[Today's Guide]
○ U.S. economy data misses expectations, gold prices close to recent high
○ Disperse dyes prices rise again, opinions on implementation of "Internet plus" effective logistic released
○ Chutian Expressway acquires Sanmu Intelligent, Evergrande Real Estate increases shareholding in Langfang Development again
○ Jiabao Group sees changes of substantial shareholder, three iron enterprises expect profits, including Xinyu Iron ＆ Steel
[SSN Focus]
○ U.S. economy data misses expectations, gold prices close to recent high
------
The Commerce Department announced on Friday (July 29) that the gross domestic product grew at a 1.2 percent annual rate in the second quarter, far below the 2.6 percent the market expected. The U.S. dollar plunged immediately after the data was released; while spot gold closed up 1.16 percent to 1.350 U.S. dollars per ounce, close to 1,375 U.S. dollars per ounce in early July, the highest level in more than two years.
Next week, the Bank of England will announce its interest rate decision on Aug. 4. Investors expect BoE will cut interest rates by 25 base points. The U.S. will release its non-farm employment report for July on Aug. 5. Investors will seek for clues indicating economic strength. Analysts believe that the easing monetary polices in Europe and Japan will continue to highlight gold's function as safe haven and weigh on the probability of interest rate hike in the U.S.
[SSN Selection]
○ Shanghai Stock Exchange indicated on July 29 that it will focus on brokerages' research reports, press conference, accountability for fraud in information disclosure and disclosure of semi-annual report, and will continue to release 7 regulatory cases in false and abnormal declaration during trading houses.
○ Cross futures-spot one pass account system, jointly established by China Securities Depository and Clearing Corporation Limited and China Futures Market Monitoring Center, is launched and is expected to facilitate cross-market regulation.
○ The State-owned Assets Supervision and Administration Commission has accredited COFCO board of directors in 18 items, suggesting that the separation between ownership and right of management in state-owned enterprises begins to implement.
○ Data from Baiinfo shows that the quoted price of ammonium paratungstate on July 29 increased 14 percent from its mid-July lows mainly because that tungsten enterprises in Jiangxi stopped production for environmental inspection.
○ Telsa U.S. super factory held opening ceremony on July 29. It is expected that that the cost for battery pack will reduce over 30 percent per kilowatt hour in 2018.
○China Minsheng Banking Corp., Ltd. (600016.SH) announces that Huaxia Insurance increased 0.25 percent shareholding in the company from July 25 to 29, and New Hope Liuhe Co., Ltd. (000876.SZ) decreased 0.41 percent shareholding during the same period.
TOP
[Industry Information]
○ Disperse dyes prices rise again due to stricter environmental regulations and production restriction
------
SSN learns that as environmental regulations become stricter and enterprises restrict production, disperse dye prices will hike again by 10 to 15 percent from August 1. Disperse dye leader Zhejiang Longsheng Group Co., Ltd. (600352.SH) announces that it will lift the quoted price of some of its disperse dyes by 2,000 yuan to 5,000 yuan per ton from August 1, and lift the price of some reactive dyes by 2,000 yuan per ton from July 29.
Comment: Relevant manufactures indicated that as the downstream has sufficient demands for supply, the profitability in the dye industry is expected to rise. As environmental inspection continues to advance, unqualified dye enterprises will shut down for correction, which will further improve the industry's supply-demand conditions. As for other companies, Shanghai Anoky Group Co., Ltd. (300067.SZ) owns 36,000 tons productivity in disperse dye and over 20,000 tons productivity in reactive dyes. Jiangsu Yabang Dyestuff Co., Ltd. (603188.SH) is mainly engaged in anthraquinone structured disperse dye and vat dyes. Zhejiang Runtu Co., Ltd. (002440.SZ) owns 110,000 tons productivity in disperse dye and 40,000 tons productivity in reactive dyes.
○ NDRC releases opinions on implementation of "Internet plus" effective logistic
------
The National Development and Reform Commission (NDRC) on July 29 released the opinions on the implementation of the "Internet plus" effective logistic strategy on its website. The opinions propose to widely apply advanced information technology in logistics, significantly improve the intelligentization level in the fields of transportation, distribution and other sectors, continuously make innovations in logistics organization; to form an internet-based, open, sharing, win-win, efficient and convenient, safe and green wisdom logistics ecosystem and greatly improve the efficiency and effectiveness of logistics.
Comment: As for specific tasks, the opinions propose to build an Internet-based logistics information sharing system and improve the intelligentization level of warehousing and delivery. That is to improve the effectiveness of logistics from the perspective of software and hardware. Zhejiang Transfar Co., Ltd. (002010.SZ) owns Transfar Logistic, a large road logistics platform operator. Shanxi Oriental Material Handling Co., Ltd. (300486.SZ) owns products, such as intelligent logistics transportation system and intelligent warehousing system.
TOP
[Announcement Interpretation]
○ Chutian Expressway acquires Sanmu Intelligent for RMB 1.26 bln. to develop Internet of vehicles
------
Hubei Chutian Expressway Co., Ltd. (600035.SH) proposes to acquire 100 percent equities in Shenzhen Sanmu Intelligent Co., Ltd. by 1.26 billion yuan by issuing shares at 4.64 yuan per share through private placement and in cash. It also proposes to raise 408 million yuan supporting funds by issuing shares at 4.64 yuan per share through private placement to its controlling shareholder Hubei Province Communications Investment Group Co., Ltd. and one of its employee shareholding plan.
The main products of Sanmu Intelligent include tablet, smart phones and communication modules for Internet of vehicles. It promises that its net profit from 2016 to 2019 will reach 98 million yuan, 118 million yuan, 140 million yuan and 170 million yuan.
○ Evergrande Real Estate increases shareholding in Langfang Development again
------
Langfang Development Co., Ltd. (600149.SH) announced that Evergrande Real Estate Group Limited (03333.HK), its shareholder, increased the shareholding in the company with 18.99 million shares with 267 million yuan at an average price of 14.06 yuan per share, accounting for 4.995 percent of the total share capitals of the company. The shareholding proportion of Evergrande Real Estate in Langfang Development increased to 10 percent, nearly reaching the shareholding proportion of 13.34 percent in Langfang State-owned Land Development and Construction Investment Holdings Co., Ltd. under the State-owned Assets Supervision and Administration Commission of the People's Government of Langfang. Evergrande Real Estate indicated that it is rosy about the development prospects of Langfang Development and increased the shareholding in the company.
Comment: Langfang Development suspended trading for mulling reorganization after Evergrande Real Estate increased the shareholding in the company in April. It proposed to acquire Wenan Tianyue Real Estate Company but terminated the reorganization on July 19 as no consensus was reached on core issues in the trading.
TOP
○ Jiabao Group sees changes of substantial shareholder
------
Beijing Guangan Sunshine Investment Center bought 34,062,000 shares of Shanghai Jiabao Industry ＆ Commerce (Group) Co., Ltd. (600622.SH) from July 18 to 27 with about 496 million yuan at an average price of about 14.56 yuan per share, accounting for 4.99 percent of the total share capital of the company. Guangan Sunshine Investment and its parties acting in concert totally hold 19.27 percent equities of Jiabao Group and become the biggest shareholder of the company.
Comment: Guangan Sunshine Investment and its parties acting are enterprises under China Everbright Group. Its parties acting in concert participated in the private placement of Jiabao Group at 10.6 yuan per share (ex-dividend) and the lock-up period of the shares issued through the private placement is 36 months. Guangan Sunshine Investment indicated that the increase in the shareholding in Jiabao Group is because it is rosy about the prospects of the company. The property companies under China Everbright Group also have transactions with Jiabao Group.
○ Xiamen Xiangyu's employee shareholding plan completes positions building
------
The employee shareholding plan of Xiamen Xiangyu Co., Ltd. (600057.SH) completed the building of positions on July 29 and bought 19,929,800 shares at an average price of 10.403 yuan per share with a turnover of 207 million yuan, accounting for 1.7 percent of the total share capital of the company. The lock-up period of the stocks bought by the plan is 12 months. The latest stock price of the company is 10.75 yuan.
○ Senior management increase shareholding in Urban Investment ＆ Development
------
Certain directors, supervisors and senior management of Vanfund Urban Investment ＆ Development Co., Ltd. increased the shareholding in the company with 1.1 million shares on July 29 at an average price of about 18.19 yuan. The purpose is to recognize the current value and the development confidence in the future. They will continue to increase the shareholding in the company in the future.
○ The reorganization of China Railway Erju Co., Ltd. (600258.SH) was unconditionally approved by the China Securities Regulatory Commission (CSRC).
[Financial Reports Express]
○ Xinyu Iron ＆ Steel expects profits
------
Xinyu Iron ＆ Steel Co., Ltd. (600782.SH), Jiangsu Shagang Co., Ltd. (002075.SZ) and Hangzhou Iron ＆ Steel Co., Ltd. (600126.SH) expect to turn losses into profits in the interim reports thanks to the cost reducing and efficiency improvement. In addition, China Shipping Development Company Limited (01138.HK; 600026.SH) expects an increase of 100 to 150 percent in the interim report as a result of the gains from the selling of the equities of a subsidiary engaged in the transportation of dry bulks. China Grand Automotive Services Co., Ltd. (600297.SH) expects an increase of 50 to 60 percent in the interim report as a result of more acquisitions and the rapid expansion of business size.
[Trading Trends]
○ Five institutional seats buy Xinhai Electric
------
The trading volume ranking list on July 29 shows that five institutional seats bought Ningbo Xinhai Electric Co., Ltd. (002120.SZ) with a total of 181 million yuan, accounting for 16.76 percent of its intraday turnover. One institutional seat sold it with 22,655,000 yuan.
Comment: Institutes believe that the backdoor listing plan with Yunda Express involves no supporting fundraising. The approval and the efficiency will be improved. Yunda Express leads the IT application transformation in the industry and will efficiently improve the cost controlling ability and the express services quality. It will be the peak season of the express industry and the profit of Yunda Express for the whole year is likely to beat the expectation.
[Trading Alarms]
○ Dowell Science and Technology conducts IPO on Aug. 1
------
Sichuan Dowell Science and Technology Inc. (300535.SZ) issues shares at 18.5 yuan per share with a P/E ratio of 23 times and an upper subscription limit of 14,500 shares for each individual account. It is principally engaged in leather and chemical products.
[Weekly Review]
○ Be prudent in midsummer heat
------
The high-temperature hit most areas of China in the recent week. To the contrary, the A-share market is extremely sluggish. The growth and small-cap stocks favored previously dropped significantly, which upsets many investors.
The recent declining of small-cap growth stocks is caused by certain macro and policy basis. On the one hand, the "tangible hand" of the regulation is imposing increasingly strict the themes and abnormal transactions, which has obvious effects on stocks with high valuation. On the one hand, with the completion of the releasing of interim reports, the growth of different industries is diversified. The financial reports are beneficial to individual stocks with relatively low valuation. It forces many investors to seek low and stable stocks in the market recently.
Based on the experiences in previous years, summer is critical in the conversion of the A-share market conditions, not to the exclusion of this year. Investors should be more patient and focus on sectors with performance background in this sensitive period. SSN also followed the idea in recent two weeks and focus on periodical products with substantial performance changes as well as the SOEs reform with substantial policy changes. We will work even harder in the future.
TOP
○ U.S. economy data misses expectations, gold prices close to recent high
○ Disperse dyes prices rise again, opinions on implementation of "Internet plus" effective logistic released
○ Chutian Expressway acquires Sanmu Intelligent, Evergrande Real Estate increases shareholding in Langfang Development again
○ Jiabao Group sees changes of substantial shareholder, three iron enterprises expect profits, including Xinyu Iron ＆ Steel
[SSN Focus]
○ U.S. economy data misses expectations, gold prices close to recent high
------
The Commerce Department announced on Friday (July 29) that the gross domestic product grew at a 1.2 percent annual rate in the second quarter, far below the 2.6 percent the market expected. The U.S. dollar plunged immediately after the data was released; while spot gold closed up 1.16 percent to 1.350 U.S. dollars per ounce, close to 1,375 U.S. dollars per ounce in early July, the highest level in more than two years.
Next week, the Bank of England will announce its interest rate decision on Aug. 4. Investors expect BoE will cut interest rates by 25 base points. The U.S. will release its non-farm employment report for July on Aug. 5. Investors will seek for clues indicating economic strength. Analysts believe that the easing monetary polices in Europe and Japan will continue to highlight gold's function as safe haven and weigh on the probability of interest rate hike in the U.S.
[SSN Selection]
○ Shanghai Stock Exchange indicated on July 29 that it will focus on brokerages' research reports, press conference, accountability for fraud in information disclosure and disclosure of semi-annual report, and will continue to release 7 regulatory cases in false and abnormal declaration during trading houses.
○ Cross futures-spot one pass account system, jointly established by China Securities Depository and Clearing Corporation Limited and China Futures Market Monitoring Center, is launched and is expected to facilitate cross-market regulation.
○ The State-owned Assets Supervision and Administration Commission has accredited COFCO board of directors in 18 items, suggesting that the separation between ownership and right of management in state-owned enterprises begins to implement.
○ Data from Baiinfo shows that the quoted price of ammonium paratungstate on July 29 increased 14 percent from its mid-July lows mainly because that tungsten enterprises in Jiangxi stopped production for environmental inspection.
○ Telsa U.S. super factory held opening ceremony on July 29. It is expected that that the cost for battery pack will reduce over 30 percent per kilowatt hour in 2018.
○China Minsheng Banking Corp., Ltd. (600016.SH) announces that Huaxia Insurance increased 0.25 percent shareholding in the company from July 25 to 29, and New Hope Liuhe Co., Ltd. (000876.SZ) decreased 0.41 percent shareholding during the same period.
TOP
[Industry Information]
○ Disperse dyes prices rise again due to stricter environmental regulations and production restriction
------
SSN learns that as environmental regulations become stricter and enterprises restrict production, disperse dye prices will hike again by 10 to 15 percent from August 1. Disperse dye leader Zhejiang Longsheng Group Co., Ltd. (600352.SH) announces that it will lift the quoted price of some of its disperse dyes by 2,000 yuan to 5,000 yuan per ton from August 1, and lift the price of some reactive dyes by 2,000 yuan per ton from July 29.
Comment: Relevant manufactures indicated that as the downstream has sufficient demands for supply, the profitability in the dye industry is expected to rise. As environmental inspection continues to advance, unqualified dye enterprises will shut down for correction, which will further improve the industry's supply-demand conditions. As for other companies, Shanghai Anoky Group Co., Ltd. (300067.SZ) owns 36,000 tons productivity in disperse dye and over 20,000 tons productivity in reactive dyes. Jiangsu Yabang Dyestuff Co., Ltd. (603188.SH) is mainly engaged in anthraquinone structured disperse dye and vat dyes. Zhejiang Runtu Co., Ltd. (002440.SZ) owns 110,000 tons productivity in disperse dye and 40,000 tons productivity in reactive dyes.
○ NDRC releases opinions on implementation of "Internet plus" effective logistic
------
The National Development and Reform Commission (NDRC) on July 29 released the opinions on the implementation of the "Internet plus" effective logistic strategy on its website. The opinions propose to widely apply advanced information technology in logistics, significantly improve the intelligentization level in the fields of transportation, distribution and other sectors, continuously make innovations in logistics organization; to form an internet-based, open, sharing, win-win, efficient and convenient, safe and green wisdom logistics ecosystem and greatly improve the efficiency and effectiveness of logistics.
Comment: As for specific tasks, the opinions propose to build an Internet-based logistics information sharing system and improve the intelligentization level of warehousing and delivery. That is to improve the effectiveness of logistics from the perspective of software and hardware. Zhejiang Transfar Co., Ltd. (002010.SZ) owns Transfar Logistic, a large road logistics platform operator. Shanxi Oriental Material Handling Co., Ltd. (300486.SZ) owns products, such as intelligent logistics transportation system and intelligent warehousing system.
TOP
[Announcement Interpretation]
○ Chutian Expressway acquires Sanmu Intelligent for RMB 1.26 bln. to develop Internet of vehicles
------
Hubei Chutian Expressway Co., Ltd. (600035.SH) proposes to acquire 100 percent equities in Shenzhen Sanmu Intelligent Co., Ltd. by 1.26 billion yuan by issuing shares at 4.64 yuan per share through private placement and in cash. It also proposes to raise 408 million yuan supporting funds by issuing shares at 4.64 yuan per share through private placement to its controlling shareholder Hubei Province Communications Investment Group Co., Ltd. and one of its employee shareholding plan.
The main products of Sanmu Intelligent include tablet, smart phones and communication modules for Internet of vehicles. It promises that its net profit from 2016 to 2019 will reach 98 million yuan, 118 million yuan, 140 million yuan and 170 million yuan.
○ Evergrande Real Estate increases shareholding in Langfang Development again
------
Langfang Development Co., Ltd. (600149.SH) announced that Evergrande Real Estate Group Limited (03333.HK), its shareholder, increased the shareholding in the company with 18.99 million shares with 267 million yuan at an average price of 14.06 yuan per share, accounting for 4.995 percent of the total share capitals of the company. The shareholding proportion of Evergrande Real Estate in Langfang Development increased to 10 percent, nearly reaching the shareholding proportion of 13.34 percent in Langfang State-owned Land Development and Construction Investment Holdings Co., Ltd. under the State-owned Assets Supervision and Administration Commission of the People's Government of Langfang. Evergrande Real Estate indicated that it is rosy about the development prospects of Langfang Development and increased the shareholding in the company.
Comment: Langfang Development suspended trading for mulling reorganization after Evergrande Real Estate increased the shareholding in the company in April. It proposed to acquire Wenan Tianyue Real Estate Company but terminated the reorganization on July 19 as no consensus was reached on core issues in the trading.
TOP
○ Jiabao Group sees changes of substantial shareholder
------
Beijing Guangan Sunshine Investment Center bought 34,062,000 shares of Shanghai Jiabao Industry ＆ Commerce (Group) Co., Ltd. (600622.SH) from July 18 to 27 with about 496 million yuan at an average price of about 14.56 yuan per share, accounting for 4.99 percent of the total share capital of the company. Guangan Sunshine Investment and its parties acting in concert totally hold 19.27 percent equities of Jiabao Group and become the biggest shareholder of the company.
Comment: Guangan Sunshine Investment and its parties acting are enterprises under China Everbright Group. Its parties acting in concert participated in the private placement of Jiabao Group at 10.6 yuan per share (ex-dividend) and the lock-up period of the shares issued through the private placement is 36 months. Guangan Sunshine Investment indicated that the increase in the shareholding in Jiabao Group is because it is rosy about the prospects of the company. The property companies under China Everbright Group also have transactions with Jiabao Group.
○ Xiamen Xiangyu's employee shareholding plan completes positions building
------
The employee shareholding plan of Xiamen Xiangyu Co., Ltd. (600057.SH) completed the building of positions on July 29 and bought 19,929,800 shares at an average price of 10.403 yuan per share with a turnover of 207 million yuan, accounting for 1.7 percent of the total share capital of the company. The lock-up period of the stocks bought by the plan is 12 months. The latest stock price of the company is 10.75 yuan.
○ Senior management increase shareholding in Urban Investment ＆ Development
------
Certain directors, supervisors and senior management of Vanfund Urban Investment ＆ Development Co., Ltd. increased the shareholding in the company with 1.1 million shares on July 29 at an average price of about 18.19 yuan. The purpose is to recognize the current value and the development confidence in the future. They will continue to increase the shareholding in the company in the future.
○ The reorganization of China Railway Erju Co., Ltd. (600258.SH) was unconditionally approved by the China Securities Regulatory Commission (CSRC).
[Financial Reports Express]
○ Xinyu Iron ＆ Steel expects profits
------
Xinyu Iron ＆ Steel Co., Ltd. (600782.SH), Jiangsu Shagang Co., Ltd. (002075.SZ) and Hangzhou Iron ＆ Steel Co., Ltd. (600126.SH) expect to turn losses into profits in the interim reports thanks to the cost reducing and efficiency improvement. In addition, China Shipping Development Company Limited (01138.HK; 600026.SH) expects an increase of 100 to 150 percent in the interim report as a result of the gains from the selling of the equities of a subsidiary engaged in the transportation of dry bulks. China Grand Automotive Services Co., Ltd. (600297.SH) expects an increase of 50 to 60 percent in the interim report as a result of more acquisitions and the rapid expansion of business size.
[Trading Trends]
○ Five institutional seats buy Xinhai Electric
------
The trading volume ranking list on July 29 shows that five institutional seats bought Ningbo Xinhai Electric Co., Ltd. (002120.SZ) with a total of 181 million yuan, accounting for 16.76 percent of its intraday turnover. One institutional seat sold it with 22,655,000 yuan.
Comment: Institutes believe that the backdoor listing plan with Yunda Express involves no supporting fundraising. The approval and the efficiency will be improved. Yunda Express leads the IT application transformation in the industry and will efficiently improve the cost controlling ability and the express services quality. It will be the peak season of the express industry and the profit of Yunda Express for the whole year is likely to beat the expectation.
[Trading Alarms]
○ Dowell Science and Technology conducts IPO on Aug. 1
------
Sichuan Dowell Science and Technology Inc. (300535.SZ) issues shares at 18.5 yuan per share with a P/E ratio of 23 times and an upper subscription limit of 14,500 shares for each individual account. It is principally engaged in leather and chemical products.
[Weekly Review]
○ Be prudent in midsummer heat
------
The high-temperature hit most areas of China in the recent week. To the contrary, the A-share market is extremely sluggish. The growth and small-cap stocks favored previously dropped significantly, which upsets many investors.
The recent declining of small-cap growth stocks is caused by certain macro and policy basis. On the one hand, the "tangible hand" of the regulation is imposing increasingly strict the themes and abnormal transactions, which has obvious effects on stocks with high valuation. On the one hand, with the completion of the releasing of interim reports, the growth of different industries is diversified. The financial reports are beneficial to individual stocks with relatively low valuation. It forces many investors to seek low and stable stocks in the market recently.
Based on the experiences in previous years, summer is critical in the conversion of the A-share market conditions, not to the exclusion of this year. Investors should be more patient and focus on sectors with performance background in this sensitive period. SSN also followed the idea in recent two weeks and focus on periodical products with substantial performance changes as well as the SOEs reform with substantial policy changes. We will work even harder in the future.
TOP
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