bureau of the Central Committee made it definite to “pay high attention to the pressure of economic downturn” one month ago, policies aiming to maintain stable growth see intensive launch and e-commerce gains major policy support. Retailing industry covers a complete process of information flow and commodities flow. Internet enterprises like Alibaba Group are making planning in offline stores, while some traditional retailers are also developing online stores to expand development space. Hunan Friendship & Apollo Commercial Co., Ltd. (002277.SZ) plans to invest in projects like O2O whole-channel operation platform, etc. through private placement; the cross-border e-commerce platform of Haining China Leather Market Co., Ltd. (002344.SZ) is expected to go live in July; Beijing Wangfujing Department Store (Group) Co., Ltd. (600859.SH), with the expectation of state-owned assets reform, is favored by institutions.
[XFA Selection]
○ Spokesman of China Securities Regulatory Commission indicates that close communications will be done with international indexes companies to make it convenient for long-term funds to enter A-share market.
○ The China Financial Stability Report (2015) released by the central bank proposes that the monetary policy of this year will maintain a more appropriate degree.
○ Central Huijin Investment Ltd. announced personnel appointment and removal information on May 29 that Xie Zhichun will no longer hold the position of executive director and general manager of the company.
○ The IPO application of Guotai Junan Securities Co., Ltd. will be reviewed by China Securities Regulatory Commission on June 3. Its financing volume might reach 30 billion yuan.
○ Nanfang Daily reported on May 31 that the reform scheme of Guangzhou state-owned assets and state-owned enterprises is launched. Competitive enterprises will all be listed within five years.
○ The first imported Middle East Respiratory Syndrome (MERS) patient of China is in stable condition now; the number of confirmed MERS-infected patients in South Korea has climbed to 12 by May 30.
[Industry Information]
○ CPI officially merges with SNPTC, nuclear power industry to see accelerated development
------
The website of China Power Investment Corporation (CPI) disclosed on May 29 that it has officially merged with State Nuclear Power Technology Corporation (SNPTC). The asset scale of the newly established State Power Investment Corporation will exceed 660 billion yuan. Wang Binghua, former chairman of SNPTC, is appointed as the chairman of the new corporation.
Comment: Under the promotion of the implementation of “One Belt and One Road” strategy, high-speed rail and nuclear power assets will see large-scale integration. This will contribute to the enhancement of their competitiveness in international market. Combined with the accelerated launch of domestic nuclear power projects, segmented markets including nuclear island, conventional island and auxiliary equipment will see materialization of orders. Listed companies under CPI include Shanghai Electric Power Co., Ltd. (600021.SH), CPI Yuanda Environmental—Protection (Group) Co., Ltd. (600292.SH), Shijiazhuang Dongfang Energy Co., Ltd. (000958.SZ), etc.
○ Supply of lithium battery falls short of demand, price of lithium carbonate continues to surge
------
XFA learns that pushed by great downstream demand on lithium battery, etc., some lithium carbonate enterprises lifted their quoted price on May 29: the price of lithium carbonate for battery increased by 5000 yuan per ton, indicating a surge of nearly 10 percent and recording a new high of this year.
Comment: Statistics show that under the support of a series of domestic policies, the output of new energy cars in the first four months sees a year-on-year growth of more than 300 times. Multiple companies including Do-Fluoride Chemicals Co., Ltd. (002407.SZ) indicate on irm.cninfo.com that the supply of lithium battery products falls short of demand. The industry predicts that under the push of limited supply of lithium resource resulted by flood in Chile and the booming downstream demand on new energy cars, domestic lithium carbonate price will continue to surge. As for listed companies, Jiangxi Ganfeng Lithium Co., Ltd. (002460.SZ) is principally engaged in the processing of lithium salt and its total capacity of lithium carbonate reaches nearly 10,000 tons; Rongda Lithium Industry Company under Luxiang Co., Ltd. (002192.SZ) owns abundant lithium resource reserves.
[Announcement Interpretation]
○ Tatwah Smartech to acquire Internet-based TV provider with RMB722 mln
------
Tatwah Smartech Co., Ltd. (002512.SZ) proposes to acquire 100 percent equities of Shenzhen Cultraview valued at 722 million yuan by issuing shares at 15.72 yuan per share through private placement. In addition, the company also intends to raise a supporting fund of 680 million yuan by issuing shares at 17.91 yuan per share. Cai Xiaoru, chairman of the company, Chen Rongsheng, CEO of the company, and the employee shareholding plan will subscribe the shares.
Cultraview is principally engaged in the research and development, design and sale of analog and digital television, the main panel of Internet-based television and the Internet-based set top boxes. It is a leading provider of comprehensive video and audio solutions across the world. The counterparty committed that the net profit of Cultraview from 2015 to 2017 will be no less than 66 million yuan, 75.90 million yuan and 87.29 million yuan, respectively.
○ Insigma Technology to develop ‘Internet plus urban services’ through mergers
------
Insigma Technology Co., Ltd. (600797.SH) plans to acquire 72 percent equities of Zhejiang Insigma Electric Technology Co., Ltd., 100 percent equities of Zhejiang Insigma Information Technology Co., Ltd., 24.47 percent equities of Zhejiang Insigma Enpu Software Co., Ltd. and 78.26 percent equities of Hangzhou Puji Investment Management Co., Ltd. by issuing shares at 7.43 yuan per share through private placement and in cash. The subject assets are totally valued at 550 million yuan. The company also plans to raise a supporting fund of 200 million yuan by issuing shares at 7.81 yuan per share to pay the consideration of the above transactions in cash and invest in the research and development of big data and cloud computing platforms.
The target of the above transactions is the ‘Internet plus urban services’. The business of the subject companies to be acquired will diversify the solutions of Insigma Technology in intelligent social insurance, intelligent transportation, intelligent conventions and exhibitions, intelligent parks, intelligent health and other vertical areas.
○ Central China Land Media to fully control Dinv Ares Film & Media with RMB625 mln
------
Central China Land Media Co., Ltd. (000719.SZ) intends to acquire 100 percent equities of Dinv Ares Film & Media via issuing shares and in cash. The latter is preliminarily valued at 625 million yuan. The company plans to pay 190 million yuan in cash and issue 29.99 million shares at 14.59 yuan per share through private placement. Meanwhile, Central China Land Media proposes to raise a supporting fund of 625 million yuan by issuing shares at no less than 14.85 yuan per share. The proceeds will be invested in the platform for the video IP incubation transactions and supplementing the working capital of Dinv Ares Film & Media. The counterparty committed that the net profit of Dinv Ares Film & Media from 2015 to 2017 will be no less than 49 million yuan, 61.25 million yuan and 78 million yuan, respectively.
○ Jinlong Machinery & Electronic to raise RMB2.5 bln through private placement to expand production
------
Jinlong Machinery & Electronic Co., Ltd. (300032.SZ) proposes to raise 2.5 billion yuan by issuing 200 million shares to Jinlong Group, the controlling shareholder of the company, and other specific targets through private placement. The proceeds will be invested in the intelligent terminal linear motor and tactile feedback integration, driving motor, components and the construction of terminal electronic products production line, the intelligent terminal touch-display integration project as well as the improvement and reconstruction of the research and development center for new technology of micro & special motors and supplementing the working capital.
○ Rising Nonferrous Metals to consolidate rare earth with RMB2.2 bln, Liu Yiqian to participate in private placement
------
Rising Nonferrous Metals Share Co., Ltd. (600259.SH) plans to raise 2.2 billion yuan by issuing 40.38 million shares at 54.48 yuan per share through private placement. The proceeds will be invested in the exploration of mining resources, research and development projects as well as repaying debts. Guangdong Rising Assets Management Co., Ltd., the controlling shareholder of the company will subscribe 13.40 million shares. Guohua Life and Liu Yiqian will subscribe 15 million shares and 8.78 million shares, respectively. The GF Assets Management established by certain directors, supervisors, senior management and other employees of the company will subscribe 1.20 million shares through the assets management plan. The private placement will boost the development and utilization of the rare earth and tungsten ore resources of the company and expand the resources reserves.
○ Dahu Aquaculture to raise RMB550 mln to develop aquatic products industry chain
------
Dahu Aquaculture Co., Ltd. (600257.SH) intends to raise 550 million yuan by issuing 54.19 million shares at 10.15 yuan per share through private placement. The proceeds will be used in supplementing the working capital and repaying debts. Ni Zhengdong, founder of Zero2IPO Ventures, and Xie Shihuang, vice president of Alibaba Group, are among the participants of the private placement.
[Weekly Review]
○ Proper adjustment to sustain market in long term
------
The stock market plunged by over 300 points on Thursday and recovered on Friday last week. But the short position recovered in closing hours and the SSE Composite Index declined. The ChiNext Board closed jumping 3.20 percent against the trend. Since the slump on May 19, the market sentiment has been excited and investors with huge profits in short term exit after they made profits, which results in the disaster on May 28. The market attributes it to the Central Huijin Investment Ltd.’s reduction of A-share holdings in the major four banks as well as the IPO of big-cap blue-chip companies represented by China Nuclear Power Engineering Co., Ltd.
XFA mentioned the regulatory measures on the umbrella trust and the HOMS of Hundsun Technologies Inc. (600570.SH) introduced by regulatory authorities on May 24 and indicated that the new round of regulatory moves will affect the market in short term. The crazy bullish market forces regulatory authorities to introduce more effective measures to cool down the market, such as the reduction of A-share holdings by Central Huijin Investment and the acceleration in the IPO of big-cap stocks. The moves are to cool down the market and achieve a moderately bullish market for a long term.
After the storm of adjustments, the market should be pacifies and avoid hypercorrection. XFA pointed out on May 28 that institutes are rosy about medium- and long-term markets. The Xinhua News Agency also released a paper, indicating that proper adjustment can help the long-term performance of the market. It shows the target of a ‘moderately bullish market’ of the regulatory authorities.
Currently, the market sentiment is prudent. The computer and military industry recovered first last Friday, which has been focused by the XFA recently. What will be the market conditions in June? Investors are advised to read the XFA information. We would like to share the saying of Buffet with investors. ‘Be fearful when others are greedy, and be greedy when others are fearful.’
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