[Today's Guide]
○LED companies announce performance growth in succession, endogenous and extensional growth help to enhance prosperity
○Zhoushan Prefecture likely to list in third batch of FTZs, Cainiao Network completes first round of financing
○Hongda Mining to expand to game industry, Gosun Holding to expand to data center
○Yuan Cheng Cable proposes high share conversion, net profits of Brother Enterprises Holding expected to soar
[SSN Focus]
○LED companies announce performance growth in succession, endogenous and extensional growth help to enhance prosperity
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Based on SSN statistics, 24 listed companies in the LED industry have disclosed their performance in last year up to now. Two thirds of them forecast a growth. Among the companies having forecasted performance in the first quarter this year, Guangzhou Hongli Opto-Electronic Co., Ltd. (300219.SZ) expects a growth of 110-140 percent, while Shenzhen Liantronics Co., Ltd. (300269.SZ) and Shenzhen Changfang Group Co., Ltd. (300301.SZ) expect a growth of 100 percent.
Comment: After experiencing the fierce competition of product homogeneity and price war, the LED industry has aroused a wave of merging since last year. The amount of money involved in the merging recorded 40.8 billion yuan in the first 11 months of last year, up by 580 percent compared to that of the whole 2014. The listed companies are the main force behind the merging. Considering the benefit brought by performance consolidation and the improving industrial concentration, industrial insiders are optimistic that further industrial merging at a scale of over 100 billion yuan might be implemented in next two years. In terms of downstream demands, the penetration rate of LED lighting is likely to exceed 80 percent three years later. The industrial prosperity will keep improving.
[TOP]
○Zhoushan Prefecture likely to list in third batch of FTZs
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SSN learnt that the scheme to build up a pilot Free Trade Zone (FTZ) in Zhoushan Prefecture is now under approval, and Zhoushan Prefecture is very likely to be listed in the third batch of FTZs. According to the scheme, a green petrochemical base of Zhoushan will be included into the FTZ, and this base possesses a planning area of about 41 square kilometers. It proposes to build up the Zhoushan FTZ into the largest oil storage and transportation base, international green petrochemical base, oil trading center and marine service base worldwide, and also as a tax-free fuel oil supply market in the Northeast Asia.
Comment: The pilots in the said FTZ will focus on liberalization of bulk commodity trade, facilitation of marine industrial investment and openness of marine businesses. As to listed companies, Zhejiang Golden Eagle Co., Ltd. (600232.SH) is a local enterprise in Zhoushan; Zhongchang Marine Company Limited (600242.SH) is a leading shipping magnate in Zhoushan; and Ningbo Port Company Limited (601018.SH) proposes to acquire 85 percent equities of Zhoushan Port Co., Ltd. held by its substantial shareholder to further integrate the resources of Zhoushan Port.
[SSN Selection]
○The General Office of the State Council issued the Implementation Scheme on the Outline of Action Plan for National Scientific Literacy (2016-2020), making arrangements in fields like the education of science and technology, professional training and etc.
○The National Development and Reform Commission on March 14 indicated that the pilot reform scope for the electricity transmission and distribution price will further expand this year, and 12 provincial power grids will be newly added.
○The offering price of battery-active high-end lithium carbonate soared to 5,000 yuan per ton again on March 11, and the growth rate accumulates 23 percent after the Spring Festival.
○The Civil Aviation Administration of China will simplify the submission requirements on applications for special and general aviation tasks from April 1 to push forward the general aviation development.
○The revenue from new individual insurance orders, which is a core indicator for the premium income of listed insurance companies, maintained high growth in February. China Life Insurance Company Limited (601628.SH) achieved a year-on-year growth of around 200 percent.
[Industry Information]
○Cainiao Network completes first round of financing, big data boosts development of logistics industry
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Cainiao Network, the logistics arm of Alibaba, announced on March 14 that it has completed its first round of external financing since it was established in 2013. Its new investors include Temasek Holdings and other famous institutions from home and abroad. It is introduced that Cainiao Network, together with other investors, will work together on promoting the establishment and application of big data logistics network, making more digitalized products and improving quality of logistics service.
Comment: Institutions believe that since Cainiao logistics adopts the strategy of integrated logistics platform, big data will be of great significance to intelligent logistics backbone network, while the construction of backbone network will also enhance the market potential of big data industry. As to listed companies, Insigma Technology Co., Ltd. (600797.SH) has developed partnership with Alibaba in Cainiao Network, Alicloud, big data and etc.; SaCa and UniEAP series of products under Neusoft Corporation (600718.SH) are strongly recommended by Alicloud.
[TOP]
[Announcement Interpretation]
○Hongda Mining to acquire UK game company Jagex Limited
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Shandong Hongda Mining Co., Ltd. (600532.SH) proposes to increase capital in Shanghai Hongtou Network Technology Co., Ltd. together with Shanghai Pintian Venture Capital Partnership, and to acquire 100 percent equities of Jagex Limited, a UK game company, via Hongtou Network Technology. The transaction will be done by paying no than 300 million U.S. dollars in cash. Jagex Limited is primarily engaged in the development and operation of electronic interactive entertainment software and its main product is RuneScape. The investment by Hongda Mining might bring the company an annual investment return of 50 million yuan.
○Gosun Holding joins hands with Huaxi Yunyou Cultural Industry to expand to data center
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Gosun Holding Co., Ltd. (000971.SZ) joins hands with Beijing Huaxi Yunyou Cultural Industry Co., Ltd. in operating big-scale data center community project. Huaxi Yunyou owns scarce land and energy resources in Beijing and the under-construction big center project is located at the center of the Beijing-Tianjin-Hebei area. Upon the completion of the cooperation project, the company might grow into an industrial leader in terms of service ability and indicators for energy conservation. The size of data center and cabinet managed and operated by Gosun Holding might grow rapidly, bringing positive influence to the company's performance.
[TOP]
○Tongda Power Technology bought by Rising-Trend Investment through secondary market acquisition to 5 pct limit
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Jiangsu Tongda Power Technology Co., Ltd. (002576.SZ) discloses that as of March 11, Guangzhou Rising-Trend Investment Co., Ltd., a private fund, totally holds 8.26 million shares of Tongda Power Technology, accounting for over 5 percent of the company's total share capital and reaching the 5 percent limit set for secondary market acquisition. Rising-Trend Investment indicates that it increases shareholding in the company because it is optimistic about the future trend of the A-share market and the development prospect of Tongda Power Technology.
○Xilong Scientific to involve in US gene sequencing company with USD22.56 mln
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Xi Long USA under Xilong Scientific Co., Ltd. (002584.SZ) proposes to acquire 15 percent equities of Fulgent Therapeutics LLC with its own 22,564,700 U.S. dollars. Fulgent, a gene detection service institution certified by the CLIA and CAP in the U.S., offers the most complete gene detection service to the whole world based on its gene big data base and advanced technical equipment. As of end 2015, Fulgent recorded a net profit of 4.21 million U.S. dollars. Xilong Scientific is a leading domestic company engaged in chemical reagent and also has made progress in in-vitro diagnostic reagent.
○Shanghai Shimao to control Qianhai Shimao Development
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Shanghai Shimao Co., Ltd. (600823.SH) plans to raise 6,671 million yuan from Shanghai Shimao Construction Co., Ltd. controlled by its actual controller and others by issuing 750 million shares through private placement. Shimao Construction intends to subscribe the stocks by its 48.57 percent equity in Qianhai Shimao Development (Shenzhen) Co., Ltd., amounting to 2,335 million yuan. 4,336 million yuan of cash to be raised will be used to acquire 2.43 percent equity of Qianhai Shimao Development and other projects. After the deal is done, Shanghai Shimao will hold 51 percent equity in Qianhai Shimao Development.
○Controlling shareholder of Yonghui Superstores introduces shareholding increase plan
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Controlling shareholder of Yonghui Superstores Co., Ltd. (601933.SH) will buy 200 million-600 million stocks of the company at a price of no more than 9 yuan per share in next six months. Latest price of the company's stock is 8.13 yuan per share. Substantial shareholder of Jiangsu Zhongnan Construction Group Co., Ltd. (000961.SZ) continues to increase shareholding in the company with 1.52 million shares on March 14.
[Financial Reports Express]
○Several companies propose high share conversion and dividend
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Net profit of Yuan Cheng Cable Co., Ltd. (002692.SZ) for 2015 rose by 32 percent and the company proposes a 12-for-10 conversion of capital surplus into shares combined with 1.5 yuan dividend for every 10 shares according to its annual report. Net profit of Y Zhejiang Dian Diagnostics Co., Ltd. (300244.SZ) for 2015 hiked by 40 percent and the company proposes a 8-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares according to its annual report. Its net profit is expected to increase by 30 percent-60 percent in the first quarter owing to the soaring principal business. Net profit of Zhejiang Jingxin Pharmaceutical Co., Ltd. (002020.SZ) for 2015 moved up by 55 percent and the company proposes a 10-for-10 conversion of capital surplus into shares combined with 1.5 yuan dividend for every 10 shares according to its annual report. Net profit of Chaozhou Three-Circle (Group) Co., Ltd. (300408.SZ) for 2015 edged up by 35 percent and the company proposes a 10-for-10 conversion of capital surplus into shares combined with 3.5 yuan dividend for every 10 shares according to its annual report.
○Net profits of several companies expected to soar
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Net profit of Brother Enterprises Holding Co., Ltd. (002562.SZ) for 2015 grew by 102 percent and is expected to increase by 150 percent-180 percent in the first quarter as prices of some vitamin products surge remarkably. Net profit of Zhejiang Narada Power Source Co., Ltd. (300068.SZ) for 2015 went up by 93 percent and is expected to rise by 100 percent-130 percent in the first quarter mainly contributed by consolidating statements with Anhui Narada Renewable Energy Technology Company. Net profit of Beijing Sinnet Technology Co., Ltd. (300383.SZ) for 2015 climbed by 19 percent and is expected to increase by 163 percent-185 percent in the first quarter thanks to consolidating statements with Beijing Zhongjin Yunwang Technology Co., Ltd. and Beijing Wushuang Technology Co., Ltd.
[TOP]
[Trading Trends]
○Yonyou Network Technology bought through 2 institutional seats
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The trading volume ranking list on March 14 shows that Yonyou Network Technology Co., Ltd. (600588.SH) was bought through two institutional seats with a total of 120 million yuan, accounting for 28.22 percent of its intraday turnover.
Comment: In the opinion of institutions, the company is determined to turn to enterprise Internet. Over the past year, various new businesses saw rapid development and trading volume of P2P and Chanpay surged significantly. Cooperativity between enterprise Internet and Internet financial business began to take effects. The company joins hands with Alibaba Group Holding Ltd. to reinforce the public cloud ecosystem and cooperates with Huawei Technologies Co., Ltd. to jointly develop low-cost private cloud service. Its leading position in the industry is acknowledged by the various parties.
[Trading Alarms]
○Minkave Technology to launch IPO on March 15
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Shenzhen Minkave Technology Co., Ltd. (300506.SZ) will launch IPO at 8.58 yuan per share with an upper limit of 12,000 shares per account. The P/E ratio is 23 times. Investors who succeed in subscribing the stocks should pay on March 17.
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