[Today's Guide]
> Chinese President Xi requires intensifying rural reform to push circulation of land
> Wuliangye announced satisfied first quarterly report, showing rebound in wine industry
> Member under Zhongzhi Enterprise Group bought 5 pnt equity of Greattown Holdings, Sansheng Special Building Materials to acquire equity of pharmaceutical company
> EVE Energy to raise RMB1.6 bln to develop principal business, Butterfly Color Asset Management likely to hold equity in Sanfangxiang Industry
[SSN Focus]
○Chinese President Xi requires intensifying rural reform to push circulation of land
------
The Xinhua News Agency on April 28 reported that Chinese President Xi Jinping recently held a symposium on rural reform and made a speech in Xiao Gang village, Feng Yang county, Anhui Province. He pointed out that we should insistently put the work about how to solve the problems of rural areas, farmers and agriculture as priority among priorities, and greatly intensify the rural reform under the new trend; we should firmly implement the registration system for contractual right of land, and make the farmers feel safe that their rights will be guaranteed; we should focus on determining every household's right of rural collective assets, push the reform on joint stock cooperative system, speed up construction of new agricultural operation system, and promote the comprehensive reform on supply and marketing cooperatives.
Comment: The contractual and operational rights of land is a crucial foundation to guide the orderly circulation of land. Experience in many countries, like the U.S. and Japan, shows that realizing clear definition of land property right and forming land circulation market can push high the value of land resource. Institutions are optimistic on listed agricultural companies with rich land resources. In addition, clear definition on rural collective property right is beneficial to control the management risks caused by unclear right of rural collective property and unstrict management. The supply and marketing cooperatives are also likely to transform to comprehensive rural service platform from simple purchase ＆ sales services through reforms.
[SSN Selection]
○Shenzhen Stock Exchange announces to implement new trading rules from May 9, and applications for competitive price transaction will not be accepted during 9:25 to 9:30.
○Based on Bloomberg's report, China's regulators have already taken strict measures to restrict the fluctuation in futures price, which is regarded as prepared policy.
○Ministry of Environmental Protection on April 28 held a meeting with major leaders of five local governments, as the areas exist some problems, including that concentration of main air pollutants does not decline but increase, and their enterprises are severely against environment-related laws.
○Data of Ministry of Industry and Information Technology shows that the total amount of China's telecommunication business increased by 45 percent year on year in the first quarter, with a growth of 1.3 times in total consumption of mobile data.
○Ministry of Foreign Affairs responded on the rumor that China will create marine reclamation land on Huangyan Island. It indicated that whether to take moves belongs to China's sovereignty.
TOP
[Industrial Information]
○Wuliangye announced satisfied first quarterly report, showing rebound in wine industry
------
Wuliangye Yibin Co., Ltd. (000858.SZ) launched its first quarterly report in the evening of April 28 that its operational revenue and net profit synchronously increased around 31 percent. In addition, at the end of the first quarter, prepayment received by the company was 2.4 times of that at the end of last year, as prepayment from wine-product distributors increases. In terms of shareholders, three Qualified Foreign Institutional Investors (QFII) rank among the ten largest shareholders, holding 79.11 million shares totally, and accounting for 2 percent of the total equity. The number of shareholders at the end of the first quarter was 177,400, which further declined when compared to 197,900 at the end of February.
Comment: Prepayment is generally regarded as the "reservoir" for wine companies to adjust their profits. Great increase in prepayment lays the foundation for the following performance. Institutions believed that, after four-year deep reform in wine sector, the consumption and product structures have optimized, with recovering performance growth and rebounding prosperity. Other leading companies in this industry, such as Kweichow Moutai Co., Ltd. (600519.SH) and Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. (002304.SZ), also realized a growth of over 10 percent in the first quarter.
TOP
[Announcement Interpretation]
○Jiacheng Zhongtai bought 5 pnt equity of Greattown Holdings
------
Jiacheng Zhongtai Culture ＆ Art Investment Management Co., Ltd. quickly bought about 100 million shares of Greattown Holdings Ltd. (600094.SH) through the secondary market acquisition on April 26 to 28, accounting to 5 percent of the listed company's total equity and with an average price of 9.61 yuan per share. The company on April 26 announced that its wholly-owned subsidiary has acquired 100 percent equity of Zhong Cheng Leasing Co., Ltd. and the company resumed the trading. Jiacheng Zhongtai indicated that it is optimistic about this acquisition, and intends to hold the listed company's shares for a long run to share added value of the equity; and it also stated that it may continue to increase the shareholdings. Jiacheng Zhongtai is wholly owned by the natural person Xie Huiyu, who is regarded as member under Zhongzhi Enterprise Group.
○Sansheng Special Building Materials to acquire equity of pharmaceutical company at RMB748 mln
------
Chongqing Sansheng Special Building Materials Co., Ltd. (002742.SZ) plans to acquire 88 percent equity of Chongqing Chunrui Pharmaceutical and Chemical Co., Ltd. at 748 million yuan by issuing shares at a price of 30.78 yuan per share through private placement and paying in cash. The company also intends to raise 748 million yuan of supporting funds through issuing shares at a floor price of 35.68 yuan per share through private placement. Chunrui Pharmaceutical and Chemical is specialized in the R＆D, production and sales of chemical and pharmaceutical material and based on performance commitment, its net profits will not be less than 55 million yuan, 61 million yuan and 68 million yuan from 2016 and 2018 respectively.
TOP
○EVE Energy to raise RMB1.6 bln to develop principal business and gain support from actual controller
------
EVE Energy Co., Ltd. (300014.SZ) plans to raise 1.6 billion yuan by issuing 80 million stocks through private placement to invest in high-performance lithium ion battery project phase two and project of power battery and integration system for new energy vehicles. The company's actual controller Liu Jincheng promise to subscribe stocks worth 320 million yuan. Once the projects are carried out, the world-class automatic production line for ternary lithium ion battery and lithium iron phosphate battery will be established and production of lithium ion battery will increase.
○Butterfly Color Asset Management likely to hold equity in Sanfangxiang Industry
------
Jiangsu Sanfangxiang Group, controlling shareholder of Jiangsu Sanfangxiang Industry Co., Ltd. (600370.SH), signed agreement on financial consultant with Butterfly Color Asset Management (Shanghai) Co., Ltd. If Butterfly Color Asset Management provides qualified consulting services, Sanfangxiang Group can pay the consulting service charges by transferring 5 percent stocks of listed company at a discount or paying in cash. Sanfangxiang Group now holds 50.33 percent equity in Sanfangxiang Industry, which are all under pledge, and it promises not to sell them in six months from Feb. 25. Therefore, Butterfly Color Asset Management is able to obtain the stocks after the commitment period ends at the soonest.
Comment: In view of previous cases, Butterfly Color Asset Management once accurately bet on some companies which experienced reorganization and is quite good at capital operation. Therefore, it will be very likely to gain 5 percent equity of Sanfangxiang Industry by offering financial consulting services.
○Gujing Distillery to acquire Pride Yellow Crane Tower Distillery at over RMB800 mln
------
Anhui Gujing Distillery Company Limited (000596.SZ) intends to acquire 51 percent equity of Wuhan Pride Yellow Crane Tower Distillery Co., Ltd. at 816 million yuan with appreciation rate of 110 percent. Gujing Distillery states that this acquisition aims to strengthen the development of its principal business distilled spirit and accelerate nationwide deployment of its products.
It is noteworthy that the transferee promises that the operating revenue of Pride Yellow Crane Tower Distillery will reach 800 million yuan, 1 billion yuan, 1.3 billion yuan, 1.7 billion yuan and 2.04 billion yuan in next five years respectively.
[Financial Reports Express]
○BYD expected to see surge in performance in first half of 2016
------
Performance of BYD Company Limited (002594.SZ) grows by 603 percent in the first quarter and is expected to rise by 382-425 percent in the first half of this year mainly due to rapid development of new energy vehicles. Performance of Guangzhou Great Power Energy ＆Technology Co., Ltd. (300438.SZ) hikes by 55 percent in the first quarter mainly contributed by profit growth of lithium-ion products. Performance of Shenzhen Neptunus Bioengineering Co., Ltd. (000078.SZ) increases by 43 percent in the first quarter and is expected to jump by 80-130 percent in the first half of this year mainly thanks to sales growth.
[Data Speaks]
○Find shell resources based on annual reports
------
SSN statistics show that according to the annual reports, some company with small market value saw poor performance in principal businesses and some even have been labeled with ST marks due to suffering losses for two consecutive years. Resulting from this, their actual controllers mighty intend to sell the shell resources, among which disclosing intention of reorganization are more catchy.
Analysts believe that three kinds of companies own larger value in the shells. Firstly, the companies which are put on the ST marks resulting from continuous losses, such as Shenji Group Kunming Machine Tool Company Limited (600806.SH), Hualing Xingma Automobile （Group）Co., Ltd. (600375.SH), Hainan Pearl River Holdings Co., Ltd. (000505.SZ), Renrenle Commercial Group Co., Ltd. (002336.SZ) and Shenzhen Nanshan Power Co., Ltd. (000037.SZ), have urgent intention in keep their listing platform through reorganization. Secondly, those making meager profit in worrying industries, including Ningbo Veken Elite Group Co., Ltd. (600152.SH), Taiyuan Chemical Industry Co., Ltd. (600281.SH), Guangdong Xinhui Meida Nylon Co., Ltd. (000782.SZ) and Yunnan Bowin Technology Industry Co., Ltd. (600883.SH) are engaged in less prosperous industries and are strongly willing to conduct transformation and reorganization. Thirdly, those that have showing their intention of reorganization like Zhejiang Dongliang New Material Co., Ltd. (002082.SZ), JinJian Cereals Industry Co., Ltd. (600127.SH) and Hunan Huasheng Co., Ltd. (600156.SH) intended to implement reorganization in 2015 but failed due to some reasons. If their principal business still see no great improvement, they are likely to continue to propel reorganization.
[Trading Alarms]
○First Capital Securities to launch IPO on April 29
------
First Capital Securities Co., Ltd. (002797.SZ) is going to launch IPO at 10.64 yuan per share with an upper limit of 65,500 shares for each investor's account. The company's PE ratio is 22.99 times. It listed three comparable securities companies in its IPO announcement and their average PE ratio records 23.66 times based on their latest stock prices.
[Publication Suspension]
○Based on the holiday schedules of Shanghai and Shenzhen stock exchanges, the SSN Early Bird will suspend publication on May 1 and will resume publication on May 2. Wish you investors a happy holiday!
TOP
> Chinese President Xi requires intensifying rural reform to push circulation of land
> Wuliangye announced satisfied first quarterly report, showing rebound in wine industry
> Member under Zhongzhi Enterprise Group bought 5 pnt equity of Greattown Holdings, Sansheng Special Building Materials to acquire equity of pharmaceutical company
> EVE Energy to raise RMB1.6 bln to develop principal business, Butterfly Color Asset Management likely to hold equity in Sanfangxiang Industry
[SSN Focus]
○Chinese President Xi requires intensifying rural reform to push circulation of land
------
The Xinhua News Agency on April 28 reported that Chinese President Xi Jinping recently held a symposium on rural reform and made a speech in Xiao Gang village, Feng Yang county, Anhui Province. He pointed out that we should insistently put the work about how to solve the problems of rural areas, farmers and agriculture as priority among priorities, and greatly intensify the rural reform under the new trend; we should firmly implement the registration system for contractual right of land, and make the farmers feel safe that their rights will be guaranteed; we should focus on determining every household's right of rural collective assets, push the reform on joint stock cooperative system, speed up construction of new agricultural operation system, and promote the comprehensive reform on supply and marketing cooperatives.
Comment: The contractual and operational rights of land is a crucial foundation to guide the orderly circulation of land. Experience in many countries, like the U.S. and Japan, shows that realizing clear definition of land property right and forming land circulation market can push high the value of land resource. Institutions are optimistic on listed agricultural companies with rich land resources. In addition, clear definition on rural collective property right is beneficial to control the management risks caused by unclear right of rural collective property and unstrict management. The supply and marketing cooperatives are also likely to transform to comprehensive rural service platform from simple purchase ＆ sales services through reforms.
[SSN Selection]
○Shenzhen Stock Exchange announces to implement new trading rules from May 9, and applications for competitive price transaction will not be accepted during 9:25 to 9:30.
○Based on Bloomberg's report, China's regulators have already taken strict measures to restrict the fluctuation in futures price, which is regarded as prepared policy.
○Ministry of Environmental Protection on April 28 held a meeting with major leaders of five local governments, as the areas exist some problems, including that concentration of main air pollutants does not decline but increase, and their enterprises are severely against environment-related laws.
○Data of Ministry of Industry and Information Technology shows that the total amount of China's telecommunication business increased by 45 percent year on year in the first quarter, with a growth of 1.3 times in total consumption of mobile data.
○Ministry of Foreign Affairs responded on the rumor that China will create marine reclamation land on Huangyan Island. It indicated that whether to take moves belongs to China's sovereignty.
TOP
[Industrial Information]
○Wuliangye announced satisfied first quarterly report, showing rebound in wine industry
------
Wuliangye Yibin Co., Ltd. (000858.SZ) launched its first quarterly report in the evening of April 28 that its operational revenue and net profit synchronously increased around 31 percent. In addition, at the end of the first quarter, prepayment received by the company was 2.4 times of that at the end of last year, as prepayment from wine-product distributors increases. In terms of shareholders, three Qualified Foreign Institutional Investors (QFII) rank among the ten largest shareholders, holding 79.11 million shares totally, and accounting for 2 percent of the total equity. The number of shareholders at the end of the first quarter was 177,400, which further declined when compared to 197,900 at the end of February.
Comment: Prepayment is generally regarded as the "reservoir" for wine companies to adjust their profits. Great increase in prepayment lays the foundation for the following performance. Institutions believed that, after four-year deep reform in wine sector, the consumption and product structures have optimized, with recovering performance growth and rebounding prosperity. Other leading companies in this industry, such as Kweichow Moutai Co., Ltd. (600519.SH) and Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. (002304.SZ), also realized a growth of over 10 percent in the first quarter.
TOP
[Announcement Interpretation]
○Jiacheng Zhongtai bought 5 pnt equity of Greattown Holdings
------
Jiacheng Zhongtai Culture ＆ Art Investment Management Co., Ltd. quickly bought about 100 million shares of Greattown Holdings Ltd. (600094.SH) through the secondary market acquisition on April 26 to 28, accounting to 5 percent of the listed company's total equity and with an average price of 9.61 yuan per share. The company on April 26 announced that its wholly-owned subsidiary has acquired 100 percent equity of Zhong Cheng Leasing Co., Ltd. and the company resumed the trading. Jiacheng Zhongtai indicated that it is optimistic about this acquisition, and intends to hold the listed company's shares for a long run to share added value of the equity; and it also stated that it may continue to increase the shareholdings. Jiacheng Zhongtai is wholly owned by the natural person Xie Huiyu, who is regarded as member under Zhongzhi Enterprise Group.
○Sansheng Special Building Materials to acquire equity of pharmaceutical company at RMB748 mln
------
Chongqing Sansheng Special Building Materials Co., Ltd. (002742.SZ) plans to acquire 88 percent equity of Chongqing Chunrui Pharmaceutical and Chemical Co., Ltd. at 748 million yuan by issuing shares at a price of 30.78 yuan per share through private placement and paying in cash. The company also intends to raise 748 million yuan of supporting funds through issuing shares at a floor price of 35.68 yuan per share through private placement. Chunrui Pharmaceutical and Chemical is specialized in the R＆D, production and sales of chemical and pharmaceutical material and based on performance commitment, its net profits will not be less than 55 million yuan, 61 million yuan and 68 million yuan from 2016 and 2018 respectively.
TOP
○EVE Energy to raise RMB1.6 bln to develop principal business and gain support from actual controller
------
EVE Energy Co., Ltd. (300014.SZ) plans to raise 1.6 billion yuan by issuing 80 million stocks through private placement to invest in high-performance lithium ion battery project phase two and project of power battery and integration system for new energy vehicles. The company's actual controller Liu Jincheng promise to subscribe stocks worth 320 million yuan. Once the projects are carried out, the world-class automatic production line for ternary lithium ion battery and lithium iron phosphate battery will be established and production of lithium ion battery will increase.
○Butterfly Color Asset Management likely to hold equity in Sanfangxiang Industry
------
Jiangsu Sanfangxiang Group, controlling shareholder of Jiangsu Sanfangxiang Industry Co., Ltd. (600370.SH), signed agreement on financial consultant with Butterfly Color Asset Management (Shanghai) Co., Ltd. If Butterfly Color Asset Management provides qualified consulting services, Sanfangxiang Group can pay the consulting service charges by transferring 5 percent stocks of listed company at a discount or paying in cash. Sanfangxiang Group now holds 50.33 percent equity in Sanfangxiang Industry, which are all under pledge, and it promises not to sell them in six months from Feb. 25. Therefore, Butterfly Color Asset Management is able to obtain the stocks after the commitment period ends at the soonest.
Comment: In view of previous cases, Butterfly Color Asset Management once accurately bet on some companies which experienced reorganization and is quite good at capital operation. Therefore, it will be very likely to gain 5 percent equity of Sanfangxiang Industry by offering financial consulting services.
○Gujing Distillery to acquire Pride Yellow Crane Tower Distillery at over RMB800 mln
------
Anhui Gujing Distillery Company Limited (000596.SZ) intends to acquire 51 percent equity of Wuhan Pride Yellow Crane Tower Distillery Co., Ltd. at 816 million yuan with appreciation rate of 110 percent. Gujing Distillery states that this acquisition aims to strengthen the development of its principal business distilled spirit and accelerate nationwide deployment of its products.
It is noteworthy that the transferee promises that the operating revenue of Pride Yellow Crane Tower Distillery will reach 800 million yuan, 1 billion yuan, 1.3 billion yuan, 1.7 billion yuan and 2.04 billion yuan in next five years respectively.
[Financial Reports Express]
○BYD expected to see surge in performance in first half of 2016
------
Performance of BYD Company Limited (002594.SZ) grows by 603 percent in the first quarter and is expected to rise by 382-425 percent in the first half of this year mainly due to rapid development of new energy vehicles. Performance of Guangzhou Great Power Energy ＆Technology Co., Ltd. (300438.SZ) hikes by 55 percent in the first quarter mainly contributed by profit growth of lithium-ion products. Performance of Shenzhen Neptunus Bioengineering Co., Ltd. (000078.SZ) increases by 43 percent in the first quarter and is expected to jump by 80-130 percent in the first half of this year mainly thanks to sales growth.
[Data Speaks]
○Find shell resources based on annual reports
------
SSN statistics show that according to the annual reports, some company with small market value saw poor performance in principal businesses and some even have been labeled with ST marks due to suffering losses for two consecutive years. Resulting from this, their actual controllers mighty intend to sell the shell resources, among which disclosing intention of reorganization are more catchy.
Analysts believe that three kinds of companies own larger value in the shells. Firstly, the companies which are put on the ST marks resulting from continuous losses, such as Shenji Group Kunming Machine Tool Company Limited (600806.SH), Hualing Xingma Automobile （Group）Co., Ltd. (600375.SH), Hainan Pearl River Holdings Co., Ltd. (000505.SZ), Renrenle Commercial Group Co., Ltd. (002336.SZ) and Shenzhen Nanshan Power Co., Ltd. (000037.SZ), have urgent intention in keep their listing platform through reorganization. Secondly, those making meager profit in worrying industries, including Ningbo Veken Elite Group Co., Ltd. (600152.SH), Taiyuan Chemical Industry Co., Ltd. (600281.SH), Guangdong Xinhui Meida Nylon Co., Ltd. (000782.SZ) and Yunnan Bowin Technology Industry Co., Ltd. (600883.SH) are engaged in less prosperous industries and are strongly willing to conduct transformation and reorganization. Thirdly, those that have showing their intention of reorganization like Zhejiang Dongliang New Material Co., Ltd. (002082.SZ), JinJian Cereals Industry Co., Ltd. (600127.SH) and Hunan Huasheng Co., Ltd. (600156.SH) intended to implement reorganization in 2015 but failed due to some reasons. If their principal business still see no great improvement, they are likely to continue to propel reorganization.
[Trading Alarms]
○First Capital Securities to launch IPO on April 29
------
First Capital Securities Co., Ltd. (002797.SZ) is going to launch IPO at 10.64 yuan per share with an upper limit of 65,500 shares for each investor's account. The company's PE ratio is 22.99 times. It listed three comparable securities companies in its IPO announcement and their average PE ratio records 23.66 times based on their latest stock prices.
[Publication Suspension]
○Based on the holiday schedules of Shanghai and Shenzhen stock exchanges, the SSN Early Bird will suspend publication on May 1 and will resume publication on May 2. Wish you investors a happy holiday!
TOP
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