[Today' Guide]
○ Online lottery sales to resume, sports industry to see billions of yuan market
○ CASC sees its asset securitization ratio to surge
○ Ronghua Industry's gold mine to resume production
○ Jahwa United's performance surges, five institutional seats buy Shuanghui Investment ＆ Development
[SSN Focus]
○Online lottery sales to resume, sports industry to see billions of yuan market
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SSN learnt that Baidu,. Inc. (NASDAQ:BIDU) on March 10 has quietly restarted selling lotteries online via its partner. Netease (NASDAQ:NETS) also reminded its customers that lottery will begin to sell on the Internet. This indicates that online lottery sales will resume after over a year's suspension. In addition, Alibaba announced gaining control of AGTech Holdings Limited with 2 billion yuan. AGTech will become the exclusive lottery business platform of Taobao and Alipay. All signs show that the online lottery sales will resume after more than a year's suspension
Comment: 2016 is a big year for sports. The Euro Cup and Olympic Games are expected to remarkably stimulate online lottery sales. According to statistics made by persons engaged in the sports lottery industry, the volume of online lottery sales is likely to reach 200 billion to 300 billion yuan. Among listed companies, Hongbo Co., Ltd. (002229.SZ) sells paperless lottery via its subsidiaries www.cailele.com and Hongbo Data Network Technology Co., Ltd. People.cn Co., Ltd. (603000.SH) owns 40 percent stake in www.okooo.com , an Internet-based lottery sales and trading platform. China United Travel Co., Ltd. (600358.SH) holds shares in Beijing Yingbo Xuncai Network Technology Co., Ltd., a company providing big data services for guessing lottery.
[SSN Selection]
○The European Central Bank determined to cut its deposit interest rates by 10 basis points and expand its monthly asset buys by 20 billion euros. European stocks rose and euros declined on the news.
○Data from the China Association of Automobile Manufacturers shoes that the new-energy vehile ouput in the first two months of this year is 37,900 units. It can be reckoned that the output in February rises about 35 percent on a monthly basis.
○ The dyeing and printing enterprises at Suzhou city raise processing charges on dyeing and printing by 5-10 percent from March 10. Dyeing and printing enterprises that are on normal operation see their full capacity under large-scale environmental remediation.
○Ganzhou Tungsten Industry Association revises tungsten prices' forecast for March up 2 percent. Few tungsten mines start to work, which will facilitate to improve the industry's supply and demand pattern.
○Shanghai Pudong Development Bank Co., Ltd. (600000.SH) proposes to raise 14.83 billion yuan by issuing shares to its substantial shareholder through private placement to supplement its core tier-one capital. Tongfang Guoxin Electronics Co., Ltd. (002049.SZ) plans to invest 6.15 billion yuan in a Taiwan company engaged in the integrated circuit industrial chain.
TOP
[Industry Information]
○ CASC determined reform plan for scientific research institutions, asset securitization ratio to surge
------
SSN learnt that the China Aerospace Science and Technology Corporation (CASC) has determined its reform plan for its scientific research institutions. The reform will launch this year. After the reform, most scientific research institutions will be turned into enterprises which will go listing in different sectors. Except for assets restricted by polices, these scientific research institutions will advance step by step and enter the capital market. The CASC plans to improve its asset securitization ratio from 15 percent to 45 percent during the 13th Five-Year Plan period. Institutes believe that as the reform plan on the classification of military scientific research institutions, all military groups will accelerate the reform of their scientific research institutions.
Comment: Currently, the CASC owns 9 companies listed in the A shares. Yet it still has many large scientific research institutions. There will be a large room for them to integrate. Among these listed companies, the substantial shareholder of Shaanxi Aerospace Power Hi-Tech Co., Ltd. (600343.SH) is a company mainly engaged in rocket engine. The potential buying target of China Aerospace Times Electronics Co., Ltd. (600879.SH) includes the CASC 13th Research Institution and CASC 771 Research Institution. China Spacesat Co., Ltd. (600118.SH) sees expectations for large assets injection. The substantial shareholder of Changzheng Engineering Co., Ltd. (603698.SH) is China Academy of Launch Vehicle Technology.
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[Announcement Interpretation]
○ Yinlun Machinery to raise RMB 1bln to expand new-energy vehicle
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Zhejiang Yinlun Machinery Co., Ltd. (002126.SZ) proposes to raise 1,007 million yuan by issuing 85.44 million shares at prices no more than 11.79 yuan per share through private placement. The fund will be invested in five projects, including the heat management project of new-energy vehicle and supplement working capital. This new projects will help the company to expand its market share in new-energy vehicle and traditional passenger vehicles to improve its main business capability.
○ Ronghua Industry's gold mine to resume production
------
Gansu Ronghua Industry Group Co., Ltd. (600311.SH) expects growth in its annual report. Zheshang Mining Investment Co., Ltd., a subsidiary of the company engaged in gold production, has passed environmental approval and will resume production on March 30. The company will apply for cancelling the warning of other risks on its stocks to Shanghai Stock Exchange.
○ Controlling shareholders of Greattown and Baihuacun to increase shareholding
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The controlling shareholder of Greattown Holdings Ltd. (600094.SH) plans to increase the shareholding in the company with no less than 2 percent but no more than 3 percent of its total share capitals in the following month. The controlling shareholder of Xinjiang Baihuacun Co., Ltd. (600721.SH) will increase the shareholding in the company with no less than 1 million but no more than 4.8 million shares in the following six months when the stock price of the company is below 13.5 yuan.
Besides, the controlling shareholder of Guangdong Yihua Timber Industry Co., Ltd. (600978.SH) increased the shareholding in the company with 6.13 million shares on March 10. The controlling shareholder of Honyu Wear-Resistant New Materials Co., Ltd. (300345.SZ) increased the shareholding in the company with 0.3 million shares on March 10. Qingdao Chengtou Financial Holdings Co., Ltd., a shareholder of Qingdao Hengshun Zhongsheng Group Co., Ltd. (300208.SZ), increased the shareholding in the company with 11.57 million shares from Jan. 21 to March 10, accounting for 1.51 percent of the total shares of the company. The controlling shareholder of Ningbo Sanxing Medical Electric Co., Ltd. (601567.SH) increased the shareholding in the company with 0.75 million shares on March 10. The actual controller of Zhongli Science And Technology Group Co., Ltd. (002309.SZ) increased the shareholding in the company with 0.89 million shares on March 10.
○ Biocause Phar. to develop insurance through private placement
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Hubei Biocause Pharmaceutical Co., Ltd. (000627.SZ) plans to raise 9.5 billion yuan by issuing 140 million shares at 6.79 yuan per share through private placement. The proceeds will be used in acquiring 40.75 percent equities of AXA Tianping P＆C Insurance Co., Ltd., increasing the investment in Guohua Life and repaying debts. The company will hold 50 percent equities of AXA Tianping after the acquisition. Liu Yiqian, the actual controller of the company, will subscribe no less than 10 percent of the total shares.
AXA Tianping is principally engaged in motor vehicles insurance, non-motor vehicles insurance and accident and health insurances. It recorded an insurance revenue of 5 billion yuan, 6.6 billion yuan and 7.3 billion yuan from 2013 to 2015. It recorded a business revenue of 7.8 billion yuan with a net profit of 234 million yuan in 2015.
○ Rainbow Heavy Industries to develop environmental protection with RMB274 mln
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Jiangsu Rainbow Heavy Industries Co., Ltd. (002483.SZ) intends to acquire 71.67 percent equities of Zhejiang Zhengjie Environmental Technology Co., Ltd. with 274 million yuan by issuing shares and in cash. Meanwhile, the company plans to raise 150 million yuan by issuing shares through private placement. The bottom price of the shares to be issued is 10.42 yuan per share. Zhengjie Environmental Technology is principally engaged in the research and development and application of high and new environmental technologies and water treatment. The counterparty committed that its net profit after extraordinary items will be no less than 27 million yuan, 36 million yuan and 47 million yuan from 2016 to 2018. Rainbow Heavy Industries will acquire its remaining 28.33 percent equities if it total net profits for the three years is less than 110 million yuan.
TOP
[Financial Reports Express]
○ Jahwa United's performance surges
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Shanghai Jahwa United Co., Ltd. (600315.SH) expects its net profit to increase 146 percent in its annual report with basic earnings per share of 3.31 yuan. It proposes 9.9 yuan dividend for every 10 shares. Angel Yeast Co., Ltd. (600298.SH) expects its net profit to increase 90 percent in its annual report with basic earnings per share of 0.85 yuan. It proposes a 15-for-10 conversion of capital surplus into shares combined with 3 yuan dividend for every 10 shares.
○ Hongli Opto-Electronic expects growth in Q1 report
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Guangzhou Hongli Opto-Electronic Co., Ltd. (300219.SZ) expects an increase of 110 to 140 percent in its first quarterly report thanks to the booming demand in the LED market. It also transferred 15 percent equities of a subsidiary, which increased the profit.
[Trading Trends]
○ Five institutional seats buy Shuanghui Investment ＆ Development
------
The trading volume ranking list on Dec. 17 shows that five institutional seats bought Henan Shuanghui Investment ＆ Development Co., Ltd. (000895.SZ) with a total of 160 million yuan, accounting for 35.72 percent of its intraday turnover. One institutional seat sold it with 7,019,000 yuan.
Comment: Institutes believe that the adjustment in the marketing strategies boosted the performance of the company in the first quarter. The recovery of the catering industry and higher expectation on inflation further improved the performance of the company. As a consumption leader in the mass consumer products industry, the company enjoys long-term competitiveness with high bonus and an ROE of over 25 percent. The current valuation is at the bottom of the mass consumer products industry.
TOP
○ Online lottery sales to resume, sports industry to see billions of yuan market
○ CASC sees its asset securitization ratio to surge
○ Ronghua Industry's gold mine to resume production
○ Jahwa United's performance surges, five institutional seats buy Shuanghui Investment ＆ Development
[SSN Focus]
○Online lottery sales to resume, sports industry to see billions of yuan market
------
SSN learnt that Baidu,. Inc. (NASDAQ:BIDU) on March 10 has quietly restarted selling lotteries online via its partner. Netease (NASDAQ:NETS) also reminded its customers that lottery will begin to sell on the Internet. This indicates that online lottery sales will resume after over a year's suspension. In addition, Alibaba announced gaining control of AGTech Holdings Limited with 2 billion yuan. AGTech will become the exclusive lottery business platform of Taobao and Alipay. All signs show that the online lottery sales will resume after more than a year's suspension
Comment: 2016 is a big year for sports. The Euro Cup and Olympic Games are expected to remarkably stimulate online lottery sales. According to statistics made by persons engaged in the sports lottery industry, the volume of online lottery sales is likely to reach 200 billion to 300 billion yuan. Among listed companies, Hongbo Co., Ltd. (002229.SZ) sells paperless lottery via its subsidiaries www.cailele.com and Hongbo Data Network Technology Co., Ltd. People.cn Co., Ltd. (603000.SH) owns 40 percent stake in www.okooo.com , an Internet-based lottery sales and trading platform. China United Travel Co., Ltd. (600358.SH) holds shares in Beijing Yingbo Xuncai Network Technology Co., Ltd., a company providing big data services for guessing lottery.
[SSN Selection]
○The European Central Bank determined to cut its deposit interest rates by 10 basis points and expand its monthly asset buys by 20 billion euros. European stocks rose and euros declined on the news.
○Data from the China Association of Automobile Manufacturers shoes that the new-energy vehile ouput in the first two months of this year is 37,900 units. It can be reckoned that the output in February rises about 35 percent on a monthly basis.
○ The dyeing and printing enterprises at Suzhou city raise processing charges on dyeing and printing by 5-10 percent from March 10. Dyeing and printing enterprises that are on normal operation see their full capacity under large-scale environmental remediation.
○Ganzhou Tungsten Industry Association revises tungsten prices' forecast for March up 2 percent. Few tungsten mines start to work, which will facilitate to improve the industry's supply and demand pattern.
○Shanghai Pudong Development Bank Co., Ltd. (600000.SH) proposes to raise 14.83 billion yuan by issuing shares to its substantial shareholder through private placement to supplement its core tier-one capital. Tongfang Guoxin Electronics Co., Ltd. (002049.SZ) plans to invest 6.15 billion yuan in a Taiwan company engaged in the integrated circuit industrial chain.
TOP
[Industry Information]
○ CASC determined reform plan for scientific research institutions, asset securitization ratio to surge
------
SSN learnt that the China Aerospace Science and Technology Corporation (CASC) has determined its reform plan for its scientific research institutions. The reform will launch this year. After the reform, most scientific research institutions will be turned into enterprises which will go listing in different sectors. Except for assets restricted by polices, these scientific research institutions will advance step by step and enter the capital market. The CASC plans to improve its asset securitization ratio from 15 percent to 45 percent during the 13th Five-Year Plan period. Institutes believe that as the reform plan on the classification of military scientific research institutions, all military groups will accelerate the reform of their scientific research institutions.
Comment: Currently, the CASC owns 9 companies listed in the A shares. Yet it still has many large scientific research institutions. There will be a large room for them to integrate. Among these listed companies, the substantial shareholder of Shaanxi Aerospace Power Hi-Tech Co., Ltd. (600343.SH) is a company mainly engaged in rocket engine. The potential buying target of China Aerospace Times Electronics Co., Ltd. (600879.SH) includes the CASC 13th Research Institution and CASC 771 Research Institution. China Spacesat Co., Ltd. (600118.SH) sees expectations for large assets injection. The substantial shareholder of Changzheng Engineering Co., Ltd. (603698.SH) is China Academy of Launch Vehicle Technology.
TOP
[Announcement Interpretation]
○ Yinlun Machinery to raise RMB 1bln to expand new-energy vehicle
------
Zhejiang Yinlun Machinery Co., Ltd. (002126.SZ) proposes to raise 1,007 million yuan by issuing 85.44 million shares at prices no more than 11.79 yuan per share through private placement. The fund will be invested in five projects, including the heat management project of new-energy vehicle and supplement working capital. This new projects will help the company to expand its market share in new-energy vehicle and traditional passenger vehicles to improve its main business capability.
○ Ronghua Industry's gold mine to resume production
------
Gansu Ronghua Industry Group Co., Ltd. (600311.SH) expects growth in its annual report. Zheshang Mining Investment Co., Ltd., a subsidiary of the company engaged in gold production, has passed environmental approval and will resume production on March 30. The company will apply for cancelling the warning of other risks on its stocks to Shanghai Stock Exchange.
○ Controlling shareholders of Greattown and Baihuacun to increase shareholding
------
The controlling shareholder of Greattown Holdings Ltd. (600094.SH) plans to increase the shareholding in the company with no less than 2 percent but no more than 3 percent of its total share capitals in the following month. The controlling shareholder of Xinjiang Baihuacun Co., Ltd. (600721.SH) will increase the shareholding in the company with no less than 1 million but no more than 4.8 million shares in the following six months when the stock price of the company is below 13.5 yuan.
Besides, the controlling shareholder of Guangdong Yihua Timber Industry Co., Ltd. (600978.SH) increased the shareholding in the company with 6.13 million shares on March 10. The controlling shareholder of Honyu Wear-Resistant New Materials Co., Ltd. (300345.SZ) increased the shareholding in the company with 0.3 million shares on March 10. Qingdao Chengtou Financial Holdings Co., Ltd., a shareholder of Qingdao Hengshun Zhongsheng Group Co., Ltd. (300208.SZ), increased the shareholding in the company with 11.57 million shares from Jan. 21 to March 10, accounting for 1.51 percent of the total shares of the company. The controlling shareholder of Ningbo Sanxing Medical Electric Co., Ltd. (601567.SH) increased the shareholding in the company with 0.75 million shares on March 10. The actual controller of Zhongli Science And Technology Group Co., Ltd. (002309.SZ) increased the shareholding in the company with 0.89 million shares on March 10.
○ Biocause Phar. to develop insurance through private placement
------
Hubei Biocause Pharmaceutical Co., Ltd. (000627.SZ) plans to raise 9.5 billion yuan by issuing 140 million shares at 6.79 yuan per share through private placement. The proceeds will be used in acquiring 40.75 percent equities of AXA Tianping P＆C Insurance Co., Ltd., increasing the investment in Guohua Life and repaying debts. The company will hold 50 percent equities of AXA Tianping after the acquisition. Liu Yiqian, the actual controller of the company, will subscribe no less than 10 percent of the total shares.
AXA Tianping is principally engaged in motor vehicles insurance, non-motor vehicles insurance and accident and health insurances. It recorded an insurance revenue of 5 billion yuan, 6.6 billion yuan and 7.3 billion yuan from 2013 to 2015. It recorded a business revenue of 7.8 billion yuan with a net profit of 234 million yuan in 2015.
○ Rainbow Heavy Industries to develop environmental protection with RMB274 mln
------
Jiangsu Rainbow Heavy Industries Co., Ltd. (002483.SZ) intends to acquire 71.67 percent equities of Zhejiang Zhengjie Environmental Technology Co., Ltd. with 274 million yuan by issuing shares and in cash. Meanwhile, the company plans to raise 150 million yuan by issuing shares through private placement. The bottom price of the shares to be issued is 10.42 yuan per share. Zhengjie Environmental Technology is principally engaged in the research and development and application of high and new environmental technologies and water treatment. The counterparty committed that its net profit after extraordinary items will be no less than 27 million yuan, 36 million yuan and 47 million yuan from 2016 to 2018. Rainbow Heavy Industries will acquire its remaining 28.33 percent equities if it total net profits for the three years is less than 110 million yuan.
TOP
[Financial Reports Express]
○ Jahwa United's performance surges
------
Shanghai Jahwa United Co., Ltd. (600315.SH) expects its net profit to increase 146 percent in its annual report with basic earnings per share of 3.31 yuan. It proposes 9.9 yuan dividend for every 10 shares. Angel Yeast Co., Ltd. (600298.SH) expects its net profit to increase 90 percent in its annual report with basic earnings per share of 0.85 yuan. It proposes a 15-for-10 conversion of capital surplus into shares combined with 3 yuan dividend for every 10 shares.
○ Hongli Opto-Electronic expects growth in Q1 report
------
Guangzhou Hongli Opto-Electronic Co., Ltd. (300219.SZ) expects an increase of 110 to 140 percent in its first quarterly report thanks to the booming demand in the LED market. It also transferred 15 percent equities of a subsidiary, which increased the profit.
[Trading Trends]
○ Five institutional seats buy Shuanghui Investment ＆ Development
------
The trading volume ranking list on Dec. 17 shows that five institutional seats bought Henan Shuanghui Investment ＆ Development Co., Ltd. (000895.SZ) with a total of 160 million yuan, accounting for 35.72 percent of its intraday turnover. One institutional seat sold it with 7,019,000 yuan.
Comment: Institutes believe that the adjustment in the marketing strategies boosted the performance of the company in the first quarter. The recovery of the catering industry and higher expectation on inflation further improved the performance of the company. As a consumption leader in the mass consumer products industry, the company enjoys long-term competitiveness with high bonus and an ROE of over 25 percent. The current valuation is at the bottom of the mass consumer products industry.
TOP
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