[Today's Guide]
○ Oil prices recovery to benefit oil and gas industries
○ State Council executive meeting plans new urbanization, smart cities to enjoy priority
○ Changlin to pump funds in SUMEC, Xiangyu to launch staff shareholding plan
○ JANUS Precision Components ＆ Jintongling Fluid Machinery Tech. proposes high share conversion and dividend, China Merchants Energy Shipping and others forecast performance growth
[SSN Focus]
○ Oil prices recovery to benefit oil and gas industries
------
The West Texas Intermediate for March delivery moved up 9 percent to settle at 32 U.S. dollars a barrel on the New York Mercantile Exchange on Jan. 22. The three major U.S. stock indexes, namely the Dow Jones Industrial Average, S＆P 500 and Nasdaq Composite Index, surged about 2 percent, the first time that the weekly average jumped for the first time in 2016. Mario Draghi, President of the European Central Bank (ECB), indicated on Jan. 21 that the economic growth and inflation will slow down. It will review its policies at its next meeting in March. It is believed that Draghi's comments suggested the central bank is willing to offer more stimulus. Warren Buffett also continued increasing the holding of the stocks of Phillips 66, an oil refining enterprise.
Comment: Oil recovery will improve the global risk preference and will improve the profitability of the whole industrial chain, including the exploitation, refinery and chemical fiber industries. In terms of listed companies, Yantai Xinchao Industry Co., Ltd. (600777.SH) and Meidu Energy Corporation (600175.SH) propose to acquire oilfield assets in the U.S. by issuing shares through private placement. The substantial shareholders, directors, supervisors and senior managers of Xinchao Industry also increased the shareholding in the company. Sinopec Shanghai Petrochemical Company Limited (00338.HK; 600688.SH) owns a capacity of processing tens of millions of crude.
[SSN Selection]
○ The government work report of Shanghai municipality proposed to initiate open and market-oriented reorganization of state-owned enterprises and establish the Zhangjiang comprehensive national scientific center.
○ The Minister of Ministry of Finance indicated on Jan. 23 that it will establish an effective and sustainable supporting mechanism for the new energy vehicles market and speed up in shoring up the weakness in charging and power switching infrastructure.
○Based on the statistics of TX Investment Consulting Co., Ltd., the average position of stock-leaning funds improved by four percentage points in the fourth quarter, of which stock funds seeing an improvement of 14 percentage points.
○ The lot winning rate of Guangzhou Goaland Energy Conservation Tech. Co., Ltd. (300499.SZ) newly issued on Jan. 22 was only 0.023 percent, a new low since 2008.
○ The reorganizations of Shanghai STEP Electric Corporation (002527.SZ) and Simei Media Co., Ltd. (002712.SZ) were unconditionally approved by the China Securities Regulatory Commission (CSRC); the reorganization of Kyland Technology Co., Ltd. (300353.SZ) was conditionally approved by the CSRC.
TOP
[Industry Information]
○ State Council executive meeting plans new urbanization, smart cities to enjoy priority
------
Chinese Premier Li Keqiang chaired the executive meeting of the State Council on Jan. 22, proposing to deepen people-oriented new type of urbanization and further release domestic demand potential. It is pointed out at the meeting that urbanization enjoys most potential in the development of China. The meeting determined to focus on the following aspects: relaxing conditions on the household registration of migrant rural population; speeding up the improvement of rundown areas and old and dilapidated houses in urban areas; expanding the comprehensive pilot of new type of urbanization; improving land and urban housing systems and encouraging local governments in the establishment of development funds for urbanization with fiscal and social capitals. The meeting also proposed to promote the establishment of smart cities through the application of "Internet plus" and improve public services and public security and guarantee.
Comment: The demands for cement and construction materials are closely related to the development of urbanization. Driven by the supply-side reform and new type of urbanization, the prosperity of relevant industries are expected to improve. As the development in western regions relatively lags behind, the urbanization enjoys more potential. Xinjiang Qingsong Building Materials and Chemicals (Group) Co., Ltd. (600425.SH), Ningxia Building Materials Group Co., Ltd. (600449.SH) and other listed companies in the region will benefit more. In addition, the establishment of smart cities is likely to enjoy priority in the establishment of urbanization. Beijing E-Hualu Info Technology Co., Ltd. (300212.SZ) and Enjoyor Co., Ltd. (300020.SZ) are quite competitive in the region.
TOP
[Announcement Interpretation]
○ Changlin to pump funds in SUMEC
------
Changlin Company Limited (600710.SH) proposes to spend 4,055 million yuan acquiring 100 percent equities of SUMEC Group Corporation (SUMEC) under China National Machinery Industry Corporation (Sinomach) by swapping assets and issuing shares at 6.49 yuan per share through private placement. It also proposes to raise 1.5 billion yuan supporting funds from Sinomach Finance Co., Ltd. and Sinomach Capital Management Co., Ltd. through private placement, which will be invested in the construction of SUMEC's core projects. Changlin will transform its main business from commodity trading, electromechanical equipment ad photovoltaic module research and development to modern manufacturing service. The operating revenue and net profit of SUMEC from Jan. to July last year was 23.3 billion yuan and 566 million yuan respectively.
○ Xiangyu to raise RMB 30mln through staff shareholding plan
------
Xiamen Xiangyu Co., Ltd. (600057.SH) plans to launch the first phase of its staff shareholding plan to raise a maximum of 30 million yuan. The directors, supervisors and senior management of the company will subscribe 7.51 million shares in the staff shareholding plan.
○ Nanshan Aluminium to buy Yili Electric Power's asset package with RMB 7bln
------
Shandong Nanshan Aluminium Co., Ltd. (600219.SH) plans to acquire the asset package of Yili Electric Power Co., Ltd. controlled by Nanshan Group with 7.0 billion yuan among which 2 billion yuan will be paid in cash and the reminder will be paid by issuing 828 million shares at 6.04 yuan per share through private placement. It also proposes to raise 2 billion yuan supporting funds at a price no less than 6.04 yuan per share through private placement. After the deal, the company's electrolytic aluminium supply capacity will increase to 816,000 tons from 136,000 tons.
○ Zhangzhou Development ＆ Binjiang Real Estate see shareholding increase
------
Fujian Zhanglong Group, the controlling shareholder of Fujian Zhangzhou Development Co., Ltd. (000753.SZ) increased shareholding in the latter by 4.31 million shares from Jan. 20 to 21 with an average price of 11.27 yuan per share, accounting for 0.49 percent of the total share capital. Hangzhou Binjiang Investment Co., Ltd., the controlling shareholder of Hangzhou Binjiang Real Estate Group Co., Ltd. (002244.SZ) increased shareholding in the latter by 1.77 million shares at an average price of 6.86 yuan per share on Jan. 22.
○ Dongfang Electric signed Egyptian EPC contract worth USD 2bln
------
Dongfang Electric Corporation Limited( 600875.SH; 01072,HK) singed an EPC (engineering, procurement and construction) contract with Egyptian Electric Holding Company on the ultra-supercritical coal-fired power plant project in Hamrawein, Egypt. The project will be conducted in two phases, with each phase at 3*660MW. The contract signed is on the first phase. The company won the bid with 2 billion U.S. dollars, accounting for about 34 percent of its 2014 operating revenue.
TOP
[Financial Reports Express]
○ JANUS Precision Components ＆ Jintongling Fluid Machinery Tech. proposes high share conversion and dividend
------
Jinghui International Enterprise Co., Ltd., the controlling shareholder of JANUS (Dongguan) Precision Components Co., Ltd. (300083.SZ), proposes a 30-for-10 conversion of capital surplus into shares in its annual report. The actual controller of JiangSu Jintongling Fluid Machinery Technology Co., Ltd. (300091.SZ) proposes a 15-for-10 conversion of capital surplus into shares combined with cash dividend according to its annual report.
○ China Merchants Energy Shipping and others forecast performance growth
------
China Merchants Energy Shipping Co., Ltd. (601872.SH) forecasts a growth of 450 to 500 percent in its annual report mainly due to a remarkable increase in the effective shipping ability of its oil tankers. Changchun Sinoenergy Corporation (600856.SH) forecasts a growth of 74,709 to 79,928percent in its annual report mainly due to its reorganization and surging natural gas sales.
Shenzhen Jiawei Photovoltaic Lighting Co., Ltd. (300317.SZ) forecasts a growth of 1,490 to 1,520 percent in its annual report mainly due to its financial statement integration with Jiangsu Huayuan New Energy Co., Ltd. since August 2015.
Tonghua Shuanglong Chemical Industry Co., Ltd. (300108.SZ) forecasts a growth of 138 to 158 percent in its annual report mainly due to its financial statement integration with Jilin Jinbao Pharmaceutical Co., Ltd. Zhongzhu Holding Co., Ltd. (600568.SH) forecasts a growth of 100 to 150 percent in its annual report mainly due to the surging income from selling its subsidiary. The company's controlling shareholder granted shares to the staff and promised to disclose all details.
Xilinmen Furniture Co., Ltd. (603008.SH) forecasts a growth of 100 to 150 percent in its annual report mainly due to its financial statement integration with Zhejiang Shengxi Huashi Culture Media Co., Ltd.
[Trading Trends]
○ Three institutions buy Esun Display
------
The trading volume ranking list on Jan. 22 shows that Shenzhen Esun Display Co., Ltd. (002751.SZ) was bought by three institutions with a total of 195 million yuan, accounting for 25.54 percent of its intraday trading turnover.
Comment: the company has strong 3D scanning technique. The core of this technique is reverse modeling from physical to virtual imaging, which is available to a variety of downstream business patterns. It is expected that it will create a lot of profits with the change of consumption habits in the future. The company strives to keep its leading position in the 3D scanning technique field, and expects to involve in a number of business models, including virtual reality (VR), augmented reality (AR), cultural relics simulation production and face/body recognition
[Trading Alarms]
○ Suzhou Institute of Architecture Design to Debut IPO on Jan. 25
------
Suzhou Institute of Architecture Design Co., Ltd (300500.SZ) will offer shares at 20.91 yuan per share with an upper limit of 15,000 shares for each applicant. The PE ratio is 23 times. After applied for subscription, applicants should ensure there is sufficient money for the payment according to his/her successful application.
[Weekly Review]
○ Good news always there
------
For a half cup of water, an optimist is cheerful because the cup is half full, but a pessimist would sigh as only a half cup of water is left. It is quite similar to the current stock market, where the divergences of bearish and bullish views are in contrast. Outdated economy will be cleaned up, but it valuation is low; emerging economy is in an embryonic stage, but the valuation is high. Last week, the Shanghai Composite Index hit the new low in adjustment, and fluctuated repeatedly. It is actually a near term balance resulted from the battle between the two forces.
So to speak, the stock market in the near term is a "voting machine"; but in the long run, it is a "weighting machine". It indicates that stock price is more subjected to the truth in the eyes of investors, instead of the truth in the market itself. But in the long run, the stock price will someday truly reflect the fundaments of a company. It is a shame that we are not able to predict the future. Even if we are sometimes able to foresee the future luckily, we cannot tell when exactly it will realize. However, one thing for sure is that after the plummet, the energy of short selling is released and bearish news is absorbed. Therefore, SSN expressly pointed out on Jan. 18 that positive factors will again come into view. Later on Jan. 19, the Shanghai Composite Index soared 3 percent and again stand above 3000 points in one strike.
The influence of information can better be mirrored by the stabilization of the market. On Jan. 17, SSN Focus reported that more efforts will be made on the reorganization of state owned enterprises (SOEs) groups. On the next day, listed companies under China Oil and Food Import and Export Corporation surged. On Jan. 20, Industry Information reminded that it is highly expected that price of vitamin A will go up, and on the next day, the trading volume ranking list shows that multiple vitamin stocks were bought by institutions.
In fact, both bearish news and bullish news are always there. But in different situations, people selectively amplify one of them and ignore the other. But it is undeniable that market slump made stocks much cheaper, and this is itself a good news. For investors, SSN will always be the messenger that bring you good news in first time when the market stabilizes.
TOP
○ Oil prices recovery to benefit oil and gas industries
○ State Council executive meeting plans new urbanization, smart cities to enjoy priority
○ Changlin to pump funds in SUMEC, Xiangyu to launch staff shareholding plan
○ JANUS Precision Components ＆ Jintongling Fluid Machinery Tech. proposes high share conversion and dividend, China Merchants Energy Shipping and others forecast performance growth
[SSN Focus]
○ Oil prices recovery to benefit oil and gas industries
------
The West Texas Intermediate for March delivery moved up 9 percent to settle at 32 U.S. dollars a barrel on the New York Mercantile Exchange on Jan. 22. The three major U.S. stock indexes, namely the Dow Jones Industrial Average, S＆P 500 and Nasdaq Composite Index, surged about 2 percent, the first time that the weekly average jumped for the first time in 2016. Mario Draghi, President of the European Central Bank (ECB), indicated on Jan. 21 that the economic growth and inflation will slow down. It will review its policies at its next meeting in March. It is believed that Draghi's comments suggested the central bank is willing to offer more stimulus. Warren Buffett also continued increasing the holding of the stocks of Phillips 66, an oil refining enterprise.
Comment: Oil recovery will improve the global risk preference and will improve the profitability of the whole industrial chain, including the exploitation, refinery and chemical fiber industries. In terms of listed companies, Yantai Xinchao Industry Co., Ltd. (600777.SH) and Meidu Energy Corporation (600175.SH) propose to acquire oilfield assets in the U.S. by issuing shares through private placement. The substantial shareholders, directors, supervisors and senior managers of Xinchao Industry also increased the shareholding in the company. Sinopec Shanghai Petrochemical Company Limited (00338.HK; 600688.SH) owns a capacity of processing tens of millions of crude.
[SSN Selection]
○ The government work report of Shanghai municipality proposed to initiate open and market-oriented reorganization of state-owned enterprises and establish the Zhangjiang comprehensive national scientific center.
○ The Minister of Ministry of Finance indicated on Jan. 23 that it will establish an effective and sustainable supporting mechanism for the new energy vehicles market and speed up in shoring up the weakness in charging and power switching infrastructure.
○Based on the statistics of TX Investment Consulting Co., Ltd., the average position of stock-leaning funds improved by four percentage points in the fourth quarter, of which stock funds seeing an improvement of 14 percentage points.
○ The lot winning rate of Guangzhou Goaland Energy Conservation Tech. Co., Ltd. (300499.SZ) newly issued on Jan. 22 was only 0.023 percent, a new low since 2008.
○ The reorganizations of Shanghai STEP Electric Corporation (002527.SZ) and Simei Media Co., Ltd. (002712.SZ) were unconditionally approved by the China Securities Regulatory Commission (CSRC); the reorganization of Kyland Technology Co., Ltd. (300353.SZ) was conditionally approved by the CSRC.
TOP
[Industry Information]
○ State Council executive meeting plans new urbanization, smart cities to enjoy priority
------
Chinese Premier Li Keqiang chaired the executive meeting of the State Council on Jan. 22, proposing to deepen people-oriented new type of urbanization and further release domestic demand potential. It is pointed out at the meeting that urbanization enjoys most potential in the development of China. The meeting determined to focus on the following aspects: relaxing conditions on the household registration of migrant rural population; speeding up the improvement of rundown areas and old and dilapidated houses in urban areas; expanding the comprehensive pilot of new type of urbanization; improving land and urban housing systems and encouraging local governments in the establishment of development funds for urbanization with fiscal and social capitals. The meeting also proposed to promote the establishment of smart cities through the application of "Internet plus" and improve public services and public security and guarantee.
Comment: The demands for cement and construction materials are closely related to the development of urbanization. Driven by the supply-side reform and new type of urbanization, the prosperity of relevant industries are expected to improve. As the development in western regions relatively lags behind, the urbanization enjoys more potential. Xinjiang Qingsong Building Materials and Chemicals (Group) Co., Ltd. (600425.SH), Ningxia Building Materials Group Co., Ltd. (600449.SH) and other listed companies in the region will benefit more. In addition, the establishment of smart cities is likely to enjoy priority in the establishment of urbanization. Beijing E-Hualu Info Technology Co., Ltd. (300212.SZ) and Enjoyor Co., Ltd. (300020.SZ) are quite competitive in the region.
TOP
[Announcement Interpretation]
○ Changlin to pump funds in SUMEC
------
Changlin Company Limited (600710.SH) proposes to spend 4,055 million yuan acquiring 100 percent equities of SUMEC Group Corporation (SUMEC) under China National Machinery Industry Corporation (Sinomach) by swapping assets and issuing shares at 6.49 yuan per share through private placement. It also proposes to raise 1.5 billion yuan supporting funds from Sinomach Finance Co., Ltd. and Sinomach Capital Management Co., Ltd. through private placement, which will be invested in the construction of SUMEC's core projects. Changlin will transform its main business from commodity trading, electromechanical equipment ad photovoltaic module research and development to modern manufacturing service. The operating revenue and net profit of SUMEC from Jan. to July last year was 23.3 billion yuan and 566 million yuan respectively.
○ Xiangyu to raise RMB 30mln through staff shareholding plan
------
Xiamen Xiangyu Co., Ltd. (600057.SH) plans to launch the first phase of its staff shareholding plan to raise a maximum of 30 million yuan. The directors, supervisors and senior management of the company will subscribe 7.51 million shares in the staff shareholding plan.
○ Nanshan Aluminium to buy Yili Electric Power's asset package with RMB 7bln
------
Shandong Nanshan Aluminium Co., Ltd. (600219.SH) plans to acquire the asset package of Yili Electric Power Co., Ltd. controlled by Nanshan Group with 7.0 billion yuan among which 2 billion yuan will be paid in cash and the reminder will be paid by issuing 828 million shares at 6.04 yuan per share through private placement. It also proposes to raise 2 billion yuan supporting funds at a price no less than 6.04 yuan per share through private placement. After the deal, the company's electrolytic aluminium supply capacity will increase to 816,000 tons from 136,000 tons.
○ Zhangzhou Development ＆ Binjiang Real Estate see shareholding increase
------
Fujian Zhanglong Group, the controlling shareholder of Fujian Zhangzhou Development Co., Ltd. (000753.SZ) increased shareholding in the latter by 4.31 million shares from Jan. 20 to 21 with an average price of 11.27 yuan per share, accounting for 0.49 percent of the total share capital. Hangzhou Binjiang Investment Co., Ltd., the controlling shareholder of Hangzhou Binjiang Real Estate Group Co., Ltd. (002244.SZ) increased shareholding in the latter by 1.77 million shares at an average price of 6.86 yuan per share on Jan. 22.
○ Dongfang Electric signed Egyptian EPC contract worth USD 2bln
------
Dongfang Electric Corporation Limited( 600875.SH; 01072,HK) singed an EPC (engineering, procurement and construction) contract with Egyptian Electric Holding Company on the ultra-supercritical coal-fired power plant project in Hamrawein, Egypt. The project will be conducted in two phases, with each phase at 3*660MW. The contract signed is on the first phase. The company won the bid with 2 billion U.S. dollars, accounting for about 34 percent of its 2014 operating revenue.
TOP
[Financial Reports Express]
○ JANUS Precision Components ＆ Jintongling Fluid Machinery Tech. proposes high share conversion and dividend
------
Jinghui International Enterprise Co., Ltd., the controlling shareholder of JANUS (Dongguan) Precision Components Co., Ltd. (300083.SZ), proposes a 30-for-10 conversion of capital surplus into shares in its annual report. The actual controller of JiangSu Jintongling Fluid Machinery Technology Co., Ltd. (300091.SZ) proposes a 15-for-10 conversion of capital surplus into shares combined with cash dividend according to its annual report.
○ China Merchants Energy Shipping and others forecast performance growth
------
China Merchants Energy Shipping Co., Ltd. (601872.SH) forecasts a growth of 450 to 500 percent in its annual report mainly due to a remarkable increase in the effective shipping ability of its oil tankers. Changchun Sinoenergy Corporation (600856.SH) forecasts a growth of 74,709 to 79,928percent in its annual report mainly due to its reorganization and surging natural gas sales.
Shenzhen Jiawei Photovoltaic Lighting Co., Ltd. (300317.SZ) forecasts a growth of 1,490 to 1,520 percent in its annual report mainly due to its financial statement integration with Jiangsu Huayuan New Energy Co., Ltd. since August 2015.
Tonghua Shuanglong Chemical Industry Co., Ltd. (300108.SZ) forecasts a growth of 138 to 158 percent in its annual report mainly due to its financial statement integration with Jilin Jinbao Pharmaceutical Co., Ltd. Zhongzhu Holding Co., Ltd. (600568.SH) forecasts a growth of 100 to 150 percent in its annual report mainly due to the surging income from selling its subsidiary. The company's controlling shareholder granted shares to the staff and promised to disclose all details.
Xilinmen Furniture Co., Ltd. (603008.SH) forecasts a growth of 100 to 150 percent in its annual report mainly due to its financial statement integration with Zhejiang Shengxi Huashi Culture Media Co., Ltd.
[Trading Trends]
○ Three institutions buy Esun Display
------
The trading volume ranking list on Jan. 22 shows that Shenzhen Esun Display Co., Ltd. (002751.SZ) was bought by three institutions with a total of 195 million yuan, accounting for 25.54 percent of its intraday trading turnover.
Comment: the company has strong 3D scanning technique. The core of this technique is reverse modeling from physical to virtual imaging, which is available to a variety of downstream business patterns. It is expected that it will create a lot of profits with the change of consumption habits in the future. The company strives to keep its leading position in the 3D scanning technique field, and expects to involve in a number of business models, including virtual reality (VR), augmented reality (AR), cultural relics simulation production and face/body recognition
[Trading Alarms]
○ Suzhou Institute of Architecture Design to Debut IPO on Jan. 25
------
Suzhou Institute of Architecture Design Co., Ltd (300500.SZ) will offer shares at 20.91 yuan per share with an upper limit of 15,000 shares for each applicant. The PE ratio is 23 times. After applied for subscription, applicants should ensure there is sufficient money for the payment according to his/her successful application.
[Weekly Review]
○ Good news always there
------
For a half cup of water, an optimist is cheerful because the cup is half full, but a pessimist would sigh as only a half cup of water is left. It is quite similar to the current stock market, where the divergences of bearish and bullish views are in contrast. Outdated economy will be cleaned up, but it valuation is low; emerging economy is in an embryonic stage, but the valuation is high. Last week, the Shanghai Composite Index hit the new low in adjustment, and fluctuated repeatedly. It is actually a near term balance resulted from the battle between the two forces.
So to speak, the stock market in the near term is a "voting machine"; but in the long run, it is a "weighting machine". It indicates that stock price is more subjected to the truth in the eyes of investors, instead of the truth in the market itself. But in the long run, the stock price will someday truly reflect the fundaments of a company. It is a shame that we are not able to predict the future. Even if we are sometimes able to foresee the future luckily, we cannot tell when exactly it will realize. However, one thing for sure is that after the plummet, the energy of short selling is released and bearish news is absorbed. Therefore, SSN expressly pointed out on Jan. 18 that positive factors will again come into view. Later on Jan. 19, the Shanghai Composite Index soared 3 percent and again stand above 3000 points in one strike.
The influence of information can better be mirrored by the stabilization of the market. On Jan. 17, SSN Focus reported that more efforts will be made on the reorganization of state owned enterprises (SOEs) groups. On the next day, listed companies under China Oil and Food Import and Export Corporation surged. On Jan. 20, Industry Information reminded that it is highly expected that price of vitamin A will go up, and on the next day, the trading volume ranking list shows that multiple vitamin stocks were bought by institutions.
In fact, both bearish news and bullish news are always there. But in different situations, people selectively amplify one of them and ignore the other. But it is undeniable that market slump made stocks much cheaper, and this is itself a good news. For investors, SSN will always be the messenger that bring you good news in first time when the market stabilizes.
TOP
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