[Today's Guide]
○Prices of bulk commodities set new highs in recent period, multiple active factors emerge
○Shenzhen-Hong Kong Stock Connect program to launch at proper time, consumption-related blue chips on Shenzhen stock market to favored
○MIIT to back up ship supporting industry, local enterprises to see wider market space, price of some rare earths up
○Aucma Company to raise RMB1 bln to expand cold chain business, Fujian Expressway Development invests RMB1 bln in stocks of Xiamen International Bank
[SSN Focus]
○Prices of bulk commodities set new highs in recent period, multiple active factors emerge
------
Various bulk commodities all saw price hike at early morning on March 5 (Beijing time). The price of crude oil in New York closed up 5 percent; the price of tin, copper and nickel hiked around 3 percent in London with the price of tin setting a new record since last April; the price of iron ore, charred coal, coke, screw-thread steel and natural rubber all sored to the daily limit at the closing hour of the evening session in China, setting new highs in months. The latest non-farm payrolls employment announced by the U.S. is quite better-than-expected. But the market expects that the Federal Reserve (Fed) inclines to further observe the continuity of the economic growth and will not raise interest rate in March.
Comment: Driven by factors including relatively easing liquidity globally, strong expectation on stabilizing economy and the efforts by China's supply-side reform in "cutting overcapacity", the supply-demand relations of bulk commodities might see improvement and attract more investment. As to listed companies, Yunnan Tin Co., Ltd. (000960.SZ), Hainan Mining Co., Ltd. (601969.SH) and Shanxi Xishan Coal and Electricity Power Co., Ltd. (000983.SZ) are leading enterprises in domestic tin, iron ore and charred coal areas, respectively.
TOP
○Shenzhen-Hong Kong Stock Connect program to launch at proper time, consumption-related blue chips on Shenzhen stock market to favored
------
The 2016 government work report announced on March 5 proposes to deepen the financial system reform this year. Relevant measures include advancing the stock and bond market reforms and the legalization construction, facilitating the healthy development of multi-layered capital market, raising the proportion of direct financing and launching the Shenzhen-Hong Kong Stock Connect program at proper time. The draft for the outline of the "Thirteenth Five-Year" planning announced on that same day proposes to create conditions for the implementation of registration-based IPO system.
Comment: the net-buying amount of northbound trading through the Shanghai-Hong Kong Stock Connect program totaled over 5.5 billion yuan in last week, setting a new high for single week trading since last August. Seen from the trading situations since the Shanghai-Hong Kong Stock Connect program was launched, consumption-related blue chips on Shanghai stock market with unique competitive edge, great defensive attribute and stable performance growth, represented by Kweichow Moutai Co., Ltd. (600519.SH), Inner Mongolia Yili Industrial Group Co., Ltd. (600887.SH) and Jiangsu Hengrui Medicine Co., Ltd. (600276.SH), are obviously favored by foreign capital. Presumably, stocks including Wuliangye Yibin Co., Ltd. (000858.SZ), Midea Group Co., Ltd. (000333.SZ) and Henan Shuanghui Investment ＆ Development Co., Ltd. (000895.SZ) might also be favored by foreign capital once the Shenzhen-Hong Kong Stock Connect program is initiated.
[SSN Selection]
○Chinese President Xi Jinping on March 5 aired his opinions on current relationship between the Chinese Mainland and Taiwan, proposing to further promote communication and cooperation in various areas.
○Shanghai Party chief Han Zheng on March 6 remarked that market system and guarantee system must be built up and perfected to solve housing problems. Shanghai Mayor Yang Xiong indicated that the overall listing of state-owned enterprises will be pushed forward this year.
○Huang Qifan, mayor of Chongqing Municipality, indicated that the application for setting up Chongqing free trade zone goes smoothly and hoped that Chongqing will be given green night for the piloting during his interview with SSN on March 6.
○EPFR data shows that gold funds attract the most amount of investment among sector funds for three weeks in a row, while funds oriented in stocks in the emerging markets ended the consecutive net outflow in past 17 weeks.
○Substantial shareholder of Guotai Junan Securities Co., Ltd. (601211.SH) and related companies totally increased shareholding in the company with 39.4 million shares since last September, while substantial shareholder of CITIC Securities Company Limited (600030.SH) further increased shareholding in the company with 18.91 million shares on March 1 and 2.
TOP
[Industry Information]
○MIIT to back up ship supporting industry, local enterprises to see wider market space
------
The Ministry of Industry and Information Technology (MIIT) recently released the Action Plan for Ability Enhancement of Ship Supporting Industries (2016-2020) on its official website. The plan proposes to basically build up a relatively perfect R＆D, design, manufacturing and service system for ship equipment. It also proposes that China can edge itself into world-class players in terms of design and manufacturing ability for critical ship equipment by 2020. Besides, the application rate of home-built shipping equipment on hi-tech ships should average to above 60 percent, while the matching rate of home-built critical components for shipping equipment reaches 80 percent.
Comment: The localized rate for loading of the shipping equipment in South Korea and Japan is at a high level of over 85 percent and 90 percent respectively, and that of China is far away from such figures, especially that the localized rate in the supporting field of hi-tech shipping and ocean engineering equipment is less than 30 percent. Along with the proposed target rate for localizing shipping supporting equipment, local enterprises will gain a market space. Among listed companies, China CSSC Holdings Limited (600150.SH) has obvious scale advantage in aspects of ship manufacturing and low-speed ＆ high-power diesel engine; CSSC Steel Structure Engineering Co., Ltd. (600072.SH) is a leading ship-related parts magnate in China; and Asian Star Anchor Chain Co., Ltd. Jiangsu (601890.SH) is a domestic production and export base for ship-related anchor chain and ocean platforms' mooring cable.
○Market supply tightens, price of some rare earths up
------
SSN learnt that, due to low rate of operation of the chemical-separation plants, the supply for praseodymium, neodymium and dysprosium tightens in the market, obviously short of stock. The prices of praseodymium and neodymium have started to increase since March 4, with transaction price up by 2,000 yuan. Relevant plants indicated that the inventory of some rare earths now is relatively low to support the price rising.
Comment: The Ministry of Industry and Information Technology held a discussion meeting on rare earth industry in January 2016, establishment work of all groups will be finished before this June, and so does the integration for all enterprises on rare earth mining, refining and separating. Under the governments' measures constantly fighting against the rare earth smuggling and illegal mining, the market order of rare earth industry has obviously improved, with higher market concentration degree, and the price is likely to further increase, due to policies related to purchase and stock of the rare earth. In terms of listed companies, China Northern Rare Earth (Group) High-tech Co., Ltd. (600111.SH) and China Minmetals Rare Earth Co., Ltd. (000831.SZ) are the leading magnates in this industry.
○China to initiate 100 major projects in "13 Five-year Plan" period, policy support to expect
------
The guideline draft for the "13 Five-year Plan" released on March 5 proposed that 100 major projects will be carried out in next five years. Aviation motor ＆ gas turbine, remote space station, quantum communication ＆ computer, brain science ＆ encephaloid research, national network security, remote space exploration ＆ space aero-craft on-orbit service ＆ system maintenance are the six most important ones.
Comment: Based on comprehensive market demands and the latest technical R＆D, it is most desired to develop the said projects, which gain the industrialized basis, and are expected to achieve further support after being listed as major projects for the "13 Five-year Plan". Referring to A-share companies, the quantum dot laser of Huagong Tech Company Limited (000988.SZ) will benefit from the development of quantum communication; and the controlling shareholder of Shanghai Fudan Forward Science ＆ Technology Co., Ltd. (600624.SH) has strong competitiveness in the human-brain engineering field.
TOP
[Announcement Interpretation]
○Aucma Company to raise RMB1 bln to expand cold chain business
------
Aucma Company Limited (600336.SH) proposes to issue 200 million shares through private placement at no less than 5.06 yuan per share to raise 1,012 million yuan, so that it can invest the intelligent manufacturing project of commercial cold chain products, commercial cold chain technical center construction project, new-type energy-saving refrigerator car as well as online ＆ site marketing platforms, and it can also supplement its cash. Its controlling shareholder Qingdao Enterprise Development will subscribe the shares with no less than 350 million yuan.
○Fujian Expressway Development invests RMB1 bln in stocks of Xiamen International Bank
------
Fujian Expressway Development Company Limited (600033.SH) plans to invest no more than 1 billion yuan in the capital and stock expansion plan of Xiamen International Bank. This will increase its shareholding proportion in the bank from the current 4.2 percent to 5.8 percent at most. Net profits of Xiamen International Bank were 1,668 million yuan, 2,228 million yuan and 3,326 million yuan during 2013 and 2015.
○Bauing Construction Holding Group invests RMB1 mln in network technology firm
------
Shenzhen Bauing Construction Holding Group Co., Ltd. (002047.SZ) plans to invest 100 million yuan in cash in Shenzhen Innovaconn Systems Co., Ltd. to acquire 20 percent equities of the company. Innovaconn Systems is specialized in the development, manufacturing and sales of wifi private network systems network and terminal devices and also provides solutions to the application of private network related to government affairs and police affairs, Internet of Things and construction of smart city.
○Maoye Communication and Network and others see shareholding increase
------
Zhongzhao Investment Management Co., Ltd., controlling shareholder of Maoye Communication and Network Co., Ltd. (000889.SZ), increased its shareholding in the company by 6.21 million shares during March 1-4, accounting for 1 percent of the company's share capital. Shenzhen Zhongkechuang Assets Management Co., Ltd., shareholder of Suzhou Hesheng Special Material Co., Ltd. (002290.SZ), increased its holdings in the company by 1.1 million shares at an average price of 20 yuan per share through block trade on March 3. AUX Group, controlling shareholder of Ningbo Sanxing Medical Electric Co., Ltd. (601567.SH), increased its shareholdings in the company by 1.25 million shares on March 4.
[Quarterly ＆ Annual Report]
○Ideal Jewellery and Dilong New Material propose high share conversion and dividend
------
Shenzhen Ideal Jewellery Co., Ltd. (002740.SZ) proposes a 20-for-10 conversion of capital surplus into shares combined with 1.1 yuan dividend for every 10 shares in its annual report. President of Zhejiang Dilong New Material Co., Ltd. (002247.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 2 yuan dividend for every 10 shares.
[Weekly Review]
○Invest in listed companies with impressive changes
------
One should be given a different look even though there are only three days of separation. This proverb indicates that one has made great progress in a short period of time and should be treated differently. We should treat others like this as well as the listed companies we invest in. The real estate, coal, nonferrous metal, chemical industry and other sectors, which saw significant increase in last week, were regarded as overcapacity industries in the last round of bull trend. But these sectors, which have been neglected for a long time, make a counterattack this time.
Fluctuation in stock prices is directly resulted from purchase and sales of investors, but investors' opinion influences their action of purchase and selling. The increase in the above cyclical sectors was contributed by the poor expectation of investors. But on the contrary, the long-neglected expectation becomes one of elements boosting the stock prices.
In the literary quotation, the Wu State's general Lv Meng at the Three Kingdoms period was regarded differently. He didn't know literature at the beginning but began to read under the guidance of Sun Quan. Lu Su claimed over Lv's changes after discussing military matters with him. This indicates that just as Lv didn't know about literature, he was able to make progress, which changed Lu's opinion on him. Also, just because people view the real estate, coal, nonferrous metal, chemical industry sectors as the overcapacity industries which won't soar, these sectors surge once there are some good news, just like dried firewood lights when encountering flame.
SSN focused on inventory reduction, supply-side reform and prices increase last week, which provided valuable information. Relevant sectors, such as real estate, vitamin, white sugar and miner metals including zinc-nickel witnessed remarkable rise in last week.
TOP
○Prices of bulk commodities set new highs in recent period, multiple active factors emerge
○Shenzhen-Hong Kong Stock Connect program to launch at proper time, consumption-related blue chips on Shenzhen stock market to favored
○MIIT to back up ship supporting industry, local enterprises to see wider market space, price of some rare earths up
○Aucma Company to raise RMB1 bln to expand cold chain business, Fujian Expressway Development invests RMB1 bln in stocks of Xiamen International Bank
[SSN Focus]
○Prices of bulk commodities set new highs in recent period, multiple active factors emerge
------
Various bulk commodities all saw price hike at early morning on March 5 (Beijing time). The price of crude oil in New York closed up 5 percent; the price of tin, copper and nickel hiked around 3 percent in London with the price of tin setting a new record since last April; the price of iron ore, charred coal, coke, screw-thread steel and natural rubber all sored to the daily limit at the closing hour of the evening session in China, setting new highs in months. The latest non-farm payrolls employment announced by the U.S. is quite better-than-expected. But the market expects that the Federal Reserve (Fed) inclines to further observe the continuity of the economic growth and will not raise interest rate in March.
Comment: Driven by factors including relatively easing liquidity globally, strong expectation on stabilizing economy and the efforts by China's supply-side reform in "cutting overcapacity", the supply-demand relations of bulk commodities might see improvement and attract more investment. As to listed companies, Yunnan Tin Co., Ltd. (000960.SZ), Hainan Mining Co., Ltd. (601969.SH) and Shanxi Xishan Coal and Electricity Power Co., Ltd. (000983.SZ) are leading enterprises in domestic tin, iron ore and charred coal areas, respectively.
TOP
○Shenzhen-Hong Kong Stock Connect program to launch at proper time, consumption-related blue chips on Shenzhen stock market to favored
------
The 2016 government work report announced on March 5 proposes to deepen the financial system reform this year. Relevant measures include advancing the stock and bond market reforms and the legalization construction, facilitating the healthy development of multi-layered capital market, raising the proportion of direct financing and launching the Shenzhen-Hong Kong Stock Connect program at proper time. The draft for the outline of the "Thirteenth Five-Year" planning announced on that same day proposes to create conditions for the implementation of registration-based IPO system.
Comment: the net-buying amount of northbound trading through the Shanghai-Hong Kong Stock Connect program totaled over 5.5 billion yuan in last week, setting a new high for single week trading since last August. Seen from the trading situations since the Shanghai-Hong Kong Stock Connect program was launched, consumption-related blue chips on Shanghai stock market with unique competitive edge, great defensive attribute and stable performance growth, represented by Kweichow Moutai Co., Ltd. (600519.SH), Inner Mongolia Yili Industrial Group Co., Ltd. (600887.SH) and Jiangsu Hengrui Medicine Co., Ltd. (600276.SH), are obviously favored by foreign capital. Presumably, stocks including Wuliangye Yibin Co., Ltd. (000858.SZ), Midea Group Co., Ltd. (000333.SZ) and Henan Shuanghui Investment ＆ Development Co., Ltd. (000895.SZ) might also be favored by foreign capital once the Shenzhen-Hong Kong Stock Connect program is initiated.
[SSN Selection]
○Chinese President Xi Jinping on March 5 aired his opinions on current relationship between the Chinese Mainland and Taiwan, proposing to further promote communication and cooperation in various areas.
○Shanghai Party chief Han Zheng on March 6 remarked that market system and guarantee system must be built up and perfected to solve housing problems. Shanghai Mayor Yang Xiong indicated that the overall listing of state-owned enterprises will be pushed forward this year.
○Huang Qifan, mayor of Chongqing Municipality, indicated that the application for setting up Chongqing free trade zone goes smoothly and hoped that Chongqing will be given green night for the piloting during his interview with SSN on March 6.
○EPFR data shows that gold funds attract the most amount of investment among sector funds for three weeks in a row, while funds oriented in stocks in the emerging markets ended the consecutive net outflow in past 17 weeks.
○Substantial shareholder of Guotai Junan Securities Co., Ltd. (601211.SH) and related companies totally increased shareholding in the company with 39.4 million shares since last September, while substantial shareholder of CITIC Securities Company Limited (600030.SH) further increased shareholding in the company with 18.91 million shares on March 1 and 2.
TOP
[Industry Information]
○MIIT to back up ship supporting industry, local enterprises to see wider market space
------
The Ministry of Industry and Information Technology (MIIT) recently released the Action Plan for Ability Enhancement of Ship Supporting Industries (2016-2020) on its official website. The plan proposes to basically build up a relatively perfect R＆D, design, manufacturing and service system for ship equipment. It also proposes that China can edge itself into world-class players in terms of design and manufacturing ability for critical ship equipment by 2020. Besides, the application rate of home-built shipping equipment on hi-tech ships should average to above 60 percent, while the matching rate of home-built critical components for shipping equipment reaches 80 percent.
Comment: The localized rate for loading of the shipping equipment in South Korea and Japan is at a high level of over 85 percent and 90 percent respectively, and that of China is far away from such figures, especially that the localized rate in the supporting field of hi-tech shipping and ocean engineering equipment is less than 30 percent. Along with the proposed target rate for localizing shipping supporting equipment, local enterprises will gain a market space. Among listed companies, China CSSC Holdings Limited (600150.SH) has obvious scale advantage in aspects of ship manufacturing and low-speed ＆ high-power diesel engine; CSSC Steel Structure Engineering Co., Ltd. (600072.SH) is a leading ship-related parts magnate in China; and Asian Star Anchor Chain Co., Ltd. Jiangsu (601890.SH) is a domestic production and export base for ship-related anchor chain and ocean platforms' mooring cable.
○Market supply tightens, price of some rare earths up
------
SSN learnt that, due to low rate of operation of the chemical-separation plants, the supply for praseodymium, neodymium and dysprosium tightens in the market, obviously short of stock. The prices of praseodymium and neodymium have started to increase since March 4, with transaction price up by 2,000 yuan. Relevant plants indicated that the inventory of some rare earths now is relatively low to support the price rising.
Comment: The Ministry of Industry and Information Technology held a discussion meeting on rare earth industry in January 2016, establishment work of all groups will be finished before this June, and so does the integration for all enterprises on rare earth mining, refining and separating. Under the governments' measures constantly fighting against the rare earth smuggling and illegal mining, the market order of rare earth industry has obviously improved, with higher market concentration degree, and the price is likely to further increase, due to policies related to purchase and stock of the rare earth. In terms of listed companies, China Northern Rare Earth (Group) High-tech Co., Ltd. (600111.SH) and China Minmetals Rare Earth Co., Ltd. (000831.SZ) are the leading magnates in this industry.
○China to initiate 100 major projects in "13 Five-year Plan" period, policy support to expect
------
The guideline draft for the "13 Five-year Plan" released on March 5 proposed that 100 major projects will be carried out in next five years. Aviation motor ＆ gas turbine, remote space station, quantum communication ＆ computer, brain science ＆ encephaloid research, national network security, remote space exploration ＆ space aero-craft on-orbit service ＆ system maintenance are the six most important ones.
Comment: Based on comprehensive market demands and the latest technical R＆D, it is most desired to develop the said projects, which gain the industrialized basis, and are expected to achieve further support after being listed as major projects for the "13 Five-year Plan". Referring to A-share companies, the quantum dot laser of Huagong Tech Company Limited (000988.SZ) will benefit from the development of quantum communication; and the controlling shareholder of Shanghai Fudan Forward Science ＆ Technology Co., Ltd. (600624.SH) has strong competitiveness in the human-brain engineering field.
TOP
[Announcement Interpretation]
○Aucma Company to raise RMB1 bln to expand cold chain business
------
Aucma Company Limited (600336.SH) proposes to issue 200 million shares through private placement at no less than 5.06 yuan per share to raise 1,012 million yuan, so that it can invest the intelligent manufacturing project of commercial cold chain products, commercial cold chain technical center construction project, new-type energy-saving refrigerator car as well as online ＆ site marketing platforms, and it can also supplement its cash. Its controlling shareholder Qingdao Enterprise Development will subscribe the shares with no less than 350 million yuan.
○Fujian Expressway Development invests RMB1 bln in stocks of Xiamen International Bank
------
Fujian Expressway Development Company Limited (600033.SH) plans to invest no more than 1 billion yuan in the capital and stock expansion plan of Xiamen International Bank. This will increase its shareholding proportion in the bank from the current 4.2 percent to 5.8 percent at most. Net profits of Xiamen International Bank were 1,668 million yuan, 2,228 million yuan and 3,326 million yuan during 2013 and 2015.
○Bauing Construction Holding Group invests RMB1 mln in network technology firm
------
Shenzhen Bauing Construction Holding Group Co., Ltd. (002047.SZ) plans to invest 100 million yuan in cash in Shenzhen Innovaconn Systems Co., Ltd. to acquire 20 percent equities of the company. Innovaconn Systems is specialized in the development, manufacturing and sales of wifi private network systems network and terminal devices and also provides solutions to the application of private network related to government affairs and police affairs, Internet of Things and construction of smart city.
○Maoye Communication and Network and others see shareholding increase
------
Zhongzhao Investment Management Co., Ltd., controlling shareholder of Maoye Communication and Network Co., Ltd. (000889.SZ), increased its shareholding in the company by 6.21 million shares during March 1-4, accounting for 1 percent of the company's share capital. Shenzhen Zhongkechuang Assets Management Co., Ltd., shareholder of Suzhou Hesheng Special Material Co., Ltd. (002290.SZ), increased its holdings in the company by 1.1 million shares at an average price of 20 yuan per share through block trade on March 3. AUX Group, controlling shareholder of Ningbo Sanxing Medical Electric Co., Ltd. (601567.SH), increased its shareholdings in the company by 1.25 million shares on March 4.
[Quarterly ＆ Annual Report]
○Ideal Jewellery and Dilong New Material propose high share conversion and dividend
------
Shenzhen Ideal Jewellery Co., Ltd. (002740.SZ) proposes a 20-for-10 conversion of capital surplus into shares combined with 1.1 yuan dividend for every 10 shares in its annual report. President of Zhejiang Dilong New Material Co., Ltd. (002247.SZ) proposes a 10-for-10 conversion of capital surplus into shares combined with 2 yuan dividend for every 10 shares.
[Weekly Review]
○Invest in listed companies with impressive changes
------
One should be given a different look even though there are only three days of separation. This proverb indicates that one has made great progress in a short period of time and should be treated differently. We should treat others like this as well as the listed companies we invest in. The real estate, coal, nonferrous metal, chemical industry and other sectors, which saw significant increase in last week, were regarded as overcapacity industries in the last round of bull trend. But these sectors, which have been neglected for a long time, make a counterattack this time.
Fluctuation in stock prices is directly resulted from purchase and sales of investors, but investors' opinion influences their action of purchase and selling. The increase in the above cyclical sectors was contributed by the poor expectation of investors. But on the contrary, the long-neglected expectation becomes one of elements boosting the stock prices.
In the literary quotation, the Wu State's general Lv Meng at the Three Kingdoms period was regarded differently. He didn't know literature at the beginning but began to read under the guidance of Sun Quan. Lu Su claimed over Lv's changes after discussing military matters with him. This indicates that just as Lv didn't know about literature, he was able to make progress, which changed Lu's opinion on him. Also, just because people view the real estate, coal, nonferrous metal, chemical industry sectors as the overcapacity industries which won't soar, these sectors surge once there are some good news, just like dried firewood lights when encountering flame.
SSN focused on inventory reduction, supply-side reform and prices increase last week, which provided valuable information. Relevant sectors, such as real estate, vitamin, white sugar and miner metals including zinc-nickel witnessed remarkable rise in last week.
TOP
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