[Today's Guide]
○Sinoma and CNBM mulling for strategic restructuring, SOEs to see rapid development
○MIIT to hold rare earth symposium soon, storage plan expected to be finalized in Q1
○ Mingzhu Plastic to develop lithium-ion battery, Tianma Bearing to introduce employee shareholding plan
○Boamax Technologies proposes high share conversion, Ringpu Bio-technology and others predict growth
[SSN Focus]
○Sinoma and CNBM mulling for strategic restructuring, SOEs to see rapid development
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Several listed companies under Sinoma International Engineering Co., Ltd. and China National Building Materials Group Corporation (CNBM) released announcements on the evening of Jan. 25 that the two groups are mulling for strategic restructuring. The two sessions recently held in various provinces highlighted the reform on the state-owned enterprises (SOEs) as the key work in 2016. The meetings of officials from central and regional State-owned Assets Supervision and Administration Commission (SASAC) also specified that they would beef up the reform on equity diversification this year.
Comment: A lot of signs show that the SOEs reform featuring restructuring, mixed-ownership reform and asset securitization is under rapid development now. Institutions believe that two key bottlenecks of the SOEs reform, namely incentive mechanism on equity diversification and weeding out outdated capacity, are expected to see breakthrough around the two sessions in March. As for construction material industry and others with overcapacity and a great number of "zombie enterprises" occupying social resources, the central government will firmly promote supply-side reform, which will certainly involve the integration of state-owned resources. Among the A-share listed companies under the above two groups, Xinjiang Tianshan Cement Co., Ltd. (000877.SZ), Ningxia Building Materials Group Co., Ltd. (600449.SH) and Gansu Qilianshan Cement Group Co., Ltd. (600720.SH) are faced with horizontal competition in their principal business. Anhui Fangxing Science ＆ Technology Co., Ltd. (600552.SH) and Sinoma Science ＆ Technology Co., Ltd. (002080.SZ) boost the scientific research institutions of their groups. Market value of Xinjiang Guotong Pipeline Co., Ltd. (002205.SZ) and Ruitai Materials Technology Co., Ltd. (002066.SZ) is less than 4 billion yuan.
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[SSN Selection]
○Chinese Premier Li Keqiang chaired a meeting on Jan. 22 studying to fully promote changing business tax into value-added tax to further relieve tax burden of enterprises.
○Many measures to supplement liquidity conducted by the People's Bank of China recently take effects. The capital supply of monetary market gets loose on Jan. 25.
○The Ministry of Civil Affairs indicated that it would formulate several items concerning the 13th Five-year Plan, which will focus on putting forward the social services system for the elderly and other projects.
○The joint Meeting mechanism for the development of tertiary industry, which is led by the National Development and Reform Commission, is approved by the State Council.
○Statistics of the Ministry of Finance show that profits of the state-owned enterprises declined by 6.7 percent and mining industry turned losses into profits in 2015.
[Industry Information]
○MIIT to hold rare earth symposium soon, storage plan expected to be finalized in Q1
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The website of the Ministry of Industry and Information Technology (MIIT) revealed that the MIIT will summon up a symposium Jan. 29 on rare earth for relevant persons in the National Development and Reform Commission, National Development and Reform Commission, Ministry of Finance, six major rare earth groups, other key rare earth companies, guild and government department. The symposium will deliberate and determine the development thoughts, objectives and tasks for the 13th Five-Year Plan period and deploy major tasks and works for 2016.
Comment: The 12th Five-Year Plan clearly required purchasing and storing rare earth each year. The industry reckons that the purchase and storage plan will still be discussed at the symposium. It is learnt that relevant plans on the purchase and storage of rare earth for commercial use have been submitted for review earlier this month. An industry insider expects that specific purchase and storage plans may be issued in the first quarter of this year. On Jan. 12, the State Council General Office issued the Opinions on Accelerating the Construction of Major Products Tracking System which includes rare earth as one of the four products under key management. Industry insiders said the move aims at cracking down private rare earth mines, which is expected to shore up rare earth prices. Among listed companies, China Northern Rare Earth(group)High-tech Co., Ltd. (600111.SH), China Minmetals Rare Earth Co., Ltd. (000831.SZ) and Rising Nonferrous Metals Share Co., Ltd. (600259.SH) are leaders in the industry.
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[Announcement Interpretation]
○ Mingzhu Plastic to develop lithium-ion battery separator through private placement
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Cangzhou Mingzhu Plastic Co., Ltd. (002108.SZ) proposes to raise 708 million yuan by issuing 50 million shares at no less than 14.16 yuan per share through private placement. The proceeds will be used in the wet lithium-ion battery separator project with an annual capacity of 105 million square meters and supplementing working capital. The stock price of the company closed at 14.51 yuan before trading suspension.
○ Tianma Bearing to introduce employee shareholding plan
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Tianma Bearing Group Co., Ltd. (002122.SZ) intends to introduce an employee shareholding plan with no more than 120 million yuan. The funds will be from capitals raised by employees and the borrowings provided by Tianma Group, the controlling shareholder of the company, with the proportion of 2:1. Based on the latest closing price of 6.61 yuan, the target stocks involved in the employee shareholding plan are about 18.15 million stocks, accounting for 1.53 percent of the total shares of the company at present.
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○ Guangxi Investment Group to control Zhongheng Group with premiums
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Guangxi Wuzhou Zhongheng Group Co., Ltd. (600252.SH) discloses that Guangxi Zhongheng Industry Co., Ltd., the controlling shareholder with 22.52 percent shares of the company, will transfer the 20.52 percent shares of the company held by it to Guangxi Investment Group Co., Ltd., a company under the State-owned Assets Supervision and Administration Commission of the People's Government of Guangxi Zhuang Autonomous Region, at 5.44 yuan per share. The corresponding number and amount are 713 million shares and 3.88 billion yuan, respectively. The actual controller of the company changes.
The registered capital of Guangxi Investment Group is 4.75 billion yuan. It mainly invests in and is principally engaged in power, aluminium, finance and other industries. It is the biggest energy and aluminium group in Guangxi and holds shares of Sealand Securities Co., Ltd. (000750.SZ) and Guangxi Guiguan Electric Power Co., Ltd. (600236.SH). Guangxi Investment Group indicated that it will consolidate quality assets through the platforms of listed companies. The latest stock price of Zhongheng Group is 5.29 yuan.
○SEC Electric Machinery to involve in games, investing RMB32 mln in FriendTimes
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SEC Electric Machinery Co., Ltd. (603988.SH) will invest 32 million yuan in private placement of Suzhou FriendTimes Technology Co., Ltd. to subscribe 480,000 common shares, accounting for 4 percent equities after fundraising through private placement. FriendTimes proposes to raise the fund of 100 million yuan through private placement this time to invest project construction for internet-based mobile game platform and related game issuance and expansion. Up to the end of October 2015, net asset of FriendTimes valued 35.65 million yuan, with 86.25 million yuan for operational revenue in the first ten months of 2015 and 21.17 million yuan for profit.
○Restructuring of Aba Chemicals, HuaSheng Electrical Appliances and Lecron Energy Saving Materials approved
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Restructuring of Aba Chemicals Corporation (300261.SZ) has been approved by the China Securities Regulatory Commission, and those of GuangDong HuaSheng Electrical Appliances Co., Ltd. (002670.SZ) and Lecron Energy Saving Materials Co., Ltd. (300343.SZ) are conditionally approved.
[Financial Report Express]
○Boamax Technologies proposes high share conversion
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Suzhou Boamax Technologies Group Co., Ltd. (002514.SZ) proposes a 10-for-10 conversion of capital surplus into shares in distribution pre-plan of its annual report. Chongqing Three Gorges Water Conservancy and Electric Power Co., Ltd. (600116.SH) announces a performance growth of 46 percent in annual report, proposing a 20-for-10 conversion of capital surplus into shares combined with 1.5 yuan dividend.
○Ringpu Bio-technology and others predict growth
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Tianjin Ringpu Bio-technology Co., Ltd. (300119.SZ) predicts its growth of 290 percent to 310 percent in annual report, mainly due to combination of financial statements with South China Biological Medicine Co., Ltd.; that of Beijing Jetsen Technology Co., Ltd. (300182.SZ) is 90 percent to 110 percent, mainly due to combination of financial statements of Beijing CCTV Splendid Film and TV Corp. Ltd. and Dongyang Ruijixiang Film and TV Co., Ltd. Qingdao Citymedia Co., Ltd. (600229.SH) announces a growth forecast of 190 percent to 220 percent in annual report, mainly as it finishes major assets restructuring and transforms to a publishing media enterprise.
Liaoning SG Automotive Group Co., Ltd. (600303.SH) announces a growth forecast of 1015 percent in annual report, mainly due to its greatly-soared sales in new energy automobile. And due to increased revenue and lowered costs, that of Nationz Technologies Inc. (300077.SZ) is 728 percent to 757 percent.
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[Trading Trends]
○Gohigh Data Networks Technology bought through four institutional seats
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The trading volume ranking list on Jan. 25 shows that Gohigh Data Networks Technology Co., Ltd. (000851.SZ) was bought through four institutional seats with a total of 135 million yuan, accounting for 18.9 percent of its intraday turnover.
Comment: The company announced to acquire Gohigh Dingheng Information Technology Co., Ltd. a few days ago to transform towards digital product marketing. Institutions believe it is beneficial for the company to deepen its deployment for development planning in IT product sales. Additionally, it will expand strategic input in internet-based innovative businesses and enterprise information-oriented business sector, likely to transform from enterprise with traditional IT sale business to a service provider with enterprise information-oriented application.
[Trading Alarms]
○Haishun New Pharmaceutical Packaging to issue on Jan. 26
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Issuing price of Shanghai Haishun New Pharmaceutical Packaging Co., Ltd. (300501.SZ) is 22.02 yuan, with upper limit of 13,000 shares and P/E ratio of 23 times. After subscription, accounts should be guaranteed to have corresponding capital for payment on Jan. 28 in line with allotment statement.
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