[Today's Guide]
○Executive meeting of State Council promotes Made in China 2025 and integrated development of "Internet Plus"
○MIIT to set Chongqing as demonstration city, greatly promoting intelligent automobile and traffic
○Orient Landscape ＆ Ecology and itoa Intelligent Control propose high share conversion, Zoomlion Heavy Industry Science and Technology to acquire Terex
○Aotecar New Energy Technology and others see shareholding increase, Taishan Petroleum bought by five institutional seats
[SSN Focus]
○Executive meeting of State Council promotes Made in China 2025 and integrated development of "Internet Plus"
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The executive meeting of the State Council on Jan. 27 determined to promote Made in China 2025 and integrated development of "Internet Plus". The meeting also proposed to enhance digitalization, networking and intelligent manufacturing, quicken the steps for laying new foundation of manufacturing industry, such as formation of automatic control and perceptive technology, industrial cloud, intelligent service platform and industrial internet, and create new pattern, commercial activities and products of the manufacturing industry.
Comment: Institutions believe integration of internet and traditional industries will become a key point for China's new round of manufacturing development, and intelligent manufacturing will be a main direction in the future. Institutions are also optimistic about investment opportunities from collection, transmission and analysis of data. Based on GE measurement and calculation, enterprise efficiency will improve about 20 percent after application of industrial internet. In terms of A-share listed companies, Kyland Technology Co., Ltd. (300353.SZ) is mainly engaged in industrial Ethernet switch; Chongqing Chuanyi Automation Co., Ltd. (603100.SH) is a leading company in industrial automatic control system; and Wuhan Huazhong Numerical Control Co., Ltd. (300161.SZ) masters core technologies, like digital control and servo motor.
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[SSN Selection]
○No.1 Document for 2016 of the central government is released, proposing to implement new concept and quicken agricultural modernization.
○Net buying transaction of the Northbound Trading of the Shanghai-Hong Kong Stock Connect reached 4.3 billion yuan on Jan. 27, setting a new high for a single trading day since months before.
○Li Dazhi, assistant executive of Hong Kong Monetary Authority, indicated that Hong Kong's banking system is strong enough to deal with market fluctuation and capital outflow, and H-share evaluation is lower than that of other markets.
○Lin Fan, vice general manager of Shenzhen Stock Exchange, indicated internal technologies and rules have been prepared for Shenzhen-Hong Kong Stock Connect program. He believed it will be initiated soon this year.
○Construction for China's the third-generation nuclear power station has been smoothly carried out, and Unit 1 of Taishan Nuclear Power Station enters into a stage of system integration and testing.
[Industrial Information]
○MIIT to set Chongqing as demonstration city, greatly promoting intelligent automobile and traffic
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The Ministry of Industry and Information Technology (MIIT) and Chongqing municipality signed a cooperative agreement on Jan. 27 to initially promote the demonstration of intelligent automobile and intelligent traffic applications in Chongqing. The two parties will jointly push the formation of 4.5G/5G, establish an industrial ecology for integrated development of intelligent automobile and traffic, and develop and research a series of key technologies and products related to intelligent automobile and traffic. As one of the first demonstration cities, Chongqing will take three years to gradually create an open environment for its urban traffic from an enclosed one in pilot area, and carry out demonstration for various applications, such as intelligent driving and road network.
Comment: With the implementation of Made in China 2025, the "Internet plus" and other strategies, the automobile, communication and electronic information industries have met the basic conditions for trans-boundary integration. The establishment of demonstration areas in Chongqing will lay foundations for the national popularization of relevant technologies and products. As a key supporting, the Internet of Vehicles is expected to see rapid development. In terms of listed companies, Shenzhen Hezheng Automobile Electronics Co., Ltd., a company under Guangdong Shenglu Telecommunication Tech. Co., Ltd. (002446.SZ), is a leader in the vehicle-mounted information system industry. Shenzhen Soling Industrial Co., Ltd. (002766.SZ) is transforming into a supplier of "hardware plus Internet of Vehicles services".
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○Titanium dioxide leader raises prices again, industry prospects continue to improve
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SSN learnt that Lomon Corporation, the domestic leader in the titanium dioxide industry, surprised the market by raising the products prices by a maximum of 300 yuan per ton or nearly 3 percent on Jan. 26 after it raised the prices by a maximum of 300 yuan per ton on Jan. 6 for the first time. Other enterprises will follow and raise the prices later. Due to the relatively tight inventory and the exit of certain capacities, the titanium dioxide market is seeing improvement opportunities in operation.
Comment: Statistics show that the titanium dioxide capacity in China is 3.52 million tons in 2015. Only 67 percent of enterprises in the industry conducted production. Various enterprises and equipment suspended production due to overcapacity. With the advancing of the supply-side reform, small capacities are expected to exit, which will accelerate the exit of small capacities and promote mergers and consolidations in the industry. Besides, the shrinking overseas capacities as well as the recovery in the demands from downstream property enterprises will support the titanium dioxide market. Institutes estimate that the titanium dioxide may see an increase of about 2,000 yuan per ton with a growth potential of nearly 20 percent. Among listed companies, Henan Billions Chemicals Co., Ltd. (002601.SZ) and Anhui Annada Titanium Industry Co., Ltd. (002136.SZ) are leaders in the industry.
[Financial Reports Express]
○Orient Landscape ＆ Ecology and itoa Intelligent Control propose high share conversion
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The actual controllers of Beijing Orient Landscape ＆ Ecology Co., Ltd. (002310.SZ) propose a 15-for-10 conversion of capital surplus into shares combined with cash dividend according to its annual report. Shenzhen Yitoa Intelligent Control Co., Ltd. (300131.SZ) expects a growth of 167 to 190 percent in its annual report and its actual controllers proposes a 10-for-10 conversion of capital surplus into shares combined with 0.5 yuan dividend for every 10 shares according to its annual report. The actual controllers of Xiamen Red Phase Instruments Inc. (300427.SZ) proposes a 22-for-10 conversion of capital surplus into shares combined with 1.9 yuan dividend for every 10 shares according to its annual report. Zhejiang Firstar Panel Technology Co., Ltd. (300256.SZ) expects a growth of 160 to 190 percent in its annual report and its actual controllers proposes a 10-for-10 conversion of capital surplus into shares according to its annual report.
○Bluestar Adisseo and other companies expects high growth
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Bluestar Adisseo Company (600299.SH) expects an increase of 500 percent in its annual report as a result of the consolidation of financial statements with Bluestar Adisseo Nanjing Co., Ltd. Zhuzhou Times New Material Technology Co., Ltd. (600458.SH) expects a growth of 450 to 500 percent thanks to the surging wind power businesses. Risen Energy Co., Ltd. (300118.SZ) expects an increase of 363 to 393 percent in its annual report thanks to the surging sales of PV products. Kunwu Jiuding Investment Holdings Co., Ltd. (600053.SH) expects an increase of 270 to 300 percent in its annual report as a result of the consolidation of financial statements with Kunwu Jiuding Investment Management Co., Ltd. Xinjiang Tianrun Dairy Co., Ltd. (600419.SH) expects an increase of 270 percent in its annual report thanks to the surging sales.
In addition, benefiting from the low coal prices, Datang Huayin Electric Power Co., Ltd. (600744.SH) expects to turn losses into profits with a profit of 463 million yuan in its annual report. Sichuan Guangan Aaa Public Co., Ltd. (600979.SH) expects to turn losses into profits with a profit of 110 to 160 million yuan in its annual report.
[Announcement Interpretation]
○Zoomlion Heavy Industry Science and Technology to acquire Terex
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Zoomlion Heavy Industry Science and Technology Co., Ltd. (01157.HK; 000157.SZ) confirmed to purchase Terex Corporation (TEX.NYSE), the world's fifth largest engineering machinery enterprise. According to the data of 2014, the total sales amount reached about 44.7 billion yuan, 72 percent of which came from West Europe and North America; and that of Zoomlion Heavy Industry Science and Technology recorded 25.9 billion yuan, 85 percent of which was contributed by China. The two companies are highly complementary to each other in terms of product modality and market coverage. Moreover, the later holds sufficient capital and various financing channels. According to the announcement, the company has obtained the confirmation letter on the acquisition plan from Chinese departments and the confirmation letter on financing support form financial institutions. Zoomlion Heavy Industry Science and Technology will continue to push forward this transaction.
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○Aotecar New Energy Technology and others see shareholding increase
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Beijing Tianyou Investment Co. Ltd., shareholder of Aotecar New Energy Technology Co., Ltd. (002239.SZ), increased its shareholding in the company by 13.49 million shares worth 163 million yuan during Jan. 6-27. Hangzhou Binjiang Investment Holdings Company, controlling shareholder of Hangzhou Binjiang Real Estate Group Co., Ltd. (002244.SZ) continue to increase its shareholding in the company by 4.51 million shares on Jan. 27. Shanghai Real Estate Group, controlling shareholder of China Enterprise Company Limited (600675.SH), increased its shareholding in the company by 6.5 million shares on Jan. 27. Fujian Construction Engineering Group Corporation, substantial shareholder of China Wuyi Co., Ltd. (000797.SZ), increased its shareholding in the company by 3.02 million shares today.
Liu Zaiwang and Xu Xingli, actual controller and general manager of Jangho Group Co., Ltd. (601886.SH), increased their shareholding in the company by 3.31 million shares during Jan. 22-26. China XD Group Corporation, controlling shareholder of China XD Electric Co., Ltd. (601179.SH), increased its shareholding in the company by 9.25 million shares today. Zhejiang Ruikang Investment Co., Ltd., controlling shareholder of Lotus Health Industry Holding Group Company (600186.SH), increased its shareholding in the company by 1 million shares on Jan. 27 and plans to buy shares by no more than 2 percent of the company's total share capital within next six months.
○Shimge Pump Industry to develop environmental protection industry by private placement at RMB330 mln
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Shimge Pump Industry Group Co., Ltd. (002532.SZ) plans to raise 330 million yuan by issuing 26.68 million shares at a price of no less than 12.37 yuan per share through private placement. The funds will be invested in a technical improvement project with an annual output of 1.2 million water pumps, the TOT＆BOT project of urban sewage treatment plant at Yunhe county, the BOO wastewater treatment project in Cangnan county, the PPP project for sewage treatment plant extension at Longxi county and supplementing operating capitals. The latest closing price of company's shares is 12 yuan per share, a little bit less than the price at the private placement.
[Trading Trends]
○Taishan Petroleum bought by five institutional seats
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The trading volume ranking list on Jan. 27 shows that Sinopec Shandong Taishan Petroleum Co., Ltd. (000554.SZ) was bought through five institutional seats with a total of 102 million yuan, accounting for 29.6 percent of its intraday turnover.
Comment: It is reported by media that the 2016 overall proposal on the reform of petroleum and natural gas system will be introduced soon and the comprehensive oil and gas reform covering the whole industrial chain will kick off. Taishan Petroleum is a commercial circulation enterprise principally engaged in buying and selling refined oil products. According the professional restructuring and listing theory of China Petroleum and Chemical Corporation, Taishan Petroleum is a rare listed company in terms of refined oil products business, which makes its platform value prominent.
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[Trading Alarms]
○Southern Publishing and Media to launch IPO on Jan. 28
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The issuing price of Southern Publishing and Media Company Limited (601900.SH) is 6.13 yuan per share. The ceiling for subscription is 50,000 shares and the PE ratio is 23 times. After subscribing the stocks, investors have to ensure enough funds in their accounts available for the payment depending on whether they win the lot for IPO on Feb. 1.
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