[Today's Guide]
○ Rare earth futures plans submitted, China to strengthen pricing right on rare earths
○ ICBC introduces quick response-based payment products, genuine music to further advance
○ Kangyue Technology proposes to acquire Yiheng Technology, Taier Heavy Industry to buy Longyu Equipment
○NanFang Bearing to participate in Wuxi Yilong Aeronautical Facility, Huawei Culture proposes high share conversion and dividend in interim report
[SSN Focus]
○ Rare earth futures plans submitted, China to strengthen pricing right on rare earths
------
Relevant plans on the feasibility study on the rare earth futures conducted by the Association of China Rare Earth Industry as appointed by Shanghai Futures Exchange last year have been submitted to the State Council, indicated by Ma Rongzhang, secretary general of the Association of China Rare Earth Industry, at the press conference of the Baotou Rare Earth Products Exchange held on July 16. It is reported that the Baotou Rare Earth Products Exchange and the China Economic Information Service under Xinhua News Agency are conducting cooperation and the open index funds for the trading of rare earth is under development.
Comment: China has been supplying 90 percent of the rare earth in the world for a long term. However, with the absence of the pricing right and the low concentration in the industry, Chinese rare earth industry has not obtained its position and profit corresponding with its significance. With the introduction of various policies recently, the supply pattern with six rare earth groups has been generally established. The supply pattern of the rare earth industry is also clear. The introduction of rare earth futures will change the currently distributed offline trading pattern and will lead the market expectation. Huachuang Securities believe that the performance of China Northern Rare Earth (Group) High-tech Co., Ltd. (600111.SH), Rising Nonferrous Metals Share Co., Ltd. (600259.SH), Shenghe Resources Holding Co., Ltd. (600392.SH), Xiamen Tungsten Co., Ltd. (600549.SH) and Advanced Technology ＆ Materials Co., Ltd. (000969.SZ) is sensitive to the hiking price of rare earths.
[SSN Selection]
○ SSN learnt that significant reforms on the management of scientific funding are under mulling, which will have positive effects on scientific and technical staff.
○ The China Securities Regulatory Commission (CSRC) issued new regulations on private assets management on July 15, requiring the leverage of stock and mixed products shall not exceed 100 percent.
○ New regulations on equity incentives will be implemented from Aug. 13. Listed companies will be more flexible in making decisions on equity incentives.
○ The appraisal results on the classification of securities companies in 2016 are released. Seven securities companies have been investigated by the CSRC for illicit businesses.
○ Qihoo 360 Technology Co., Ltd. announced the completion of privatization transaction with a de-list valuation of 9.3 billion U.S. dollars.
○ A coup attempt hit Turkey on July 15 evening local time. Turkey's premier indicated on July 16 that the situation is generally under control.
TOP
[Industry Information]
○ ICBC introduces quick response-based payment products, industry to see rapid develop
------
The Industrial and Commercial Bank of China Limited (ICBC, 01398.HK; 601398.SH) officially introduced quick response-based payment products on July 15, making it the first commercial bank in China with quick response-based payment products. ICBC President Yi Huiman the quick response-based payment of the ICBC is equipped with all functions of dominant products in the current market. It firstly adopted the internationally leading token technology of the Bank for International Settlement in conducting variation on the card numbers. It provides clients with capital and information security at the bank level. The quick response-based payment was suspended by the regulatory authorities in March 2014 for payment risks.
Comment: Insiders pointed out that with the introduction of quick response-based payment products by the ICBC, it is expected that other commercial banks will follow the trend and introduce quick response-based payment products after passing the regulatory recognition. Essence Securities Co., Ltd. believes that driven by the huge demand for mobile payment, the quick response-based payment will resume rapid development. The POS business of SZZT Electronics Co., Ltd. (002197.SZ) will benefit from the quick response-based and other mobile payment industry. The quick response-based recognition hardware of Fujian Newland Computer Co., Ltd. (000997.SZ) is leading in the industry. Shenzhen Xinguodu Technology Co., Ltd. (300130.SZ) also develops quick response-based payment.
○ Genuine music to further advance, copyright and artist value to stand out
------
The QQ Music under Tencent Holdings Limited (00700.HK) officially consolidated with Music Group, which owns Kugou, Kuwo and other products, on July 15. The three platforms will further promote the genuine process in the music industry. Insiders pointed out that the new music group will enjoy a market share of over 70 percent. With the development of the genuine digital music in China, consumers will see more paid music in the future.
Comment: Piracy has been a barrier in the development of copyright and the value of artists. With the improvement in concentration in the industry, the process of advancing the genuine music will speed up. The value of music copyright and artists resources will stand out. Shandong Gettop Acoustic Co., Ltd. (002655.SZ) proposes to acquire the pop music of Yuehua Entertainment. It will learn the system in fostering stars in South Korea and promote the exchange between the Chinese and South Korean music markets. Hang Geng and Zhou Bichang are singers under the company. Beijing Hualu Baina Film ＆ TV Inc. (300291.SZ) joined Han Hong in establishing a joint venture positioned in the pan-entertainment industry with music as the core.
TOP
[Announcement Interpretation]
○ Kangyue Technology proposes to acquire Yiheng Technology, tapping into intelligent equipment sector
------
Kangyue Technology Co., Ltd. (300391.SZ) proposes to acquire the entire shares of Yiheng Technology with 900 million yuan, which will be raised by issuing shares at 16.28 yuan per share through private placement and cash payment of 387 million yuan. At the same time, the company proposes to raise supporting fund of 417 million yuan.
Yiheng Technology is intelligent complement equipment and solar cell module provider, primarily aiming at photovoltaic, laser and high-speed rail sectors. Its committed net profits after deducted of non-recurring profits or losses will be 50 million yuan, 67 million yuan and 88 million yuan respectively from 2016 to 2018.
○ Taier Heavy Industry to buy Longyu Equipment with RMB460 mln, expanding into intelligent manufacturing
------
Taier Heavy Industry Co., Ltd. (002347.SZ) proposes to increase its cash by private placement to buy the entire equity of Suzhou Longyu Electronic Equipment Co., Ltd., and at the same time to raise 190 million yuan supporting fund through private placement. The issuing price are both 15.51 yuan per share. After the reorganization, the company will expand into intelligent manufacturing industry.
Longyu Electronic Equipment provides automatic supporting services to 3C manufacturing industry. Its products are used in intelligent consumer electronics, motor vehicle and its parts, LCD panel, medical apparatus and instruments and communications engineering industries. The counterparty committed that Longyu Electronic Equipment's net profits deducted of non-recurring profits or losses will be 26 million yuan, 41 million yuan and 53 million yuan respectively from 2016 to 2018.
TOP
○ NanFang Bearing to participate in Wuxi Yilong Aeronautical Facility, exploring aero tyre market
------
Jiangsu NanFang Bearing Co., Ltd. (002553.SZ) proposes to utilize self-owned 58,115,500 yuan to buy 36 percent equity of Wuxi Yilong Aeronautical Facility Co., Ltd. In the future, the company might continue to increase holding to acquire the controlling right. Wuxi Yilong Aeronautical Facility is currently the only aero tyre remanufacturer in China with continuous seaworthiness and supply ability. Its estimated net profits are expected to reach 5 million yuan, 30 million yuan and 50 million yuan respectively from 2016 to 2018.
[Financial Reports Express]
○ Huawei Culture proposes high share conversion and dividend
------
Controlling shareholder of Huawei Culture Co., Ltd. (002502.SZ) proposes 10-for-10 conversion of capital surplus into shares in the distribution plan in the interim report.
○ Fushine Pharmaceutical expects growth
------
Jiangxi Fushine Pharmaceutical Co., Ltd. (300497.SZ) expects 100 percent to 130 percent growth in its interim report, primarily due to rise in sales and decline in raw material purchase. Beijing Tiantan Biological Products Corporation Limited (600161.SH) expects 70 percent to 80 percent growth in its interim report, primarily due to the increase of revenue from blood products. Shandong Xiantan Co., ltd. (002746.SZ) upwardly revises its growth from 7 times to nearly 8 times, primarily due to the better-than-expected rise in the price of chicken.
[Trading Alarms]
○ Guangdong Super Telecom IPO to debut on July 18.
------
Guangdong Super Telecom Co., Ltd. (732322.SZ) will debut its IPO on July 18 with the issuing price of 11.99 yuan per share. The PE ratio is 23 times, and the upper limit of subscription is 20,000 shares. The company primarily engaged in the construction of telecommunication network.
[Weekly Review]
○ Ups and downs of global financial markets
------
Price of Nintendo nearly doubled in just one week, setting a new record in the Japanese securities history; in the U.S. market, the Dow and S＆P reached historic highs in consecution; the global bond prices keeps going up, and nearly 13 trillion worth of U.S. Treasury bond has entered negative interest rate status never seen before; risk aversion commodities such as gold and silver, and risk preference commodities such as Zinc and cotton both surged. As the monetary policies in the U.S., Europe and Japan remain loose, global investors believe that "whether to increase investment" becomes more important than "what to invest".
In this context, the A-share market also saw massive surges and sectors surging in rotation. Investment directions with good performance, policy support and new technology boom. Last week, only one-tenth industry index declined, and most are varieties that have soared earlier, such as aerospace and military industries. As individual investors, we don't have to be too cautious about the market. Provided that the capital resources remain loose, even the plummet caused by other bearish news could also create buying opportunities.
In terms of specific investment opportunities, the sentiment on the market is low earlier, and now there are sectors with bullish news that can easily surge in the near term. Take the coal industry for example, it has declined for long, but preannouncement on growth have been frequently released since July. After the SSN made in-depth interpretation on July 11, the sector jumped sharply on the second day to outperform the market; online lottery has been suspended for long, but supporting policies on starting online lottery were intensively issued last week, and people.com.cn has surged over 10 percent in total on July 14 and 15; though State-owned enterprises (SOEs) reform theme, which has sunk for long, Shanghai Zhenhua Heavy Industries Co., ltd. (600320.SH) surged to the daily 10 percent limit soon after opening on July 15, after 7 central SOEs are approved to implement pilots of investing in companies by state-owned capitals.
TOP
○ Rare earth futures plans submitted, China to strengthen pricing right on rare earths
○ ICBC introduces quick response-based payment products, genuine music to further advance
○ Kangyue Technology proposes to acquire Yiheng Technology, Taier Heavy Industry to buy Longyu Equipment
○NanFang Bearing to participate in Wuxi Yilong Aeronautical Facility, Huawei Culture proposes high share conversion and dividend in interim report
[SSN Focus]
○ Rare earth futures plans submitted, China to strengthen pricing right on rare earths
------
Relevant plans on the feasibility study on the rare earth futures conducted by the Association of China Rare Earth Industry as appointed by Shanghai Futures Exchange last year have been submitted to the State Council, indicated by Ma Rongzhang, secretary general of the Association of China Rare Earth Industry, at the press conference of the Baotou Rare Earth Products Exchange held on July 16. It is reported that the Baotou Rare Earth Products Exchange and the China Economic Information Service under Xinhua News Agency are conducting cooperation and the open index funds for the trading of rare earth is under development.
Comment: China has been supplying 90 percent of the rare earth in the world for a long term. However, with the absence of the pricing right and the low concentration in the industry, Chinese rare earth industry has not obtained its position and profit corresponding with its significance. With the introduction of various policies recently, the supply pattern with six rare earth groups has been generally established. The supply pattern of the rare earth industry is also clear. The introduction of rare earth futures will change the currently distributed offline trading pattern and will lead the market expectation. Huachuang Securities believe that the performance of China Northern Rare Earth (Group) High-tech Co., Ltd. (600111.SH), Rising Nonferrous Metals Share Co., Ltd. (600259.SH), Shenghe Resources Holding Co., Ltd. (600392.SH), Xiamen Tungsten Co., Ltd. (600549.SH) and Advanced Technology ＆ Materials Co., Ltd. (000969.SZ) is sensitive to the hiking price of rare earths.
[SSN Selection]
○ SSN learnt that significant reforms on the management of scientific funding are under mulling, which will have positive effects on scientific and technical staff.
○ The China Securities Regulatory Commission (CSRC) issued new regulations on private assets management on July 15, requiring the leverage of stock and mixed products shall not exceed 100 percent.
○ New regulations on equity incentives will be implemented from Aug. 13. Listed companies will be more flexible in making decisions on equity incentives.
○ The appraisal results on the classification of securities companies in 2016 are released. Seven securities companies have been investigated by the CSRC for illicit businesses.
○ Qihoo 360 Technology Co., Ltd. announced the completion of privatization transaction with a de-list valuation of 9.3 billion U.S. dollars.
○ A coup attempt hit Turkey on July 15 evening local time. Turkey's premier indicated on July 16 that the situation is generally under control.
TOP
[Industry Information]
○ ICBC introduces quick response-based payment products, industry to see rapid develop
------
The Industrial and Commercial Bank of China Limited (ICBC, 01398.HK; 601398.SH) officially introduced quick response-based payment products on July 15, making it the first commercial bank in China with quick response-based payment products. ICBC President Yi Huiman the quick response-based payment of the ICBC is equipped with all functions of dominant products in the current market. It firstly adopted the internationally leading token technology of the Bank for International Settlement in conducting variation on the card numbers. It provides clients with capital and information security at the bank level. The quick response-based payment was suspended by the regulatory authorities in March 2014 for payment risks.
Comment: Insiders pointed out that with the introduction of quick response-based payment products by the ICBC, it is expected that other commercial banks will follow the trend and introduce quick response-based payment products after passing the regulatory recognition. Essence Securities Co., Ltd. believes that driven by the huge demand for mobile payment, the quick response-based payment will resume rapid development. The POS business of SZZT Electronics Co., Ltd. (002197.SZ) will benefit from the quick response-based and other mobile payment industry. The quick response-based recognition hardware of Fujian Newland Computer Co., Ltd. (000997.SZ) is leading in the industry. Shenzhen Xinguodu Technology Co., Ltd. (300130.SZ) also develops quick response-based payment.
○ Genuine music to further advance, copyright and artist value to stand out
------
The QQ Music under Tencent Holdings Limited (00700.HK) officially consolidated with Music Group, which owns Kugou, Kuwo and other products, on July 15. The three platforms will further promote the genuine process in the music industry. Insiders pointed out that the new music group will enjoy a market share of over 70 percent. With the development of the genuine digital music in China, consumers will see more paid music in the future.
Comment: Piracy has been a barrier in the development of copyright and the value of artists. With the improvement in concentration in the industry, the process of advancing the genuine music will speed up. The value of music copyright and artists resources will stand out. Shandong Gettop Acoustic Co., Ltd. (002655.SZ) proposes to acquire the pop music of Yuehua Entertainment. It will learn the system in fostering stars in South Korea and promote the exchange between the Chinese and South Korean music markets. Hang Geng and Zhou Bichang are singers under the company. Beijing Hualu Baina Film ＆ TV Inc. (300291.SZ) joined Han Hong in establishing a joint venture positioned in the pan-entertainment industry with music as the core.
TOP
[Announcement Interpretation]
○ Kangyue Technology proposes to acquire Yiheng Technology, tapping into intelligent equipment sector
------
Kangyue Technology Co., Ltd. (300391.SZ) proposes to acquire the entire shares of Yiheng Technology with 900 million yuan, which will be raised by issuing shares at 16.28 yuan per share through private placement and cash payment of 387 million yuan. At the same time, the company proposes to raise supporting fund of 417 million yuan.
Yiheng Technology is intelligent complement equipment and solar cell module provider, primarily aiming at photovoltaic, laser and high-speed rail sectors. Its committed net profits after deducted of non-recurring profits or losses will be 50 million yuan, 67 million yuan and 88 million yuan respectively from 2016 to 2018.
○ Taier Heavy Industry to buy Longyu Equipment with RMB460 mln, expanding into intelligent manufacturing
------
Taier Heavy Industry Co., Ltd. (002347.SZ) proposes to increase its cash by private placement to buy the entire equity of Suzhou Longyu Electronic Equipment Co., Ltd., and at the same time to raise 190 million yuan supporting fund through private placement. The issuing price are both 15.51 yuan per share. After the reorganization, the company will expand into intelligent manufacturing industry.
Longyu Electronic Equipment provides automatic supporting services to 3C manufacturing industry. Its products are used in intelligent consumer electronics, motor vehicle and its parts, LCD panel, medical apparatus and instruments and communications engineering industries. The counterparty committed that Longyu Electronic Equipment's net profits deducted of non-recurring profits or losses will be 26 million yuan, 41 million yuan and 53 million yuan respectively from 2016 to 2018.
TOP
○ NanFang Bearing to participate in Wuxi Yilong Aeronautical Facility, exploring aero tyre market
------
Jiangsu NanFang Bearing Co., Ltd. (002553.SZ) proposes to utilize self-owned 58,115,500 yuan to buy 36 percent equity of Wuxi Yilong Aeronautical Facility Co., Ltd. In the future, the company might continue to increase holding to acquire the controlling right. Wuxi Yilong Aeronautical Facility is currently the only aero tyre remanufacturer in China with continuous seaworthiness and supply ability. Its estimated net profits are expected to reach 5 million yuan, 30 million yuan and 50 million yuan respectively from 2016 to 2018.
[Financial Reports Express]
○ Huawei Culture proposes high share conversion and dividend
------
Controlling shareholder of Huawei Culture Co., Ltd. (002502.SZ) proposes 10-for-10 conversion of capital surplus into shares in the distribution plan in the interim report.
○ Fushine Pharmaceutical expects growth
------
Jiangxi Fushine Pharmaceutical Co., Ltd. (300497.SZ) expects 100 percent to 130 percent growth in its interim report, primarily due to rise in sales and decline in raw material purchase. Beijing Tiantan Biological Products Corporation Limited (600161.SH) expects 70 percent to 80 percent growth in its interim report, primarily due to the increase of revenue from blood products. Shandong Xiantan Co., ltd. (002746.SZ) upwardly revises its growth from 7 times to nearly 8 times, primarily due to the better-than-expected rise in the price of chicken.
[Trading Alarms]
○ Guangdong Super Telecom IPO to debut on July 18.
------
Guangdong Super Telecom Co., Ltd. (732322.SZ) will debut its IPO on July 18 with the issuing price of 11.99 yuan per share. The PE ratio is 23 times, and the upper limit of subscription is 20,000 shares. The company primarily engaged in the construction of telecommunication network.
[Weekly Review]
○ Ups and downs of global financial markets
------
Price of Nintendo nearly doubled in just one week, setting a new record in the Japanese securities history; in the U.S. market, the Dow and S＆P reached historic highs in consecution; the global bond prices keeps going up, and nearly 13 trillion worth of U.S. Treasury bond has entered negative interest rate status never seen before; risk aversion commodities such as gold and silver, and risk preference commodities such as Zinc and cotton both surged. As the monetary policies in the U.S., Europe and Japan remain loose, global investors believe that "whether to increase investment" becomes more important than "what to invest".
In this context, the A-share market also saw massive surges and sectors surging in rotation. Investment directions with good performance, policy support and new technology boom. Last week, only one-tenth industry index declined, and most are varieties that have soared earlier, such as aerospace and military industries. As individual investors, we don't have to be too cautious about the market. Provided that the capital resources remain loose, even the plummet caused by other bearish news could also create buying opportunities.
In terms of specific investment opportunities, the sentiment on the market is low earlier, and now there are sectors with bullish news that can easily surge in the near term. Take the coal industry for example, it has declined for long, but preannouncement on growth have been frequently released since July. After the SSN made in-depth interpretation on July 11, the sector jumped sharply on the second day to outperform the market; online lottery has been suspended for long, but supporting policies on starting online lottery were intensively issued last week, and people.com.cn has surged over 10 percent in total on July 14 and 15; though State-owned enterprises (SOEs) reform theme, which has sunk for long, Shanghai Zhenhua Heavy Industries Co., ltd. (600320.SH) surged to the daily 10 percent limit soon after opening on July 15, after 7 central SOEs are approved to implement pilots of investing in companies by state-owned capitals.
TOP
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