[Today's Guide]
○ Liu Shiyu responded to hot issues, stabilizing market expectations
○ Dyes in short supply as firms stop production, dyes to hike prices after Spring Festival
○ GM develops self-driving to push for industry development
○ Yihua Healthcare to introduce employee shareholding plan, Kemen Noodle Manufacturing proposes high share conversion and dividend
[SSN Focus]
○ Liu Shiyu responds to hot issues, stabilizing market expectations
------
Liu Shiyu, chairman of the China Securities Regulatory Commission, showed at a press conference on March 12 for the first time. He said that the the registration-based IPO system is a mission that China must accomplish to assure a long-term health development of Chinese capital market. But the registration-based IPO system reform is not independent and separate. It should take a long time as it cannot advance without support from improved multi-layered market system, equity financing through various channels and improved legal environment. It is too early for China Securities Finance Co., Ltd. to exit in a long time of the future. There is no condition that China must adopt the circuit-breaker mechanism in the coming few years.
Comment: Xinhua News Agency writes in an article that Liu Shiyu made postive responses to the market's much concerned issues, such as registration-based IPO system, abnormal fluctuations in the stock market and the circuit-breaker mechanism. His answers sent many signals. The market generally believes that his answers at the press conference sent clear signals that the regulators send stable policy expectations and express clear attitude towards promoting the market reform on the basis of a stable market.
[SSN Selection]
○ Chairman of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) indicated on March 12 that China will increase efforts in reorganization of central state-owned enterprises (SOEs) and central SOEs should increase input in the fields of aerospace, nuclear power and high-speed railway.
○ SSN learnt that there are three banks having begun securitizing non-performing asset, which is irrelevant to the rise and fall of bad loans.
○ The new renminbi loans in February decreased to 726.6 billion yuan. Various institutions believe that the new renminbi loans is expected to rise to around one trillion yuan in March.
○ The investment in real estate development in China increases 3.0 percent year on year during January to February, representing a rapid increase for the first time in two years.
○ The administrator of the State Administration of Taxation (SAT) indicated on March 13 that China should guarantee the implementation of the reform program to replace business tax with value-added tax in all sectors. It is the first time that China mentions that natural person should pay value-added tax in second-hand housing transaction.
○ China Vanke Co., Ltd. (000002.SZ; 02202.HK) announces the acquisition of 40 to 60 billion yuan asset of Shenzhen Metro Group. The latter will become a major long-term shareholder of Vanke.
TOP
[Industry Information]
○ Dyes in short supply as firms stop production, dyes to hike prices after Spring Festival
------
SSN learnt that the Dadongjiang Linjiang Industrial Park, Hangzhou City has stopped production to renovate due to the blast accident. Zhejiang Jihua Group, a large disperse dye manufacturing base in the industrial park, has stopped production. As the G20 summit will be held in Hangzhou this September, there will be a great renovation in the safe production due to this accident. The production restriction will bring a second round of price hike in the dye industry. It is learnt that the prices of major disperse dye products will rise by 4,000 to 6,000 yuan per ton from March 12. The highest price hike will be no more than 20 percent. In addition,the reactive dyes have also seen prices rising by nearly 2,000 yuan per ton as the H acid leader shut down.
Comment: Currently, dye inventories are in low level. The textile industry will see a high season from March. The downstream printing and dyeing industry has begun lifting prices after the Spring Festival, which has propped up the rise of dye prices. In terms of companies, Zhejiang Longsheng Group Co., Ltd. (600352.SH) owns nearly 300,000-ton capacity in disperse and reactive dyes and ranks first in terms of market shares in China. Zhejiang Runtu Co., Ltd. (002440.SZ) owns nearly 150,000-ton dye capacity and possesses 20,000-ton H acid production equipment. Shanghai Anoky Group Co., Ltd. (300067.SZ) owns 36,000-ton capacity in disperse dye and over 20,000-ton capacity in reactive dye.
TOP
○ GM develops self-driving to push for industry development
------
Francisco self-driving vehicle startup, Reuters reported. Cruise has been working to develop hardware and software that could be installed in a vehicle to enable the car to pilot itself on a highway, without the driver steering or braking. GM President said that the company intends to use Cruise's technology and people to accelerate its effort to develop vehicles. Sources said that GM paid one billion U.S. dollars for the acquisition.
Comment: Previously, Internet giants, including Google and Baidu (NASDAQ:BIDU), have developed self-driving. The active joining of traditional automakers represented by GM in this field will push further for the development of the industry. Enterprises with assistant driving technology will take advantages. Among listed companies,
Zhejiang Vie Science ＆ Technology Co., Ltd. (002590.SZ) completed its private placement in March and the fund raised will be invested in the research and development of advanced driver assistance system (ADAS). Zhejiang Jingu Co., Ltd. (002488.SZ) develops intelligent driving by investing Shuzhou Invo Automobile Electronics Co., Ltd.
TOP
[Announcement Interpretation]
○ Yihua Healthcare to introduce employee shareholding plan
------
Yihua Healthcare Co., Ltd. (000150.SZ) proposes to introduce an employee shareholding plan with an upper limit of 700 million yuan, which is expected to involve 32.27 million stocks of the company, accounting for 7.21 percent of the total share capital.
Meidu Energy Corporation (600175.SH) plans to introduce an employee shareholding plan to raise funds with a proportion of 1:3. It is expected to buy the stocks of the company with no more than 300 million yuan, which is expected to involve a maximum of about 60.12 million stocks of the company, accounting for 2.45 percent of the total share capital. In addition, Wuxi Boton Technology Co., Ltd. (300031.SZ) intends to introduce an employee shareholding plan with a maximum of 40 million yuan.
○ Infogem Technologies to expand Internet-based finance by resuming private placement
------
Shenzhen Infogem Technologies Co., Ltd. (300085.SZ) intends raise about 830 million yuan by issuing 27.88 million shares at 29.76 yuan per share through private placement. The proceeds will be invested in the first phase of the service platform for Internet-based big financial data. The project will provide the credit industry with the development and operation of data service platforms, data analysis and other technical services and consultancy services on big data. Liu Yi, a director and vice-chairman of the company, will subscribe 1.68 million shares through an asset management plan under Donghai Funds.
The company suspended private placement. The resuming of the private placement will improve the profitability of the company.
○ Nonghua Intelligent Agriculture Technology sees shareholding increase
------
The controlling shareholders of Jiangsu Nonghua Intelligent Agriculture Technology Co., Ltd. (000816.SZ) continued to increase the shareholding in the company with 970,000 shares on March 11. The controlling shareholder of Eternal Asia Supply Chain Management Ltd. (002183.SZ) continued to increase the shareholding in the company with 800,000 shares on March 11. The substantial shareholder of Jiangsu Zhongnan Construction Group Co., Ltd. (000961.SZ) continued to increase the shareholding in the company with 5.32 million shares on March 11. The second biggest shareholder of North Navigation Control Technology Co., Ltd. (600435.SH) increased the shareholding in the company with 8.98 million shares from March 7 to 11. Certain senior management of Xinjiang Baihuacun Co., Ltd. (600721.SH) plan to increase the shareholding in the company with 50,000 to 500,000 shares in the following six months when the stock price is no higher than 14 yuan.
[Financial Reports Express]
○ Kemen Noodle Manufacturing proposes high share conversion and dividend
------
Kemen Noodle Manufacturing Co., Ltd. (002661.SZ) expects its net profit to grow 66 percent and proposes a 20-for-10 conversion of capital surplus into shares combined with 5 yuan dividend for every 10 shares according to its annual report.
[Data Speaks]
○ Chemical enterprises to see performance growth thanks to price rise
------
Statistics show that 34 companies expected growth in the first quarter. New energy vehicles and photovoltaic industries see more growth. Institutes believe that thanks to the supply-side reform and loose monetary policies, chemical products with prices rise in the first quarter will bring higher growth in performance. The profitability of the lithium carbonate, titanium dioxide and dying industries will continue to improve as a result of the higher demands and concentration.
In terms of listed companies, Sichuan Tianqi Lithium Industries, Inc. (002466.SZ) is a lithium carbonate leader in China. Considering the 100 percent increase of lithium carbonate price on a yearly basis, the performance of the company will see rapid growth. Henan Billions Chemicals Co., Ltd. (002601.SZ) is leader in the domestic rutile titanium dioxide with a capacity of 260,000 tons. Its total capacity will account for nearly 20 percent of the industry after acquiring Lomon Corporation. The leading products of the company see three prices rises in the first quarter with a total increase of nearly 9 percent.
[Weekly Review]
○ Go playing and bullish vs bearish game
------
AlphaGo, the Google Artificial Intelligence (AI) program, beat South Korea's Lee Sedol in three consecutive matches, which make the go, an old and mysterious intelligent game, a highlight in the world. Go is known as the most complicated cheese game while the securities market is a gaming place for most intelligent investors. The similarities between the two worth our attention.
There are 300 positions in the go. Most players prefer to place first pieces in the corner. However, it is difficult to get a steady opening. There are various transaction varieties in the securities market. As ordinary people, we have to find one to two industries we are good at. Investors like online series can seek the next Ciwen Media Co., Ltd. (002343.SZ). Those live new steel plants can pay attention to the number of trucks and may find the turning point in the industry first.
Even minor pieces can reverse the situation in the go. The leveraged-based bullish run was the focus in the first half of last year, but it plunged after the crackdown of off-market margin financing. Although small-cap stocks with bad performance are last choices of many investors, some substantial shareholders with few debts will exit. The price of the shell will show out after the market value falls to certain extent.
The situation is generally determined by closing. However, careful calculation may bring more profits to prevent silly mistakes. Investment in securities also need patient and careful operation. Investors shall adjust the position and the mood.
TOP
○ Liu Shiyu responded to hot issues, stabilizing market expectations
○ Dyes in short supply as firms stop production, dyes to hike prices after Spring Festival
○ GM develops self-driving to push for industry development
○ Yihua Healthcare to introduce employee shareholding plan, Kemen Noodle Manufacturing proposes high share conversion and dividend
[SSN Focus]
○ Liu Shiyu responds to hot issues, stabilizing market expectations
------
Liu Shiyu, chairman of the China Securities Regulatory Commission, showed at a press conference on March 12 for the first time. He said that the the registration-based IPO system is a mission that China must accomplish to assure a long-term health development of Chinese capital market. But the registration-based IPO system reform is not independent and separate. It should take a long time as it cannot advance without support from improved multi-layered market system, equity financing through various channels and improved legal environment. It is too early for China Securities Finance Co., Ltd. to exit in a long time of the future. There is no condition that China must adopt the circuit-breaker mechanism in the coming few years.
Comment: Xinhua News Agency writes in an article that Liu Shiyu made postive responses to the market's much concerned issues, such as registration-based IPO system, abnormal fluctuations in the stock market and the circuit-breaker mechanism. His answers sent many signals. The market generally believes that his answers at the press conference sent clear signals that the regulators send stable policy expectations and express clear attitude towards promoting the market reform on the basis of a stable market.
[SSN Selection]
○ Chairman of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) indicated on March 12 that China will increase efforts in reorganization of central state-owned enterprises (SOEs) and central SOEs should increase input in the fields of aerospace, nuclear power and high-speed railway.
○ SSN learnt that there are three banks having begun securitizing non-performing asset, which is irrelevant to the rise and fall of bad loans.
○ The new renminbi loans in February decreased to 726.6 billion yuan. Various institutions believe that the new renminbi loans is expected to rise to around one trillion yuan in March.
○ The investment in real estate development in China increases 3.0 percent year on year during January to February, representing a rapid increase for the first time in two years.
○ The administrator of the State Administration of Taxation (SAT) indicated on March 13 that China should guarantee the implementation of the reform program to replace business tax with value-added tax in all sectors. It is the first time that China mentions that natural person should pay value-added tax in second-hand housing transaction.
○ China Vanke Co., Ltd. (000002.SZ; 02202.HK) announces the acquisition of 40 to 60 billion yuan asset of Shenzhen Metro Group. The latter will become a major long-term shareholder of Vanke.
TOP
[Industry Information]
○ Dyes in short supply as firms stop production, dyes to hike prices after Spring Festival
------
SSN learnt that the Dadongjiang Linjiang Industrial Park, Hangzhou City has stopped production to renovate due to the blast accident. Zhejiang Jihua Group, a large disperse dye manufacturing base in the industrial park, has stopped production. As the G20 summit will be held in Hangzhou this September, there will be a great renovation in the safe production due to this accident. The production restriction will bring a second round of price hike in the dye industry. It is learnt that the prices of major disperse dye products will rise by 4,000 to 6,000 yuan per ton from March 12. The highest price hike will be no more than 20 percent. In addition,the reactive dyes have also seen prices rising by nearly 2,000 yuan per ton as the H acid leader shut down.
Comment: Currently, dye inventories are in low level. The textile industry will see a high season from March. The downstream printing and dyeing industry has begun lifting prices after the Spring Festival, which has propped up the rise of dye prices. In terms of companies, Zhejiang Longsheng Group Co., Ltd. (600352.SH) owns nearly 300,000-ton capacity in disperse and reactive dyes and ranks first in terms of market shares in China. Zhejiang Runtu Co., Ltd. (002440.SZ) owns nearly 150,000-ton dye capacity and possesses 20,000-ton H acid production equipment. Shanghai Anoky Group Co., Ltd. (300067.SZ) owns 36,000-ton capacity in disperse dye and over 20,000-ton capacity in reactive dye.
TOP
○ GM develops self-driving to push for industry development
------
Francisco self-driving vehicle startup, Reuters reported. Cruise has been working to develop hardware and software that could be installed in a vehicle to enable the car to pilot itself on a highway, without the driver steering or braking. GM President said that the company intends to use Cruise's technology and people to accelerate its effort to develop vehicles. Sources said that GM paid one billion U.S. dollars for the acquisition.
Comment: Previously, Internet giants, including Google and Baidu (NASDAQ:BIDU), have developed self-driving. The active joining of traditional automakers represented by GM in this field will push further for the development of the industry. Enterprises with assistant driving technology will take advantages. Among listed companies,
Zhejiang Vie Science ＆ Technology Co., Ltd. (002590.SZ) completed its private placement in March and the fund raised will be invested in the research and development of advanced driver assistance system (ADAS). Zhejiang Jingu Co., Ltd. (002488.SZ) develops intelligent driving by investing Shuzhou Invo Automobile Electronics Co., Ltd.
TOP
[Announcement Interpretation]
○ Yihua Healthcare to introduce employee shareholding plan
------
Yihua Healthcare Co., Ltd. (000150.SZ) proposes to introduce an employee shareholding plan with an upper limit of 700 million yuan, which is expected to involve 32.27 million stocks of the company, accounting for 7.21 percent of the total share capital.
Meidu Energy Corporation (600175.SH) plans to introduce an employee shareholding plan to raise funds with a proportion of 1:3. It is expected to buy the stocks of the company with no more than 300 million yuan, which is expected to involve a maximum of about 60.12 million stocks of the company, accounting for 2.45 percent of the total share capital. In addition, Wuxi Boton Technology Co., Ltd. (300031.SZ) intends to introduce an employee shareholding plan with a maximum of 40 million yuan.
○ Infogem Technologies to expand Internet-based finance by resuming private placement
------
Shenzhen Infogem Technologies Co., Ltd. (300085.SZ) intends raise about 830 million yuan by issuing 27.88 million shares at 29.76 yuan per share through private placement. The proceeds will be invested in the first phase of the service platform for Internet-based big financial data. The project will provide the credit industry with the development and operation of data service platforms, data analysis and other technical services and consultancy services on big data. Liu Yi, a director and vice-chairman of the company, will subscribe 1.68 million shares through an asset management plan under Donghai Funds.
The company suspended private placement. The resuming of the private placement will improve the profitability of the company.
○ Nonghua Intelligent Agriculture Technology sees shareholding increase
------
The controlling shareholders of Jiangsu Nonghua Intelligent Agriculture Technology Co., Ltd. (000816.SZ) continued to increase the shareholding in the company with 970,000 shares on March 11. The controlling shareholder of Eternal Asia Supply Chain Management Ltd. (002183.SZ) continued to increase the shareholding in the company with 800,000 shares on March 11. The substantial shareholder of Jiangsu Zhongnan Construction Group Co., Ltd. (000961.SZ) continued to increase the shareholding in the company with 5.32 million shares on March 11. The second biggest shareholder of North Navigation Control Technology Co., Ltd. (600435.SH) increased the shareholding in the company with 8.98 million shares from March 7 to 11. Certain senior management of Xinjiang Baihuacun Co., Ltd. (600721.SH) plan to increase the shareholding in the company with 50,000 to 500,000 shares in the following six months when the stock price is no higher than 14 yuan.
[Financial Reports Express]
○ Kemen Noodle Manufacturing proposes high share conversion and dividend
------
Kemen Noodle Manufacturing Co., Ltd. (002661.SZ) expects its net profit to grow 66 percent and proposes a 20-for-10 conversion of capital surplus into shares combined with 5 yuan dividend for every 10 shares according to its annual report.
[Data Speaks]
○ Chemical enterprises to see performance growth thanks to price rise
------
Statistics show that 34 companies expected growth in the first quarter. New energy vehicles and photovoltaic industries see more growth. Institutes believe that thanks to the supply-side reform and loose monetary policies, chemical products with prices rise in the first quarter will bring higher growth in performance. The profitability of the lithium carbonate, titanium dioxide and dying industries will continue to improve as a result of the higher demands and concentration.
In terms of listed companies, Sichuan Tianqi Lithium Industries, Inc. (002466.SZ) is a lithium carbonate leader in China. Considering the 100 percent increase of lithium carbonate price on a yearly basis, the performance of the company will see rapid growth. Henan Billions Chemicals Co., Ltd. (002601.SZ) is leader in the domestic rutile titanium dioxide with a capacity of 260,000 tons. Its total capacity will account for nearly 20 percent of the industry after acquiring Lomon Corporation. The leading products of the company see three prices rises in the first quarter with a total increase of nearly 9 percent.
[Weekly Review]
○ Go playing and bullish vs bearish game
------
AlphaGo, the Google Artificial Intelligence (AI) program, beat South Korea's Lee Sedol in three consecutive matches, which make the go, an old and mysterious intelligent game, a highlight in the world. Go is known as the most complicated cheese game while the securities market is a gaming place for most intelligent investors. The similarities between the two worth our attention.
There are 300 positions in the go. Most players prefer to place first pieces in the corner. However, it is difficult to get a steady opening. There are various transaction varieties in the securities market. As ordinary people, we have to find one to two industries we are good at. Investors like online series can seek the next Ciwen Media Co., Ltd. (002343.SZ). Those live new steel plants can pay attention to the number of trucks and may find the turning point in the industry first.
Even minor pieces can reverse the situation in the go. The leveraged-based bullish run was the focus in the first half of last year, but it plunged after the crackdown of off-market margin financing. Although small-cap stocks with bad performance are last choices of many investors, some substantial shareholders with few debts will exit. The price of the shell will show out after the market value falls to certain extent.
The situation is generally determined by closing. However, careful calculation may bring more profits to prevent silly mistakes. Investment in securities also need patient and careful operation. Investors shall adjust the position and the mood.
TOP
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