[Today's Guide]
○Privatization of Qihoo 360 speeds up, two SPVs complete capital increase
○Highlights keep emerging in new economy in April, industries like radar and rail transit record outstanding growth
○General Administration of Sport to hold e-sport games carnival, industry to see more support
○HopeRun Software to expand to finance area through private placement, above 5 pct. shares of Fasten bought by subsidiary under Zhongzhi Enterprise Group
[SSN Focus]
○Policies for refinancing, M＆A and reorganization remain unchanged
------
As to the rumor recently concerned by media and investors that Chinese securities regulators will suspend "cross-industry private placement", the news spokesman for the China Securities Regulatory Commission (CSRC) claimed on May 13 that the CSRC actively supports the refinancing, merger and acquisition (M＆A) and reorganization of qualified listed companies so as to make capital market effectively serve real economy. At present, policies for refinancing, M＆A and reorganization remain unchanged, and it will be reported publicly if there is any modification or adjustment of relevant regulations and policies in the future.
TOP
○Privatization of Qihoo 360 speeds up, two SPVs complete capital increase
------
SSN learnt that Tianjin Qixin Zhicheng Technology Co., Ltd. and Tianjin Qixin Tongda Technology Co., Ltd., two special purpose vehicles (SPVs) for the privatization of Qihoo 360 Technology Co., Ltd. (NYSE:QIHU), recently have completed procedures for capital increase. The two companies are valued at 4 billion U.S. dollars and 11.7 billion U.S. dollars, respectively. Besides Zhou Hongyi, chairman of Qihoo 360, and Qi Xiangdong, president of Qihoo 360, 39 institutions are involved. Qihoo 360 also announced on May 13 that latest progress about the purchasers of the privatization has been received.
Comment: Henceforth, Qihoo 360 has built a large, complicated, precise and well-organized structure for the privatization. Statistics show that at least 10 A-share companies have been involved in the privatization course of Qihoo 360. CITIC Guoan Information Industry Co., Ltd. (000839.SZ) has totally invested 412 million U.S. dollars directly and indirectly and it will hold 4.46 percent equities of Qihoo 360 after the privatization is completed. Shandong Tyan Home Co., Ltd. (600807.SH) has indirectly invested around 89.71 million U.S. dollars.
[SSN Selection]
○The China Securities Regulatory Commission (CSRC) on May 13 approved the IPO application of nine enterprises with China Nuclear Engineering and Construction Group included. The financing is expected to total 5 billion yuan at most.
○China's new yuan-denominated lending in April amounted to 555.6 billion yuan, which is lower than expected. And it might be resulted by seasonal fall of investment growth in infrastructure and the large amount of bond-for-debt swap.
○The China Banking Regulatory Commission (CBRC) required standardizing consignment business of commercial banks. Industry insiders believe that it will exercise limited impact on the sales of private placement, according to investigation by caixin.com.
○As introduced by Shanghai Municipal Financial Service Office on May 13, it will strive to roll out the negative list for the financial service business and admittance of Shanghai Free Trade Zone.
○The U.S. announced the launch of National Microbiome Initiative on May 13. Technologies like gene sequencing will be applied.
TOP
[Industry Information]
○Highlights keep emerging in new economy, industries like radar and rail transit record outstanding growth
------
The National Bureau of Statistics (NBS) on May 14 announced the industrial production data in April. Iron ＆ steel and coal industries, mainly focusing on cutting overcapacity, both see negative year-on-year growth in production. But highlights keep emerging in new economy. The industrial value added of radar and supporting equipment manufacturing industry grew by 118.4 percent from a year earlier, aviation, spacecraft and equipment manufacturing climbed by 28.6 percent year on year, and the urban rail transit equipment manufacturing recorded a year-on-year growth of 25.3 percent. As to year-on-year growth of new products, new energy vehicles grew by nearly 1.4 times, urban rail vehicles surged by 38 percent, SUVs grew by 33.8 percent, and carbon fiber reinforced composite grew by 32.9 percent.
Comment: Radars for military use are core equipment for electronic war and information war. Benefited from national informationization construction, radars for civil use might become main vehicle sensor and embrace explosive growth along with intelligent driving industry. Anhui Sun Create Electronics Co., Ltd. (600990.SH) and Hang Zhou Great Star Industrial Co., Ltd. (002444.SZ) see technology advantages in radar area. Since the mileage of urban rail transit might double during the 13th five-year plan period and the government will surely make investment in this area, institutions are optimistic about equipment companies including Nanjing Kangni Mechanical ＆ Electrical Co., Ltd. (603111.SH).
TOP
○General Administration of Sport to hold e-sport games carnival, industry to see more support
------
The General Administration of Sport of China announced on May 15 that the first session of China E-sport Games Carnival will be held on Nov. 26-28. The new e-sport games alliance initiated by the information center of the General Administration of Sport is also kicked off officially. Relevant officer indicated that the General Administration of Sport will work out reasonable standards for e-sport games, and lay a good foundation for lifting e-sport as a sport event with wide social influence.
Comment: The General Administration of Sport was involved in holding several e-sport games earlier, showing that it has changed from a pure regulator to a participant and sponsor. And it keeps making more efforts in supporting the e-sport games industry. As to listed companies, ZheJiang Daily Media Group Co., Ltd. (600633.SH) proposes to hold the e-sport event in Zhejiang province this year and it owns a live-broadcasting game platform; Perfect World Pictures Co., Ltd. (002624.SZ) completed the acquisition of 100 percent equities of Perfect World in April and the latter has constructed an independent e-sport game platform.
○Sales of new energy vehicles speeds up, institutions pay attention to demand for electrical machine
------
Data recently released by the China Association of Automobile Manufacturers (CAAM) show that the sales of new energy vehicles in April hit 191 percent and over 90,000 new energy vehicles were sold in the past four months. The rapid sales growth of electric automobile attracts market's attention to the electrical machine industry. Institutions including China Galaxy Securities Co., Ltd. and Guosen Securities Co., Ltd. carried out investigation in the electrical machine industry. Considering that the point system for automobiles will be launched later, the popularization of new energy vehicles will be further accelerated. The Ministry of Industry and Information Technology (MIIT) also indicated earlier that the sales of new energy vehicles in 2016 might grow by over 100 percent from a year earlier.
Comment: According to the targeted market scale of new energy vehicle proposed in policy planning, demand for motor drive system will reach 50-100 billion yuan by 2020. In terms of listed companies, Zhongshan Broad-Ocean Motor Co., Ltd. (002249.SZ) purchased 100 percent equity of Shanghai Edrive Co., Ltd., allowing it to own the capacity of producing nearly 300,000 sets of powertrain for new energy vehicle. Zhejiang Founder Motor Co., Ltd. (002196.SZ) has improved its competitiveness in drive motor and powertrain of new energy vehicle and other businesses through acquiring Shanghai High Energy Automotive Electronics Co., Ltd. and Hangzhou Dewoshi Electronic Technology Co., Ltd.
TOP
[Announcement Interpretation]
○HopeRun Software to invest RMB1.9 bln in finance and energy informatization
------
Jiangsu HopeRun Software Co., Ltd. (300339.SZ) plans to raise 1.92 billion yuan by issuing 50 million shares through private placement to invest in construction projects of financial cloud service platform and energy informatization platform and to supplement working capital. The pricing benchmark will be based on the first day of issuing. The company indicates that it will provide banks, insurance companies and emerging financial enterprises with services through financial cloud service platform.
○Above 5 pct. shares of Fasten bought by subsidiary under Zhongzhi Enterprise Group
------
The announcement of Jiangsu Fasten Company Limited (000890.SZ) states that Jiangyin Yaobo Taibang Investment Center (Limited Partnership) has totally held 10 percent shares of the company as of May 13. Yaobo Taibang Investment Center, a wholly-owned subsidiary of Zhongzhi Assets Management Co., Ltd., bought 18,932,000 shares and 19,032,200 shares of Fasten in April and May respectively, and it is likely to increase shareholding in the company in next 12 months.
○Controlling shareholder of Tianqiao Crane introduces shareholding increase plan
------
Controlling shareholder of Zhuzhou Tianqiao Crane Co., Ltd. (002523.SZ) increased his shareholding by 7.99 million in the company on May 13 and will continue to buy the company's shares with worth ranging from 100 million to 150 million yuan in next 12 months.
In addition, Xcmg Construction Machinery Co., Ltd. (000425.SZ) repurchased 26.32 million shares on May 13. By now, the company has accumulatively repurchased 76.56 million shares at 259 million yuan, accounting for 1.08 percent of the company's total shares.
○Sinocera Functional Material acquires Prince Ceramics to make deployment in exhaust treatment
------
Shandong Sinocera Functional Material Co., Ltd. (300285.SZ) plans to acquire 100 percent equity of Yixing Prince Ceramics Co., Ltd. at 560 million yuan by issuing 8.07 million shares at a price of 27.74 yuan per share and paying 336 million yuan in cash. Meanwhile, the company will also raise supporting funds of 160 million yuan through private placement.
Prince Ceramics is specialized in honeycomb ceramics and its products are mainly used to purify exhaust of gasoline cars and diesel cars. The company's net profit recorded 27.19 million yuan and 44.79 million yuan in 2014 and 2015 respectively. The counterparty promises that total net profit of Prince Ceramics will reach 182 million yuan during 2016 and 2018.
○Shipbuilding Industry Group Power and Kingland Pipeline and Technologies set foot in graphene field
------
China Shipbuilding Industry Group Power Co., Ltd. (600482.SH) cooperates with Shanghai SIMBATT Energy Technology Co., Ltd. controlled by Zhejiang Chint Electrics Co., Ltd. (601877.SH) to jointly develop high-performance graphene lead-acid storage battery and lithium battery.
Zhejiang Kingland Pipeline and Technologies Co., Ltd. (002443.SZ) partners with Beijing Xintan Technology Co., Ltd. and DDH Advanced Materials ＆ Systems, Inc. to jointly establish a graphene material application research institute. Technology and team of Xintan Technology come from DDH and the graphene made by its industrial technology and nano-carbon material technology are leading in the world.
[Trading Alarms]
○Monarch Sanitary Ware to launch IPO on May 16
------
Sichuan Monarch Sanitary Ware Co., Ltd. (002798.SZ) will launch IPO at a price of 10.57 yuan per share with an upper limit of 85 million shares for each account. The PE ratio is 23 times. The company is engaged in sanitary ware.
[Weekly Review]
○Avoid cutting edge and go against current
------
The overseas-listed Chinese enterprises to be listed in China, rumor about tightening review on crossover mergers and the long-term L-shared economic trend predicted by authorities from People's Daily further froze market sentiment last week. Facing uncertainties of policy expectation, some people sell their stocks remarkably as their investment logic was shaken and some reduced their positions due to worries on systematic risks. But we should also notice that some funds choose to avoid the cutting edge and go against the current when there are both doubts and panics in the market.
In the first half of last week, white spirit, animal husbandry and fishery sectors all showed good performance against market trend, and in the second half, lithium battery and rare earth sectors experienced strong recovery. The common grounds of these sectors may be that their prosperity may keep recovering or keep going up; thus the uncertainties of policy expectation cannot prevent them from surging. To some extent, these sectors might become safe harbor for some funds.
In fact, the market operation situation can be vaguely seen from SSN report. SSN's Data Speak and Trading Trends reported on May 10 that institutions made greater efforts in surveying consumption sector, anti-inflation concept stocks were frequently included in trading volume ranking list, pointing investment direction for investors with facts and data. SSN successively made reports that prices of rare earth and molybdenum ore were expected to continue to rebound and related products would see significant rise.
China Securities Regulatory Commission responded on last Friday that there was no any change in policy on merger and reorganization, but it is unknown that how the market will react on Monday. Avoiding the cutting edge means avoiding dangers under the unclear market expectation; going against the current means abandoning market noise to buy high-quality stocks which have suffered excessive price decrease previously amid pessimism. The former needs wisdom and the latter courage, and these are both necessary qualities that investors stand on stocks market for long time.
TOP
○Privatization of Qihoo 360 speeds up, two SPVs complete capital increase
○Highlights keep emerging in new economy in April, industries like radar and rail transit record outstanding growth
○General Administration of Sport to hold e-sport games carnival, industry to see more support
○HopeRun Software to expand to finance area through private placement, above 5 pct. shares of Fasten bought by subsidiary under Zhongzhi Enterprise Group
[SSN Focus]
○Policies for refinancing, M＆A and reorganization remain unchanged
------
As to the rumor recently concerned by media and investors that Chinese securities regulators will suspend "cross-industry private placement", the news spokesman for the China Securities Regulatory Commission (CSRC) claimed on May 13 that the CSRC actively supports the refinancing, merger and acquisition (M＆A) and reorganization of qualified listed companies so as to make capital market effectively serve real economy. At present, policies for refinancing, M＆A and reorganization remain unchanged, and it will be reported publicly if there is any modification or adjustment of relevant regulations and policies in the future.
TOP
○Privatization of Qihoo 360 speeds up, two SPVs complete capital increase
------
SSN learnt that Tianjin Qixin Zhicheng Technology Co., Ltd. and Tianjin Qixin Tongda Technology Co., Ltd., two special purpose vehicles (SPVs) for the privatization of Qihoo 360 Technology Co., Ltd. (NYSE:QIHU), recently have completed procedures for capital increase. The two companies are valued at 4 billion U.S. dollars and 11.7 billion U.S. dollars, respectively. Besides Zhou Hongyi, chairman of Qihoo 360, and Qi Xiangdong, president of Qihoo 360, 39 institutions are involved. Qihoo 360 also announced on May 13 that latest progress about the purchasers of the privatization has been received.
Comment: Henceforth, Qihoo 360 has built a large, complicated, precise and well-organized structure for the privatization. Statistics show that at least 10 A-share companies have been involved in the privatization course of Qihoo 360. CITIC Guoan Information Industry Co., Ltd. (000839.SZ) has totally invested 412 million U.S. dollars directly and indirectly and it will hold 4.46 percent equities of Qihoo 360 after the privatization is completed. Shandong Tyan Home Co., Ltd. (600807.SH) has indirectly invested around 89.71 million U.S. dollars.
[SSN Selection]
○The China Securities Regulatory Commission (CSRC) on May 13 approved the IPO application of nine enterprises with China Nuclear Engineering and Construction Group included. The financing is expected to total 5 billion yuan at most.
○China's new yuan-denominated lending in April amounted to 555.6 billion yuan, which is lower than expected. And it might be resulted by seasonal fall of investment growth in infrastructure and the large amount of bond-for-debt swap.
○The China Banking Regulatory Commission (CBRC) required standardizing consignment business of commercial banks. Industry insiders believe that it will exercise limited impact on the sales of private placement, according to investigation by caixin.com.
○As introduced by Shanghai Municipal Financial Service Office on May 13, it will strive to roll out the negative list for the financial service business and admittance of Shanghai Free Trade Zone.
○The U.S. announced the launch of National Microbiome Initiative on May 13. Technologies like gene sequencing will be applied.
TOP
[Industry Information]
○Highlights keep emerging in new economy, industries like radar and rail transit record outstanding growth
------
The National Bureau of Statistics (NBS) on May 14 announced the industrial production data in April. Iron ＆ steel and coal industries, mainly focusing on cutting overcapacity, both see negative year-on-year growth in production. But highlights keep emerging in new economy. The industrial value added of radar and supporting equipment manufacturing industry grew by 118.4 percent from a year earlier, aviation, spacecraft and equipment manufacturing climbed by 28.6 percent year on year, and the urban rail transit equipment manufacturing recorded a year-on-year growth of 25.3 percent. As to year-on-year growth of new products, new energy vehicles grew by nearly 1.4 times, urban rail vehicles surged by 38 percent, SUVs grew by 33.8 percent, and carbon fiber reinforced composite grew by 32.9 percent.
Comment: Radars for military use are core equipment for electronic war and information war. Benefited from national informationization construction, radars for civil use might become main vehicle sensor and embrace explosive growth along with intelligent driving industry. Anhui Sun Create Electronics Co., Ltd. (600990.SH) and Hang Zhou Great Star Industrial Co., Ltd. (002444.SZ) see technology advantages in radar area. Since the mileage of urban rail transit might double during the 13th five-year plan period and the government will surely make investment in this area, institutions are optimistic about equipment companies including Nanjing Kangni Mechanical ＆ Electrical Co., Ltd. (603111.SH).
TOP
○General Administration of Sport to hold e-sport games carnival, industry to see more support
------
The General Administration of Sport of China announced on May 15 that the first session of China E-sport Games Carnival will be held on Nov. 26-28. The new e-sport games alliance initiated by the information center of the General Administration of Sport is also kicked off officially. Relevant officer indicated that the General Administration of Sport will work out reasonable standards for e-sport games, and lay a good foundation for lifting e-sport as a sport event with wide social influence.
Comment: The General Administration of Sport was involved in holding several e-sport games earlier, showing that it has changed from a pure regulator to a participant and sponsor. And it keeps making more efforts in supporting the e-sport games industry. As to listed companies, ZheJiang Daily Media Group Co., Ltd. (600633.SH) proposes to hold the e-sport event in Zhejiang province this year and it owns a live-broadcasting game platform; Perfect World Pictures Co., Ltd. (002624.SZ) completed the acquisition of 100 percent equities of Perfect World in April and the latter has constructed an independent e-sport game platform.
○Sales of new energy vehicles speeds up, institutions pay attention to demand for electrical machine
------
Data recently released by the China Association of Automobile Manufacturers (CAAM) show that the sales of new energy vehicles in April hit 191 percent and over 90,000 new energy vehicles were sold in the past four months. The rapid sales growth of electric automobile attracts market's attention to the electrical machine industry. Institutions including China Galaxy Securities Co., Ltd. and Guosen Securities Co., Ltd. carried out investigation in the electrical machine industry. Considering that the point system for automobiles will be launched later, the popularization of new energy vehicles will be further accelerated. The Ministry of Industry and Information Technology (MIIT) also indicated earlier that the sales of new energy vehicles in 2016 might grow by over 100 percent from a year earlier.
Comment: According to the targeted market scale of new energy vehicle proposed in policy planning, demand for motor drive system will reach 50-100 billion yuan by 2020. In terms of listed companies, Zhongshan Broad-Ocean Motor Co., Ltd. (002249.SZ) purchased 100 percent equity of Shanghai Edrive Co., Ltd., allowing it to own the capacity of producing nearly 300,000 sets of powertrain for new energy vehicle. Zhejiang Founder Motor Co., Ltd. (002196.SZ) has improved its competitiveness in drive motor and powertrain of new energy vehicle and other businesses through acquiring Shanghai High Energy Automotive Electronics Co., Ltd. and Hangzhou Dewoshi Electronic Technology Co., Ltd.
TOP
[Announcement Interpretation]
○HopeRun Software to invest RMB1.9 bln in finance and energy informatization
------
Jiangsu HopeRun Software Co., Ltd. (300339.SZ) plans to raise 1.92 billion yuan by issuing 50 million shares through private placement to invest in construction projects of financial cloud service platform and energy informatization platform and to supplement working capital. The pricing benchmark will be based on the first day of issuing. The company indicates that it will provide banks, insurance companies and emerging financial enterprises with services through financial cloud service platform.
○Above 5 pct. shares of Fasten bought by subsidiary under Zhongzhi Enterprise Group
------
The announcement of Jiangsu Fasten Company Limited (000890.SZ) states that Jiangyin Yaobo Taibang Investment Center (Limited Partnership) has totally held 10 percent shares of the company as of May 13. Yaobo Taibang Investment Center, a wholly-owned subsidiary of Zhongzhi Assets Management Co., Ltd., bought 18,932,000 shares and 19,032,200 shares of Fasten in April and May respectively, and it is likely to increase shareholding in the company in next 12 months.
○Controlling shareholder of Tianqiao Crane introduces shareholding increase plan
------
Controlling shareholder of Zhuzhou Tianqiao Crane Co., Ltd. (002523.SZ) increased his shareholding by 7.99 million in the company on May 13 and will continue to buy the company's shares with worth ranging from 100 million to 150 million yuan in next 12 months.
In addition, Xcmg Construction Machinery Co., Ltd. (000425.SZ) repurchased 26.32 million shares on May 13. By now, the company has accumulatively repurchased 76.56 million shares at 259 million yuan, accounting for 1.08 percent of the company's total shares.
○Sinocera Functional Material acquires Prince Ceramics to make deployment in exhaust treatment
------
Shandong Sinocera Functional Material Co., Ltd. (300285.SZ) plans to acquire 100 percent equity of Yixing Prince Ceramics Co., Ltd. at 560 million yuan by issuing 8.07 million shares at a price of 27.74 yuan per share and paying 336 million yuan in cash. Meanwhile, the company will also raise supporting funds of 160 million yuan through private placement.
Prince Ceramics is specialized in honeycomb ceramics and its products are mainly used to purify exhaust of gasoline cars and diesel cars. The company's net profit recorded 27.19 million yuan and 44.79 million yuan in 2014 and 2015 respectively. The counterparty promises that total net profit of Prince Ceramics will reach 182 million yuan during 2016 and 2018.
○Shipbuilding Industry Group Power and Kingland Pipeline and Technologies set foot in graphene field
------
China Shipbuilding Industry Group Power Co., Ltd. (600482.SH) cooperates with Shanghai SIMBATT Energy Technology Co., Ltd. controlled by Zhejiang Chint Electrics Co., Ltd. (601877.SH) to jointly develop high-performance graphene lead-acid storage battery and lithium battery.
Zhejiang Kingland Pipeline and Technologies Co., Ltd. (002443.SZ) partners with Beijing Xintan Technology Co., Ltd. and DDH Advanced Materials ＆ Systems, Inc. to jointly establish a graphene material application research institute. Technology and team of Xintan Technology come from DDH and the graphene made by its industrial technology and nano-carbon material technology are leading in the world.
[Trading Alarms]
○Monarch Sanitary Ware to launch IPO on May 16
------
Sichuan Monarch Sanitary Ware Co., Ltd. (002798.SZ) will launch IPO at a price of 10.57 yuan per share with an upper limit of 85 million shares for each account. The PE ratio is 23 times. The company is engaged in sanitary ware.
[Weekly Review]
○Avoid cutting edge and go against current
------
The overseas-listed Chinese enterprises to be listed in China, rumor about tightening review on crossover mergers and the long-term L-shared economic trend predicted by authorities from People's Daily further froze market sentiment last week. Facing uncertainties of policy expectation, some people sell their stocks remarkably as their investment logic was shaken and some reduced their positions due to worries on systematic risks. But we should also notice that some funds choose to avoid the cutting edge and go against the current when there are both doubts and panics in the market.
In the first half of last week, white spirit, animal husbandry and fishery sectors all showed good performance against market trend, and in the second half, lithium battery and rare earth sectors experienced strong recovery. The common grounds of these sectors may be that their prosperity may keep recovering or keep going up; thus the uncertainties of policy expectation cannot prevent them from surging. To some extent, these sectors might become safe harbor for some funds.
In fact, the market operation situation can be vaguely seen from SSN report. SSN's Data Speak and Trading Trends reported on May 10 that institutions made greater efforts in surveying consumption sector, anti-inflation concept stocks were frequently included in trading volume ranking list, pointing investment direction for investors with facts and data. SSN successively made reports that prices of rare earth and molybdenum ore were expected to continue to rebound and related products would see significant rise.
China Securities Regulatory Commission responded on last Friday that there was no any change in policy on merger and reorganization, but it is unknown that how the market will react on Monday. Avoiding the cutting edge means avoiding dangers under the unclear market expectation; going against the current means abandoning market noise to buy high-quality stocks which have suffered excessive price decrease previously amid pessimism. The former needs wisdom and the latter courage, and these are both necessary qualities that investors stand on stocks market for long time.
TOP
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