[Today's Guide]
○Regulations on social security fund released, important move in facilitating investment of pension fund in A-share market
○Cainiao Network Technology initiates Cainiao Alliance, efforts to made in intelligent logistics
○Qianjiang Motorcycle to transfer controlling stake, Subsidiary of China Resources Wandong Medical Equipment attracts investment of AliHealth
○The Great Wall of Culture Group and other firms propose high share conversion and dividend, net profits of BYD and others expected to surge
[SSN Focus]
○Regulations on social security fund released, important move in facilitating investment of pension fund in stock market
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The State Council on March 28 printed and distributed the Regulations on National Social Security Fund which will take effect from May 1. It is specified that the national social security fund should conduct reasonable allocation of its assets among the varieties, including fixed income investment, stocks and unlisted equities, approved by the State Council within approved proportion. The National Council for Social Security Fund is allowed to manage and operate social security fund after being entrusted by provincial governments. Responsible person of the Legislative Affairs Office of the State Council indicates that the social security fund covers basic pension fund, basic medical insurance, work-related injury insurance, unemployment insurance and maternity insurance.
Comment: It means that an important step is taken in facilitating the investment of pension fund in the A-share market. According to management guidelines released last year, the maximum proportion of investments in stocks and equities was set at 30 percent of total pension funds. 100 billion yuan will be invested in the stock market, according to institutional estimation. Statistics by SSN show that social security fund prefers industries including electric equipment, leisure service and chemicals. Released annual reports show that the shares of Hunan Tianrun Enterprises Holding Co., Ltd. (002113.SZ), Dalian Sunasia Tourism Holding Co., Ltd. (600593.SH) and Zhejiang Garden Bio-chemical High-tech Co., Ltd. (300401.SZ) are newly bought by social security fund and the shareholdings in these companies exceed 3 percent respectively. The shareholding of social security fund in Beijing Jingxi Culture ＆ Tourism Co., Ltd. (000802.SZ), Wiscom System Co., Ltd. (002090.SZ), Xiang Xue Pharmaceutical Co., Ltd. (300147.SZ) and Jiangsu Dagang Co., Ltd. (002077.SZ) increases by over two percentage points respectively.
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[SSN Selection]
○The planned total investment of projects newly started in China in the first two months sees a year-on-year growth of 41.1 percent, surging by 35.6 percentage points compared with that of the whole year in 2015.
○The National Development and Reform Commission (NDRC) released documents on March 28 to ensure that power generation through renewable energies including wind power, solar power and biomass energy enjoy the highest scheduling priority.
○The National Development and Reform Commission (NDRC) announced that the temporary storage policies for corn will be adjusted as market-oriented purchase plus subsidies. The dominant contract of corn futures closed down 3 percent on March 28.
○A research team under Chinese Academy of Sciences has developed a new-type aluminum-graphite binary Ion-battery whose power density is greatly improved compared with that of traditional Ion-batteries.
[Industry Information]
○Cainiao Network Technology initiates Cainiao Alliance, efforts to made in intelligent logistics
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Cainiao Network Technology Co., Ltd., Alibaba's logistics arm, announced on March 28 that it will establish the Cainiao Alliance with its logistics partners. To encourage customers to adopt services provided by Cainiao Alliance and promote consistent quality logistics service, 1 billion yuan will be invested in as initial capital. Dong Wenhong, CEO of Cainiao Network Technology, claims that big data and socialized cooperation will play a key role in the future development of logistics.
Comment: Institutional research reports point out that the bottlenecks and challenges confronted by e-commerce now actually can be ascribed to the problem of low intellectualization level of the whole logistics system. As estimated by the information center under China Logistics Technology Association, the market size of domestic logistics system might approach 100 billion yuan by 2017. Qingdao KENGIC Logistics Technology Co., Ltd., a subsidiary under Mesnac Co., Ltd. (002073.SZ), provides one-stop solution for goods and logistics; Suzhou DEMAC Electric Co., Ltd., to be acquired by Shandong Weida Machinery Co., Ltd. (002026.SZ), is engaged in business including logistics automation and equipment; Zhejiang Noblelift Equipment Joint Stock Co., Ltd. (603611.SH) is actively transforming towards the integration of intelligent logistics and storage system.
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○Association calls for 15 pct cut in tungsten concentrate output, product prices to hike
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The Ministry of Land and Resources disclosed on March 28 on its website that the China Tungsten Industry Association recently held a meeting and discussed the current supply and demand in the tungsten market. The association calls for controlling the capacity and reducing the output. The output of tungsten concentrate in 2016 will reduce 15 percent year on year. The output of tungsten concentrate and the output of raw tungsten of key enterprises will reduce by 10,000 tons. Meanwhile, it will increase the commercial reserves of tungsten concentrate, APT and other tungsten products.
Comment: As a result, the supply of spot products in the domestic tungsten concentrate market saw slow growth. Driven by the stable demand and the relatively low market supplies, the prices of tungsten products may increase. The Ganzhou Tungsten Industry Association has raised the estimated average prices of tungsten products for many times. In terms of listed companies, Chongyi Zhangyuan Tungsten Co., Ltd. (002378.SZ), China Molybdenum Co., Ltd. (03993.HK; 603993.SH) and Xiamen Tungsten Co., Ltd. (600549.SH) own businesses in the exploration of mines, smelting and deep processing of tungsten products.
○2022 Hangzhou Asian Games Organizing Committee to be established, local listed companies to benefit
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According to the official website of Chinese government on March 28, the State Council approves the establishment of the 2022 19th Asian Games Organizing Committee and the composition. The chairmen of the commitment will be Liu Peng, Minister of the General Administration of Sport, and Li Qiang, governor of the people's government of Zhejiang Province. The Sports Bureau of Hangzhou City discloses that the 2022 Asian Games Organizing Committee will be established this month. The preparatory work for the Hangzhou Asian Games will speed up.
Comment: Institutions points out that the total investment in the Guangzhou Asian Games in 2010 was over 120 billion yuan. In comparison, Hangzhou is expected to invest more, which will boost local infrastructure. The local tourism and services in Hangzhou will be improved when it holds the Asian Games. In terms of listed companies, Hangxiao Steel Structure Co., Ltd. (600477.SH) is mainly engaged in steel structure products. Hangzhou Jiebai Group Co., Limited. (600814.SH) is a leader in local department industry and is actively developing sports industry.
[Announcement Interpretation]
○Qianjiang Motorcycle to transfer controlling stake to boost transformation
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Wenling Qianjiang Investment Management Co., Ltd., controlling shareholder of Zhejiang Qianjiang Motorcycle Co., Ltd. (000913.SZ), intends to transfer its 135 million shares in the company through agreement, accounting for 29.77 percent of the company's total share capital. After the deal is done, the shareholding proportion of Qianjiang Investment Management will drop to 11.68 percent, resulting in a change in the company's controlling shareholder and actual controller. Qianjiang Motorcycle attracts strategic investors with the proportion of equity transfer just a little less than the 30 percent threshold for tender offer, aiming to boost the company's optimized integration and strategic transformation and upgrading.
○Subsidiary of China Resources Wandong Medical Equipment attracts investment of AliHealth
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Wanliyun Medical Information Technology (Beijing) Co., Ltd., a subsidiary of China Resources Wandong Medical Equipment Co., Ltd. (600055.SH), intends to introduce AliHealth as investor, which will invest 225 million yuan to gain 25 percent equity of Wanliyun Medical Information Technology, remaining the rest 75 percent equity held by China Resources Wandong Medical Equipment. With this cooperation, Wanliyun Medical Information Technology will give full play to AliHealth's advantages in Internet medical treatment and its 60 years of experience in China's medical image industry to explore the third-party image center, undertake 2B and 2C Remote medical imaging diagnosis and relevant services and establish platform for medical image.
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○Huasi makes investment in CP through private placement
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Huasi Holding Company Limited (002494.SZ) intends to issue 41.87 million shares at a price of no less than 14.33 yuan per share through private placement specific to its actual controller He Guoying and other shareholders to raise 600 million yuan, which will be invested in cleaner production (CP) platform project, CP warehouse base project and be used to repay bank loans.
○Xinbao Electrical Appliances to invest in intelligent household appliances through private placement
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Guangdong Xinbao Electrical Appliances Holdings Co., Ltd. (002705.SZ) plans to raise 1 billion yuan by issuing 60 million shares at 15.28 yuan per share. The fundraising will be invested in automation upgrading project, intelligent household appliances project, electrical appliance for health and beauty and high-end electrical appliance for home kitchen. The construction period of intelligent household appliances project is 36 months and its annual net profit is expected to be 53 million yuan when the project achieves the designed capacity.
[Financial Reports Express]
○The Great Wall of Culture Group and other firms propose high share conversion and dividend
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Net profit of The Great Wall of Culture Group Holding Co., Ltd. Guangdong (300089.SZ) soars by 47 percent in 2015 and the company proposes a 15-for-10 conversion of capital surplus into shares combined with 0.2 yuan dividend for every 10 shares according to its annual report. Board of directors of Harbin Viti Electronic Co., Ltd. (603023.SH) has approved the proposal of a 20-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 Shenzhen Prolto Supply Chain Management Co., Ltd. (002769.SZ) edges up by 59 percent in 2015 and the company proposes a 15-for-10 conversion of capital surplus into shares combined with 2.1 yuan dividend for every 10 shares according to its annual report. Net profit of Jiangsu King's Luck Brewery Joint-Stock Co., Ltd. (603369.SH) is up by 6 percent in 2015 and the company proposes a 5-for-10 conversion of capital surplus into shares combined with 4.1 yuan dividend for every 10 shares according to its annual report.
Net profit of Suzhou Sushi Testing Instrument Co., Ltd. (300416.SZ) goes up by 22 percent in 2015 and the company proposes a 10-for-10 conversion of capital surplus into shares combined with 2 yuan dividend for every 10 shares according to its annual report. Net profit of Gansu Jingyuan Coal Industry And Electricity Power Co., Ltd. (000552.SZ) falls by 45 percent in 2015 and the company proposes a 10-for-10 conversion of capital surplus into shares combined with 0.4 yuan dividend for every 10 shares according to its annual report. Net profit of Zhengzhou Gl Tech Co., Ltd. (300480.SZ) drops by 29 percent in 2015 and the company proposes a 10-for-10 conversion of capital surplus into shares according to its annual report.
○Net profits of BYD and others expected to surge
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Due to the surging sales of new energy vehicles, net profit of BYD Company Limited (002594.SZ) soars by 551 percent in 2015 and is expected to increase by 495 percent-644 percent in the first quarter. Net profit of Jiangxi Special Electric Motor Co., Ltd. (002176.SZ) hikes by 2 percent in 2015 and is expected to jump by 90 percent-120 percent in the first quarter mainly thanks to the consolidated financial statements with two companies it acquired and the increasing earnings from lithium carbonate business.
Net profit of Shanghai Yongli Belting Co., Ltd. (300230.SZ) moves up by 66 percent in 2015 and is expected to jump by 120 percent-150 percent in the first quarter mainly owing to the consolidated financial statements with Qingdao Injelic Mould ＆ Plastics Technology Group Co., Ltd. Net profit of Chenguang Biotech Group Co., Ltd. (300138.SZ) hikes by 208 percent in 2015 and is expected to rally by 207 percent-235 percent in the first quarter mainly contributed to the recovery growth and low base number of last year. Net profit of Shenzhen Sunwin Intelligent Co., Ltd. (300044.SZ) increases by 48 percent in 2015 and is expected to edge up by 60 percent-90 percent in the first quarter mainly thanks to recognition of project revenue.
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