[Today's Guide]
○ Central Leading Group on Financial and Economic Affairs meeting convened, de-capacity to highlight again
○ No. 1 Central Document to release soon, rural tourism to embrace development opportunities
○ Chitianhua proposes to buy Salvage Capital, Chtc Helon proposes to acquire two game assets
○ A property developer to borrow shell from Tongfeng Electronics, Baoshuo proposes to takeover Huachuang Securities
[SSN Focus]
○ Central Leading Group on Financial and Economic Affairs meeting convened, de-capacity to highlight again
------
Chinese President Xi Jinping chaired the 12th meeting of the Central Leading Group on Financial and Economic Affairs on Jan. 26 to study plans on the supply-side structural reform. Xi emphasized that China should cut capacities, stocks, leverages, reduce costs and shore up weakness while maintaining moderate expanding of total demands. It should increase quality supplies, reduce ineffective supplies and expand effective supplies in the production industries, improve the adaptability and flexibility of the supply structure and improve the production rate of all factors to make the supply system better meet the changes of the demand structure.
Comment" Institutes believe that capacities cutting in the iron and steel industry under increasing pressure on environmental protection, the cement industry with a high proportion of private enterprises and the electrolytic aluminium industry easily regulated by pricing means are under smooth progress. Under the background of regulatory incentives, market forces and improving systems, this year will see peaks in the horizontal consolidation of industries.
◆The meeting also studied the plan on the development of the Yangtze River Economic Belt and the work on forest ecology safety. It requires giving play to the golden waterway of the Yangtze River and the industrial development should meet the requirements on green, circular and low-carbon development. It should promote land greening and the performance of the obligation of planting trees by all people, strengthen the construction of key forestry projects and implement a new round of returning farmland to forests.
[SSN Selection]
○ The reverse repo of the central bank continued to increase to 440 billion yuan on Jan. 26 to ensure sound capitals during the Spring Festival holiday.
○ The plan on the development of the internal combustion engine industry during the 13th Five-year Plan period has been prepared with the focus on the development of technologies on green design, clean production and circular utilization of resources as well as energy-saving and emission and noises reduction.
○ The Aviation Industry Corporation of China proposed to deepen enterprise reform in the 2016 summit, striving to become a pilot company for the investment and operation of state-owned capitals.
○ The U.S. Federal Reserve will convene a monetary policy meeting on Jan. 26 and 27. The market expects that the fluctuation in the global financial market may soften its attitude in the pace of interest rate rise.
○ Searainbow Holding Corp. (000503.SZ) determined to suspend trading as the pledged shares of its controlling shareholder reached the limit for closing positions. Shenzhen Comix Group Co., Ltd. (002301.SZ), Huludao Zinc Industry Co., Ltd. (000751.SZ) and Fujian Guanfu Modern Household Wares Co., Ltd. (002102.SZ) determined to suspend trading as the pledged shares of their controlling shareholder reached the limit for closing positions or the alarming line.
TOP
[Industry Information]
○ No. 1 Central Document to release soon, rural tourism to embrace development opportunities
------
SSN learnt that the Ministry of Agriculture held special activities on learning the spirit of the No. 1 Central Document of 2016 recently. Based on past experiences, the No. 1 Central Document will be released in end-January or early-February. Yu Xinrong, Vice Minister of Agriculture, pointed out that the rural work will focus on improving the comprehensive grains production ability, facilitating agricultural transformation and upgrading, strengthening the protection of environment and resources, boosting the vitality of rural development and promoting continuous incomes growth of farmers.
Comment: Based on recent activities, Chinese Vice Premier Wang Yang emphasized the development of rural tourism and promoting the supply-side reform in tourism. Driven by the integrated development of the primary, secondary and tertiary industries, rural tourism and other service industries will embrace development opportunities. Among listed companies, Luoniushan Co., Ltd. (000735.SZ) owns industrial parks for agricultural products. Its substantial shareholders are developing the Guilinyang national tropical agricultural park in Hainan Province to make plans on the development of rural sightseeing and beautiful rural tourism. BTG Hotels (Group) Co., Ltd. (600258.SH) introduces many resort hotels in rural areas through the establishment of joint ventures to develop rural tourism markets.
TOP
[Announcement Interpretation]
○ Chitianhua proposes to buy Salvage Capital with nearly RMB2 bln
------
Guizhou Chitianhua CO., Ltd. (600227.SH) proposes to buy 100 percent shareholding of Salvage Capital Group at the valuation of 1,987 million yuan by issuing an estimated 462 million shares at 4.3 yuan per share through private placement. Salvage Capital is held by Guizhou Yuyang Trade Company, which is owned by Chitianhua's actual controller Ding Linhong. Meanwhile, Chitianhua proposes to raise supporting fund of 1,987 million yuan by issuing shares at no less than 4.3 yuan per share through private placement, and Yuyang Trade agreed to subscribe 10 to 50 percent. The fundraising will be used for hospital construction project and loan repayment.
Through this acquisition, Chitianhua will achieve dual-wheel drive from its two main businesses, namely medicine and health plus chemical engineering. Salvage Capital realized net profits of 123 million yuan in 2015. Yuyang Trade committed that net profits of Salvage Capital for 2016-2018 will be no less than 150 million yuan, 210 million yuan and 260 million yuan, respectively.
○ Chtc Helon proposes to acquire game assets with over RMB3.3 bln
------
Chtc Helon Co., ltd. (000677.SZ) proposes to buy the entire equity of Hangazhou Miaoju Network Technology Company Ltd. (1724 million yuan) and the entire equity of Shanghai Lingyu Network Technology Company Ltd. (1,614 million yuan) at the valuation of 3,338 million yuan by issuing 652 million shares at 3.99 yuan per share through private placement and 737 million yuan in cash; meanwhile, the company proposes to raise supporting fund of 108 million yuan by issuing shares at 5.22 yuan per share through private placement. A party acting in concert with one of its controlling shareholder proposes to subscribe with an amount of 800 million yuan.
Miaoju Network is primarily engaged in online game operation and distribution. Its committed net profits deducted of non-recurring profits or losses for 2016-2018 are 119 million yuan, 158 million yuan and 194 million yuan, respectively. LingYu Network is primarily engaged in the R＆D of webgame and networked mobile game, and its committed net profits deducted of non-recurring profits or losses are 114 million yuan, 152 million yuan and 185 million yuan, respectively.
TOP
○ Zhuochengzhaoye Property to borrow shell from Tongfeng Electronics
------
Anhui Tongfeng Electronics Company Limited (600237.SH) proposes to buy the entire equity of Zhejiang Zhuochengzhaoye Property at the valuation of 4.53 billion yuan by issuing shares at 5.2 yuan per share to its indirect controlling shareholder Tech-New Group through private placement, and at the same time raise supporting fund of 2 billion yuan. The transaction constitutes a shell borrowing. Zhuochengzhaoye Property is engaged in property development, and its projects are primarily located in third and fourth tier cities like Tongling City and Yongkang City. As of the end of 2015, net assets of Zhuochengzhaoye Property is 2.5 billion yuan and its net profits for 2015 is 50 million yuan. The counterparty committed that accumulative net profits of the subject asset during 2016 to 2018 will be no less than 2.5 billion yuan.
○ Baoshuo proposes to takeover Huachuang Securities with RMB7,750 mln
------
Hebei Baoshuo Co., Ltd. (600155.SH) proposes to buy 100 percent shareholding of Huachuang Securities Co., Ltd held by Guizhou Materials Group Co., Ltd and Maotai Group respectively at the valuation of 7,751 million yuan by issuing 753 million shares at 10.29 yuan per share. Meanwhile, the company proposes to raise supporting fund of 7.75 billion yuan by issuing shares at 13.45 yuan per share though private placement, which will be used for supplement of the capital of Huachuang Securities. Liu Yonghao, the actual controlling shareholder of Baoshuo, proposes to subscribe with an amount of 2 billion yuan. Huachuang Securities realized net profits of 92 million yuan, 262 million yuan and 582 million yuan in 2013, 2014 and the first eight months of 2015, respectively.
○ Sanyuan Foods to acquire ice cream maker with RMB 1.3bln
------
Beijing Sanyuan Foods Co., Ltd. (600429.SH) proposes to spend 1,305 million yuan cash acquiring 90 percent equities of Beijing Ailai Faxi Food Co., Ltd. from its controlling shareholder Beijing Capital Agribusiness Group and others. Ailai Faxi Food is mainly engaged in the manufacturing and sales of dairy products. Its products include Baxi milk ice cream and other dairy products. Its estimated net profit after deducting extraordinary gains or losses will be 84.42 million yuan, 92,57 million yuan and 102 million yuan from 2016 to 2018.
○ Changjiang Runfa Machinery to inject RMB 3.5mln into Changjiang Pharmaceutical
------
Changjiang Runfa Machinery Co., Ltd. (002435.SZ) proposes to acquire 100 equities of Changjiang Pharmaceutical Group from the latter's controlling shareholder Cheung Kong (Holdings) Group with 3.5 billion yuan among which 300 billion yuan will be paid in cash and the reminder will be paid by issuing shares at 14.31 yuan per share through private placement. It also proposes to raise 1.2 billion yuan supporting funds at 16.62 yuan per share through private placement. After the deal, the the listing company will expand its main business into the R＆D, production and sales of anti-infection drugs.
○ Etrol Technologies to acquire ingniao Science and Tech, proposes high share conversion and dividend
------
Beijing Etrol Technologies Co., Ltd. (300370.SZ) proposes to acquire 100 equities of Hangzhou Qingniao Science and Technology Co., Ltd., a national-level hi-tech enterprise that is engaged in building intelligentization, security systems, computer systems integration, design and construction of bioidentification technology, and system solutions. The company forecasts a growth of 35 to 45 percent and proposes a 10-for-10 conversion of capital surplus into shares combined with 0.6 yuan dividend for every 10 shares in its annual report.
[Financial Reports Express]
○ Bangjie Digital Knitting and Lead Intelligent Equipment propose high share conversion and dividend
------
Zhejiang Bangjie Digital Knitting Share Co., Ltd. (002634.SZ) proposes a 26-for-10 conversion of capital surplus into shares combined with 2yuan dividend for every 10 shares according to its annual report. Wuxi Lead Intelligent Equipment Co, Ltd. (300450.SZ) proposes a 20-for-10 conversion of capital surplus into shares combined with 5.5 yuan dividend for every 10 shares according to its annual report.
○ Eastern Gold Jade and others forecast growth
------
Eastern Gold Jade Co., Ltd. (600086.SH) forecasts a growth of 190 to 240 percent in its annual report mainly due to its surging sales. Nanjing Chemical Fibre Co., Ltd. (600889.SH) forecasts a growth of 7,319 to 8,966 percent in its annual report as it sold 70 percent equities in Nanjing Jinling Real Estate Development Co., Ltd. Sichuan Hejia Co., Ltd. (600093.SH) forecasts a growth of 870 percent in its annual report mainly due to the successful implementation of its supply chain management and commercial factoring fund-raising project.
In addition, Shenzhen Changfang Light Emitting Diode Lighting Co., Ltd. (300301.SZ) forecasts its net profit to grow 99 percent in its annual report and estimates a growth of 78 to 105 percent in the first quarter of 2016 mainly due to its financial statement integration with its subsidiary Shenzhen Kang Mingsheng Industry Co., Ltd.
[Trading Alarms]
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○Eastern Pioneer Driving School to debut IPO on Jan. 27
------
Eastern Pioneer Driving School Co., Ltd. (603377.SH) will offer shares at 16.4 yuan per share with an upper limit of 15,000 shares for each applicant. The company's PE ratio is 22 times. After applied for subscription, applicants should ensure there is sufficient money for the payment according to their successful application on Jan. 29.
○ Structured funds see another wave of discount, type-B funds likely to suffer heavy losses
------
The net value of ICBC CSI high-speed rail structured fund - type B (fund code: 150326) announced on Jan. 26 dropped below 0.25 yuan, and triggered discount. As of the press time, Citic-Prudential CSI 300 structured fund - type B (fund code: 150052) and E-fund securities structured fund - type B (fund code:502102 ) have not disclosed their net value yet, but might probably see their net value trigger discount. Yet the transaction prices in the secondary market are still much higher than their net vale. If the discount is triggered, holders of type B funds will suffer heavy losses even though the stock index will rebound on Jan. 27. The net vale of BOCOM CSI Internet-based finance fund - type B (fund code:150318) and CSCL CSI high-speed rail structured fund - type B (fund code:502030) almost reach the threshold for discount. Investors should pay special attention to risks in these funds.
TOP
○ Central Leading Group on Financial and Economic Affairs meeting convened, de-capacity to highlight again
○ No. 1 Central Document to release soon, rural tourism to embrace development opportunities
○ Chitianhua proposes to buy Salvage Capital, Chtc Helon proposes to acquire two game assets
○ A property developer to borrow shell from Tongfeng Electronics, Baoshuo proposes to takeover Huachuang Securities
[SSN Focus]
○ Central Leading Group on Financial and Economic Affairs meeting convened, de-capacity to highlight again
------
Chinese President Xi Jinping chaired the 12th meeting of the Central Leading Group on Financial and Economic Affairs on Jan. 26 to study plans on the supply-side structural reform. Xi emphasized that China should cut capacities, stocks, leverages, reduce costs and shore up weakness while maintaining moderate expanding of total demands. It should increase quality supplies, reduce ineffective supplies and expand effective supplies in the production industries, improve the adaptability and flexibility of the supply structure and improve the production rate of all factors to make the supply system better meet the changes of the demand structure.
Comment" Institutes believe that capacities cutting in the iron and steel industry under increasing pressure on environmental protection, the cement industry with a high proportion of private enterprises and the electrolytic aluminium industry easily regulated by pricing means are under smooth progress. Under the background of regulatory incentives, market forces and improving systems, this year will see peaks in the horizontal consolidation of industries.
◆The meeting also studied the plan on the development of the Yangtze River Economic Belt and the work on forest ecology safety. It requires giving play to the golden waterway of the Yangtze River and the industrial development should meet the requirements on green, circular and low-carbon development. It should promote land greening and the performance of the obligation of planting trees by all people, strengthen the construction of key forestry projects and implement a new round of returning farmland to forests.
[SSN Selection]
○ The reverse repo of the central bank continued to increase to 440 billion yuan on Jan. 26 to ensure sound capitals during the Spring Festival holiday.
○ The plan on the development of the internal combustion engine industry during the 13th Five-year Plan period has been prepared with the focus on the development of technologies on green design, clean production and circular utilization of resources as well as energy-saving and emission and noises reduction.
○ The Aviation Industry Corporation of China proposed to deepen enterprise reform in the 2016 summit, striving to become a pilot company for the investment and operation of state-owned capitals.
○ The U.S. Federal Reserve will convene a monetary policy meeting on Jan. 26 and 27. The market expects that the fluctuation in the global financial market may soften its attitude in the pace of interest rate rise.
○ Searainbow Holding Corp. (000503.SZ) determined to suspend trading as the pledged shares of its controlling shareholder reached the limit for closing positions. Shenzhen Comix Group Co., Ltd. (002301.SZ), Huludao Zinc Industry Co., Ltd. (000751.SZ) and Fujian Guanfu Modern Household Wares Co., Ltd. (002102.SZ) determined to suspend trading as the pledged shares of their controlling shareholder reached the limit for closing positions or the alarming line.
TOP
[Industry Information]
○ No. 1 Central Document to release soon, rural tourism to embrace development opportunities
------
SSN learnt that the Ministry of Agriculture held special activities on learning the spirit of the No. 1 Central Document of 2016 recently. Based on past experiences, the No. 1 Central Document will be released in end-January or early-February. Yu Xinrong, Vice Minister of Agriculture, pointed out that the rural work will focus on improving the comprehensive grains production ability, facilitating agricultural transformation and upgrading, strengthening the protection of environment and resources, boosting the vitality of rural development and promoting continuous incomes growth of farmers.
Comment: Based on recent activities, Chinese Vice Premier Wang Yang emphasized the development of rural tourism and promoting the supply-side reform in tourism. Driven by the integrated development of the primary, secondary and tertiary industries, rural tourism and other service industries will embrace development opportunities. Among listed companies, Luoniushan Co., Ltd. (000735.SZ) owns industrial parks for agricultural products. Its substantial shareholders are developing the Guilinyang national tropical agricultural park in Hainan Province to make plans on the development of rural sightseeing and beautiful rural tourism. BTG Hotels (Group) Co., Ltd. (600258.SH) introduces many resort hotels in rural areas through the establishment of joint ventures to develop rural tourism markets.
TOP
[Announcement Interpretation]
○ Chitianhua proposes to buy Salvage Capital with nearly RMB2 bln
------
Guizhou Chitianhua CO., Ltd. (600227.SH) proposes to buy 100 percent shareholding of Salvage Capital Group at the valuation of 1,987 million yuan by issuing an estimated 462 million shares at 4.3 yuan per share through private placement. Salvage Capital is held by Guizhou Yuyang Trade Company, which is owned by Chitianhua's actual controller Ding Linhong. Meanwhile, Chitianhua proposes to raise supporting fund of 1,987 million yuan by issuing shares at no less than 4.3 yuan per share through private placement, and Yuyang Trade agreed to subscribe 10 to 50 percent. The fundraising will be used for hospital construction project and loan repayment.
Through this acquisition, Chitianhua will achieve dual-wheel drive from its two main businesses, namely medicine and health plus chemical engineering. Salvage Capital realized net profits of 123 million yuan in 2015. Yuyang Trade committed that net profits of Salvage Capital for 2016-2018 will be no less than 150 million yuan, 210 million yuan and 260 million yuan, respectively.
○ Chtc Helon proposes to acquire game assets with over RMB3.3 bln
------
Chtc Helon Co., ltd. (000677.SZ) proposes to buy the entire equity of Hangazhou Miaoju Network Technology Company Ltd. (1724 million yuan) and the entire equity of Shanghai Lingyu Network Technology Company Ltd. (1,614 million yuan) at the valuation of 3,338 million yuan by issuing 652 million shares at 3.99 yuan per share through private placement and 737 million yuan in cash; meanwhile, the company proposes to raise supporting fund of 108 million yuan by issuing shares at 5.22 yuan per share through private placement. A party acting in concert with one of its controlling shareholder proposes to subscribe with an amount of 800 million yuan.
Miaoju Network is primarily engaged in online game operation and distribution. Its committed net profits deducted of non-recurring profits or losses for 2016-2018 are 119 million yuan, 158 million yuan and 194 million yuan, respectively. LingYu Network is primarily engaged in the R＆D of webgame and networked mobile game, and its committed net profits deducted of non-recurring profits or losses are 114 million yuan, 152 million yuan and 185 million yuan, respectively.
TOP
○ Zhuochengzhaoye Property to borrow shell from Tongfeng Electronics
------
Anhui Tongfeng Electronics Company Limited (600237.SH) proposes to buy the entire equity of Zhejiang Zhuochengzhaoye Property at the valuation of 4.53 billion yuan by issuing shares at 5.2 yuan per share to its indirect controlling shareholder Tech-New Group through private placement, and at the same time raise supporting fund of 2 billion yuan. The transaction constitutes a shell borrowing. Zhuochengzhaoye Property is engaged in property development, and its projects are primarily located in third and fourth tier cities like Tongling City and Yongkang City. As of the end of 2015, net assets of Zhuochengzhaoye Property is 2.5 billion yuan and its net profits for 2015 is 50 million yuan. The counterparty committed that accumulative net profits of the subject asset during 2016 to 2018 will be no less than 2.5 billion yuan.
○ Baoshuo proposes to takeover Huachuang Securities with RMB7,750 mln
------
Hebei Baoshuo Co., Ltd. (600155.SH) proposes to buy 100 percent shareholding of Huachuang Securities Co., Ltd held by Guizhou Materials Group Co., Ltd and Maotai Group respectively at the valuation of 7,751 million yuan by issuing 753 million shares at 10.29 yuan per share. Meanwhile, the company proposes to raise supporting fund of 7.75 billion yuan by issuing shares at 13.45 yuan per share though private placement, which will be used for supplement of the capital of Huachuang Securities. Liu Yonghao, the actual controlling shareholder of Baoshuo, proposes to subscribe with an amount of 2 billion yuan. Huachuang Securities realized net profits of 92 million yuan, 262 million yuan and 582 million yuan in 2013, 2014 and the first eight months of 2015, respectively.
○ Sanyuan Foods to acquire ice cream maker with RMB 1.3bln
------
Beijing Sanyuan Foods Co., Ltd. (600429.SH) proposes to spend 1,305 million yuan cash acquiring 90 percent equities of Beijing Ailai Faxi Food Co., Ltd. from its controlling shareholder Beijing Capital Agribusiness Group and others. Ailai Faxi Food is mainly engaged in the manufacturing and sales of dairy products. Its products include Baxi milk ice cream and other dairy products. Its estimated net profit after deducting extraordinary gains or losses will be 84.42 million yuan, 92,57 million yuan and 102 million yuan from 2016 to 2018.
○ Changjiang Runfa Machinery to inject RMB 3.5mln into Changjiang Pharmaceutical
------
Changjiang Runfa Machinery Co., Ltd. (002435.SZ) proposes to acquire 100 equities of Changjiang Pharmaceutical Group from the latter's controlling shareholder Cheung Kong (Holdings) Group with 3.5 billion yuan among which 300 billion yuan will be paid in cash and the reminder will be paid by issuing shares at 14.31 yuan per share through private placement. It also proposes to raise 1.2 billion yuan supporting funds at 16.62 yuan per share through private placement. After the deal, the the listing company will expand its main business into the R＆D, production and sales of anti-infection drugs.
○ Etrol Technologies to acquire ingniao Science and Tech, proposes high share conversion and dividend
------
Beijing Etrol Technologies Co., Ltd. (300370.SZ) proposes to acquire 100 equities of Hangzhou Qingniao Science and Technology Co., Ltd., a national-level hi-tech enterprise that is engaged in building intelligentization, security systems, computer systems integration, design and construction of bioidentification technology, and system solutions. The company forecasts a growth of 35 to 45 percent and proposes a 10-for-10 conversion of capital surplus into shares combined with 0.6 yuan dividend for every 10 shares in its annual report.
[Financial Reports Express]
○ Bangjie Digital Knitting and Lead Intelligent Equipment propose high share conversion and dividend
------
Zhejiang Bangjie Digital Knitting Share Co., Ltd. (002634.SZ) proposes a 26-for-10 conversion of capital surplus into shares combined with 2yuan dividend for every 10 shares according to its annual report. Wuxi Lead Intelligent Equipment Co, Ltd. (300450.SZ) proposes a 20-for-10 conversion of capital surplus into shares combined with 5.5 yuan dividend for every 10 shares according to its annual report.
○ Eastern Gold Jade and others forecast growth
------
Eastern Gold Jade Co., Ltd. (600086.SH) forecasts a growth of 190 to 240 percent in its annual report mainly due to its surging sales. Nanjing Chemical Fibre Co., Ltd. (600889.SH) forecasts a growth of 7,319 to 8,966 percent in its annual report as it sold 70 percent equities in Nanjing Jinling Real Estate Development Co., Ltd. Sichuan Hejia Co., Ltd. (600093.SH) forecasts a growth of 870 percent in its annual report mainly due to the successful implementation of its supply chain management and commercial factoring fund-raising project.
In addition, Shenzhen Changfang Light Emitting Diode Lighting Co., Ltd. (300301.SZ) forecasts its net profit to grow 99 percent in its annual report and estimates a growth of 78 to 105 percent in the first quarter of 2016 mainly due to its financial statement integration with its subsidiary Shenzhen Kang Mingsheng Industry Co., Ltd.
[Trading Alarms]
------
○Eastern Pioneer Driving School to debut IPO on Jan. 27
------
Eastern Pioneer Driving School Co., Ltd. (603377.SH) will offer shares at 16.4 yuan per share with an upper limit of 15,000 shares for each applicant. The company's PE ratio is 22 times. After applied for subscription, applicants should ensure there is sufficient money for the payment according to their successful application on Jan. 29.
○ Structured funds see another wave of discount, type-B funds likely to suffer heavy losses
------
The net value of ICBC CSI high-speed rail structured fund - type B (fund code: 150326) announced on Jan. 26 dropped below 0.25 yuan, and triggered discount. As of the press time, Citic-Prudential CSI 300 structured fund - type B (fund code: 150052) and E-fund securities structured fund - type B (fund code:502102 ) have not disclosed their net value yet, but might probably see their net value trigger discount. Yet the transaction prices in the secondary market are still much higher than their net vale. If the discount is triggered, holders of type B funds will suffer heavy losses even though the stock index will rebound on Jan. 27. The net vale of BOCOM CSI Internet-based finance fund - type B (fund code:150318) and CSCL CSI high-speed rail structured fund - type B (fund code:502030) almost reach the threshold for discount. Investors should pay special attention to risks in these funds.
TOP
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