[Today's Guide]
○Two subsidiaries of Baosteel Group suspend trading, steel capacity reduction goal determined
○Apple intensifies strength for VR deployment, benefiting industrial penetration rate
○Cloud computing industry to boom, five institutes buy Eastone Century Technology
○Tianqi Lithium Industries and other firms propose high share conversion and dividend, Net profits of East Money Information and other firms expected to surge
[SSN Focus]
○Two subsidiaries of Baosteel Group suspend trading, steel capacity reduction goal determined
------
Xinjiang Ba Yi Iron ＆ Steel Co., Ltd. (600581.SH) and SGIS Songshan Co., Ltd. (000717.SZ) announced on Jan. 30 at the same time that planning of the actual controller Baosteel Group Corporation involves in major activities of the said two listed companies, and they begin to suspend the trading. Based on information of The Economic Observer, Guidelines on Getting Steel Industry out of Poverty has gained official reply from the State Council, likely to issue formally after the Spring Festival. Eight supporting policy documents related to the Guidelines will be drafted and finished by related authorities. A goal to reduce crude steel capacity of 100 to 150 million tons will be reached within next three years.
Comment: Among various industries with surplus capacity, steel industry bears the biggest loss pressure. Gansu Jiu Steel Group Hongxing Iron ＆ Steel Co., Ltd. (600307.SH) and Wuhan Iron and Steel Company Limited (600005.SH) suffered the largest loss of nearly 7 billion yuan respectively in their annual reports, according to the latest performance forecast. Policies always regard the steel industry as a priority, and steps will be speeded up to reduce its surplus capacity along with gradually-implemented supporting policies in the future. In terms of regions severely suffering haze, including Beijing-Tianjin-Hebei region and Yangtze River Delta, strength will be intensified to reduce the surplus capacity. Steel companies, whose main business is difficult to make profits from loss and substantial shareholder owns unlisted high-quality asset, are still likely to realize restructuring and transformation. For example, Beijing Shougang Co., Ltd. (000959.SZ) is stepping into comprehensive urban service industry; Hang Zhou Iron ＆ Steel Co., Ltd. (600126.SH) will involve in the businesses of environmental protection and renewable resources.
◆China National Coal Association recently issued notice to its member enterprises, proposing that they should stop the production and construction of coal mines during the Spring Festival of 2016.
[SSN Selection]
○China Securities Regulatory Commission indicated that current margin trading, short selling and stock pledge repo are safe and controllable, shareholding decreased by the substantial shareholders are obviously less than that of the same period of last year.
○Hainan Province has eased the offshore duty-free policy. It will cancel limitation on shopping times of non-island travelers, and set online shopping windows in duty-free shops.
○Apple Inc. (AAPL. NASDAQ) is devoting itself to developing the next-generation wireless charging technology, making remote-distance charging available for users of iPhone and iPad.
○JD.com, Inc. (JD.NASDAQ) tested goods delivery by the UAV in the rural e-commerce logistics system. Jiangsu Huifeng Agrochemical Co., Ltd. (002496.SZ) plans to intensify the popularity strength for agricultural UAV.
○The central bank of Japan on Jan. 29 unexpectedly announced that policy interest rate will be set as -0.1 percent, and three main stock indexes of the U.S. increased by 2 percent respectively on the same day.
TOP
[Industry Information]
○Apple intensifies strength for VR deployment, benefiting industrial penetration rate
------
Apple Inc. (AAPL. NASDAQ) builds up a team of virtual reality and augmented reality with hundreds of experts to research and develop VR/AR headset devices, reported by Financial Times. Additionally, top VR expert Doug Bowman has participated in the company. Its iPhone sales slows down, and new products including VR devices are likely to become key orientation for breakthroughs.
Comment: Institution predict that the 70 million units of VR devices will be sold by 2017 and the market size of VR/AR devices will reach 150 billion U.S. dollars. The industry will see rapid penetration. Manufacturers of hardware including chips, games and video provider and enterprises with integration of software and hardware are expected to see rapid development. In terms of listed companies, All Winner Technology Co., Ltd. (300458.SZ), which is principally engaged in the design of intelligent terminal chips, plans to raise 1.16 billion yuan through private placement to invest in VR displayer processor chip and other projects. Shenzhen Esun Display Co., Ltd. (002751.SZ) has successively developed high-efficient 3D scanning device and solved the bottleneck of 3D modeling industry.
TOP
○Operating revenue of Aliyun surges remarkably, cloud computing industry to boom
------
Alibaba Group Holding Limited (NYSE: BABA) recently released its performance for the fourth quarter of 2015. The operating revenue of Alibaba Group's cloud computing subsidiary Aliyun increased by 126 percent year on year to 819 million yuan, representing a double year-on-year growth for three consecutive quarters. In view of global market, AWS cloud business of Amazon also saw continuous rapid growth. Scientific and technological giants such as Microsoft and IBM are making bigger efforts in expanding cloud computing business.
Comment: Driven by information economy, cloud computing services are booming as companies want to reduce operating costs. As estimation, stimulated by demands from enterprises and individuals, the market size of cloud computing industrial chain will reach several 100 billion yuan. Relevant data center, system service, basic equipment and related industries are expected to gain support from substantial demand. In terms of listed firms, Taiji Computer Corporation Limited (002368.SZ) and Xiamen Kehua Hengsheng Co., Ltd. (002335.SZ) are actively making transformation to cloud computing service field.
TOP
[Financial Reports Express]
○Tianqi Lithium Industries and other firms propose high share conversion and dividend
------
Jiang Weiping, actual controller of Sichuan Tianqi Lithium Industries, Inc. (002466.SZ), and other shareholders propose a 28-for-10 conversion of capital surplus into shares combined with 4 yuan dividend for every 10 shares in the company's annual report. Board of directors of Pci-suntek Technology Co., Ltd. (600728), proposes a 16-for-10 conversion of capital surplus into shares in the company's annual report.
Net profits of CITIC Guoan Information Industry Co., Ltd. (000839.SZ) are expected to surge by 85 percent and it proposes a 12-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares in its annual report. Net profits of Shenzhen Sunline Tech Co., Ltd. (300348.SZ) are predicted to hike by 20 percent-50 percent and it proposes a 10-for-10 conversion of capital surplus into shares combined with dividend for every 10 shares in its annual report.
○Net profits of East Money Information and other firms expected to surge
------
Net profits of East Money Information Co., Ltd. (300059.SZ) are expected to grow by 96 percent-1,065 percent mainly contributed by the growth in Internet finance business and fund sales. Net profits of Chongqing Tong Jun Ge Co., Ltd. (000591.SZ) are expected to jump by 11,753 percent-12,526 percent mainly due to the consolidated statements with CECEP Solar Energy Technology Co., Ltd. Net profits of Shenyang Chemical Industry Co., Ltd. (000698.SZ) are expected to move up by 512 percent-992 percent mainly due to the consolidated statements with Shandong Bluestar Dongda Chemical Co. Ltd. Net profits of Sotech Smarter Equipment Co., Ltd. (300173.SZ) are expected to go up by 840 percent-870 percent mainly due to the consolidated statements with Shenzhen DayuCNC Technology Company.
[Announcement Interpretation]
○Yihua Timber Industry and others see shareholding increase
------
Yihua Enterprise (Group) Co. Ltd., controlling shareholder of Guangdong Yihua Timber Industry Co., Ltd. (600978.SH), continued to increase its shareholding in the company by 4.83 million shares during Jan. 26-29. It is also the controlling shareholder of Yihua Healthcare Co., Ltd. (000150.SZ) and increased its shareholding in the company by 900,000 shares on Jan. 29. Yihua Healthcare previously announced that it acquired over 58 percent equity of Cherish-Yearn Co., Ltd., thus entering the pension industry.
In addition, Zhongnan Urban Construction Investment Co., Ltd. controlling shareholder of Jiangsu Zhongnan Construction Group Co., Ltd. (000961.SZ) will buy the company's share worth 200 million yuan at a price of no more than 10 yuan per share in next two months. Five senior executives of Shenzhen Kingdom Technology Co., Ltd. (600446.SH), increased their shareholding in the company by more than 1.5 million shares on Jan. 29. They plan to buy the company's shares worth 200 million yuan at most if the company's share price continues to be less than 33 yuan per share during next three months.
○Microgate Technology to raise RMB1 bln to develop terminal intelligent components
------
Shenzhen Microgate Technology Co., Ltd. (300319.SZ) proposes to raise 1 billion yuan by issuing 60 million shares through private placement for promoting the upgrading of industrial structure. 450 million yuan will be invested in the development of packaging workmanship and production of terminal radio frequency sound filter based on basal plates, which is expected to record an annual average net profit of 58.06 million yuan. 340 million yuan are planned to be invested in the production of small-sized MPIM electrical inductances, which is expected to record an annual average net profit of 51.14 million yuan. The above products are accessories to smart mobile phones.
[Trading Trends]
○Five institutes buy Eastone Century Technology
------
The trading volume ranking list on Jan. 29 shows that five institutional seats bought Guangdong Eastone Century Technology Co., Ltd. (300310.SZ) with a total of 51,304,000 yuan, accounting for 34.37 percent of its intraday turnover. Two institutional seats sold it with a total of 23,078,000 yuan.
Comment: The acquisition of 100 percent equities of Beijing Tianhe Hongcheng Electronics Co., Ltd. by the company was approved by the China Securities Regulatory Commission (CSRC). Institutes believe that the company is expected to seek advantages in the Internet of Things industry. It will conduct exclusive cooperation with Jasper, a leader in the global Internet of Things industry to provide China United Network Communications Limited (600050.SH) with services for the operation of the Internet of Things platforms. Besides, with the conclusion of the 4G construction by the three major telecommunication operators in China, namely China Mobile Limited (CHL.NYSE; 00941.HK), China United Network Communications and China Telecom Corporation Limited (CHA.NYSE; 00728.HK), as a typical industry in the industry, the network improvement businesses of the company is likely to remain booming in the following two to three years.
[Trading Alarms]
○Topscore Fashion Shoes subscription on Feb. 1
------
Topscore Fashion Shoes Co., Ltd., launches subscription at the price of 9.8 yuan per share with an up-limit per account of 28,000 shares and a P/E ratio of 23 times. Subscribers shall guarantee the corresponding amounts in the accounts on Feb. 3 based on the lot-winning results after the subscription.
[Weekly Review]
○Familiar fairy and ghost tales
------
The Internet of Internet, e-commerce, mergers and reorganization were hot topics during the bullish run in 1999. Guangdong Yorkpoint S＆T Co., Ltd. with shares of 100 yuan conducted cooperation in electronic vehicles with Tsinghua University and even claimed to develop carbon nano tube (CNT) batteries. In the bearish run in 1998, George Soros, RM exchange rate and SOEs layoffs were the most severe topics. Some even velieved that domestic banks were actually bankrupt.
Although ten years have passed, familiar fairy and ghost tales made their appearances in the stock market one after another. After the soaring of the stock market on May 19, 1999, the market shifted its focus from the ghost tales in the financial crisis to the fairy tales of technology stocks. It only took months for the market to shift from the leveraged bull run to fighting for foreign exchanges.
As investors, we should calmly analyze the facts and logics rather than believe in all tales. Unlikely the bubbles of technology stocks more than ten years ago, certain Internet-based companies have found their own profit model and their stock prices will never return to the starting points. New energy vehicles have become reality and are playing a more and more important role in the whole industrial chain. Sichuan Tianqi Lithium Industries, Inc. (002466.SZ) proposes a 28-for-10 conversion of capital surplus into shares, which shows its confidence. The overcapacity cutting in the supply-side will certainly bring difficulties to the macro economy as well as rebirth opportunities to certain loss-making industries. The price of titanium dioxide has been increasing. Xinjiang Bayi Iron ＆ Steel Co., Ltd. (600581.SH) and SGIS Songshan Co., Ltd. (000717.SZ) suspended trading for reorganization. Investment opportunities have been springing up.
TOP
○Two subsidiaries of Baosteel Group suspend trading, steel capacity reduction goal determined
○Apple intensifies strength for VR deployment, benefiting industrial penetration rate
○Cloud computing industry to boom, five institutes buy Eastone Century Technology
○Tianqi Lithium Industries and other firms propose high share conversion and dividend, Net profits of East Money Information and other firms expected to surge
[SSN Focus]
○Two subsidiaries of Baosteel Group suspend trading, steel capacity reduction goal determined
------
Xinjiang Ba Yi Iron ＆ Steel Co., Ltd. (600581.SH) and SGIS Songshan Co., Ltd. (000717.SZ) announced on Jan. 30 at the same time that planning of the actual controller Baosteel Group Corporation involves in major activities of the said two listed companies, and they begin to suspend the trading. Based on information of The Economic Observer, Guidelines on Getting Steel Industry out of Poverty has gained official reply from the State Council, likely to issue formally after the Spring Festival. Eight supporting policy documents related to the Guidelines will be drafted and finished by related authorities. A goal to reduce crude steel capacity of 100 to 150 million tons will be reached within next three years.
Comment: Among various industries with surplus capacity, steel industry bears the biggest loss pressure. Gansu Jiu Steel Group Hongxing Iron ＆ Steel Co., Ltd. (600307.SH) and Wuhan Iron and Steel Company Limited (600005.SH) suffered the largest loss of nearly 7 billion yuan respectively in their annual reports, according to the latest performance forecast. Policies always regard the steel industry as a priority, and steps will be speeded up to reduce its surplus capacity along with gradually-implemented supporting policies in the future. In terms of regions severely suffering haze, including Beijing-Tianjin-Hebei region and Yangtze River Delta, strength will be intensified to reduce the surplus capacity. Steel companies, whose main business is difficult to make profits from loss and substantial shareholder owns unlisted high-quality asset, are still likely to realize restructuring and transformation. For example, Beijing Shougang Co., Ltd. (000959.SZ) is stepping into comprehensive urban service industry; Hang Zhou Iron ＆ Steel Co., Ltd. (600126.SH) will involve in the businesses of environmental protection and renewable resources.
◆China National Coal Association recently issued notice to its member enterprises, proposing that they should stop the production and construction of coal mines during the Spring Festival of 2016.
[SSN Selection]
○China Securities Regulatory Commission indicated that current margin trading, short selling and stock pledge repo are safe and controllable, shareholding decreased by the substantial shareholders are obviously less than that of the same period of last year.
○Hainan Province has eased the offshore duty-free policy. It will cancel limitation on shopping times of non-island travelers, and set online shopping windows in duty-free shops.
○Apple Inc. (AAPL. NASDAQ) is devoting itself to developing the next-generation wireless charging technology, making remote-distance charging available for users of iPhone and iPad.
○JD.com, Inc. (JD.NASDAQ) tested goods delivery by the UAV in the rural e-commerce logistics system. Jiangsu Huifeng Agrochemical Co., Ltd. (002496.SZ) plans to intensify the popularity strength for agricultural UAV.
○The central bank of Japan on Jan. 29 unexpectedly announced that policy interest rate will be set as -0.1 percent, and three main stock indexes of the U.S. increased by 2 percent respectively on the same day.
TOP
[Industry Information]
○Apple intensifies strength for VR deployment, benefiting industrial penetration rate
------
Apple Inc. (AAPL. NASDAQ) builds up a team of virtual reality and augmented reality with hundreds of experts to research and develop VR/AR headset devices, reported by Financial Times. Additionally, top VR expert Doug Bowman has participated in the company. Its iPhone sales slows down, and new products including VR devices are likely to become key orientation for breakthroughs.
Comment: Institution predict that the 70 million units of VR devices will be sold by 2017 and the market size of VR/AR devices will reach 150 billion U.S. dollars. The industry will see rapid penetration. Manufacturers of hardware including chips, games and video provider and enterprises with integration of software and hardware are expected to see rapid development. In terms of listed companies, All Winner Technology Co., Ltd. (300458.SZ), which is principally engaged in the design of intelligent terminal chips, plans to raise 1.16 billion yuan through private placement to invest in VR displayer processor chip and other projects. Shenzhen Esun Display Co., Ltd. (002751.SZ) has successively developed high-efficient 3D scanning device and solved the bottleneck of 3D modeling industry.
TOP
○Operating revenue of Aliyun surges remarkably, cloud computing industry to boom
------
Alibaba Group Holding Limited (NYSE: BABA) recently released its performance for the fourth quarter of 2015. The operating revenue of Alibaba Group's cloud computing subsidiary Aliyun increased by 126 percent year on year to 819 million yuan, representing a double year-on-year growth for three consecutive quarters. In view of global market, AWS cloud business of Amazon also saw continuous rapid growth. Scientific and technological giants such as Microsoft and IBM are making bigger efforts in expanding cloud computing business.
Comment: Driven by information economy, cloud computing services are booming as companies want to reduce operating costs. As estimation, stimulated by demands from enterprises and individuals, the market size of cloud computing industrial chain will reach several 100 billion yuan. Relevant data center, system service, basic equipment and related industries are expected to gain support from substantial demand. In terms of listed firms, Taiji Computer Corporation Limited (002368.SZ) and Xiamen Kehua Hengsheng Co., Ltd. (002335.SZ) are actively making transformation to cloud computing service field.
TOP
[Financial Reports Express]
○Tianqi Lithium Industries and other firms propose high share conversion and dividend
------
Jiang Weiping, actual controller of Sichuan Tianqi Lithium Industries, Inc. (002466.SZ), and other shareholders propose a 28-for-10 conversion of capital surplus into shares combined with 4 yuan dividend for every 10 shares in the company's annual report. Board of directors of Pci-suntek Technology Co., Ltd. (600728), proposes a 16-for-10 conversion of capital surplus into shares in the company's annual report.
Net profits of CITIC Guoan Information Industry Co., Ltd. (000839.SZ) are expected to surge by 85 percent and it proposes a 12-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares in its annual report. Net profits of Shenzhen Sunline Tech Co., Ltd. (300348.SZ) are predicted to hike by 20 percent-50 percent and it proposes a 10-for-10 conversion of capital surplus into shares combined with dividend for every 10 shares in its annual report.
○Net profits of East Money Information and other firms expected to surge
------
Net profits of East Money Information Co., Ltd. (300059.SZ) are expected to grow by 96 percent-1,065 percent mainly contributed by the growth in Internet finance business and fund sales. Net profits of Chongqing Tong Jun Ge Co., Ltd. (000591.SZ) are expected to jump by 11,753 percent-12,526 percent mainly due to the consolidated statements with CECEP Solar Energy Technology Co., Ltd. Net profits of Shenyang Chemical Industry Co., Ltd. (000698.SZ) are expected to move up by 512 percent-992 percent mainly due to the consolidated statements with Shandong Bluestar Dongda Chemical Co. Ltd. Net profits of Sotech Smarter Equipment Co., Ltd. (300173.SZ) are expected to go up by 840 percent-870 percent mainly due to the consolidated statements with Shenzhen DayuCNC Technology Company.
[Announcement Interpretation]
○Yihua Timber Industry and others see shareholding increase
------
Yihua Enterprise (Group) Co. Ltd., controlling shareholder of Guangdong Yihua Timber Industry Co., Ltd. (600978.SH), continued to increase its shareholding in the company by 4.83 million shares during Jan. 26-29. It is also the controlling shareholder of Yihua Healthcare Co., Ltd. (000150.SZ) and increased its shareholding in the company by 900,000 shares on Jan. 29. Yihua Healthcare previously announced that it acquired over 58 percent equity of Cherish-Yearn Co., Ltd., thus entering the pension industry.
In addition, Zhongnan Urban Construction Investment Co., Ltd. controlling shareholder of Jiangsu Zhongnan Construction Group Co., Ltd. (000961.SZ) will buy the company's share worth 200 million yuan at a price of no more than 10 yuan per share in next two months. Five senior executives of Shenzhen Kingdom Technology Co., Ltd. (600446.SH), increased their shareholding in the company by more than 1.5 million shares on Jan. 29. They plan to buy the company's shares worth 200 million yuan at most if the company's share price continues to be less than 33 yuan per share during next three months.
○Microgate Technology to raise RMB1 bln to develop terminal intelligent components
------
Shenzhen Microgate Technology Co., Ltd. (300319.SZ) proposes to raise 1 billion yuan by issuing 60 million shares through private placement for promoting the upgrading of industrial structure. 450 million yuan will be invested in the development of packaging workmanship and production of terminal radio frequency sound filter based on basal plates, which is expected to record an annual average net profit of 58.06 million yuan. 340 million yuan are planned to be invested in the production of small-sized MPIM electrical inductances, which is expected to record an annual average net profit of 51.14 million yuan. The above products are accessories to smart mobile phones.
[Trading Trends]
○Five institutes buy Eastone Century Technology
------
The trading volume ranking list on Jan. 29 shows that five institutional seats bought Guangdong Eastone Century Technology Co., Ltd. (300310.SZ) with a total of 51,304,000 yuan, accounting for 34.37 percent of its intraday turnover. Two institutional seats sold it with a total of 23,078,000 yuan.
Comment: The acquisition of 100 percent equities of Beijing Tianhe Hongcheng Electronics Co., Ltd. by the company was approved by the China Securities Regulatory Commission (CSRC). Institutes believe that the company is expected to seek advantages in the Internet of Things industry. It will conduct exclusive cooperation with Jasper, a leader in the global Internet of Things industry to provide China United Network Communications Limited (600050.SH) with services for the operation of the Internet of Things platforms. Besides, with the conclusion of the 4G construction by the three major telecommunication operators in China, namely China Mobile Limited (CHL.NYSE; 00941.HK), China United Network Communications and China Telecom Corporation Limited (CHA.NYSE; 00728.HK), as a typical industry in the industry, the network improvement businesses of the company is likely to remain booming in the following two to three years.
[Trading Alarms]
○Topscore Fashion Shoes subscription on Feb. 1
------
Topscore Fashion Shoes Co., Ltd., launches subscription at the price of 9.8 yuan per share with an up-limit per account of 28,000 shares and a P/E ratio of 23 times. Subscribers shall guarantee the corresponding amounts in the accounts on Feb. 3 based on the lot-winning results after the subscription.
[Weekly Review]
○Familiar fairy and ghost tales
------
The Internet of Internet, e-commerce, mergers and reorganization were hot topics during the bullish run in 1999. Guangdong Yorkpoint S＆T Co., Ltd. with shares of 100 yuan conducted cooperation in electronic vehicles with Tsinghua University and even claimed to develop carbon nano tube (CNT) batteries. In the bearish run in 1998, George Soros, RM exchange rate and SOEs layoffs were the most severe topics. Some even velieved that domestic banks were actually bankrupt.
Although ten years have passed, familiar fairy and ghost tales made their appearances in the stock market one after another. After the soaring of the stock market on May 19, 1999, the market shifted its focus from the ghost tales in the financial crisis to the fairy tales of technology stocks. It only took months for the market to shift from the leveraged bull run to fighting for foreign exchanges.
As investors, we should calmly analyze the facts and logics rather than believe in all tales. Unlikely the bubbles of technology stocks more than ten years ago, certain Internet-based companies have found their own profit model and their stock prices will never return to the starting points. New energy vehicles have become reality and are playing a more and more important role in the whole industrial chain. Sichuan Tianqi Lithium Industries, Inc. (002466.SZ) proposes a 28-for-10 conversion of capital surplus into shares, which shows its confidence. The overcapacity cutting in the supply-side will certainly bring difficulties to the macro economy as well as rebirth opportunities to certain loss-making industries. The price of titanium dioxide has been increasing. Xinjiang Bayi Iron ＆ Steel Co., Ltd. (600581.SH) and SGIS Songshan Co., Ltd. (000717.SZ) suspended trading for reorganization. Investment opportunities have been springing up.
TOP
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