[Today's Guide]
○Seven companies approved for IPOs under new rules, issuance pace slower than that of last year
○Supply-demand structure of titanium dioxide constantly improves, leading enterprises likely to increase price again
○UN formulates rules on unmanned driving, propelling industrialization course
○Perfect World Pictures to acquire Perfect World, Sanlian Commercial to acquire Dejing Electronics Technology
[SSN Focus]
○Seven companies approved for IPOs under new rules, issuance pace slower than that of last year
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Seven companies have been approved for IPOs on Jan. 19, including Eastern Pioneer Driving School Co., Ltd. and Guangzhou Gaoland Energy Conservation Tech Co., Ltd., which become the first batch of companies for IPOs under the new rules launched by the IPO system reform. Investors do not need to pay for the subscription on Day T, and those succeed in subscription after results are issued will pay for it on Day T 2. China Securities Regulatory Commission indicated that these seven companies will successively issue the new shares before the Spring Festival, and only one company will be available for subscription each day.
Comment: Under the new rules, a large-scale of capital to stag new shares will no longer exist, and new share issuance will not have impact on capital supply in the market. Based on issuance pace, two batches of IPOs were approved in each month in the second quarter of last year, with about 20 companies for each batch, and 28 new shares were approved in the last month of 2015. For this round, seven new stocks will be issued one by one, bringing less impact on investors than before. Data shows that Rongxin Power Electronic Co., Ltd. (002123.SZ) holds 4 percent equities of Gaoland Energy Conservation Tech with a cost of 8 million yuan.
[SSN Selection]
○The central bank will arrange over 600 billion yuan to support the banks to meet the medium-term liquidity demand before and after the Spring Festival, and cut the interest rate of MLF.
○Three ministries and commissions issued guidance and opinions, encouraging coal-fired power plants to promote the third-party treatment for environmental pollution.
○The National Meteorological Center of CMA will release a pre-warning for heavy snowfall and cold wave on Jan. 20. Lowest temperature of various areas in China will be close to an extreme value of the same period historically in next week.
○According to announcement of Massachusetts Institute of Technology, its research team has invented a liquid-state lithium battery, likely to improve the battery capacity greatly.
○Beijing Leshi Internet Information ＆ Technology Corp. (300104.SZ) announced that it will name the Beijing Guo'an Football Club with 100 million yuan, and the both parties will discuss the possibility of equity cooperation in the future.
TOP
[Industry Information]
○Supply-demand structure of titanium dioxide constantly improves, leading enterprises likely to increase price again
------
SSN learnt that titanium dioxide manufacturers commonly have low inventory with smooth delivery, and some production lines are still in overhauling. Therefore, leading enterprises are likely to further increase the price. They are now negotiating with downstream clients, with the price likely to increase by 300 to 500 yuan per ton. Sichuan Lomon Corporation, a leading enterprise, once increased the price of its product by 300 yuan per ton, closing to 3 percent.
Comment: Due to the rebounded sales in the real estate market and uptrend of foreign trade, demands for titanium dioxide have started to increase since the fourth quarter of last year. Forced by pressure on environmental protection, the outdated capacity that exits from the industry in recent years, totals around 300,000 to 400,000 ton, or over 10 percent. Promoted by rebounded demands and decreased supply, industrial profits are likely to further increase. In terms of listed companies, Henan Billions Chemicals Co., Ltd. (002601.SZ) proposes to acquire Lomon Corporation; titanium dioxide capacity of Jilin Gpro Titanium Industry Co., Ltd. (000545.SZ) and CNNC Hua Yuan Titanium Dioxide Co., Ltd. (002145.SZ) also ranks high in the industry.
TOP
○UN formulates rules on unmanned driving, propelling industrialization course
------
As reported by Kyodo News Agency on Jan. 19, negotiators from the United Nations (UN) indicated that about the unmanned driving system researched by global automobile manufacturers, institutions under the UN, being responsible for formulating international rules for automobiles, have set about to work on relevant safety laws and regulations. Japan and Germany are expected to come up with proposals, and the driving rules on highways will be approved in March 2017 at the soonest. Member nations will have to improve their own laws in accordance with international rules.
Comment: Japan and Germany enjoy leading edge in the unmanned driving area. Their industrialization course of relevant technologies will be accelerated once the international driving rules are formed. As China initiates the R＆D of 5G technologies, the expectation on the industrialization of domestic unmanned driving technologies will gradually intensify. Companies involved in relevant technologies might get a head start. As to listed companies, ZYNP Corporation (002448.SZ) has invested in Shenzhen Vastfly Tech Co., Ltd. which masters the core technology and service ability in the area of Advanced Driver Assistance System (ADAS); Zhejiang Vie Science ＆ Technology Co., Ltd. (002590.SZ) is nodded by the China Securities Regulatory Commission (CSRC) to invest in ADAS projects through private placement.
○Conference on agricultural mechanization emphasizes supply-side reform, mid- and high-end demand on mechanization to release
------
The National Work Conference on Agricultural Mechanization is held in Beijing on Jan. 19. Zhang Taolin, vice-minister of agriculture, emphasized on the meeting that the supply-side structural reform in agricultural mechanization area will be intensified and the upgrading of China's agricultural mechanization will be accelerated to better fuel the construction of China's modern agriculture. Zhang also proposed to realize mechanization before, during and after the whole production process of main crops, achieve obvious progress in the mechanization of farm production, animal raising and processing as well as achieve a comprehensive mechanization rate of over 68 percent in the cultivation and harvest of crops by 2020.
Comment: Institutions believe that agricultural mechanization is the core part of modern agriculture. Intensifying the supply-side structural reform helps to meet the demand on mid- and high-end mechanization and propel the transformation and upgrading of mechanization. In the meantime, it helps to create and release new demand on agricultural mechanization. As to listed companies, Jiangsu Nonghua Intelligent Agriculture Technology Co., Ltd. (000816.SZ), Xinjiang Machinery Research Institute Co., Ltd. (300159.SZ) and Xingguang Agricultural Machinery Co., Ltd. (603789.SH) are involved in the production of agricultural machinery.
TOP
[Announcement Interpretation]
○Perfect World Pictures to acquire Perfect World with RMB12 bln, representing return of Perfect World to A-share market
------
Perfect World Pictures Co., Ltd. (002624.SZ) proposes to acquire Perfect World Co., Ltd. (NASDAQ: PWRD) with 12 billion yuan by issuing 614 million shares through private placement at 19.53 yuan per share. Meanwhile, a supporting fund of 5 billion yuan will be raised by issuing 212 million shares at 23.56 yuan per share to invest in film ＆ TV, the R＆D, operation and agency of games, and etc. The counterparty promises that the net profit of Perfect World will be no less than 755 million yuan, 988 million yuan and 1,198 million yuan from 2016 to 2018, respectively.
Comment: After the restructuring, this tycoon in game industry, which has been listed in the U.S. for eight years, will return to the A-share market. At the same time, the film ＆ TV and game platform under the company's actual controller Chi Yufeng will be integrated. Perfect World Pictures and Perfect World both own powerful strength in IP development. They will consolidate their resources to build a comprehensively original development platform of "general entertainment industry".
○Sanlian Commercial to acquire Dejing Electronics Technology at RMB900 mln to develop intelligent mobile terminal
------
Sanlian Commercial Co., Ltd. (600898.SH) plans to purchase 100 percent equity of Zhejiang Dejing Electronics Technology Co., Ltd. by issuing 61.02 million shares at a price of 13.11 yuan per share through private placement and paying 100 million yuan in cash, amounting to 900 million yuan. In addition, the company intends to raise supporting funds of 900 million yuan by issuing shares at a price of 13.11 yuan per share through private placement. The company's related parities including GOME Electrical Appliances Holding Limited and Trilateral International Trade (Beijing) Co., Ltd. will subscribe shares valued at 500 million yuan and 200 million yuan respectively and Xiamen Tsinghua Zhanrui Technology Co., Ltd. under Tsinghua Unigroup plans to subscribe shares valued at 200 million yuan. After the deal, Huang Guangyu is still the company's actual controller.
Dejing Electronics Technology is a solution provider of intelligent mobile communication devices and has produced safe smartphones with China-made safe chips. Its net profits will be not less than 60 million yuan, 80 million yuan and 100 million from 2016 to 2018, respectively.
○Layn Natural Ingredients to launch employee shareholding plan with leverage at 4 times
------
Guilin Layn Natural Ingredients Corp. (002166.SZ) plans to raise 25 million yuan from no more than 100 employees, among whom eight directors, supervisors and senior executives will contribute nearly 10 million yuan. This plan will enlarge the funds to 100 million yuan with leverage, which will be bought within six months after taking effect. Based on the latest closing price of the company's stocks, the funds can be equivalent to the value of about 8,756,600 shares, accounting for 2 percent of the company's total share capital.
○Dian Diagnostics acquires controlling shareholding in Yuanding Medical Equipment
------
Zhejiang Dian Diagnostics Co., Ltd. (300244.SZ) is going to purchase 51 percent equity of Xinjiang Yuanding Medical Equipment Co., Ltd. at 330 million yuan. Yuanding Medical Equipment provides products and professional technology on in vitro diagnosis for medical laboratory and it is one of the most professional and largest companies selling imported medical equipment in Xinjiang. The counterparty promises its net profits will not be less than 56 million yuan, 80 million yuan and 100 million yuan from 2015 to 2017, respectively.
○West Construction and Western Power Industrial see big orders
------
China West Construction Group Co., Ltd. (002302.SZ) signed contracts valued at 3.99 billion yuan in the fourth quarter of 2015, accounting for 39 percent of the company's operating revenue in 2014. China Western Power Industrial Co., Ltd. (002630.SZ) and EcoEnergy Scandinavia Holding AB signed the EPC contract on cogeneration project with biomass and cogeneration project with urban household garbage. The contract amount totals 78.9 million U.S. dollars, equivalent to 16 percent of the company's operating revenue in 2014.
[Financial Reports Express]
○Net profits of several companies to grow significantly
-----
Owing to innovation in business, SDIC Essence (Holdings) Co., Ltd. (600061.SH) saw a growth of 403 percent in net profits in 2015. Net profits of Everbright Securities Company Limited (601788.SH) are expected to soar by 274 percent in 2015 due to the surge in its trading volume in the first half and prudent operation in the second half of 2015. Net profits of Angel Yeast Co., Ltd. (600298.SH) are predicted to jump by 70-100 percent mainly contributed by its increasing sales. Net profits of Zhuhai Orbita Control Engineering Co., Ltd. (300053.SZ) are expected to rise by 119-147 percent thanks to the consolidated statements with Guangdong Poya Information and Technology Co., Ltd. which it acquired.
TOP
○Seven companies approved for IPOs under new rules, issuance pace slower than that of last year
○Supply-demand structure of titanium dioxide constantly improves, leading enterprises likely to increase price again
○UN formulates rules on unmanned driving, propelling industrialization course
○Perfect World Pictures to acquire Perfect World, Sanlian Commercial to acquire Dejing Electronics Technology
[SSN Focus]
○Seven companies approved for IPOs under new rules, issuance pace slower than that of last year
------
Seven companies have been approved for IPOs on Jan. 19, including Eastern Pioneer Driving School Co., Ltd. and Guangzhou Gaoland Energy Conservation Tech Co., Ltd., which become the first batch of companies for IPOs under the new rules launched by the IPO system reform. Investors do not need to pay for the subscription on Day T, and those succeed in subscription after results are issued will pay for it on Day T 2. China Securities Regulatory Commission indicated that these seven companies will successively issue the new shares before the Spring Festival, and only one company will be available for subscription each day.
Comment: Under the new rules, a large-scale of capital to stag new shares will no longer exist, and new share issuance will not have impact on capital supply in the market. Based on issuance pace, two batches of IPOs were approved in each month in the second quarter of last year, with about 20 companies for each batch, and 28 new shares were approved in the last month of 2015. For this round, seven new stocks will be issued one by one, bringing less impact on investors than before. Data shows that Rongxin Power Electronic Co., Ltd. (002123.SZ) holds 4 percent equities of Gaoland Energy Conservation Tech with a cost of 8 million yuan.
[SSN Selection]
○The central bank will arrange over 600 billion yuan to support the banks to meet the medium-term liquidity demand before and after the Spring Festival, and cut the interest rate of MLF.
○Three ministries and commissions issued guidance and opinions, encouraging coal-fired power plants to promote the third-party treatment for environmental pollution.
○The National Meteorological Center of CMA will release a pre-warning for heavy snowfall and cold wave on Jan. 20. Lowest temperature of various areas in China will be close to an extreme value of the same period historically in next week.
○According to announcement of Massachusetts Institute of Technology, its research team has invented a liquid-state lithium battery, likely to improve the battery capacity greatly.
○Beijing Leshi Internet Information ＆ Technology Corp. (300104.SZ) announced that it will name the Beijing Guo'an Football Club with 100 million yuan, and the both parties will discuss the possibility of equity cooperation in the future.
TOP
[Industry Information]
○Supply-demand structure of titanium dioxide constantly improves, leading enterprises likely to increase price again
------
SSN learnt that titanium dioxide manufacturers commonly have low inventory with smooth delivery, and some production lines are still in overhauling. Therefore, leading enterprises are likely to further increase the price. They are now negotiating with downstream clients, with the price likely to increase by 300 to 500 yuan per ton. Sichuan Lomon Corporation, a leading enterprise, once increased the price of its product by 300 yuan per ton, closing to 3 percent.
Comment: Due to the rebounded sales in the real estate market and uptrend of foreign trade, demands for titanium dioxide have started to increase since the fourth quarter of last year. Forced by pressure on environmental protection, the outdated capacity that exits from the industry in recent years, totals around 300,000 to 400,000 ton, or over 10 percent. Promoted by rebounded demands and decreased supply, industrial profits are likely to further increase. In terms of listed companies, Henan Billions Chemicals Co., Ltd. (002601.SZ) proposes to acquire Lomon Corporation; titanium dioxide capacity of Jilin Gpro Titanium Industry Co., Ltd. (000545.SZ) and CNNC Hua Yuan Titanium Dioxide Co., Ltd. (002145.SZ) also ranks high in the industry.
TOP
○UN formulates rules on unmanned driving, propelling industrialization course
------
As reported by Kyodo News Agency on Jan. 19, negotiators from the United Nations (UN) indicated that about the unmanned driving system researched by global automobile manufacturers, institutions under the UN, being responsible for formulating international rules for automobiles, have set about to work on relevant safety laws and regulations. Japan and Germany are expected to come up with proposals, and the driving rules on highways will be approved in March 2017 at the soonest. Member nations will have to improve their own laws in accordance with international rules.
Comment: Japan and Germany enjoy leading edge in the unmanned driving area. Their industrialization course of relevant technologies will be accelerated once the international driving rules are formed. As China initiates the R＆D of 5G technologies, the expectation on the industrialization of domestic unmanned driving technologies will gradually intensify. Companies involved in relevant technologies might get a head start. As to listed companies, ZYNP Corporation (002448.SZ) has invested in Shenzhen Vastfly Tech Co., Ltd. which masters the core technology and service ability in the area of Advanced Driver Assistance System (ADAS); Zhejiang Vie Science ＆ Technology Co., Ltd. (002590.SZ) is nodded by the China Securities Regulatory Commission (CSRC) to invest in ADAS projects through private placement.
○Conference on agricultural mechanization emphasizes supply-side reform, mid- and high-end demand on mechanization to release
------
The National Work Conference on Agricultural Mechanization is held in Beijing on Jan. 19. Zhang Taolin, vice-minister of agriculture, emphasized on the meeting that the supply-side structural reform in agricultural mechanization area will be intensified and the upgrading of China's agricultural mechanization will be accelerated to better fuel the construction of China's modern agriculture. Zhang also proposed to realize mechanization before, during and after the whole production process of main crops, achieve obvious progress in the mechanization of farm production, animal raising and processing as well as achieve a comprehensive mechanization rate of over 68 percent in the cultivation and harvest of crops by 2020.
Comment: Institutions believe that agricultural mechanization is the core part of modern agriculture. Intensifying the supply-side structural reform helps to meet the demand on mid- and high-end mechanization and propel the transformation and upgrading of mechanization. In the meantime, it helps to create and release new demand on agricultural mechanization. As to listed companies, Jiangsu Nonghua Intelligent Agriculture Technology Co., Ltd. (000816.SZ), Xinjiang Machinery Research Institute Co., Ltd. (300159.SZ) and Xingguang Agricultural Machinery Co., Ltd. (603789.SH) are involved in the production of agricultural machinery.
TOP
[Announcement Interpretation]
○Perfect World Pictures to acquire Perfect World with RMB12 bln, representing return of Perfect World to A-share market
------
Perfect World Pictures Co., Ltd. (002624.SZ) proposes to acquire Perfect World Co., Ltd. (NASDAQ: PWRD) with 12 billion yuan by issuing 614 million shares through private placement at 19.53 yuan per share. Meanwhile, a supporting fund of 5 billion yuan will be raised by issuing 212 million shares at 23.56 yuan per share to invest in film ＆ TV, the R＆D, operation and agency of games, and etc. The counterparty promises that the net profit of Perfect World will be no less than 755 million yuan, 988 million yuan and 1,198 million yuan from 2016 to 2018, respectively.
Comment: After the restructuring, this tycoon in game industry, which has been listed in the U.S. for eight years, will return to the A-share market. At the same time, the film ＆ TV and game platform under the company's actual controller Chi Yufeng will be integrated. Perfect World Pictures and Perfect World both own powerful strength in IP development. They will consolidate their resources to build a comprehensively original development platform of "general entertainment industry".
○Sanlian Commercial to acquire Dejing Electronics Technology at RMB900 mln to develop intelligent mobile terminal
------
Sanlian Commercial Co., Ltd. (600898.SH) plans to purchase 100 percent equity of Zhejiang Dejing Electronics Technology Co., Ltd. by issuing 61.02 million shares at a price of 13.11 yuan per share through private placement and paying 100 million yuan in cash, amounting to 900 million yuan. In addition, the company intends to raise supporting funds of 900 million yuan by issuing shares at a price of 13.11 yuan per share through private placement. The company's related parities including GOME Electrical Appliances Holding Limited and Trilateral International Trade (Beijing) Co., Ltd. will subscribe shares valued at 500 million yuan and 200 million yuan respectively and Xiamen Tsinghua Zhanrui Technology Co., Ltd. under Tsinghua Unigroup plans to subscribe shares valued at 200 million yuan. After the deal, Huang Guangyu is still the company's actual controller.
Dejing Electronics Technology is a solution provider of intelligent mobile communication devices and has produced safe smartphones with China-made safe chips. Its net profits will be not less than 60 million yuan, 80 million yuan and 100 million from 2016 to 2018, respectively.
○Layn Natural Ingredients to launch employee shareholding plan with leverage at 4 times
------
Guilin Layn Natural Ingredients Corp. (002166.SZ) plans to raise 25 million yuan from no more than 100 employees, among whom eight directors, supervisors and senior executives will contribute nearly 10 million yuan. This plan will enlarge the funds to 100 million yuan with leverage, which will be bought within six months after taking effect. Based on the latest closing price of the company's stocks, the funds can be equivalent to the value of about 8,756,600 shares, accounting for 2 percent of the company's total share capital.
○Dian Diagnostics acquires controlling shareholding in Yuanding Medical Equipment
------
Zhejiang Dian Diagnostics Co., Ltd. (300244.SZ) is going to purchase 51 percent equity of Xinjiang Yuanding Medical Equipment Co., Ltd. at 330 million yuan. Yuanding Medical Equipment provides products and professional technology on in vitro diagnosis for medical laboratory and it is one of the most professional and largest companies selling imported medical equipment in Xinjiang. The counterparty promises its net profits will not be less than 56 million yuan, 80 million yuan and 100 million yuan from 2015 to 2017, respectively.
○West Construction and Western Power Industrial see big orders
------
China West Construction Group Co., Ltd. (002302.SZ) signed contracts valued at 3.99 billion yuan in the fourth quarter of 2015, accounting for 39 percent of the company's operating revenue in 2014. China Western Power Industrial Co., Ltd. (002630.SZ) and EcoEnergy Scandinavia Holding AB signed the EPC contract on cogeneration project with biomass and cogeneration project with urban household garbage. The contract amount totals 78.9 million U.S. dollars, equivalent to 16 percent of the company's operating revenue in 2014.
[Financial Reports Express]
○Net profits of several companies to grow significantly
-----
Owing to innovation in business, SDIC Essence (Holdings) Co., Ltd. (600061.SH) saw a growth of 403 percent in net profits in 2015. Net profits of Everbright Securities Company Limited (601788.SH) are expected to soar by 274 percent in 2015 due to the surge in its trading volume in the first half and prudent operation in the second half of 2015. Net profits of Angel Yeast Co., Ltd. (600298.SH) are predicted to jump by 70-100 percent mainly contributed by its increasing sales. Net profits of Zhuhai Orbita Control Engineering Co., Ltd. (300053.SZ) are expected to rise by 119-147 percent thanks to the consolidated statements with Guangdong Poya Information and Technology Co., Ltd. which it acquired.
TOP
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