[Today's Guide]
○ Systematic reform plan of salt industry issued, upstream salt enterprises expected to benefit from various aspects
○ 13th Five-Year sports plan issued, CBN obtains basic telecom business license from MIIT
○ Chengzhi Shareholding to acquire Huisheng Energy, Transtrue Technology to acquire Netforce
○ Changchenghuili Asset Management increases shareholding in Yaxing Chemical, CSC Huitong increases shareholding in Hirisun Technology
[SSN Focus]
○ Systematic reform plan of salt industry issued, upstream salt enterprises expected to benefit from various aspects
------
The State Council on May 5 issued Systematic Reform Plan of the Salt Industry, which allows manufacturing enterprises to enter the distribution and sales area, and conduct cross-region business with their own brands, to realize the integration of production and sales. In terms of the pricing mechanism, the manufacturer's price, whole sale price and retail price will be determined by the producers independently according to the costs of production and operation, quality of salt and supply and demand in the market. The plan also proposes to encourage merging and reorganization between salt production and wholesale enterprises, to form a number of enterprise groups with core competiveness.
Comment: the current manufacturer's price of salt is only one sixth of the terminal retail price. After involving in both production and sales, salt enterprises' profit will grow significantly. The permission of cross-region business will allow joint-stock salt enterprise with flexible mechanism to expand market share. Following the liberalization of retail price, variety salt with high gross margin will see rapid increase in sales volume and improve salt enterprises' profitability. In A-share companies, Jiangsu Jingshen Salt ＆ Chemical Industry Co., Ltd. (603299.SH) and Yunnan Salt ＆ Salt Chemical Industry Co., ltd. (002053.SZ) are controlled by provincial State-owned Assets Supervision and Administration Commission of the State Council (SASAC); the actual controller of Inner Mongolia Lantai Industrial Co., Ltd. (600328.SH) is China National Salt Industry Corporation; variety salt produced by Shindoo Chemi-industry Co., ltd. (002593.SZ) has access to 15 provinces across the nation.
[SSN Selection]
○ President Xi Jinping on May 5 met with Bob Iger, CEO of the Walt Disney Company; the eastday.com reported that the main castle in Shanghai Disneyland Park has fundamentally completed.
○ The National Council for Social Security Fund (NCSSF) recently published a recruitment announcement, providing six positions in the pension management department and pension accountant department.
○ The Ministry of Industry and Information Technology (MIIT) and Ministry of Housing and Urban-Rural Development (MHOUR) on May 5 announced to jointly investigate the implementation of national standard of the "Fiber to the Home" project, to adhere to the "Broadband China" strategy.
○ The State Administration for Industry and Commerce (SAIC) will roll out special action on network market supervision from May to November, to reinforce regulation in online store and online tourism, where chaotic phenomena frequently occur.
○ The China Insurance Regulatory Commission (CIRC) on May 5 issued three documents, aiming to strengthen information disclosure on capital inflow to the insurance industry, outbound investment of insurance fund, connected transactions between insurance companies and etc.
TOP
[Industry Information]
○ 13th Five-Year sports plan issued, football and lottery catch attention
------
The official website of the General Administration of Sport of China (GASC) on May 5 issued the 13th Five-year plan on sports development, which put forward to make new breakthroughs in key sports area reform and advance pilot reforms of football project. The plan also proposes to maintain a good work in sports lotteries, accelerate innovation of sports lotteries and actively research and promote the issuance of football lotteries with China's professional soccer tournament as the object of quiz.
Comment: institutions believe that the sport industry has huge growth potential, and are optimistic about subsectors such as stadium transformation and operation, competitions operation, mass leisure and bodybuilding. In addition, European Cup, Olympic Games and Copa America, which all held once every four years, will open from June and August. In listed companies, Lander Sports Development CO., Ltd. (000558.SZ) has involved in smart sports venue for football and Ice and snow sport competitions in succession since it tapped into the sports field; China Sports Industry Group Co., Ltd. (600158.SH) has deployed the whole industry chain of sports, and owns abundant competition resources; Hongbo Co., ltd. (002229.SZ) announced that it proposes to increase investment in lottery business through private placement.
○ CBN obtains basic telecom business license from MIIT, industrial investment to increase
------
The Ministry of Industry and Information Technology (MIIT) on May 5 officially issued a basic telecom business license to China Broadcasting Network Ltd (CBN), approving the latter to operate internet domestic data transmission business and domestic telecommunication infrastructure service business across the country. China Cable Television Network Co., Ltd., a subsidiary under the CBN, is also allowed to be authorized by the CBN to operate above two businesses.
Comment: Institutions believe that this move will facilitate the nation's progress in three-network convergence, which aims to combine cable television, telecommunications and the internet into one seamless chain. The industry will see more investment, and enterprises engaged in relevant transmission equipment and software supporting the operation will embrace huge market. As to listed companies, Jiangsu Yitong High-tech Co., Ltd. (300211.SZ) is a leading company engaged in equipment manufacturing for broadcasting transmission network; Avit., Ltd. (300264.SZ) is a relevant equipment and system supplier; Bejing STARCOR Technology Co., Ltd., acquired by Hangzhou CNCR-IT Co., Ltd. (300250.SZ), provides CBN with OTT system solutions and video operation service.
TOP
[Announcement Interpretation]
○ Chengzhi Shareholding to acquire Huisheng Energy with RMB10 bln
------
Chengzhi Shareholding Co., Ltd. (000990.SZ) proposes to raise 12,486 million yuan by issuing shares at 14.35 yuan per share through private placement. The proceeds will be used in the acquisition of 99.6 percent equities of Huisheng Energy and the MTO construction project of Huisheng New Materials, a wholly-owned subsidiary of Huisheng Energy. It will take 9,752 million yuan in the acquisition of Huisheng Energy with an appreciation rate of 295 percent. Huisheng Energy committed that the net profit from 2017 to 2020 will be no less than 671 million yuan, 683 million yuan, 764 million yuan, 882 million yuan and 1,016 million yuan, respectively.
Comment: Huisheng Energy is a comprehensive supplier of industrial gas and fundamental chemical materials. It gave up the IPO in 2014. It recorded a net profit of 950 million yuan in 2014 and 490 million yuan in the first eight months of 2015. Chengzhi Shareholding will become the new energy platform under Tsinghua University after the completion of the acquisition.
○ Transtrue Technology to acquire information technical services company
------
Beijing Transtrue Technology Inc. (002771.SZ) plans to acquire 100 percent equities of Netforce with 400 million yuan by issuing shares at 69.44 yuan per share through private placement and in cash. It also plans to raise a supporting fund of 400 million yuan by issuing shares at 69.44 yuan per share.
Netforce is principally engaged in the construction of data centers and the operation, maintenance and management of data centers with Qihoo 360 Technology Co., Ltd., Leshi Internet Information ＆ Technology Corp., Beijing (300104.SZ) and Samsung SDS China as its clients. Based on the performance commitment, the net profit of Netforce after extraordinary items will be 25 million yuan in 2016, 56.25 million yuan in 2016 to 2017 and 95.31 million yuan in 2016 to 2018.
TOP
○ Changchenghuili Asset Management increases shareholding in Yaxing Chemical
------
Weifang Yaxing Chemical Co., Ltd. (600319.SH) disclosed that Shenzhen Changchenghuili Asset Management Co., Ltd. bought 15.78 million stocks of the company from April 18 to May 4, accounting for 5 percent of its total share capitals. The average price is 8.12 yuan per share and the total amount reaches 128 million yuan. Changchenghuili Asset Management indicated that the acquisition is for investment and may increase or decrease the shareholding in the following year. Currently, it also holds 17.52 percent equities of Star Lake Bioscience Co., Inc Zhaoqing Guangdong (600866.SH), 26.16 percent equities of Hangzhou Tian-mu-shan Pharmaceutical Enterprise Co., Ltd. (600671.SH) and 11.50 percent equities of Shenzhen Century Plaza Hotel Co., Ltd. (000033.SZ).
○ CSC Huitong increases shareholding in Hirisun Technology
------
CSC Huitong (Shenzhen) Equities Investment Fund Co., Ltd., the substantial shareholder of Shenzhen Hirisun Technology Incorporated (300277.SZ), increased the shareholding in the company with 8.50 million shares at an average price of 16.7 yuan per share through bulk transaction on May 4, accounting for 2.54 percent of its total share capital. CSC Huitong totally holds 29.85 percent shares of the company after the shareholding increase. Zhang Feng, the second biggest shareholder of the company reduced the shareholding in the company with 11.25 million shares through bulk transaction on May 4, accounting for 3.36 percent of the total share capital of the company. Zhang reduced the shareholding in the company with 8.50 million shares at an average price of 16.7 yuan per share. Hirisun Technology soared by the daily limit of 10 percent on May 5 and closed at 16.89 yuan per share.
Comment: CSC Huitong is a whooly-owned subsidiary of China Science ＆ Merchants Investment Management Group (CSC). It became a shareholder of Hirisun Technology through an agreed transfer last year. It is expected to help enterprises achieve great growth through assets injection and other ways.
○ Zhongzhu Holding not worry about stock price below issuance price
------
The chairman of Zhongzhu Holding Co., Ltd. (600568.SH) indicated at the investors seminar that it is unlikely to lower the issuance price of the private placement. The company proposes to raise 1.3 billion yuan by issuing shares at 17.49 yuan per share through private placement. Zhongzhu Group, the controlling shareholder of the company, commits to subscribe no less than 50 percent. The latest stock price of the company is 15.14 yuan, which is about 15 percent below the issuance price. The private placement plan of the company was approved by the China Securities Regulatory Commission (CSRC) on Feb. 4. In addition, the senior management of the company responded that ET Medical, a subsidiary acquired before, has no connected relationship with the "Putian" hospitals.
○ Guyuelongshan Shaoxing Wine to raise certain products prices
------
Zhejiang Guyuelongshan Shaoxing Wine Co., Ltd. (600059.SH) will raise the prices of certain products from May 20. The prices of the traditional wines with storage of five years will rise 7 to 10 percent. The sales of such products reached approximately 200 million yuan in 2015, accounting for 15 percent of its total business revenue in 2015.
[Trading Trends]
○ Three institutional seats buy Sanmao Industrial
------
The trading volume ranking list on May 5 shows that three institutional seats bought Lanzhou Sanmao Industrial Co., Ltd. (000779.SZ) with a total of 94.39 million yuan, accounting for 34.22 percent of its intraday turnover.
Comment: The company announced last year that it proposed to acquire 100 percent equities of Beijing Zhongzhixin Technology Co., Ltd. It announced on May 5 that it has reached an agreement with the counterparty on the performance of the subject asset. The total net profit of the subject asset attributable to the parent company will be no less than 166 million yuan from March. Public information shows that Zhongzhixin Technology is an affiliate under Peking University and is engaged in the design, manufacturing and sale of CPU chips for personal computers and complete computers.
[Trading Alarms]
○ Square Cold Chain Equipment starts subscription on May 6
------
Nantong Square Cold Chain Equipment Co., Ltd. (603339.SH) issues shares at 10.19 yuan per share with a P/E ratio of 19 times and an upper subscription limit of 19,000 shares for each account. The company is principally engaged in cold-chain equipment.
TOP
○ Systematic reform plan of salt industry issued, upstream salt enterprises expected to benefit from various aspects
○ 13th Five-Year sports plan issued, CBN obtains basic telecom business license from MIIT
○ Chengzhi Shareholding to acquire Huisheng Energy, Transtrue Technology to acquire Netforce
○ Changchenghuili Asset Management increases shareholding in Yaxing Chemical, CSC Huitong increases shareholding in Hirisun Technology
[SSN Focus]
○ Systematic reform plan of salt industry issued, upstream salt enterprises expected to benefit from various aspects
------
The State Council on May 5 issued Systematic Reform Plan of the Salt Industry, which allows manufacturing enterprises to enter the distribution and sales area, and conduct cross-region business with their own brands, to realize the integration of production and sales. In terms of the pricing mechanism, the manufacturer's price, whole sale price and retail price will be determined by the producers independently according to the costs of production and operation, quality of salt and supply and demand in the market. The plan also proposes to encourage merging and reorganization between salt production and wholesale enterprises, to form a number of enterprise groups with core competiveness.
Comment: the current manufacturer's price of salt is only one sixth of the terminal retail price. After involving in both production and sales, salt enterprises' profit will grow significantly. The permission of cross-region business will allow joint-stock salt enterprise with flexible mechanism to expand market share. Following the liberalization of retail price, variety salt with high gross margin will see rapid increase in sales volume and improve salt enterprises' profitability. In A-share companies, Jiangsu Jingshen Salt ＆ Chemical Industry Co., Ltd. (603299.SH) and Yunnan Salt ＆ Salt Chemical Industry Co., ltd. (002053.SZ) are controlled by provincial State-owned Assets Supervision and Administration Commission of the State Council (SASAC); the actual controller of Inner Mongolia Lantai Industrial Co., Ltd. (600328.SH) is China National Salt Industry Corporation; variety salt produced by Shindoo Chemi-industry Co., ltd. (002593.SZ) has access to 15 provinces across the nation.
[SSN Selection]
○ President Xi Jinping on May 5 met with Bob Iger, CEO of the Walt Disney Company; the eastday.com reported that the main castle in Shanghai Disneyland Park has fundamentally completed.
○ The National Council for Social Security Fund (NCSSF) recently published a recruitment announcement, providing six positions in the pension management department and pension accountant department.
○ The Ministry of Industry and Information Technology (MIIT) and Ministry of Housing and Urban-Rural Development (MHOUR) on May 5 announced to jointly investigate the implementation of national standard of the "Fiber to the Home" project, to adhere to the "Broadband China" strategy.
○ The State Administration for Industry and Commerce (SAIC) will roll out special action on network market supervision from May to November, to reinforce regulation in online store and online tourism, where chaotic phenomena frequently occur.
○ The China Insurance Regulatory Commission (CIRC) on May 5 issued three documents, aiming to strengthen information disclosure on capital inflow to the insurance industry, outbound investment of insurance fund, connected transactions between insurance companies and etc.
TOP
[Industry Information]
○ 13th Five-Year sports plan issued, football and lottery catch attention
------
The official website of the General Administration of Sport of China (GASC) on May 5 issued the 13th Five-year plan on sports development, which put forward to make new breakthroughs in key sports area reform and advance pilot reforms of football project. The plan also proposes to maintain a good work in sports lotteries, accelerate innovation of sports lotteries and actively research and promote the issuance of football lotteries with China's professional soccer tournament as the object of quiz.
Comment: institutions believe that the sport industry has huge growth potential, and are optimistic about subsectors such as stadium transformation and operation, competitions operation, mass leisure and bodybuilding. In addition, European Cup, Olympic Games and Copa America, which all held once every four years, will open from June and August. In listed companies, Lander Sports Development CO., Ltd. (000558.SZ) has involved in smart sports venue for football and Ice and snow sport competitions in succession since it tapped into the sports field; China Sports Industry Group Co., Ltd. (600158.SH) has deployed the whole industry chain of sports, and owns abundant competition resources; Hongbo Co., ltd. (002229.SZ) announced that it proposes to increase investment in lottery business through private placement.
○ CBN obtains basic telecom business license from MIIT, industrial investment to increase
------
The Ministry of Industry and Information Technology (MIIT) on May 5 officially issued a basic telecom business license to China Broadcasting Network Ltd (CBN), approving the latter to operate internet domestic data transmission business and domestic telecommunication infrastructure service business across the country. China Cable Television Network Co., Ltd., a subsidiary under the CBN, is also allowed to be authorized by the CBN to operate above two businesses.
Comment: Institutions believe that this move will facilitate the nation's progress in three-network convergence, which aims to combine cable television, telecommunications and the internet into one seamless chain. The industry will see more investment, and enterprises engaged in relevant transmission equipment and software supporting the operation will embrace huge market. As to listed companies, Jiangsu Yitong High-tech Co., Ltd. (300211.SZ) is a leading company engaged in equipment manufacturing for broadcasting transmission network; Avit., Ltd. (300264.SZ) is a relevant equipment and system supplier; Bejing STARCOR Technology Co., Ltd., acquired by Hangzhou CNCR-IT Co., Ltd. (300250.SZ), provides CBN with OTT system solutions and video operation service.
TOP
[Announcement Interpretation]
○ Chengzhi Shareholding to acquire Huisheng Energy with RMB10 bln
------
Chengzhi Shareholding Co., Ltd. (000990.SZ) proposes to raise 12,486 million yuan by issuing shares at 14.35 yuan per share through private placement. The proceeds will be used in the acquisition of 99.6 percent equities of Huisheng Energy and the MTO construction project of Huisheng New Materials, a wholly-owned subsidiary of Huisheng Energy. It will take 9,752 million yuan in the acquisition of Huisheng Energy with an appreciation rate of 295 percent. Huisheng Energy committed that the net profit from 2017 to 2020 will be no less than 671 million yuan, 683 million yuan, 764 million yuan, 882 million yuan and 1,016 million yuan, respectively.
Comment: Huisheng Energy is a comprehensive supplier of industrial gas and fundamental chemical materials. It gave up the IPO in 2014. It recorded a net profit of 950 million yuan in 2014 and 490 million yuan in the first eight months of 2015. Chengzhi Shareholding will become the new energy platform under Tsinghua University after the completion of the acquisition.
○ Transtrue Technology to acquire information technical services company
------
Beijing Transtrue Technology Inc. (002771.SZ) plans to acquire 100 percent equities of Netforce with 400 million yuan by issuing shares at 69.44 yuan per share through private placement and in cash. It also plans to raise a supporting fund of 400 million yuan by issuing shares at 69.44 yuan per share.
Netforce is principally engaged in the construction of data centers and the operation, maintenance and management of data centers with Qihoo 360 Technology Co., Ltd., Leshi Internet Information ＆ Technology Corp., Beijing (300104.SZ) and Samsung SDS China as its clients. Based on the performance commitment, the net profit of Netforce after extraordinary items will be 25 million yuan in 2016, 56.25 million yuan in 2016 to 2017 and 95.31 million yuan in 2016 to 2018.
TOP
○ Changchenghuili Asset Management increases shareholding in Yaxing Chemical
------
Weifang Yaxing Chemical Co., Ltd. (600319.SH) disclosed that Shenzhen Changchenghuili Asset Management Co., Ltd. bought 15.78 million stocks of the company from April 18 to May 4, accounting for 5 percent of its total share capitals. The average price is 8.12 yuan per share and the total amount reaches 128 million yuan. Changchenghuili Asset Management indicated that the acquisition is for investment and may increase or decrease the shareholding in the following year. Currently, it also holds 17.52 percent equities of Star Lake Bioscience Co., Inc Zhaoqing Guangdong (600866.SH), 26.16 percent equities of Hangzhou Tian-mu-shan Pharmaceutical Enterprise Co., Ltd. (600671.SH) and 11.50 percent equities of Shenzhen Century Plaza Hotel Co., Ltd. (000033.SZ).
○ CSC Huitong increases shareholding in Hirisun Technology
------
CSC Huitong (Shenzhen) Equities Investment Fund Co., Ltd., the substantial shareholder of Shenzhen Hirisun Technology Incorporated (300277.SZ), increased the shareholding in the company with 8.50 million shares at an average price of 16.7 yuan per share through bulk transaction on May 4, accounting for 2.54 percent of its total share capital. CSC Huitong totally holds 29.85 percent shares of the company after the shareholding increase. Zhang Feng, the second biggest shareholder of the company reduced the shareholding in the company with 11.25 million shares through bulk transaction on May 4, accounting for 3.36 percent of the total share capital of the company. Zhang reduced the shareholding in the company with 8.50 million shares at an average price of 16.7 yuan per share. Hirisun Technology soared by the daily limit of 10 percent on May 5 and closed at 16.89 yuan per share.
Comment: CSC Huitong is a whooly-owned subsidiary of China Science ＆ Merchants Investment Management Group (CSC). It became a shareholder of Hirisun Technology through an agreed transfer last year. It is expected to help enterprises achieve great growth through assets injection and other ways.
○ Zhongzhu Holding not worry about stock price below issuance price
------
The chairman of Zhongzhu Holding Co., Ltd. (600568.SH) indicated at the investors seminar that it is unlikely to lower the issuance price of the private placement. The company proposes to raise 1.3 billion yuan by issuing shares at 17.49 yuan per share through private placement. Zhongzhu Group, the controlling shareholder of the company, commits to subscribe no less than 50 percent. The latest stock price of the company is 15.14 yuan, which is about 15 percent below the issuance price. The private placement plan of the company was approved by the China Securities Regulatory Commission (CSRC) on Feb. 4. In addition, the senior management of the company responded that ET Medical, a subsidiary acquired before, has no connected relationship with the "Putian" hospitals.
○ Guyuelongshan Shaoxing Wine to raise certain products prices
------
Zhejiang Guyuelongshan Shaoxing Wine Co., Ltd. (600059.SH) will raise the prices of certain products from May 20. The prices of the traditional wines with storage of five years will rise 7 to 10 percent. The sales of such products reached approximately 200 million yuan in 2015, accounting for 15 percent of its total business revenue in 2015.
[Trading Trends]
○ Three institutional seats buy Sanmao Industrial
------
The trading volume ranking list on May 5 shows that three institutional seats bought Lanzhou Sanmao Industrial Co., Ltd. (000779.SZ) with a total of 94.39 million yuan, accounting for 34.22 percent of its intraday turnover.
Comment: The company announced last year that it proposed to acquire 100 percent equities of Beijing Zhongzhixin Technology Co., Ltd. It announced on May 5 that it has reached an agreement with the counterparty on the performance of the subject asset. The total net profit of the subject asset attributable to the parent company will be no less than 166 million yuan from March. Public information shows that Zhongzhixin Technology is an affiliate under Peking University and is engaged in the design, manufacturing and sale of CPU chips for personal computers and complete computers.
[Trading Alarms]
○ Square Cold Chain Equipment starts subscription on May 6
------
Nantong Square Cold Chain Equipment Co., Ltd. (603339.SH) issues shares at 10.19 yuan per share with a P/E ratio of 19 times and an upper subscription limit of 19,000 shares for each account. The company is principally engaged in cold-chain equipment.
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