Early Bird

Early Bird 03-February-2016

PREMIUM A NEWS
2016-02-03 13:38

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[Today’s Guide]
○ Downpayment requirements for home purchase cut again, property industry continues to recover
○ Energy Internet embraces development opportunities, rural power grids transformation to speed up
○ NetPosa Technologies to raise fund to invest in big data and service robot, Septwolves and others propose large buybacks
○ Sunline Tech to expand financial informationalization, Gloria Pharmaceuticals proposes high share conversion and dividend

 
[SSN Focus]
○ Downpayment requirements for home purchase cut again, property industry continues to recover

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The central bank of China and the China Banking Regulatory Commission (CBRC) issued a circular on Feb. 2, requiring further supporting reasonable housing consumption to promote the sound and healthy development of the property market. The downpayment requirements for home buyers in cities without housing purchase restrictions can be reduced by another five percentage points on the basis of 25 percent for the purchasing of the first commercial house by families. For families with one house and the loans unsettled, the downpayment requirements on the purchase of a second house with individual commercial loans have been reduced from 40 percent to 30 percent.
 
Comment: The property industry is a key engine in economic growth, which is highly close to the upper and downstream industries. With the reducing of the downpayment requirements and the loan interest rate, the sales of commercial houses have grew significantly across China. The investment in property development also recovered. The Central Economic Work Conference has listed “cutting property stocks” as one of the five tasks of this year. Institutes believe that the introduction of the downpayment requirements reduction is ahead of the expected time. They are rosy about the implementation of reserve requirement ratio (RRR) and interest rates cut, fiscal subsidies, preferential taxes and fees as well as other subsequent policies.
 
[SSN Selection]
○ The central bank conducts its first 14-day reverse repo in more than four months, showing that the liquidity is advancing towards fine management.
○ The Chinese Academy of Social Sciences releases a financial blue book report, indicating that it will be normal to gradually cut the reserve requirement ratio in the following years.
○ Yu Zhengsheng, chairman of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), presided over a symposium with private entrepreneurs and required implementing innovation-driven development strategies and supply-side structural reforms.
○ Last week saw a net inflow of 8.7 billion yuan in securities margin and the net inflow reached a total of 157.3 billion in January.
○ The financial reports recently released by global technology enterprises show that the demands for mobile phones and hardware businesses slowed down and the cloud services industry saw rapid growth.
 
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[Industry Information]
○ SGCC establishes Global Energy Internet Group to promote industry development
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It is learnt from the national market entity credit information system that the Global Energy Internet Group Co., Ltd. invested by the State Grid Corporation of China (SGCC) with a registered capital of 100 million yuan was approved by the Beijing Municipal Administration of Industry and Commerce on Dec. 31, 2015. In addition, the SGCC is mulling the establishment of a “global energy Internet development cooperation group”. It proposes to work with its partners to advance the study on the planning of global energy Internet, technological innovation, projects development and investment and financing activities.
 
Comment: The establishment of the above companies is expected to further advance the development of energy Internet. SGCC President Liu Zhenya estimated that upon the establishment of the global energy Internet in 2050, the total investment will exceed 50 trillion U.S. dollars. Among listed companies, Sungrow Power Supply Co., Ltd. (300274.SZ) cooperates with Alibaba Group Holding Limited (NYSE: BABA) in the development of big data on energy to develop energy Internet. Integrated Electronic Systems Lab Co., Ltd. (002339.SZ) proposes to issue shares at no less than 22.32 yuan through private placement to invest in energy Internet. The plan has been approved at the general meeting of the company. The latest stock price of the company is 15.82 yuan.
 
○ Power grids transformation and upgrading in rural areas speed up, equipment demand to expand
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Local companies under the State Grid Corporation of China recently conducted special meetings on advancing the transformation and upgrading of the power grids in rural areas. It is reported that the State Grid will accelerate the transformation and upgrading of power grids in rural areas this year to effectively solve the low voltage and insufficient dynamic electricity of the power grids in rural areas and initiate various intelligent power distribution demonstration projects. According to the action plan on the transformation of power distribution network in 2015-2020 issued by the National Energy Administration, the investment in power distribution network will be no less than 2 trillion yuan during the 13th Five-year Plan period. Power grid in rural areas and other industries will enjoy priority in investment.
 
Comment: With the implementation of supporting capitals and detailed policies, the investment in power distribution network in rural areas will speed up. It will bring expansion opportunities to manufacturers of primary and secondary equipment. In terms of listed companies, Shanghai Zhixin Electric Co., Ltd. (600517.SH) is competitive in the amorphous power distributing transformer market. Beijing Creative Distribution Automation Co., Ltd. (002350.SZ) is principally engaged in switches and other primary equipment and is actively developing in power services market.
 
○ The NDRC to boost agricultural recycling economy, relevant companies expected to get support
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The website of the National Development and Reform Commission on Feb. 2 indicated that Guidance on accelerating the Development of Agricultural Recycling Economy was issued recently. The guidance pointed out that China should improve the utilization efficiency of agricultural resources and enhance rural ecological environment, promote integrative development of the primary, secondary and tertiary industries, and comprehensively promote efficient resource utilization, clean production, recycling industry chain and recycling waste disposal. Relevant local authorities are required to plan the development of local agricultural recycling economy scientifically and focus on key tasks, projects and measures based on local realities, strengthen communication and coordination and introduce supportive policies.
 
Comment: recycling of straw and waste from livestock farming are typical representatives of agricultural recycling economy. Companies involved in relevant business are expected to get policy prop-up in the future. In listed companies, Kaidi Ecological and Environmental Technology Co., Ltd. (000939.SZ) utilizes straw as the main fuel for its biomass power generation; Minhe Biology, a subsidiary of Shandong Minhe Animal Husbandry Co., Ltd. (002234.SZ), makes use of waste from poultry farming to produce soluble organic fertilizer.
 
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[Announcement Interpretation]
○ NetPosa Technologies to raise fund to invest in big data and service robot
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NetPosa Technologies, Ltd. (300367.SZ) proposes to raise 1.83 billion yuan by issuing 80 million shares through private placement, which will be used for big data and intelligent terminal industrialization project, intelligent service robot project and supplementing working capital. Its announcement said that the company’s annual results grew by 83 percent and it proposes a 15-for-10 conversion of capital surplus into shares combined with 1.25 yuan dividend for every 10 shares. The company also expects 10 to 40 percent growth in the first quarter of 2016.
 
○ Septwolves and others propose large buybacks
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Fujian Septwolves Industry Co., Ltd. (002029.SZ) proposes to repurchse no more than 300 million yuan worth of its own shares at no less than 12 yuan per share and cancel such shares. Based on the latest price, the company can buy back 33,520,000 shares, representing 4.43 percent of its total share capital. The latest price of the company is 8.95 yuan per share.
 
Industrial Securities Co., Ltd. (601377.SH) proposes to buy back no more than 1.5 billion yuan worth of its shares at no more than 11 yuan a share. The whole amount of buyback will not exceed 3 percent of its share capital. The repurchased shares will be used as a source of its employee share ownership plan (ESOP). Before suspension of trading, its price closed at 7.46 yuan a share. Besides, Xizang Haisco Pharmaceutical Group Co., Ltd. (002653.SZ) has already completed its 200 million yuan buyback plan, and repurchased 40,658,000 shares in aggregation.
 
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○ Sunline Tech to raise fund to expand financial informationalization
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Shenzhen Sunline Tech Co., ltd. (300348.SZ) proposes to issue 15 million shares through private placement to raise 480 million yuan, to invest in the construction project of overall solution of financial informationalization, construction project of R&D center and to supplement working capital.
 
○ Huafu Top Dyed Melange Yarn to launch RMB2 bln ESOP
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Huafu Top Dyed Melange Yarn Co., Ltd. (002042.SZ) proposes to launch ESOP of no more than 50 million yuan, to subscribe substandard portion of Huafu Wealth No.2 Special Assets Management Scheme. Huafu Wealth No.2 proposes to raise no more than 200 million yuan in total (priority: 75 percent; substandard: 25 percent), which will be used to buy back the company’s stock in the secondary market with an amount of 25 million shares. The latest price of the company is 8.21 yuan per share.
 
○ Elion Clean Energy to launch private placement at 50 percent premium, to embedded in ESOP
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Elion Clean Energy Company Limited (600277.SH) proposes to issue 438 million shares at no less than 11.19 yuan a share through private placement to raise 4.9 billion yuan, which will be used for micro atomization thermal coal project and supplementing working capital. Chinalion Securities-Elion Resources Group All-win No.1 Fund Assets Management Scheme will subscribe 10 percent in private placement, and its targets are the controlling shareholder Elion Resources Group and its employees and employees of Elion Clean Energy.
 
[Financial Reports Express]
○ Gloria Pharmaceuticals proposes high share conversion and dividend

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Harbin Gloria Pharmaceuticals Co., Ltd. (002437.SZ) announced that its annual results grew by 58 percent, and proposed a 10-for-10 conversion of capital surplus into shares combined with 10 stocks dividend and 2.5 yuan dividend for every 10 shares. Top Resource Investment, controlling shareholder of Top Resource Conservation & Environment Corp. (300332.SZ), proposed 10-for-10 conversion of capital surplus into shares combined with 0.8 yuan dividend for every 10 shares. Wuhan Double Co., Ltd. (600136.SH) recorded annual growth of 5504 percent, and proposed 10-for-10 conversion of capital 

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