[Today's Guide]
○ Baosteel Group and Wuhan Iron and Steel (Group) mull over strategic reorganization, integration of central SOEs with overcapacity attracts attention
○Anxin Industrial Investment Fund launched, IC industry to embrace improving prosperity
○ Big data of health and medical care gains policy support, Wonders Information to acquire Jiada Information Technology at RMB994 mln
○ O-film Tech to acquire smart vehicle assets, Ningbo Tech Bank upwardly revises performance for 1st half of 2016
[SSN Focus]
○Baosteel Group and Wuhan Iron and Steel (Group) mull over strategic reorganization, integration of central SOEs with overcapacity attracts attention
------
Both Baoshan Iron ＆ Steel Co., Ltd. (600019.SH) and Wuhan Iron and Steel Company Limited (600005.SH) announced on June 26 that Baosteel Group and Wuhan Iron and Steel (Group) Corp. are mulling over strategic reorganization, and the two companies will suspend training from June 27. Other listed companies under Baosteel Group, such as Shanghai Baosight Software Co., Ltd. (600845.SH), Shanghai Baosteel Packaging Co., Ltd. (601968.SH) and SGIS Songshan Co., Ltd. (000717.SZ), also made same announcements. According to media, Xu Shaoshi, chairman of the National Development and Reform Commission, indicated on June 26 that the reorganization is planned for the de-capacity of iron and steel, central and local governments are pooling efforts to advance the acquisition and reorganization of enterprises with overcapacity in a powerful and orderly manner.
Comment: State-owned enterprises (SOEs) reform is frequently mentioned by leaders of central government in the meetings of the Central Leading Group for Deepening Overall Reform, the executive meetings of the State Council, the meetings of the Central Leading Group on Financial and Economic Affairs and etc. since the later part of May. It is believed by institutional research report that besides iron ＆ steel and non-ferrous metals, reorganization will also be frequently seen in industries with overcapacity such as coal and building materials. Central SOEs like Shenhua Group, China National Coal Group Corp., China National Building Materials Group Corporation and China National Materials Group Corp., Ltd. are involved. As to listed companies under these central SOEs, Xinjiang Tianshan Cement Co., Ltd. (000877.SZ), principally engaged in cement, will resume trading on June 27. The company proposes to raise 1,135 million yuan through private placement and its substantial shareholder will subscribe all of it; Beijing New Building Materials Public Limited Company (000786.SZ), principally engaged in plasterboard, lately announced that the IPO application of one of its subsidiaries is nodded.
◆The Economic Observer reports that China Chengtong Holdings Group Ltd. has been renamed as China Chengtong Capital Operation Company. The company aims at developing itself into a state-owned capital transfer and shareholding company focusing on market-oriented operation and professional management through multilayered capital market and capital operation means.
[TOP]
[SSN Selection]
○Russian President Vladimir Putin made a state visit to China on June 25. President Xi Jinping and Putin signed three joint statements with one statement promoting to strengthen global strategic stability included.
○China Securities Regulatory Commission (CSRC) on June 24 indicated that special law enforcement actions will be arranged recently, and it will strictly strike cheatings in IPO as well as the violation of laws and rules in information disclosure.
○Shanghai Stock Exchange reported the new moves of the supervision over listed companies, key efforts will be made in the supervision of performance commitment for acquisition and reorganization, the impact of industry research report over stock price and etc.
○China's central bank indicated that countermeasures against the result of Brexit referendum have been arranged; experts believe that a second referendum is almost impossible.
○The Long March 7 carrier rocket was successfully launched skyward on June 25. The multi-purpose re-entry capsule touched down successfully on June 26.
○Baoneng Group submits application to the board of directors of China Vanke Co., Ltd. (000002.SZ) to hold a temporary general meeting of the shareholders to dismiss Wangshi and Yuliang from their post as the board of directors.
[Industry Information]
○Anxin Industrial Investment Fund launched, IC industry to embrace improving prosperity
------
As reported by the Xinhua News Agency, Fujian Anxin Industrial Investment Fund was officially launched in Jinjiang city, Fujian province on June 25. The fund, targeting at a size of 50 billion yuan, focuses on building an integrated circuit (IC) industrial cluster in Jinjiang so as to drive the transformation and upgrading of traditional manufacturing industries in Fujian. The fund is jointly established by governments of Fujian province, Quanzhou city and Jinjiang city together with the National Integrated Circuit (IC) Industrial Investment Fund, Huaxin Investment Management Co., Ltd. At present, the National IC Industrial Investment Fund has promised an investment of 46.8 billion yuan and it has drove a size of domestic social investment over 100 billion yuan by the end of 2015.
Comment: Institutional research reports believe that China's IC market size now takes up nearly 60 percent of global market, but its degree of self-sufficiency reaches only 27 percent, suggesting large potential of improvement. Signs, including that the construction of domestic wafer factories accelerates and that the North American semiconductor book-to-bill ratio is maintained at above 1 for the sixth consecutive month, show that the IC industry is embracing improving prosperity. As to listed companies, Jiangsu Changjiang Electronics Technology Co., Ltd. (600584.SH), a leading company engaged in packaging ＆ testing of semiconductors, gained investment from the national fund; benefited from the investment of the storage project of Wuhan XMC Company, a subsidiary under Tianshui Huatian Technology Co., Ltd. (002185.SZ) gained a further investment of 500 million yuan from the national fund.
[TOP]
○Big data of health and medical care gains policy support
------
The general office of the State Council on June 24 printed and distributed the Guidance on Promoting and Standardizing the Application and Development of the Big Data of Health and Medical Care, proposing 14 key tasks and projects with speeding up the construction of a unified, authoritative and interconnected health information platform as well as fostering new business forms like the application of the big data of health and medical care included. It is also proposed in the guidance to standardize and advance the "Internet plus health and medical care" service. Segmented industries like intelligent medical care, remote medical care and informatization of medical care will be greatly supported by the state.
Comment: Along with the state's efforts in speeding up the construction of health information platform as well as in perfecting the basic database of electronic residential health record, electronic medical record and electronic recipe and etc., pioneers of medical informatization like Winning Health Technology Group Co., Ltd. (300253.SZ) might benefit from market expansion. As China intensifies supervision over medical institutions, perfects the supervision mechanism of the income structure of medical care service, medicine, consumables and etc., and the changing trend, and further advances the medical reform, Searainbow Holding Corp. (000503.SZ), mainly focusing on controlling and managing the expenditure of medical insurance through means including informatization, will embrace development opportunities.
○Banks studying new standards on block chain to extend technology application prospect
------
It is reported by the 21st Business Herald that there are joint-stock commercial banks studying standard on block chain available for supply chain finance. The major thought that based on block chain, the supply chain finance will include commercial banks, core enterprises and factoring companies into block chain to act as hub of net structure of block chain and make suppliers with smaller size and centering on core supply-chain enterprises as clients of block chain.
Comment: It is introduced that compared with the "overwhelming" financial monetary system, banks are quite cautious about the deployment in block chain to facilitate application of block chain technology. Institutions believe that according to the characteristics of de-concentration and safety, block chain technology boasts extensive prospect in Internet finance, artificial intelligence, big data and cloud computing fields. Among listed companies, Feitian Technologies Co., Ltd. (300386.SZ) owns technology reserves and research in block chain. GRG Banking Equipment Co., Ltd. (002152.SZ) conducts research, development and preview in block chain and biological recognition technology.
[Announcement Interpretation]
○Wonders Information to acquire Jiada Information Technology at RMB994 mln
------
Wonders Information Co., Ltd. (300168.SZ) plans to acquire 99.4 percent equity of Shanghai Jiada Information Technology Co., Ltd. at a total of 994 million yuan by issuing shares at a price of 22.99 yuan per share through private placement from Jiashi Investment Management Co., Ltd. and Ningbo Lianchuang Lixin Investment Management Partnership (limited partnership). The listed company also plans to raise 300 million yuan by issuing shares at the same price through private placement to invest in construction of pharmaceutical cloud project of Jiada Information Technology. The latest share price of the company is 25.85 yuan per share (after dividend implementation in annual report).
Jiada Information Technology mainly owns 90 percent of Shanghai Siwei Medical Technological Limited Company and 92.04 percent equity of Shanghai Pharm Valley Corp. Siwei Medical Technological is principally engaged in the third-party diagnose of tele-medical imaging and its former shareholder promised that the company will achieve net profits of 18.11 million yuan and 25.76 million yuan in 2016 and 2017 respectively. Wonders Information indicates that it is able to establish one-stop medical health service platform through cloud service after the acquisition.
[TOP]
○O-film Tech to acquire smart vehicle assets
------
Shanghai O-film Smart Vehicle Networking Co., Ltd., wholly-owned subsidiary of Shenzhen O-film Tech Co., Ltd. (002456.SZ), paid 168 million yuan in cash to acquire 70 percent equity of CETC-MOTOR (worth 160 million yuan) and 48 percent equity of Nanjing Tianqing Automobile Electronics Co., Ltd. (worth 8.64 million yuan). By March 31, total assets and net assets of CETC-MOTOR are 192 million yuan and 60.34 million yuan respectively, and those of Tianqing Automobile Electronics are 87.21 million yuan -2.25 million yuan respectively.
CETC-MOTOR has cooperation and project experience in sensor, new energy and car networking fields. O-film Tech intends to accelerate stepping into automobile electronics to develop smart vehicle strategy.
○Shareholding proportion of actual shareholders of TongLing Zonfa Trinity Technology up to 20 pct.
------
Luo Qifang, Zhou Wenyu and her son, new actual controllers of TongLing Zonfa Trinity Technology Co., Ltd. (600520.SH) totally increase shareholdings in the company by 4,612,700 shares during June 8 and 24, accounting for 2.91 percent of the company's share capital. As a result, they totally hold 31,686,000 shares in the company, accounting for 20 percent of the company's total share capital. They indicate that the shareholding increase is resulted from that they are rosy about the future development of the company and will continue to buy more shares within next 12 months.
[Financial Reports Express]
○Ningbo Tech Bank upwardly revises performance for 1st half of 2016
------
Ningbo Tech Bank Co., Ltd. (002124.SZ) upwardly revised its predicted net profits for the first half of this year from the previous 140-160 million yuan to 200-220 million yuan, while it suffered loss of 21.2 million yuan in the same period of last year. This revision is caused by the increasing sales of commercial pigs and profits of vaccine products higher than expectation.
[TOP]
○Yechiu Metal Recycling (China) proposes high share conversion and dividend in annual report
------
Board of directors of Yechiu Metal Recycling (China) Ltd. (601388.SH) has passed the proposal with a 19-for-10 conversion of capital surplus into shares for every 10 shares in its annual report, which is put forward of the company's controlling shareholders.
[Trading Alarms]
○Fengyuan Chemical to launch IPO on June 27
------
Shandong Fengyuan Chemical Co., Ltd. is about to launch IPO at a price of 5.8 yuan per share with an upper limit of 95 million shares for each account. The PE ratio is 23 times. The company is principally engaged in oxalic acid products.
[Weekly Review]
○God opens window while closing door
------
Bearish news came one after another in recent period. MSCI unexpectedly didn't include A-share market on June 15 again; China Securities Regulatory Commission (CSRC) imposed such strict restriction on restructuring of listed companies on June 20, which is out of expectation; and the Brexit referendum showed that the UK voted to leave the EU on June 24. However, stock indexes are always managed to rebound amid all these disasters. More than 70 stocks in the A-share market hit new high record on the afternoon of June 24 in a nearly one month.
At present, total market value of the A-share market reaches 46 trillion yuan with participation of more and more financial institutions, industrial assets and even "national team". There are fewer and fewer situations that the rise and fall of all the stocks accord with the ups and downs of the market and sector polarization is becoming normalized. When facing problems, we need to not only analyze advantages and disadvantages of the matter itself and make all-around consideration based on the whole situation. It is necessary for us to know that the God will usually open a window when closing a door. In spite of failure in including A shares into MSCI, other channels of long-term capitals investing in stock market such as occupational annuity and Shenzhen-Hong Kong Stock Connect program are being expended. Although there are strict limits on backdoor listing which will press the value of "shell stocks", this manifests scarcity of high-quality growth stocks, which have gone public. Brexit may mean a setback of economic globalization, but it will also urge the development of China-made chips and engines.
Last week, SSN's report focused on some themes that Hainan Haiqi Transportation Group Co., Ltd. and Bank of Jiangsu are going to go public, Chinese supercomputer adopts China-developed chip, Long March 7 is about to experience maiden flight and scientific and technological giants rush to invest in in-depth study technology. Relevant companies such as Hainan Expressway Co., Ltd. (000886.SZ), Black Peony (Group) Co., Ltd. (600510.SH), Dawning Information Industry Co., Ltd. (603019.SH) and Aerospace Hi-Tech Holding Group Co., Ltd. (000901.SZ) keep showing good performance.
Latest comments