[Today's Guide]
○ CPC Central Committee issued guideline on revitalization of northeast China, to push for SOEs reform via various ways
○ Qianjiang Motorcycle to controlled by Geely, stock transfer to become frenzy
○ State Council issued key tasks for medical reform, rare earth prices continue to pick up
○ eGOVA to to develop smart city, YLZ Information Technology to develop Internet-based medical treatment
[SSN Focus]
○ CPC Central Committee issued guideline on revitalization of northeast China, to push for SOEs reform via various ways
------
The Central Committee of the Communist Party of China (CPC) and the State Council on April released the guideline on fully revitalize northeast China and other old industrial bases. It guideline proposes that by 2020, northeast China should make major breakthroughs in the reform in important fields and key links. Specific reform plans include supporting central state-owned enterprises headquartered in northeast China to launch trial reform; allowing local government to sell parts of their equities in SOEs; stably promoting reform in state-owned forest and forest farm; further promoting reform and development of the agricultural reclamation system. The founding ceremony of national-level Changchun new district was held on the same day, which witnessed a batch of major projects signed.
Comments: A great number of signs show that the revitalization of northeast China is becoming another focus of China's regional plan. Among listed companies in northeast China, the actual controller of Changchun Yidong Clutch Co., Ltd. (600148.SH) and Daqing Huake Co., Ltd. (000985.SZ) respectively is central SOE China North Industries Group Corporation and China National Petroleum Corporation. Their latest market capitalization is less than 3.5 billion yuan. The substantial shareholder of Jilin Forest Industry Co., Ltd. (600189.SH) is among China's four largest forest industry groups.
TOP
○ Qianjiang Motorcycle to controlled by Geely, stock transfer to become frenzy
------
Zhejiang Qianjiang Motorcycle Co., Ltd. (000913.SZ) announces the progress of its public bidding for transferring its 29.77 percent equities, saying that Zhejiang Geely Holding Group has submitted letter of intent and relevant documents for the transfer and paid cash deposit. After the transfer of equities, the proportion of equities held by its former substantial shareholder Wenling Qiangjiang Investment Operation Co., Ltd. will decrease to 11.68 percent, resulting in change of the company's actual controller. Geely owns brands such as Geely Automobile, Volvo Automobile and London taxi. Its current assets are valued more than 100 billion yuan.
Comments: Over 50 companies have conducted equity transfer this year. Some saw their value increase by buying shells or introducing strategic investors. Statistics show that the controlling stake of Zhejiang Dongliang New Material Co., Ltd. (002082.SZ), Suzhou Tianma Specialty Chemicals Co., Ltd. (002453.SZ) and Guangdong Macro Co., Ltd. (000533.SZ) were transferred to investment companies, and their latest stock prices are lower than the transfer prices.
[SSN Selection]
○ Chinese Premier Li Keqiang on April 26 inspected Yimin Food market in Chengdu, Sichuan Province to learn the progress of the trial domestic trade circulation reform and the situation of agricultural products supply and prices.
○ The National Development and Reform Commission decided to lift gasoline and diesel prices by respectively165 yuan and 160 yuan per ton for the first year in the year.
○ Shanghai Futures Exchange decided to shorten the hours of the night session of rebar and other commodities. Dalian Commodity Exchange has lifted commission fees for coke and coking coal for a third time in the recent week.
○ 24 ministries and commissions jointly issued the action plan on promoting consumption-driven transformation and upgrading, deploying actions to expand consumption in ten fields, including general aviation and e-sports game.
○ The Ministry of Agriculture recently issued the guideline on promoting the health development of the veterinary drug industry, striving to improve the industry's capacity utilization by over 10 percentage points by 2020.
TOP
[Industry Information]
○ Key tasks for medical reform issued, public hospital reform to accelerate
------
The General Office of the State Council on April 26 issued the key tasks for deepening medial and health system reform for 2016. It proposes to fully deepening public hospital reform, accelerating the construction of hierarchical treatment system and improve medial insurance system for all people. The public hospital reform is taken as the first priority. The document proposes to expand the trial comprehensive public hospital reform to 200 cities, strictly control unreasonable growth in medial costs and strive to improve medial services.
Comment: According to industry insiders' analysis, there is a clear direction for public hospitals returning to basic medical services. Listed companies that have participated in the public hospital reform, such as Xi'an International Medical Investment Company Limited (000516.SZ) and Jinling Pharmaceutical Company Limited (000919.SZ) are expected to copy mature experience and win great opportunities for development. In addition, the market room for private capital in the field of high-end and some specialized medical service and old-caring services, will emerge. Among listed companies, Jiangsu Aoyang Technology Corporation Limited. (002172.SZ) is transforming to rehabilitation therapy. Aier Eye Hospital Group Co., Ltd. (300015.SZ) is one of the largest ophthalmology hospitals in China.
○ Rare earth prices continue to pick up, industry operation expected to improve
------
SSN learns that benefiting from the continuing purchase for storage, rare earth prices continue to pick up. On April 26, didymium oxide was quoted as high as 265,000 yuan per ton and didymium as high as 338,000 yuan per ton. In addition, the price of dysprosium oxide rose to 1.23 million to 1.25 million yuan per ton. The price of terbium oxide rose to 23.5 million yuan per ton. As the commercial storage organized spontaneously rare earth enterprises started, the prices of middle and heavy rare earths increase remarkably.
Comment: With the advance of the following-up of national storage, and driven by continuous crackdown on rare earth smuggling and illegal mining, the rare earth industry expects to see its operation to improve. Among listed companies, Rising Nonferrous Metals Share Co., Ltd. (600259.SH) is a leader in middle and heavy rare earths. It produced a total of 3,822 tons of rare earth oxide in 2015. Shenghe Resources Holding Co., Ltd. (600392.SH) is engaged in rare earth metallurgy and separation. It plans to acquire 100 equities of Ganzhou Chenguang Rare Earths New Material Co., Ltd. Its plan has obtained approval from the anti-monopoly department of the Ministry of Commerce.
○ Power batteries energy intensity to double, graphene to play key role
------
Minister of Science and Technology Wan Gang indicated on April 26 that it will double the unit energy intensity of power batteries and reduce the manufacturing cost by 50 percent in the following five years. The unit battery energy will reach over 300 watt-hours while the cost will reduce to below 1 yuan. Wan also indicated that the adjustment of the energy structure in China provides energy guarantees to the development of new energy vehicles. The introduction of relevant regulations proposed requirements on energy consumption, which also facilitated the transformation of the industry towards the orientation of new energy.
Comment: The graphene is expected to play a key role in improving the energy intensity of batteries. It was reported that Samsung improved the energy intensity to be over 200 percent with graphene technologies. In addition, the super-capacitor developed by the Qingdao Institute of Bioenergy and Bioprocess Technology, Chinese Academy of Sciences, also adopted graphene technologies. Among listed companies, FSPG Hi-Tech Co., Ltd. (000973.SZ) announced in March that it would cooperate with Shanghai Institute of Ceramics, Chinese Academy of Sciences in the research and development of graphene power batteries. Guoxuan High-Tech Co., Ltd. (002074.SZ) indicated on its interactive platform that it has been following the cutting-edge technologies in the development of graphene and other power batteries.
TOP
[Announcement Interpretation]
○ eGOVA to raise RMB1.2 bln to develop smart city
------
Beijing eGOVA Co., Ltd. (300075.SZ) proposes to raise 1.2 billion yuan by issuing 80 million shares through private placement. 900 million yuan of the proceeds will be invested in the new-generation "network plus" comprehensive information services and operation programs for smart cities. The remaining proceeds will supplement the working capital. The pricing benchmark day for the issuance is the first day of the issuing period.
○ YLZ Information Technology to raise RMB4.5 bln to develop Internet-based medical treatment, chairman to become actual controller
------
YLZ Information Technology Co., Ltd. (300096.SZ) plans to raise 4.5 billion yuan by issuing shares at 14.4 yuan per share to Xiamen Linzhen, Huaxia Life Insurance, Everbright Securities-YLZ phase I and other participants through private placement. The proceeds will be invested in the medical treatment and health services operation platform, the livelihood information services operation platform, the big data center, industrial finance and other projects as well as supplementing the working capital. Zhang Xi, a shareholder of Xiamen Linzhen, is the chairman of the listed company while the Everbright Securities-YLZ phase I is its employees shareholding plan. Zhang will directly and indirectly hold 31.72 percent shares of the listed company and will become the actual controller of the listed company after the transaction.
○ Anhui Water Resources to acquire Anhui Construction Engineering
------
Anhui Water Resources Development Co., Ltd. (600502.SH) intends to acquire Anhui Construction Engineering Group with 3.01 billion yuan by issuing shares at 11.18 yuan per share to its shareholder. The 16.07 percent shares of the listed company held by Anhui Construction Engineering will be cancelled. As a result, Anhui Construction Engineering will achieve the overall listing of its businesses and the construction and the property development and other businesses will be injected. At the same time, the company proposes to raise 1,788 million yuan.
○ Zhiyun Automation to raise RMB1 bkn to develop intelligent manufacturing
------
Dalian Zhiyun Automation Co., Ltd. (300097.SZ) proposes to raise 1 billion yuan by issuing 40 million shares through private placement. The proceeds will be invested in the construction of the 3C intelligent equipment manufacturing capacity, the lithium battery intelligent equipment manufacturing capacity and the construction of the southern intelligent manufacturing research and development center as well as supplementing the working capital.
○ GEM signs strategic cooperation agreement on new energy supply energy
------
GEM Co., Ltd. (002340.SZ), Dongfeng Xiangyang Touring Car Co., Ltd. and Samsung Huanxin (Xi'an) Power Batteries Co., Ltd. signed a strategic cooperation agreement on the green supply chain of new energy vehicles. It is expected that the first cooperation will be 2,000 pure electric logistics vehicles and special vehicles in 2016 and the cooperation will be expanded to buses shuttling between urban and rural areas. They will actively pilot the use of 10,000 new energy vehicles in logistics, environmental hygiene and other special occasions as well as urban-rural transportation.
Samsung Huanxin is a Chinese-Korean joint venture established by Samsung SDI, the biggest lithium battery and power battery manufacturing company in the world, Anhui Huanxin Group and Xi'an High-tech Group. It has cooperated with Dongfeng Automobile Co., Ltd. (600006.SH) in pure electric logistics vehicles.
[Financial Reports Express]
○ Good-ark Electronics expects growth in H1 report
------
Suzhou Good-ark Electronics Co., Ltd. (002079.SZ) recorded a growth of 333 percent in the firstly quarterly report and expects an increase of 430 to 480 in the first half thanks to the surging overall performance and the growth of the fundraising projects. Cangzhou Mingzhu Plastic Co., Ltd. (002108.SZ) recorded a growth of 231 percent in the firstly quarterly report and expects an increase of 140 to 180 in the first half thanks to the improved profits from the BOPA film products and the lithium battery diaphragm products. Rongxin Power Electronic Co., Ltd. (002123.SZ) recorded a growth of 587 percent in the firstly quarterly report and expects an increase of 426 to 464 in the first half thanks to the consolidation of the financial statements of Montnets.
AVIC Electromechanical Systems Co., Ltd. (002013.SZ) recorded a growth of 58 percent in the firstly quarterly report and expects an increase of 335 to 363 in the first half thanks to the batter delivery of military products than the corresponding period of last year. Guomai Technologies, Inc. (002093.SZ) recorded a growth of 82 percent in the firstly quarterly report and expects an increase of 100 to 150 in the first half thanks to the upgrading of the Fuzhou Institute of Technology. Meisheng Cultural ＆ Creative Corp., Ltd. (002699.SZ) recorded a growth of 63 percent in the firstly quarterly report and expects an increase of 70 to 100 in the first half thanks to the continuous improvement of operation results.
[Trading Alarms]
○ Shijia Science ＆ Technology to issues shares on April 27
------
Suzhou Shijia Science ＆ Technology Inc. (002796.SZ) issues shares at 12.95 yuan per share with a P/E ratio of 22 times and an upper subscription of 20,000 shares for each account. The company is principally engaged in precision casing systems.
TOP
○ CPC Central Committee issued guideline on revitalization of northeast China, to push for SOEs reform via various ways
○ Qianjiang Motorcycle to controlled by Geely, stock transfer to become frenzy
○ State Council issued key tasks for medical reform, rare earth prices continue to pick up
○ eGOVA to to develop smart city, YLZ Information Technology to develop Internet-based medical treatment
[SSN Focus]
○ CPC Central Committee issued guideline on revitalization of northeast China, to push for SOEs reform via various ways
------
The Central Committee of the Communist Party of China (CPC) and the State Council on April released the guideline on fully revitalize northeast China and other old industrial bases. It guideline proposes that by 2020, northeast China should make major breakthroughs in the reform in important fields and key links. Specific reform plans include supporting central state-owned enterprises headquartered in northeast China to launch trial reform; allowing local government to sell parts of their equities in SOEs; stably promoting reform in state-owned forest and forest farm; further promoting reform and development of the agricultural reclamation system. The founding ceremony of national-level Changchun new district was held on the same day, which witnessed a batch of major projects signed.
Comments: A great number of signs show that the revitalization of northeast China is becoming another focus of China's regional plan. Among listed companies in northeast China, the actual controller of Changchun Yidong Clutch Co., Ltd. (600148.SH) and Daqing Huake Co., Ltd. (000985.SZ) respectively is central SOE China North Industries Group Corporation and China National Petroleum Corporation. Their latest market capitalization is less than 3.5 billion yuan. The substantial shareholder of Jilin Forest Industry Co., Ltd. (600189.SH) is among China's four largest forest industry groups.
TOP
○ Qianjiang Motorcycle to controlled by Geely, stock transfer to become frenzy
------
Zhejiang Qianjiang Motorcycle Co., Ltd. (000913.SZ) announces the progress of its public bidding for transferring its 29.77 percent equities, saying that Zhejiang Geely Holding Group has submitted letter of intent and relevant documents for the transfer and paid cash deposit. After the transfer of equities, the proportion of equities held by its former substantial shareholder Wenling Qiangjiang Investment Operation Co., Ltd. will decrease to 11.68 percent, resulting in change of the company's actual controller. Geely owns brands such as Geely Automobile, Volvo Automobile and London taxi. Its current assets are valued more than 100 billion yuan.
Comments: Over 50 companies have conducted equity transfer this year. Some saw their value increase by buying shells or introducing strategic investors. Statistics show that the controlling stake of Zhejiang Dongliang New Material Co., Ltd. (002082.SZ), Suzhou Tianma Specialty Chemicals Co., Ltd. (002453.SZ) and Guangdong Macro Co., Ltd. (000533.SZ) were transferred to investment companies, and their latest stock prices are lower than the transfer prices.
[SSN Selection]
○ Chinese Premier Li Keqiang on April 26 inspected Yimin Food market in Chengdu, Sichuan Province to learn the progress of the trial domestic trade circulation reform and the situation of agricultural products supply and prices.
○ The National Development and Reform Commission decided to lift gasoline and diesel prices by respectively165 yuan and 160 yuan per ton for the first year in the year.
○ Shanghai Futures Exchange decided to shorten the hours of the night session of rebar and other commodities. Dalian Commodity Exchange has lifted commission fees for coke and coking coal for a third time in the recent week.
○ 24 ministries and commissions jointly issued the action plan on promoting consumption-driven transformation and upgrading, deploying actions to expand consumption in ten fields, including general aviation and e-sports game.
○ The Ministry of Agriculture recently issued the guideline on promoting the health development of the veterinary drug industry, striving to improve the industry's capacity utilization by over 10 percentage points by 2020.
TOP
[Industry Information]
○ Key tasks for medical reform issued, public hospital reform to accelerate
------
The General Office of the State Council on April 26 issued the key tasks for deepening medial and health system reform for 2016. It proposes to fully deepening public hospital reform, accelerating the construction of hierarchical treatment system and improve medial insurance system for all people. The public hospital reform is taken as the first priority. The document proposes to expand the trial comprehensive public hospital reform to 200 cities, strictly control unreasonable growth in medial costs and strive to improve medial services.
Comment: According to industry insiders' analysis, there is a clear direction for public hospitals returning to basic medical services. Listed companies that have participated in the public hospital reform, such as Xi'an International Medical Investment Company Limited (000516.SZ) and Jinling Pharmaceutical Company Limited (000919.SZ) are expected to copy mature experience and win great opportunities for development. In addition, the market room for private capital in the field of high-end and some specialized medical service and old-caring services, will emerge. Among listed companies, Jiangsu Aoyang Technology Corporation Limited. (002172.SZ) is transforming to rehabilitation therapy. Aier Eye Hospital Group Co., Ltd. (300015.SZ) is one of the largest ophthalmology hospitals in China.
○ Rare earth prices continue to pick up, industry operation expected to improve
------
SSN learns that benefiting from the continuing purchase for storage, rare earth prices continue to pick up. On April 26, didymium oxide was quoted as high as 265,000 yuan per ton and didymium as high as 338,000 yuan per ton. In addition, the price of dysprosium oxide rose to 1.23 million to 1.25 million yuan per ton. The price of terbium oxide rose to 23.5 million yuan per ton. As the commercial storage organized spontaneously rare earth enterprises started, the prices of middle and heavy rare earths increase remarkably.
Comment: With the advance of the following-up of national storage, and driven by continuous crackdown on rare earth smuggling and illegal mining, the rare earth industry expects to see its operation to improve. Among listed companies, Rising Nonferrous Metals Share Co., Ltd. (600259.SH) is a leader in middle and heavy rare earths. It produced a total of 3,822 tons of rare earth oxide in 2015. Shenghe Resources Holding Co., Ltd. (600392.SH) is engaged in rare earth metallurgy and separation. It plans to acquire 100 equities of Ganzhou Chenguang Rare Earths New Material Co., Ltd. Its plan has obtained approval from the anti-monopoly department of the Ministry of Commerce.
○ Power batteries energy intensity to double, graphene to play key role
------
Minister of Science and Technology Wan Gang indicated on April 26 that it will double the unit energy intensity of power batteries and reduce the manufacturing cost by 50 percent in the following five years. The unit battery energy will reach over 300 watt-hours while the cost will reduce to below 1 yuan. Wan also indicated that the adjustment of the energy structure in China provides energy guarantees to the development of new energy vehicles. The introduction of relevant regulations proposed requirements on energy consumption, which also facilitated the transformation of the industry towards the orientation of new energy.
Comment: The graphene is expected to play a key role in improving the energy intensity of batteries. It was reported that Samsung improved the energy intensity to be over 200 percent with graphene technologies. In addition, the super-capacitor developed by the Qingdao Institute of Bioenergy and Bioprocess Technology, Chinese Academy of Sciences, also adopted graphene technologies. Among listed companies, FSPG Hi-Tech Co., Ltd. (000973.SZ) announced in March that it would cooperate with Shanghai Institute of Ceramics, Chinese Academy of Sciences in the research and development of graphene power batteries. Guoxuan High-Tech Co., Ltd. (002074.SZ) indicated on its interactive platform that it has been following the cutting-edge technologies in the development of graphene and other power batteries.
TOP
[Announcement Interpretation]
○ eGOVA to raise RMB1.2 bln to develop smart city
------
Beijing eGOVA Co., Ltd. (300075.SZ) proposes to raise 1.2 billion yuan by issuing 80 million shares through private placement. 900 million yuan of the proceeds will be invested in the new-generation "network plus" comprehensive information services and operation programs for smart cities. The remaining proceeds will supplement the working capital. The pricing benchmark day for the issuance is the first day of the issuing period.
○ YLZ Information Technology to raise RMB4.5 bln to develop Internet-based medical treatment, chairman to become actual controller
------
YLZ Information Technology Co., Ltd. (300096.SZ) plans to raise 4.5 billion yuan by issuing shares at 14.4 yuan per share to Xiamen Linzhen, Huaxia Life Insurance, Everbright Securities-YLZ phase I and other participants through private placement. The proceeds will be invested in the medical treatment and health services operation platform, the livelihood information services operation platform, the big data center, industrial finance and other projects as well as supplementing the working capital. Zhang Xi, a shareholder of Xiamen Linzhen, is the chairman of the listed company while the Everbright Securities-YLZ phase I is its employees shareholding plan. Zhang will directly and indirectly hold 31.72 percent shares of the listed company and will become the actual controller of the listed company after the transaction.
○ Anhui Water Resources to acquire Anhui Construction Engineering
------
Anhui Water Resources Development Co., Ltd. (600502.SH) intends to acquire Anhui Construction Engineering Group with 3.01 billion yuan by issuing shares at 11.18 yuan per share to its shareholder. The 16.07 percent shares of the listed company held by Anhui Construction Engineering will be cancelled. As a result, Anhui Construction Engineering will achieve the overall listing of its businesses and the construction and the property development and other businesses will be injected. At the same time, the company proposes to raise 1,788 million yuan.
○ Zhiyun Automation to raise RMB1 bkn to develop intelligent manufacturing
------
Dalian Zhiyun Automation Co., Ltd. (300097.SZ) proposes to raise 1 billion yuan by issuing 40 million shares through private placement. The proceeds will be invested in the construction of the 3C intelligent equipment manufacturing capacity, the lithium battery intelligent equipment manufacturing capacity and the construction of the southern intelligent manufacturing research and development center as well as supplementing the working capital.
○ GEM signs strategic cooperation agreement on new energy supply energy
------
GEM Co., Ltd. (002340.SZ), Dongfeng Xiangyang Touring Car Co., Ltd. and Samsung Huanxin (Xi'an) Power Batteries Co., Ltd. signed a strategic cooperation agreement on the green supply chain of new energy vehicles. It is expected that the first cooperation will be 2,000 pure electric logistics vehicles and special vehicles in 2016 and the cooperation will be expanded to buses shuttling between urban and rural areas. They will actively pilot the use of 10,000 new energy vehicles in logistics, environmental hygiene and other special occasions as well as urban-rural transportation.
Samsung Huanxin is a Chinese-Korean joint venture established by Samsung SDI, the biggest lithium battery and power battery manufacturing company in the world, Anhui Huanxin Group and Xi'an High-tech Group. It has cooperated with Dongfeng Automobile Co., Ltd. (600006.SH) in pure electric logistics vehicles.
[Financial Reports Express]
○ Good-ark Electronics expects growth in H1 report
------
Suzhou Good-ark Electronics Co., Ltd. (002079.SZ) recorded a growth of 333 percent in the firstly quarterly report and expects an increase of 430 to 480 in the first half thanks to the surging overall performance and the growth of the fundraising projects. Cangzhou Mingzhu Plastic Co., Ltd. (002108.SZ) recorded a growth of 231 percent in the firstly quarterly report and expects an increase of 140 to 180 in the first half thanks to the improved profits from the BOPA film products and the lithium battery diaphragm products. Rongxin Power Electronic Co., Ltd. (002123.SZ) recorded a growth of 587 percent in the firstly quarterly report and expects an increase of 426 to 464 in the first half thanks to the consolidation of the financial statements of Montnets.
AVIC Electromechanical Systems Co., Ltd. (002013.SZ) recorded a growth of 58 percent in the firstly quarterly report and expects an increase of 335 to 363 in the first half thanks to the batter delivery of military products than the corresponding period of last year. Guomai Technologies, Inc. (002093.SZ) recorded a growth of 82 percent in the firstly quarterly report and expects an increase of 100 to 150 in the first half thanks to the upgrading of the Fuzhou Institute of Technology. Meisheng Cultural ＆ Creative Corp., Ltd. (002699.SZ) recorded a growth of 63 percent in the firstly quarterly report and expects an increase of 70 to 100 in the first half thanks to the continuous improvement of operation results.
[Trading Alarms]
○ Shijia Science ＆ Technology to issues shares on April 27
------
Suzhou Shijia Science ＆ Technology Inc. (002796.SZ) issues shares at 12.95 yuan per share with a P/E ratio of 22 times and an upper subscription of 20,000 shares for each account. The company is principally engaged in precision casing systems.
TOP
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