[Today's Guide]
○Shenzhen-Hong Kong Stock Connect program strives for launch this year, stocks with information disclosed likely to attract attention of foreign investment
○Market pays attention to shell resources again, searching for potential targets
○Increasing sales of new energy vehicles to speed up construction of charging piles, industrial orders to implemented
○Controlling shareholder of Youngor Group launches shareholding increase plan, Power Construction Corporation and Road ＆ Bridge Engineering gain big orders
[SSN Focus]
○Shenzhen-Hong Kong Stock Connect program strives for launch this year, stocks with information disclosed likely to attract attention of foreign investment
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The Chinese Premier Li Keqiang met the journalists from home and abroad and answered their questions on the morning of March 16. He indicated that China's new driving forces are forming out of expectation. The practice proves that Shanghai-Hong Kong Stock Connect program benefits the inland China and Hong Kong, and both sides now are closely discussing to make every effort to launch the Shenzhen-Hong Kong Stock Connect program this year. On the same day, HK Financial Secretary John Tsang mentioned that HK has already prepared for Shenzhen-Hong Kong Stock Connect program since last year and will quickly carry out the jobs right after the decision of China's central government.
Comment: The investor structure of H shares is more international, preferring stocks with large market value and high dividend, whose information has already been disclosed, in the finance and consumption fields. The financial openness and integration of inland China and HK are likely to bring in investment opportunities through eliminating risk premium. Statistics shows that Zhejiang Supor Co., Ltd. (002032.SZ), Hangzhou Robam Appliances Co., Ltd. (002508.SZ), Henan Shuanghui Investment ＆ Development Co., Ltd. (000895.SZ) and Midea Group Co., Ltd. (000333.SZ) are held by various QFIIs, and their performances and dividends have been constantly favorable in recent years.
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[SSN Selection]
○The electricity consumption of the whole society increased by 4 percent year on year in February, showing that economic downtrend pressure has been eased to some extent, according to experts at the State Grid Energy Research Institute.
○The People's Bank of China, also known as China's central bank, cut the interest rates of each term of the MLF by 25 base points again on March 16, guiding the capital cost to decrease, reported by the Reuters.
○The State Administration of Science. Technology and Industry for National Defense recently issued the 2016 Special Action Plan for Military and Civil Integration, proposing to formulate and release the catalogue on "Military to Civil" and "Civil to Military".
○Beijing Meteorological Service expects that the region of Beijing, Tianjin and Hebei will suffer a heavy pollution with a longest duration since this year, which will possibly be Grade 5 from March 17 to 18.
○Foreign media reported that main oil producing countries including the member countries of OPEC will hold a meeting to discuss the issue of freezing the oil production. The growth rate of international oil price expanded in the trading hour.
[Data Speaks]
○Market pays attention to shell resources again, searching for potential targets
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Recently, the regulators determined that they will not focus all the strength on registration-based IPO system. Additionally, the drafted planning outline for the 13th Five-Year Plan deletes the content related to "building up strategic board for emerging sectors". All these make the market pay more attention to shell resources again. Based on opinions of various institutions, standards to select the shell companies include various aspects, such as small market value, less liabilities, distributed equity, meager profits or losses, and etc.
According to statistics by SSN, among companies meeting aforesaid standards, Wuhan Xianglong Power Industry Co., Ltd. (600769.SH), Henan Oriental Silver Star Investment Co., Ltd. (600753.SH) and etc. once failed to reorganize or expressed its intention towards transformation; Shandong Jiangquan Industry Co., Ltd. (600212.SH) has its controller newly changed recently and is still confronted with pressure on maintaining shell resource; the promise on "no reorganization" by Shanghai Zhongji Investment Holding Co., Ltd. (600634.SH) after failure in reorganization will soon expire. It is noteworthy that most of the shell companies are faced with unsatisfying business conditions. There are lots of uncertainties in backdoor listing and reorganization, so the difficulties and risks behind the investment should never be ignored.
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[Industry Information]
○Increasing sales of new energy vehicles to speed up construction of charging piles, industrial orders to implemented
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Miao Wei, minister of industry and information technology, recently indicated that the output and sales of new energy vehicles is likely to double in 2016 and it will focus on making breakthroughs in charging piles and other bottlenecks in the development of the industry. According to the guidance on the development of charging infrastructure for new energy vehicles released earlier, it will increase over 4.8 million distributed charging piles by 2020, which meet the charging demand of 5 million electro-mobiles.
Comment: Driven by policies and market demands, the construction of charging network will further speed up and will form various profit models. It is expected that the charging equipment market in China may reach 132 billion yuan by 2020. In terms of listed companies, Shenzhen Clou Electronics Co., Ltd. (002121.SZ) proposes to invest 120 million yuan in the establishment of a vehicle power network company with CDB Development Fund Co., Ltd. to develop electro-mobiles and charging network. Hangzhou Zhongheng Electric Co., Ltd. (002364.SZ) received multiple orders for charging equipment from State Grid Corporation of China.
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[Announcement Interpretation]
○Controlling shareholder of Youngor Group launches shareholding increase plan
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Controlling shareholder of Youngor Group Co., Ltd. (600177.SH) proposes to increase shareholding in the company with no less than 200 million yuan and no more than 600 million yuan in next three months if the company's stock price ranges from 12 yuan per share to 18 yuan per share. The second largest shareholder of North Navigation Control Technology Co., Ltd. (600435.SH) increased shareholding in the company by 6.05 million shares during March 14-16. Actual controller of Greattown Holdings Ltd. (600094.SH) increased shareholding in the company by 20.11 million shares during March 10-16. Actual controller and some senior management of Hubei Dinglong Chemical Co., Ltd. (300054.SZ) totally increased shareholding in the company by 1.61 million shares on March 16.
○Power Construction Corporation and Road ＆ Bridge Engineering gain big orders
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Power Construction Corporation of China, Ltd. (601669.SH) signed new contracts with total amount of about 62,963 million yuan during January-February, up by 149 percent year on year. Chengdu Road ＆ Bridge Engineering Co., Ltd. (002628.SZ) is the bid winner of JTL05 section from Ji'an to Tonghua of expressway project running from Ji'an to Shuangliao. The contract amount totals about 940 million yuan, accounting for 62 percent of the company's operating revenue in 2014.
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○Huakong Seg applies to remove *ST mark
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Shenzhen Huakong Seg Co., Ltd. (000068.SZ) turns losses into profits in 2015 annual report and submits application for cancelling delisting risk warnings to Shenzhen Stock Exchange on March 16.
○Allwin Telecommunication to acquire mobile game company with RMB1.86 bln
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Allwin Telecommunication Co., Ltd. (002231.SZ) proposes to acquire 100 percent equity of Shanghai Snowfish Tech. Co., Ltd. by issuing 79.49 million shares at 14.04 yuan per share and paying 744 million yuan in cash, which will totally cost 1.86 billion yuan. In addition, it plans to raise 914 million yuan by issuing shares at 15.64 yuan per share through private placement. Snowfish Tech. is principally engaged in the R＆D and operation of mobile games and operation of mobile game channel access platform. According to the counterparty's performance commitment, its net profits will be no less than 143 million yuan, 186 million yuan and 223 million yuan during 2016-2018 respectively.
[Financial Reports Express]
○Sinopec Shanghai Petrochemical turns losses into profits
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Thanks to the declining costs, Sinopec Shanghai Petrochemical Company Limited (600688.SH) turns losses into profits in 2015 with its net profits recording 3,246 million yuan. The basic earnings per share is 0.30 yuan. The company proposes a 0.3 yuan dividend for every 10 shares.
○Jiuzhou Pharmaceutical proposes high share conversion and dividend
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Controlling shareholder of Zhejiang Jiuzhou Pharmaceutical Co., Ltd. (603456.SH) proposes a 10-for-10 conversion of capital surplus into shares combined cash dividend for every 10 shares according to its annual report.
[Trading Alarms]
○Tongyu Communication to launch IPO on March 17
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Tongyu Communication Inc. (002792.SZ) will launch IPO at 22.94 yuan per share with an upper limit of 15,000 shares per account. The P/E ratio is 15 times. Investors who succeed in subscribing the stocks should pay on March 21.
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