[Today's Guide]
○ Extreme weather triggers dealers' storage, price of traditional Chinese medicinal materials constantly rises
○ Supply actively reduced, epoxy propane price sets new high
○ Andon Health to acquire overseas mobile medical treatment company, Huaxicun to invest in Bank of Jiangsu
○ Great Walle bought share through secondary market acquisition to the 5 percent limit, net profit of several companies in lithium battery industry chain expected to surge
[SSN Focus]
○ Extreme weather triggers dealers' storage, price of traditional Chinese medicinal materials constantly rises
------
The latest information of zyctd.com shows that prices of traditional Chinese medicinal materials, such as radix pseudostellariae, coptis and flos chrysanthemi indici, recently hike. It learnt that, due to constant storm and heavy rains in provinces like Guizhou and Anhui, only limited amount of radix pseudostellariae are collected, with very few new ones in the market. Additionally, pseudo-ginseng price has gotten out of the bottom since the beginning of this year, and along with the increasing demands, traditional Chinese medicinal enterprises expand the storage, and the price is likely to further increase. Based on SSN survey, main factors to drive an obvious price hike to this respect include extreme weather, reduced planting and dealers' storage.
Comment: Changjiang Securities believed that traditional Chinese medicinal materials are likely to speed up the pace for a new round of growth period, and related trade enterprises will be the largest beneficiaries. Price of prepared herbal medicine in small pieces ready for decoction is not limited, and related companies can benefit from this. Xiang Xue Pharmaceutical Co., Ltd. (300147.SZ) announced in May to invest in the industrial park of traditional Chinese medicine to reinforce deployment for the whole industrial chain. Kangmei Pharmaceutical Co., Ltd. (600518.SH) has gradually carried out the trade of traditional Chinese medicinal materials since 2006, and speeded up the standardized planting since last year.
[SSN Selection]
○ A so-called final arbitration related to the South China Sea initiated by Philippines was announced on July 12, and China stressed that we will not accept or admit it.
○ Based on report from The Xinhua News Agency on July 12, test flights have been successfully implemented for new airports of Mishidf Reef and Subi Reef in the Nansha Islands of China.
○ Chinese Premier Li Keqiang on July 11 hosted a discussion for economic trend experts and entrepreneurs, with people, including head of Shenyang Machine Tool Co., Ltd. (000410.SZ), made speeches.
○ Last week, securities margin came across outflow for the 3rd week, and investors' trading activity obviously improves.
○ China Vanke Co., Ltd. (000002.SZ) replied the notice from Shenzhen Stock Exchange, and indicated that the rumor of "China Resources and Shenzhen Metro going to acquire shares held by Baoneng" is not true.
TOP
[Industry Information]
○ Supply actively reduced, epoxy propane price sets new high
------
Due to active compression by supply side, epoxy propane price constantly rises, and those in the East China set new highs of this year. The market price increases 3 percent on July 11, with nearly 10 percent accumulated in the latest month. Based on data statistics of Baiinfo, the overall capacity of this industry is now 3.11 million tons, with nearly 20 percent suspended for overhaul. Therefore, supply obviously reduces, benefiting for de-stock and improving the profits.
Comment: Related factories indicate that current inventory is low to support the price. The price in the East China reaches 8,900 to 9,000 yuan per ton, and Shandong province offers a price of 8,700 yuan per ton. Among listed companies, Befar Group Co., Ltd. (601678.SH) has a capacity of 280,000 tons, with epoxy propane business taking up 52 percent of the total revenue last year; and Wanhua Chemical Group Co., Ltd. (600309.SH) has a capacity of 240,000 tons.
TOP
[Announcement Interpretation]
○ Andon Health to acquire overseas mobile medical treatment company for EUR93.88 mln
------
Andon Health Co., Ltd. (002432.SZ) plans to acquire the 100 equities of eDevice, a medical equipment data ＆ information system solutions provider, with 93.88 million euros. EDevice is mainly engaged in mobile medical products sales and medical data transmission service; 350,000 devices have been applied by end users now. The fund for this acquisition will be raised through private placement. Self-funding capital will be for payment, if the private placement is not approved. The target realized 23.89 and 52.88 million yuan in 2014 and 2015 respectively.
○ Huaxicun to invest in Bank of Jiangsu by private placement
------
Jiangsu Huaxicun Co., Ltd. (000936.SZ) proposes to raise 1.3 billion yuan through private placement with a price no less than 7.87 yuan per share. The raised fund will subscribe 326 million shares of to-be-listed Bank of Jiangsu, which will be carried out by Huaxi Capital, wholly owned by the listed company. The subscription price is 1,265 million yuan. After the transaction, Huaxi Capital will hold 9.62 percent equities of the bank, making it the largest shareholder. Operating revenues of recorded 5.087 billion yuan and net profits regristered 1.367 billion yuan in 2015. In addition, the company holds 249 million shares of to-be-listed Bank of Jiangsu.
TOP
○ Great Walle bought share of Yaxing Chemical through secondary market acquisition to the 5 percent limit
------
Weifang Yaxing Chemical Co., Ltd. (600319.SH) announced that Shenzhen Great Walle Assets Management Co., Ltd. bought 15.783 million shares of the company during July 1 and 11, accounting for 5 percent of the company's total share capital. At present, the latter holds 23.60 percent stake in the listed company.
○ Second largest shareholder of Shuangta Food transfers 90 million shares to chairman
------
Shihezi Jindu Investment Limited Partnership, the second largest shareholder of Yantai Shuangta Food Co., Ltd. (002481.SZ), plans to transfer 90 million shares all held by itself to the listed company's chairman Yang Minjun by agreement at a price of 6.44 yuan per share. After the deal is done, shareholding proportion of Shihezi Jindu Investment will decline to 1.99 percent, while that of Yang will increase from 3.79 percent to 10.91 percent. Yang buys more shares due to his confidence in the company's future development. The latest share price of Shuangta Food is 8.06 yuan per share.
[Financial Reports Express]
○ Net profit of of several companies in lithium battery industry chain expected to surge
------
Growth of net profit of Tianqi Lithium Industries, Inc. (002466.SZ) is upward revised from 13-14 times to 16-17 times in its semiannual report due to price hike of lithium products beating expectation in the second quarter. Net profit of Beijing Easpring Material Technology Co., Ltd. (300073.SZ) is expected to rise by 36-38 times according to its semiannual report thanks to surging sales of anode material for lithium battery and consolidated financial statements with Beijing Zodngoc Automatic Technology Co., Ltd. As operating revenue of Cangzhou Mingzhu Plastic Co., Ltd. (002108.SZ) shows better performance than expected, its net profit growth is upward revised from 140-180 percent to 180-200 percent. Resulting from growth in power lithium battery business, net profit of Zhejiang Narada Power Source Co., Ltd. (300068.SZ) is predicted to hike by 80-110 percent in its semiannual report. Owing to growth in lithium primary battery business, net profit of EVE Energy Co., Ltd. (300014.SZ) is expected to climb 40-50 percent.
Net profit of Bluefocus Communication Group Co., Ltd. (300058.SZ) for the first half of this year is expected to rise by 272-318 percent contributed by rapid development of mobile Internet business. As performance of digital joined screen system business and kindergarten business was better than expected, net profit of Vtron technologies Ltd. is predicted to increase by 275-300 percent in its semiannual report. As Ningbo Yunsheng Co., Ltd. (600366.SH) saw increasing sales in rare earth permanent magnetic material and servo motor, its net profit growth is upward revised from 180-230 percent to 220-240 percent. Net profit growth of Sinoer Men's Wear Co., Ltd. (002485.SZ) is upward revised from 250-300 percent to 390-440 percent in its semiannual repot as the company sold its own shops.
[Trading Trends]
○ Airlines stocks bought through institutional seats
------
The trading volume ranking list on July 12 shows that China Southern Airlines Company Limited (600029.SH) was bought through three institutional seats with a total of 254 million yuan, accounting for 16.4 percent of its intraday turnover, and was sold by two institutional seats with a total of 59.53 million yuan. Air China Limited (601111.SH) was bought through four institutional seats with a total of 219 million yuan, accounting for 23.6 percent of its intraday turnover, and was sold by one institutional seat with a total of 15.27 million yuan.
Comment: Esssence Securities points out that civil airlines see increasing prosperity since summer holidays in July. Over the last week, revenue passenger kilometers (RPK) of domestic airlines rose by 1 percent when compared with previous week and by 10 percent year on year. Ticket prices moved up by 4 percent compared with previous week but declined by 4 percent year on year. Volumes and prices of international and regional airlines both show upward trend with growth ranging from 2 percent to 4 percent.
[Data Speaks]
○ Net profits of small household appliance enterprises expected to keep growing
------
According to SSN statistics, 32 listed companies engaged in household appliances have forecasted their performance for the first half of this year, 23 of which predict growth in performance. It is noteworthy that net profits of 9 listed companies are expected to hike by more than 20 percent as their principal business keep growth and most of them are small household appliance enterprises.
Comment: Research report of securities companies indicates that benefiting from product structure upgrade in tier-1 and tier-2 cites and rapid popularization in tier-3 and tier-4 cites, small household appliance industry is undergoing rapid development. Guangdong Xinbao Electrical Appliances Holdings Co., Ltd. (002705.SZ), a leader in western-style small household appliance in China, keeps making improvement in profitability and will benefit from renminbi devaluation. Zhejiang Supor Co., Ltd. (002032.SZ) owns strong brand influence in cookers and small kitchen electric appliances.
[Trading Alarms]
○ Global Safety Technology to launch IPO on July 13
------
Beijing Global Safety Technology Co., Ltd. (300523.SZ) is going to launch IPO at a price of 21.92 yuan per share with upper limit of 20,000 shares for single account. The PE ratio is 23 times. The company is engaged in emergency platform comprehensive application system.
TOP
○ Extreme weather triggers dealers' storage, price of traditional Chinese medicinal materials constantly rises
○ Supply actively reduced, epoxy propane price sets new high
○ Andon Health to acquire overseas mobile medical treatment company, Huaxicun to invest in Bank of Jiangsu
○ Great Walle bought share through secondary market acquisition to the 5 percent limit, net profit of several companies in lithium battery industry chain expected to surge
[SSN Focus]
○ Extreme weather triggers dealers' storage, price of traditional Chinese medicinal materials constantly rises
------
The latest information of zyctd.com shows that prices of traditional Chinese medicinal materials, such as radix pseudostellariae, coptis and flos chrysanthemi indici, recently hike. It learnt that, due to constant storm and heavy rains in provinces like Guizhou and Anhui, only limited amount of radix pseudostellariae are collected, with very few new ones in the market. Additionally, pseudo-ginseng price has gotten out of the bottom since the beginning of this year, and along with the increasing demands, traditional Chinese medicinal enterprises expand the storage, and the price is likely to further increase. Based on SSN survey, main factors to drive an obvious price hike to this respect include extreme weather, reduced planting and dealers' storage.
Comment: Changjiang Securities believed that traditional Chinese medicinal materials are likely to speed up the pace for a new round of growth period, and related trade enterprises will be the largest beneficiaries. Price of prepared herbal medicine in small pieces ready for decoction is not limited, and related companies can benefit from this. Xiang Xue Pharmaceutical Co., Ltd. (300147.SZ) announced in May to invest in the industrial park of traditional Chinese medicine to reinforce deployment for the whole industrial chain. Kangmei Pharmaceutical Co., Ltd. (600518.SH) has gradually carried out the trade of traditional Chinese medicinal materials since 2006, and speeded up the standardized planting since last year.
[SSN Selection]
○ A so-called final arbitration related to the South China Sea initiated by Philippines was announced on July 12, and China stressed that we will not accept or admit it.
○ Based on report from The Xinhua News Agency on July 12, test flights have been successfully implemented for new airports of Mishidf Reef and Subi Reef in the Nansha Islands of China.
○ Chinese Premier Li Keqiang on July 11 hosted a discussion for economic trend experts and entrepreneurs, with people, including head of Shenyang Machine Tool Co., Ltd. (000410.SZ), made speeches.
○ Last week, securities margin came across outflow for the 3rd week, and investors' trading activity obviously improves.
○ China Vanke Co., Ltd. (000002.SZ) replied the notice from Shenzhen Stock Exchange, and indicated that the rumor of "China Resources and Shenzhen Metro going to acquire shares held by Baoneng" is not true.
TOP
[Industry Information]
○ Supply actively reduced, epoxy propane price sets new high
------
Due to active compression by supply side, epoxy propane price constantly rises, and those in the East China set new highs of this year. The market price increases 3 percent on July 11, with nearly 10 percent accumulated in the latest month. Based on data statistics of Baiinfo, the overall capacity of this industry is now 3.11 million tons, with nearly 20 percent suspended for overhaul. Therefore, supply obviously reduces, benefiting for de-stock and improving the profits.
Comment: Related factories indicate that current inventory is low to support the price. The price in the East China reaches 8,900 to 9,000 yuan per ton, and Shandong province offers a price of 8,700 yuan per ton. Among listed companies, Befar Group Co., Ltd. (601678.SH) has a capacity of 280,000 tons, with epoxy propane business taking up 52 percent of the total revenue last year; and Wanhua Chemical Group Co., Ltd. (600309.SH) has a capacity of 240,000 tons.
TOP
[Announcement Interpretation]
○ Andon Health to acquire overseas mobile medical treatment company for EUR93.88 mln
------
Andon Health Co., Ltd. (002432.SZ) plans to acquire the 100 equities of eDevice, a medical equipment data ＆ information system solutions provider, with 93.88 million euros. EDevice is mainly engaged in mobile medical products sales and medical data transmission service; 350,000 devices have been applied by end users now. The fund for this acquisition will be raised through private placement. Self-funding capital will be for payment, if the private placement is not approved. The target realized 23.89 and 52.88 million yuan in 2014 and 2015 respectively.
○ Huaxicun to invest in Bank of Jiangsu by private placement
------
Jiangsu Huaxicun Co., Ltd. (000936.SZ) proposes to raise 1.3 billion yuan through private placement with a price no less than 7.87 yuan per share. The raised fund will subscribe 326 million shares of to-be-listed Bank of Jiangsu, which will be carried out by Huaxi Capital, wholly owned by the listed company. The subscription price is 1,265 million yuan. After the transaction, Huaxi Capital will hold 9.62 percent equities of the bank, making it the largest shareholder. Operating revenues of recorded 5.087 billion yuan and net profits regristered 1.367 billion yuan in 2015. In addition, the company holds 249 million shares of to-be-listed Bank of Jiangsu.
TOP
○ Great Walle bought share of Yaxing Chemical through secondary market acquisition to the 5 percent limit
------
Weifang Yaxing Chemical Co., Ltd. (600319.SH) announced that Shenzhen Great Walle Assets Management Co., Ltd. bought 15.783 million shares of the company during July 1 and 11, accounting for 5 percent of the company's total share capital. At present, the latter holds 23.60 percent stake in the listed company.
○ Second largest shareholder of Shuangta Food transfers 90 million shares to chairman
------
Shihezi Jindu Investment Limited Partnership, the second largest shareholder of Yantai Shuangta Food Co., Ltd. (002481.SZ), plans to transfer 90 million shares all held by itself to the listed company's chairman Yang Minjun by agreement at a price of 6.44 yuan per share. After the deal is done, shareholding proportion of Shihezi Jindu Investment will decline to 1.99 percent, while that of Yang will increase from 3.79 percent to 10.91 percent. Yang buys more shares due to his confidence in the company's future development. The latest share price of Shuangta Food is 8.06 yuan per share.
[Financial Reports Express]
○ Net profit of of several companies in lithium battery industry chain expected to surge
------
Growth of net profit of Tianqi Lithium Industries, Inc. (002466.SZ) is upward revised from 13-14 times to 16-17 times in its semiannual report due to price hike of lithium products beating expectation in the second quarter. Net profit of Beijing Easpring Material Technology Co., Ltd. (300073.SZ) is expected to rise by 36-38 times according to its semiannual report thanks to surging sales of anode material for lithium battery and consolidated financial statements with Beijing Zodngoc Automatic Technology Co., Ltd. As operating revenue of Cangzhou Mingzhu Plastic Co., Ltd. (002108.SZ) shows better performance than expected, its net profit growth is upward revised from 140-180 percent to 180-200 percent. Resulting from growth in power lithium battery business, net profit of Zhejiang Narada Power Source Co., Ltd. (300068.SZ) is predicted to hike by 80-110 percent in its semiannual report. Owing to growth in lithium primary battery business, net profit of EVE Energy Co., Ltd. (300014.SZ) is expected to climb 40-50 percent.
Net profit of Bluefocus Communication Group Co., Ltd. (300058.SZ) for the first half of this year is expected to rise by 272-318 percent contributed by rapid development of mobile Internet business. As performance of digital joined screen system business and kindergarten business was better than expected, net profit of Vtron technologies Ltd. is predicted to increase by 275-300 percent in its semiannual report. As Ningbo Yunsheng Co., Ltd. (600366.SH) saw increasing sales in rare earth permanent magnetic material and servo motor, its net profit growth is upward revised from 180-230 percent to 220-240 percent. Net profit growth of Sinoer Men's Wear Co., Ltd. (002485.SZ) is upward revised from 250-300 percent to 390-440 percent in its semiannual repot as the company sold its own shops.
[Trading Trends]
○ Airlines stocks bought through institutional seats
------
The trading volume ranking list on July 12 shows that China Southern Airlines Company Limited (600029.SH) was bought through three institutional seats with a total of 254 million yuan, accounting for 16.4 percent of its intraday turnover, and was sold by two institutional seats with a total of 59.53 million yuan. Air China Limited (601111.SH) was bought through four institutional seats with a total of 219 million yuan, accounting for 23.6 percent of its intraday turnover, and was sold by one institutional seat with a total of 15.27 million yuan.
Comment: Esssence Securities points out that civil airlines see increasing prosperity since summer holidays in July. Over the last week, revenue passenger kilometers (RPK) of domestic airlines rose by 1 percent when compared with previous week and by 10 percent year on year. Ticket prices moved up by 4 percent compared with previous week but declined by 4 percent year on year. Volumes and prices of international and regional airlines both show upward trend with growth ranging from 2 percent to 4 percent.
[Data Speaks]
○ Net profits of small household appliance enterprises expected to keep growing
------
According to SSN statistics, 32 listed companies engaged in household appliances have forecasted their performance for the first half of this year, 23 of which predict growth in performance. It is noteworthy that net profits of 9 listed companies are expected to hike by more than 20 percent as their principal business keep growth and most of them are small household appliance enterprises.
Comment: Research report of securities companies indicates that benefiting from product structure upgrade in tier-1 and tier-2 cites and rapid popularization in tier-3 and tier-4 cites, small household appliance industry is undergoing rapid development. Guangdong Xinbao Electrical Appliances Holdings Co., Ltd. (002705.SZ), a leader in western-style small household appliance in China, keeps making improvement in profitability and will benefit from renminbi devaluation. Zhejiang Supor Co., Ltd. (002032.SZ) owns strong brand influence in cookers and small kitchen electric appliances.
[Trading Alarms]
○ Global Safety Technology to launch IPO on July 13
------
Beijing Global Safety Technology Co., Ltd. (300523.SZ) is going to launch IPO at a price of 21.92 yuan per share with upper limit of 20,000 shares for single account. The PE ratio is 23 times. The company is engaged in emergency platform comprehensive application system.
TOP
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