[Today's Guide]
○ President Xi Jinping arranges SOEs reform, important areas to advance
○ Beidou system helps with flood prevention, promotion of industry application speeds up
○ Informatization of national defense to highlight on Military and Civil Integration Expo, bringing RMB1 trln market in next 10 years
○ Ji En Nickel Industry to invest lithium battery, Soling Industrial proposes to expand investment in Internet of Vehicles
[SSN Focus]
○ President Xi Jinping arranges SOEs reform, important areas to advance
------
The National State-Owned Enterprises (SOEs) Reform Forum was held on July 4. Chinese President Xi Jinping made important instructions and stressed that SOEs, as an important force in strengthening national power and guaranteeing people's common interest, must grow stronger and bigger with great confidence. Structural adjustment, innovative development and improvement of arrangement should be advanced to make SOEs play a driving role in the supply-side structural reform. The party committee and government of various levels should intensify their leadership over SOEs reform, and strive to achieve new progress in important areas and critical links of the reform.
Comment: It means that after months-long low-profile efforts, the SOEs reform might embrace intensive launch of policies again. Essences Securities believes that once the list of piloting state-owned capital investment companies is unveiled in the second half, the market's pessimistic expectation will be improved to be neutral and even optimistic. According to earlier media report, the newly organized China Minmetals Corporation will pilot the state-owned capital investment company, and listed companies under it include Minmetals Development Co., Ltd. (600058.SH), China Tungsten And Hightech Materials Co., Ltd. (000657.SZ), Metallurgical Corporation of China Ltd. (601618.SH), Zhuzhou Smelter Group Co., Ltd. (600961.SH), Kingray New Materials Science ＆ Technology Co., Ltd. (600390.SH) and China Minmetals Rare Earth Co., Ltd. (000831.SZ).
[SSN Selection]
○ www.gov.cn announced on July 4 that the State Council approved seven areas, with Beijing-Tianjin-Hebei coordinated development area included, to implement the comprehensively innovative reform scheme in a systematic manner.
○ The Ministry of National Defense indicated that China's cruise fighter recently was provoked by Japanese fighter at the Donghai Sea. Chinese army stands unswervingly in defending territorial sovereignty and national security.
○ The Ministry of Agriculture on July 4 printed and distributed the trial operation standard for the transfer and trading of land management rights in rural areas, aiming to make the transfer and trading developed in a fair, just and standard manner.
○ As introduced by leaders from the State Administration of Science, Technology and Industry for National Defense, China will launch 14 meteorological satellites in next 10 years.
○ Shenzhen Tellus Holding Co., Ltd. (000025.SZ) indicated that it has no plan to acquire relevant real estate in Shuibei area, Shenzhen; Jiangsu Olive Sensors High-tech Co., Ltd. (300507.SZ) indicated that no dividend or share conversion is planned in its semi-yearly report.
TOP
[Industry Information]
○ Beidou system helps with flood prevention, promotion of industry application speeds up
------
China's flood prevention now enters a critical period, Chen Lei, head of the Ministry of Water Resources, stressed that full play should be given to the professional monitoring of mountain flood disaster as well as the mass prediction and disaster prevention system, and alarming information should be sent in advance. By adopting joint monitoring of multiple systems like Beidou GPS, deformation of mountains can be monitored in real time around the clock. The safety status will be assessed intelligently and possible landslide can be alarmed in advance. Relevant products like Beidou/GNSS landslide monitoring system have been gradually adopted in the market.
Comment: China is now working on the Regulations for Satellite Navigation and the work is included in the State Council's Work Plan for Legislation in 2016. It will become China's first administrative law in satellite navigation field. Institutions estimate that by 2020, the size of the satellite navigation industry will exceed 400 billion yuan and the market share of Beidou products will climb to over 60 percent. Beijing BDStar Navigation Co., Ltd. (002151.SZ) completed private placement by raising funds from the industry fund and its president. The raised fund will be invested in the R＆D of Beidou chips and etc.; Hwa Create Corporation (300045.SZ) owns a series of products covering Beidou chips, modules, antenna, terminal system and etc.
TOP
○ Informatization of national defense to highlight on Military and Civil Integration Expo, bringing RMB1 trln market in next 10 years
------
The 2nd China (Beijing) Military and Civil Integration Expo was opened in China National Convention Center in Beijing on July 4. The Expo closely focuses on hot areas like independent controllability, network security, joint commanding, mobile platform, military training and etc. Multiple forums like "C4ISR theory and technology", "modeling and simulation", "big data technology", "rich media commanding information system" and etc. will be held during the Expo. According to the arrangement, the informatization of national defense will be highlighted.
Comment: Research report by China Securities points out that the informatization of national defense will not only greatly improve the fighting efficiency of the army but also will greatly enrich the information acquired by the army from the battlefield. It is expected that the overall size of the informatization of national defense industry might reach 1.66 trillion yuan in next 10 years. Shenzhen SDG Information Co., Ltd. (000070.SZ) acquired Shenzhen Dongzhi Technology Co., Ltd. and Chengdu Fuliye Electronic Technology Co., Ltd. last year to expand to the informatization of national defense; the series of products for military communication independently developed by Huaxun Fangzhou Co., Ltd. (000687.SZ) can be widely used in the C4ISR construction, including commanding control, communication, information, monitoring and scouting systems.
TOP
[Announcement Interpretation]
○ Ji En Nickel Industry to invest lithium battery with RMB4.1 bln raised by private placement
------
Ji Lin Ji En Nickel Industry Co., Ltd. (600432.SH) proposes to raise 4.1 billion yuan through private placement with a bottom price of 6.21 yuan per share. 1.27 billion yuan of the raised fund will be used to build up a R＆D and production base whose anode material production of lithium battery records 20,000 tons annually, 1.07 billion yuan for lithium carbonate project with the annual production of 20,000 tons, 490 million yuan for functional materials project based on metal carbonyl, and the rest 1.2 billion yuan for debt repayment.
The company is mainly engaged in nickel metal now, and its product, nickel sulfate, is raw material for anode material of ternary lithium battery. Previously, it acquired lithium mining project in Quebec, guaranteeing the resources for its subsidiary, the second largest ni-mh based battery material supplier named as Jilin Yarong Technology Co., Ltd.
○ Soling Industrial proposes to acquire two companies for investment expansion in Internet of Vehicles with RMB717 mln
------
Shenzhen Soling Industrial Co., Ltd. (002766.SZ) proposes to acquire the 100 percent equities of Shanghai Tricheer Technology Co., Ltd. and Shenzhen Incar Technology Co., Ltd. respectively with a total price of 717 million yuan. 70 percent will be paid by the fund raised by private placement with 26.42 yuan per share, and the rest will be paid in cash. The listed company will also raise 360 million yuan for supporting fund through private placement for three targets including its actual controller named as Xiao Xingyi with the same price.
Tricheer Technology is mainly engaged in Internet of Vehicles and mobile-end communication products. It promises that its net profit after deduction for 2016 to 2019 will reach 40, 50, 60 and 66 million yuan respectively. Technical service related to Internet of Vehicles is the main business of Incar Technology, and the company commits that the figures for 2016 to 2018 will reach 10, 12 and 16 million yuan respectively. After this acquisition, the listed company will become an Internet of Vehicles based operational platform with the whole industrial chain of "software hardware operational platform".
○ Jinhui Liquor stops restructuring and resumes trading
------
Jinhui Liquor Co., Ltd. (603919.SH) decides to stop the restructuring plan of major assets, and resumes the trading. During the trading suspension, its sub-new stock surged.
○ Xuelang Environmental Technology and Orient Wires ＆ Cables conduct private placement
------
Wuxi Xuelang Environmental Technology Co., Ltd. (300385.SZ) proposes to issue 13.41 million shares through private placement with 29.82 yuan per share. The raised 400 million yuan will be used to repay the debts to the banks, and supplement the liquidity. The actual controller Yang Jianping subscribes shares with 150 million yuan. Harvest Fund, New China Fund and Jinhe Innovative Investment participate in the subscription.
Ningbo Orient Wires ＆ Cables Co., Ltd. (603606.SH) proposes to issue 70 million shares through private placement with 11.54 yuan per share as the bottom price, so as to raise 800 million yuan. The raised fund will be used to invest in marine cable system project for marine energy interconnection, and supplement the liquidity. The controlling shareholder Orient Group Incorporation (600811.SH) will subscribe the shares with 100 million yuan.
○ Actual controller increased shareholdings in Sunnada Communication
------
The actual controller of Fujian Sunnada Communication Co., Ltd. (002417.SZ) named as Zhou Shiping increased 3.54 million shareholdings in the company from June 30 to July 4, accounting for 1.31 percent of the total equity.
[Financial Reports Express]
○ Many companies including Fuan Pharmaceutical predict performance growth in semi-annual report
------
Fuan Pharmaceutical (Group) Co., Ltd. (300194.SZ) predicts performance growth of 181 to 211 percent in semi-annual report, mainly due to great growth in revenue and financial statement combination with Yantai Justaware Pharmaceutical Co., Ltd.; 130 to150 percent for Hangzhou Shunwang Technology Co., Ltd. (300113.SZ), mainly due to revenue growth from game and internet ad.; 80 to 100 percent for Yonker Environmental Protection Co., Ltd. (300187.SZ), mainly due to operation of Xinyu rubbish power generation project and breakthrough of land recovery business.
160 to 200 percent for China Merchants Energy Shipping Co., Ltd. (601872.SH), mainly due to overal properity of oil shipping market, and dry bulk business's getting rid of losses; 50 to 80 percent for Shandong Longda Meat Foodstuff Co., Ltd. (002726.SZ), mainly due to constant increase in live pig price. Additionally, Jinguyuan Holding Co., Ltd. (000408.SZ) announced profit of 80 million yuan in its semi-annual report, greatly from the losses, mainly benefitting from the restructuring.
[Trading Trends]
○ GF Securities achieves block trade, institutional seats buy with fair price
------
Two special institutional seats bought 21,188,000 shares GF Securities Co., Ltd. (000776.SZ) through block trade with 362 million yuan. The traction price is 17.1 yuan per share for both seats, flat with the latest closing price. The seller is headquarter of Citic Securities Company Limited (600030.SH).
Comment: Based on Founder Securities' report, expectation for the initiation of Shenzhen-Hong Kong Stock Connect program becomes increasingly hot; in the future, expansion of Shanghai-London Stock Connect program and Shanghai-Hong Kong Stock Connect program is also expected, which all will benefit the securities-related stocks. In terms of market factors, this sector gains increase in both turnover and price, the market enthusiasm rises. Securities-related stocks are very flexible, worthy of big capital allocation.
○ Institutional seats greatly bought nonferrous metal stocks
------
The trading volume ranking list on July 4 shows that Shenzhen Zhongjin Lingnan Nonfemet Co., Ltd. (000060.SZ) was bought through four institutional seats with a total of 267 million yuan, accounting for 21.7 percent of its intraday turnover; Yunnan Aluminium Co., Ltd. (000807.SZ) bought by four institutional seats with a total of 108 million yuan, accounting for 14.8 percent of its intraday turnover
Comment: Institutions believed that periodic products are now at a low inventory, the prices of these products, such as coal and nonferrous metals, rise to different extents, under the supply side reform, this round of price surge will not easily change. Additionally, periodic products still face significant observation window of performance reverse.
TOP
○ President Xi Jinping arranges SOEs reform, important areas to advance
○ Beidou system helps with flood prevention, promotion of industry application speeds up
○ Informatization of national defense to highlight on Military and Civil Integration Expo, bringing RMB1 trln market in next 10 years
○ Ji En Nickel Industry to invest lithium battery, Soling Industrial proposes to expand investment in Internet of Vehicles
[SSN Focus]
○ President Xi Jinping arranges SOEs reform, important areas to advance
------
The National State-Owned Enterprises (SOEs) Reform Forum was held on July 4. Chinese President Xi Jinping made important instructions and stressed that SOEs, as an important force in strengthening national power and guaranteeing people's common interest, must grow stronger and bigger with great confidence. Structural adjustment, innovative development and improvement of arrangement should be advanced to make SOEs play a driving role in the supply-side structural reform. The party committee and government of various levels should intensify their leadership over SOEs reform, and strive to achieve new progress in important areas and critical links of the reform.
Comment: It means that after months-long low-profile efforts, the SOEs reform might embrace intensive launch of policies again. Essences Securities believes that once the list of piloting state-owned capital investment companies is unveiled in the second half, the market's pessimistic expectation will be improved to be neutral and even optimistic. According to earlier media report, the newly organized China Minmetals Corporation will pilot the state-owned capital investment company, and listed companies under it include Minmetals Development Co., Ltd. (600058.SH), China Tungsten And Hightech Materials Co., Ltd. (000657.SZ), Metallurgical Corporation of China Ltd. (601618.SH), Zhuzhou Smelter Group Co., Ltd. (600961.SH), Kingray New Materials Science ＆ Technology Co., Ltd. (600390.SH) and China Minmetals Rare Earth Co., Ltd. (000831.SZ).
[SSN Selection]
○ www.gov.cn announced on July 4 that the State Council approved seven areas, with Beijing-Tianjin-Hebei coordinated development area included, to implement the comprehensively innovative reform scheme in a systematic manner.
○ The Ministry of National Defense indicated that China's cruise fighter recently was provoked by Japanese fighter at the Donghai Sea. Chinese army stands unswervingly in defending territorial sovereignty and national security.
○ The Ministry of Agriculture on July 4 printed and distributed the trial operation standard for the transfer and trading of land management rights in rural areas, aiming to make the transfer and trading developed in a fair, just and standard manner.
○ As introduced by leaders from the State Administration of Science, Technology and Industry for National Defense, China will launch 14 meteorological satellites in next 10 years.
○ Shenzhen Tellus Holding Co., Ltd. (000025.SZ) indicated that it has no plan to acquire relevant real estate in Shuibei area, Shenzhen; Jiangsu Olive Sensors High-tech Co., Ltd. (300507.SZ) indicated that no dividend or share conversion is planned in its semi-yearly report.
TOP
[Industry Information]
○ Beidou system helps with flood prevention, promotion of industry application speeds up
------
China's flood prevention now enters a critical period, Chen Lei, head of the Ministry of Water Resources, stressed that full play should be given to the professional monitoring of mountain flood disaster as well as the mass prediction and disaster prevention system, and alarming information should be sent in advance. By adopting joint monitoring of multiple systems like Beidou GPS, deformation of mountains can be monitored in real time around the clock. The safety status will be assessed intelligently and possible landslide can be alarmed in advance. Relevant products like Beidou/GNSS landslide monitoring system have been gradually adopted in the market.
Comment: China is now working on the Regulations for Satellite Navigation and the work is included in the State Council's Work Plan for Legislation in 2016. It will become China's first administrative law in satellite navigation field. Institutions estimate that by 2020, the size of the satellite navigation industry will exceed 400 billion yuan and the market share of Beidou products will climb to over 60 percent. Beijing BDStar Navigation Co., Ltd. (002151.SZ) completed private placement by raising funds from the industry fund and its president. The raised fund will be invested in the R＆D of Beidou chips and etc.; Hwa Create Corporation (300045.SZ) owns a series of products covering Beidou chips, modules, antenna, terminal system and etc.
TOP
○ Informatization of national defense to highlight on Military and Civil Integration Expo, bringing RMB1 trln market in next 10 years
------
The 2nd China (Beijing) Military and Civil Integration Expo was opened in China National Convention Center in Beijing on July 4. The Expo closely focuses on hot areas like independent controllability, network security, joint commanding, mobile platform, military training and etc. Multiple forums like "C4ISR theory and technology", "modeling and simulation", "big data technology", "rich media commanding information system" and etc. will be held during the Expo. According to the arrangement, the informatization of national defense will be highlighted.
Comment: Research report by China Securities points out that the informatization of national defense will not only greatly improve the fighting efficiency of the army but also will greatly enrich the information acquired by the army from the battlefield. It is expected that the overall size of the informatization of national defense industry might reach 1.66 trillion yuan in next 10 years. Shenzhen SDG Information Co., Ltd. (000070.SZ) acquired Shenzhen Dongzhi Technology Co., Ltd. and Chengdu Fuliye Electronic Technology Co., Ltd. last year to expand to the informatization of national defense; the series of products for military communication independently developed by Huaxun Fangzhou Co., Ltd. (000687.SZ) can be widely used in the C4ISR construction, including commanding control, communication, information, monitoring and scouting systems.
TOP
[Announcement Interpretation]
○ Ji En Nickel Industry to invest lithium battery with RMB4.1 bln raised by private placement
------
Ji Lin Ji En Nickel Industry Co., Ltd. (600432.SH) proposes to raise 4.1 billion yuan through private placement with a bottom price of 6.21 yuan per share. 1.27 billion yuan of the raised fund will be used to build up a R＆D and production base whose anode material production of lithium battery records 20,000 tons annually, 1.07 billion yuan for lithium carbonate project with the annual production of 20,000 tons, 490 million yuan for functional materials project based on metal carbonyl, and the rest 1.2 billion yuan for debt repayment.
The company is mainly engaged in nickel metal now, and its product, nickel sulfate, is raw material for anode material of ternary lithium battery. Previously, it acquired lithium mining project in Quebec, guaranteeing the resources for its subsidiary, the second largest ni-mh based battery material supplier named as Jilin Yarong Technology Co., Ltd.
○ Soling Industrial proposes to acquire two companies for investment expansion in Internet of Vehicles with RMB717 mln
------
Shenzhen Soling Industrial Co., Ltd. (002766.SZ) proposes to acquire the 100 percent equities of Shanghai Tricheer Technology Co., Ltd. and Shenzhen Incar Technology Co., Ltd. respectively with a total price of 717 million yuan. 70 percent will be paid by the fund raised by private placement with 26.42 yuan per share, and the rest will be paid in cash. The listed company will also raise 360 million yuan for supporting fund through private placement for three targets including its actual controller named as Xiao Xingyi with the same price.
Tricheer Technology is mainly engaged in Internet of Vehicles and mobile-end communication products. It promises that its net profit after deduction for 2016 to 2019 will reach 40, 50, 60 and 66 million yuan respectively. Technical service related to Internet of Vehicles is the main business of Incar Technology, and the company commits that the figures for 2016 to 2018 will reach 10, 12 and 16 million yuan respectively. After this acquisition, the listed company will become an Internet of Vehicles based operational platform with the whole industrial chain of "software hardware operational platform".
○ Jinhui Liquor stops restructuring and resumes trading
------
Jinhui Liquor Co., Ltd. (603919.SH) decides to stop the restructuring plan of major assets, and resumes the trading. During the trading suspension, its sub-new stock surged.
○ Xuelang Environmental Technology and Orient Wires ＆ Cables conduct private placement
------
Wuxi Xuelang Environmental Technology Co., Ltd. (300385.SZ) proposes to issue 13.41 million shares through private placement with 29.82 yuan per share. The raised 400 million yuan will be used to repay the debts to the banks, and supplement the liquidity. The actual controller Yang Jianping subscribes shares with 150 million yuan. Harvest Fund, New China Fund and Jinhe Innovative Investment participate in the subscription.
Ningbo Orient Wires ＆ Cables Co., Ltd. (603606.SH) proposes to issue 70 million shares through private placement with 11.54 yuan per share as the bottom price, so as to raise 800 million yuan. The raised fund will be used to invest in marine cable system project for marine energy interconnection, and supplement the liquidity. The controlling shareholder Orient Group Incorporation (600811.SH) will subscribe the shares with 100 million yuan.
○ Actual controller increased shareholdings in Sunnada Communication
------
The actual controller of Fujian Sunnada Communication Co., Ltd. (002417.SZ) named as Zhou Shiping increased 3.54 million shareholdings in the company from June 30 to July 4, accounting for 1.31 percent of the total equity.
[Financial Reports Express]
○ Many companies including Fuan Pharmaceutical predict performance growth in semi-annual report
------
Fuan Pharmaceutical (Group) Co., Ltd. (300194.SZ) predicts performance growth of 181 to 211 percent in semi-annual report, mainly due to great growth in revenue and financial statement combination with Yantai Justaware Pharmaceutical Co., Ltd.; 130 to150 percent for Hangzhou Shunwang Technology Co., Ltd. (300113.SZ), mainly due to revenue growth from game and internet ad.; 80 to 100 percent for Yonker Environmental Protection Co., Ltd. (300187.SZ), mainly due to operation of Xinyu rubbish power generation project and breakthrough of land recovery business.
160 to 200 percent for China Merchants Energy Shipping Co., Ltd. (601872.SH), mainly due to overal properity of oil shipping market, and dry bulk business's getting rid of losses; 50 to 80 percent for Shandong Longda Meat Foodstuff Co., Ltd. (002726.SZ), mainly due to constant increase in live pig price. Additionally, Jinguyuan Holding Co., Ltd. (000408.SZ) announced profit of 80 million yuan in its semi-annual report, greatly from the losses, mainly benefitting from the restructuring.
[Trading Trends]
○ GF Securities achieves block trade, institutional seats buy with fair price
------
Two special institutional seats bought 21,188,000 shares GF Securities Co., Ltd. (000776.SZ) through block trade with 362 million yuan. The traction price is 17.1 yuan per share for both seats, flat with the latest closing price. The seller is headquarter of Citic Securities Company Limited (600030.SH).
Comment: Based on Founder Securities' report, expectation for the initiation of Shenzhen-Hong Kong Stock Connect program becomes increasingly hot; in the future, expansion of Shanghai-London Stock Connect program and Shanghai-Hong Kong Stock Connect program is also expected, which all will benefit the securities-related stocks. In terms of market factors, this sector gains increase in both turnover and price, the market enthusiasm rises. Securities-related stocks are very flexible, worthy of big capital allocation.
○ Institutional seats greatly bought nonferrous metal stocks
------
The trading volume ranking list on July 4 shows that Shenzhen Zhongjin Lingnan Nonfemet Co., Ltd. (000060.SZ) was bought through four institutional seats with a total of 267 million yuan, accounting for 21.7 percent of its intraday turnover; Yunnan Aluminium Co., Ltd. (000807.SZ) bought by four institutional seats with a total of 108 million yuan, accounting for 14.8 percent of its intraday turnover
Comment: Institutions believed that periodic products are now at a low inventory, the prices of these products, such as coal and nonferrous metals, rise to different extents, under the supply side reform, this round of price surge will not easily change. Additionally, periodic products still face significant observation window of performance reverse.
TOP
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