[Today's Guide]
○MLR propels de-capacity of iron ＆ steel industry, vitalizing land benefits multiple parties
○Block chain technlogy shows advantage, refrigerant sees improved supply-demand pattern
○Fasten Company acquires commercial factoring company, Pci-suntek Technology to wholly control Huazhiyuan Information Engineering
○GCI Science ＆ Technology to acquire communication assets, net profit of Sed Industry expected to surge remarkably in Q1
[SSN Focus]
○MLR propels de-capacity of iron ＆ steel industry, vitalizing land benefits multiple parties
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The CCTV News on April 13 evening reported that the Ministry of Land and Resources (MLR) explicitly announced that it will not accept any land applications for new projects involving iron ＆ steel and coal industries. No construction land will be arranged for any newly-added capacity projects in industries seeing excessive capacity if they are not approved and recorded as required by national regulations. It is also reported that the MLR also has launched several new regulations which support the exit, acquisition and reorganization of iron ＆ steel and coal industries by vitalizing land resources, improving management system for mining rights and etc. Any moves involving changing land use can process land use procedure through agreement-based assignment after being approved.
Comment: The MLR will effectively facilitate the de-capacity in iron ＆ steel and coal industries by strictly controlling newly-added land use and supporting disposal of stocking lands. Perfect supporting facilities have been constructed around the old factories of many iron ＆ steel enterprises. Capitals gained from idle land after capacity exits will turn out to be a win-win situation for both iron ＆ steel enterprises and the state. At present, Internet finance industrial park, creative plaza and etc. have been built in the old industrial area of Shougang Group. Xining Special Steel Co., Ltd. (600117.SH) achieves more diversified operation through acquisition of real estate business. Qinghai province has proposed to relocate the front-end processes of the puddling, steelmaking and coking coal of Xining Special Steel to Geermu area in an orderly manner.
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[SSN Selection]
○The executive meeting of the State Council held on April 13 required establishing a tracking system from production to injection of vaccines; the National Health and Family Planning Commission had decided to let provincial-level disease control and prevention centers to conduct centralized purchasing of class II vaccines.
○The net capital inflow of the northbound trading under the Shanghai-Hong Kong Stock Connect program reached 3.154 billion yuan on April 13, setting a new high of single-day net inflow since middle February.
○China's central bank pumped 285.5 billion yuan into the financial system in open market operations via medium-term lending facility (MLF) on April 13. The liquidity in the inter-bank market was eased again in the afternoon.
○The National Development and Reform Commission (NDRC) proposes to implement major projects related to "Internet plus" in 2016 with projects involving the Internet of Things, cloud computing, 4G and etc. prioritized.
○The price of lanthanum oxide 3N in Baotou City, Inner Mongolia Autonomous Region is raised by 20-30 percent on April 13. Its price might further increase in the future along with the national policy on storing rare earth lanthanum.
[Industry Information]
○Block chain technlogy shows advantage, financial payment application sees sound prospect
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Foreign media reports that Adena Friedman, president of NASDAQ Inc., recently indicates that block chain technology will make trade settlement faster and more efficient. NASDAQ will provide such technical support to exchanges and clearing houses in over 100 areas across the globe. The company is discussing the block chain technology and its potential application with customers. While in China, various mainstream institutions have intensively released reports on block chain technology. They believe that the block chain technology is of great significance to information security and digital currency.
Comment: Block chain is a special data structure formed in a chronological order, which cannot be tampered and forged with cryptology guarantee. It has a wide application prospect in financial payment. Currently, international giants, such as Microsoft and Goldman Sachs, are vigorously developing block chain. China's central bank said in January that it would launch digital currency as soon as possible. The block chain technology is an important supporting technology for it. As to listed companies, Guangzhou Kingteller Technology Co., Ltd. (002177.SZ) has organized teams to conduct researches in this area; Shenzhen Xinguodu Technology Co., Ltd. (300130.SZ) will closely follow the trend of digital currency.
○Refrigerant price continues surging, supply-demand pattern improved
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SSN learnt that sue to the short supply, the price of the refrigerant R134a continued to surge on April 12. The increase is 500 to 1,000 yuan/ton with a maximum of 5 percent. The price has increased by over 10 percent since the beginning of the year. As some manufacturers refuse to accept new orders, the supply shortage may last till May. As for the refrigerant R22, the quoted price in the market continued to surge with slight short supply. Manufacturers expect the price will continue to surge and the dominant quoted price has reached 9,000 to 9,200 yuan/ton.
Comment: Relevant manufacturers indicate that as a result of the relatively low pressure on inventory and the booming demand in the downstream, the price may continue to surge in the following period. Besides, according to the Montreal Protocol on Substances that Depletethe Ozone Layer, the quota for the refrigerant R22 of China will reduce gradually. Driven by the supply-side reform, the supply-demand pattern in the fluorine chemical industry is expected to continue improving. As to listed companies, Shanghai 3F New Materials Company Limited (600636.SH) and Zhejiang Juhua Co., Ltd. (600160.SH), leading companies in domestic fluorine chemical industry, have complete industrial chain.
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[Announcement Interpretation]
○Fasten Company acquires commercial factoring company with RMB1.2 bln
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Jiangsu Fasten Company Limited (000890.SZ) proposes to acquire 100 percent equities of Shanghai Moses Factoring Co., Ltd. held by Fasten Group and etc. with 1.2 billion yuan. Moses Factoring mainly provides enterprises out of fund with capitals needed by daily operation through factoring of receivables, thus it gains interest income, factorage and etc. The counterparty promises that the net profit of Moses Factoring reaches 110 million yuan, 120 million yuan, 160 million yuan and 185 million yuan, respectively, from 2015 to 2018.
○Pci-suntek Technology to wholly control Huazhiyuan Information Engineering
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Pci-suntek Technology Co., Ltd. (600728.SH) plans to wholly control Guangdong Huazhiyuan Information Engineering Co., Ltd. by acquiring its remaining 49 percent equity worth 220 million yuan through private placement and paying in cash. In addition, the company intends to raise supporting funds of 218 million yuan through private placement. The company will issue the above-mentioned shares at 21.13 yuan per share. Huazhiyuan Information Engineering is principally engaged in urban rail transit communication system and achieved net profits of 32.4 million yuan in last year. According to performance commitment, Huazhiyuan Information Engineering's net profits will reach 40 million yuan and 50 million yuan in 2016 and 2017 respectively.
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○GCI Science ＆ Technology to acquire communication assets at RMB1.9 bln under its actual controller
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GCI Science ＆ Technology Co., Ltd. (002544.SZ) plans to issue shares at a price of 30.27 yuan per share to buy 100 percent equity of Heibei Fareast Communication System Engineering Co., Ltd., 57.74 percent equity of ChinaComm Design ＆ Consulting Co., Ltd., 100 percent equity of ChinaComm Tianchang Engineering Construction Supervision Co. Ltd., 100 percent equity of CETC Satellite Navigation Operation ＆ Service Co., Ltd., 98 percent equity of Shanghai Synergy Technology Co., Ltd. and 70 percent equity of CETC ASEAN Satellite Navigation Operation ＆ Service Co., Ltd., which are held by The 54th Research Institute of China Electronics Technology Group Corporation (CETC54). The assets are expected to be valued at 1.9 billion. Meanwhile, GCI Science ＆ Technology proposes to raise supporting funds by issuing shares at 30.27 yuan at least per share through private placement. These assets to be acquired are all owned by GCI Science ＆ Technology's actual controller CETC.
The total net profits of Fareast Communication System Engineering, ChinaComm Design ＆ Consulting and Synergy Technology are promised to be 111 million yuan, 143 million yuan and 178 million yuan during 2016 and 2018. After the acquisition, GCI Science ＆ Technology will add the businesses covering communication solutions and communication equipment manufacturing, communication project supervision, electric power automation and satellite navigation operation and service.
○Actual controller of Jangho Group to increase shareholding again
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Liu Zaiwang, actual controller of Jangho Group Co., Ltd. (601886.SH), plans to increase his shareholding in the company by buying stocks at a price of no more than 18 yuan per share in the following six months, with the total amount ranging from 10 million yuan to 20 million yuan. The latest stocks price of the company stays at 13.32 yuan per share.
Comment: Jangho Group recently acquired excellent domestic and foreign medical health enterprises successively, forming the strategic pattern with two principal businesses related to construction and medical industries. Liu previously performed well in shareholding increase and sized good timing for the shareholding increase.
○Kaichuang Marine International to acquire Spanish canned fish company
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Shanghai Kaichuang Offshore Fishing Co., Ltd., the wholly-owned subsidiary of Shanghai Kaichuang Marine International Co., Ltd. (600097.SH), plans to purchase 100 percent equity of Spanish company HIJOS DE CARLOS ALBO SL at 61 million euros. ALBO is a Spanish company leading in medium and high-end brands of canned fish products and tuna fast foods. It ranks top three in Spain in terms of popularity and market share.
○Jingxi Culture ＆ Tourism to invest and join in making reality show
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Beijing Jingxi Culture ＆ Tourism Co., Ltd. (000802.SZ) plans to partner with Nanjing Avenue Xingzhi Culture Media Co. Ltd. and Beijing Xingbaoyuan Movie ＆ TV lnvestment Co., Ltd. to invest 45 million yuan in the TV column Go Fighting Season II. It is reported that this column is a reality show participated by such actors as Huang Bo, Sun Honglei, Huang Lei and Luo Zhixiang and is expected to be on show on April 17.
[Financial Reports Express]
○Net profit of Sed Industry expected to surge remarkably in Q1
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Net profit of Shenzhen Sed Industry Co., Ltd. (000032.SZ) is expected rise by 2,290-4,019 percent in the first quarter due to the consolidated financial statements with Shenzhen SED Wireless Communication Technology Co., Ltd., Shenzhen Shencai Logistics Co., Ltd. and China Elec-Trans International Service Ltd. Net profit of Infore Environment Technology Group Co., Ltd. (000967.SZ) is expected surge by 489-538 percent in the first quarter due to the consolidated financial statements with Universtar Science ＆ Technology (Shenzhen) Co., Ltd. The expected net profit growth of Shenzhen Haoningda Meters Co., Ltd. is adjusted to be 1,648-1,674 percent from the previous 512 -687 percent mainly as Union Financial Information Company and Shenzhen Union Financial Micro Loan Co., Ltd. consolidated financial statements.
Tibet Mineral Development Co., Ltd. (000762.SZ) turns losses into profits in the first quarter resulting from the surging sales of lithium salt products. Net profit of COFCO Property (Group) Co., Ltd. (000031.SZ) is predicted to increase by 150-200 percent in the first quarter due to significant growth in carry-over revenues from commercial housing sales.
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○Hongda Xingye proposes high share conversion and dividend
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Controlling shareholder of Hongda Xingye Co., Ltd. (002002.SZ) proposes a 25-for-10 conversion of capital surplus into shares combined with 2 yuan dividend for every 10 shares according to the annual report. Hangzhou Zhongtai Cryogenic Technology Corporation (300435.SZ) sees a profit growth of 16 percent in 2015 and proposes a 20-for-10 conversion of capital surplus into shares combined with 2 yuan dividend for every 10 shares. The company plans to establish a commercial factoring company by investing more than 100 million yuan. Net profit of Sichuan Sunny Seal Co., Ltd. (300470.SZ) declines by 8 percent in 2015 and the company proposes a 10-for-10 conversion of capital surplus into shares combined with 3 yuan dividend for every 10 shares.
[Trading Alarms]
○Newamstar Packaging Machinery to launch IPO on April 14
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Newamstar Packaging Machinery Co., Ltd. (300509.SZ) will launch IPO at 13.22 yuan per share with an upper limit of 20,000 shares per account. The P/E ratio is 23 times. Investors who succeed in subscribing the stocks should pay on April 18.
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