[Today's Guide]
○ State Council General Office to promote Internet plus circulation and strengthen infrastructure construction
○ Signing of Paris Agreement to held, carbon trade market to open
○ Yongtai Tech. to buy two drug firms for RMB700 mln, Rising-Trend Investment again bought Xintai Electric to 5pct limit
○ Fengyuan Pharm. to control Pushi Pharm., Agro-Pastoral Group sees H1 performance surge
[SSN Focus]
○ State Council General Office to promote Internet plus circulation and strengthen infrastructure construction
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The General Office of the State Council released the opinions on the implementation of the "Internet plus circulation" action plan, proposing increasing policy supports in the construction of logistics bases and cold chains; increasing the efforts in improving the IT Application in circulation infrastructure and promoting the construction of intelligent logistics system with the Internet of Things and other new technologies; and facilitating the coordinated development of e-commerce and the logistics and express industries.
Comment: The "Internet plus circulation" infrastructure in China is less developed. The total social logistics fees reached 10 trillion yuan last year, accounting for 16 percent of the GDP, far above the global average. The "Internet plus" in intelligent sorting and automatic cubic warehousing management enjoys huge potential. Express giants, including STO Express and YTO Express conducted backdoor listing recently. With the solving of capital problems, the industry will see more investments.
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[SSN Selection]
○ The People's Bank of China, the China Securities Regulatory Commission, the China Banking Regulatory Commission and the China Insurance Regulatory Commission jointly released a document to support the de-capacity in the steel and coal industries and encourage expanding the exports of steel and coals.
○ The Shanghai Futures Exchange issued the circular on risks controlling under the current market conditions on April 21. The Zhengzhou Commodity Exchange issued risk warnings, indicating risks in the cotton market.
○ The prices of refined oil products will see the next price adjustment window on April 26. Institutes estimate that it may see the first hike in three months.
○ The spokesperson of the China Academy of Space Technology (CAST) indicated that the global networking of the Beidoiu navigation satellites will complete in 2020. It will provide basic services to countries participating in the Belt and Road initiatives.
○ The U.S. dollar index dropped immediately after the European Central Bank announced that it would maintain the monetary policies unchanged. As of the press time, the prices of silver, zinc and aluminum futures hit new high in the year.
[Industry Information]
○ Signing of Paris Agreement to held, carbon trade market to open
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The signing of the Paris Agreement will take place at UN Headquarters in New York on April 22. According to the official website of the UN, over 150 countries have sent representatives to attend the signing ceremony and some even indicated that they will submit the approval documents at the same time. At least 55 countries, representing at least 55 per cent of global greenhouse gas emissions, are needed to ratify the agreement before it can take legal effect.
Comment: The international community is optimistic that the agreement will take effect. Based on the goal, the global carbon emission will be controlled within 40 billion tons in 2030 and will achieve zero emission in 2080. Once the agreement takes effect, the carbon trade market will see further growth. The World Bank estimates that the global carbon trading turnover will reach 3.5 trillion U.S. dollars in 2020. Among listed companies, Zhejiang Juhua Co., Ltd. (600160.SH) is the first fluorine chemical enterprise carrying out the trading of carbon emission permit in China. CPI Yuanda Environmental-Protection (Group) Co., Ltd. (600292.SH) develops the trading of carbon emission futures through holding the shares of CPI Xianrong Futures Co., Ltd.
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○ Steel price keeps surging, steel tube industry to raise price
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Driven by the economic recovery in China and the supply-side reform, the prices of iron ores and steel materials have been surging recently. The prices of hot rolling, deformed steel bar and iron ores futures have surged over 50 percent from the lowest level this year.
Comment: Driven by the surging prices of raw materials, the steel tube manufacturers in the downstream will raise prices and the value of inventories will improve. In addition, with the progress of major oil and gas projects, tube materials and equipment enterprises will see more demands in the market. In terms of listed companies, Jiangsu Yulong Steel Pipe Co., Ltd. (601028.SH) is principally engaged in longitudinal submerged arc welding pipes. Zhejiang Kingland Pipeline and Technologies Co., Ltd. (002443.SZ) is engaged in the production of galvanized steel pipes and spiral welded pipes.
[Announcement Interpretation]
○ Yongtai Tech. to buy two drug firms for RMB700 mln
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Zhejiang Yongtai Technology Co., Ltd. (002326.SZ) plans to acquire 100 equities of Zhejiang Chiral Medicine Chemicals Co., Ltd. by issuing shares through private placement and in cash. It will also acquire 90 percent equities of Foshan Soin Chiral Pharmaceutical Co., Ltd. in cash. The underlying assets are valued at a total of 700 million yuan. The company also plans to raise 700 billion yuan supporting fund by issuing shares through private placement. The issuing price of the first private placement and the floor price are both at 19.57 yuan per share.
Chiral Medicine Chemicals ranks top in China in terms of its production of special bulk pharmaceutical chemicals methyldopa and gabapentin. Soin Chiral Pharmaceutical's products include medicines for alimentary system, antibiotics, cardiovascular medicines and children' drugs. Last year, Chiral Medicine Chemicals earned a net profit of 36.18 million yuan. Soin Chiral Pharmaceutical turned losses into profit and earned a net profit of 21.45 million. The stock prices of Yongtai Technology closed at 15.84 yuan per share before suspending trading, over 20 percent higher than the private placement price.
○ Rising-Trend Investment again bought Xintai Electric to 5pct limit
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Dandong Xintai Electric Co., Ltd. (300372.SZ) announces that Guangzhou Rising-Trend Investment Co., Ltd. increased shareholding in the company by 8,564,700 shares from March 30 to April 20 at an average price of 14.02 yuan per share. As of April 20, Rising-Trend Investment holds a total of 10 percent shares in the company, reaching the 5 percent limit twice and becoming the second largest shareholder of the company. Rising-Trend Investment said that it increased shareholding in the company because it is optimistic about the future market and bullish about the company's prospect.
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○ Fengyuan Pharm. to control Pushi Pharm.
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Anhui Fengyuan Pharmaceutical Co., Ltd. (000153.SZ) proposes to acquire 85 equities of Chengdu Pushi Pharmaceutical Co., Ltd. for 246 million yuan by issuing 25.74 million shares at 9.56 yuan per share through private placement. Meanwhile, it plans to raise 240 million yuan supporting fund by issuing shares at a price no less than 8.61 yuan per share through private placement. The proceeds will be used to develop Fengyuan drug stores, supplement working capital for Pushi Pharmaceutical, repay loans and supplement working capital for the listed company.
○ China Eastern Airlines to introduce Ctrip.com as strategic investor
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China Eastern Air Holding Company, the controlling shareholder of China Eastern Airlines Corporation Limited (600115.SH; 00670.HK), and Ctrip.com International Ltd. (CTRP.NASDAQ) signed a strategic cooperation framework agreement under which the two sides will carry out full cooperation in business, equity and capital market. Ctrip.com promises to subscribe 3 billion yuan shares issued by China Eastern Airlines through private placement and becomes its strategic investor. China Eastern Airlines releases its private placement plan last June, saying that it would raise 15 billion yuan by issuing 2,329 million shares at no less than 6.44 yuan per share through private placement to purchase 28 planes and repay loans.
○ Dongbao Pharm joins hands with Tencent to build chronic disease management platform
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Tonghua Dongbao Pharmaceutical Co., Ltd. (600867.SH) and Tencent signed a cooperation agreement under the Internet plus strategy. The two sides will fully explore into new medical service models and build and popularize "Internet plus" chronic disease management platform. Dongbao Pharmaceutical is a Chinese diabetes drug manufacturer that has the most gross-root diabetes patient clients. Through cooperation with the Internet giant Tencent, it hopes to provide comprehensive solutions for more diabetes patient in remote.
[Financial Reports Express]
○ Agro-Pastoral Group sees H1 performance surge
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Chuying Agro-Pastoral Group Co., Ltd. (002477.SZ) reported a growth of 222 percent in its annual report and forecasts a growth of 8,612 to 8,661 percent for the first half year mainly due to the picking-up hot prices. Shenzhen Mason Technologies Co., Ltd. (002654.SZ) reported a growth of 279 percent in its annual report and forecasts a growth of 170 to 220 percent for the first half year mainly due to integration of the financial statement of Beijing Yiwan Wireless Information Technology Co., Ltd. and Beijing Dingsheng Media Co., Ltd. Global Top E-Commerce Co., Ltd. (002640.SZ) reported a growth of 215 percent in its annual report and forecasts a growth of 100 to 150 percent for the first half year mainly due to integration of the financial statement of Shenzhen Qianhai Patozon Network Technology Co., Ltd. Shenzhen Selen Science ＆ Technology Co., Ltd. (002341.SZ) reported a growth of 112 percent in its annual report and forecasts a growth of 80 to 130 percent for the first half year mainly because its electronic functional material project was put into operation and earned profits.
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[Trading Alarms]
○ Xuerong Biotech. to debut IPO on April 22
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Shanghai Xuerong Biotechnology Co., Ltd. (300511.SZ) will offer shares at 16.82 yuan per share with an upper limit of 15,000 shares for each applicant. The company's PE ratio is 23 times. The company is mainly engaged in fresh edible fungus.
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