[Today's Guide]
○ Jiangsu speeds up SOEs reform and pushes for asset securitization
○ Acrylic acid price recovers slightly as supply-demand conditions improve
○ Orient Tantalum Industry receives huge compensation, China Bicycle Company invests in smart home
○ Wangsu Science ＆ Technology maintain rapid growth, Zhongya Machinery proposes high share conversion and dividend
[SSN Focus]
○ Jiangsu speeds up SOEs reform and pushes for asset securitization
------
SSN learnt that Ma Qiulin, vice governor of Jiangsu Province, has inspected 10 provincial state-owned enterprises (SOEs) since July. Ma repeatedly mentioned that the government should "push for asset securitization to inject catalyst for the development of SOEs, give full play to listed companies and make full use of state-owned capital to activate social capital".
Comment: There were over 20 provinces setting their target for the securitization ratio of state-owned assets at above 50 percent by 2020. The securitization ratio in SOEs in Jiangsu Province is less than 15 percent, so there is a great room for improvement. Relevant SOEs are expected to go overall listing or consolidate with listed companies. Currently, among companies under the State-owned Assets Supervision and Administration Commission of Jiangsu Provincial Government, 8 are listed companies: Huatai Securities Co., Ltd. (601668.SH), Jinling Hotel Corporation Ltd. (601007.SH), Jiangsu Holly Corporation (600128.SH), Jiangsu High Hope International Group Corporation (600981.SH), Jiangsu Sainty Corp., Ltd. (600287.SH), Sainty Marine Corporation Ltd. (002608.SZ), Jiangsu Expressway Company Limited (600377.SH) and Jiangsu Jingshen Salt ＆ Chemical Industry Co., Ltd. (603299.SH).
[SSN Selection]
○ The China Banking Regulatory Commission responded on July 28 that it is preparing the measures for the supervision and administration of financial services in commercial banks, and that the measures are still under internal study and soliciting opinions.
○ The equity pledge in Shanghai and Shenzhen bourses as of the end of June exceeded 900 billion yuan for the first time. Industry insiders expect that the momentum will slow down in the next half of this year.
○ Officials from the Ministry of Transport on July 28 introduced the interim measures for the administration of online car-hailing services. Online car-hailing services will have legal position.
○ People.cn reported that the China Securities Regulatory Commission will forbid enterprises to refinance for non-capital expenditures and forbid house enterprises to refinance to acquire lands.
○ Beijing Leshi Internet Information ＆ Technology Corp. released the draft of the first phase of its employee shareholding plan with an upper limit of 510 million yuan.
TOP
[Industry Information]
○ Acrylic acid price recovers slightly as supply-demand conditions improve
------
SSN learnt that thanks to the improved supply-demand pattern caused by the overhauls of production equipment and the overall low production load, the price of acrylic acid recovered slightly recently. The acrylic acid price of Zhejiang Satellite Petrochemical Co., Ltd. (002648.SZ) surged 400 yuan/ton or nearly 7 percent on July 28. The acrylic acid price of Shenyang Paraffin Chemical Engineering Co., Ltd. surged 200 yuan/ton while the butyl acrylate price surged 150 yuan to 7,000 yuan/ton.
Comment: The domestic acrylic acid capacity is nearly 2.6 million tons. Driven by the supply-side reform and the increasing demand for high-oil-absorption resins in the downstream industries, the supply-demand pattern is expected to be further improved. In terms of listed companies, Satellite Petrochemical owns a capacity of 480,000 tons of acrylic acid and 450,000 tons of acrylic ester. It enjoys advantages in the whole industrial chain. Shenyang Chemical Industry Co., Ltd. (000698.SZ) owns a project with an annual capacity of 180,000 tons of acrylic acid and acrylic ester.
TOP
[Announcement Interpretation]
○ Orient Tantalum Industry terminates reorganization and receives huge compensation
------
Ningxia Orient Tantalum Industry Co., Ltd. (000962.SZ) terminates its plan for major asset reorganization, and will decide whether resume it after the 6-month commitment period comes due. The counterparty proposes to compensate 352 million yuan cash for the company, which is expected greatly improve the company's earnings in 2016.
○ China Bicycle Company raises RMB 1.2bln to develop smart home
------
China Bicycle Company (Holdings) Limited (000017.SZ) proposes to raise 1.2 billion yuan by issuing 126 million shares at 9.5 yuan per share through private placement. The proceeds will be used to acquire 66.67 percent in Anmingsi Corporation and invest its own projects. The company controlling shareholder Shenzhen Guosheng Energy Investment Development Co., Ltd., Shenzhen Ruian Information Technology Co., Ltd., Shenzhen Wansheng Industry Co., Ltd. and Shenzhen Zhisheng Hi-Tech Co., Ltd. will subscribe. It will take controlling stake in Anmingsi so as to build building talk-back equipment and system platform for intelligent community. The project will generate an average net profit of 129 million yuan each year after it reaches its designed productivity.
○ Top Resource Conservation ＆ Environment to buy Scinor Water Technology with RMB880 mln
------
Top Resource Conservation ＆ Environment Corp. (300332.SZ) proposes to buy the entire equity of Beijing Scinor Water Technology with 880 million yuan. The company proposes to pay 524 million yuan of the valuation by additional issuance of 63,610,000 shares at 8.24 yuan per share, and the remainder 356 million yuan will be paid by cash. At the same time, the company proposes to raise supporting fund of 524 million yuan through private placement at the same price.
Scinor Water Technology is a company providing integrated solutions, including design, manufacturing and water treatment to municipal, industrial and sea water desalination water treatment market. Upon completion of the acquisition, Top Resource Conservation ＆ Environment will be able to provide "water, electricity and gas" integrated solutions to its customers, and become a comprehensive environmental investment service operator in China. The counterparty committed that net profits of Scinor Water Technology from 2016 to 2018 will be no less than 50 million yuan, 70 million yuan and 100 million yuan respectively.
○ Restructuring of three companies approved by CSRC
------
The CSRC has conditionally approved the restructuring of Dalian Dayang Trands Co., Ltd. (600233.SH) and unconditionally approved the restructuring of China Dalian International Cooperation (Group) Holdings Ltd. (000881.SZ) and Leking Wellness Co., Ltd. (300247.SZ).
TOP
[Financial Reports Express]
○ Wangsu Science ＆ Technology achieves rapid growth in performance
------
Wangsu Science ＆ Technology Co., ltd. (300017.SZ) expects 82 percent growth in its interim report, primarily due to rapid growth of its main business.
In addition, Sundy Land Investment Co., ltd. (600077.SH) expects 11 times to 14 times growth in its interim growth, primarily due to the real estate market in the Yangtze River Delta maintains strong momentum. Dasheng Times Cultural Investment Co., Ltd. (600892.SH) expects 25.9 percent growth in its interim report, primarily due to the combination of Taole Game and Beijing Zhonglian Chuandong Film Culture Co., Ltd. in the company's financial statements. AVIC Heavy Machinery Co., ltd. (600765.SH) expects 7 times growth in its interim report, primarily due to the growth of gross profit margin and decline of assets impairment loss. Kunwu Jiuding Investment Holdings Co., Ltd. (600053.SH) expects 5 times growth in the interim report, primarily due to the combination of Kunwu Jiuding Capital Co., Ltd. in its financial statements and growth of real estate business. Shanghai Datun Energy Resources Co., ltd. (600508.SH) expects 23 times growth in its interim report, primarily due to gains from the transfer of equity of Sifang Aluminum.
○ Zhongya Machinery proposes high share conversion and dividend
------
The controlling shareholder of Hangzhou Zhongya Machinery Co., Ltd. (300512.SZ) proposes a distribution plan of 10-for-10 conversion of capital surplus into shares in the interim report.
[Trading Trends]
○ Domestic giants promote LTE-V, institutions buy stocks likely to benefit
------
The Ministry of Industry and Information Technology recently revealed that the research of "development roadmap of Intelligent Internet automotive technology" has fundamentally completed and likely to be issued in August. Domestic giants such as Huawei and Datang Telecom Technology Co., Ltd. (600198.SH) vigorously promote LTE-V, which is likely to become the standard of China's technology roadmap.
SSN learnt that as the government starts to promote and support the communication standard, the development of Internet of Vehicles and intelligent vehicle will accelerate. Institutions believe LTE-V will bring numerous opportunities. Relevant companies such as Datang Telecom, Gohigh Data Networks Technology Co., Ltd. (000851.SZ) and Guangdong Shenglu Telecommunication Tech. Co., Ltd. (002446.SZ) are likely to benefit. The Q2 reports of funds show that 17 funds bought 33,400,000 shares of Datang Telecom in Q2. The trading volume ranking list shows that Gohigh Data Networks Technology was bought from institutional seats with a total of 180 million yuan on July 22 and 25.
[Trading Alarms]
○ DaZhi Environmental Protection Technology and Changjiu Logistics IPO to debut on July 29
------
Guangdong DaZhi Environmental Protection Technology Co., Ltd. (300530.SZ) will offer for subscription at the issuing price of 11.95 yuan per share. The PE ratio of the company is 23 times. The upper limit of subscription is 17,500 shares. The company is primarily engaged in new type of surface engineering environmental protection chemicals. Changjiu Logistics Co., Ltd. (732569.SZ) will offer for subscription at 15.43 yuan per share. The PE ratio of the company is 23 times. The upper limit of subscription is 12,000 shares. The company is primarily engaged in automotive logistics.
TOP
○ Jiangsu speeds up SOEs reform and pushes for asset securitization
○ Acrylic acid price recovers slightly as supply-demand conditions improve
○ Orient Tantalum Industry receives huge compensation, China Bicycle Company invests in smart home
○ Wangsu Science ＆ Technology maintain rapid growth, Zhongya Machinery proposes high share conversion and dividend
[SSN Focus]
○ Jiangsu speeds up SOEs reform and pushes for asset securitization
------
SSN learnt that Ma Qiulin, vice governor of Jiangsu Province, has inspected 10 provincial state-owned enterprises (SOEs) since July. Ma repeatedly mentioned that the government should "push for asset securitization to inject catalyst for the development of SOEs, give full play to listed companies and make full use of state-owned capital to activate social capital".
Comment: There were over 20 provinces setting their target for the securitization ratio of state-owned assets at above 50 percent by 2020. The securitization ratio in SOEs in Jiangsu Province is less than 15 percent, so there is a great room for improvement. Relevant SOEs are expected to go overall listing or consolidate with listed companies. Currently, among companies under the State-owned Assets Supervision and Administration Commission of Jiangsu Provincial Government, 8 are listed companies: Huatai Securities Co., Ltd. (601668.SH), Jinling Hotel Corporation Ltd. (601007.SH), Jiangsu Holly Corporation (600128.SH), Jiangsu High Hope International Group Corporation (600981.SH), Jiangsu Sainty Corp., Ltd. (600287.SH), Sainty Marine Corporation Ltd. (002608.SZ), Jiangsu Expressway Company Limited (600377.SH) and Jiangsu Jingshen Salt ＆ Chemical Industry Co., Ltd. (603299.SH).
[SSN Selection]
○ The China Banking Regulatory Commission responded on July 28 that it is preparing the measures for the supervision and administration of financial services in commercial banks, and that the measures are still under internal study and soliciting opinions.
○ The equity pledge in Shanghai and Shenzhen bourses as of the end of June exceeded 900 billion yuan for the first time. Industry insiders expect that the momentum will slow down in the next half of this year.
○ Officials from the Ministry of Transport on July 28 introduced the interim measures for the administration of online car-hailing services. Online car-hailing services will have legal position.
○ People.cn reported that the China Securities Regulatory Commission will forbid enterprises to refinance for non-capital expenditures and forbid house enterprises to refinance to acquire lands.
○ Beijing Leshi Internet Information ＆ Technology Corp. released the draft of the first phase of its employee shareholding plan with an upper limit of 510 million yuan.
TOP
[Industry Information]
○ Acrylic acid price recovers slightly as supply-demand conditions improve
------
SSN learnt that thanks to the improved supply-demand pattern caused by the overhauls of production equipment and the overall low production load, the price of acrylic acid recovered slightly recently. The acrylic acid price of Zhejiang Satellite Petrochemical Co., Ltd. (002648.SZ) surged 400 yuan/ton or nearly 7 percent on July 28. The acrylic acid price of Shenyang Paraffin Chemical Engineering Co., Ltd. surged 200 yuan/ton while the butyl acrylate price surged 150 yuan to 7,000 yuan/ton.
Comment: The domestic acrylic acid capacity is nearly 2.6 million tons. Driven by the supply-side reform and the increasing demand for high-oil-absorption resins in the downstream industries, the supply-demand pattern is expected to be further improved. In terms of listed companies, Satellite Petrochemical owns a capacity of 480,000 tons of acrylic acid and 450,000 tons of acrylic ester. It enjoys advantages in the whole industrial chain. Shenyang Chemical Industry Co., Ltd. (000698.SZ) owns a project with an annual capacity of 180,000 tons of acrylic acid and acrylic ester.
TOP
[Announcement Interpretation]
○ Orient Tantalum Industry terminates reorganization and receives huge compensation
------
Ningxia Orient Tantalum Industry Co., Ltd. (000962.SZ) terminates its plan for major asset reorganization, and will decide whether resume it after the 6-month commitment period comes due. The counterparty proposes to compensate 352 million yuan cash for the company, which is expected greatly improve the company's earnings in 2016.
○ China Bicycle Company raises RMB 1.2bln to develop smart home
------
China Bicycle Company (Holdings) Limited (000017.SZ) proposes to raise 1.2 billion yuan by issuing 126 million shares at 9.5 yuan per share through private placement. The proceeds will be used to acquire 66.67 percent in Anmingsi Corporation and invest its own projects. The company controlling shareholder Shenzhen Guosheng Energy Investment Development Co., Ltd., Shenzhen Ruian Information Technology Co., Ltd., Shenzhen Wansheng Industry Co., Ltd. and Shenzhen Zhisheng Hi-Tech Co., Ltd. will subscribe. It will take controlling stake in Anmingsi so as to build building talk-back equipment and system platform for intelligent community. The project will generate an average net profit of 129 million yuan each year after it reaches its designed productivity.
○ Top Resource Conservation ＆ Environment to buy Scinor Water Technology with RMB880 mln
------
Top Resource Conservation ＆ Environment Corp. (300332.SZ) proposes to buy the entire equity of Beijing Scinor Water Technology with 880 million yuan. The company proposes to pay 524 million yuan of the valuation by additional issuance of 63,610,000 shares at 8.24 yuan per share, and the remainder 356 million yuan will be paid by cash. At the same time, the company proposes to raise supporting fund of 524 million yuan through private placement at the same price.
Scinor Water Technology is a company providing integrated solutions, including design, manufacturing and water treatment to municipal, industrial and sea water desalination water treatment market. Upon completion of the acquisition, Top Resource Conservation ＆ Environment will be able to provide "water, electricity and gas" integrated solutions to its customers, and become a comprehensive environmental investment service operator in China. The counterparty committed that net profits of Scinor Water Technology from 2016 to 2018 will be no less than 50 million yuan, 70 million yuan and 100 million yuan respectively.
○ Restructuring of three companies approved by CSRC
------
The CSRC has conditionally approved the restructuring of Dalian Dayang Trands Co., Ltd. (600233.SH) and unconditionally approved the restructuring of China Dalian International Cooperation (Group) Holdings Ltd. (000881.SZ) and Leking Wellness Co., Ltd. (300247.SZ).
TOP
[Financial Reports Express]
○ Wangsu Science ＆ Technology achieves rapid growth in performance
------
Wangsu Science ＆ Technology Co., ltd. (300017.SZ) expects 82 percent growth in its interim report, primarily due to rapid growth of its main business.
In addition, Sundy Land Investment Co., ltd. (600077.SH) expects 11 times to 14 times growth in its interim growth, primarily due to the real estate market in the Yangtze River Delta maintains strong momentum. Dasheng Times Cultural Investment Co., Ltd. (600892.SH) expects 25.9 percent growth in its interim report, primarily due to the combination of Taole Game and Beijing Zhonglian Chuandong Film Culture Co., Ltd. in the company's financial statements. AVIC Heavy Machinery Co., ltd. (600765.SH) expects 7 times growth in its interim report, primarily due to the growth of gross profit margin and decline of assets impairment loss. Kunwu Jiuding Investment Holdings Co., Ltd. (600053.SH) expects 5 times growth in the interim report, primarily due to the combination of Kunwu Jiuding Capital Co., Ltd. in its financial statements and growth of real estate business. Shanghai Datun Energy Resources Co., ltd. (600508.SH) expects 23 times growth in its interim report, primarily due to gains from the transfer of equity of Sifang Aluminum.
○ Zhongya Machinery proposes high share conversion and dividend
------
The controlling shareholder of Hangzhou Zhongya Machinery Co., Ltd. (300512.SZ) proposes a distribution plan of 10-for-10 conversion of capital surplus into shares in the interim report.
[Trading Trends]
○ Domestic giants promote LTE-V, institutions buy stocks likely to benefit
------
The Ministry of Industry and Information Technology recently revealed that the research of "development roadmap of Intelligent Internet automotive technology" has fundamentally completed and likely to be issued in August. Domestic giants such as Huawei and Datang Telecom Technology Co., Ltd. (600198.SH) vigorously promote LTE-V, which is likely to become the standard of China's technology roadmap.
SSN learnt that as the government starts to promote and support the communication standard, the development of Internet of Vehicles and intelligent vehicle will accelerate. Institutions believe LTE-V will bring numerous opportunities. Relevant companies such as Datang Telecom, Gohigh Data Networks Technology Co., Ltd. (000851.SZ) and Guangdong Shenglu Telecommunication Tech. Co., Ltd. (002446.SZ) are likely to benefit. The Q2 reports of funds show that 17 funds bought 33,400,000 shares of Datang Telecom in Q2. The trading volume ranking list shows that Gohigh Data Networks Technology was bought from institutional seats with a total of 180 million yuan on July 22 and 25.
[Trading Alarms]
○ DaZhi Environmental Protection Technology and Changjiu Logistics IPO to debut on July 29
------
Guangdong DaZhi Environmental Protection Technology Co., Ltd. (300530.SZ) will offer for subscription at the issuing price of 11.95 yuan per share. The PE ratio of the company is 23 times. The upper limit of subscription is 17,500 shares. The company is primarily engaged in new type of surface engineering environmental protection chemicals. Changjiu Logistics Co., Ltd. (732569.SZ) will offer for subscription at 15.43 yuan per share. The PE ratio of the company is 23 times. The upper limit of subscription is 12,000 shares. The company is primarily engaged in automotive logistics.
TOP
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