[Today's Guide]
○New Chinese supercomputer ranks first of TOP 500 list, "Chinese chip" attracts great attention
○Piloting mixed-ownership reform of 1st batch of central SOEs to kick off, northeast China to highlight
○Venustech Group to acquire information security assets, Yunnan Tin to raise RMB2.6 bln through private placement to invest in zinc and indium project
○Control right of Weihua may change, Institutional seats favor IC industrial chain
[SSN Focus]
○New Chinese supercomputer ranks first of TOP 500 list, "Chinese chip" attracts great attention
------
As reported by the Xinhua News Agency, the TOP 500 list of the world's fastest supercomputers is updated on June 20 with a new Chinese supercomputer called Sunway TaihuLight on the top. Sunway TaihuLight entirely uses processors designed and made in China, meaning that China has mastered the core technology of supercomputing manufacturing. Sunway TaihuLight is twice as fast and three times as efficient as China's Tianhe-2 supercomputer. 51 supercomputers from Dawning Information Industry Co., Ltd. (603019.SH) and 20 supercomputers from Inspur Electronic Information Industry Co., Ltd. (000977.SZ) are listed in the ranking.
Comment: Supercomputer, as a basic tool applied in national scientific research, provides a series of major challenges in economy, technology and etc. fields with important countermeasures. The ranking of Sunway TaihuLight means that China has got rid of its dependence on foreign chips. At present, the domestication of China's chips is speeding up. It is believed by Essences Securities that the electronic chemicals industry, as the upstream, also benefits from the domestication trend of integral material. In addition, chip companies are expected to see larger development space in baseband chip, car networking and FPGA through industrial cooperation.
TOP
○Piloting mixed-ownership reform of 1st batch of central SOEs to kick off, northeast China to highlight
------
SSN learnt that relevant departments will kick off the piloting mixed-ownership reform of the first batch of central state-owned enterprises (SOEs) and the local governments will follow up. Since the state-owned economy sees high proportion in the northeast and there are lots of pending issues remained unsolved there. Ineffective system and mechanism reforms are the main factor to be blamed for the economic difficulties. The northeast part of China might see intensive efforts in reform. Earlier on May 6, the Department of Northeastern Region Revitalization under the National Development and Reform Commission (NDRC) held a work forum about the piloting mixed-ownership reform of central SOEs in the northeast of China. Leaders from local central SOEs like FAW Group Corporation, China First Heavy Industries Corporation and Harbin Electric Corporation were involved in the forum.
[SSN Selection]
○The General Office of the State Council issued the Opinions about Playing the Leading Role of Brands and Advancing Upgrading of Supply-Demand Structure on June 20, proposing to speed up the development of emerging cultural industries like online audio-visual industry.
○The General Office of the National Development and Reform Commission (NDRC) on June 20 issued the draft of scheme about compulsory garbage classification, requiring a trash recycling and utilization ratio of at least 35 percent by 2020 in major cities.
○The amount of reverse repo developed by the central bank on June 20 hit a new high in nearly two months. The market's prudent expectation about the liquid at the end of the half year gradually eases.
○Data from the State Administration of Foreign Exchange shows that deficit of the settlement of foreign exchanges by Chinese banks has declined for the fifth consecutive month. The supply-demand structure of foreign exchange further balances.
○Tian Yulong, secretary-general of the China National Space Administration, indicated on June 20 that the roadmap for the development of space robot has been formulated, and a slew of efforts will be made to achieve breakthroughs in critical technologies.
[Industry Information]
○Implementation scheme for energy equipment unveiled, advanced nuclear power equipment highlighted
------
As reported on the website of the National Development and Reform Commission (NDRC), three departments and commissions recently jointly printed and distributed the Implementation Scheme for Energy Equipment-Made in China 2025. It is proposed to achieve breakthroughs in the critical technologies and equipment for clean, low-carbon, safe and high-efficient development of energy as well as carry out application before 2020. As to the development tasks defined in the scheme, advanced nuclear power equipment sees the largest proportion with over 100 technical difficulties in nuclear island equipment, critical pumps and valves and critical nuclear-level material included.
Comment: China National Nuclear Corporation and China General Nuclear Power Corporation are purchasing through invitation for bids in large scale in recent period. For Hualong No.1 technology, greatly promoted by China now, requires a domestication rate of critical material at no less than 85 percent. As the construction of domestic nuclear power projects speeds up and the exporting market expands, securities companies expect that 8 units will be newly started this year and the invitation for bids will be carried out for 8-10 units, and the investment in nuclear power equipment will reach 360 billion yuan by 2020.
TOP
[Announcement Interpretation]
○Venustech Group to acquire information security assets at RMB637 mln
------
Venustech Group Inc. (002439.SZ) plans to purchase 100 percent equity of Beijing Cyber Xingan Technology Co., Ltd. by issuing 19,256,900 shares at a price of 20.05 yuan per share and paying 251 million yuan in cash, which totals 637 million yuan. Meanwhile, the company also raises supporting funds of 264 million yuan by issuing shares at the same price from employee shareholding plan and Zhongzhi Investment Management Co., Ltd.
Cyber Xingan Technology is engaged in information security field and targets major customers including army and military industrial enterprises. The counterparty promises that net profits after extraordinary gains and losses of Cyber Xingan Technology will be no less than 38.74 million yuan, 50.36 million yuan and 65.47 million yuan during 2016 and 2018 respectively.
○Yunnan Tin to raise RMB2.6 bln through private placement to invest in zinc and indium project
------
Yunnan Tin Co., Ltd. (000960.SZ) intends to raise 2.6 billion yuan by issuing shares at a floor price of 9.48 yuan per share through private placement to invest in smelting technical improvement project which annual produces 100,000 tons of zinc and 60 tons of indium and multi-metal concentrator project of demonstration parks of mineral processing experiments. It is reported that building the biggest indium industrial base is one of the cores of the company's strategy developing both tin and indium. According the estimation in the announcement, after the zinc and indium smelting technical improvement project with investment of 2.1 billion yuan reaches the designed capacity, the annual after-tax profit of the company is predicted to be 230 million yuan and the zinc and indium smelting system featuring environmental protection, low consumption and comprehensive utilization of resources will be established.
TOP
○Substantial shareholder of Weihua transfer 8.15 percent equity to Chengtun Group, paving way for change in control right
------
Li Jianhua, actual controller of Guangdong Weihua Corporation (002240.SZ) plans to transfer 40 million shares (accounting for 8.15 percent of the company's total share capital) of the company at a price of 12.32 yuan per share to Shenzhen Chengtun Group Co., Ltd. and the transaction amount records 493 million yuan. After the transfer, the total shareholding proportion of Li and persons acting in concert of the company reduces to 15.38 percent, but they are still the company's controlling shareholder and actual controller. Previously, the private placement proposal of Weihua revealed that the company planned to raise 858 million yuan through private placement from Chengtun Group. If the share price is no more than 10.15 yuan per share involved in the private placement this time, the shareholding proportion of Chengtun Group will be no less than that of current actual controller, which will change the company's control right.
Comment: Chengtun Group is specialized in investment in industrial and mineral projets and is the controller shareholder of Chengtun Mining Group Co., Ltd. (600711.SH) with holding 15.72 percent stakes in the company.
○China Baoan Group acquries Uchen Technology ＆ Engine to perfect new energy industrial chain
------
China Baoan Group Co., Ltd. (000009.SZ) plans to acquire 68 percent equity of Zhangjiagang Uchen Technology ＆ Engine Co., Ltd. at 272 million yuan. Uchen Technology ＆ Engine is specialized in providing charging facilities and relevant solutions to charging for new energy vehicle and it gained 33.74 million yuan of profits in 2015. The counterparty promises that net profits after extraordinary gains and losses of Uchen Technology ＆ Engine will be no less than 45 million yuan, 60 million yuan and 80 million yuan during 2016 and 2018 respectively.
○SDL Technology add more investment in principal business by private placement
------
Beijing SDL Technology Co., Ltd. (002658.SZ) plans to raise 1.18 billion yuan by issuing about 82 million shares at a floor price of 14.44 yuan per share to invest in ecological environment monitoring network project, production line construction project of VOCs monitoring system and supplement working capitals.
○Hengshun Vinegar-industry raises prices of some products
------
Jiangsu Hengshun Vinegar-industry Co., Ltd. (600305.SH) will raise prices of its main product classic vinegar series by about 9 percent on average in next three months. Products involved in the price hike achieved sales amount of 500 million yuan in 2015 and the company's operating income registered 1.3 billion yuan in 2015.
[Trading Trends]
○Institutional seats favor IC industrial chain
------
Integrated circuit (IC) industrial chain sees active trading on June 20. The trading volume ranking list today shows that JiLin Sino-Microelectronics Co., Ltd. (600360.SH) was bought through four institutional seats with a total of 98,456,000 yuan, accounting for 12.7 percent of its intraday turnover and was sold through one institutional seat with a total of 13.81 million yuan. In addition, individual shares such as All Winner Technology Co., Ltd. (300458.SZ), Zhejiang Jingsheng Mechanical ＆ Electrical Co., Ltd. (300316.SZ) and Beijing Sevenstar Electronics Co., Ltd. (002371.SZ) were also bought through institutional seats.
Comment: The market size of China's IC industry accounts for 60 percent of global market and self-sufficiency rate of the industry was only about 27 percent in 2015, implying huge potential in localization. Shenwan Hongyuan Group indicates that the industrial inventory level has dropped below the historic level and industrial prosperity will be recovered in the fourth quarter, which will be mainly driven by pickup in demand in server and automobile electronics fields.
[Trading Alarms]
○SAHAT Electrical Apparatus to launch IPO on June 21
------
Wuxi SAHAT Electrical Apparatus Co., Ltd. (732016) is going to launch IPO at a price of 8.49 yuan per share with an upper limit of 14,000 shares for each account. The PE ratio is 19 times. The company is engaged in key parts of breaker.
TOP
○New Chinese supercomputer ranks first of TOP 500 list, "Chinese chip" attracts great attention
○Piloting mixed-ownership reform of 1st batch of central SOEs to kick off, northeast China to highlight
○Venustech Group to acquire information security assets, Yunnan Tin to raise RMB2.6 bln through private placement to invest in zinc and indium project
○Control right of Weihua may change, Institutional seats favor IC industrial chain
[SSN Focus]
○New Chinese supercomputer ranks first of TOP 500 list, "Chinese chip" attracts great attention
------
As reported by the Xinhua News Agency, the TOP 500 list of the world's fastest supercomputers is updated on June 20 with a new Chinese supercomputer called Sunway TaihuLight on the top. Sunway TaihuLight entirely uses processors designed and made in China, meaning that China has mastered the core technology of supercomputing manufacturing. Sunway TaihuLight is twice as fast and three times as efficient as China's Tianhe-2 supercomputer. 51 supercomputers from Dawning Information Industry Co., Ltd. (603019.SH) and 20 supercomputers from Inspur Electronic Information Industry Co., Ltd. (000977.SZ) are listed in the ranking.
Comment: Supercomputer, as a basic tool applied in national scientific research, provides a series of major challenges in economy, technology and etc. fields with important countermeasures. The ranking of Sunway TaihuLight means that China has got rid of its dependence on foreign chips. At present, the domestication of China's chips is speeding up. It is believed by Essences Securities that the electronic chemicals industry, as the upstream, also benefits from the domestication trend of integral material. In addition, chip companies are expected to see larger development space in baseband chip, car networking and FPGA through industrial cooperation.
TOP
○Piloting mixed-ownership reform of 1st batch of central SOEs to kick off, northeast China to highlight
------
SSN learnt that relevant departments will kick off the piloting mixed-ownership reform of the first batch of central state-owned enterprises (SOEs) and the local governments will follow up. Since the state-owned economy sees high proportion in the northeast and there are lots of pending issues remained unsolved there. Ineffective system and mechanism reforms are the main factor to be blamed for the economic difficulties. The northeast part of China might see intensive efforts in reform. Earlier on May 6, the Department of Northeastern Region Revitalization under the National Development and Reform Commission (NDRC) held a work forum about the piloting mixed-ownership reform of central SOEs in the northeast of China. Leaders from local central SOEs like FAW Group Corporation, China First Heavy Industries Corporation and Harbin Electric Corporation were involved in the forum.
[SSN Selection]
○The General Office of the State Council issued the Opinions about Playing the Leading Role of Brands and Advancing Upgrading of Supply-Demand Structure on June 20, proposing to speed up the development of emerging cultural industries like online audio-visual industry.
○The General Office of the National Development and Reform Commission (NDRC) on June 20 issued the draft of scheme about compulsory garbage classification, requiring a trash recycling and utilization ratio of at least 35 percent by 2020 in major cities.
○The amount of reverse repo developed by the central bank on June 20 hit a new high in nearly two months. The market's prudent expectation about the liquid at the end of the half year gradually eases.
○Data from the State Administration of Foreign Exchange shows that deficit of the settlement of foreign exchanges by Chinese banks has declined for the fifth consecutive month. The supply-demand structure of foreign exchange further balances.
○Tian Yulong, secretary-general of the China National Space Administration, indicated on June 20 that the roadmap for the development of space robot has been formulated, and a slew of efforts will be made to achieve breakthroughs in critical technologies.
[Industry Information]
○Implementation scheme for energy equipment unveiled, advanced nuclear power equipment highlighted
------
As reported on the website of the National Development and Reform Commission (NDRC), three departments and commissions recently jointly printed and distributed the Implementation Scheme for Energy Equipment-Made in China 2025. It is proposed to achieve breakthroughs in the critical technologies and equipment for clean, low-carbon, safe and high-efficient development of energy as well as carry out application before 2020. As to the development tasks defined in the scheme, advanced nuclear power equipment sees the largest proportion with over 100 technical difficulties in nuclear island equipment, critical pumps and valves and critical nuclear-level material included.
Comment: China National Nuclear Corporation and China General Nuclear Power Corporation are purchasing through invitation for bids in large scale in recent period. For Hualong No.1 technology, greatly promoted by China now, requires a domestication rate of critical material at no less than 85 percent. As the construction of domestic nuclear power projects speeds up and the exporting market expands, securities companies expect that 8 units will be newly started this year and the invitation for bids will be carried out for 8-10 units, and the investment in nuclear power equipment will reach 360 billion yuan by 2020.
TOP
[Announcement Interpretation]
○Venustech Group to acquire information security assets at RMB637 mln
------
Venustech Group Inc. (002439.SZ) plans to purchase 100 percent equity of Beijing Cyber Xingan Technology Co., Ltd. by issuing 19,256,900 shares at a price of 20.05 yuan per share and paying 251 million yuan in cash, which totals 637 million yuan. Meanwhile, the company also raises supporting funds of 264 million yuan by issuing shares at the same price from employee shareholding plan and Zhongzhi Investment Management Co., Ltd.
Cyber Xingan Technology is engaged in information security field and targets major customers including army and military industrial enterprises. The counterparty promises that net profits after extraordinary gains and losses of Cyber Xingan Technology will be no less than 38.74 million yuan, 50.36 million yuan and 65.47 million yuan during 2016 and 2018 respectively.
○Yunnan Tin to raise RMB2.6 bln through private placement to invest in zinc and indium project
------
Yunnan Tin Co., Ltd. (000960.SZ) intends to raise 2.6 billion yuan by issuing shares at a floor price of 9.48 yuan per share through private placement to invest in smelting technical improvement project which annual produces 100,000 tons of zinc and 60 tons of indium and multi-metal concentrator project of demonstration parks of mineral processing experiments. It is reported that building the biggest indium industrial base is one of the cores of the company's strategy developing both tin and indium. According the estimation in the announcement, after the zinc and indium smelting technical improvement project with investment of 2.1 billion yuan reaches the designed capacity, the annual after-tax profit of the company is predicted to be 230 million yuan and the zinc and indium smelting system featuring environmental protection, low consumption and comprehensive utilization of resources will be established.
TOP
○Substantial shareholder of Weihua transfer 8.15 percent equity to Chengtun Group, paving way for change in control right
------
Li Jianhua, actual controller of Guangdong Weihua Corporation (002240.SZ) plans to transfer 40 million shares (accounting for 8.15 percent of the company's total share capital) of the company at a price of 12.32 yuan per share to Shenzhen Chengtun Group Co., Ltd. and the transaction amount records 493 million yuan. After the transfer, the total shareholding proportion of Li and persons acting in concert of the company reduces to 15.38 percent, but they are still the company's controlling shareholder and actual controller. Previously, the private placement proposal of Weihua revealed that the company planned to raise 858 million yuan through private placement from Chengtun Group. If the share price is no more than 10.15 yuan per share involved in the private placement this time, the shareholding proportion of Chengtun Group will be no less than that of current actual controller, which will change the company's control right.
Comment: Chengtun Group is specialized in investment in industrial and mineral projets and is the controller shareholder of Chengtun Mining Group Co., Ltd. (600711.SH) with holding 15.72 percent stakes in the company.
○China Baoan Group acquries Uchen Technology ＆ Engine to perfect new energy industrial chain
------
China Baoan Group Co., Ltd. (000009.SZ) plans to acquire 68 percent equity of Zhangjiagang Uchen Technology ＆ Engine Co., Ltd. at 272 million yuan. Uchen Technology ＆ Engine is specialized in providing charging facilities and relevant solutions to charging for new energy vehicle and it gained 33.74 million yuan of profits in 2015. The counterparty promises that net profits after extraordinary gains and losses of Uchen Technology ＆ Engine will be no less than 45 million yuan, 60 million yuan and 80 million yuan during 2016 and 2018 respectively.
○SDL Technology add more investment in principal business by private placement
------
Beijing SDL Technology Co., Ltd. (002658.SZ) plans to raise 1.18 billion yuan by issuing about 82 million shares at a floor price of 14.44 yuan per share to invest in ecological environment monitoring network project, production line construction project of VOCs monitoring system and supplement working capitals.
○Hengshun Vinegar-industry raises prices of some products
------
Jiangsu Hengshun Vinegar-industry Co., Ltd. (600305.SH) will raise prices of its main product classic vinegar series by about 9 percent on average in next three months. Products involved in the price hike achieved sales amount of 500 million yuan in 2015 and the company's operating income registered 1.3 billion yuan in 2015.
[Trading Trends]
○Institutional seats favor IC industrial chain
------
Integrated circuit (IC) industrial chain sees active trading on June 20. The trading volume ranking list today shows that JiLin Sino-Microelectronics Co., Ltd. (600360.SH) was bought through four institutional seats with a total of 98,456,000 yuan, accounting for 12.7 percent of its intraday turnover and was sold through one institutional seat with a total of 13.81 million yuan. In addition, individual shares such as All Winner Technology Co., Ltd. (300458.SZ), Zhejiang Jingsheng Mechanical ＆ Electrical Co., Ltd. (300316.SZ) and Beijing Sevenstar Electronics Co., Ltd. (002371.SZ) were also bought through institutional seats.
Comment: The market size of China's IC industry accounts for 60 percent of global market and self-sufficiency rate of the industry was only about 27 percent in 2015, implying huge potential in localization. Shenwan Hongyuan Group indicates that the industrial inventory level has dropped below the historic level and industrial prosperity will be recovered in the fourth quarter, which will be mainly driven by pickup in demand in server and automobile electronics fields.
[Trading Alarms]
○SAHAT Electrical Apparatus to launch IPO on June 21
------
Wuxi SAHAT Electrical Apparatus Co., Ltd. (732016) is going to launch IPO at a price of 8.49 yuan per share with an upper limit of 14,000 shares for each account. The PE ratio is 19 times. The company is engaged in key parts of breaker.
TOP
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