[Today's Guide]
○Tesla sees continuous progress in business expansion in China, relevant companies listed on A-share market to benefit
○Pickup trucks to become new growth point of vehicles industry, carbon black to see price hike
○Zongyi to acquire security and protection monitoring assets with RMB10 bln, Huazhong Numerical Control to develop new energy vehicles
○Kaile Science and Technology to carry out private placement, Join In not to change strategy despite reorganization termination
[SSN Focus]
○Tesla sees continuous progress in business expansion in China, relevant companies listed on A-share market to benefit
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Tesla Motors (China) claimed on May 3 that multiple types of electric vehicles with Tesla included are still empowered to have free license according to the newly released policies for the license of new energy vehicles in Shanghai. Tesla sees continuous progress in its business expansion in China in recent period: vice minister of the Ministry of Industry and Information Technology (MIIT) met the Asia-Pacific president of Tesla on April 27 and hoped that Tesla will beef up its production and R＆D in China; on April 28, Tesla and China Quality Certification Center jointly launched the charging partnership plan.
Comment: Over 300,000 Tesla Model 3 vehicles are ordered in the first week after it was launched, surpassing the total number of vehicles sold by Tesla in the past decade since it was established. Expansion of capacity allows of no delay. Listed companies involved in the industrial chain will benefit from the capacity expansion. The components produced by Wuhu Token Sciences Co., Ltd. (300088.SZ) have been supplied to Tesla; Shandong Shida Shenghua Chemical Group Co., Ltd. (603026.SH) provides Tesla with high-quality solvent raw material; Xinzhi Motor Co., Ltd. (002664.SZ) provides Fukuta Elec. ＆ Mach. Co, Ltd., the only electric motor supplier of Tesla, with components of electric motor.
[SSN Selection]
○The National Health and Family Planning Commission announced on May 3 that eight departments including itself will carry out special actions to crack down scalpers of clinical registration and online medical cappers.
○The National Development and Reform Commission (NDRC) on May 3 issued a circular on its website claiming to deepen the price reform in areas including electricity, natural gas, medical service, transportation and etc.
○Gao Xiaobing, vice minister of civil affairs, indicated on May 3 that great efforts will be made in advancing supply-side reform in elderly care area and the elderly care market will be fully decontrolled.
○The CPI in April will be unveiled on May 10. Institutions estimate that the CPI might slightly rebound due to the price hike of non-food elements like real estate.
○The securities margin saw a slight net outflow of 37.5 billion yuan in April and the game of stock capital is seen in the market.
TOP
[Industry Information]
○Restrictions over pickup trucks to lift, pickup trucks to become new growth point of vehicles industry
------
The Industry and Information Technology Department, the Development and Reform Commission and the Provincial Public Security Department of Hebei province recently jointly issued a circular requiring lifting the restrictions preventing pickup trucks from entering the towns in ten cities within the province from May. The Ministry of Industry and Information Technology (MIIT), the National Development and Reform Commission (NDRC) and the Ministry of Public Security jointly released a notice at end-February determining to pilot the relaxation of control over pickup trucks in Hebei province, Liaoning province, Henan province and Yunnan province. The other three provinces are also actively advancing the piloting. Experts estimate that lifting the restriction on pickup trucks will bring new demand. Pickup trucks will become a new growth point of the vehicles industry in the future.
Comment: Institutions believe that the pickup trucks market remains sluggish in recent years. The piloting in the aforesaid four provinces will help to popularize pickup trucks across the country. The policies allowing pickup trucks to go to towns will be great bullish news for the pickup trucks market. The demand for middle and high-end pickup trucks might see steep rise. As to listed companies, pickup trucks business takes up a large proportion of the business under Great Wall Motor Company Limited (601633.SH; 02333.HK) and Jiangling Motors Corporation, Ltd. (000550.SZ).
○Boosted by downstream recovery, carbon black to see price hike
------
SSN learnt that driven by the surging coal tar price and the recovery of tire production in the downstream, carbon black enterprises are expected to raise the price by nearly 10 percent soon. The carbon black market has been sluggish due to the excessive capacity and most enterprises have been loss-making. According to the outline of the 13th five-year development plan for the rubber industry, obsoleting outdated capacity will be promoted in the policies for the carbon black industry.
Comment: Carbon black is one of the main raw materials for the production of tires. Boosted by the supply-side reform and the increasing demand in the downstream, the profitability of the industry is likely to improve. As to listed companies, Jiangxi Black Cat Carbon Black Inc., Ltd. (002068.SZ) owns a carbon black capacity of 1.06 million ton; Longxing Chemical Stock Co., Ltd. (002442.SZ) produced 405,000 tons of carbon black in 2015.
TOP
[Announcement Interpretation]
○Zongyi to acquire security and protection monitoring assets with RMB10 bln
------
Jiangsu Zongyi Co., Ltd. (600770.SH) plans to acquire 100 percent equity of Zhongxing Technology Co., Ltd. at 10.1 billion yuan by issuing shares a price of 12.20 yuan per share through private placement and paying in cash. The company also intends to raise supporting funds of 5.1 billion yuan by issuing shares at a price of 15.20 yuan per share through private placement to investors including its actual controller Zan Shengda, who will subscribe stocks worth 500 million yuan.
Zhongxing Technology is a security and protection monitoring enterprise which owns SVAC national standard and complete industrial chain in China. Its net profit after extraordinary gains and losses is predicted to be 346 million yuan, 558 million yuan and 916 million yuan during 2016 and 2018. After the reorganization, the company's information technology business will expand to security and protection monitoring field, which will help strengthen information technology business and make new contributor to profit.
○Huazhong Numerical Control to develop new energy vehicles through cooperation
------
Wuhan Huazhong Numerical Control Co., Ltd. (300161.SZ) is going to cooperate with Wuhan Linkonggang Investment Group Co., Ltd. to jointly establish Wuhan Intelligent Control Industrial Technology Research Institute. The research institute, with 350 million yuan of registered capital including 200 million yuan invested by the company, researches and develops products and the products' testing service for new energy vehicles and realizes industrialization by focusing on electrification, intelligentization and lightweight. This investment is an important application in new energy vehicle industry of the company's core technology in intelligent control field (like electric motor, drive and intelligent control, etc.)
TOP
○Kaile Science and Technology to raise RMB1.75 bln to invest in quantum communication
------
Kaile Science and Technology Co., Ltd. Hubei intends to raise 1.75 billion yuan by issuing shares through private placement from its substantial shareholder Jingzhou Keda Commerce Investment Co., Ltd. and other investors. The issuing price is to be finalized. The substantial shareholder will subscribe the stocks accounting for 20 percent to 40 percent. The fundraising will be invested in industrialization project of quantum communication technology data chain products, industrialization of self-controllable computing platform, intelligent command control terminal and platform construction. After the foresaid projects are finished, the newly added net profit of the company will record 321 million yuan and the company will be transformed into a high-end communication equipment manufacturer.
○Join In not to change strategy despite reorganization termination
------
Join In (Holding) Co., Ltd. (600745.SH) terminates significant reorganization matter. In spite of the termination of reorganization and commitment of no reorganization in six months, the company will stick to the scheduled orientation with "Internet plush big health" to acquire enterprises.
○Book of Love won box office success, benefiting Lead Eastern Investment
------
The movie Book of Love, a sequel of the 2013 film Finding Mr. Right and invested and produced by the wholly-owned subsidiary of Lead Eastern Investment Co., Ltd. (000673.SZ), saw the box office exceeding 430 million yuan after it hit the big screen four days ago. Statistics show that Lead Eastern Investment gained 493 million yuan in operating revenues, 111 million yuan in net profit and 34.03 million yuan income from films for the whole year of 2015.
○Risen Energy to raise RMB3.5 bln through private placement to invest in PV project
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Risen Energy Co., Ltd. (300118.SZ) plans to raise 3.5 billion yuan by issuing 250 million shares through private placement in invest in five PV power generation project. The company's controlling shareholder and actual controller Lin Haifeng will subscribe the stocks at no less than 600 million yuan. The issuing price will be based on the stock price when the private placement is launched.
Comment: The previous private placement of Risen Energy expired on April 29. Last December, as one of the firms which Risen Energy was going to acquire had not finished the filing of privately offered fund, Risen Energy applied to China Securities Regulatory Commission for suspending reviewing its private placement application document.
[Trading Trends]
○Shunxin Agriculture bought through three institutional seats
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The trading volume ranking list on May 3 shows that Beijing Shunxin Agriculture Co., Ltd. (000860.SZ) was bought through three institutional seats with a total of 136 million yuan, accounting for 24.23 percent of its intraday turnover, and was sold by another institutional seat with a total of 6.8 million yuan.
Comment: Institutions point out that the company's Niulanshan liquor will see growth in both sales volume and price. Reasonable valuation of white spirit business is 14 billion yuan and that of meat business posts 3.2 billion yuan. The company is stripping off real estate business, so its overall reasonable valuation records 17.2 billion yuan. The company's market value reaches 12.8 billion yuan based on the newest closing price of its stocks.
[Trading Alarms]
○Grand Dragon Organic Wine to launch IPO on May 4
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Grand Dragon Organic Wine Co., Ltd. (732779) is going to launch IPO at a price of 4.61 yuan per share with an upper limit of 20,000 shares for each single account. The PE ratio is 22 times. The company is principally engaged in wine.
TOP
○Tesla sees continuous progress in business expansion in China, relevant companies listed on A-share market to benefit
○Pickup trucks to become new growth point of vehicles industry, carbon black to see price hike
○Zongyi to acquire security and protection monitoring assets with RMB10 bln, Huazhong Numerical Control to develop new energy vehicles
○Kaile Science and Technology to carry out private placement, Join In not to change strategy despite reorganization termination
[SSN Focus]
○Tesla sees continuous progress in business expansion in China, relevant companies listed on A-share market to benefit
------
Tesla Motors (China) claimed on May 3 that multiple types of electric vehicles with Tesla included are still empowered to have free license according to the newly released policies for the license of new energy vehicles in Shanghai. Tesla sees continuous progress in its business expansion in China in recent period: vice minister of the Ministry of Industry and Information Technology (MIIT) met the Asia-Pacific president of Tesla on April 27 and hoped that Tesla will beef up its production and R＆D in China; on April 28, Tesla and China Quality Certification Center jointly launched the charging partnership plan.
Comment: Over 300,000 Tesla Model 3 vehicles are ordered in the first week after it was launched, surpassing the total number of vehicles sold by Tesla in the past decade since it was established. Expansion of capacity allows of no delay. Listed companies involved in the industrial chain will benefit from the capacity expansion. The components produced by Wuhu Token Sciences Co., Ltd. (300088.SZ) have been supplied to Tesla; Shandong Shida Shenghua Chemical Group Co., Ltd. (603026.SH) provides Tesla with high-quality solvent raw material; Xinzhi Motor Co., Ltd. (002664.SZ) provides Fukuta Elec. ＆ Mach. Co, Ltd., the only electric motor supplier of Tesla, with components of electric motor.
[SSN Selection]
○The National Health and Family Planning Commission announced on May 3 that eight departments including itself will carry out special actions to crack down scalpers of clinical registration and online medical cappers.
○The National Development and Reform Commission (NDRC) on May 3 issued a circular on its website claiming to deepen the price reform in areas including electricity, natural gas, medical service, transportation and etc.
○Gao Xiaobing, vice minister of civil affairs, indicated on May 3 that great efforts will be made in advancing supply-side reform in elderly care area and the elderly care market will be fully decontrolled.
○The CPI in April will be unveiled on May 10. Institutions estimate that the CPI might slightly rebound due to the price hike of non-food elements like real estate.
○The securities margin saw a slight net outflow of 37.5 billion yuan in April and the game of stock capital is seen in the market.
TOP
[Industry Information]
○Restrictions over pickup trucks to lift, pickup trucks to become new growth point of vehicles industry
------
The Industry and Information Technology Department, the Development and Reform Commission and the Provincial Public Security Department of Hebei province recently jointly issued a circular requiring lifting the restrictions preventing pickup trucks from entering the towns in ten cities within the province from May. The Ministry of Industry and Information Technology (MIIT), the National Development and Reform Commission (NDRC) and the Ministry of Public Security jointly released a notice at end-February determining to pilot the relaxation of control over pickup trucks in Hebei province, Liaoning province, Henan province and Yunnan province. The other three provinces are also actively advancing the piloting. Experts estimate that lifting the restriction on pickup trucks will bring new demand. Pickup trucks will become a new growth point of the vehicles industry in the future.
Comment: Institutions believe that the pickup trucks market remains sluggish in recent years. The piloting in the aforesaid four provinces will help to popularize pickup trucks across the country. The policies allowing pickup trucks to go to towns will be great bullish news for the pickup trucks market. The demand for middle and high-end pickup trucks might see steep rise. As to listed companies, pickup trucks business takes up a large proportion of the business under Great Wall Motor Company Limited (601633.SH; 02333.HK) and Jiangling Motors Corporation, Ltd. (000550.SZ).
○Boosted by downstream recovery, carbon black to see price hike
------
SSN learnt that driven by the surging coal tar price and the recovery of tire production in the downstream, carbon black enterprises are expected to raise the price by nearly 10 percent soon. The carbon black market has been sluggish due to the excessive capacity and most enterprises have been loss-making. According to the outline of the 13th five-year development plan for the rubber industry, obsoleting outdated capacity will be promoted in the policies for the carbon black industry.
Comment: Carbon black is one of the main raw materials for the production of tires. Boosted by the supply-side reform and the increasing demand in the downstream, the profitability of the industry is likely to improve. As to listed companies, Jiangxi Black Cat Carbon Black Inc., Ltd. (002068.SZ) owns a carbon black capacity of 1.06 million ton; Longxing Chemical Stock Co., Ltd. (002442.SZ) produced 405,000 tons of carbon black in 2015.
TOP
[Announcement Interpretation]
○Zongyi to acquire security and protection monitoring assets with RMB10 bln
------
Jiangsu Zongyi Co., Ltd. (600770.SH) plans to acquire 100 percent equity of Zhongxing Technology Co., Ltd. at 10.1 billion yuan by issuing shares a price of 12.20 yuan per share through private placement and paying in cash. The company also intends to raise supporting funds of 5.1 billion yuan by issuing shares at a price of 15.20 yuan per share through private placement to investors including its actual controller Zan Shengda, who will subscribe stocks worth 500 million yuan.
Zhongxing Technology is a security and protection monitoring enterprise which owns SVAC national standard and complete industrial chain in China. Its net profit after extraordinary gains and losses is predicted to be 346 million yuan, 558 million yuan and 916 million yuan during 2016 and 2018. After the reorganization, the company's information technology business will expand to security and protection monitoring field, which will help strengthen information technology business and make new contributor to profit.
○Huazhong Numerical Control to develop new energy vehicles through cooperation
------
Wuhan Huazhong Numerical Control Co., Ltd. (300161.SZ) is going to cooperate with Wuhan Linkonggang Investment Group Co., Ltd. to jointly establish Wuhan Intelligent Control Industrial Technology Research Institute. The research institute, with 350 million yuan of registered capital including 200 million yuan invested by the company, researches and develops products and the products' testing service for new energy vehicles and realizes industrialization by focusing on electrification, intelligentization and lightweight. This investment is an important application in new energy vehicle industry of the company's core technology in intelligent control field (like electric motor, drive and intelligent control, etc.)
TOP
○Kaile Science and Technology to raise RMB1.75 bln to invest in quantum communication
------
Kaile Science and Technology Co., Ltd. Hubei intends to raise 1.75 billion yuan by issuing shares through private placement from its substantial shareholder Jingzhou Keda Commerce Investment Co., Ltd. and other investors. The issuing price is to be finalized. The substantial shareholder will subscribe the stocks accounting for 20 percent to 40 percent. The fundraising will be invested in industrialization project of quantum communication technology data chain products, industrialization of self-controllable computing platform, intelligent command control terminal and platform construction. After the foresaid projects are finished, the newly added net profit of the company will record 321 million yuan and the company will be transformed into a high-end communication equipment manufacturer.
○Join In not to change strategy despite reorganization termination
------
Join In (Holding) Co., Ltd. (600745.SH) terminates significant reorganization matter. In spite of the termination of reorganization and commitment of no reorganization in six months, the company will stick to the scheduled orientation with "Internet plush big health" to acquire enterprises.
○Book of Love won box office success, benefiting Lead Eastern Investment
------
The movie Book of Love, a sequel of the 2013 film Finding Mr. Right and invested and produced by the wholly-owned subsidiary of Lead Eastern Investment Co., Ltd. (000673.SZ), saw the box office exceeding 430 million yuan after it hit the big screen four days ago. Statistics show that Lead Eastern Investment gained 493 million yuan in operating revenues, 111 million yuan in net profit and 34.03 million yuan income from films for the whole year of 2015.
○Risen Energy to raise RMB3.5 bln through private placement to invest in PV project
------
Risen Energy Co., Ltd. (300118.SZ) plans to raise 3.5 billion yuan by issuing 250 million shares through private placement in invest in five PV power generation project. The company's controlling shareholder and actual controller Lin Haifeng will subscribe the stocks at no less than 600 million yuan. The issuing price will be based on the stock price when the private placement is launched.
Comment: The previous private placement of Risen Energy expired on April 29. Last December, as one of the firms which Risen Energy was going to acquire had not finished the filing of privately offered fund, Risen Energy applied to China Securities Regulatory Commission for suspending reviewing its private placement application document.
[Trading Trends]
○Shunxin Agriculture bought through three institutional seats
------
The trading volume ranking list on May 3 shows that Beijing Shunxin Agriculture Co., Ltd. (000860.SZ) was bought through three institutional seats with a total of 136 million yuan, accounting for 24.23 percent of its intraday turnover, and was sold by another institutional seat with a total of 6.8 million yuan.
Comment: Institutions point out that the company's Niulanshan liquor will see growth in both sales volume and price. Reasonable valuation of white spirit business is 14 billion yuan and that of meat business posts 3.2 billion yuan. The company is stripping off real estate business, so its overall reasonable valuation records 17.2 billion yuan. The company's market value reaches 12.8 billion yuan based on the newest closing price of its stocks.
[Trading Alarms]
○Grand Dragon Organic Wine to launch IPO on May 4
------
Grand Dragon Organic Wine Co., Ltd. (732779) is going to launch IPO at a price of 4.61 yuan per share with an upper limit of 20,000 shares for each single account. The PE ratio is 22 times. The company is principally engaged in wine.
TOP
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