[Today's Guide]
○First mobilization meeting on Mars exploration kicked off, aerospace industry to see rapid development
○Degradable stent developed by China sees breakthrough, listed companies make aggressive deployment
○Chaohua Technology to expand to smart city, Fasten strips off losing enterprises
○Qixing Iron Tower to construct intelligent multistory parking garage, Dongcheng Biochemicals to acquire two medicine enterprises
[SSN Focus]
○First mobilization meeting on Mars exploration kicked off, aerospace industry to see rapid development
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According to the website of State Administration of Science, Technology and Industry for National Defence (SASTIND) on May 26, Chinese Academy of Sciences (CAS) convened a mobilization meeting for the first mars exploration task in Beijing on Mary 24 to mobilize research institutes under CAS to effectively achieve this year's tasks and goals. It is reported by Legal Evening News that the SASTIND and China National Space Administration held a briefing conference on May 26, indicating that they would launch Tiangong-2 and Shenzhou-11 and accelerate the implementation of deep space exploration project centering on Mars exploration in next five to ten years.
Comment: Developing space technology is not only the important embodiment of national wisdom, economic strength and comprehensive national power, but can also promote development of productive force and improve international prestige. Driven by the Mars exploration and other projects, China's aerospace development will see strategic opportunity during the 13 Five-year Plan period. China Aerospace Science and Technology Corporation (CASC) is the developer and manufacturer of Long March launcher and Chang'e lunar probe. Its subordinating listed companies include Shanghai Aerospace Automobile Electromechanical Co., Ltd. (600151.SH) and China Spacesat Co., Ltd. (600118.SH), etc. Institutions believe that CASC will continue to play an important role in Mars exploration.
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[SSN Selection]
○Officials from the Ministry of Finance indicate that there is still certain potential for China's government to borrow debts on the whole, so the government can raise leverage by stage.
○The lottery sales amount rose by 7 percent year on year in the whole country in April, representing the year-on-year positive growth the second consecutive month.
○SSN learnt that the Action Plan on the Prevention of Soil Pollution has completed modification and will be released soon.
○Hebei government held a meeting on encouraging de-capacity of iron and steel and coal industries. Tangshan city indicated that it will never shake its resolution in spite of the short-term recovery in the market.
○CITIC Limited, shareholder of controlling shareholder of China Citic Bank Corporation Limited (00998.SH; 601998.SH), increased shareholding in the company by 137 million H shares during April 11 and May 18.
[Industry Information]
○Degradable stent developed by China sees breakthrough, listed companies make aggressive deployment
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The first International Summit on Cardiovascular Innovations (ISCI) kicked off in Shanghai on May 26. Ge Junbo, academician from Chinese Academy of Sciences released the latest news at the summit, stating that biodegradable poly--lactic acid stent developed by China has finished clinical test and will enter procedure for examination and approval on innovative medical device, making a key step of approval before going public. Bio-absorbable stent is a hotspot of global research in recent years and is regarded as the fourth revolution in the history of coronary artery intervention therapy.
Comment: As disclosed by Center for Medical Device Evaluation of SFDA, China's medical device evaluation method is under reform and innovative medical device evaluation is expected to have registration, technical evaluation and administration evaluation in priority. Lepu Medical Technology (Beijing) Co., Ltd. (300003.SZ), Shenzhen Salubris Pharmaceuticals Co., Ltd. (002294.SZ) and other A-share listed companies conduct deep R＆D in cardiovascular stent and all plan to launch new products of degradable heart stent in this year and next year.
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[Announcement Interpretation]
○Chaohua Technology to acquire company engaged in smart city at over RMB1.2 bln
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Guangdong Chaohua Technology Co., Ltd. (002288.SZ) plans to acquire 80 percent equity of Shenzhen Bellsent Intelligent System Co., Ltd. at 1.24 billion yuan through issuing 144 million shares at a price of 8.63 yuan per share and intends to raise supporting funds. The company promises that net profits of Bellsent Intelligent System will not be less than 120 million yuan, 156 million yuan and 203 million yuan during 2016 and 2018. Bellsent Intelligent System is principally engaged in smart city field and its products target urban complex, living block and governmental departments.
○Fasten strips off losing enterprises with RMB460 mln
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Jiangsu Fasten Company Limited (000890.SZ) proposes to sell 100 percent equities of three losing companies to Fasten Group which is a relevant party of the company's controlling shareholder. The transaction is priced around 460 million yuan and will bring an investment return of about 47 million yuan, helping to boost the company's efforts in transformation. The company also announces voluntary resignation of Jiang Weiqiu, president and general manager of the company, and Dong Dong, executive deputy general manager of the company. Meanwhile, the board of directors nominates three people with Zhang Yun included for candidates of directors. Zhang is now a partner of Zhongzhi Capital Management Co., Ltd.
Comment: As of May 13, Jiangyin Yaobo Taibang Investment Center (Limited Partnership) under Zhongzhi Enterprise Group totally holds 37,964,200 shares of Fasten, accounting for 10 percent of its total share capital.
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○Qixing Iron Tower wins bidding of intelligent multistory parking garage project in Tonghua city
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Shandong Qixing Iron Tower Co., Ltd. (002359.SZ) wins the bidding of the Intelligent Multistory Parking Garage Project in Tonghua City. The bid-winning sum totals 269 million yuan, accounting for 41 percent of the company's audited revenue in 2015. Winning the bidding will pave way for the company to undertake large-scale intelligent multistory parking garage project later and help to improve the company's business performance.
Besides, Shenzhen Gongjin Electronics Co., Ltd. (603118.SH) wins the bidding of the 2016 purchasing project of optical communication terminal products, which is a bid jointly invited by Alcatel Shanghai Bell Co., Ltd., Alcatel-Lucent International and Alcatel Lucent USA. The bidding totals around 130 million U.S. dollars.
○Dongcheng Biochemicals to acquire two medicine enterprises with RMB380 mln
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Yantai Dongcheng Biochemicals Co., Ltd. (002675.SZ) proposes to acquire 70 percent equities of Sino Siam Biotechnique Co., Ltd. with 315 million yuan and 83.5 percent equities of Shanghai Yi Tai Pharmaceutical Technology Co., Ltd. with 65.13 million yuan. The transaction will be done by issuing shares at 36.21 yuan per share through private placement and by paying in cash. In the meantime, the company proposes to raise a supporting fund of 380 million yuan through private placement at no less than 36.21 yuan per share. Sino Siam Biotechnique, involved in the production and sales of chondroitin sulfate, now mainly produces chondroitin sulfate and albumen powder. Yi Tai Pharmaceutical Technology is now working on a new drug which is expected to be helpful for treating the metastasis of malignant bone cancer.
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○Kuaijishan Shaoxing Wine to raise prices of some products by 5-20 pct from June
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Kuaijishan Shaoxing Wine Co., Ltd. (601579.SH) has decided to raise the prices of some products by 5-20 percent from June 1. The contract sales of products involved in the price hike totaled 526 million yuan in 2015, while the company's total revenue recorded 915 million yuan in the same period.
[Trading Trends]
○RMB600 mln overseas funds flow into A-share market through RQFII
Trading information disclosed on the website of Hong Kong Exchanges and Clearing Limited on May 26 shows that CSOP FTSE China A50 ETF, the largest RQFII A-share ETF at overseas, received a net subscription of 50 million fund units, indicating a net inflow of around 600 million yuan. As disclosed by He Xuan, head of CSOP ETF and Index Strategy Department, more than five institutions all subscribed the fund in the primary market on May 25. Factors like clear reform signal sent by Chinese central government and rosy expectation raised by overseas market about the inclusion of A-share market into MSCI emerging market index in June accelerated the inflow of capitals.
[Trading Alarms]
○Global Printing launches IPO on May 27
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Xi'an Global Printing Co., Ltd. (002799.SZ), principally engaged in the paper packaging for medicines, issues shares at 7.98 yuan per share with an up-limit per account of 10,000 shares. The P/E ratio is 23 times.
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