[Today's Guide]
○Chemicals market becomes active, vitamin sees price hike
○Insufficiency of zinc concentrate widens, profitability of industrial chain to improve
○Guidance on "Internet plus" intelligent energy released, energy storage to play key role
○Companies including Kuangda Technology see shareholding increase, net profit of Cangzhou MingZhu Plastic expected to soar in Q1
[SSN Focus]
○Chemicals market becomes active, vitamin sees price hike
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It is reported on www.100PPI.com on Feb. 29 that Bulk Commodity Index (BCI) set a new high in February during the latest two years, ending previous decline for nine trading days in a row. Chief analyst of www.100PPI.com remarks that the market now steps into a new stage. Tense atmosphere of the economy is eased temporarily, and BCI is expected to continuously increase in March. The intraday trading volume ranking list showed that Zhejiang NHU Company Ltd. (002001.SZ) and Zhejiang Garden Bio-chemical High-tech Co., Ltd. (300401.SZ) mainly engaged in vitamin, Hubei Shuanghuan Science and Technology Stock Co., Ltd. (000707.SZ) mainly engaged in sodium carbonate, and Hengyi Petrochemical Co., Ltd. (000703.SZ) mainly engaged in PTA are bought through institutional seats.
Comment: Prices of many chemicals increase recently and the main reason behind that is the tightened supply. Especially, the concentration ratio of the vitamin industry has obviously improved in recent years, and downstream prosperity also improves, bringing more flexible prices. The offering price of vitamin D3 has soared by 25 percent to 30 percent since the beginning of this year. A few Chinese enterprises, including NHU Company, Garden Bio-chemical High-tech and Xiamen Kingdomway Group Company (002626.SZ), take around 75 percent of global capacity. Kingdomway Group also announced that vitamin A enjoys a year-on-year price hike of about 100 percent, and vitamin D3 sees tight supply, bringing positive impact to the performance of the first quarter.
[TOP]
◆Sichuan Province on Feb. 29 held a work meeting for energy development, proposing to stop the planning for new coal mine construction in next three years and speed up the steps for industrial integration. The trading volume ranking list on Feb. 29 shows that Jizhong Energy Resources Co., Ltd. (000937.SZ) and Shanxi Xishan Coal and Electricity Power Co., Ltd. (000983.SZ) involved in the coal industry were bought through institutional seats.
○China's central bank to lower RRR for commercial banks by 0.5 percentage points
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The People's Bank of China announced on Feb. 29 that it will lower its reserve requirement ratio (RRR) for commercial banks by 0.5 percentage points from March 1, aiming to ensure reasonably ample liquidity in the financial system; guide a stable and appropriate growth in credit; and create a favorable financial environment for the supply-side structural reform. It is estimated that this move will release a liquidity of 650-700 billion yuan.
[SSN Selection]
○Chinese Primer Li Keqiang on Feb. 29 met the U.S. Minister of Finance, and indicated that fiscal policies still gain large space, and the supply-side structural reform will be greatly pushed.
○Guangdong province issued the first overall scheme for supply-side reform of provincial level, encouraging non-state-owned capital to legally involve in the system reform and restructuring of state-owned "zombie enterprises".
○The net buying turnover of the northbound trading of the Shanghai-Hong Kong Stock Connect program on Feb. 29 recorded 1.7 billion yuan, setting a new high for a single trading day in February.
○Substantial shareholders of CITIC Securities Company Limited (600030.SH; 06030.HK) totally increased shareholding in the company by 111 million shares on Feb. 26 and 29 and indicated that further shareholding increase will be carried out at proper time if necessary.
○Beijing Leshi Internet Information ＆ Technology Corp. (300104.SZ) announces that its trading resumption is delayed to before May 7 due to needed improvement of reorganization scheme.
[Industry Information]
○Insufficiency of zinc concentrate widens, profitability of industrial chain to improve
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The 2016 International Zinc Conference was recently held in the U.S. The conference agrees with the estimation on widened insufficiency of zinc concentrate and refined zinc and is optimistic about the price hike of zinc in the future. Considering the shutdown of Century, Lisheen and Magellan mines and the large reduction of output by Glencore, institutions estimate that global insufficiency of zinc concentrate might be widened from 96,000 tons in 2015 to 681,000 tons. In addition, it is expected that global output of zinc ores might reach 12,588,000 tons in 2016, representing a year-on-year decline of 5.2 percent.
Comment: 10 key enterprises involved in China's zinc industry reached consensus earlier to cut the production of refined zinc by 500,000 tons in 2016, accounting for 10 percent of the total output of the industry. March and April usually see booming consumption of zinc in China. Driven by the supply-side reform and the goal of stabilizing growth, the profitability of the industry might enhance. As to listed companies, Huludao Zinc Industry Co., Ltd. (000751.SZ) is principally engaged in the smelting and further processing of zinc, copper and lead. Shenzhen Zhongjin Lingnan Nonfemet Co., Ltd. (000060.SZ) manages the largest fankou lead-zinc mine in Asia.
[TOP]
○Guidance on "Internet plus" intelligent energy released, energy storage to play key role
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The National Development and Reform Commission (NDRC) officially launched the Guidance on Promoting the Development of "Internet Plus" Intelligent Energy on Feb. 29. It is proposed to construct a batch of piloting demonstration projects with different types and sizes during the 2016-2018 period and preliminarily build up the energy Internet industrial system during the 2019-2025 period. Key tasks include promoting coordinated development of centralized and distributed energy storage, developing the new model of "new energy electric automobile" and etc.
Comment: Institutions believe that energy storage, as one of the key supporting technologies for building energy Internet, is also the last mile for energy transportation. Intelligent power grid, distributed energy, electric automobile and etc. are all associated with energy storage. Under the general framework of energy Internet, the energy storage industry will soon see skyrocketing growth. As to listed companies, Zhejiang Narada Power Source Co., Ltd. (300068.SZ) enjoys technical advantage in energy storage batteries; Shenzhen Clou Electronics Co., Ltd. (002121.SZ) announced its partnership with LG in last December to establish a joint company producing energy storage batteries.
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[Announcement Interpretation]
○Several companies see shareholding increase
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Jiangsu Kuangda Venture Capital Company, the controlling shareholder and person acting in concert of Kuangda Technology Group Co., Ltd. (002516.SZ), increases its holdings in the company by 2.65 million shares on Feb. 29. Fujian Sanan Group Co. Ltd., shareholder of Sanan Optoelectronics Co., Ltd. (600703.SH), increases its holdings in the company by 3.64 million shares on Feb. 29. Anhui Wanwei Group Co., Ltd., controlling shareholder of Anhui Wanwei Updated High-Tech Material Industry Co., Ltd. (600063.SH), increases its holdings in the company by 8.05 million shares during Feb. 1-29. Li Zongsong, actual controller of Jiangsu Jiujiujiu Technology Co., Ltd. (002411.SZ), increase his shareholdings in the company by 1.27 million shares.
Shandong Hi-tech Venture Capital Co., Ltd., shareholder of Shandong Longlive Bio-Technology Co., Ltd. (002604.SZ), increases its holdings in the company by 710,000 shares on Feb. 29. Employee shareholding plan of Holitech Technology Co., Ltd. (002217.SZ) buys 9.61 million shares of the company on Feb. 29. AUX Group, controlling shareholder of Ningbo Sanxing Medical Electric Co., Ltd. (601567.SH), increases its shareholdings in the company by 1.72 million shares. Yihua Enterprise (Group) Co., Ltd., controlling shareholder of Guangdong Yihua Timber Industry Co., Ltd. (600978.SH), increased its holdings in the company by 2.2 million shares during Feb. 15-29 and will continue to buy the stocks at a price of no more than 16 yuan per share before July 25, which will be totally worth of 400 million yuan at least.
○Qinling Cement applies for cancelling ST mark
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Shaanxi Qinling Cement (Group) Co., Ltd. (600217.SH) carried out major assets restructuring in 2015. It withdrew all of the assets in cement production business and input the assets in business of dismantling waste electrical and electronic equipment. The company's net profit was 175 million yuan in 2015 according to its annual report. It has submitted the application for cancelling the delisting risk warning to Shanghai Stock Exchange.
○Eontec launches stock incentive plan at premium
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Dongguan Eontec Co., Ltd. (300328.SZ) plans to offer 3.5 million stock options to 289 incentive objects of the company, accounting for 1.56 percent of the company's total share capital. The exercise price of the first stock option is 21.96 yuan per share. The major exercise conditions are that the growth rates of company's revenues in 2017 and 2018 should not be less than 15 percent and 30 percent when compared with that of 2015 respectively. The latest stock price is 18.28 yuan per share.
[Financial Reports Express]
○Net profit of Cangzhou MingZhu Plastic expected to soar in Q1
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Net profit of Cangzhou MingZhu Plastic Co., Ltd. (002108.SZ) is predicted to soar by 200-250 percent in the first quarter, which is mainly contributed by increase in profits of BOPA product and diaphragm products for lithium battery.
[TOP]
○Hangzhou Cable proposes high share conversion and dividend
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Hangzhou Cable Co., Ltd. (603618.SH) saw a performance growth of 15 percent in 2015 and proposes a 20-for-10 conversion of capital surplus into shares combined with 1.5 yuan dividend for every 10 shares according to its annual report.
[Trading Alarms]
○Jinhui Liquor to launch IPO on March 1
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Jinhui Liquor Co., Ltd. (603919.SH) launched IPO at a price of 10.94 yuan per share with an up-limit of 28,000 shares per single account. The P/E ratio is 18 times. Investors who succeed in subscribing the new share must ensure that enough funds have been placed in their accounts to pay for the subscription before March 3.
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