[Today's Guide]
○ NDRC makes New Year's resolution to promote supply-side reform from multiple aspects
○ Sodium carbonate prices in various regions pick up, swine breeding expected to continue prosperity
○ Xiyi Industrial to acquire Suken Yinhe，ORG buys Huangshan Novel through secondary market acquisition to the 5 percent limit for the fifth time
○ KPC Phar. proposes high share conversion in annual report, Feilo Acoustics expects 5 times growth in net profit
[SSN Focus]
○ NDRC makes New Year's resolution to promote supply-side reform from multiple aspects
------
The National Development and Reform Commission (NDRC) indicated at the press conference on Jan 12. that the NDRC will cooperate with other relevant departments in greatly promoting the supply-side structural reform this year. It will focus on carrying out pilot demonstration on mixed ownership reform in power, oil and gas, railway, civil aviation, telecommunication, military engineering and other key industries and facilitating reform in power, petroleum, natural gas, salt and other industries. It will also continue to deepen the pricing reform in power, natural gas, medical treatment and other key industries.
Comment: With the gradual implementation of the supply-side reform, the reform dividends will gradually release, improving the total factor productivity (TFP) of China's economy. The orientation of the salt industry reform is to scrap franchising and achieve the integration of production and marketing. Salt manufacturers are expected to enter the salt terminal consumption field by taking this opportunity to increase their gross profits. They can reasonably improve medical service prices and terminate the supplement of medical service prices with medicine prices. Privately-run medicine institutions can take this opportunities to provide differential services according to the demands in markets of different levels and improve profitability.
[SSN Selection]
○ The State Council issued a document, requiring advancing the integration of the medical insurance system for urban residents and the new rural cooperatives medical system. It also proposes to promote the intelligent approval and real-time monitoring of medical insurance by information-based means.
○ The General Office of the State Council proposes in a statement to promote the construction of major products tracking system and increase input in traceability code and other information technology in the key fields of food and drug.
○ The China Insurance Regulatory Commission (CIRC) disclosed that the industry saw its premium revenue grow 20 percent year on year last year. Its overall net profit is expected to growth nearly 73 percent.
○ 23 listed companies that had released their financial data for last December saw their net profit increase 25 percent on a monthly basis, beating the market expectations.
○ Gemdale Corporation (600383.SH) announced that it will suspend trading for one day due to abnormal trading changes. The trading volume ranking list shows that a business department in Shenzhen heavily bought it with 800 million yuan in recent three days.
TOP
[Industry Information]
○ Sodium carbonate prices pick up amid low inventory and capacity integration
------
SSN learns that due to low inventories and capacity integration, sodium carbonate prices in East China, North China and Guangdong Province have been hiking since January and picked up nearly 7 percent at the highest level. Relevant manufacturers indicate that some manufacturers have no inventory now, and downstream manufacturers are actively preparing for the supply. Shored up by the few newly-increased capacity and recovery of new home construction, the profitability level of the sodium carbonate industry is expected to improve.
Comment: Institutes believe that driven by the supply-side reform, the petroleum and chemical industry where overcapacity concentrates has huge potential for integration. SSN learnt that the the three-year action plan on the structural adjustment of the petroleum and chemical industry is under preparation, which will focus on combating overcapacity. Capacity integration and demand recovery will post opportunities for sodium carbonate enterprises to improve their profitability. Among listed companies, Shandong Haihua Company Limited (000822.SZ) is mainly engaged in sodium carbonate. Its annual productivity reaches as high as 3,000,000 tons. Tangshan Sanyou Chemical Industries Co., Ltd. (600409.SH) owns 2,760,000-ton equity productivity of sodium carbonate.
○ Contraction of production capacity send price of swine higher, prosperity cycle expected to continue
------
On Jan.12, the average price of swine across country hit 16.99 yuan per kg., up 0.46 yaun per kg. than last Friday. The prices in one third of provinces reached 18 yuan per kg. Meanwhile, fodder price continue to decline, pushing the average pig grain ratio to 8.9:1, up 5.37 percent than last week, and 60.98 percent higher than the same period last year. The swine market continue to show a trend of lower fodder costs and higher swine prices.
Comment: industry insiders believe that the duration of decline of breeding stock sows is beyond expectation. After suffering huge losses, swine farmers are cautious to increase breeding stock at the moment. At the same time, strict environment protection and agrarian policy further restrict the expansion of farming scale. Benefiting from contraction of production capacity and steady growth of demand, prosperity cycle of breeding industry is expected to continue throughout the year. In A-share companies, Jiangxi Zhengbang Technology Co., Ltd. (002157.SZ), Muyuan Foods Co., Ltd. (002714.SZ) are leading enterprises of swine production.
TOP
[Announcement Interpretation]
○ Xiyi Industrial to acquire auto components and parts manufacturer
------
Yunnan Xiyi Industrial Co., ltd. (002265.SZ) proposes to issue 21,990,000 shares through private placement at 15.88 yuan per share to raise 349 million yuan, in order to acquire the entire equity of Chengde Suken Yinhe Connecting Rod Co., Ltd. Meanwhile, the company proposes to raise matching fund of 345 million yuan through private placement at 14.33 yuan per share. Suken Yinhe has distinct advantage in the area of auto engine rod manufacturing. The counterparty committed that net profits of Suken Yinhe after deduction of non-recurring losses and profits for 2016 to 2018will be no less than 30 million yuan, 32 million yuan and 35 million yuan, respectively.
○ ORG buys Huangshan Novel through secondary market acquisition to the 5 percent limit for the fifth time
------
Huangshan Novel Co.,Ltd. (002014.SZ) disclosed that ORG Packaging Co., Ltd. (002701.SZ) and its parties acting in concert have in aggregate increased holding 16,010,000 shares of the company from November 2015 to January 2016, and ORG's shareholding in the company has increased from previous 20.215 percent to 25.13 percent, completing the fifth buying to the 5 percent limit. For the reason behind the buying, ORG insisted that it is optimistic about the prospect of Huangshan Novel. Not long ago, Yong Jia, controlling shareholder of Huangshan Novel, has completed shareholding increase in the company, with its shareholding increased to 28.49 percent.
○ Chint Electrics to control SIM-MAX Technology
-----
Zhejiang Chint Electrics Co., ltd. (601877.SH) proposes to acquire 51 percent equity in Shanghai SIM-MAX Technology with the consideration of 156 million yuan. Production lines of SIM-MAX Technology include three major categories, namely advanced crystal materials, the radiation detection instruments and equipment, explosive, drugs and chemical warfare agent detector. Chint Electrics committed to build SIM-MAX Technology into a security check and radiation measurement comprehensive solution provider integrating counter-terrorism security check, environment protection and nuclear radiation detection in the future.
○ Chunxing Precision Mechanical to acquire Xi'an Xinghang
------
Suzhou Chunxing Precision Mechanical Co., ltd. (002547.SZ) proposes to acquire 52 percent equity in Xi'an Xinghang aeronautical manufacturing company limited. Xi'an Xinghang is a private enterprise whose main businesses involve aviation components and parts processing and heavy mould manufacturing, and has obtained GJB9001B military products quality system certification, AS9100C aerospace quality system certification and level 3 secrecy qualification certification for weapons and equipment research and production enterprise.
○ Sino Great Wall wins order with USD285 mln
------
Sino Great Wall International Engineering Co., Ltd., a wholly-owned subsidiary of Sino Great Wall Co., Ltd. (000018.SZ), received the letter of acceptance from Oxley-Gem (Cambodia) Co., Ltd. The project is a comprehensive development project with 55 floors in a village at No. 14 Hun Sen Road with an accepted contract amount of 285 million U.S. dollars, including reserve funds and total amounts. The accepted contract amount accounts for 16,979 percent of its operation revenue in 2014.
○ Sanlux sees shareholding increases
------
Wu Qiongying, the actual controller of Sanlux Co., Ltd. (002224.SZ), plans to increase the shareholding in the company with no less than 5 million shares in the following six months. Shenzhen Risheng Chuangyuan Assets Investment Co., Ltd., the third biggest shareholder of Guangdong Shaoneng Group Co., Ltd. (000601.SZ), increased the shareholding in the company with 3.71 million shares on Jan. 12.
TOP
[Financial Reports Express]
○ KPC Phar. proposes high share conversion
------
KPC Pharmaceuticals, Inc. (600422.SH) proposes a 10-for-10 conversion of capital surplus into shares combined with cash dividend according to its annual report. Meanwhile, the company expects its net profit in 2015 to increase 45 to 55 percent year on year. Zhongfu Straits (Pingtan) Development Company Limited (000592.SZ) proposes a 10-for-10 conversion of capital surplus into shares according to its annual report.
○ Feilo Acoustics expects high growth in net profit
------
Shanghai Feilo Acoustics Co., Ltd. (600651.SH) expects its net profit to see a year-on-year growth of 500 percent in its annual report, which is mainly attributed to the consolidation of Beijing Shen'an Investment Group Co., Ltd. into the combined statements and the surge in the lighting business. Shandong Jincheng Pharmaceutical and Chemical Co., Ltd. (300233.SZ) expects its net profit to see a year-on-year growth of 50 to 80 percent in its annual report thanks to the growth of the sales and prices of its antibiotic products. Anxin Trust Co., Ltd. (600816.SH) expects its net profit to see a year-on-year growth of 68 percent in its annual report thanks to the business growth. In addition, Hangzhou Robam Appliances Co., Ltd. (002508.SZ) revised the expected growth from 20-40 percent to 40-50 percent year on year.
[News Tracking]
○ Langold Real Estate's private placement under smooth progress
------
SSN learnt that the fundraising of Wuhan Langold Real Estate Co., Ltd. (002305.SZ) by issuing shares through private placement is under smooth progress currently. Its Tanhualin project has completed the construction of main structure. The project plans to achieve sales of 1,691 million yuan with an after-tax profit of 309 million yuan. The phase-II of Langold Center project has completed over 50 percent and the project plans to achieve an after-tax profit of 626 million yuan.
The application of Langold Real Estate for private placement was approved by the China Securities Regulatory Commission (CSRC) in December 2015. The bottom issuance price is 5.64 yuan, which is higher than the latest stock price of the company. Besides, PowerChina Real Estate Group Ltd., the controlling shareholder of the company, announced that it plans to increase the shareholding in the company in the following six months from July 13, 2015. As the commitment period approaches, the company has not released announcement on shareholding increasing.
[Trading Trends]
○ Four institutional seats buy Shunwang Technology
------
The trading volume ranking list on Jan. 12 shows that four institutional seats bought Hangzhou Shunwang Technology Co., Ltd. (300113.SZ) with a total of 208 million yuan, accounting for 19 percent of its intraday turnover.
Comment: The company established Hangzhou Shunwang Bangquan Financial Information Services Co., Ltd., a company engaged in financial services for the transformation and upgrading of cybercafes. Institutes believe that the financial platform will bring the platform of Shunwang Technology with higher B user stickiness and profit growth. It is estimated that the financial services market for cybercafes can reach 100 million yuan and may bring considerable profit growth.
TOP
○ NDRC makes New Year's resolution to promote supply-side reform from multiple aspects
○ Sodium carbonate prices in various regions pick up, swine breeding expected to continue prosperity
○ Xiyi Industrial to acquire Suken Yinhe，ORG buys Huangshan Novel through secondary market acquisition to the 5 percent limit for the fifth time
○ KPC Phar. proposes high share conversion in annual report, Feilo Acoustics expects 5 times growth in net profit
[SSN Focus]
○ NDRC makes New Year's resolution to promote supply-side reform from multiple aspects
------
The National Development and Reform Commission (NDRC) indicated at the press conference on Jan 12. that the NDRC will cooperate with other relevant departments in greatly promoting the supply-side structural reform this year. It will focus on carrying out pilot demonstration on mixed ownership reform in power, oil and gas, railway, civil aviation, telecommunication, military engineering and other key industries and facilitating reform in power, petroleum, natural gas, salt and other industries. It will also continue to deepen the pricing reform in power, natural gas, medical treatment and other key industries.
Comment: With the gradual implementation of the supply-side reform, the reform dividends will gradually release, improving the total factor productivity (TFP) of China's economy. The orientation of the salt industry reform is to scrap franchising and achieve the integration of production and marketing. Salt manufacturers are expected to enter the salt terminal consumption field by taking this opportunity to increase their gross profits. They can reasonably improve medical service prices and terminate the supplement of medical service prices with medicine prices. Privately-run medicine institutions can take this opportunities to provide differential services according to the demands in markets of different levels and improve profitability.
[SSN Selection]
○ The State Council issued a document, requiring advancing the integration of the medical insurance system for urban residents and the new rural cooperatives medical system. It also proposes to promote the intelligent approval and real-time monitoring of medical insurance by information-based means.
○ The General Office of the State Council proposes in a statement to promote the construction of major products tracking system and increase input in traceability code and other information technology in the key fields of food and drug.
○ The China Insurance Regulatory Commission (CIRC) disclosed that the industry saw its premium revenue grow 20 percent year on year last year. Its overall net profit is expected to growth nearly 73 percent.
○ 23 listed companies that had released their financial data for last December saw their net profit increase 25 percent on a monthly basis, beating the market expectations.
○ Gemdale Corporation (600383.SH) announced that it will suspend trading for one day due to abnormal trading changes. The trading volume ranking list shows that a business department in Shenzhen heavily bought it with 800 million yuan in recent three days.
TOP
[Industry Information]
○ Sodium carbonate prices pick up amid low inventory and capacity integration
------
SSN learns that due to low inventories and capacity integration, sodium carbonate prices in East China, North China and Guangdong Province have been hiking since January and picked up nearly 7 percent at the highest level. Relevant manufacturers indicate that some manufacturers have no inventory now, and downstream manufacturers are actively preparing for the supply. Shored up by the few newly-increased capacity and recovery of new home construction, the profitability level of the sodium carbonate industry is expected to improve.
Comment: Institutes believe that driven by the supply-side reform, the petroleum and chemical industry where overcapacity concentrates has huge potential for integration. SSN learnt that the the three-year action plan on the structural adjustment of the petroleum and chemical industry is under preparation, which will focus on combating overcapacity. Capacity integration and demand recovery will post opportunities for sodium carbonate enterprises to improve their profitability. Among listed companies, Shandong Haihua Company Limited (000822.SZ) is mainly engaged in sodium carbonate. Its annual productivity reaches as high as 3,000,000 tons. Tangshan Sanyou Chemical Industries Co., Ltd. (600409.SH) owns 2,760,000-ton equity productivity of sodium carbonate.
○ Contraction of production capacity send price of swine higher, prosperity cycle expected to continue
------
On Jan.12, the average price of swine across country hit 16.99 yuan per kg., up 0.46 yaun per kg. than last Friday. The prices in one third of provinces reached 18 yuan per kg. Meanwhile, fodder price continue to decline, pushing the average pig grain ratio to 8.9:1, up 5.37 percent than last week, and 60.98 percent higher than the same period last year. The swine market continue to show a trend of lower fodder costs and higher swine prices.
Comment: industry insiders believe that the duration of decline of breeding stock sows is beyond expectation. After suffering huge losses, swine farmers are cautious to increase breeding stock at the moment. At the same time, strict environment protection and agrarian policy further restrict the expansion of farming scale. Benefiting from contraction of production capacity and steady growth of demand, prosperity cycle of breeding industry is expected to continue throughout the year. In A-share companies, Jiangxi Zhengbang Technology Co., Ltd. (002157.SZ), Muyuan Foods Co., Ltd. (002714.SZ) are leading enterprises of swine production.
TOP
[Announcement Interpretation]
○ Xiyi Industrial to acquire auto components and parts manufacturer
------
Yunnan Xiyi Industrial Co., ltd. (002265.SZ) proposes to issue 21,990,000 shares through private placement at 15.88 yuan per share to raise 349 million yuan, in order to acquire the entire equity of Chengde Suken Yinhe Connecting Rod Co., Ltd. Meanwhile, the company proposes to raise matching fund of 345 million yuan through private placement at 14.33 yuan per share. Suken Yinhe has distinct advantage in the area of auto engine rod manufacturing. The counterparty committed that net profits of Suken Yinhe after deduction of non-recurring losses and profits for 2016 to 2018will be no less than 30 million yuan, 32 million yuan and 35 million yuan, respectively.
○ ORG buys Huangshan Novel through secondary market acquisition to the 5 percent limit for the fifth time
------
Huangshan Novel Co.,Ltd. (002014.SZ) disclosed that ORG Packaging Co., Ltd. (002701.SZ) and its parties acting in concert have in aggregate increased holding 16,010,000 shares of the company from November 2015 to January 2016, and ORG's shareholding in the company has increased from previous 20.215 percent to 25.13 percent, completing the fifth buying to the 5 percent limit. For the reason behind the buying, ORG insisted that it is optimistic about the prospect of Huangshan Novel. Not long ago, Yong Jia, controlling shareholder of Huangshan Novel, has completed shareholding increase in the company, with its shareholding increased to 28.49 percent.
○ Chint Electrics to control SIM-MAX Technology
-----
Zhejiang Chint Electrics Co., ltd. (601877.SH) proposes to acquire 51 percent equity in Shanghai SIM-MAX Technology with the consideration of 156 million yuan. Production lines of SIM-MAX Technology include three major categories, namely advanced crystal materials, the radiation detection instruments and equipment, explosive, drugs and chemical warfare agent detector. Chint Electrics committed to build SIM-MAX Technology into a security check and radiation measurement comprehensive solution provider integrating counter-terrorism security check, environment protection and nuclear radiation detection in the future.
○ Chunxing Precision Mechanical to acquire Xi'an Xinghang
------
Suzhou Chunxing Precision Mechanical Co., ltd. (002547.SZ) proposes to acquire 52 percent equity in Xi'an Xinghang aeronautical manufacturing company limited. Xi'an Xinghang is a private enterprise whose main businesses involve aviation components and parts processing and heavy mould manufacturing, and has obtained GJB9001B military products quality system certification, AS9100C aerospace quality system certification and level 3 secrecy qualification certification for weapons and equipment research and production enterprise.
○ Sino Great Wall wins order with USD285 mln
------
Sino Great Wall International Engineering Co., Ltd., a wholly-owned subsidiary of Sino Great Wall Co., Ltd. (000018.SZ), received the letter of acceptance from Oxley-Gem (Cambodia) Co., Ltd. The project is a comprehensive development project with 55 floors in a village at No. 14 Hun Sen Road with an accepted contract amount of 285 million U.S. dollars, including reserve funds and total amounts. The accepted contract amount accounts for 16,979 percent of its operation revenue in 2014.
○ Sanlux sees shareholding increases
------
Wu Qiongying, the actual controller of Sanlux Co., Ltd. (002224.SZ), plans to increase the shareholding in the company with no less than 5 million shares in the following six months. Shenzhen Risheng Chuangyuan Assets Investment Co., Ltd., the third biggest shareholder of Guangdong Shaoneng Group Co., Ltd. (000601.SZ), increased the shareholding in the company with 3.71 million shares on Jan. 12.
TOP
[Financial Reports Express]
○ KPC Phar. proposes high share conversion
------
KPC Pharmaceuticals, Inc. (600422.SH) proposes a 10-for-10 conversion of capital surplus into shares combined with cash dividend according to its annual report. Meanwhile, the company expects its net profit in 2015 to increase 45 to 55 percent year on year. Zhongfu Straits (Pingtan) Development Company Limited (000592.SZ) proposes a 10-for-10 conversion of capital surplus into shares according to its annual report.
○ Feilo Acoustics expects high growth in net profit
------
Shanghai Feilo Acoustics Co., Ltd. (600651.SH) expects its net profit to see a year-on-year growth of 500 percent in its annual report, which is mainly attributed to the consolidation of Beijing Shen'an Investment Group Co., Ltd. into the combined statements and the surge in the lighting business. Shandong Jincheng Pharmaceutical and Chemical Co., Ltd. (300233.SZ) expects its net profit to see a year-on-year growth of 50 to 80 percent in its annual report thanks to the growth of the sales and prices of its antibiotic products. Anxin Trust Co., Ltd. (600816.SH) expects its net profit to see a year-on-year growth of 68 percent in its annual report thanks to the business growth. In addition, Hangzhou Robam Appliances Co., Ltd. (002508.SZ) revised the expected growth from 20-40 percent to 40-50 percent year on year.
[News Tracking]
○ Langold Real Estate's private placement under smooth progress
------
SSN learnt that the fundraising of Wuhan Langold Real Estate Co., Ltd. (002305.SZ) by issuing shares through private placement is under smooth progress currently. Its Tanhualin project has completed the construction of main structure. The project plans to achieve sales of 1,691 million yuan with an after-tax profit of 309 million yuan. The phase-II of Langold Center project has completed over 50 percent and the project plans to achieve an after-tax profit of 626 million yuan.
The application of Langold Real Estate for private placement was approved by the China Securities Regulatory Commission (CSRC) in December 2015. The bottom issuance price is 5.64 yuan, which is higher than the latest stock price of the company. Besides, PowerChina Real Estate Group Ltd., the controlling shareholder of the company, announced that it plans to increase the shareholding in the company in the following six months from July 13, 2015. As the commitment period approaches, the company has not released announcement on shareholding increasing.
[Trading Trends]
○ Four institutional seats buy Shunwang Technology
------
The trading volume ranking list on Jan. 12 shows that four institutional seats bought Hangzhou Shunwang Technology Co., Ltd. (300113.SZ) with a total of 208 million yuan, accounting for 19 percent of its intraday turnover.
Comment: The company established Hangzhou Shunwang Bangquan Financial Information Services Co., Ltd., a company engaged in financial services for the transformation and upgrading of cybercafes. Institutes believe that the financial platform will bring the platform of Shunwang Technology with higher B user stickiness and profit growth. It is estimated that the financial services market for cybercafes can reach 100 million yuan and may bring considerable profit growth.
TOP
Latest comments