[Today's Guide]
○General Office of State Council advances alliance between big central SOEs, concentrating resources to join efforts
○Tsinghua Unigroup invests in XMC, localization of memory chip advances
○Sensor gains attention from MIIT with potential market size of RMB100 bln
○Longsheng Group to raise nearly RMB2 bln to invest in Shanghai real estate through private placement, China Resources Sanjiu Medical ＆ Phar. to acquire Shenghuo Phar. Group
[SSN Focus]
○General Office of State Council advances alliance between big central SOEs, concentrating resources to join efforts
------
The General Office of the State Council recently printed and distributed the Guidance on Advancing the Structural Adjustment and Reorganization of Central State-owned Enterprises. It is proposed to build a batch of world-class innovative multinational companies with international competitiveness by 2020. Alliance between big central state-owned enterprises (SOEs) will be encouraged, and the reorganization of enterprises engaged in areas like equipment manufacturing, constructional engineering, electricity, iron ＆ steel, non-ferrous metals, shipping, construction materials, travel, aviation service and etc. will be pushed forward smoothly, aiming to concentrate resources to join efforts as well as reduce disordered competition and homogenous operation; reorganization of central SOEs engaged in the upstream and downstream of the industrial chain of coal, electricity, metallurgy and etc. industries is encouraged so as to better play the role of synergistic effect.
Comment: Multiple signs show that the central SOEs reform will soon outburst. A series of reform measures, including that CITS Group Corporation is merged into China National Travel Service (HK) Group Corporation, COFCO Limited reorganizes Chinatex Corporation as well as China Poly Group Corporation and Aviation Industry Corporation of China mull on reorganization of their real estate business, is put into action since July. Actual controllers of companies like Ruitai Materials Technology Co., Ltd. (002066.SZ), Shanghai Zhenhua Heavy Industries Co., Ltd. (600320.SH) and COFCO Biochemical (Anhui) Co., Ltd. (000930.SZ) are listed as piloting central SOEs and these companies attract attention of institutions.
[SSN Selection]
○The Political Bureau of the Central Committee held a meeting on July 26, requiring implementation of policy mix that moderately expands total demand, unswervingly sticks to the supply-side structural reform and guides sound expectation of development.
○China's Enterprise Association of Metallurgical Mines announced on July 26 that it has requested the Ministry of Commerce to carry out anti-dumping investigation over imported iron ores.
○The experience exchange meeting about addressing overcapacity and overcoming difficulties in national coal industry was held on July 26. It is reported that the coal capacity being removed in the first half only accounts for 29 percent of the goal set for 2016.
○China has started the R＆D of next-generation exascale (or quintillion) supercomputer and it will enjoy the highest localization rate in China.
○The securities margin saw net outflow for the fifth consecutive week in last week with the proportion of investors holding positions recording new low in 2016.
○Beijing E-Hualu Info Technology Co., Ltd. (300212.SZ) released new blue-ray storage products on July 26, providing users with secure, long-cycle, green and environmental-friendly storage solutions that are oriented in big data.
TOP
[Industry Information]
○Tsinghua Unigroup invests in XMC, localization of memory chip advances
------
According to foreign media, Tsinghua Unigroup has acquired most of the equities of Wuhan Xinxin Semiconductor Manufacturing Corporation (XMC), aiming to build it into a more powerful large-scale enterprise. Insider claims that China National Integrated Circuit (IC) Industrial Investment Fund acts as a go-between for the deal. XMC once built a memory chip manufacturing center valued at 24 billion U.S. dollars. In the meantime, Tsinghua Unigroup plans to invest over 12 billion U.S. dollars in constructing a new memory chip factory and acquiring semiconductor business.
Comment: Institutions believe that memory chip is featured with large technology gap, high industrial concentration ratio, strong periodicity and large capital input. As the state strives to advance the domestication of memory chip, China's memorizer market might reach 42 billion U.S. dollars by 2018. Unisplendour Guoxin Co., Ltd. (002049.SZ) is a leading domestic memorizer company; Payton Technology (Shenzhen) Co., Ltd. under Shenzhen Kaifa Technology Co., Ltd. (000021.SZ) has provided Kingston and Micron Technology with packaging ＆ testing service for years. Payton Technology is quite advanced in technology and benefits a lot from the localization of memory chip.
TOP
○Sensor gains attention from MIIT with potential market size of RMB100 bln
------
The Ministry of Industry and Information Technology (MIIT) will focus on the development of weak links of intelligent manufacturing, including sensor, industrial software, project control system and system integration to promote intelligent manufacturing in a systematic way, MIIT Vice Minister Xin Guobin pointed out at a ministers' seminar on major soft science subjects - research on development strategy for intelligent manufacturing.
Comment: Sensor, as the foundation for Internet of everything, is widely applied in fields of industrial manufacturing, intelligent vehicle and communication and consumer electronics. Currently, China has to rely on imports for high-end sensor chips. Driven by policies, China's sensor industry will see rapid development, and its market potential can reach one hundred billion yuan. Brokerages note in their research report that Henan Hanwei Electronics Co., Ltd. (300007.SZ) ranks top in the industry in terms of its market share in gas senor. Henan Hanwei Electronics Co., Ltd. (002185.SZ) is engaged in packaging business which will benefit from the development of the MEMS sensor industry.
TOP
[Announcement Interpretation]
○Longsheng Group to raise nearly RMB2 bln to invest in Shanghai real estate through private placement
------
Zhejiang Longsheng Group Co., Ltd. (600352.SH) plans to raise 1.96 billion yuan by issuing 245 million shares at a price of 8 yuan per share through private placement targeting the company's actual controller, senior management and core managers to invest in reconstruction project of old areas of Huaxing new town. In particular, Ruan Weixiang, one actual controller of the company, will subscribe 200 million shares.
After the deal is done, shareholding proportion of controlling shareholders will rise from 26.33 percent to 30.2 percent. The above-said project is located in east of Suhewan of Shanghai municipality. It enjoys a total of investment of 25 billion yuan, covering an area of 310,000 square meters, which includes residential housings and commercial buildings. Constructions of this project will start from the second quarter of 2018 at the earliest and is expected to last for 6 years for the whole project. The latest stock price of the company is 9.61 yuan per share.
○China Resources Sanjiu Medical ＆ Phar. to acquire Shenghuo Phar. Group at RMB1.89 bln
------
China Resources Sanjiu Medical ＆ Pharmaceutical Co., Ltd. (000999.SZ) intends to acquire 100 percent equity of Kunming Shenghuo Pharmaceutical Group Co., Ltd. at 1.89 billion yuan. Shenghuo Pharmaceutical Group is exploring the OTX mode for prescription medicine products, and its Xuesaitong soft capsule meets demand for chronic disease management. Clinic and retailing see better synergy. 180 million yuan of the above funds is related to performance commitment. If Shenghuo Pharmaceutical Group fails to achieve performance with 100 million yuan and 120 million yuan in 2016 and 2017 respectively and a total performance with 360 million yuan during 2016 and 2018, the company will deduct corresponding transfer value according to agreement.
○Restructuring proposals of 4 companies approved
------
Restructuring proposal of Aerospace Hi-Tech Holding Group Co., Ltd. (000901.SZ) is approved by China Securities Regulatory Commission (CSRC) with condition, and those of Uroica Mining Safety Engineering Co., Ltd. (300099.SZ), Goldcard High-Tech Co., Ltd. (300349.SZ) and Kingland Technology Co., Ltd. (000711.SZ) are approved by the CSRC without condition.
○Actual controller of Kingee Culture Development bought its 7 mln shares
------
Zhong Cong, actual controller of Beijing Kingee Culture Development Co., Ltd. (002721.SZ) bought 7,000,300 shares of the company on July 25 and 26, accounting for 1.08 percent of the company's total share capital. It cost Zhong 144 million yuan.
○Jinzi Ham terminates restructuring and resumes trading
------
Jinzi Ham Co., Ltd. (002515.SZ) terminates restructuring and resumes trading. Meanwhile, it plans to gain 43 percent equity of Ch-gemstone Capital Management (Beijing) Co., Ltd. through transfer at 430 million yuan. Ch-gemstone Capital Management will strive to develop system of acquaintance seeing a doctor and doctor-patient diagnosis and treatment through Internet and build the largest chain hospital and diagnosis and treatment system in China.
[Financial Reports Express]
○Kingray New Materials Science ＆ Technology turns losses into profits
------
Kingray New Materials Science ＆ Technology Co., Ltd. (600390.SH) is expected to achieve net profit with 75 million yuan according to its semiannual report. Turing losses into profits is mainly contributed by the surging production and sales of the company's ternary materials for lithium battery.
[Trading Alarms]
○Urovo Technology to launch IPO on July 27
------
Urovo Technology Corporation Limited (300531.SZ) is going to launch IPO at a price of 13.36 yuan per share with an upper subscription limit of 20,000 shares. The PE ratio is 23 times. The company provides solutions to software and hardware for mobile application.
TOP
○General Office of State Council advances alliance between big central SOEs, concentrating resources to join efforts
○Tsinghua Unigroup invests in XMC, localization of memory chip advances
○Sensor gains attention from MIIT with potential market size of RMB100 bln
○Longsheng Group to raise nearly RMB2 bln to invest in Shanghai real estate through private placement, China Resources Sanjiu Medical ＆ Phar. to acquire Shenghuo Phar. Group
[SSN Focus]
○General Office of State Council advances alliance between big central SOEs, concentrating resources to join efforts
------
The General Office of the State Council recently printed and distributed the Guidance on Advancing the Structural Adjustment and Reorganization of Central State-owned Enterprises. It is proposed to build a batch of world-class innovative multinational companies with international competitiveness by 2020. Alliance between big central state-owned enterprises (SOEs) will be encouraged, and the reorganization of enterprises engaged in areas like equipment manufacturing, constructional engineering, electricity, iron ＆ steel, non-ferrous metals, shipping, construction materials, travel, aviation service and etc. will be pushed forward smoothly, aiming to concentrate resources to join efforts as well as reduce disordered competition and homogenous operation; reorganization of central SOEs engaged in the upstream and downstream of the industrial chain of coal, electricity, metallurgy and etc. industries is encouraged so as to better play the role of synergistic effect.
Comment: Multiple signs show that the central SOEs reform will soon outburst. A series of reform measures, including that CITS Group Corporation is merged into China National Travel Service (HK) Group Corporation, COFCO Limited reorganizes Chinatex Corporation as well as China Poly Group Corporation and Aviation Industry Corporation of China mull on reorganization of their real estate business, is put into action since July. Actual controllers of companies like Ruitai Materials Technology Co., Ltd. (002066.SZ), Shanghai Zhenhua Heavy Industries Co., Ltd. (600320.SH) and COFCO Biochemical (Anhui) Co., Ltd. (000930.SZ) are listed as piloting central SOEs and these companies attract attention of institutions.
[SSN Selection]
○The Political Bureau of the Central Committee held a meeting on July 26, requiring implementation of policy mix that moderately expands total demand, unswervingly sticks to the supply-side structural reform and guides sound expectation of development.
○China's Enterprise Association of Metallurgical Mines announced on July 26 that it has requested the Ministry of Commerce to carry out anti-dumping investigation over imported iron ores.
○The experience exchange meeting about addressing overcapacity and overcoming difficulties in national coal industry was held on July 26. It is reported that the coal capacity being removed in the first half only accounts for 29 percent of the goal set for 2016.
○China has started the R＆D of next-generation exascale (or quintillion) supercomputer and it will enjoy the highest localization rate in China.
○The securities margin saw net outflow for the fifth consecutive week in last week with the proportion of investors holding positions recording new low in 2016.
○Beijing E-Hualu Info Technology Co., Ltd. (300212.SZ) released new blue-ray storage products on July 26, providing users with secure, long-cycle, green and environmental-friendly storage solutions that are oriented in big data.
TOP
[Industry Information]
○Tsinghua Unigroup invests in XMC, localization of memory chip advances
------
According to foreign media, Tsinghua Unigroup has acquired most of the equities of Wuhan Xinxin Semiconductor Manufacturing Corporation (XMC), aiming to build it into a more powerful large-scale enterprise. Insider claims that China National Integrated Circuit (IC) Industrial Investment Fund acts as a go-between for the deal. XMC once built a memory chip manufacturing center valued at 24 billion U.S. dollars. In the meantime, Tsinghua Unigroup plans to invest over 12 billion U.S. dollars in constructing a new memory chip factory and acquiring semiconductor business.
Comment: Institutions believe that memory chip is featured with large technology gap, high industrial concentration ratio, strong periodicity and large capital input. As the state strives to advance the domestication of memory chip, China's memorizer market might reach 42 billion U.S. dollars by 2018. Unisplendour Guoxin Co., Ltd. (002049.SZ) is a leading domestic memorizer company; Payton Technology (Shenzhen) Co., Ltd. under Shenzhen Kaifa Technology Co., Ltd. (000021.SZ) has provided Kingston and Micron Technology with packaging ＆ testing service for years. Payton Technology is quite advanced in technology and benefits a lot from the localization of memory chip.
TOP
○Sensor gains attention from MIIT with potential market size of RMB100 bln
------
The Ministry of Industry and Information Technology (MIIT) will focus on the development of weak links of intelligent manufacturing, including sensor, industrial software, project control system and system integration to promote intelligent manufacturing in a systematic way, MIIT Vice Minister Xin Guobin pointed out at a ministers' seminar on major soft science subjects - research on development strategy for intelligent manufacturing.
Comment: Sensor, as the foundation for Internet of everything, is widely applied in fields of industrial manufacturing, intelligent vehicle and communication and consumer electronics. Currently, China has to rely on imports for high-end sensor chips. Driven by policies, China's sensor industry will see rapid development, and its market potential can reach one hundred billion yuan. Brokerages note in their research report that Henan Hanwei Electronics Co., Ltd. (300007.SZ) ranks top in the industry in terms of its market share in gas senor. Henan Hanwei Electronics Co., Ltd. (002185.SZ) is engaged in packaging business which will benefit from the development of the MEMS sensor industry.
TOP
[Announcement Interpretation]
○Longsheng Group to raise nearly RMB2 bln to invest in Shanghai real estate through private placement
------
Zhejiang Longsheng Group Co., Ltd. (600352.SH) plans to raise 1.96 billion yuan by issuing 245 million shares at a price of 8 yuan per share through private placement targeting the company's actual controller, senior management and core managers to invest in reconstruction project of old areas of Huaxing new town. In particular, Ruan Weixiang, one actual controller of the company, will subscribe 200 million shares.
After the deal is done, shareholding proportion of controlling shareholders will rise from 26.33 percent to 30.2 percent. The above-said project is located in east of Suhewan of Shanghai municipality. It enjoys a total of investment of 25 billion yuan, covering an area of 310,000 square meters, which includes residential housings and commercial buildings. Constructions of this project will start from the second quarter of 2018 at the earliest and is expected to last for 6 years for the whole project. The latest stock price of the company is 9.61 yuan per share.
○China Resources Sanjiu Medical ＆ Phar. to acquire Shenghuo Phar. Group at RMB1.89 bln
------
China Resources Sanjiu Medical ＆ Pharmaceutical Co., Ltd. (000999.SZ) intends to acquire 100 percent equity of Kunming Shenghuo Pharmaceutical Group Co., Ltd. at 1.89 billion yuan. Shenghuo Pharmaceutical Group is exploring the OTX mode for prescription medicine products, and its Xuesaitong soft capsule meets demand for chronic disease management. Clinic and retailing see better synergy. 180 million yuan of the above funds is related to performance commitment. If Shenghuo Pharmaceutical Group fails to achieve performance with 100 million yuan and 120 million yuan in 2016 and 2017 respectively and a total performance with 360 million yuan during 2016 and 2018, the company will deduct corresponding transfer value according to agreement.
○Restructuring proposals of 4 companies approved
------
Restructuring proposal of Aerospace Hi-Tech Holding Group Co., Ltd. (000901.SZ) is approved by China Securities Regulatory Commission (CSRC) with condition, and those of Uroica Mining Safety Engineering Co., Ltd. (300099.SZ), Goldcard High-Tech Co., Ltd. (300349.SZ) and Kingland Technology Co., Ltd. (000711.SZ) are approved by the CSRC without condition.
○Actual controller of Kingee Culture Development bought its 7 mln shares
------
Zhong Cong, actual controller of Beijing Kingee Culture Development Co., Ltd. (002721.SZ) bought 7,000,300 shares of the company on July 25 and 26, accounting for 1.08 percent of the company's total share capital. It cost Zhong 144 million yuan.
○Jinzi Ham terminates restructuring and resumes trading
------
Jinzi Ham Co., Ltd. (002515.SZ) terminates restructuring and resumes trading. Meanwhile, it plans to gain 43 percent equity of Ch-gemstone Capital Management (Beijing) Co., Ltd. through transfer at 430 million yuan. Ch-gemstone Capital Management will strive to develop system of acquaintance seeing a doctor and doctor-patient diagnosis and treatment through Internet and build the largest chain hospital and diagnosis and treatment system in China.
[Financial Reports Express]
○Kingray New Materials Science ＆ Technology turns losses into profits
------
Kingray New Materials Science ＆ Technology Co., Ltd. (600390.SH) is expected to achieve net profit with 75 million yuan according to its semiannual report. Turing losses into profits is mainly contributed by the surging production and sales of the company's ternary materials for lithium battery.
[Trading Alarms]
○Urovo Technology to launch IPO on July 27
------
Urovo Technology Corporation Limited (300531.SZ) is going to launch IPO at a price of 13.36 yuan per share with an upper subscription limit of 20,000 shares. The PE ratio is 23 times. The company provides solutions to software and hardware for mobile application.
TOP
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