[Today's Guide]
○ CEC to exit from CEC CoreCast, assets consolidation to speed up
○ Green manufacturing projects to kick off, contract energy management to see opportunities
○ Shengtong Printing to acquire Roborobo Education Tech, Tianyuan Group to invest in titanium
○ Luzhou Laojiao to develop wine-making technology improvement, United Science ＆ Technology raises fund develop self-driving
[SSN Focus]
○ CEC to exit from CEC CoreCast, assets consolidation to speed up
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CEC CoreCast Corporation Limited (600764.SH) announced that China Electronics Corporation (CEC), the substantial shareholder of the company, proposes to transfer all equities held in the company through negotiation, which involves the changes in the actual control in the company. The company will suspend trading. CEC, a central enterprise, owns five business sectors, including the new-type display, integrated circuit, network security, high-tech electronics and information services and 11 A-share companies. It proposes to establish one listed company for each sector.
Comment: The assets consolidation of the CEC has been speeding up. The A-share companies under it played important roles. Nanjing Panda Electronics Company Limited (00553.HK; 600775.SH) has received more capitals from CEC Panda. Institutes are rosy about the injection of military engineering assets in the future. The controlling right over Shanghai Belling Corp., Ltd. (600171.SH) has been transferred to Huada Semiconductor Co., Ltd., the operation platform for the integrated circuit business of the group. Institutes believe that it may accept the assets of the platform in the future.
[TOP]
[SSN Selection]
○ The Leading Group for Financial and Economic Affairs held the 13th meeting on May 16, proposing to implement the supply-side structural reform and expand the middle-income group.
○ Jiangsu Hongda New Material Co., Ltd. (002211.SZ) announced that it would purchase 100 percent equities of Yongle Film and Television with 3.26 billion yuan, which forms a backdoor listing.
○ The central bank conducts an MLF operation with a total of 290 billion yuan on May 16, stabilizing the capital in the interbank market.
○ The foreign exchange settlement and sale by banks for customers reduced 35 percent to 23.7 billion U.S. dollars in April. The State Administration of Foreign Exchange indicated that the pressure on cross-border capital outflow is increasing reducing.
○ The releasing of financial reports of U.S. stocks has come to an end. Statistics show that enterprises in the healthcare, consumer services and consumables industries with high profit growth saw the highest proportion.
[Industry Information]
○ Green manufacturing projects to kick off, contract energy management to see opportunities
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SSN learnt that the Ministry of Industry and Information Technology (MIIT) will initiate key tasks in initiating green manufacturing projects and conduct green factories pilots soon. Based on the plan of the MIIT, the above work will initiate in the second quarter. The Made in China 2025 released last year set the green development as a key orientation, which proposes the promotion of green manufacturing projects.
Comment: Statistics show that the average energy consumption in the iron and steel industry is 6 to 7 percent below the internationally advanced level. The construction materials industry and the petrochemical and chemical industry are about 10 percent and 10-20 percent below the international level, respectively. Industrial insiders believe that with the implementation of green manufacturing projects by authorities, contract energy management companies will see more market opportunities. Among listed companies, Shuangliang Eco-energy Systems Co., Ltd. (600481.SH) successfully signed many contract energy management projects. Jiangsu Linyang Energy Co., Ltd. (601222.SH) has signed a big order on contract energy management. Institutes believe that is a milestone in the transformation of the company.
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○VR sees strong demand, GPU market to expand
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Thanks to the unexpected financial reports, NVIDIA Corporation (NASDAQ: NVDA), the global GPU leader, hit a new high. Currently, NVIDIA operates VR technologies through the GPU installed in computers to meet the demands of the Oculus Rift under Facebook in image treatment for wearable equipment.
Comment: Institutes estimate that the output of VR equipment will reach 30 million in 2020 and the market will exceed 150 billion U.S. dollars. The GPU market will expand soon. In terms of listed companies, Nantong Fujitsu Microelectronics Co., Ltd. (002156.SZ) develops GPU sealing and testing through the acquisition of a subsidiary under AMD. Changsha Jingjia Microelectronics Co., Ltd. (300474.SZ) is a supplier of military image display and is actively concerned about the development of the GPU in relevant industries.
[Announcement Interpretation]
○ Shengtong Printing to acquire Roborobo Education Tech for RMB430 mln
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Beijing Shengtong Printing Co., Ltd. (002599.SZ) plans to acquire 100 equities in Beijing Roborobo Education Technology Co., Ltd. for 430 million yuan among which 30.53 million yuan will be paid in cash and the reminder will be paid by issuing 15,293,600 shares at 26.12 yuan per share. Meanwhile, the company plans to raise 413 million yuan supporting fund to pay considerations in cash and launch service cloud project.
Roborobo Education Technology is a leader in in the children education industry, providing training services in the design, assembling, programming and operation for children. Roborobo Education Technology promised that the cumulative total of its audited net profit after tax from 2016 to 2019 will be no less than 149 million yuan.
○ Shengheng Tech becomes new shareholder of Tianyuan Group, to invest RMB1.5 bln in titanium
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Yibin Tianyuan Group Co., Ltd. (002386.SZ) plans to raise 1,498 million yuan by issuing 227 million shares at 6.60 yuan per share through private placement. The proceeds will be invested in the titanium production through chloride method with annual output of 50,000 tons, the PVC-O pipe project with annual output of 30,000 tons and high-end environmentally friendly plank with annual output of 10 million kilometers. After the transaction, Shengheng Technology Co., Ltd. will overtake the State-owned Assets Supervision and Administration Commission of Yibin City to become the company's controlling shareholder. He Wenjun will become the company's actual controller. The change of controlling shareholder is the latest case for local mixed ownership reform in Sichuan Province.
[TOP]
○ Luzhou Laojiao to raise RMB3 bln for wine-making technology improvement
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Luzhou Laojiao Co., Ltd. (000568.SZ) plans to raise 3 billion yuan by issuing shares at prices no less than 21.86 yuan per share from Luzhou Wine Industry Investment Co., Ltd. to invest in wine-making technology improvement project (first phase). Luzhou Laojiao indicated that after the fund-raising completes, the company will build 7,000 pits for quality base liquor production, and will gradually substitute its backward capacity by introducing production equipment and enhancing the mechanization and automation in wine-making and starter-making process.
○ United Science ＆ Technology raises fund to acquire environment firm and develop self-driving
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United Science ＆ Technology Co., Ltd. (000925.SZ) plans to acquire 100 equities in Suzhou Koovine Environmental Protection Co., Ltd. for 682 million yuan by issuing 42,76 million shares at 15.95 yuan per share. Meanwhile, the company plans to raise 476 million yuan supporting fund by issuing shares at 15.95 yuan per share. The proceeds will be used in the research and development of self-driving signal system solutions, the research and development of intelligent vehicles in Qingshan Lake technology town and loan repayment.
Koovine Environmental Protection is engaged in advanced waste-water treatment business. It takes the leading position in the advanced treatment o f petrochemical industry waste-water. The transaction counterpart promises that the net profit of Koovine Environmental Protection from 2016 to 2018 will be no less than 58.5 million yuan, 73,12 million yuan and 91,41 million yuan.
[TOP]
○ Tianmushan Phar and Tianye see heavy shareholding increase by controlling shareholders
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The controlling shareholder of Hangzhou Tianmushan Pharmaceutical Enterprise Co., Ltd. (600671.SH) increased shareholding in the company by a total of 4,906,500 shares from May 10 to 16, accounting for 4.03 percent of its total share capital. The controlling shareholder of Xinjiang Tianye Co., Ltd. (600075.SH) increased shareholding in the company by a total of 1,638,000 shares as of the announcement date.
[Trading Alarms]
○ Zhongya Machinery to debut IPO on May 17
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Hangzhou Zhongya Machinery Co., Ltd. (300512.SZ) will offer shares at 20.91 yuan per share with an upper limit of 13,000 shares for each applicant. The company's PE ratio is 23 times. It is mainly engaged in liquid food packaging equipment.
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