[Today's Guide]
○ Third FTZs to introduce, various provinces actively prepare
○ Global sugar market to see short supply, industry to boom
○ Pengxin International Mining to wholly control Pengxin Investment, Yuneng Holdings proposes to acquire power assets of its shareholder
○ Jetsen Technology to own 30 pct of culture and media company, Water Business Doctor and others see shareholding increase
[SSN Focus]
○ Third FTZs to introduce, various provinces actively prepare
------
SSN learnt that Henan, Shandong, Chongqing, Zhejiang, Shaanxi and other provinces and municipalities have submitted the application for the establishment of the third free trade zones (FTZs) to relevant authorities. Some provinces have listed the FTZs establishment in the schedule of this year and have released their FTZs plans. Huo Jianguo, former president of the Chinese Academy of International Trade and Economic Cooperation, believes that the experiment on Shanghai FTZ and the expansion of the second FTZs have achieved positive results. The third FTZs will consider the development of the western and central regions as well as the demands in expanding opening.
Comment: The expansion of FTZs will facilitate the establishment of a higher opening pattern and vitalize China's economic growth. If the FTZs application of the above provinces can be approved, it will directly boost the development of local ports and trade and the land value is also expected to increase. Relevant A-share companies include Chongqing Gangjiu Co., Ltd. (600279.SH), Ningbo Port Company Limited (601018.SH) and Tande Co., Ltd. (600665.SH).
[SSN Selection]
○ The China Securities Regulatory Commission (CSRC) approved the IPO application of eight enterprises on March 1 with a total fundraising of no more than 4 billion yuan.
○ Over 60 percent of 1,282 listed companies released performance expresses expect growth in performance. Construction and decoration, pharmaceutical and biology, automobile and TMT industries see outstanding performance.
○ Two state-level power trading centers in Beijing and Guangzhou are established on March 1. Shanxi Province was approved to conduct comprehensive pilot reform on the power system.
○ Chen Zhaoxiong, vice minister of the Ministry of Industry and Information Technology (MIIT) visited Datang Telecom Technology ＆ Industry Group to make an inspection on 5G recently. Chen pointed out that it will be crucial for the development of 5G during the "13th Five-year Plan" period
○ Shenyang introduced 22 policies on promoting the stable development of the property market. College students and graduates can purchase houses without down payment.
TOP
[Industry Information]
○ Global sugar market to see short supply, industry to boom
------
The 2016 China International Sugar Industry Development Forum will be held in Guangxi on March 11. It will introduce relevant conditions on the production and sale of sugar and policies on the industry in 2015-2016. Affected by the El Nino, the sugar output in Brazil, India, China and other major sugar producers dropped significantly. Major international sugar institutes expect that the global sugar market will see short supply for the first time in six years and the shortage may beat the expectation.
Comment: Institutes believe that the sugar industry is seeing production reduction. The stable growth of demand will speed up the de-stock in the industry. The sugar price is expected to continue hiking and the industry will continue to boom. Among listed companies, Nanning Sugar Industry Co., Ltd. (000911.SZ) owns a white sugar capacity of 650,000 tons with leading production cost. COFCO Tunhe Co., Ltd. (600737.SH) is the biggest sugar importer in China. Thanks to the high price spread between China and overseas markets and the improvement in desaccharification, it expects its 2015 performance to surge.
○ Hitachi Metals' two patents judged as invalid, domestic NdFeB sales to promoted
------
Two U.S. patents from Hitachi Metals Ltd. were finally judged as invalid by the United States Patent and Trademark Office, which had been recently appealed by Strategic Alliance of Rare Earth Permanent Magnet Industrial Technology Innovation. Headquartered in Tokyo of Japan, Hitachi Metals is the largest enterprise for sintered NdFeB production and sales in the world and owns over 600 patents on sintering NdFeB.
Comment: The winning of the lawsuit is expected to break the patent blockade of Hitachi Metals on Chinese enterprises and will reduce the patent fees. Statistics show that China exports about 30,000 tons of NdFeB products each year, accounting for less than 30 percent of the total output. It will boost the export demand for domestic products. In terms of listed companies, Beijing Zhong Ke San Huan High-Tech Co., Ltd. (000970.SZ) and Ningbo Yunsheng Co., Ltd. (600366.SH) are leading NdFeB enterprises in China.
○ Guidance on green consumption issued, new favorable policy to motor enterprises
------
The National Development and Reform Commission (NDRC) recently issued Guidance on Promoting Green consumption, pointing out that it will continue to promote energy saving products such as high-efficiency and energy-saving motors, energy saving and environment friendly vehicles, and high-efficiency lighting products. It will strive to realize 50 percent market share for air conditioner, refrigerator and water heater with energy efficiency label of level 2 or above, reinforce the promotion of new energy vehicles and accelerate the construction of charging infrastructure for electric vehicles.
Comment: currently, many motor enterprises have tapped into the new energy car sector. Both the promotion of high-efficiency and energy-saving motors and the growth of sales of new energy vehicles are expected to bring new market incremental to these companies. In listed companies, Zhongshan Broad-Ocean Motor Co., Ltd. (002249.SZ) has completed the acquisition of Shanghai Eorive Co., Ltd in January. The latter is a leading enterprise of new energy vehicle driving motor system in China; Preliminary earnings estimate of Jiangxi Special Electric Motor Co., Ltd. (002176.SZ) shows that the company's new energy vehicle motor and lithium carbonate businesses witnessed thriving production and sales.
TOP
[Announcement Interpretation]
○ Pengxin International Mining to wholly control Pengxin Investment
------
Pengxin International Mining Co., ltd. (600490.SH) proposes to buy 49.82 percent shareholding of Shanghai Pengxin Investment Co., Ltd. held by Pengxin Group Co., Ltd. and Cheng Jianling at the valuation of 1.7 billion yuan, which will be satisfied by issuing 210 million shares at 8.45 yuan per share through private placement. Upon completion of the transaction, the company owns 100 percent of Pengxin Investment. The company also proposes to raise supporting fund of 1.7 billion yuan to increase capital in Pengxin Investment and supplement working capital for listed company. Pengxin Group committed that Pengxin Investment's sales revenue realized based on SMCO mining right will be 175 million, 350 million and 525 million U.S. dollars in aggregate by the end of 2016, 2017 and 2018 respectively. The company's latest price is 6.61 yuan per share, 3 percent lower than the private placing price.
○ Yuneng Holdings proposes to acquire power assets of its shareholder
------
Henan Yuneng Holdings Co., ltd. (001896.SZ) proposes to acquire 97.15 percent, 50 percent and 35 percent equity of Hebi Tongli Power Generation Company, Hebi Fenghe Power Generation Company and Huaneng Qinbei Power Generation Co., Ltd. respectively at the valuation of 3,781 million yuan by the combination of share issuance through private placement and cash payment. Such target assets are all held by the company's shareholder Henan Investment Group. Meanwhile, the company proposes to raise supporting fund through private placement to pay for the above cash consideration. The aforesaid private placing price is no less than 9.46 yuan per share. Through the acquisition, the scale of the company's installed capacity and thermal power capacity will be further expanded.
TOP
○ Jetsen Technology to own 30 pct of culture and media company
------
Beijing Jetsen Technology Co., Ltd. (300182.SZ) proposes to take over 30 percent shareholding of Beijing Zhongxi Heli Culture Media Co. Ltd. The subject company is primarily engaged in the production and release of TV, film and TV entertainment program, as well as media agency business. The counterparty promised that the subject company's net profits deducted of non-recurring profits or losses will be no less than 95 million yuan, and growth rates of its net profits from 2017 to 2019 will be no less than 25 percent. The acquisition will provide synergetic effect to the company's further expansion in audio and video ecosystem.
○ Water Business Doctor and others see shareholding increase
------
Wang Piaoyang, the actual controller of Beijing Water Business Doctor Co., Ltd. (300055.SZ), increased shareholding in the company by 3.12 million shares on March 1. Jiangsu Kuangda Venture Investment Co., Ltd., the actual controller of Kuangda Technology Group Co., Ltd. (002516.SZ), continued to increase shareholding in the company by 1.69 million shares on March 1. Gui Rui, general manager of Meisheng Cultural ＆ Creative Corp., Ltd.(002699.SZ), increased shareholding in the company by 327,000 shares on March 1. Cheng Shaobo, the controlling shareholder of Shandong Longlive Bio-Technology Co., Ltd.(002604.SZ) increased shareholding in the company by 530,000 shares on March 1. Wang Heping, shareholder of Shandong Sinobioway Biomedicine Co., Ltd.(002581.SZ) increased shareholding in the company by a total of 1.72 million shares on Feb. 26 and 29. Hu Yangzhong, general manger of Hangzhou Hikvision Digital Technology Co., Ltd. (002415.SZ), increased shareholding in the company by 3.66 million shares from Feb. 29 to March 1. Yuan Yafei, the actual controller of Nanjing Xinjiekou Department Store Co., Ltd. (600682.SH), increased shareholding in the company by 7.23 million shares on March 1. Sun Yi, the actual controller of Zhefu Holding Group Co., Ltd. (002266.SZ), increased shareholding in the company by 15.65 million shares on Feb. 29 and March 1. Dashang Group, the shareholder of Dashang Co., Ltd. (600694.SH), and its person acting in concert Dashang Management Company increased shareholding in the company by 12.57 million shares from Feb. 1 to March 1, accounting for 4.28 percent of the company's total share capital. Industrial Securities Co., Ltd. (601377.SH) announced that the company spend 386 million yuan in repurchasing a total of 47.3 million shares as of Feb. 29.
○ Tofflon Science and Tech wholly owns YuFa Pharmaceutical Equipment
------
Shanghai Tofflon Science and Technology Co., Ltd. (300171.SZ) proposes to acquire the remaining 40 percent equities of Shanghai YuFa Pharmaceutical Equipment Co., Ltd. with 36 million yuan. YuFa Pharmaceutical Equipment will become the company's wholly-owned subsidiary after the deal. YuFa Pharmaceutical Equipment has achieved rapid development in recent years and has grown as a major supplier for the core production equipment for small-volume injection of pharmaceutical enterprise.
○ Leshan Electric Power applies to revoke ST risk admonition
------
Leshan Electric Power Co., Ltd. (600644.SH) posted a net profit of 116 million yuan in 2015, turning losses to profits year on year. The company submitted an application for revoking its special treatment (ST) risk admonition.
[Financial Reports Express]
○ Focused Photonics forecasts growth in Q1
------
Focused Photonics (Hangzhou), Inc. (300203.SZ) reported 28 percent growth in its annual report and forecasts a growth of 90 to 120 percent in the first quarter mainly due to the continuous growth of its environmental protection business.
○ Techmation proposes high share conversion and dividend
------
The controlling shareholder and actual controller of Ningbo Techmation Co., Ltd. (603015.SH) proposes a 10-for-10 conversion of capital surplus into shares combined with dividend in its annual report. The controlling shareholder of Hangzhou Hikvision Digital Technology Co., Ltd. (002145.SZ) proposes a 20-for-10 conversion of capital surplus into shares in its annual report.
[Trading Trends]
○ Haoxiangni Jujube bought by five institutions
------
The trading volume ranking list on March 1 shows that Haoxiangni Jujube Co., Ltd. (002582.SZ) was bought by five institutions with a total amount of 228 million yuan, accounting for 24.3 percent of its intraday turnover. Another two institutional seats sold 58.64 million yuan.
Comment: The company recently announced its plan to acquire Hangzhou Foodmate Co., Ltd. through private placement. The latter owns the BE ＆ CHEERY brand, a leading Internet-based snack brand in China. Institutes believe that the acquisition will enrich the online products of Haoxiangni Jujube. Meanwhile, Foodmate's excellent management team and rich experience in Internet marketing will help the company to create a new business model combining with Internet, jujube and health snack.
[Trading Alarms]
○ Jianyi Group to debut IPO on March 2
------
Jianyi Group (002789.SZ) will offer shares at 22.53 yuan per share with an upper limit of 8000 shares for each applicant. The company's PE ratio is 21 times. After applied for subscription, applicants should ensure there is sufficient money for the payment according to their successful application on March 4.
TOP
○ Third FTZs to introduce, various provinces actively prepare
○ Global sugar market to see short supply, industry to boom
○ Pengxin International Mining to wholly control Pengxin Investment, Yuneng Holdings proposes to acquire power assets of its shareholder
○ Jetsen Technology to own 30 pct of culture and media company, Water Business Doctor and others see shareholding increase
[SSN Focus]
○ Third FTZs to introduce, various provinces actively prepare
------
SSN learnt that Henan, Shandong, Chongqing, Zhejiang, Shaanxi and other provinces and municipalities have submitted the application for the establishment of the third free trade zones (FTZs) to relevant authorities. Some provinces have listed the FTZs establishment in the schedule of this year and have released their FTZs plans. Huo Jianguo, former president of the Chinese Academy of International Trade and Economic Cooperation, believes that the experiment on Shanghai FTZ and the expansion of the second FTZs have achieved positive results. The third FTZs will consider the development of the western and central regions as well as the demands in expanding opening.
Comment: The expansion of FTZs will facilitate the establishment of a higher opening pattern and vitalize China's economic growth. If the FTZs application of the above provinces can be approved, it will directly boost the development of local ports and trade and the land value is also expected to increase. Relevant A-share companies include Chongqing Gangjiu Co., Ltd. (600279.SH), Ningbo Port Company Limited (601018.SH) and Tande Co., Ltd. (600665.SH).
[SSN Selection]
○ The China Securities Regulatory Commission (CSRC) approved the IPO application of eight enterprises on March 1 with a total fundraising of no more than 4 billion yuan.
○ Over 60 percent of 1,282 listed companies released performance expresses expect growth in performance. Construction and decoration, pharmaceutical and biology, automobile and TMT industries see outstanding performance.
○ Two state-level power trading centers in Beijing and Guangzhou are established on March 1. Shanxi Province was approved to conduct comprehensive pilot reform on the power system.
○ Chen Zhaoxiong, vice minister of the Ministry of Industry and Information Technology (MIIT) visited Datang Telecom Technology ＆ Industry Group to make an inspection on 5G recently. Chen pointed out that it will be crucial for the development of 5G during the "13th Five-year Plan" period
○ Shenyang introduced 22 policies on promoting the stable development of the property market. College students and graduates can purchase houses without down payment.
TOP
[Industry Information]
○ Global sugar market to see short supply, industry to boom
------
The 2016 China International Sugar Industry Development Forum will be held in Guangxi on March 11. It will introduce relevant conditions on the production and sale of sugar and policies on the industry in 2015-2016. Affected by the El Nino, the sugar output in Brazil, India, China and other major sugar producers dropped significantly. Major international sugar institutes expect that the global sugar market will see short supply for the first time in six years and the shortage may beat the expectation.
Comment: Institutes believe that the sugar industry is seeing production reduction. The stable growth of demand will speed up the de-stock in the industry. The sugar price is expected to continue hiking and the industry will continue to boom. Among listed companies, Nanning Sugar Industry Co., Ltd. (000911.SZ) owns a white sugar capacity of 650,000 tons with leading production cost. COFCO Tunhe Co., Ltd. (600737.SH) is the biggest sugar importer in China. Thanks to the high price spread between China and overseas markets and the improvement in desaccharification, it expects its 2015 performance to surge.
○ Hitachi Metals' two patents judged as invalid, domestic NdFeB sales to promoted
------
Two U.S. patents from Hitachi Metals Ltd. were finally judged as invalid by the United States Patent and Trademark Office, which had been recently appealed by Strategic Alliance of Rare Earth Permanent Magnet Industrial Technology Innovation. Headquartered in Tokyo of Japan, Hitachi Metals is the largest enterprise for sintered NdFeB production and sales in the world and owns over 600 patents on sintering NdFeB.
Comment: The winning of the lawsuit is expected to break the patent blockade of Hitachi Metals on Chinese enterprises and will reduce the patent fees. Statistics show that China exports about 30,000 tons of NdFeB products each year, accounting for less than 30 percent of the total output. It will boost the export demand for domestic products. In terms of listed companies, Beijing Zhong Ke San Huan High-Tech Co., Ltd. (000970.SZ) and Ningbo Yunsheng Co., Ltd. (600366.SH) are leading NdFeB enterprises in China.
○ Guidance on green consumption issued, new favorable policy to motor enterprises
------
The National Development and Reform Commission (NDRC) recently issued Guidance on Promoting Green consumption, pointing out that it will continue to promote energy saving products such as high-efficiency and energy-saving motors, energy saving and environment friendly vehicles, and high-efficiency lighting products. It will strive to realize 50 percent market share for air conditioner, refrigerator and water heater with energy efficiency label of level 2 or above, reinforce the promotion of new energy vehicles and accelerate the construction of charging infrastructure for electric vehicles.
Comment: currently, many motor enterprises have tapped into the new energy car sector. Both the promotion of high-efficiency and energy-saving motors and the growth of sales of new energy vehicles are expected to bring new market incremental to these companies. In listed companies, Zhongshan Broad-Ocean Motor Co., Ltd. (002249.SZ) has completed the acquisition of Shanghai Eorive Co., Ltd in January. The latter is a leading enterprise of new energy vehicle driving motor system in China; Preliminary earnings estimate of Jiangxi Special Electric Motor Co., Ltd. (002176.SZ) shows that the company's new energy vehicle motor and lithium carbonate businesses witnessed thriving production and sales.
TOP
[Announcement Interpretation]
○ Pengxin International Mining to wholly control Pengxin Investment
------
Pengxin International Mining Co., ltd. (600490.SH) proposes to buy 49.82 percent shareholding of Shanghai Pengxin Investment Co., Ltd. held by Pengxin Group Co., Ltd. and Cheng Jianling at the valuation of 1.7 billion yuan, which will be satisfied by issuing 210 million shares at 8.45 yuan per share through private placement. Upon completion of the transaction, the company owns 100 percent of Pengxin Investment. The company also proposes to raise supporting fund of 1.7 billion yuan to increase capital in Pengxin Investment and supplement working capital for listed company. Pengxin Group committed that Pengxin Investment's sales revenue realized based on SMCO mining right will be 175 million, 350 million and 525 million U.S. dollars in aggregate by the end of 2016, 2017 and 2018 respectively. The company's latest price is 6.61 yuan per share, 3 percent lower than the private placing price.
○ Yuneng Holdings proposes to acquire power assets of its shareholder
------
Henan Yuneng Holdings Co., ltd. (001896.SZ) proposes to acquire 97.15 percent, 50 percent and 35 percent equity of Hebi Tongli Power Generation Company, Hebi Fenghe Power Generation Company and Huaneng Qinbei Power Generation Co., Ltd. respectively at the valuation of 3,781 million yuan by the combination of share issuance through private placement and cash payment. Such target assets are all held by the company's shareholder Henan Investment Group. Meanwhile, the company proposes to raise supporting fund through private placement to pay for the above cash consideration. The aforesaid private placing price is no less than 9.46 yuan per share. Through the acquisition, the scale of the company's installed capacity and thermal power capacity will be further expanded.
TOP
○ Jetsen Technology to own 30 pct of culture and media company
------
Beijing Jetsen Technology Co., Ltd. (300182.SZ) proposes to take over 30 percent shareholding of Beijing Zhongxi Heli Culture Media Co. Ltd. The subject company is primarily engaged in the production and release of TV, film and TV entertainment program, as well as media agency business. The counterparty promised that the subject company's net profits deducted of non-recurring profits or losses will be no less than 95 million yuan, and growth rates of its net profits from 2017 to 2019 will be no less than 25 percent. The acquisition will provide synergetic effect to the company's further expansion in audio and video ecosystem.
○ Water Business Doctor and others see shareholding increase
------
Wang Piaoyang, the actual controller of Beijing Water Business Doctor Co., Ltd. (300055.SZ), increased shareholding in the company by 3.12 million shares on March 1. Jiangsu Kuangda Venture Investment Co., Ltd., the actual controller of Kuangda Technology Group Co., Ltd. (002516.SZ), continued to increase shareholding in the company by 1.69 million shares on March 1. Gui Rui, general manager of Meisheng Cultural ＆ Creative Corp., Ltd.(002699.SZ), increased shareholding in the company by 327,000 shares on March 1. Cheng Shaobo, the controlling shareholder of Shandong Longlive Bio-Technology Co., Ltd.(002604.SZ) increased shareholding in the company by 530,000 shares on March 1. Wang Heping, shareholder of Shandong Sinobioway Biomedicine Co., Ltd.(002581.SZ) increased shareholding in the company by a total of 1.72 million shares on Feb. 26 and 29. Hu Yangzhong, general manger of Hangzhou Hikvision Digital Technology Co., Ltd. (002415.SZ), increased shareholding in the company by 3.66 million shares from Feb. 29 to March 1. Yuan Yafei, the actual controller of Nanjing Xinjiekou Department Store Co., Ltd. (600682.SH), increased shareholding in the company by 7.23 million shares on March 1. Sun Yi, the actual controller of Zhefu Holding Group Co., Ltd. (002266.SZ), increased shareholding in the company by 15.65 million shares on Feb. 29 and March 1. Dashang Group, the shareholder of Dashang Co., Ltd. (600694.SH), and its person acting in concert Dashang Management Company increased shareholding in the company by 12.57 million shares from Feb. 1 to March 1, accounting for 4.28 percent of the company's total share capital. Industrial Securities Co., Ltd. (601377.SH) announced that the company spend 386 million yuan in repurchasing a total of 47.3 million shares as of Feb. 29.
○ Tofflon Science and Tech wholly owns YuFa Pharmaceutical Equipment
------
Shanghai Tofflon Science and Technology Co., Ltd. (300171.SZ) proposes to acquire the remaining 40 percent equities of Shanghai YuFa Pharmaceutical Equipment Co., Ltd. with 36 million yuan. YuFa Pharmaceutical Equipment will become the company's wholly-owned subsidiary after the deal. YuFa Pharmaceutical Equipment has achieved rapid development in recent years and has grown as a major supplier for the core production equipment for small-volume injection of pharmaceutical enterprise.
○ Leshan Electric Power applies to revoke ST risk admonition
------
Leshan Electric Power Co., Ltd. (600644.SH) posted a net profit of 116 million yuan in 2015, turning losses to profits year on year. The company submitted an application for revoking its special treatment (ST) risk admonition.
[Financial Reports Express]
○ Focused Photonics forecasts growth in Q1
------
Focused Photonics (Hangzhou), Inc. (300203.SZ) reported 28 percent growth in its annual report and forecasts a growth of 90 to 120 percent in the first quarter mainly due to the continuous growth of its environmental protection business.
○ Techmation proposes high share conversion and dividend
------
The controlling shareholder and actual controller of Ningbo Techmation Co., Ltd. (603015.SH) proposes a 10-for-10 conversion of capital surplus into shares combined with dividend in its annual report. The controlling shareholder of Hangzhou Hikvision Digital Technology Co., Ltd. (002145.SZ) proposes a 20-for-10 conversion of capital surplus into shares in its annual report.
[Trading Trends]
○ Haoxiangni Jujube bought by five institutions
------
The trading volume ranking list on March 1 shows that Haoxiangni Jujube Co., Ltd. (002582.SZ) was bought by five institutions with a total amount of 228 million yuan, accounting for 24.3 percent of its intraday turnover. Another two institutional seats sold 58.64 million yuan.
Comment: The company recently announced its plan to acquire Hangzhou Foodmate Co., Ltd. through private placement. The latter owns the BE ＆ CHEERY brand, a leading Internet-based snack brand in China. Institutes believe that the acquisition will enrich the online products of Haoxiangni Jujube. Meanwhile, Foodmate's excellent management team and rich experience in Internet marketing will help the company to create a new business model combining with Internet, jujube and health snack.
[Trading Alarms]
○ Jianyi Group to debut IPO on March 2
------
Jianyi Group (002789.SZ) will offer shares at 22.53 yuan per share with an upper limit of 8000 shares for each applicant. The company's PE ratio is 21 times. After applied for subscription, applicants should ensure there is sufficient money for the payment according to their successful application on March 4.
TOP
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