[Today's Guide]
○ Pilot on state-owned capitals investment companies expanded, seven central enterprises included
○ 13th Five-year Plan on sports lottery to issue soon, vocational education to see rapid development
○ Yunda proposes to go backdoor listing via Xinhai Electric, actual controller of Dongjiang Environmental changes
○ Zhengbang Tech proposes high share conversion, various companies forecast growth for H1
[SSN Focus]
○ Pilot on state-owned capitals investment companies expanded, seven central enterprises included
------
The pilot on the reform of central enterprise has been fully conducted, indicated Peng Huagang, deputy secretary-general of the State-owned Assets Supervision and Administration Commission (SASAC) on July 14. While deepening the pilot on state-owned capitals operation companies, the SASAC chose seven enterprises, namely Shenhua Group, Baosteel, Wuhan Iron and Steel Group, China Minmetals Corporation, China Merchants Group, China Communications Construction Company Limited and China Poly Group, to conduct the pilot of state-owned capitals investment companies.
Comment: COFCO Limited and State Development ＆ Investment Corporation (SDIC) were adopted as pilots of the state-owned capitals investment companies two years ago. The expansion of the pilot may mean that the SOEs reform is under full operation. The design of the state-owned capitals investment companies will transform the state-owned assets supervision from "assets regulation" to "capitals regulation". It will no longer be responsible for the specific operation decision-making but will focus on assets consolidation and capital operation. Certain listed companies under COFCO and SDIC have improved their fundamentals through assets consolidation and capital operation. Listed companies with actual controllers covered by the pilot and small market value and bad performance in competitive industries are expected to conduct consolidation in the future.
[SSN Selection]
○ Fang Xinghai indicated on July 12 that the Shanghai-London Stock Connect has made progresses. Shenzhen Securities Information Co., Ltd. and the Euronext have signed a cooperation agreement on index recently.
○ The Shenzhen Stock Exchange released the guidance on the information disclosure by listed video companies on the ChiNext Board, requiring that the disclosure source should be within the business revenue range of films with high box office.
○ Everbright Group recently increased the shareholding in China Everbright Bank Co., Ltd. (06818.HK; 601818.SH) with 425 million A and H shares. China Minsheng Banking Corp., Ltd. (01988.HK; 600016.SH) saw a turnover of over 4 billion yuan through bulk trading on July 14.
○ Foreign media reported that Qihoo 360 Technology Co., Ltd. will be delisted from the New York Stock Exchange before the opening session on July 18.
○ Ningbo GQY Video ＆ Telecom Joint-stock Co., Ltd. (300076.SZ) and Hengxin Mobile Business Co., Ltd. (300081.SZ) announced trading suspension for self-checking due to the recent significant growth. The Shenzhen Stock Exchange also issued a letter of concerns to GQY.
○ The central bank of the U.K. unexpectedly remains the interest rate and the assets purchase size unchanged. The exchange rate of the pound against U.S. dollars recovered rapidly.
TOP
[Industry Information]
○ 13th Five-year Plan on sports lottery to issue soon, Internet-based lotteries to see strong rebound
------
SSN learnt that with the issuing of the 13th Five-year Plan on the Sports Industry, the 13th Five-year Plan on sports lottery will also be introduced soon. The General Administration of Sport (GAS) is actively advancing the preparation for the pilot Internet-based sales of sports lotteries. China will continue to strengthen the store basis and get prepared for the pilot Internet-based sales of sports lotteries, indicated Yan Yufeng, the secretary of the Party committee of the sports lottery center of the GAS at the working conference on the national sports lottery work held in January.
Comment: Shenwan Hongyuan Securities believe that the Internet-based lottery sales have been suspended for over one year and it is expected to reinitiate. It is expected that the new Internet-based lottery sales regulated by the authorities will be more safe and authoritative. The returning of original users and the joining of new users will promote the strong recovery of the industry. Okooo under People.cn Co., Ltd. (603000.SH) provides sports lottery users with top-level lottery purchasing experiences and account for a considerable market share. Hongbo Co., Ltd. (002229.SZ) is leader in the printing of lotteries. It recorded a lottery sales of 313 million yuan through the Internet in 2014.
○ MHRSS promotes technical institutes reform, vocational education to see rapid development
------
The Ministry of Human Resources and Social Security (MHRSS) released the Outline of the 13th Five-year Plan on the Development of Human Resources and Social Securities, proposing to prepare the 13th Five-year Plan on technical education. It will actively advance the reform and innovation in technical colleges, promote the construction of vocational training institutes and deeply conduct the teaching reform on integrated courses in technical institutes to build a framework of the criteria on the fostering of technical talents. It will promote the new type of apprenticeship system, the national basic vocational training, the cooperation between universities and enterprises and the Internet plus vocational training and other training models.
Comment: Institutes believe that Chinese population aged above 15 faces huge graduates, employment difficulties and skills mismatching, which will promote the rapid development of vocational education. The investment in vocational education will exceed 400 billion yuan each year in the following five years and will reach 550.6 billion yuan in 2020. China Hi-Tech Group Co., Ltd. (600730.SH) focuses on independent institutes and large open online courses and fully transforms into vocational education. Shenzhen Hongtao Decoration Co., Ltd. (002325.SZ) is developing the fostering of college students, construction training and medical education through acquiring leaders in specific industries. Dingli Corp., Ltd. (300050.SZ) will develop IT vocational education by acquiring Zhixiang Information.
TOP
[Announcement Interpretation]
○ Yunda proposes to go backdoor listing via Xinhai Electric for RMB 18bln
------
Ningbo Xinhai Electric Co., Ltd. (002120.SZ) proposes to acquire 100 percent equities of Yunda Ltd. for 18 billion yuan among which 661 million yuan will be paid by exchange-out assets and liabilities and the reminder will be paid by issuing 876 million shares at 19.79 yuan per share through private placement. Yunda, one of the express leaders in China, promises its net profit after deducting non-recurring losses and gains from 2016 to 2018 will be no less than 1.13 billion yuan, 1.36 billion yuan and 1.56 billion yuan, respectively. The reorganization composes backboor listing. Niu Tengyun and his wife Chen Liying will become the new actual controller of the company.
○ Dongjiang Environmental to raise funds through private placement to invest in solid waste treatment, Guangdong SASAC becomes its actual controller
------
Dongjiang Environmental Company Limited (002672.SZ) plans to raise 2 billion yuan by issuing 150 million shares through private placement to Guangdong Rising Assets Management Co., Ltd. (GRAM) to invest in solid waste treatment projects. The date of pricing benchmark will also be the first issuance day. Currently, GRAM holds a total of 14 percent disposable voting right in Dongjiang Environmental Company. This time, GRAM will control the company. GRAM is a single proprietorship under the State-owned Assets Supervision and Administration Commission (SASAC) of Guangdong Province. After the transaction, the actual controller of Dongjiang Environmental Company will become Guangdong SASAC, and transform from a private company to a state-owned company.
○ Actual controller of Sunnada Communication increases shareholding by 13.5 mln shares
------
Zhou Shiping, the actual controller of Fujian Sunnada Communication Co., Ltd. (002417.SZ), increased the shareholding in the company by 13.5 million shares via acquisition in the secondary market and block trade from June 30 to July 14, accounting for 5 percent of the company's total capital share. Its shareholding in the company now rises to 18.33 percent. Zhou Shiping said that he increased shareholding because he was optimistic about the company's prospect, and is likely to continue to increase shareholding in next 12 months.
○ Chunxing Precision Mechanical to acquire Hongze Tech for RMB 300 mln.
------
Suzhou Chunxing Precision Mechanical Co., Ltd. (002547.SZ) proposes to acquire 100 equities of Huizhou Hongze Technology Co., Ltd. for 300 million yuan. The target company is mainly engaged in the processing and sales of hardware products and plastics. It promises that its net profit from 2016 to 2018 will be 25 million yuan, 32 million yuan and 43 million yuan, respectively. Its acquisition of Hongze Technology will help the company build a production base radiating the Pearl River Delta and expand is e-market business.
TOP
[Financial Reports Express]
○ Zhengbang Tech proposes high share conversion
------
Jiangxi Zhengbang Technology Co., Ltd. (002157.SZ) forecasts a growth of over 200 times in its semi-annual report. Its controlling shareholder proposes a distribution plan of a 20-for-10 conversion of capital surplus into shares. The actual controller of Jilin Jinguan Electric Co., Ltd. (300510.SZ) proposes a 10-for-10 conversion of capital surplus into shares in its semi-annual report. The actual controller of Sungrow Power Supply Co., Ltd. (300274.SZ) proposes a 8-or-10 conversion of capital surplus into shares combined with 1 yuan dividend in its semi-annual report.
○ Sanxiang and other forecast growth in H1
------
Sanxiang Co., Ltd. (000863.SZ) forecasts a growth of 4 times in its semi-annual report mainly due to the carry-over from real estate project delivery. Guangzhou Tinci Materials Technology Co., Ltd. (002709.SZ) revises up its growth forecast from 4 times to 5 times in its semi-annual report mainly due to increasing sales of electrolyte. Jiangsu Fasten Company Limited (000890.SZ) forecasts a growth of 11 to12 times in its semi-annual report mainly due to integration of the financial statement of Shanghai Moses Factoring Co., Ltd. Unisplendour Corporation Limited (000938.SZ) forecasts a growth of 165 to 195 percent in its semi-annual report mainly due to integration of the financial statement of Hangzhou H3C Communication Technology Co., Ltd. Dalian Zhiyun Automation Co., Ltd. (300097.SZ) forecasts a growth of 5 times in its semi-annual report mainly because it transferred equities of its subsidiaries.
Shenyang Chemical Industry Co., Ltd. (000698.SZ) forecasts to turn losses to profits mainly due to integration of the financial statement of Shandong Bluestar Dongda Chemical Co. Ltd. Guangdong Sky Dragon Printing Ink Group Co., Ltd. (300063.SZ) forecasts a growth of 34 to 45 times in its semi-annual report mainly due to integration of the financial statement of Beijing Yutang Lianchuang Information Technology Co., Ltd. and Beijing Uniquead Advertising Co., Ltd. Shenzhen Microgate Technology Co., Ltd. (300319.SZ) forecasts a growth of 286 to 316 percent in its semi-annual report mainly due to integration of the financial statement of Shenzhen Xinyuan Electronics Technology Co., Ltd. CSG Holding Co., Ltd. (000012.SZ) forecasts a growth of 100 percent in its semi-annual report mainly due to warm-up of the solar energy industry. Hangzhou CNCR-IT Co., Ltd. (300250.SZ) forecasts a growth of 3 to 4 times in its semi-annual report mainly due to integration of the financial statement of STARCOR. Xinjiang Zhongtai Chemical Co., Ltd. (002092.SZ) forecasts a growth of 6 to 8 times in its semi-annual report mainly due to lower costs.
[Trading Trends]
○ Honggao Creative Architectural Design bought by three institutions
------
The trading volume ranking list on July 14 shows that Beijing Honggao Creative Architectural Design Co., Ltd. (002504.SZ) was bought by three institutions with a total amount of 194 million yuan, accounting for 26 percent of its intraday turnover.
Comment: The company is mainly engaged in the construction and design of building decoration engineering. Institutes believe that the company will introduce VR to enhance users' experience based on BIM, and it will make exogenous acquisition while focusing on endogenous development to build new business map.
[Trading Alarms]
○ Boss Software Development to debut IPO on July 15
------
Fuzhou Boss Software Development Co., Ltd. (300525.SZ) will offer shares at 11.68 yuan per share with an upper limit of 17,000 shares for each applicant. The company's PE ratio is 23 times.
TOP
○ Pilot on state-owned capitals investment companies expanded, seven central enterprises included
○ 13th Five-year Plan on sports lottery to issue soon, vocational education to see rapid development
○ Yunda proposes to go backdoor listing via Xinhai Electric, actual controller of Dongjiang Environmental changes
○ Zhengbang Tech proposes high share conversion, various companies forecast growth for H1
[SSN Focus]
○ Pilot on state-owned capitals investment companies expanded, seven central enterprises included
------
The pilot on the reform of central enterprise has been fully conducted, indicated Peng Huagang, deputy secretary-general of the State-owned Assets Supervision and Administration Commission (SASAC) on July 14. While deepening the pilot on state-owned capitals operation companies, the SASAC chose seven enterprises, namely Shenhua Group, Baosteel, Wuhan Iron and Steel Group, China Minmetals Corporation, China Merchants Group, China Communications Construction Company Limited and China Poly Group, to conduct the pilot of state-owned capitals investment companies.
Comment: COFCO Limited and State Development ＆ Investment Corporation (SDIC) were adopted as pilots of the state-owned capitals investment companies two years ago. The expansion of the pilot may mean that the SOEs reform is under full operation. The design of the state-owned capitals investment companies will transform the state-owned assets supervision from "assets regulation" to "capitals regulation". It will no longer be responsible for the specific operation decision-making but will focus on assets consolidation and capital operation. Certain listed companies under COFCO and SDIC have improved their fundamentals through assets consolidation and capital operation. Listed companies with actual controllers covered by the pilot and small market value and bad performance in competitive industries are expected to conduct consolidation in the future.
[SSN Selection]
○ Fang Xinghai indicated on July 12 that the Shanghai-London Stock Connect has made progresses. Shenzhen Securities Information Co., Ltd. and the Euronext have signed a cooperation agreement on index recently.
○ The Shenzhen Stock Exchange released the guidance on the information disclosure by listed video companies on the ChiNext Board, requiring that the disclosure source should be within the business revenue range of films with high box office.
○ Everbright Group recently increased the shareholding in China Everbright Bank Co., Ltd. (06818.HK; 601818.SH) with 425 million A and H shares. China Minsheng Banking Corp., Ltd. (01988.HK; 600016.SH) saw a turnover of over 4 billion yuan through bulk trading on July 14.
○ Foreign media reported that Qihoo 360 Technology Co., Ltd. will be delisted from the New York Stock Exchange before the opening session on July 18.
○ Ningbo GQY Video ＆ Telecom Joint-stock Co., Ltd. (300076.SZ) and Hengxin Mobile Business Co., Ltd. (300081.SZ) announced trading suspension for self-checking due to the recent significant growth. The Shenzhen Stock Exchange also issued a letter of concerns to GQY.
○ The central bank of the U.K. unexpectedly remains the interest rate and the assets purchase size unchanged. The exchange rate of the pound against U.S. dollars recovered rapidly.
TOP
[Industry Information]
○ 13th Five-year Plan on sports lottery to issue soon, Internet-based lotteries to see strong rebound
------
SSN learnt that with the issuing of the 13th Five-year Plan on the Sports Industry, the 13th Five-year Plan on sports lottery will also be introduced soon. The General Administration of Sport (GAS) is actively advancing the preparation for the pilot Internet-based sales of sports lotteries. China will continue to strengthen the store basis and get prepared for the pilot Internet-based sales of sports lotteries, indicated Yan Yufeng, the secretary of the Party committee of the sports lottery center of the GAS at the working conference on the national sports lottery work held in January.
Comment: Shenwan Hongyuan Securities believe that the Internet-based lottery sales have been suspended for over one year and it is expected to reinitiate. It is expected that the new Internet-based lottery sales regulated by the authorities will be more safe and authoritative. The returning of original users and the joining of new users will promote the strong recovery of the industry. Okooo under People.cn Co., Ltd. (603000.SH) provides sports lottery users with top-level lottery purchasing experiences and account for a considerable market share. Hongbo Co., Ltd. (002229.SZ) is leader in the printing of lotteries. It recorded a lottery sales of 313 million yuan through the Internet in 2014.
○ MHRSS promotes technical institutes reform, vocational education to see rapid development
------
The Ministry of Human Resources and Social Security (MHRSS) released the Outline of the 13th Five-year Plan on the Development of Human Resources and Social Securities, proposing to prepare the 13th Five-year Plan on technical education. It will actively advance the reform and innovation in technical colleges, promote the construction of vocational training institutes and deeply conduct the teaching reform on integrated courses in technical institutes to build a framework of the criteria on the fostering of technical talents. It will promote the new type of apprenticeship system, the national basic vocational training, the cooperation between universities and enterprises and the Internet plus vocational training and other training models.
Comment: Institutes believe that Chinese population aged above 15 faces huge graduates, employment difficulties and skills mismatching, which will promote the rapid development of vocational education. The investment in vocational education will exceed 400 billion yuan each year in the following five years and will reach 550.6 billion yuan in 2020. China Hi-Tech Group Co., Ltd. (600730.SH) focuses on independent institutes and large open online courses and fully transforms into vocational education. Shenzhen Hongtao Decoration Co., Ltd. (002325.SZ) is developing the fostering of college students, construction training and medical education through acquiring leaders in specific industries. Dingli Corp., Ltd. (300050.SZ) will develop IT vocational education by acquiring Zhixiang Information.
TOP
[Announcement Interpretation]
○ Yunda proposes to go backdoor listing via Xinhai Electric for RMB 18bln
------
Ningbo Xinhai Electric Co., Ltd. (002120.SZ) proposes to acquire 100 percent equities of Yunda Ltd. for 18 billion yuan among which 661 million yuan will be paid by exchange-out assets and liabilities and the reminder will be paid by issuing 876 million shares at 19.79 yuan per share through private placement. Yunda, one of the express leaders in China, promises its net profit after deducting non-recurring losses and gains from 2016 to 2018 will be no less than 1.13 billion yuan, 1.36 billion yuan and 1.56 billion yuan, respectively. The reorganization composes backboor listing. Niu Tengyun and his wife Chen Liying will become the new actual controller of the company.
○ Dongjiang Environmental to raise funds through private placement to invest in solid waste treatment, Guangdong SASAC becomes its actual controller
------
Dongjiang Environmental Company Limited (002672.SZ) plans to raise 2 billion yuan by issuing 150 million shares through private placement to Guangdong Rising Assets Management Co., Ltd. (GRAM) to invest in solid waste treatment projects. The date of pricing benchmark will also be the first issuance day. Currently, GRAM holds a total of 14 percent disposable voting right in Dongjiang Environmental Company. This time, GRAM will control the company. GRAM is a single proprietorship under the State-owned Assets Supervision and Administration Commission (SASAC) of Guangdong Province. After the transaction, the actual controller of Dongjiang Environmental Company will become Guangdong SASAC, and transform from a private company to a state-owned company.
○ Actual controller of Sunnada Communication increases shareholding by 13.5 mln shares
------
Zhou Shiping, the actual controller of Fujian Sunnada Communication Co., Ltd. (002417.SZ), increased the shareholding in the company by 13.5 million shares via acquisition in the secondary market and block trade from June 30 to July 14, accounting for 5 percent of the company's total capital share. Its shareholding in the company now rises to 18.33 percent. Zhou Shiping said that he increased shareholding because he was optimistic about the company's prospect, and is likely to continue to increase shareholding in next 12 months.
○ Chunxing Precision Mechanical to acquire Hongze Tech for RMB 300 mln.
------
Suzhou Chunxing Precision Mechanical Co., Ltd. (002547.SZ) proposes to acquire 100 equities of Huizhou Hongze Technology Co., Ltd. for 300 million yuan. The target company is mainly engaged in the processing and sales of hardware products and plastics. It promises that its net profit from 2016 to 2018 will be 25 million yuan, 32 million yuan and 43 million yuan, respectively. Its acquisition of Hongze Technology will help the company build a production base radiating the Pearl River Delta and expand is e-market business.
TOP
[Financial Reports Express]
○ Zhengbang Tech proposes high share conversion
------
Jiangxi Zhengbang Technology Co., Ltd. (002157.SZ) forecasts a growth of over 200 times in its semi-annual report. Its controlling shareholder proposes a distribution plan of a 20-for-10 conversion of capital surplus into shares. The actual controller of Jilin Jinguan Electric Co., Ltd. (300510.SZ) proposes a 10-for-10 conversion of capital surplus into shares in its semi-annual report. The actual controller of Sungrow Power Supply Co., Ltd. (300274.SZ) proposes a 8-or-10 conversion of capital surplus into shares combined with 1 yuan dividend in its semi-annual report.
○ Sanxiang and other forecast growth in H1
------
Sanxiang Co., Ltd. (000863.SZ) forecasts a growth of 4 times in its semi-annual report mainly due to the carry-over from real estate project delivery. Guangzhou Tinci Materials Technology Co., Ltd. (002709.SZ) revises up its growth forecast from 4 times to 5 times in its semi-annual report mainly due to increasing sales of electrolyte. Jiangsu Fasten Company Limited (000890.SZ) forecasts a growth of 11 to12 times in its semi-annual report mainly due to integration of the financial statement of Shanghai Moses Factoring Co., Ltd. Unisplendour Corporation Limited (000938.SZ) forecasts a growth of 165 to 195 percent in its semi-annual report mainly due to integration of the financial statement of Hangzhou H3C Communication Technology Co., Ltd. Dalian Zhiyun Automation Co., Ltd. (300097.SZ) forecasts a growth of 5 times in its semi-annual report mainly because it transferred equities of its subsidiaries.
Shenyang Chemical Industry Co., Ltd. (000698.SZ) forecasts to turn losses to profits mainly due to integration of the financial statement of Shandong Bluestar Dongda Chemical Co. Ltd. Guangdong Sky Dragon Printing Ink Group Co., Ltd. (300063.SZ) forecasts a growth of 34 to 45 times in its semi-annual report mainly due to integration of the financial statement of Beijing Yutang Lianchuang Information Technology Co., Ltd. and Beijing Uniquead Advertising Co., Ltd. Shenzhen Microgate Technology Co., Ltd. (300319.SZ) forecasts a growth of 286 to 316 percent in its semi-annual report mainly due to integration of the financial statement of Shenzhen Xinyuan Electronics Technology Co., Ltd. CSG Holding Co., Ltd. (000012.SZ) forecasts a growth of 100 percent in its semi-annual report mainly due to warm-up of the solar energy industry. Hangzhou CNCR-IT Co., Ltd. (300250.SZ) forecasts a growth of 3 to 4 times in its semi-annual report mainly due to integration of the financial statement of STARCOR. Xinjiang Zhongtai Chemical Co., Ltd. (002092.SZ) forecasts a growth of 6 to 8 times in its semi-annual report mainly due to lower costs.
[Trading Trends]
○ Honggao Creative Architectural Design bought by three institutions
------
The trading volume ranking list on July 14 shows that Beijing Honggao Creative Architectural Design Co., Ltd. (002504.SZ) was bought by three institutions with a total amount of 194 million yuan, accounting for 26 percent of its intraday turnover.
Comment: The company is mainly engaged in the construction and design of building decoration engineering. Institutes believe that the company will introduce VR to enhance users' experience based on BIM, and it will make exogenous acquisition while focusing on endogenous development to build new business map.
[Trading Alarms]
○ Boss Software Development to debut IPO on July 15
------
Fuzhou Boss Software Development Co., Ltd. (300525.SZ) will offer shares at 11.68 yuan per share with an upper limit of 17,000 shares for each applicant. The company's PE ratio is 23 times.
TOP
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