[Today's Guide]
○Executive meeting of State Council supports construction of water conservancy works, industry to see benefit
○Tesla leads popularization of electric vehicles, supply chain to embrace new opportunities
○Shares of Langsha bought by Tsinghua Unigroup through secondary market acquisition to 5 pct limit, Tus-sound Environmental Resources to launch private placement
○PV companies including Topray Solar expect growth, Movie ＆ TV companies to see more acquisition and reorganization
[SSN Focus]
○Executive meeting of State Council supports construction of water conservancy works, industry to see benefit
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The executive meeting of the State Council held on April 27 approved the draft regulations for irrigation and water conservancy, proposing specific rules for the planning, construction, operation and maintenance of water conservancy works, and the irrigation and drainage of farmland as well as encouraging participation of social force in relevant construction and operation.
Comment: China's per capita availability of water only takes up one fourth of the average level in the world and its agricultural water accounts for 60 percent of the total water consumption, indicating that the construction of water conservancy works is of great significance. The Ministry of Water Resources has proposed to invest at least 800 billion yuan in this area in 2016 with efficient water-saving irrigation and the construction of water conservancy works highlighted. As to listed companies, DAYU Water-saving Group Co., Ltd. (300021.SZ) expects a growth of 287 percent in terms of net profit in the first quarter thanks to the great national support to the water conservancy industry; Shimge Pump Industry Group Co., Ltd. (002532.SZ), the largest manufacturer of water pump for agricultural use, expects a growth of 10-40 percent in terms of net profit in the first half.
[TOP]
○Trial operation of Shanghai Disneyland to start soon, surrounding businesses to see improving value
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SSN learns that Shanghai Disneyland will start trial operation on May 7. At present, the tickets for trial operation have been provided to relevant units. In addition, the Disney resort station on the subway line 11 in Shanghai, nearby Disney towns and etc. are open to the public from April 26.
Comment: Seen from the development course of Disneyland at abroad, only 30 percent of Disneyland's income comes from tickets, while the rest 70 percent is contributed by secondary consumption within the resort. As Shanghai Disneyland starts trial operation, the value of surrounding businesses including retailing, catering and entertainment will be improved. As to listed companies, the headquarter of Shanghai Jielong Industry Group Corporation Limited (600836.SH) and its subordinate buildings are located around the Disneyland resort; Shanghai Jinjiang International Hotels Development Co., Ltd. (600754.SH) owns over 10 hotels nearby the resort.
[SSN Selection]
○Chinese President Xi Jinping recently inspected Anhui province where he was introduced to different innovative technologies including intelligent voice, intelligent robotics and new energy vehicles.
○A joint inter-ministerial meeting for cracking down illegal fundraising was held on April 27, proposing to carry out special actions against the risks of illegal fundraising across the country in the second half.
○The first spot and forward transaction product for carbon emission permit in China was launched on April 27, laying foundations for establishing and perfecting the national carbon market in 2017.
○Dalian Commodity Exchange doubled the service fees for the transaction of coking coal and coke for the fourth consecutive time and indicated that it is working on methods for differentiated charging of the service fees.
○Driven by the continuous decline of the inventory and output of crude oil in the U.S., the crude oil futures rose to above 45 U.S. dollars per barrel during trading hours, the first time in nearly five months, on the New York Mercantile Exchange (NYMEX).
[Industry Information]
○Tesla leads popularization of electric vehicles, supply chain to embrace new opportunities
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Foreign media reported that Tesla CEO Elon Musk recently indicated that the company will introduce an electric vehicle cheaper than Model 3 in the future. Tesla has introduced Model S, Model X and Model 3. The price of Model 3 starts at 35,000 U.S. dollars, lower than the price of the other two vehicles which are sold at 80,000 U.S. dollars. The orders for Model 3 have exceeded 400,000, showing that such low-priced model is favored by the market.
Comment: The electric vehicles of Tesla have played an important leading role in the promotion of new energy vehicles. Meanwhile, the increasing orders of the company also bring increasing demands for components from suppliers. As to listed companies, Shenzhen Tatfook Technology Co., Ltd. (300134.SZ), principally engaged in radio frequency products and structural component for intelligent terminals, claims that it has delivered some products to Tesla. Wuhu Token Sciences Co., Ltd. (300088.SZ) also has supplied its goods to Tesla.
[TOP]
○Enterprises rosy about commercial prospect of AI
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As reported by Xinhua News Agency, Fu Sheng, CEO of Cheetah Mobile, announced that the company will invest over 50 million U.S. dollars in the early stage to expand to the artificial intelligence (AI) area. Cheetah Mobile will start using its R＆D bases in Beijing and the Silicon Valley to initiate its development of robotics and AI technology. Cheetah Mobile will also release new video products in May. In addition, the intelligent concept store, jointly built by Baidu and KFC, recently steps into spotlight in Shanghai. Customers can order their meals through interaction with AI.
Comment: The commercial prospect of AI is attracting attentions from more enterprises. As estimated by institutions, the global AI market will reach a size of 119 billion yuan by 2020. As to listed companies, NetPosa Technologies, Ltd. (300367.SZ) has applied AI to its principal business security and protection; a company participated by Anhui Jiangnan Chemical Industry Co., Ltd. (002226.SZ) is engaged in businesses related to AI.
[Announcement Interpretation]
○Shares of Langsha bought by Tsinghua Unigroup through secondary market acquisition to 5 pct limit
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The first quarterly report of Sichuan Langsha Holding Ltd. (600137.SH) shows that Tsinghua Unigroup increased shareholding in Langsha by 3,925,000 shares during the first quarter, accounting for 4.04 percent of Langsha's total equity, making Tsinghua Unigroup the second largest shareholder. In addition, up to the end of the first quarter, Dacheng Innovative Growth Fund and 118 components of Social Security Fund have respectively bought nearly 680,000 and 500,000 shares of Langsha, making them the fifth and seventh shareholders. And Langsha announced a performance growth of 757 percent in its first quarterly report.
Comment: TongLing Zonfa Trinity Technology Co., Ltd. (600520.SH) announced on Jan. 29 that Tsinghua Unigroup bought its shares through the secondary market acquisition to 5.08 percent. Up to the end of March, Tsinghua Unigroup has held 7.76 percent of its total equity, making Tsinghua Unigroup the second largest shareholder too.
○Tus-sound Environmental Resources to raise RMB9.5 bln through private placement to expand environmental business
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Tus-sound Environmental Resources Co., Ltd. (000826.SZ) proposes to issue 343 million shares through private placement to specific investors to raise 9.5 billion yuan. The targeted investors include shareholder-related parties, like Tus-sound Investment and Tus-sound Green Resources, and participants in the first-phrase employee shareholding plan of Harvest Fund and Tus-sound Environmental Resources. The raised fund will be used to construct integrated environmental sanitation platform and service network, reconstruct and expand environmental sanitation equipment of Hubei Eguard, build up environmental technology research and development center, generate power through refuse incineration and treat the cooking rubbish. The fund will also be used to supplement liquidity and cash, and repay part of the company's interest-bearing debts.
Comment: With investment from companies under Tsinghua University, Tus-sound Environmental Resources gains rapid integration for its businesses. This round of private placement will further expand its business scope to speed up the creation of the said integrated service platform.
[TOP]
○Sun Paper Industry to build bio-refinery project with over USD1 bln
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Shan Dong Sun Paper Industry Joint Stock Co., Ltd. (002078.SZ) proposes to invest and build a bio-refinery project in Arkansas of the U.S. with a total capital of 1 to 1.3 billion U.S. dollars, whose annual production will be 0.7 million tons.
Comment: Bio-refinery products are crucial for the company to realize the "433" developing strategy. Currently, the company has formed a dissolving pulp production scale of 0.5 million tons in the bio-refinery field, making it the third largest dissolving pulp provider worldwide. The fluff pulp products manufactured by the said project with 0.7 million tons in production will drive the company into the industrial upstream of fast moving consumer goods, laying the foundation for the company to gain sustainable development in personal care supply field.
○Chairman of Sunlord Electronics to acquire 5.13 pct shareholdings from its controlling shareholder
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Jincang Investment Co., Ltd., the controlling shareholder of Shenzhen Sunlord Electronics Co., Ltd. (002138.SZ), and Sunlord Electronics's chairman Yuan Jinyu sign shareholding transfer agreement. The both parties determine that Jincang Investment will transfer 38 million shares of Sunlord Electronics to Yuan, accounting for 5.13 percent of Sunlord Electronics's total equity with 13.17 yuan per share. The transaction totals 500 million yuan. After the transfer finishes, Yuan will hold 11.65 percent of the company's shareholdings, and Jincang Investment will hold 14.67 percent, who is still the largest shareholder. Yuan indicated that this move aims to guarantee Sunlord Electronics's long-term and stable development to further optimize its equity structure. The latest stock price of the company is 14.81 yuan per share.
[Financial Reports Express]
○PV companies including Topray Solar expect growth
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Shenzhen Topray Solar Co., Ltd. (002218.SZ) announced a performance growth of 301 percent in its first quarterly report, and growth forecast of 363 to 513 percent in semi-annual report, mainly as domestic PV market rebounds; Zhejiang Jinggong Science ＆ Technology Co., Ltd. (002006.SZ): performance growth of 247 percent and growth forecast of 427 to 532 percent, mainly due to great increase in its solar energy business.
Additionally, Yunnan Salt ＆ Salt Chemical Industry Co., Ltd. (002053.SZ) announced a performance growth of 234 percent in its first quarterly report, and growth forecast of 284 to 333 percent in semi-annual report, mainly due to soared salt business; Shandong Realcan Pharmaceutical Co., Ltd. (002589.SZ): performance growth of 68 percent and growth forecast of 110 to 160 percent, mainly as it speeds up company acquisition in other provinces; Holitech Technology Co., Ltd. (002217.SZ) announced growth forecast of 194 to 219 percent, mainly due to combined financial statements of BYD electronic components, Shenzhen Eachopto Co., Ltd. and Pingbo Electronic Co., Ltd.
○Movie ＆ TV companies gain considerable profit in Q1, more acquisition and reorganization to carried out
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Listed companies in movie ＆ TV industry continued to achieve high-speed growth in the first quarter. Beijing Enlight Media Co., Ltd. (300251.SZ) gained a profit growth of over 40 times, and realized a net profit of 213 million yuan, up by 4382 percent year on year, mainly as its high box office revenue from movies including The Mermaid. Songcheng Performance Development Co., Ltd. (300144.SZ) realized a net profit of 194 million yuan in the first quarter through famous online platforms like 6.cn, up by 103 percent year on year. Zhejiang Huace Film ＆ TV Co., Ltd. (300133.SZ) achieved a net profit of 117 million yuan, up by 41 percent year on year.
Meanwhile, listed companies in this field continue to carry out merging and restructuring. Enlight Media and Huace Film ＆ TV invest Beijing FWS Movie ＆ TV Culture Co., Ltd. which is rich in stars. Zhejiang Talent Television ＆ Film Co., Ltd. (300426.SZ) subscribes 51 percent equities of Ai Mei Shen Film ＆ TV Co., Ltd. owned by a famous movie star Fan Bingbing. Huayi Brothers Media Corporation (300027.SZ) invested Korea movie and TV companies SIM and HB one by one. Songcheng Performance Development also speeds up its step to merge and restructure overseas site entertainment and tourism projects to upgrade the company's ecology.
[TOP]
○New Hope Liuhe and Guodian Changyuan Electric Power propose high share conversion
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New Hope Liuhe Co., Ltd. (000876.SZ) announced a performance growth of 9 percent in its annual report, proposing a 10-for-10 conversion of capital surplus into shares combined with 5.5 yuan dividend for every 10 shares; Guodian Changyuan Electric Power Co., Ltd. (000966.SZ) announced a performance growth of 38 percent and proposed a 10-for-10 conversion of capital surplus into shares combined with 2.6 yuan dividend for every 10 shares.
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