[Today's Guide]
○ Chongqing Iron ＆ Steel to become financial company, state-owned assets reform in Chongqing to speed up
○ Home-made chips application marks significant progress, vanadium battery to see industrial criteria
○ Longmaster Information to invest in phar. Enterprises, reorganization of Xingye Holding approved
○ Wanda Cinema Line proposes to acquire Wanda Media, Taiantang Pharmaceutical proposes to expand big health
[SSN Focus]
○ Chongqing Iron ＆ Steel to become financial company, state-owned assets reform in Chongqing to speed up
------
Chongqing Iron ＆ Steel Company Limited (01053.HK; 601005.SH), which suddenly suspended trading on June 2, announced that Chongqing State-owned Assets Supervision and Administration Commission is mulling a significant event over the company, which constitutes a major assets reorganization. The company is planning to sell its iron and steel assets and acquire non-listed financial assets with high profitability. Chongqing Yufu Assets Management Group., Ltd., one of the counterparties, is known as the Chongqing version of the Central Huijin Investment Ltd. It plays a key role in equity management, industrial investment, funds operation, assets acquisition and land operation.
Comment: The state-owned assets reform in Chongqing is leading the whole country and shows signs of acceleration. Chongqing SASAC proposed to promote the state-owned assets reform through projects in February. The municipal government clarified the classification of 40 key municipal SOEs in May. Chongqing Jianfeng Chemical Co., Ltd. (000950.SZ), Chongqing Sanxia Paints Co., Ltd. (000565.SZ) and listed companies under the Chongqing SASAC has suspended trading for reorganization. Among those haven't suspended trading, Chongqing Yukaifa Co., Ltd. (000514.SZ) proposes to make full use of the platform resources to improve the business operation and market value management. Chongqing Taiji Industry (Group) Co., Ltd. (600129.SH) has completed the disposal of the shell assets of Southwest Pharmaceutical Co., Ltd. (600666.SH) and Chongqing Tong Jun Ge Co., Ltd. (00591.SZ) and solved refinancing obstacles through compstitions.
[SSN Selection]
○ China Securities Regulatory Commission (CSRC) approved the IPO application of nine enterprises on June 3, proposing to raise a maximum of no more than 5.3 billion yuan.
○ The central bank announced the adjustment to the assessment on the required reserves on June 3, which will reduce the fluctuation of the monetary market.
○ China Banking Regulatory Commission (CBRC) and the Ministry of Land and Resources issued new regulations, requiring that two types of collective commercial construct land in rural areas can be pledged for financing.
○ The U.S. non-agricultural employment data for May released on June 3 hit a new low in six years. The financial market ruled out the possibilities of interest hike by the Federal Reserve in June.
○ Officials from the General Administration of Sport indicated on June 4 that Chinese Go grandmaster Ke Jie will rival AlphaGo within the year.
○ Hyperloop One, a company backed by Elon Musk, indicated on June 3 that its piped high-speed rail will conducted manned test next year.
TOP
[Industry Information]
○ Loongson big data appliance developed, home-made chips application marks significant progress
------
China News Service reported that the first big data appliance based on the home-made Loongson processor has been successfully developed in Hefei City, Anhui Province recently. The appliance is significant to the controllability of information security and can be applied to the processing of big data. It supports home-made operating systems, database and other basic software and enjoys a bright future in national defense, intelligent cities, finance, scientific computing and other industries. In addition, the key interchanger, robots and other products developed with Loongson technologies are expected to be introduce by the year end.
Comment: The localization of chips is fundamental to achieve the controllability of information security. Loongson is a general CPU independently developed by the Institute of Computing Technology of the Chinese Academy of Sciences. The successful development of the big data appliance means a significant progress in the application of home-made chips. With the improvement in the localization of chips and the expansion in their application, companies in the industrial chain will see opportunities in replacing imported products. Among listed-companies, Shenzhen Fastprint Circuit Tech Co., Ltd. (002436.SZ) develops the two core materials in IC packaging and manufacturing through investing in IC carriers and big silicon chips projects. Nationz Technologies Inc. (300077.SZ) focuses on the IC research, development and design in information security.
○ Vanadium battery to see industrial criteria with potential market of over RMB100 bln
------
www.escn.com.cn reported on June 3 that the Technical Conditions on Electrolyte for All Vanadium Flow Batteries drafted by Dalian Boling New Materials Co., Ltd. (BNM) as the leader is under final drafting. The all vanadium flow battery currently has no unified standards as industrial guidance. The general technical conditions is a framework document for the products and a key criteria in the all vanadium electrolyte industry. The preparation of the criteria will fill the blankness in the criteria on the domestic all vanadium electrolyte industry.
Comment: BNM is the first large-scale enterprise for the industrialized production of vanadium electrolyte in the world. The preparation of the industrial criteria will promote the domestic all vanadium electrolyte industry. Currently, China owns 100 percent proprietary intellectual property rights over all vanadium flow batteries. Industrial insiders estimate that the vanadium battery enjoys a market of over 100 billion yuan. In terms of listed companies, Sichuan Mingxing Electric Power Co., Ltd. (600101.SH) and Chengdu Tianxing Instrument And Meter Co., Ltd. (000710.SZ) own vanadium mine resources.
TOP
[Announcement Interpretation]
○ Longmaster Information to control large phar. enterprises
------
Longmaster Information ＆ Technology Co., Ltd. (300288.SZ) proposes to increase the investment in Guiyang Pharmaceutical E-Business Services Co., Ltd., a subsidiary of the company. Meanwhile, the latter plans to acquire large pharmaceutical enterprise and obtain the controlling right over them through shares swap or in cash.
○ Reorganizations of Xingye Holding, Chieftain Control and Wuzhong Industrial approved
------
The reorganizations of Dazhou Xingye Holding Co., Ltd. (600603.SH) and Beijing Chieftain Control Engineering Technology Co., Ltd. (300430.SZ), including the purchase of assets by issuing shares, have been conditionally approved by the China Securities Regulatory Commission (CSRC). Jiangsu Wuzhong Industrial Co., Ltd. (600200.SH) was unconditionally approved.
TOP
○ Wanda Cinema Line proposes to acquire Wanda Media with RMB37.2 bln to integrate the industrial chain
------
Wanda Cinema Line Co., Ltd. (002739.SZ) proposes to buy the entire equities of Wanda Media Co., Ltd through private placement at 74.84 yuan per share. The estimated appreciation rate of the subject asset is 171.46 percent, and the valuation is currently fixed at 37,204 million yuan. At the same time, the company proposes to raise supporting fund of 8 billion yuan through private placement at no less than 74.84 yuan per share. The proceeds will be used for the construction of cinemas and supplementing working capitals. The original shareholders committed that the net profits of Wanda Media for 2016-2018 will be no less than 5,097.8 million yuan.
The recent master work of Wanda Media include Mojin - The Lost Legend and Goodbye Mr. Loser. Legendary Pictures, a subsidiary of Wanda Media, is a well-known global independent film company. In 2015, films invested Wanda Media witnessed a total box office of 6.15 billion yuan, the top among domestic private film production companies. Through this transaction, the main business of Wanda Cinema Line will expand to film development, investment, production, release, and film and game interaction sectors. Thus the company will integrate the industrial chain.
○ Taiantang Pharmaceutical proposes to expand big health by raising RMB2.8 bln through private placement
------
Guangdong Taiantang Pharmaceutical Co., Ltd. (002433.SZ) propose to raise 2.8 billion yuan through private placement at no less than 9.27 yuan per share. The fundraising will be used for the construction of Internet health cloud platform, construction project of reproductive health systematic upgrading and supplementing working capital. The company aims to realize the strategic transformation upgrading of transferring to big health.
○ Cultural Investment Holdings to control a game company with RMB190 mln
------
Dowan Internet, a wholly owned subsidiary of Cultural Investment Holdings Co.，Ltd. (600715.SH) proposes to invest 190 million yuan to acquire 70 percent shareholding of Beijing Ziyou Xinghe Technology Company Limited in the ways of increasing capital and transfer. Ziyou Xinghe has launched various games on Tencent's game platform, including Hua Qiangu, Shushan Zhanji and The Legend of Miyue. Its committed net profits deducted of non-recurring profits or losses for 2016-2018 are no less than 33 million yuan, 40 million yuan and 46.7 million yuan.
○ Homyear Capital Holdings launches Phase II ESOP
------
Beijing Homyear Capital Holdings Co., ltd. (600240.SH) proposes to launch Phase II Employee Stock Ownership Plan with the cap of 100 million yuan. After raising funds at the rate of 1:1, the plan intended to buy and hold stocks of the company through asset management plan of no more than 200 million yuan.
[Trading Trends]
○ Four institutions bought Jiugui Liquor
------
The trading volume ranking list on June 3 shows that Jiugui Liquor Co., Ltd. (000799.SZ) was bought through four institutional seats with a total of 254 million yuan, accounting for 42.5 percent of intraday turnover. Another institution sold with a total of 28,067,000 yuan.
Comment: institutions believe that currently the company's inventory has been cleared. It means that the fundamentals of the company will bottom out. In the future, the company will rebuild its marketing team and make use of channel resources brought by China Oil ＆ Foodstuffs Corporation, to rise again in its base in Hunan Province by virtue of the brand.
[Weekly Review]
○ Observe and act, do not guess
------
On June 15 and 16 (Beijing Time), two big events concerned by the financial industry will be unveiled: whether A shares will be included in the MSCI index, and whether the Federal Reserve will increase interest rates. The market has been discussed these issues even a month ago. Seemingly the opinions of both the buying side and selling side make sense, as the A shares surged instead of plummet a few days ago after trading sideways for a long time.
We are not able to know the changes of sentiment of most market participants, but the actions of big investment funds must have left some traces. If you have often read SSN, it is not hard to find out that in the pullback period during the middle and end of May when the trading volumes shrunk, short-term funds all choose to wait sidelines. And some experienced institutions buy in large amount of value stocks, such as liquor stock. However, those short-term funds has not thoroughly left the market. Most of them were waiting for opportunities by setting aside capitals in the securities account with reverse repurchase. Judging from the appearance, the sentiment on the market is pessimistic; but actually, the landscape of a probable surge has already in position.
On May 30, the SSN exclusively reported that CSOP FTSE CHINA A50 ETF has attracted nearly 2 billion yuan subscription. As the market tend to surge, this report has ignited the buying sentiment on the market. Blue-chip stocks allocated by A50 ETF rallied as soon as the trading session began. At last, short-term funds also started buying. All kinds of conceptual stocks outperformed other sectors. The SSN stroke a breathtaking period for the market in May.
As to Fed rates hike, it is not necessary for A share investors to worry too much. Compared with last year, the central bank and the State Administration of Foreign Exchange (SAFE) has introduced various measures to manage cross-border capital flow. Individual investors intended to allocate overseas assets has mostly used up the foreign exchange quota of 50,000 U.S. dollars in January. Even if rates hikes will be implemented during the year, its impact on A shares will be significantly less than last year.
TOP
○ Chongqing Iron ＆ Steel to become financial company, state-owned assets reform in Chongqing to speed up
○ Home-made chips application marks significant progress, vanadium battery to see industrial criteria
○ Longmaster Information to invest in phar. Enterprises, reorganization of Xingye Holding approved
○ Wanda Cinema Line proposes to acquire Wanda Media, Taiantang Pharmaceutical proposes to expand big health
[SSN Focus]
○ Chongqing Iron ＆ Steel to become financial company, state-owned assets reform in Chongqing to speed up
------
Chongqing Iron ＆ Steel Company Limited (01053.HK; 601005.SH), which suddenly suspended trading on June 2, announced that Chongqing State-owned Assets Supervision and Administration Commission is mulling a significant event over the company, which constitutes a major assets reorganization. The company is planning to sell its iron and steel assets and acquire non-listed financial assets with high profitability. Chongqing Yufu Assets Management Group., Ltd., one of the counterparties, is known as the Chongqing version of the Central Huijin Investment Ltd. It plays a key role in equity management, industrial investment, funds operation, assets acquisition and land operation.
Comment: The state-owned assets reform in Chongqing is leading the whole country and shows signs of acceleration. Chongqing SASAC proposed to promote the state-owned assets reform through projects in February. The municipal government clarified the classification of 40 key municipal SOEs in May. Chongqing Jianfeng Chemical Co., Ltd. (000950.SZ), Chongqing Sanxia Paints Co., Ltd. (000565.SZ) and listed companies under the Chongqing SASAC has suspended trading for reorganization. Among those haven't suspended trading, Chongqing Yukaifa Co., Ltd. (000514.SZ) proposes to make full use of the platform resources to improve the business operation and market value management. Chongqing Taiji Industry (Group) Co., Ltd. (600129.SH) has completed the disposal of the shell assets of Southwest Pharmaceutical Co., Ltd. (600666.SH) and Chongqing Tong Jun Ge Co., Ltd. (00591.SZ) and solved refinancing obstacles through compstitions.
[SSN Selection]
○ China Securities Regulatory Commission (CSRC) approved the IPO application of nine enterprises on June 3, proposing to raise a maximum of no more than 5.3 billion yuan.
○ The central bank announced the adjustment to the assessment on the required reserves on June 3, which will reduce the fluctuation of the monetary market.
○ China Banking Regulatory Commission (CBRC) and the Ministry of Land and Resources issued new regulations, requiring that two types of collective commercial construct land in rural areas can be pledged for financing.
○ The U.S. non-agricultural employment data for May released on June 3 hit a new low in six years. The financial market ruled out the possibilities of interest hike by the Federal Reserve in June.
○ Officials from the General Administration of Sport indicated on June 4 that Chinese Go grandmaster Ke Jie will rival AlphaGo within the year.
○ Hyperloop One, a company backed by Elon Musk, indicated on June 3 that its piped high-speed rail will conducted manned test next year.
TOP
[Industry Information]
○ Loongson big data appliance developed, home-made chips application marks significant progress
------
China News Service reported that the first big data appliance based on the home-made Loongson processor has been successfully developed in Hefei City, Anhui Province recently. The appliance is significant to the controllability of information security and can be applied to the processing of big data. It supports home-made operating systems, database and other basic software and enjoys a bright future in national defense, intelligent cities, finance, scientific computing and other industries. In addition, the key interchanger, robots and other products developed with Loongson technologies are expected to be introduce by the year end.
Comment: The localization of chips is fundamental to achieve the controllability of information security. Loongson is a general CPU independently developed by the Institute of Computing Technology of the Chinese Academy of Sciences. The successful development of the big data appliance means a significant progress in the application of home-made chips. With the improvement in the localization of chips and the expansion in their application, companies in the industrial chain will see opportunities in replacing imported products. Among listed-companies, Shenzhen Fastprint Circuit Tech Co., Ltd. (002436.SZ) develops the two core materials in IC packaging and manufacturing through investing in IC carriers and big silicon chips projects. Nationz Technologies Inc. (300077.SZ) focuses on the IC research, development and design in information security.
○ Vanadium battery to see industrial criteria with potential market of over RMB100 bln
------
www.escn.com.cn reported on June 3 that the Technical Conditions on Electrolyte for All Vanadium Flow Batteries drafted by Dalian Boling New Materials Co., Ltd. (BNM) as the leader is under final drafting. The all vanadium flow battery currently has no unified standards as industrial guidance. The general technical conditions is a framework document for the products and a key criteria in the all vanadium electrolyte industry. The preparation of the criteria will fill the blankness in the criteria on the domestic all vanadium electrolyte industry.
Comment: BNM is the first large-scale enterprise for the industrialized production of vanadium electrolyte in the world. The preparation of the industrial criteria will promote the domestic all vanadium electrolyte industry. Currently, China owns 100 percent proprietary intellectual property rights over all vanadium flow batteries. Industrial insiders estimate that the vanadium battery enjoys a market of over 100 billion yuan. In terms of listed companies, Sichuan Mingxing Electric Power Co., Ltd. (600101.SH) and Chengdu Tianxing Instrument And Meter Co., Ltd. (000710.SZ) own vanadium mine resources.
TOP
[Announcement Interpretation]
○ Longmaster Information to control large phar. enterprises
------
Longmaster Information ＆ Technology Co., Ltd. (300288.SZ) proposes to increase the investment in Guiyang Pharmaceutical E-Business Services Co., Ltd., a subsidiary of the company. Meanwhile, the latter plans to acquire large pharmaceutical enterprise and obtain the controlling right over them through shares swap or in cash.
○ Reorganizations of Xingye Holding, Chieftain Control and Wuzhong Industrial approved
------
The reorganizations of Dazhou Xingye Holding Co., Ltd. (600603.SH) and Beijing Chieftain Control Engineering Technology Co., Ltd. (300430.SZ), including the purchase of assets by issuing shares, have been conditionally approved by the China Securities Regulatory Commission (CSRC). Jiangsu Wuzhong Industrial Co., Ltd. (600200.SH) was unconditionally approved.
TOP
○ Wanda Cinema Line proposes to acquire Wanda Media with RMB37.2 bln to integrate the industrial chain
------
Wanda Cinema Line Co., Ltd. (002739.SZ) proposes to buy the entire equities of Wanda Media Co., Ltd through private placement at 74.84 yuan per share. The estimated appreciation rate of the subject asset is 171.46 percent, and the valuation is currently fixed at 37,204 million yuan. At the same time, the company proposes to raise supporting fund of 8 billion yuan through private placement at no less than 74.84 yuan per share. The proceeds will be used for the construction of cinemas and supplementing working capitals. The original shareholders committed that the net profits of Wanda Media for 2016-2018 will be no less than 5,097.8 million yuan.
The recent master work of Wanda Media include Mojin - The Lost Legend and Goodbye Mr. Loser. Legendary Pictures, a subsidiary of Wanda Media, is a well-known global independent film company. In 2015, films invested Wanda Media witnessed a total box office of 6.15 billion yuan, the top among domestic private film production companies. Through this transaction, the main business of Wanda Cinema Line will expand to film development, investment, production, release, and film and game interaction sectors. Thus the company will integrate the industrial chain.
○ Taiantang Pharmaceutical proposes to expand big health by raising RMB2.8 bln through private placement
------
Guangdong Taiantang Pharmaceutical Co., Ltd. (002433.SZ) propose to raise 2.8 billion yuan through private placement at no less than 9.27 yuan per share. The fundraising will be used for the construction of Internet health cloud platform, construction project of reproductive health systematic upgrading and supplementing working capital. The company aims to realize the strategic transformation upgrading of transferring to big health.
○ Cultural Investment Holdings to control a game company with RMB190 mln
------
Dowan Internet, a wholly owned subsidiary of Cultural Investment Holdings Co.，Ltd. (600715.SH) proposes to invest 190 million yuan to acquire 70 percent shareholding of Beijing Ziyou Xinghe Technology Company Limited in the ways of increasing capital and transfer. Ziyou Xinghe has launched various games on Tencent's game platform, including Hua Qiangu, Shushan Zhanji and The Legend of Miyue. Its committed net profits deducted of non-recurring profits or losses for 2016-2018 are no less than 33 million yuan, 40 million yuan and 46.7 million yuan.
○ Homyear Capital Holdings launches Phase II ESOP
------
Beijing Homyear Capital Holdings Co., ltd. (600240.SH) proposes to launch Phase II Employee Stock Ownership Plan with the cap of 100 million yuan. After raising funds at the rate of 1:1, the plan intended to buy and hold stocks of the company through asset management plan of no more than 200 million yuan.
[Trading Trends]
○ Four institutions bought Jiugui Liquor
------
The trading volume ranking list on June 3 shows that Jiugui Liquor Co., Ltd. (000799.SZ) was bought through four institutional seats with a total of 254 million yuan, accounting for 42.5 percent of intraday turnover. Another institution sold with a total of 28,067,000 yuan.
Comment: institutions believe that currently the company's inventory has been cleared. It means that the fundamentals of the company will bottom out. In the future, the company will rebuild its marketing team and make use of channel resources brought by China Oil ＆ Foodstuffs Corporation, to rise again in its base in Hunan Province by virtue of the brand.
[Weekly Review]
○ Observe and act, do not guess
------
On June 15 and 16 (Beijing Time), two big events concerned by the financial industry will be unveiled: whether A shares will be included in the MSCI index, and whether the Federal Reserve will increase interest rates. The market has been discussed these issues even a month ago. Seemingly the opinions of both the buying side and selling side make sense, as the A shares surged instead of plummet a few days ago after trading sideways for a long time.
We are not able to know the changes of sentiment of most market participants, but the actions of big investment funds must have left some traces. If you have often read SSN, it is not hard to find out that in the pullback period during the middle and end of May when the trading volumes shrunk, short-term funds all choose to wait sidelines. And some experienced institutions buy in large amount of value stocks, such as liquor stock. However, those short-term funds has not thoroughly left the market. Most of them were waiting for opportunities by setting aside capitals in the securities account with reverse repurchase. Judging from the appearance, the sentiment on the market is pessimistic; but actually, the landscape of a probable surge has already in position.
On May 30, the SSN exclusively reported that CSOP FTSE CHINA A50 ETF has attracted nearly 2 billion yuan subscription. As the market tend to surge, this report has ignited the buying sentiment on the market. Blue-chip stocks allocated by A50 ETF rallied as soon as the trading session began. At last, short-term funds also started buying. All kinds of conceptual stocks outperformed other sectors. The SSN stroke a breathtaking period for the market in May.
As to Fed rates hike, it is not necessary for A share investors to worry too much. Compared with last year, the central bank and the State Administration of Foreign Exchange (SAFE) has introduced various measures to manage cross-border capital flow. Individual investors intended to allocate overseas assets has mostly used up the foreign exchange quota of 50,000 U.S. dollars in January. Even if rates hikes will be implemented during the year, its impact on A shares will be significantly less than last year.
TOP
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