[Today's Guide]
○ New financial policy supports old-age service, resulting high growth expectations
○ Ecommerce trading turnover of Alibaba Group hits 3 trillion, starting feast of the industry
○ Xishui Strong Year to buy stake in Tianan Property Insurance, Baoding Technology to raise funds through private placement
○ J＆R Fire Protection to buy lithium battery firm, Photovoltaic Tech. and and others propose high share conversion and dividends
[SSN Focus]
○ New financial policy supports old-age service, resulting high growth expectations
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The central bank, China Banking Regulatory Commission (CBRC), China Securities Regulatory Commission (CSRC), China Insurance Regulatory Commission (CIRC) and the Ministry of Civil Affairs on March 21 jointly issued Instructions on Support old-age Service Industry for Accelerated Development by Finance. Various financial sectors will provide supports to old-age service, including assisting qualified enterprises in the industry to raise fund through listing, and encouraging qualified listed companies in the industry to conduct M＆A and reorganization.
Comment: driven by accelerated aging trend and the implementation of two-child policy, China's household maintenance pressure gradually increased, and demands for specialized old-age service become stronger. Haitong Securities estimated that China's institutional old-age service market is expected to maintain high-speed growth of 10 to 15 percent per year. In A shares, Zhejiang Double Arrow Rubber Co., Ltd. (002381.SZ) recently announced to set up joint venture with Shanghai Hongri Home Enterprise Management Limited, a well-known chain old people's home in Shanghai; Hunan Development Group Co., ltd. (000722.SZ) indicated last November that the project planning of its subsidiary engaged in the old-age service had advanced in an orderly way; Beijing Homyear Capital Holdings Co., Ltd. (600240.SH) plans to contribute about 4 billion yuan for the construction of healthcare financial platform.
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[SSN Selection]
○ Premier Li Keqiang on March 21 met with German President Joachim Gauck, expressing the intention to promote strategic connection of "Made in China 2025" and "Industry 4.0" with Germany.
○ As at the end of the trading session on March 21, various RQFII China A share ETF on the Stock Exchange of Hong Kong Limited maintains premium trading, which shows that foreign capital continues to flow in the A share market through Northbound trading.
○ The minister of the National Energy Administration indicated that during the 13th "Five-Year" plan period, China's photovoltaic power generation will increase 15 to 20 billion Kilowatts each year, continue to lead the world in growth.
○ The Municipal government of Shanghai on March 21 announced to reduce employees' social security rates by 2.5 percentage points. It is estimated that this move will ease the burden of enterprises by 13.5 billion yuan.
○ Zhuhai Boyuan Investment Co., Ltd. become the first company to be delisted due to illegal disclosure of important information. The company will enter delisting preparatory period from March 29.
[Industry Information]
○ Ecommerce trading turnover of Alibaba Group hits 3 trillion, starting feast of the industry
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Alibaba Group on March 21 announced that its ecommerce trading turnover in the past fiscal year beat 3 trillion yuan. It indicated that Alibaba is expected to surpass Walmart to become the biggest retailing platform in the world. In the next step, Alibaba aims to become the first platform in human history to realize 6 trillion yuan trading turnover by 2020, said Zhang Yong, CEO of the Alibaba Group.
Comment: 3 trillion yuan equals to 1/10 of total retailing sales of consumer goods nationwide, or the GDP of a medium or large province in China. As the ecommerce platforms represented by Alibaba grow stronger, related enterprises in the upper stream or downstream of the industry chain are also expected to benefit from the industry boom. Shanghai DragonNet Technology Co., Ltd. (300245.SZ) indicated in the interactive platform that the company had provided IT support and maintenance service for Alibaba; Beijing Shiji Information Technology Co., Ltd. (002153.SZ) brings in Taobao as strategic investor, and the two parties plan to expand hospitality and food＆ beverage O2O markets. Zhejiang IDC Fluid Control Co., Ltd. (002468.SZ) intends to transform into the express delivery industry, and is likely to benefit from the trading turnover growth of ecommerce.
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○ China Radio ＆ TV Cloud Computing Conference to hold, highlighting "integration of three networks"
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The 2nd China Radio ＆ TV Cloud Computing Conference will be held on March 22 with the theme of "integrating media cloud to promote industrial upgrading". It is reported that the conference will interpret the contents of the "radio ＆ TV cloud" in policies, technical supports, market prospects, operation and management and will jointly make plans on the development of the radio ＆ TV cloud computing. Besides, China Radio and TV Network Co., Ltd. has submitted its application for the license for the basic operation of the Internet to the Ministry of Industry and Information Technology in early March.
Comment: based on the plan on the integration of the telecommunication, radio and TV and the Internet network issued by the General Office of the State Council last year, the two-way access to the radio and TV and telecommunication businesses will be expanded to the whole country. The acceleration in the construction of the radio ＆ TV cloud computing businesses will facilitate the integration of the three networks and promote information consumption. Among listed companies, Shaanxi Broadcast ＆ TV Network Intermediary (Group) Co., Ltd. (600831.SH) and Beijing Gehua CATV Network Co., Ltd. (600037.SH) as well as other cable network operators are actively developing Internet-based value-added businesses.
[Announcement Interpretation]
○ Xishui Strong Year to buy stake in Tianan Property Insurance
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Inner Mongolia Xishui Strong Year Co., Ltd.(600291.SH) plans to set up three limited partnerships through its wholly-owned subsidiary. It will subscribe shares issued by Tianan Property Insurance Co., Ltd. through private placement for a total of 6,897 million yuan. After the subscription, the company will hold 35.88 percent stake in Tianan Property Insurance directly and 14.99 percent stake in the latter through its three limited partnerships. Its total holdings in Tianan Property Insurance still remain unchanged from before the private placement at 50.87 percent and have not been diluted. The private placement will benefit Tianan Property Insurance for its long-term development.
○ Baoding Technology to raise RMB 600mln from insiders to expand new material
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Baoding Technology Co., Ltd. (002552.SZ) proposes to raise 600 million yuan by issuing shares at 12.75 yuan per share to three investors through private placement. The fund will be used to build an annual catalyst production project of 5,000 tons in Shanghai Fuyu (Zhangjiagang) New Material Technology Co., Ltd. and supplement its working capital.
The subscribers include Cinda-Baoding Growth No.1 assets management plan which will subscribe 9,921,600 shares, Haitong-Baoding Growth No. 2 assets management plan which will subscribe 15,686,300 shares and Qian Yuying who will subscribe 21,451,000 shares. Qian yuying is the wife of the company's controlling shareholder and actual controller Zhu Baosong and mother of Zhu Lixia. The consignor of the Cinda-Baoding Growth No.1 assets management plan is the first phase of the company's employee shareholding plan. The consignor of the Haitong-Baoding Growth No. 2 assets management plan is the former shareholder or his spouse of Fuyu (Zhangjiagang) New Material Technology, a wholly-owned subsidiary of Baoding Technology.
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○ J＆R Fire Protection to buy Optimum Nano Battery for RMB 5.2bln
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Shaanxi J＆R Fire Protection Co., Ltd. (300116.SZ) proposes to acquire 100 equities in Shenzhen Optimum Nano Battery Co., Ltd. for 5.2 billion yuan among which 1.2 billion yuan will be paid in cash and the reminder will be paid by issuing shares at 8.63 yuan per share at 4.63 per share through private placement. It also proposes to raise 2.5 billion yuan supporting funds at 9.90 yuan per share through private placement. The counterpart promised that Optimum Nano Battery will see its net profit after deducting extraordinary gains or losses no less than 403 million yuan, 909 million yuan and 1,518 million yuan from 2016 to 2018.
Comment: Optimum Nano Battery is one of the earliest power lithium battery manufacturers that developed the lithium iron phosphate power battery, automobile starting power and energy storage solutions and one of the earliest firms that began mass-producing power lithium batteries. After the deal, J＆R Fire Protection will develop the strategy of "fire safety plus new energy".
○ Xintai Electric bought by Rising-Trend Investment to 5 pct limit
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Dandong Xintai Electric Co., Ltd. (300372.SZ) announces that Guanzhou Rising-Trend Investment Co., Ltd. has increased a total of 8.59 million shareholdings at an average price of 13.28 yuan per share from March 1 to 18, accounting for 5 percent of the company's total share capital. Rising-Trend Investment indicated that it increased shareholding in the company because it is optimistic about its outlook and is likely to continue to increase shareholding in the following 12 months. Rising-Trend Investment bought 5 percent limit shares in Jiangsu Tongda Power Technology Co., Ltd. (002576.SZ) not long before.
○ Zhangjiajie Tourism to raise RMB 1.2bln yuan through private placement to expand cultural tourism
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Zhangjiajie Tourism Group Co., Ltd. (000430.SZ) proposes to raise 1.2 billion yuan by issuing 115 million shares at prices no more than 10.39 yuan per share through private placement. Its controlling shareholder Changde Economic Construction Investment Group Co., Ltd. Plans to subscribe no less than 100 million yuan. The fund will be invested in Dayong Ancient Town (Nanmenkou special street) project. It will build Nanmenkou districts into a tourism and leisure area that integrates with eating, accommodating, tourism and reaction by constructing engines.
[Financial Reports Express]
○ Photovoltaic Technology and and others propose high share conversion and dividends
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EGing Photovoltaic Technology Co., Ltd. (600537.SH) reports 95 percent growth in net profit in its annual report and proposes a 10-for-10 conversion of capital surplus into shares combined with 0.2 yuan dividend for every 10 shares. Shanghai M＆g Stationery Inc. (603899.SH) reports 24 percent growth in net profit in its annual report and proposes a 10-for-10 conversion of capital surplus into shares combined with 5 yuan dividends for every 10 shares. Beijing Supermap Software Co., Ltd. (300036.SZ) reports 28 percent growth in net profit in its annual report and proposes a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares. Saimo Electric Co., Ltd. (300466.SZ) reports 8 percent decline in its annual report and proposes a 20-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares. Zhejiang Zanyu Technology Co., Ltd. (002637.SZ) reports 75 percent decline in its annual report and proposes a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares. Sichuan Yimikang Environmental Tech.Co., Ltd. (300249.SZ) reports 31 percent growth in net profit in its annual report. Its board of directors passed the dividend plan for a 15-for-10 conversion of capital surplus into shares combined with 0.3 yuan dividend for every 10 shares.
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○ Capchem Technology and others forecast growth in Q1
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Shenzhen Capchem Technology Co., Ltd. (300037.SZ) forecasts a growth of 320 percent to 340 percent in the first quarter mainly due to its integration of its subsidiary Sanming Hexafluo Chemicals Co. Ltd. and the short supply of lithium battery products. Jiangsu Jintongling Machinery Technology Co., Ltd. (300091.SZ) forecasts a growth of 101 percent to 120 percent in the first quarter mainly due to an increase in product sales. Csg Smart Science ＆ Technology Co., Ltd. (300222.SZ) forecasts a growth of 185 percent to 205 percent in the first quarter mainly due to an increase in gross profits.
[Trading Alarms]
○ Jingjia Macro Electronics to debut IPO on March 22
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Changsha Jingjia Macro Electronics Co., Ltd. (300474.SZ) will offer shares at 13.64 yuan per share with an upper limit of 13,000 shares for each applicant. The company's PE ratio is 21 times. Successful applicants should pay subscriptions on March 24.
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