Early Bird

Early Bird 16-February-2016

XFA Premium News
2016-02-16 14:04

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[Today's Guide]
○ Capital of various sources compete for deployment in sport industry with huge development space
○ China Unicom starts LTE third phase centralized procurement, 4G construction to speed up
○ Guangbo Group Stock to acquire Geoswift Limit, Jinlihua Electric proposes to buy Xinli Media
○ Controlling shareholder of Senyuan Electric to increase shareholding at RMB1.5 billion, Hongxiang Yixintang Pharmaceutical proposes high share conversion and dividend 

[SSN Focus]
○ Capital of various sources compete for deployment in sport industry with huge development space
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According to report of http://tech.sina.com.cn on Feb. 15, www.lesports.com has finished B round of financing with an amount of 1 billion U.S. dollar, valuing at 4 billion U.S. dollar, and the company is likely to hold a press conference to announce it next week. The company only valued 2.8 billion yuan when completing A round of financing in May last year. Based on several opinions on accelerating development of sport industry issued by the State Council, the total scale of sport industry will exceed 5 trillion yuan by 2025.

Comment: Along with issuance of each supporting rules, Olympic Winter Games in Beijing and the Asian Games in Hangzhou City, China's sport industry will step into a stage of accelerating development. The fields of sport competition, goods, media and lotteries will see in a long-term development opportunity. In terms of listed companies, Shenzhen Aoto Electronics Co., Ltd. (002587.SZ) provides display system solution for stadium; Lander Sports Development Co., Ltd. (000558.SZ) proposes to acquire Pegasus Gym Co., Ltd. and transform to event operations; Wuhan Double Co., Ltd. (600136.SH) has merged desports, a sport marketing company; ORG Packaging Co., Ltd. (002701.SZ) has invested ice sports, and substantial shareholders recently increased the shareholdings and are held up.

[TOP]

[SSN Selection]

○ China's export and import amounts declined year on year in January, however, China Export Leading Indicator has increased month-on-month for the first time since the latest year.
○ Data of China Banking Regulatory Commission shows that non-performing loan ratio of commercial banks in the fourth quarter of last year increased by 0.08 percentage point quarter-on-quarter, with a net profit growth of 2.43 percent for a whole year. 
○ Establishment of Changchun New District has been approved, and it will become a new growth point to enhance development of Northeast China.
○ Various provinces including Sichuan and Fujian recently speed up the steps to follow new house loan policies, which is likely to promote real estate demands to gradually release.
○ Data of World Gold Council shows that net purchase of gold by the central bank of each country was 167 tons in the fourth quarter last year, up by 25 percent year on year.

[Industry Information]

○ China Unicom starts LTE third phase centralized procurement, 4G construction to speed up
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SSN learnt that China United Network Communications Limited (600050.SH) has recently started the third phase centralized procurement project of wireless main equipment for LTE FDD in 2016. Such centralized procurement involves 469,000 base stations in 334 cities across China. It is learnt that China Unicom has previously held fast to the "4G/3G integration strategy". But under fierce market competition and subscribers' better-than-expected acceptance for the 4G, China Unicom has explicitly terminated investment towards 2G and WCDMA, and all capitals will be transferred to the construction of 4G network.

Comments: industrial insiders believe that this centralized procurement indicated that China Unicom's 4G construction has speed up. Along with the invitation of tender and construction of the third phase of LTE FDD, the company will have nearly 900,000 4G base stations, which will significantly improve its network coverage ability and system capacity. In listed companies, Fiberhome Telecommunication Technologies Co., Ltd. (600498.SH) is a leading telecommunication equipment provider in China; Sunwave Communications Co., Ltd. (002115.SZ), Dingli Corp., Ltd. (300050.SZ) are engaged in mobile communication network optimization services.

[TOP]

[Announcement Interpretation]
○ Guangbo Group Stock to acquire Geoswift Limit, to deploy cross-border payment
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Guangbo Group Stock Co., Ltd. (002103.SZ) proposes to acquire the entire equity of Geoswift Limit at the total valuation of 330 million U.S. dollars by issuing 47,400,000 shares at 22.85 yuan per share through private placement and cash payment of 165 million U.S. dollars. Meanwhile, the company proposes to raise supporting fund of 1.24 million yuan through private placement at the same price.

Geoswift Limit provides innovative payment services across China and other regions in the world. Its committed profits for 2016 to 2018 are no less than 29 million U.S. dollars, 39 million U.S. dollars, 49 million U.S. dollars before tax, respectively. Guangbo Group Stock closed at 17.52 yuan before suspension of trading, 2 percent lower than the price for private placement.

○ Jinlihua Electric proposes to buy Xinli Media, to tap into advertising media
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Zhejiang Jinlihua Electric Co., ltd. (300069.SZ) proposes to acquire 100 percent shareholding of Hangzhou Xinli Media Company Limited at the total valuation of 675 million yuan by issuing 18,240,000 shares at 22.20 yuan per share through private placement and cash payment of 270 million yuan. Meanwhile, the company will raise supporting fund of 470 million yuan through private placement.

Xinli Media is principally engaged in advertisement services such as media agency service, advertisement implantation, public relations activities. The counter party promises that net profits of Xinli Media will reach 45 million yuan, 58.5 million yuan and 76 million yuan during 2016 and 2018 respectively. After the deal is done, Jinlihua Electric will undertake integrated marketing advertising business besides the existing electronic machinery and equipment manufacturing.

[TOP]

○ Controlling shareholder of Senyuan Electric to increase shareholding at RMB1.5 billion
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Henan Senyuan Electric Co., Ltd. (002358.SZ) decides to terminate mulling for significant matters. The company's controlling shareholder Henan Senyuan Group Co., Ltd. plans to increase its shareholding in the company in next 6 months with an amount of no more than 1.5 billion yuan at a price of no more than 18 yuan per share. The company's latest share price is 12.99 yuan.
 
○ Zhuozhong Dafu Investment Partnership to become controlling shareholder of Jikai Equipment Manufacturing
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Khorgos Jinkai Venture Capital Co. Ltd., controlling shareholder of Jikai Equipment Manufacturing Co., Ltd. (002691.SZ), transfer its 58 million shares (accounting for 29 percent of the company's total share capital) to Shenzhen Zhuozhong Dafu Investment Partnership and 22 million shares (accounting for 11 percent of the company's total share capital) to Tianjin Dingjie Assets Management Co., Ltd. at a price of 26.5 yuan per share. The transfer costs 2.12 billion yuan in total. After the transfer is finished, Zhuozhong Dafu Investment Partnership will be the company's new controlling shareholder. The company's latest share price is 23.76 yuan per share.

Established on Jan. 5, 2016, Zhuozhong Dafu Investment Partnership is specialized in investment management, assets management and project investment. Shenzhen Shuishan Yuanhe Investment Co., Ltd. actually controls Zhuozhong Dafu Investment Partnership and its actual controller is Liu Wei. Zhuozhong Dafu Investment Partnership indicates that it may conduct significant adjustment or restructuring of the listed company in next 12 months.

[Financial Reports Express]
○ Hongxiang Yixintang Pharmaceutical proposes high share conversion and dividend
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Ruan Hongxian, actual controller of Yunnan Hongxiang Yixintang Pharmaceutical Co., Ltd. (002727.SZ), proposes a 10-for-10 conversion of capital surplus into shares combined with 5 yuan dividend for every 10 shares in the company's annual report.

[TOP]

[Trading Trends]
○ Dowstone Technology bought through 4 institutional seats
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The trading volume ranking list on Feb. 15 shows that Guangdong Dowstone Technology Co., Ltd. (300409.SZ) was bought through four institutional seats with a total of 54,291,200 yuan, accounting for 42.72 percent of its intraday turnover.

Comment: Institutions thinks that as ceramic ink makes the biggest contribution to the company's income and profits, the company's marketing strategy should focus on seizing market share. With the increasing localization rate of ceramic ink and the advantage in cost and scale, the company is expected to see hiking sales of ceramic ink.

 

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