[Today's Guide]
> Executive meeting of State Council again proposes to propel consumption and requires moving faster towards manufacturing of quality goods
> Price of rare earth speeds up in rebound and likely to further hike
> Goldcard High-Tech to expand intelligent natural gas industrial chain, Beiqi Foton Motor proposes high share conversion and dividend
> Controlling shareholder of Baiyang Investment to increase shareholdings, Feilihua Quartz Glass bought by five institutional seats
[SSN Focus]
○Executive meeting of State Council again proposes to propel consumption and requires moving faster towards manufacturing of quality goods
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The executive meeting of the State Council held on May 11 believed that facilitating industrial upgrading of consumption goods and giving play to the critical role of consumption in economic development and industrial transformation are important measures for advancing structural reform, especially the supply-side structural reform and the expansion of internal demand. It is proposed to advance "quality reform" while focusing on production of mass consumer products; push "Made in China" to move faster towards the "manufacturing of quality goods" so as to dominate larger market; propel inheritance and upgrading of time-honored brands in China, and encourage enterprises to foster new brands.
Comment: As one of the three drivers behind economic growth, consumption always helps to stabilize economic growth. After basically meeting ordinary consumption demand, the future development will be mainly pushed by consumption upgrading. The arrangement made by the executive meeting complies with the demand of consumption upgrading. Institutions believe that high-end white spirits are gradually accepted by private consumption and business activities consumption after they are banned in government expenditure in receptions, vehicles and overseas trips, also known as "the three public consumptions"; enterprises engaged in dairy products actively upgrade their products; as the concentration ratio improves, the beer industry will also see enhancing profitability.
◆The executive meeting held this time also gave green light to the Development Plan for City Agglomeration in the Yangtze River Delta, meaning that mature reform experience related to piloting free trade zones, independent innovation demonstration areas and etc. will be copied and popularized.
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[SSN Selection]
○Data from the China Association of Automobile Manufacturers (CAAM) shows that the sales of new energy vehicles in April recorded a year-on-year growth of 191 percent and the figure during January-April period recorded 131 percent.
○According to a source involved in asset management business of a city commercial bank, hierarchical structured financing products are required to be suspended. It is learnt that not much amount of funds from banks' financing products are directly invested in the stock market.
○Dalian Commodity Exchange on May 11 announced adding trading limit system, clearly defining the maximum positions can be built by members or customers in a certain contract in a certain term.
○The first land auction in Shanghai after Shanghai toughened conditions to buy property was held on May 11, and the price of three residential lands hiked over 70 percent from half a year earlier.
○Hengxin Mobile Business Co., Ltd. (300081.SZ) announced that the subject to be reorganized by the company is re-identified as engaged in professional technical service business rather than previously identified film, television and entertainment business.
[Industry Information]
○Price of rare earth speeds up in rebound and likely to further hike
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SSN learnt that the commercial acquisition of rare earth for reserve is having increasing effects on the market. The prices of rare earth continued hiking on May 10 and the price hiking is speeding up. The quoted prices of praseodymium-neodymium oxide and dysprosium oxide have reached 310,000-315,000 yuan/ton and 1.30-1.32 million yuan/ton. The prices of certain varieties even jumped nearly 20 percent in this round of price rise.
Comment: Currently, manufacturers are rosy about the future operation of the rare earth market and are reluctant to sell. Driven by the acquisition for reserve and other factors, the prices of rare earth will further increase. Securities companies also believe that the total of the commercial and national acquisition of rare earths for reserve will reach about 20,000 tons, accounting for nearly 20 percent of the total output in 2015. Based on the acquisition in recent years, the acquisition in 2012 drove the prices of major rare earths hiking 40 to 100 percent.
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[Announcement Interpretation]
○Goldcard High-Tech to expand intelligent natural gas industrial chain
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Goldcard High-Tech Co., Ltd. (300349.SZ) proposes to acquire the 100 percent equities of Beijing Enesys Software Development Co., Ltd. with its own 70 million yuan. Meanwhile, it will additionally invest 20 million yuan in Enesys Software to help the latter one to acquire the equity of no less than 51 percent of Beijing Hua Si Ke Software Development Co., Ltd. Enesys Software is a professional service provider related to natural gas application management software, and it now has over 300 users in China, such as urban natural gas, LNG and water supply companies. Hua Si Ke Software is an internet-based innovation service company independently established by the team of Enesys Software.
○Beiqi Foton Motor proposes high share conversion and dividend
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Weichai Power Co., Ltd. (000338.SZ), Shandong Huayuan Laidong Engine Co., Ltd. and Yihe Axles, which are all shareholders of Beiqi Foton Motor Co., Ltd. (600166.SH), jointly propose a 7-for-10 conversion with additional 3 for free of capital surplus into shares combined with 0.37 yuan dividend for every 10 shares according to allocation pre-scheme in the annual report. They have no plan to decrease the shareholdings in next six months. The substantial shareholder, Baic Motor Corporation Ltd., promises to give affirmative vote to this proposal. The shareholder SWS MU Fund Management proposes a 20-for-10 conversion in line with allocation preplan, and will decrease no more than 105 million shareholdings with a net asset per share of 5.57 yuan in next six months, but Baic Motor does not agree with such preplan. The latest closing price of Beiqi Foton Motor is 5.20 yuan.
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○Controlling shareholder of Baiyang Investment to increase shareholdings
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The controlling shareholder of Baiyang Investment Group, Inc. (002696.SZ) proposes to increase 8 million shareholdings in next 12 months, accounting for over 4.5 percent equity. SZ Capital Co., Ltd. (under the Shenzhen Municipal People's Government State-owned Assets Supervision and Administration Commission, SZ SASAC), the shareholder of Shenzhen Agricultural Products Co., Ltd. (000061.SZ), increased 16.97 million shareholdings in Agricultural Products from May 9 to 11, accounting for 1 percent equity. SZ SASAC will increase the shareholdings of no more than 2 percent in Agricultural Products in next 12 months since the first shareholding-increase day.
Directors, supervisors and senior managers of Kaile Science and Technology Co., Ltd. Hubei (600260.SH) increased 1 million shareholdings in the company from May 6 to 10. The controlling shareholder increased 2.97 million shareholdings in Hangzhou Binjiang Real Estate Group Co., Ltd. (002244.SZ) on May 11. The controlling shareholder increased 1.80 million shareholdings in Shandong Gettop Acoustic Co., Ltd. (002655.SZ) on May 11.
○ORG Packaging to raise RMB1.9 bln through private placement to repay debts, substantial shareholder to subscribe 1/3
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ORG Packaging Co., Ltd. (002701.SZ) proposes to issue 202 million shares with 9.4 yuan per share through private placement to six investors, including its controlling shareholder Shanghai Yuanlong Investment Co., Ltd., to raise 1.9 billion yuan. 1.3 billion yuan will be used to supplement the liquidity, and 0.6 billion yuan for repaying the bank loan. Yuanlong Investment will subscribe 35.16 percent, and 4.8 percent for the partnership firm established by the management team. The company's latest closing price is 8.83 yuan.
[Trading Trends]
○Feilihua Quartz Glass bought by five institutional seats
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The trading volume ranking list on May 11 shows that Hubei Feilihua Quartz Glass Co., Ltd. (300395.SZ) was bought through five institutional seats with a total of 71,644,200 yuan , accounting for 45.07 percent of its intraday turnover. Another institutional seat sold the shares with 3,455,000 yuan.
Comment: Insitutions point out that the company raises the fund to invest a 200 ton/year compound quartz ingots project, which will be put into production at the end of June. The compound quartz ingots can be used to product mask placode, and the latter one can be applied for OLED flat-panel display. The new version of iPhone is likely to use AMOLED panel. The process of OLED replacing LCD will exceed the market expectation to drive the demands for raw materials in the upstream, including mask placode. It is just the right time for the company to invest such project.
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