[Today's Guide]
○Work conference on regulation of securities and futures convened with acquisition and reorganization supported
○Integration of irrigation and fertilization speeds up in promotion, new fertilizers expected to see growth opportunities
○B-ray Media purchases financial assets, Yuanli Active Carbon and Kingsignal Technology conduct private placement
○Shareholdings to increase in Shengda Forestry Industry and Xinchao Industry, Winall Hi-tech Seed expects annual net profit to triple
[SSN Focus]
○Work conference on regulation of securities and futures convened with acquisition and reorganization supported
------
Xiao Gang, head of China Securities Regulatory Commission (CSRC), indicated on the national work conference on the regulation of securities and futures held on Jan. 16 that the reform on the registration-based initial public offering (IPO) system will be a gradual process and the IPO pace and pricing will not be completely deregulated "all at once" as the regulator will seek to prevent a massive supply of new shares. He also required deepening market-oriented reform of acquisition and reorganization and removing the obstacles impeding the acquisitions and reorganizations that cross industries, regions and ownerships; supporting listed companies, especially state-holding listed companies, to grow better and stronger through various means including asset injection, introduction of strategic investment, absorption and merger and overall listing; initiating the Shenzhen-Hong Kong Stock Connect, improving Shanghai-Hong Kong Stock Connect and studying the feasibility of Shanghai-London Stock Connect in 2016.
Comment: The registration-based IPO system is not a dreadful monster. Under the backdrop that the decision-maker is determined to stabilize the market, the IPO pace might be slower than it is expected by the market. Central enterprises and local state-owned groups usually hold lots of listed resources but a large part of which are involved in traditional areas and see poor performance and overcapacity. The CSRC's support to acquisition and reorganization will make more private capitals with both strength and courage to achieve back-door listing via state-owned enterprises. The companies, seeing smaller total value and gloomy performance of primary business and being less attractive to state-owned enterprises, are more likely to see reorganization.
◆Efforts on reorganizing state-owned enterprises to intensify in 2016
------
An annual conference of the responsible persons for central enterprises and local SASACs was held by the State-owned Assets Supervision and Administration Commission (SASAC) on Jan. 15 with the ideas about the reform on state-owned enterprises and assets during the "thirteenth five-year plan" period determined and the work tasks in 2016 arranged. It is determined to carry out drastic reform on the SASAC itself; advance the acquisition and reorganization of state-owned enterprises through reorganizations of industries, industrial chain and leading enterprises; set deadline for the disposal of "zombie companies" and strive to basically complete the main tasks in around three years.
[SSN Selection]
○Chinese President Xi Jinping attended the opening ceremony of the Asian Infrastructure Investment Bank (AIIB) on Jan. 16, proposing to build the AIIB into a new platform to help foster a community of shared future for mankind.
○The China Securities Regulatory Commission (CSRC) indicated on a press conference held on Jan. 15 that the risks, presented by margin trading and banks using stocks as collateral, were controllable on the whole.
○The People's Bank of China on Jan. 15 injected 100 billion yuan through medium-term lending facility (MLF) again to keep liquidity steady.
○As reported by the Reuters, the People's Bank of China will collect the reserve requirement on overseas RMB inter-bank deposit from Jan. 25 so as to ward off macro financial risks.
○Domestic price of magnesium ingot moved up nearly 10 percent last week. Materials show that companies including Nanjing Yunhai Special Metals Co., Ltd. (002182.SZ) and Puyang Refractories Group Co., Ltd. (002225.SZ) are involved in magnesium business.
○China Vanke Co., Ltd. (000002.SZ; 02202.HK) proposes to continue its trading suspension for no more than two months; Shanghai YTO Express (Logistics) Co., Ltd. proposes to achieve back-door listing via Dalian Dayang Trands Co., Ltd. (600233.SZ) which is still in trading suspension.
TOP
[Industry Information]
○Integration of irrigation and fertilization speeds up in promotion, new fertilizers expected to see growth opportunities
------
SSN learnt that the Ministry of Industry and Information Technology (MIIT) inspected the promotion of the integration of irrigation and fertilization in Shandong Province and proposed to increase the supporting efforts on the industry and introduce relevant subsidy policies. The technology will help reduce water and fertilizers. It is environmental and efficient and will promote agricultural modernization.
According to the Action Plan on Zero Growth in Fertilizer Consumption by 2020, the proportion of new fertilizers in total fertilizer consumption will be improved from less than 10 percent to 30 percent. It will encourage the development of slow controlled-release fertilizer, water-souble fertilizers and other new types of fertilizers. During the 13th Five-year Plan period, the application of the integration of irrigation and fertilization will increase by another 80 million mu and the target of 150 million mu with the application of the integration of irrigation and fertilization will be achieved. The water-souble fertilizers will see rapid development opportunities. In terms of listed companies, Kingenta Ecological Engineering Group Co., Ltd. (002470.SZ) and Shenzhen Batian Ecotypic Engineering Co., Ltd. (002170.SZ) are actively promoting water-souble fertilizers and conducting the integration of irrigation and fertilization projects.
TOP
[Announcement Interpretation]
○B-ray Media conducts private placement at premium to purchase financial assets at over RMB1.1 bln
------
Chengdu B-ray Media Co., Ltd. (600880.SH) plans to purchase 81 percent equity of Chengdu Small Enterprise Financing Guarantee Co., Ltd. by issuing 92.69 million shares at a price of 9.67 yuan per share through private placement and paying cash 256 million yuan. The total amount reaches 1,152 million yuan. The company will also raise supporting funds of 1,152 million yuan by issuing shares at the same price of 9.67 yuan per share through private placement. Its controlling shareholder Chengdu Boray Investment Holding Group will subscribe 20 percent-30 percent of the shares.
Small Enterprise Financing Guarantee is one of the guarantee companies with the largest registered capital amount in Sichuan Province. According to the performance committee, its accumulative net profits will be 541 million yuan during 2016-2018. The latest share price of B-ray Media records 7.5 yuan per share, over 20 percent lower than the price in the private placement.
○Yuanli Active Carbon raise RMB600 mln to upgrade product structure
------
Fujian Yuanli Active Carbon Co., Ltd. (300174.SZ) plans to raise 600 million yuan by issuing 30 million shares through private placement to invest in the high-end refined activated carbon project, repay loans and supplement working capitals. The fundraising project is conducive to promote the company's product structure to transform to such high-end fields as health and medicine, environment and energy and new materials.
○Kingsignal Technology to raise RMB1.2 bln through private placement
------
Kingsignal Technology Co., Ltd. (300252.SZ) plans to raise 1.2 billion yuan by issuing 45 million shares through private placement to invest in Kingsignal industrial parks, the construction project of production and R＆D center of new connector, capacity expansion project of special cable and the construction project of production base of big-data cables.
Shenzhen Qianhai Xinnuo Investment Partnership (Limited Partnership) subscribes the shares valued at 550 million yuan. Qianhai Xinnuo Investment Partnership is a company held by Kingsignal Technology's second largest shareholder Zhangtian and his spouse Xiao Donghua, its actual controller Huang Changhua and its third laregest shareholder Zheng Jun. Kingsignal Technology also announces that its net profits are predicted to grow by 50 percent-80 percent in 2015 owing to the promotion of 4G technology.
TOP
○Shareholdings to increase in Shengda Forestry Industry and Xinchao Industry
------
Shenda Group, the controlling shareholder of Sichuan Shengda Forestry Industry Co., Ltd. (002259.SZ), plans to increase the shareholding in the company with 30 million yuan in next three months. Shenzhen Jinzhi Cangshun Investment Development Co., Ltd., substantial shareholder of Yantai Xinchao Industry Co., Ltd. (600777.SH), proposes to increase the shareholding in the company with no more than 1 billion yuan at a price of no more than 18 yuan per share in next three months.
[Financial Express]
○Winall Hi-tech Seed expects annual net profit to triple
------
Winall Hi-tech Seed Co., Ltd. (300087.SZ) announced an annual growth rate of 280 percent to 330 percent for its net profit forecast, mainly as popularity of its new products reaches expectation, and 112 percent to 149 percent for Nanfang Black Sesame Group Co., Ltd. (000716.SZ) due to expansion of its product sales channel.
[Weekly Review]
○Good time to prepare in market adjustment
------
In 2016, A-share market suffered a depressed start, with adjustment for the successive two weeks, which perhaps makes optimistic investors feel disappointed. There is an old saying that "goods should be sold out when price is expensive, and acquired when cheap". More depressed the stock price is, more investment opportunities are. Investors should not treat the market lightly at this moment.
In terms of major circle, A-share market has entered a turning point at the beginning of this year since an uptrend for continuous three years. It will take time to determine that whether it will rise again after adjustment or changes to a situation depending on value. But we can make sure that gradually based on the changing market trend. It is an important task to keep a close eye, and constantly analyze and research the A-share market.
In terms of minor circle, the stock market has entered a stage of "new normal status" since the middle of last year, with stock index compressed and fluctuated in the box, and on-market capital continuously searches for partial hotspots. Along with some major policies successively issued in the new year, especially that China pays much attention to supply side reform, the next round of hotspots in the A-share market is arousing. Based on this, SSN has constantly focused on investment opportunities brought by supply side reform since the beginning of this year.
The winter ends and the spring will arrive. Prepared investors are more likely to grasp the opportunities. SSN will always make every effort to help investors catch the market chances in the future.
TOP
○Work conference on regulation of securities and futures convened with acquisition and reorganization supported
○Integration of irrigation and fertilization speeds up in promotion, new fertilizers expected to see growth opportunities
○B-ray Media purchases financial assets, Yuanli Active Carbon and Kingsignal Technology conduct private placement
○Shareholdings to increase in Shengda Forestry Industry and Xinchao Industry, Winall Hi-tech Seed expects annual net profit to triple
[SSN Focus]
○Work conference on regulation of securities and futures convened with acquisition and reorganization supported
------
Xiao Gang, head of China Securities Regulatory Commission (CSRC), indicated on the national work conference on the regulation of securities and futures held on Jan. 16 that the reform on the registration-based initial public offering (IPO) system will be a gradual process and the IPO pace and pricing will not be completely deregulated "all at once" as the regulator will seek to prevent a massive supply of new shares. He also required deepening market-oriented reform of acquisition and reorganization and removing the obstacles impeding the acquisitions and reorganizations that cross industries, regions and ownerships; supporting listed companies, especially state-holding listed companies, to grow better and stronger through various means including asset injection, introduction of strategic investment, absorption and merger and overall listing; initiating the Shenzhen-Hong Kong Stock Connect, improving Shanghai-Hong Kong Stock Connect and studying the feasibility of Shanghai-London Stock Connect in 2016.
Comment: The registration-based IPO system is not a dreadful monster. Under the backdrop that the decision-maker is determined to stabilize the market, the IPO pace might be slower than it is expected by the market. Central enterprises and local state-owned groups usually hold lots of listed resources but a large part of which are involved in traditional areas and see poor performance and overcapacity. The CSRC's support to acquisition and reorganization will make more private capitals with both strength and courage to achieve back-door listing via state-owned enterprises. The companies, seeing smaller total value and gloomy performance of primary business and being less attractive to state-owned enterprises, are more likely to see reorganization.
◆Efforts on reorganizing state-owned enterprises to intensify in 2016
------
An annual conference of the responsible persons for central enterprises and local SASACs was held by the State-owned Assets Supervision and Administration Commission (SASAC) on Jan. 15 with the ideas about the reform on state-owned enterprises and assets during the "thirteenth five-year plan" period determined and the work tasks in 2016 arranged. It is determined to carry out drastic reform on the SASAC itself; advance the acquisition and reorganization of state-owned enterprises through reorganizations of industries, industrial chain and leading enterprises; set deadline for the disposal of "zombie companies" and strive to basically complete the main tasks in around three years.
[SSN Selection]
○Chinese President Xi Jinping attended the opening ceremony of the Asian Infrastructure Investment Bank (AIIB) on Jan. 16, proposing to build the AIIB into a new platform to help foster a community of shared future for mankind.
○The China Securities Regulatory Commission (CSRC) indicated on a press conference held on Jan. 15 that the risks, presented by margin trading and banks using stocks as collateral, were controllable on the whole.
○The People's Bank of China on Jan. 15 injected 100 billion yuan through medium-term lending facility (MLF) again to keep liquidity steady.
○As reported by the Reuters, the People's Bank of China will collect the reserve requirement on overseas RMB inter-bank deposit from Jan. 25 so as to ward off macro financial risks.
○Domestic price of magnesium ingot moved up nearly 10 percent last week. Materials show that companies including Nanjing Yunhai Special Metals Co., Ltd. (002182.SZ) and Puyang Refractories Group Co., Ltd. (002225.SZ) are involved in magnesium business.
○China Vanke Co., Ltd. (000002.SZ; 02202.HK) proposes to continue its trading suspension for no more than two months; Shanghai YTO Express (Logistics) Co., Ltd. proposes to achieve back-door listing via Dalian Dayang Trands Co., Ltd. (600233.SZ) which is still in trading suspension.
TOP
[Industry Information]
○Integration of irrigation and fertilization speeds up in promotion, new fertilizers expected to see growth opportunities
------
SSN learnt that the Ministry of Industry and Information Technology (MIIT) inspected the promotion of the integration of irrigation and fertilization in Shandong Province and proposed to increase the supporting efforts on the industry and introduce relevant subsidy policies. The technology will help reduce water and fertilizers. It is environmental and efficient and will promote agricultural modernization.
According to the Action Plan on Zero Growth in Fertilizer Consumption by 2020, the proportion of new fertilizers in total fertilizer consumption will be improved from less than 10 percent to 30 percent. It will encourage the development of slow controlled-release fertilizer, water-souble fertilizers and other new types of fertilizers. During the 13th Five-year Plan period, the application of the integration of irrigation and fertilization will increase by another 80 million mu and the target of 150 million mu with the application of the integration of irrigation and fertilization will be achieved. The water-souble fertilizers will see rapid development opportunities. In terms of listed companies, Kingenta Ecological Engineering Group Co., Ltd. (002470.SZ) and Shenzhen Batian Ecotypic Engineering Co., Ltd. (002170.SZ) are actively promoting water-souble fertilizers and conducting the integration of irrigation and fertilization projects.
TOP
[Announcement Interpretation]
○B-ray Media conducts private placement at premium to purchase financial assets at over RMB1.1 bln
------
Chengdu B-ray Media Co., Ltd. (600880.SH) plans to purchase 81 percent equity of Chengdu Small Enterprise Financing Guarantee Co., Ltd. by issuing 92.69 million shares at a price of 9.67 yuan per share through private placement and paying cash 256 million yuan. The total amount reaches 1,152 million yuan. The company will also raise supporting funds of 1,152 million yuan by issuing shares at the same price of 9.67 yuan per share through private placement. Its controlling shareholder Chengdu Boray Investment Holding Group will subscribe 20 percent-30 percent of the shares.
Small Enterprise Financing Guarantee is one of the guarantee companies with the largest registered capital amount in Sichuan Province. According to the performance committee, its accumulative net profits will be 541 million yuan during 2016-2018. The latest share price of B-ray Media records 7.5 yuan per share, over 20 percent lower than the price in the private placement.
○Yuanli Active Carbon raise RMB600 mln to upgrade product structure
------
Fujian Yuanli Active Carbon Co., Ltd. (300174.SZ) plans to raise 600 million yuan by issuing 30 million shares through private placement to invest in the high-end refined activated carbon project, repay loans and supplement working capitals. The fundraising project is conducive to promote the company's product structure to transform to such high-end fields as health and medicine, environment and energy and new materials.
○Kingsignal Technology to raise RMB1.2 bln through private placement
------
Kingsignal Technology Co., Ltd. (300252.SZ) plans to raise 1.2 billion yuan by issuing 45 million shares through private placement to invest in Kingsignal industrial parks, the construction project of production and R＆D center of new connector, capacity expansion project of special cable and the construction project of production base of big-data cables.
Shenzhen Qianhai Xinnuo Investment Partnership (Limited Partnership) subscribes the shares valued at 550 million yuan. Qianhai Xinnuo Investment Partnership is a company held by Kingsignal Technology's second largest shareholder Zhangtian and his spouse Xiao Donghua, its actual controller Huang Changhua and its third laregest shareholder Zheng Jun. Kingsignal Technology also announces that its net profits are predicted to grow by 50 percent-80 percent in 2015 owing to the promotion of 4G technology.
TOP
○Shareholdings to increase in Shengda Forestry Industry and Xinchao Industry
------
Shenda Group, the controlling shareholder of Sichuan Shengda Forestry Industry Co., Ltd. (002259.SZ), plans to increase the shareholding in the company with 30 million yuan in next three months. Shenzhen Jinzhi Cangshun Investment Development Co., Ltd., substantial shareholder of Yantai Xinchao Industry Co., Ltd. (600777.SH), proposes to increase the shareholding in the company with no more than 1 billion yuan at a price of no more than 18 yuan per share in next three months.
[Financial Express]
○Winall Hi-tech Seed expects annual net profit to triple
------
Winall Hi-tech Seed Co., Ltd. (300087.SZ) announced an annual growth rate of 280 percent to 330 percent for its net profit forecast, mainly as popularity of its new products reaches expectation, and 112 percent to 149 percent for Nanfang Black Sesame Group Co., Ltd. (000716.SZ) due to expansion of its product sales channel.
[Weekly Review]
○Good time to prepare in market adjustment
------
In 2016, A-share market suffered a depressed start, with adjustment for the successive two weeks, which perhaps makes optimistic investors feel disappointed. There is an old saying that "goods should be sold out when price is expensive, and acquired when cheap". More depressed the stock price is, more investment opportunities are. Investors should not treat the market lightly at this moment.
In terms of major circle, A-share market has entered a turning point at the beginning of this year since an uptrend for continuous three years. It will take time to determine that whether it will rise again after adjustment or changes to a situation depending on value. But we can make sure that gradually based on the changing market trend. It is an important task to keep a close eye, and constantly analyze and research the A-share market.
In terms of minor circle, the stock market has entered a stage of "new normal status" since the middle of last year, with stock index compressed and fluctuated in the box, and on-market capital continuously searches for partial hotspots. Along with some major policies successively issued in the new year, especially that China pays much attention to supply side reform, the next round of hotspots in the A-share market is arousing. Based on this, SSN has constantly focused on investment opportunities brought by supply side reform since the beginning of this year.
The winter ends and the spring will arrive. Prepared investors are more likely to grasp the opportunities. SSN will always make every effort to help investors catch the market chances in the future.
TOP
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