[Today's Guide]
○ Catalogue of strategically emerging industries updated, AI and cyber security included
○ Sports industry to catch more attention, lithium vanadium phosphate battery project to put into production by year-end
○ Industrial park assets will be injected in Shanghai Lingang Holdings, Jianghai Capacitor to invest thin film capacitor
○ Dongcheng Biochemicals proposes high share conversion and dividend, multiple companies expect growth in interim reports
[SSN Focus]
○ Catalogue of strategically emerging industries updated, AI and cyber security included
------
The National Development and Reform Commission (NDRC) began to seek opinions on the 2016 version of the Guidance Catalogue of Key Products and Services in Strategically Emerging Industries on July 5. The catalogue covers nine industries. Compared with the seven industries in the 2013 version, the digital innovation industry and the high-tech services industry were added into the catalogue. It also revised the previous seven industries. For example, it added the artificial intelligence industry in the "new generation of information technology industry" and will establish it from the platform, hardware, software and application systems. In terms of cyber information security, it added fundamental services and supporting software and raised new requirements on autonomous control.
Comment: Four ministries had released the three-year action plans on the Internet plus artificial intelligence, proposing that the application of artificial intelligence will reach 100 billion yuan in 2018. Machine vision, speech processing, GPU and other industries are expected to see rapid growth first. In addition, China's input in cyber security accounts for only about 2 percent of the whole IT industry, far below the 10 percent in European and American countries. It enjoys a huge potential. The machine vision products of Shenzhen JT Automation Equipment Co., Ltd. (300400.SZ), the GPU business of Dawning Information Industry Co., Ltd. (603019.SH) and the homemade storage equipment of Toyou Feiji Electronics Co., Ltd. (300302.SZ) are favored by institutes in inspections.
[SSN Selection]
○ The Ministry of Human Resources and Social Security issued the Guidance Opinions on Actively Promoting the Reform of Medical Treatment, Medical Insurance and the Connection of Hospitals and Medicines on July 5, proposing to solve the difficulties in accessing to doctors by the public.
○ The Ministry of Commerce issued the guideline of the 13th Five-year Plan, setting 26 key projects, including the construction of free trade zones, the development of e-commerce in rural areas and the innovation of smart supply chains.
○ China Railway held a press conference on July 5, indicating that various programs in the "going out" of Chinese railways are under stable progress.
○ The water levels of the main stream of the middle and down streams of the Yangtze River are above the alerting level. The Ministry of Civil Affairs indicated that the strong rainfall has caused 170 deaths and missing.
○ Anhui Province Natural Gas Development Co., Ltd. proposes to debut IPOs on July 6. Public information shows that Anhui Energy Co., Ltd. (000543.SZ) and SDIC Xinji Energy Co., Ltd. (601918.SH) respectively hold 6.12 percent and 5.6 percent shares in the company.
TOP
[Industry Information]
○ Rio Olympics to count down, sports industry to catch more attention
------
It will take one month for the opening of the Rio Olympics. China Sports Daily reported that all teams of the Chinese sports delegation began to obtain their equipment at the Beijing Gymnasium from July 4. Ten national teams, including the men's and women's basketball teams and the women's soccer team, obtained their equipment on the first day. Other teams will obtain their equipment before Friday. Xinhua News Agency published an article on July 5, indicating that it should embrace the Olympics with the mentality of a sports power.
Comment: The Euro 2016 has reached the semifinals. As the Olympics will be held soon, sports events will catch more attention from the society. Bohai Securities believes that the 13th Five-year Plan on Competitive Sports and the 13th Five-year Plan on Sports Industry and other key documents will be released in the second half. The industry faces bullish events and policy stimulus. Ledman Optoelectronic Co., Ltd. (300162.SZ) has been increasing the input in the sports industry in recent years. Its revenue from the sports commercial operation increased over 120 percent year on year. Wuhan DDMC Culture Co., Ltd. (600136.SH) has been conducting businesses in sports brokerage, events operation and venues operation.
○ Lithium vanadium phosphate battery enjoys excellent low-temperature performance and expected to put into production by year-end
------
SSN learnt from the China High-tech Industrialization Association that the technology in the "manufacturing of square soft packaging 5Ah lithium vanadium phosphate/graphite lithium ion battery" conducted by Tianjin University, Harbin Faraway New Energy and Heilongjiang Faraway New Energy technology has passed the test and are expected to put into production by the end of the year in Heilongjiang Province. The technology adopts lithium vanadium phosphate with excellent heat stability as positive materials, which highlights the heat stability, safety and recycling life of batteries, particularly the progresses made in the discharging performance of batteries in low-temperature environments.
Comment: The low-temperature environment will reduce the performance of lithium batteries. Therefore, the above batteries will be applied in various outdoor chemical power in north China and enjoy huge economic and social benefits. Currently, the lithium batteries mainly adopt lithium iron phosphate and ternary batteries in China. The industrialization of lithium vanadium phosphate batteries will improve the demand for navajoites. Sichuan Mingxing Electric Power Co., Ltd. (600101.SH) owns the Yangwa navajoite mine project. A subsidiary of Foshan Nationstar Optoelectronics Co., Ltd. (002449.SZ) is engaged in the development of navajoite mines.
TOP
[Announcement Interpretation]
○ RMB1.65 bln industrial park assets will be injected in Shanghai Lingang Holdings
------
Shanghai Lingang Holdings Corporation Limited (600848.SH) proposes to issue about 117 million shares at 14.07 yuan per share to Pujiang Company under its actual controller Lingang Group. The valuation of the transaction is 1.65 billion yuan, which includes the entire equity of Puxing Company (1.54 billion yuan) and 85 percent shareholding of Shuangchuang Company (110 million yuan); at the same time, the company plans to raise about 1.5 billion yuan by additional issuance through private placement at the same price, which will be used for the three projects located at Pujiang High-tech Park.
Puxing Company is primarily responsible for the development, construction, operation and management of Pujiang High-Tech Park; Shuangchuang Company is the main operator of the innovation and entrepreneur park with incubating function in Pujiang High-tech Park. The net profits of the assets to be injected were 39.75 million yuan and 97.18 million yuan respectively in 2014 and 2015.
○ Jianghai Capacitor to buy thin film capacitor assets with RMB180 mln
------
Nantong Jianghai New Power Electronics Co. Ltd., a wholly owned subsidiary of Nantong Jianghai Capacitor Co., Ltd. (002484.SZ), proposes to buy the entire equities of Youpu Electronic (Suzhou) Co., Ltd. with 180 million yuan. As a world-renowned company in the industry, Youpu has focused on the research and development and production of thin film capacitor for over 20 years. Its DC and AC thin film capacitor, cartridge and box-type products have been the selection of various clients. It has also served as an OEM for famous international brands. Jianghai Capacitor indicated that this acquisition will enrich its strategic development of thin film capacitor, and will largely shorten the research and production process of vehicle-mounted and AC thin film capacitors.
○ Kaidi Ecological and Environmental Technology reaches strategic cooperation with Zhong Min Investment, receiving RMB20 bln in initial stage
------
Kaidi Ecological and Environmental Technology Co., Ltd. (000939.SZ) has entered into strategic cooperation framework with Zhong Min Investment Group. The two parties will make comprehensive strategic cooperation in various sectors, such as green economy, green finance, targeted poverty alleviation in the biomass industry and the "Belt and Road"; build long-term strategic cooperation relationship through mutual investment and building domestic and overseas platforms. The company will provide technologies and resources, and Zhong Min Investment will provide capital, to build industry and capital cooperation platform. The two parties aims to invest 20 billion yuan to conduct cooperation in respect of biomass poverty alleviation industrial fund, overseas market investment projects and green finance.
○ Shenzhen Maoye increases shareholding in Maoye Communication and Network
------
Shenzhen Maoye Group, a party acting in concert with Zhongzhao Investment (Group) Co., Ltd., the controlling shareholder of Maoye Communication and Network Co., Ltd. (000889.SZ), had increased 12,436,000 shares in the company from March 1 to July 5, accounting for 2 percent of the total share capital of the company. Shenzhen Maoye likely continue to increase shareholding in the company in the next 12 months.
TOP
[Financial Reports Express]
○ Dongcheng Biochemicals proposes high share conversion and dividend
------
Controlling shareholder and actual controller of Yantai Dongcheng Biochemicals Co., Ltd. (002675.SZ) propose a distribution plan of 20-for-10 conversion of capital surplus into shares in the interim report.
○ Multiple companies expect growth in interim reports
------
AVIC Electromechanical Systems Co., Ltd. (002013.SZ) upwardly revises its expected growth of 335 percent to 363 percent growth, to 560 percent growth to 590 percent growth in its interim report, primarily due to its delivery of aeronautical products is better than that of the same period last year. Xiamen Tungsten Co., Ltd. (600549.SH) expects 101 percent growth in its interim report, primarily due to the price hike of tungsten and growth of its lithium battery materials. Cpt Technology (group) Co., ltd. (000536.SZ) expects 1,014 percent to 1,043 percent growth in its interim report, primarily due to investment return derived from the disposal of its subsidiary. CTS International Logistics Corporation Limited (603128.SH) expects over 100 percent growth in the interim report, primarily due to rapid development of international air transportation and third party warehouse and logistics business.
Shanghai Zhixin Electric Co., Ltd. (600517.SH) expects 200 percent to 210 percent growth in the interim report, primarily due to growth of operational revenue. Hunan Investment Group Co., Ltd. (000548.SZ) expects 925 percent to 975 percent growth in the interim report, primarily due to interest income from the 1,094 mu land located at Changsha Jinxia Economic Development Zone. Guangdong Shaoneng Group Co., Ltd. (000601.SZ) expects 158 percent to 179 percent growth in the interim report, primarily due to improved benefit from hydropower station as the water condition is good.
[Trading Trends]
○ Secret capital buys China Vanke with large amount near closing session, likely be Baoneng again
------
Nearly 3 billion yuan capital flows into China Vanke Co., Ltd. (000002.SZ) within 15 minutes near the closing session on July 5. The trading volume ranking list shows that two institutional seats have bought with 1.49 billion yuan in total, representing about 75,293,000 shares and accounting for 0.682 percent of Vanke's total share capital.
Comment: Baoneng Group previously held about 24.3 percent of Vanke's equities. If Baoneng is behind the institutional buying today, its shareholding will exactly stop at the 25 percent, the red line of secondary market acquisition. It is worth noting that Baoneng earlier used huge leveraged fund to increase shareholding in Vanke. If Vanke stops decline to the daily 10 percent limit earlier than expected, it will be in the favor of Baoneng.
○ Zhengye Technology bought through four institutional seats
------
The trading volume ranking list on July 5 shows that Guangdong Zhengye Technology Co., Ltd. (300410.SZ) was bought through four institutional seats with a total of 200 million yuan, accounting for 38.78 percent of intraday turnover. Another two institutional sold 13,886,400 yuan.
Comment: institutions are in the view that the company is primarily engaged in precision machining of PCB and lithium battery, as well research and development of high-end materials. Benefiting from the rapid development of lithium battery industry, the company is expected to have outstanding growth, as it will see fast development internally and extensionally in the future.
TOP
○ Catalogue of strategically emerging industries updated, AI and cyber security included
○ Sports industry to catch more attention, lithium vanadium phosphate battery project to put into production by year-end
○ Industrial park assets will be injected in Shanghai Lingang Holdings, Jianghai Capacitor to invest thin film capacitor
○ Dongcheng Biochemicals proposes high share conversion and dividend, multiple companies expect growth in interim reports
[SSN Focus]
○ Catalogue of strategically emerging industries updated, AI and cyber security included
------
The National Development and Reform Commission (NDRC) began to seek opinions on the 2016 version of the Guidance Catalogue of Key Products and Services in Strategically Emerging Industries on July 5. The catalogue covers nine industries. Compared with the seven industries in the 2013 version, the digital innovation industry and the high-tech services industry were added into the catalogue. It also revised the previous seven industries. For example, it added the artificial intelligence industry in the "new generation of information technology industry" and will establish it from the platform, hardware, software and application systems. In terms of cyber information security, it added fundamental services and supporting software and raised new requirements on autonomous control.
Comment: Four ministries had released the three-year action plans on the Internet plus artificial intelligence, proposing that the application of artificial intelligence will reach 100 billion yuan in 2018. Machine vision, speech processing, GPU and other industries are expected to see rapid growth first. In addition, China's input in cyber security accounts for only about 2 percent of the whole IT industry, far below the 10 percent in European and American countries. It enjoys a huge potential. The machine vision products of Shenzhen JT Automation Equipment Co., Ltd. (300400.SZ), the GPU business of Dawning Information Industry Co., Ltd. (603019.SH) and the homemade storage equipment of Toyou Feiji Electronics Co., Ltd. (300302.SZ) are favored by institutes in inspections.
[SSN Selection]
○ The Ministry of Human Resources and Social Security issued the Guidance Opinions on Actively Promoting the Reform of Medical Treatment, Medical Insurance and the Connection of Hospitals and Medicines on July 5, proposing to solve the difficulties in accessing to doctors by the public.
○ The Ministry of Commerce issued the guideline of the 13th Five-year Plan, setting 26 key projects, including the construction of free trade zones, the development of e-commerce in rural areas and the innovation of smart supply chains.
○ China Railway held a press conference on July 5, indicating that various programs in the "going out" of Chinese railways are under stable progress.
○ The water levels of the main stream of the middle and down streams of the Yangtze River are above the alerting level. The Ministry of Civil Affairs indicated that the strong rainfall has caused 170 deaths and missing.
○ Anhui Province Natural Gas Development Co., Ltd. proposes to debut IPOs on July 6. Public information shows that Anhui Energy Co., Ltd. (000543.SZ) and SDIC Xinji Energy Co., Ltd. (601918.SH) respectively hold 6.12 percent and 5.6 percent shares in the company.
TOP
[Industry Information]
○ Rio Olympics to count down, sports industry to catch more attention
------
It will take one month for the opening of the Rio Olympics. China Sports Daily reported that all teams of the Chinese sports delegation began to obtain their equipment at the Beijing Gymnasium from July 4. Ten national teams, including the men's and women's basketball teams and the women's soccer team, obtained their equipment on the first day. Other teams will obtain their equipment before Friday. Xinhua News Agency published an article on July 5, indicating that it should embrace the Olympics with the mentality of a sports power.
Comment: The Euro 2016 has reached the semifinals. As the Olympics will be held soon, sports events will catch more attention from the society. Bohai Securities believes that the 13th Five-year Plan on Competitive Sports and the 13th Five-year Plan on Sports Industry and other key documents will be released in the second half. The industry faces bullish events and policy stimulus. Ledman Optoelectronic Co., Ltd. (300162.SZ) has been increasing the input in the sports industry in recent years. Its revenue from the sports commercial operation increased over 120 percent year on year. Wuhan DDMC Culture Co., Ltd. (600136.SH) has been conducting businesses in sports brokerage, events operation and venues operation.
○ Lithium vanadium phosphate battery enjoys excellent low-temperature performance and expected to put into production by year-end
------
SSN learnt from the China High-tech Industrialization Association that the technology in the "manufacturing of square soft packaging 5Ah lithium vanadium phosphate/graphite lithium ion battery" conducted by Tianjin University, Harbin Faraway New Energy and Heilongjiang Faraway New Energy technology has passed the test and are expected to put into production by the end of the year in Heilongjiang Province. The technology adopts lithium vanadium phosphate with excellent heat stability as positive materials, which highlights the heat stability, safety and recycling life of batteries, particularly the progresses made in the discharging performance of batteries in low-temperature environments.
Comment: The low-temperature environment will reduce the performance of lithium batteries. Therefore, the above batteries will be applied in various outdoor chemical power in north China and enjoy huge economic and social benefits. Currently, the lithium batteries mainly adopt lithium iron phosphate and ternary batteries in China. The industrialization of lithium vanadium phosphate batteries will improve the demand for navajoites. Sichuan Mingxing Electric Power Co., Ltd. (600101.SH) owns the Yangwa navajoite mine project. A subsidiary of Foshan Nationstar Optoelectronics Co., Ltd. (002449.SZ) is engaged in the development of navajoite mines.
TOP
[Announcement Interpretation]
○ RMB1.65 bln industrial park assets will be injected in Shanghai Lingang Holdings
------
Shanghai Lingang Holdings Corporation Limited (600848.SH) proposes to issue about 117 million shares at 14.07 yuan per share to Pujiang Company under its actual controller Lingang Group. The valuation of the transaction is 1.65 billion yuan, which includes the entire equity of Puxing Company (1.54 billion yuan) and 85 percent shareholding of Shuangchuang Company (110 million yuan); at the same time, the company plans to raise about 1.5 billion yuan by additional issuance through private placement at the same price, which will be used for the three projects located at Pujiang High-tech Park.
Puxing Company is primarily responsible for the development, construction, operation and management of Pujiang High-Tech Park; Shuangchuang Company is the main operator of the innovation and entrepreneur park with incubating function in Pujiang High-tech Park. The net profits of the assets to be injected were 39.75 million yuan and 97.18 million yuan respectively in 2014 and 2015.
○ Jianghai Capacitor to buy thin film capacitor assets with RMB180 mln
------
Nantong Jianghai New Power Electronics Co. Ltd., a wholly owned subsidiary of Nantong Jianghai Capacitor Co., Ltd. (002484.SZ), proposes to buy the entire equities of Youpu Electronic (Suzhou) Co., Ltd. with 180 million yuan. As a world-renowned company in the industry, Youpu has focused on the research and development and production of thin film capacitor for over 20 years. Its DC and AC thin film capacitor, cartridge and box-type products have been the selection of various clients. It has also served as an OEM for famous international brands. Jianghai Capacitor indicated that this acquisition will enrich its strategic development of thin film capacitor, and will largely shorten the research and production process of vehicle-mounted and AC thin film capacitors.
○ Kaidi Ecological and Environmental Technology reaches strategic cooperation with Zhong Min Investment, receiving RMB20 bln in initial stage
------
Kaidi Ecological and Environmental Technology Co., Ltd. (000939.SZ) has entered into strategic cooperation framework with Zhong Min Investment Group. The two parties will make comprehensive strategic cooperation in various sectors, such as green economy, green finance, targeted poverty alleviation in the biomass industry and the "Belt and Road"; build long-term strategic cooperation relationship through mutual investment and building domestic and overseas platforms. The company will provide technologies and resources, and Zhong Min Investment will provide capital, to build industry and capital cooperation platform. The two parties aims to invest 20 billion yuan to conduct cooperation in respect of biomass poverty alleviation industrial fund, overseas market investment projects and green finance.
○ Shenzhen Maoye increases shareholding in Maoye Communication and Network
------
Shenzhen Maoye Group, a party acting in concert with Zhongzhao Investment (Group) Co., Ltd., the controlling shareholder of Maoye Communication and Network Co., Ltd. (000889.SZ), had increased 12,436,000 shares in the company from March 1 to July 5, accounting for 2 percent of the total share capital of the company. Shenzhen Maoye likely continue to increase shareholding in the company in the next 12 months.
TOP
[Financial Reports Express]
○ Dongcheng Biochemicals proposes high share conversion and dividend
------
Controlling shareholder and actual controller of Yantai Dongcheng Biochemicals Co., Ltd. (002675.SZ) propose a distribution plan of 20-for-10 conversion of capital surplus into shares in the interim report.
○ Multiple companies expect growth in interim reports
------
AVIC Electromechanical Systems Co., Ltd. (002013.SZ) upwardly revises its expected growth of 335 percent to 363 percent growth, to 560 percent growth to 590 percent growth in its interim report, primarily due to its delivery of aeronautical products is better than that of the same period last year. Xiamen Tungsten Co., Ltd. (600549.SH) expects 101 percent growth in its interim report, primarily due to the price hike of tungsten and growth of its lithium battery materials. Cpt Technology (group) Co., ltd. (000536.SZ) expects 1,014 percent to 1,043 percent growth in its interim report, primarily due to investment return derived from the disposal of its subsidiary. CTS International Logistics Corporation Limited (603128.SH) expects over 100 percent growth in the interim report, primarily due to rapid development of international air transportation and third party warehouse and logistics business.
Shanghai Zhixin Electric Co., Ltd. (600517.SH) expects 200 percent to 210 percent growth in the interim report, primarily due to growth of operational revenue. Hunan Investment Group Co., Ltd. (000548.SZ) expects 925 percent to 975 percent growth in the interim report, primarily due to interest income from the 1,094 mu land located at Changsha Jinxia Economic Development Zone. Guangdong Shaoneng Group Co., Ltd. (000601.SZ) expects 158 percent to 179 percent growth in the interim report, primarily due to improved benefit from hydropower station as the water condition is good.
[Trading Trends]
○ Secret capital buys China Vanke with large amount near closing session, likely be Baoneng again
------
Nearly 3 billion yuan capital flows into China Vanke Co., Ltd. (000002.SZ) within 15 minutes near the closing session on July 5. The trading volume ranking list shows that two institutional seats have bought with 1.49 billion yuan in total, representing about 75,293,000 shares and accounting for 0.682 percent of Vanke's total share capital.
Comment: Baoneng Group previously held about 24.3 percent of Vanke's equities. If Baoneng is behind the institutional buying today, its shareholding will exactly stop at the 25 percent, the red line of secondary market acquisition. It is worth noting that Baoneng earlier used huge leveraged fund to increase shareholding in Vanke. If Vanke stops decline to the daily 10 percent limit earlier than expected, it will be in the favor of Baoneng.
○ Zhengye Technology bought through four institutional seats
------
The trading volume ranking list on July 5 shows that Guangdong Zhengye Technology Co., Ltd. (300410.SZ) was bought through four institutional seats with a total of 200 million yuan, accounting for 38.78 percent of intraday turnover. Another two institutional sold 13,886,400 yuan.
Comment: institutions are in the view that the company is primarily engaged in precision machining of PCB and lithium battery, as well research and development of high-end materials. Benefiting from the rapid development of lithium battery industry, the company is expected to have outstanding growth, as it will see fast development internally and extensionally in the future.
TOP
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