[Today's Guide]
○ Trial reform in water resource tax to launch, highlight importance of water-saving and water treatment
○ VA prices hike again, industry profitability to continue to rise
○ Hualian Mining to become dairy firm, Tianmushan Pharmaceutical and Yaxing Chemical bought to 5 pct. limit
○ Inspect positions of social insurance in Q1, anti-inflation stocks on trading volume ranking list
[SSN Focus]
○ Trial reform in water resource tax to launch, highlight importance of water-saving and water treatment
------
The Ministry of Finance (MOF) on May 10 issued a notice on fully promoting resource tax reform and the interim measures for trial reform in water resource tax. It will first conduct trial reform in water resource tax in Hebei Province and expand the reform around the country when conditions permitted. The measures specify that the tax payable standard in water-intensive industries should be improved properly, the taxation for water for regular production and household use should remain unchanged and recycling water after sewage treatment and renewable water will be exempted from water resource tax.
Comment: This move will enhance the society's awareness in protecting resources and environment, forcing water-intensive enterprises to increase application of water-saving technology. As the State Council has required to implementing the strictest water resource management system, polices supporting industrial water-saving and sewage recycling have been issued intensively in recent years. Among A-share companies, Luoyang Longhua Heat Transfer ＆ Energy Conservation Co., Ltd. (300263.SZ) have been included the the list of "industrial water-saving process, technology and equipment encouraged by the state". Shanghai Safbon Water Service Co., Ltd. (300262.SZ) and
Cec Environmental Protection Co., Ltd. (30.0172.SZ) have rich experience in industrial water treatment
◆The notice also proposed to fully carry out ad valorem taxation for mineral resource tax. As resource prices remained weak in recent years, the implementation of ad valorem taxation will help to ease enterprises' burden.
[SSN Selection]
○ China's consumer price index (CPI) growth remained unchanged at 2.3 percent on a year-on-year basis for the third consecutive month. Chief macro-economic analyst at Shenwan Hongyuan Securities indicated that monetary policy is still in an observation period.
○ The General Office of the State Council issued a notice on May 9, requiring to conduct supervision on the implementation of policies promoting private investment and vigorously push for PPP mode.
○ The National Development and Reform Commission (NDRC) approved the comprehensive trial reform in electricity system in Yunnan and Guizhou and required to accelerating establishment of relatively independent electricity trading institutions.
○ The securities margin recorded a net inflow of 32.1 billion yuan last week. The market is facing gaming among existing capital.
○ The spokesperson for the Ministry of Foreign Affairs indicated on May 10 that China firmly opposes U.S. destroyers' illegal entry into waters adjacent to relevant reefs of the Nansha Islands of China.
TOP
[Industry Information]
○ VA prices hike again, industry profitability to continue to rise
------
SSN learns that shored up by improving imports, Zhejiang NHU Company Ltd. (002001.SZ) on May 9 lifted the quoted price of vitamin A to 360 yuan per kilogram, a cumulative increase of 260 percent from the low point of 100 yuan per kilogram in January. As the company enjoys a great share in the global VA market, its lifting quoted price will take significant demonstration effect. Besides, thanks to the upcoming G20 meeting in September in Hangzhou, the rectification actions in environment are expected to further improve the industry's concentration ratio.
Comment: Manufacturers concerned believe that under the pressure of enterprise production restriction to prick up prices and rectification in environment, and benefiting from rising demands for fodder, the profitability in the vitamin market will continue to rise. Xiamen Kingdomway Group Company (002626.SZ), Zhejiang Medicine Co., Ltd. (600216.SH) and Zhejiang NHU Company Ltd. (002001.SZ) rank top in the industry in terms of VA productivity. Benefiting from large flexibility due to rising prices, their net profit all increased remarkably in the first quarter.
TOP
[Announcement Interpretation]
○ Hualian Mining to become dairy firm
------
Shandong Hualian Mining Holdings Co., Ltd. (600882.SH) proposes to swap the 100 equities of Ground Dairy Industry Co., Ltd. and 100 equities of Jilin Dairy Products Co., Ltd. (preliminary estimated at a total value of about 814 million yuan) held by Jilin Dairy Industry Group with 421 million shares in Hualian Mining and 100 percent equities of Yuancheng Consulting Co., Ltd. (preliminary estimated at a total value of about 1.1 bilion to 1.2 billion yuan). Jilin Dairy Industry Group will pay the spread in cash. After the deal, Hualian Mining will transform its main business from mining exploitation and sale to dairy production and sale.
○ Tianmushan Pharmaceutical and Yaxing Chemical bought to 5 pct. limit
------
Hangzhou Tianmushan Pharmaceutical Enterprise Co., Ltd. (600671.SH) discloses that China Minsheng Trust Co., Ltd. increased shareholding in the company by 6,089,000 shares from April 7 to May 10, accounting for 5 percent of the company's total share capital. Minsheng Trust hopes that this deal will increase its value-added returns in equity. And it is likely to continue to increase shareholding in the company in the next 12 months.
Weifang Yaxing Chemical Co., Ltd. (600319.SH) announces that the company's former largest shareholder Yaxing Group increased shareholding in the company by 550,000 shares from May 9 to 10 at an average price of 8.15 yuan per share, accounting from 0.17 percent of its total share capital. After the shareholding increase, Yaxing Group's holdings in the company increased to 15,782,800 shares. Its shareholding ratio in the company rose from 4.83 percent to 5 percent, reaching the upper limit. Yaxing Group used to be the largest shareholder of Yaxing Chemical. In August 2015, Yaxing Group transferred 40 million shares it holds in Yaxing Chemical to Glorious Oriental Group via agreement, making Glorious Oriental Group the largest shareholder of Yaxing Chemical. In addition, Shenzhen Great Walle Asset Management Co., Ltd. bought 15,780,000 shares in Yaxing Chemical from April 18 to May 4, accounting from over 5 percent of its total share capital, reaching the upper limit.
○ Boomsense Technology's employee shareholding plan buys nearly 5 pct shares
------
Fortune Securities, the carrier of the phase-II employee shareholding plan of Boomsense Technology Co., Ltd. (300312.SZ), has bought 7,979,200 shares of Boomsense Technology, accounting for 4.986 percent of the total share capital of the company. It will continue to increase the shareholding in the company in the future.
In addition, Shanghai Longyun Advertising ＆ Media Co., Ltd. (603729.SH) released a phase of an employee shareholding plan to raise a maximum of 40 million yuan. It will buy the stocks of the company with no more than 100 million yuan at the proportion of 1:1.5. It is expected that about 2 million shares of the company will be involved, accounting for about 3 percent of the total share capital.
○ Everjoy Health and Sino Great Wall to invest in medical treatment
------
Shanghai Everjoy Health Group Co., Ltd. (002162.SZ) conducts strategic cooperation with Taiji Biotechnology Co., Ltd. and will indirectly control Shanghai Yabiting Investment Consultancy Co., Ltd. under the latter. They will jointly develop the domestic high-end dental medical treatment market. Everjoy Health will invest 95 million yuan in Yabiting Investment Consultancy in two installments and will hold no less than 50.1 percent equities of the company after the completion. The brand of Taiji Biotechnology is ABC Dentists Association and owns more than 20 years experiences in the dental chain operation.
Sino Great Wall Co., Ltd. (000018.SZ) proposes to acquire 100 percent equities of Wuhan Commercial Staff Hospital with 97 million yuan and will inject 158 million yuan in the latter. The subject asset is a profit-seeking medical institute and recorded a net profit of 5.20 million yuan and 2.80 million yuan in 2014 and 2015. Sino Great Wall is mainly engaged in construction projects and have been increasing in the medical industry in recent years.
○ Xinhu Zhongbao continues repurchasing shares
------
Xinhu Zhongbao Co., Ltd. (600208.SH) reourchased 91.02 million shares of the company from May 5 to 10, accounting for 1 percent of its total share capital. Jilin Aodong Pharmaceutical Group Co., Ltd. (000623.SZ) repurchased 18.20 million shares of the company as at the closing hours of May 10, accounting for over 2 percent of the share capital of the company. The controlling shareholders of Shanghai Pudong Road ＆ Bridge Construction Co., Ltd. (600284.SH) increased the shareholding in the company with 1.77 million shares from April 15 to May 10.
TOP
[Data Speaks]
○ Inspect positions of social insurance in Q1
------
Based on the statistics of SSN, social insurance portfolio holds the highest position in pharmaceutical, media and non-ferrous metal sectors as at the end of the first quarter. Based on the positions held by the social insurance, Inner Mongolia Yili Industrial Group Co., Ltd. (600887.SH), China South Publishing ＆ Media Group Co., Ltd. (601098.SH) and China Merchants Shekou Industrial Zone Holdings Co., Ltd. (001979.SZ) rank high. Based on the number of individual stocks, Shenzhen Overseas Chinese Town Co., Ltd. (000069.SZ), Guangdong Advertising Group Co., Ltd. (002400.SZ) and Suzhou Chunxing Precision Mechanical Co., Ltd. (002547.SZ) were bought by the social insurance at the end of the first quarter. Among the companies with at least three social insurance portfolios, Zhejiang Juhua Co., Ltd. (600160.SH), Guizhou Jiulian Industrial Explosive Material Development Co., Ltd. (002037.SZ) and Westone Information Industry Inc. (002268.SZ) saw the highest decline in the first quarter.
In addition, some individual stocks saw social insurance portfolios in the shareholder list managed by the same fund manager. The fund products under the fund manager also appeared in the list. Such companies include Keda Group Co., Ltd. (600986.SH) and Shan Dong Sun Paper Industry Joint Stock Co., Ltd. (002078.SZ).
○ Institutes conduct more inspections on consumption sector
------
Based on the statistics of SSN, institutes have been inspecting the household appliances, food and beverage as well as other consumption industries since mid-April. In terms of the household appliances industry, Guangdong Xinbao Electrical Appliances Holdings Co., Ltd. (002705.SZ) has been inspected by 36 institutes since end-April. The company indicated that it will consolidate the advantages in kitchen appliances and expand into the household care appliances, infant appliances, health and beauty appliances as well as other product lines. Besides, over ten institutes inspected Vatti Corporation Limited (002035.SZ), a company principally engaged in flue gas turbines and cookers.
In terms of spirit, Beijing Shunxin Agriculture Co., Ltd. (000860.SZ) was inspected by nearly 30 institutes. The company indicated that it will continue focusing on spirit and pigs breeding as well as the processing of meat products. It will also conduct mergers and consolidation when it is appropriate. Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. (002304.SZ) was inspected by Citibank and other foreign banks through telephone. Citibank inquired about the sales and gross profit margin of the blue classic series, which is the dominant product of the company.
[Trading Trends]
○ Anti-inflation stocks on trading volume ranking list
------
The trading volume ranking list on May 10 shows that several anti-inflation individual stocks were bought by institutional seats. Five institutional seats bought Shenzhen Jinxinnong Feed Co., Ltd. (002548.SZ), a company principally engaged in pig fodders, with a total of 64,751,300 yuan. Four institutional seats bought Xiwang Foodstuffs Co., Ltd. (000639.SZ), a company principally engaged in corn oil, with a total of 61,747,900 yuan. Shandong Minhe Animal Husbandry Co., Ltd. (002234.SZ), a company engaged in the production of chicks for meat, was also bought by institutional seats.
Comment: The CPI increased 2.3 percent in April as announced on May 10. Pork price saw a year-on-year increase of 33.5 percent, driving the CPI up about 0.75 percentage points. Institutes believe that benefiting from the pigs breeding industry, the fodder business of Jinxinnong Feed will see improvements in the sales and gross profit margin. In addition, the bean oil price has been increasing since April. As the corn oil price is closely related to the bean oil price, institutes are rosy about the prospects of Xiwang Foodstuffs in fighting against inflation.
TOP
○ Trial reform in water resource tax to launch, highlight importance of water-saving and water treatment
○ VA prices hike again, industry profitability to continue to rise
○ Hualian Mining to become dairy firm, Tianmushan Pharmaceutical and Yaxing Chemical bought to 5 pct. limit
○ Inspect positions of social insurance in Q1, anti-inflation stocks on trading volume ranking list
[SSN Focus]
○ Trial reform in water resource tax to launch, highlight importance of water-saving and water treatment
------
The Ministry of Finance (MOF) on May 10 issued a notice on fully promoting resource tax reform and the interim measures for trial reform in water resource tax. It will first conduct trial reform in water resource tax in Hebei Province and expand the reform around the country when conditions permitted. The measures specify that the tax payable standard in water-intensive industries should be improved properly, the taxation for water for regular production and household use should remain unchanged and recycling water after sewage treatment and renewable water will be exempted from water resource tax.
Comment: This move will enhance the society's awareness in protecting resources and environment, forcing water-intensive enterprises to increase application of water-saving technology. As the State Council has required to implementing the strictest water resource management system, polices supporting industrial water-saving and sewage recycling have been issued intensively in recent years. Among A-share companies, Luoyang Longhua Heat Transfer ＆ Energy Conservation Co., Ltd. (300263.SZ) have been included the the list of "industrial water-saving process, technology and equipment encouraged by the state". Shanghai Safbon Water Service Co., Ltd. (300262.SZ) and
Cec Environmental Protection Co., Ltd. (30.0172.SZ) have rich experience in industrial water treatment
◆The notice also proposed to fully carry out ad valorem taxation for mineral resource tax. As resource prices remained weak in recent years, the implementation of ad valorem taxation will help to ease enterprises' burden.
[SSN Selection]
○ China's consumer price index (CPI) growth remained unchanged at 2.3 percent on a year-on-year basis for the third consecutive month. Chief macro-economic analyst at Shenwan Hongyuan Securities indicated that monetary policy is still in an observation period.
○ The General Office of the State Council issued a notice on May 9, requiring to conduct supervision on the implementation of policies promoting private investment and vigorously push for PPP mode.
○ The National Development and Reform Commission (NDRC) approved the comprehensive trial reform in electricity system in Yunnan and Guizhou and required to accelerating establishment of relatively independent electricity trading institutions.
○ The securities margin recorded a net inflow of 32.1 billion yuan last week. The market is facing gaming among existing capital.
○ The spokesperson for the Ministry of Foreign Affairs indicated on May 10 that China firmly opposes U.S. destroyers' illegal entry into waters adjacent to relevant reefs of the Nansha Islands of China.
TOP
[Industry Information]
○ VA prices hike again, industry profitability to continue to rise
------
SSN learns that shored up by improving imports, Zhejiang NHU Company Ltd. (002001.SZ) on May 9 lifted the quoted price of vitamin A to 360 yuan per kilogram, a cumulative increase of 260 percent from the low point of 100 yuan per kilogram in January. As the company enjoys a great share in the global VA market, its lifting quoted price will take significant demonstration effect. Besides, thanks to the upcoming G20 meeting in September in Hangzhou, the rectification actions in environment are expected to further improve the industry's concentration ratio.
Comment: Manufacturers concerned believe that under the pressure of enterprise production restriction to prick up prices and rectification in environment, and benefiting from rising demands for fodder, the profitability in the vitamin market will continue to rise. Xiamen Kingdomway Group Company (002626.SZ), Zhejiang Medicine Co., Ltd. (600216.SH) and Zhejiang NHU Company Ltd. (002001.SZ) rank top in the industry in terms of VA productivity. Benefiting from large flexibility due to rising prices, their net profit all increased remarkably in the first quarter.
TOP
[Announcement Interpretation]
○ Hualian Mining to become dairy firm
------
Shandong Hualian Mining Holdings Co., Ltd. (600882.SH) proposes to swap the 100 equities of Ground Dairy Industry Co., Ltd. and 100 equities of Jilin Dairy Products Co., Ltd. (preliminary estimated at a total value of about 814 million yuan) held by Jilin Dairy Industry Group with 421 million shares in Hualian Mining and 100 percent equities of Yuancheng Consulting Co., Ltd. (preliminary estimated at a total value of about 1.1 bilion to 1.2 billion yuan). Jilin Dairy Industry Group will pay the spread in cash. After the deal, Hualian Mining will transform its main business from mining exploitation and sale to dairy production and sale.
○ Tianmushan Pharmaceutical and Yaxing Chemical bought to 5 pct. limit
------
Hangzhou Tianmushan Pharmaceutical Enterprise Co., Ltd. (600671.SH) discloses that China Minsheng Trust Co., Ltd. increased shareholding in the company by 6,089,000 shares from April 7 to May 10, accounting for 5 percent of the company's total share capital. Minsheng Trust hopes that this deal will increase its value-added returns in equity. And it is likely to continue to increase shareholding in the company in the next 12 months.
Weifang Yaxing Chemical Co., Ltd. (600319.SH) announces that the company's former largest shareholder Yaxing Group increased shareholding in the company by 550,000 shares from May 9 to 10 at an average price of 8.15 yuan per share, accounting from 0.17 percent of its total share capital. After the shareholding increase, Yaxing Group's holdings in the company increased to 15,782,800 shares. Its shareholding ratio in the company rose from 4.83 percent to 5 percent, reaching the upper limit. Yaxing Group used to be the largest shareholder of Yaxing Chemical. In August 2015, Yaxing Group transferred 40 million shares it holds in Yaxing Chemical to Glorious Oriental Group via agreement, making Glorious Oriental Group the largest shareholder of Yaxing Chemical. In addition, Shenzhen Great Walle Asset Management Co., Ltd. bought 15,780,000 shares in Yaxing Chemical from April 18 to May 4, accounting from over 5 percent of its total share capital, reaching the upper limit.
○ Boomsense Technology's employee shareholding plan buys nearly 5 pct shares
------
Fortune Securities, the carrier of the phase-II employee shareholding plan of Boomsense Technology Co., Ltd. (300312.SZ), has bought 7,979,200 shares of Boomsense Technology, accounting for 4.986 percent of the total share capital of the company. It will continue to increase the shareholding in the company in the future.
In addition, Shanghai Longyun Advertising ＆ Media Co., Ltd. (603729.SH) released a phase of an employee shareholding plan to raise a maximum of 40 million yuan. It will buy the stocks of the company with no more than 100 million yuan at the proportion of 1:1.5. It is expected that about 2 million shares of the company will be involved, accounting for about 3 percent of the total share capital.
○ Everjoy Health and Sino Great Wall to invest in medical treatment
------
Shanghai Everjoy Health Group Co., Ltd. (002162.SZ) conducts strategic cooperation with Taiji Biotechnology Co., Ltd. and will indirectly control Shanghai Yabiting Investment Consultancy Co., Ltd. under the latter. They will jointly develop the domestic high-end dental medical treatment market. Everjoy Health will invest 95 million yuan in Yabiting Investment Consultancy in two installments and will hold no less than 50.1 percent equities of the company after the completion. The brand of Taiji Biotechnology is ABC Dentists Association and owns more than 20 years experiences in the dental chain operation.
Sino Great Wall Co., Ltd. (000018.SZ) proposes to acquire 100 percent equities of Wuhan Commercial Staff Hospital with 97 million yuan and will inject 158 million yuan in the latter. The subject asset is a profit-seeking medical institute and recorded a net profit of 5.20 million yuan and 2.80 million yuan in 2014 and 2015. Sino Great Wall is mainly engaged in construction projects and have been increasing in the medical industry in recent years.
○ Xinhu Zhongbao continues repurchasing shares
------
Xinhu Zhongbao Co., Ltd. (600208.SH) reourchased 91.02 million shares of the company from May 5 to 10, accounting for 1 percent of its total share capital. Jilin Aodong Pharmaceutical Group Co., Ltd. (000623.SZ) repurchased 18.20 million shares of the company as at the closing hours of May 10, accounting for over 2 percent of the share capital of the company. The controlling shareholders of Shanghai Pudong Road ＆ Bridge Construction Co., Ltd. (600284.SH) increased the shareholding in the company with 1.77 million shares from April 15 to May 10.
TOP
[Data Speaks]
○ Inspect positions of social insurance in Q1
------
Based on the statistics of SSN, social insurance portfolio holds the highest position in pharmaceutical, media and non-ferrous metal sectors as at the end of the first quarter. Based on the positions held by the social insurance, Inner Mongolia Yili Industrial Group Co., Ltd. (600887.SH), China South Publishing ＆ Media Group Co., Ltd. (601098.SH) and China Merchants Shekou Industrial Zone Holdings Co., Ltd. (001979.SZ) rank high. Based on the number of individual stocks, Shenzhen Overseas Chinese Town Co., Ltd. (000069.SZ), Guangdong Advertising Group Co., Ltd. (002400.SZ) and Suzhou Chunxing Precision Mechanical Co., Ltd. (002547.SZ) were bought by the social insurance at the end of the first quarter. Among the companies with at least three social insurance portfolios, Zhejiang Juhua Co., Ltd. (600160.SH), Guizhou Jiulian Industrial Explosive Material Development Co., Ltd. (002037.SZ) and Westone Information Industry Inc. (002268.SZ) saw the highest decline in the first quarter.
In addition, some individual stocks saw social insurance portfolios in the shareholder list managed by the same fund manager. The fund products under the fund manager also appeared in the list. Such companies include Keda Group Co., Ltd. (600986.SH) and Shan Dong Sun Paper Industry Joint Stock Co., Ltd. (002078.SZ).
○ Institutes conduct more inspections on consumption sector
------
Based on the statistics of SSN, institutes have been inspecting the household appliances, food and beverage as well as other consumption industries since mid-April. In terms of the household appliances industry, Guangdong Xinbao Electrical Appliances Holdings Co., Ltd. (002705.SZ) has been inspected by 36 institutes since end-April. The company indicated that it will consolidate the advantages in kitchen appliances and expand into the household care appliances, infant appliances, health and beauty appliances as well as other product lines. Besides, over ten institutes inspected Vatti Corporation Limited (002035.SZ), a company principally engaged in flue gas turbines and cookers.
In terms of spirit, Beijing Shunxin Agriculture Co., Ltd. (000860.SZ) was inspected by nearly 30 institutes. The company indicated that it will continue focusing on spirit and pigs breeding as well as the processing of meat products. It will also conduct mergers and consolidation when it is appropriate. Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. (002304.SZ) was inspected by Citibank and other foreign banks through telephone. Citibank inquired about the sales and gross profit margin of the blue classic series, which is the dominant product of the company.
[Trading Trends]
○ Anti-inflation stocks on trading volume ranking list
------
The trading volume ranking list on May 10 shows that several anti-inflation individual stocks were bought by institutional seats. Five institutional seats bought Shenzhen Jinxinnong Feed Co., Ltd. (002548.SZ), a company principally engaged in pig fodders, with a total of 64,751,300 yuan. Four institutional seats bought Xiwang Foodstuffs Co., Ltd. (000639.SZ), a company principally engaged in corn oil, with a total of 61,747,900 yuan. Shandong Minhe Animal Husbandry Co., Ltd. (002234.SZ), a company engaged in the production of chicks for meat, was also bought by institutional seats.
Comment: The CPI increased 2.3 percent in April as announced on May 10. Pork price saw a year-on-year increase of 33.5 percent, driving the CPI up about 0.75 percentage points. Institutes believe that benefiting from the pigs breeding industry, the fodder business of Jinxinnong Feed will see improvements in the sales and gross profit margin. In addition, the bean oil price has been increasing since April. As the corn oil price is closely related to the bean oil price, institutes are rosy about the prospects of Xiwang Foodstuffs in fighting against inflation.
TOP
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