[Today's Guide]
○ First holographic soft mobile phone developed, OLED technologies play essential role
○ Tungsten price keeps surging, supply-side reform shows effects
○ Alibaba hits new high in cloud computing business, industry to see rapid development
○ Kanhoo Industry proposes to buy lithium battery production equipment supplier, Tande plans fundraising to expand main business
[SSN Focus]
○ CSRC studies effects on Chinese concept stocks' returning
------
Rumor has it that the China Securities Regulatory Commission (CSRC) will suspend the listing of red-chip enterprises listed overseas in China. The spokesperson of the CSRC indicated on May 6 that it has noted relevant opinions and is conducting deep study on the possible effects caused by the returning of the red-chip enterprises listed overseas to the A-share market through IPOs, mergers and acquisitions as well as reorganizations. For relevant interpretation, please refer to the "Policy trend stabilizing and building market won't change" in this issue of Strategy.
◆ Qihoo 360 Technology Co., Ltd. May 7 stated on its official weibo that rumors on its privatization in recent days are untrue.
TOP
○ First holographic soft mobile phone developed, OLED technologies play essential role
------
As reported by Engadget, a technology information media, on May 6, Canadian scientific and technical personnel have developed HoloFlex, the first holographic soft intelligent mobile phone in the world. Users can watch 3D videos at any angle by covering micro lens on the flexional high-definition OLED screen without wearing glasses and other equipment. With the bending sensor and touch feedback technology, users can move forward and back along the z axis of the mobile phone and play 3D games more authentically.
Comment: With intelligent mobile phones entering the stock time, OLED, 3D projection and other technologies are playing essential roles in achieving differentiation by mobile phone manufacturers and will be used in more and more new products. Among A-sahre companies, Shenzhen Tatfook Technology Co., Ltd. (300134.SZ) proposes to establish soft OLED display module industrialization projects. Tianma Microelectronics Co., Ltd. (000050.SZ) owns various patents in the naked eye 3D display industry. Dongxu Optoelectronic Technology Co., Ltd. (000413.SZ) is planning the technology upgrading for display materials.
[SSN Selection]
○ The statistics of the General Administration of Customs show that China's export maintained positive growth in April and the China Export Leading Indicator continued recovering.
○ The General Office of the State Council released opinions on strengthening the sports work in schools on May 6, proposing that it will be an indicator in assessing the performance of the government.
○ The Economic Observer reported that the new platform for the operation of state-owned capitals will be officially released, which will promote reform through the appropriation of stock capital.
○ The Shanghai Disney Resort started an internal test run on Saturday on May 7, which attracted nearly 10,000 tourists. The management committee of the Shanghai International Tourism and Resorts Zone disclosed that the trial operation will initiate in late-May.
○ Leshi Internet Information ＆ Technology Corp., Beijing (300104.SZ) released the proposal on acquiring Le Vision Pictures with a consideration of 9.8 billion yuan and indicated that the trading suspension will be no more than 10 trading days in principal.
TOP
[Industry Information]
○ Tungsten price keeps surging, supply-side reform shows effects
------
SSN learnt that driven by the decreased supply and the acquisition for storage, the prices of tungsten concentrate, ammonium paratungstate and tungsten powder surged 2 to 4 percent in recent week and hiked nearly 14 percent in recent month. As a result of the control on the exploration and other regulatory policies on the industry, the output of tungsten concentrate reached about 12,000 tons in the first quarter, decreasing 15 percent year on year. In addition, Ganzhou Tungsten Industry Association expects that the average price will increase, which also boosted the market price.
Comment: Institutes believe that thanks to the acquisition of wolframite concentrate and scheelite concentrate accounting for over 10 percent of the annual output for storage, the inventory in the market will reduce significantly. In addition, the association calls for that the output of tungsten concentrate decreasing 15 percent year on year in 2016, which has shown preliminary results. The cost of leaders in the tungsten industry has reached the market price and they are willing to further boost the price. In terms of listed companies, China Tungsten and Hightech Materials Co., Ltd. (000657.SZ), Chongyi Zhangyuan Tungsten Co., Ltd. (002378.SZ) and Xiamen Tungsten Co., Ltd. (600549.SH) are domestic tungsten leaders and are competitive in the full industrial chains.
TOP
○ Alibaba hits new high in cloud computing business, industry to see rapid development
------
Alibaba Group Holding Ltd, (NYSE: BABA) released its financial results for the first quarter of 2016 recently. The operating revenue from its cloud computing business was 1,066 million yuan, representing an increase of as high as 175 percent and hitting a new high. It is learnt that Aliyun.com, Alibaba's cloud computing platform, has become one of the world's largest cloud computing service provider. It has over 500,000 paying customers as of the end of March, up by 108 percent from the year earlier of 240,000.
Comment: Institutes estimate that driven by the demands for SaaS (Software as a Service), the cloud computing market will maintain an annual average growth of 100 percent in the next three years, and the potential market will reach a scale of 100 billion yuan. Net263 Ltd. (002467.SZ) has launched the new generation of enterprise cloud communication platform, covering six products, including enterprise instant communication product. Xiamen 35.com Technology Co., Ltd. (300051.SZ) is a leading SAAS service provider in China.
TOP
[Announcement Interpretation]
○Kanhoo Industry proposes to buy lithium battery production equipment supplier
------
Jiangmen Kanhoo Industry Co., Ltd. (300340.SZ) proposes to buy 90 percent shareholdings in Haoneng Technology at the valuation of 450 million yuan, which will be satisfied by private placement at 28.15 yuan per share and cash payment. Haoneng Technology will be wholly owned by Kanhoo Industry. Meanwhile, Kanhoo Industry plans to raise supporting fund of 142 million yuan through private placement at 22 yuan per share.
Haoneng Technology is a lithium battery automation production solution provider. Its committed net profits after deduction of non-recurring profits or losses for 2016-2018 will be 35 million yuan, 45 million yuan and 55 million yuan, respectively.
○ Tande plans fundraising to expand property business in Suzhou and Tianjin
------
Tande Co., Ltd. (600665.SH) proposes to raise 2.5 billion yuan by additional issuance at no less than 5.01 yuan per share. The proceeds will be used for five property projects in Suzhou City and Tianjin City, as well as loan repayment. The company's biggest shareholder promised that it will subscribe 10 percent of the total fundraising. Tande indicated that this additional issuance will lower the company's asset-liability ratio and enhance the company's capital strength.
○ Wanliyang proposes to acquire gear box company under Chery Automobile
------
Zhejiang Wanliyang Co.,Ltd. (002434.SZ) proposes to buy the entire equities of a gear box company in Wuhu City controlled by Chery Automobile Co., Ltd. at the valuation of 2.6 billion yuan, which will be paid by issuing 165 million shares at 9.68 yuan per share through private placement and cash payment of 1 billion yuan. Meanwhile, the company proposes to raise 1.5 billion yuan supporting fund by private placement at 9.18 yuan per share. Chery Automobile promises that the net profits of the gear box company for 2016-2019 will be no less than 200 million yuan, 220 million yuan, 242 million yuan and 266 million yuan respectively.
○ Controlling shareholder of Jointo Energy Investment to increase shareholding
------
Hebei Construction ＆Investment Group (HCIG), controlling shareholder of Jointo Energy Investment Co., ltd. Hebei. (000600.SZ) on May 6 increased holding 1.82 million shares in the company. HCIG plans to increase no more than 2 percent of the total share capital of Jointo Energy Investment within the coming six months from May 6. Senyuan Group, the controlling shareholder of Henan Senyuan Electric Co., Ltd. (002358.SZ) had increased 7 million shares in the company from May 5 to May 6. Senyuan Group has planned to increase no more than 1.5 billion yuan in the 6 months starting from Feb. 16 at the price of no more than 18 yuan per share.
The controlling shareholder of Yihua Healthcare Co., ltd. (000150.SZ) has in total increased more than 4.48 million shares in the company from Jan. 28 to May 6, accounting for 1 percent of the company's total share capital. Jilin Aodong Pharmaceutical Group Co., Ltd. (000623.SZ) announced that as of the closing time of May 6, it had repurchased 9.47 million shares, accounting for 1.06 percent of the company's total share capital.
[Weekly Review]
○ Stampede and massive sell-offs
------
The Chinese stock market stumbled on May 6 with shrinking trading turnover. Previously, a rumor "the return to the A-share market of overseas listed Chinese companies will suspended", left many small capped companies, which are scare shell resources, shaken off the surge of the previous week or over the month. It is really confusing, since about 700 enterprises are waiting to go public in the A-share market, and thousands others have the intention to list. Even all the 30 some overseas listed stocks all come back, it shouldn't have so severe impact on the value of shell resources.
As a matter of fact, the stock market is just like the crowds of people. Most of the time, people are walking towards their own directions. External emergency can at most result in part of the people to stop for a while, and they will quickly go back to their original directions. But in extreme conditions, when most people swarming into one place, an attack, rumor of disaster and even an insignificant push-over would evolve into stampede. Similarly, when an increasing number of people buy in small capped stocks simply because "the registration-based IPO system and the strategic emerging market will suspend", and hope to make big money overnight, the risk of massive sell-offs is enlarged. For example, a stock with "360" in the stock code, which is possibly the target shell for the New York listed Chinese Internet Company Qihoo 360 Technology Co., Ltd., has soared to the daily limit of 10 percent for days.
Back in 2014, a stampede of the crowds of people happened in the Shanghai Bund had taken 36 young lives. We should take the experience acquired at the cost of life as mirror, to remind us about the safety of our lives and investment. When heading to a new place, we'd better look into different exits; when standing among the crowds, never go against the stream, the right thing to do is to follow the crows and move to the sides, and then get out of the crowds.
TOP
○ First holographic soft mobile phone developed, OLED technologies play essential role
○ Tungsten price keeps surging, supply-side reform shows effects
○ Alibaba hits new high in cloud computing business, industry to see rapid development
○ Kanhoo Industry proposes to buy lithium battery production equipment supplier, Tande plans fundraising to expand main business
[SSN Focus]
○ CSRC studies effects on Chinese concept stocks' returning
------
Rumor has it that the China Securities Regulatory Commission (CSRC) will suspend the listing of red-chip enterprises listed overseas in China. The spokesperson of the CSRC indicated on May 6 that it has noted relevant opinions and is conducting deep study on the possible effects caused by the returning of the red-chip enterprises listed overseas to the A-share market through IPOs, mergers and acquisitions as well as reorganizations. For relevant interpretation, please refer to the "Policy trend stabilizing and building market won't change" in this issue of Strategy.
◆ Qihoo 360 Technology Co., Ltd. May 7 stated on its official weibo that rumors on its privatization in recent days are untrue.
TOP
○ First holographic soft mobile phone developed, OLED technologies play essential role
------
As reported by Engadget, a technology information media, on May 6, Canadian scientific and technical personnel have developed HoloFlex, the first holographic soft intelligent mobile phone in the world. Users can watch 3D videos at any angle by covering micro lens on the flexional high-definition OLED screen without wearing glasses and other equipment. With the bending sensor and touch feedback technology, users can move forward and back along the z axis of the mobile phone and play 3D games more authentically.
Comment: With intelligent mobile phones entering the stock time, OLED, 3D projection and other technologies are playing essential roles in achieving differentiation by mobile phone manufacturers and will be used in more and more new products. Among A-sahre companies, Shenzhen Tatfook Technology Co., Ltd. (300134.SZ) proposes to establish soft OLED display module industrialization projects. Tianma Microelectronics Co., Ltd. (000050.SZ) owns various patents in the naked eye 3D display industry. Dongxu Optoelectronic Technology Co., Ltd. (000413.SZ) is planning the technology upgrading for display materials.
[SSN Selection]
○ The statistics of the General Administration of Customs show that China's export maintained positive growth in April and the China Export Leading Indicator continued recovering.
○ The General Office of the State Council released opinions on strengthening the sports work in schools on May 6, proposing that it will be an indicator in assessing the performance of the government.
○ The Economic Observer reported that the new platform for the operation of state-owned capitals will be officially released, which will promote reform through the appropriation of stock capital.
○ The Shanghai Disney Resort started an internal test run on Saturday on May 7, which attracted nearly 10,000 tourists. The management committee of the Shanghai International Tourism and Resorts Zone disclosed that the trial operation will initiate in late-May.
○ Leshi Internet Information ＆ Technology Corp., Beijing (300104.SZ) released the proposal on acquiring Le Vision Pictures with a consideration of 9.8 billion yuan and indicated that the trading suspension will be no more than 10 trading days in principal.
TOP
[Industry Information]
○ Tungsten price keeps surging, supply-side reform shows effects
------
SSN learnt that driven by the decreased supply and the acquisition for storage, the prices of tungsten concentrate, ammonium paratungstate and tungsten powder surged 2 to 4 percent in recent week and hiked nearly 14 percent in recent month. As a result of the control on the exploration and other regulatory policies on the industry, the output of tungsten concentrate reached about 12,000 tons in the first quarter, decreasing 15 percent year on year. In addition, Ganzhou Tungsten Industry Association expects that the average price will increase, which also boosted the market price.
Comment: Institutes believe that thanks to the acquisition of wolframite concentrate and scheelite concentrate accounting for over 10 percent of the annual output for storage, the inventory in the market will reduce significantly. In addition, the association calls for that the output of tungsten concentrate decreasing 15 percent year on year in 2016, which has shown preliminary results. The cost of leaders in the tungsten industry has reached the market price and they are willing to further boost the price. In terms of listed companies, China Tungsten and Hightech Materials Co., Ltd. (000657.SZ), Chongyi Zhangyuan Tungsten Co., Ltd. (002378.SZ) and Xiamen Tungsten Co., Ltd. (600549.SH) are domestic tungsten leaders and are competitive in the full industrial chains.
TOP
○ Alibaba hits new high in cloud computing business, industry to see rapid development
------
Alibaba Group Holding Ltd, (NYSE: BABA) released its financial results for the first quarter of 2016 recently. The operating revenue from its cloud computing business was 1,066 million yuan, representing an increase of as high as 175 percent and hitting a new high. It is learnt that Aliyun.com, Alibaba's cloud computing platform, has become one of the world's largest cloud computing service provider. It has over 500,000 paying customers as of the end of March, up by 108 percent from the year earlier of 240,000.
Comment: Institutes estimate that driven by the demands for SaaS (Software as a Service), the cloud computing market will maintain an annual average growth of 100 percent in the next three years, and the potential market will reach a scale of 100 billion yuan. Net263 Ltd. (002467.SZ) has launched the new generation of enterprise cloud communication platform, covering six products, including enterprise instant communication product. Xiamen 35.com Technology Co., Ltd. (300051.SZ) is a leading SAAS service provider in China.
TOP
[Announcement Interpretation]
○Kanhoo Industry proposes to buy lithium battery production equipment supplier
------
Jiangmen Kanhoo Industry Co., Ltd. (300340.SZ) proposes to buy 90 percent shareholdings in Haoneng Technology at the valuation of 450 million yuan, which will be satisfied by private placement at 28.15 yuan per share and cash payment. Haoneng Technology will be wholly owned by Kanhoo Industry. Meanwhile, Kanhoo Industry plans to raise supporting fund of 142 million yuan through private placement at 22 yuan per share.
Haoneng Technology is a lithium battery automation production solution provider. Its committed net profits after deduction of non-recurring profits or losses for 2016-2018 will be 35 million yuan, 45 million yuan and 55 million yuan, respectively.
○ Tande plans fundraising to expand property business in Suzhou and Tianjin
------
Tande Co., Ltd. (600665.SH) proposes to raise 2.5 billion yuan by additional issuance at no less than 5.01 yuan per share. The proceeds will be used for five property projects in Suzhou City and Tianjin City, as well as loan repayment. The company's biggest shareholder promised that it will subscribe 10 percent of the total fundraising. Tande indicated that this additional issuance will lower the company's asset-liability ratio and enhance the company's capital strength.
○ Wanliyang proposes to acquire gear box company under Chery Automobile
------
Zhejiang Wanliyang Co.,Ltd. (002434.SZ) proposes to buy the entire equities of a gear box company in Wuhu City controlled by Chery Automobile Co., Ltd. at the valuation of 2.6 billion yuan, which will be paid by issuing 165 million shares at 9.68 yuan per share through private placement and cash payment of 1 billion yuan. Meanwhile, the company proposes to raise 1.5 billion yuan supporting fund by private placement at 9.18 yuan per share. Chery Automobile promises that the net profits of the gear box company for 2016-2019 will be no less than 200 million yuan, 220 million yuan, 242 million yuan and 266 million yuan respectively.
○ Controlling shareholder of Jointo Energy Investment to increase shareholding
------
Hebei Construction ＆Investment Group (HCIG), controlling shareholder of Jointo Energy Investment Co., ltd. Hebei. (000600.SZ) on May 6 increased holding 1.82 million shares in the company. HCIG plans to increase no more than 2 percent of the total share capital of Jointo Energy Investment within the coming six months from May 6. Senyuan Group, the controlling shareholder of Henan Senyuan Electric Co., Ltd. (002358.SZ) had increased 7 million shares in the company from May 5 to May 6. Senyuan Group has planned to increase no more than 1.5 billion yuan in the 6 months starting from Feb. 16 at the price of no more than 18 yuan per share.
The controlling shareholder of Yihua Healthcare Co., ltd. (000150.SZ) has in total increased more than 4.48 million shares in the company from Jan. 28 to May 6, accounting for 1 percent of the company's total share capital. Jilin Aodong Pharmaceutical Group Co., Ltd. (000623.SZ) announced that as of the closing time of May 6, it had repurchased 9.47 million shares, accounting for 1.06 percent of the company's total share capital.
[Weekly Review]
○ Stampede and massive sell-offs
------
The Chinese stock market stumbled on May 6 with shrinking trading turnover. Previously, a rumor "the return to the A-share market of overseas listed Chinese companies will suspended", left many small capped companies, which are scare shell resources, shaken off the surge of the previous week or over the month. It is really confusing, since about 700 enterprises are waiting to go public in the A-share market, and thousands others have the intention to list. Even all the 30 some overseas listed stocks all come back, it shouldn't have so severe impact on the value of shell resources.
As a matter of fact, the stock market is just like the crowds of people. Most of the time, people are walking towards their own directions. External emergency can at most result in part of the people to stop for a while, and they will quickly go back to their original directions. But in extreme conditions, when most people swarming into one place, an attack, rumor of disaster and even an insignificant push-over would evolve into stampede. Similarly, when an increasing number of people buy in small capped stocks simply because "the registration-based IPO system and the strategic emerging market will suspend", and hope to make big money overnight, the risk of massive sell-offs is enlarged. For example, a stock with "360" in the stock code, which is possibly the target shell for the New York listed Chinese Internet Company Qihoo 360 Technology Co., Ltd., has soared to the daily limit of 10 percent for days.
Back in 2014, a stampede of the crowds of people happened in the Shanghai Bund had taken 36 young lives. We should take the experience acquired at the cost of life as mirror, to remind us about the safety of our lives and investment. When heading to a new place, we'd better look into different exits; when standing among the crowds, never go against the stream, the right thing to do is to follow the crows and move to the sides, and then get out of the crowds.
TOP
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