[Today's Guide]
○ Various provinces stress to expand investment in H2, focusing on PPP mode
○ Promotion for oil gas pipeline project speeds up, related companies likely to gain orders
○ Xinlong Holding to acquire medicine enterprises, JSTI to acquire US environment detection service provider
○ Firstar Panel Technology to expand principal business, Rongsheng Petrochemical and Qixing Iron Tower expect large performance growth
[SSN Focus]
○ Various provinces stress to expand investment in H2, focusing on PPP mode
------
Recently, many provinces in China consecutively hold the economic trend analysis meeting to arrange and deploy the economic work for the second half year. Infrastructure investment of most provinces kept a two-digital growth rate in the first half year, higher than those of real estate and manufacturing industries, SSN statistics shows. When describing the detailed measures, many provinces commonly put effective investment expansion in the first place, focusing on investment in major projects. Only in the latest month, at least six provinces, including Guizhou, Gansu, Anhui, Sichuan, Shandong and Inner Mongolia, have launched PPP demonstration projects, with a total investment over 750 billion yuan. Many provinces also establish PPP guidance funds to boost the social capital's enthusiasm for PPP projects.
Comment: Each government greatly promoting PPP mode plays double roles, which can solve the funds problem of some local governments, but also allows private capital involving in industries previously monopolized by governments to incent private investment enthusiasm, according to experts in the interview. Institutions are optimistic on private infrastructure enterprises powerful in PPP capability to improve their market shares; urban landscape enterprises are also likely to improve payment receiving expectation to enhance the project operability.
[SSN Selection]
○ CPI increased 1.8 percent year on year in July; pig price growth obviously fell back, but influence from non-food price growth increased.
○ Securities industry achieved a net profit of 62.5 billion yuan for the first half year, and net revenue of businesses, such as financial consultant, investment consultant, assets management and etc., increased year on year.
○ Major premium of China Life Insurance Company Limited (601628.SH) and Ping An Insurance (Group) Company Of China, Ltd. (601318.SH) have respectively increased 250 percent and 40 percent year on year since January to July, with insurance orders sale environment constantly turning good.
○ Last week, securities margin realized net inflow for the second week, and daily average balance of settlement funds for securities trading continued to call back.
○ Evergrande Group raises the sales contract target of 2016 to 300 billion yuan from 200 billion yuan, and indicates that it does not form the persons acting in concert with other first ten largest shareholders of China Vanke Co., Ltd. (000002.SZ).
TOP
[Industry Information]
○ Promotion for oil gas pipeline project speeds up, related companies likely to gain orders
------
Recently, four-line gas transmission pipeline project of Shaanxi-Beijing starts construction, marking that this national major project comprehensively starts the site construction. It is an important way to import Central Asian gas and transmit domestically-produced gas, which includes one mainline and three sub lines. This phase of construction will cover one main line and one sub line. Additionally, China Petroleum ＆ Chemical Corp. (600028.SH) has invested nearly 130 billion yuan in Xinjiang-Guangdong-Zhejiang pipeline project, which is officially approved by National Development and Reform Commission. This project will raise the demands of main pipeline to over 4.20 million tons, and the demands for sub pipelines and urban ones are four to seven times of that for main line.
Comment: Along with speeding-up promotion for oil gas pipeline project, related enterprises will see support from more orders, institutions believed. In terms of listed companies, Jiangsu Yulong Steel Pipe Co., Ltd. (601028.SH) is mainly engaged in longitudinally submerged arc welded pipe and other products, and Xinjiang-Guangdong-Zhejiang pipeline project will bring in the average annual orders of 250,000 tons for the company according to securities companies' research report; Zhejiang Kingland Pipeline and Technologies Co., Ltd. (002443.SZ) is mainly engaged in producing galvanized steel pipe, helical weld pipe and etc., with important experience in supplying oil gas pipeline in the world.
○ Cyclic Development Guiding Plan searches for public opinions, renewable resources field sees RMB2.7 trln market
------
Resource saving and environment protection department under the National Development and Reform Commission issued a notice on August 9 to search for public opinions on Cyclic Development Guiding Plan. It proposes to improve output rate of the main resources by 15 percent up to 2020 when compared to that of 2015; comprehensive utilization rate of industrial solid wastes to 73 percent; that of agriculture straw to 85 percent; industrial output of cyclic resources utilization to 3 trillion yuan; and 75 percent of national parks and 50 percent of provincial ones realize cyclized renewal.
Comment: Institutions expect the output of renewable resources field to reach 2.7 trillion yuan by 2020, with favorable growth space for automobile disassembling and electronic wastes utilization. Miracle Automation Engineering Co., Ltd. (002009.SZ) constantly deploys the automobile disassembling industry, likely to benefit from uptrend cycle of large-scaled automobile liquidation in China. Shaanxi Qinling Cement (Group) Co., Ltd. (600217.SH) transforms to recycle the wasted electronics after restructuring, and its controlling shareholder China Recycling Development Corporation Ltd. is the largest enterprise to recycle and utilize renewable resources.
TOP
[Announcement Interpretation]
○ Xinlong Holding to acquire two traditional Chinese medicine enterprises with RMB830 mln
------
Xinlong Holding (Group) Company Ltd. (000955.SZ) proposes to acquire 100 percent equities of Shanxi Huawei Pharmaceutical Industry Co., Ltd. and 70 percent equities of Anhui Dechang Pharmaceutical Industry Co., Ltd. with 830 million yuan. 610 million yuan will be paid by issuing shares at 6.91 yuan per share. Meanwhile, the company will raise a supporting fund of 610 million yuan through private placement at the same offering price. Substantial shareholder of the company will subscribe with 443 million yuan.
Original shareholder of Huawei Pharmaceutical which is principally engaged in safflower injection promises that the net profit of the company during the 2016-2019 period will be no less than 28 million yuan, 55 million yuan, 80 million yuan and 100 million yuan, respectively. Original shareholder of Dechang Pharmaceutical which is principally engaged in prepared herbal medicine in small pieces ready for decoction promises that the net profit of the company during the 2016-2018 period will be no less than 35.2 million yuan, 39.50 million yuan and 44.2 million yuan, respectively.
○ JSTI to acquire US environment detection service provider with USD132 mln
------
JSTI Group (300284.SZ) proposes to acquire 100 percent equities of Test America, an US environment detection service provider, at the cost around 132 million U.S. dollars. Ranking top in the US environment detection field, the latter owns complete industrial chain of environment detection service and takes up a market share of around 11 percent. Test America pocketed 1,434 million yuan revenue in recent fiscal year. JSTI indicates that the acquisition can not only introduce advanced environment detection technology from the target firm but also help the company to expand its current infrastructure detection business into the U.S.
TOP
○ Firstar Panel Technology to raise over RMB2.3 bln through private placement to expand principal business
------
Zhejiang Firstar Panel Technology Co., Ltd. (300256.SZ) proposes to raise 2.34 billion yuan through private placement by issuing 300 million shares. The raised fund will be invested in new-type integrated touch-display module project, fingerprint identification module project, metal CNC precision components, production base project and etc. Ye Yuxian, actual controller of the company, will subscribe no less than 20 percent of the private placement.
○ Sanjin Pharm. gets nod for clinic use of its new targeted anti-cancer drug
------
It is learnt that Guilin Sanjin Pharmaceutical Co., Ltd. (002275.SZ) has obtained approval for the clinic use of recombinant anti-EGFR human-mouse chimeric monoclonal antibody injection (known as "Erbitux"). Erbitux, a molecular targeted drug developed by Dragonboat Biopharmaceutical (Shanghai) Co., Ltd. under Sanjin Pharmaceutical, targets at curing metastatic colorectal cancer as well as head and neck cancers. Most Erbitux is now produced by ImClone owned by Eli Lilly and Company and the German-based company Merck Drugs ＆ Biotechnology. The global sales of Erbitux in 2015 recorded 1.5 billion U.S. dollars.
[Financial Reports Express]
○ Rongsheng Petrochemical and Qixing Iron Tower expect large performance growth in first three quarters
------
Rongsheng Petrochemical Co., Ltd. (002493.SZ) expects a performance growth of 300 percent and 2,000 percent-2,200 percent, respectively, in the first half and in the first three quarters. Shandong Qixing Iron Tower Co., Ltd. (002359.SZ) expects a performance growth of 2,300 percent and 1,100 percent-1,600 percent, respectively, in the first half and in the first three quarters. Moso Power Supply Technology Co., Ltd. (002660.SZ) expects a performance growth of 126 percent and 200 percent, respectively, in the first half and in the first three quarters. C＆s Paper Co., Ltd. (002511.SZ) expects a performance growth of 131 percent and 136 percent-166 percent, respectively, in the first half and in the first three quarters.
As to the performance growth in the first half, Beijing Sanju Environmental Protection ＆ New Materials Co., Ltd. (300072.SZ), Toyou Feiji Electronics Co., Ltd. (300302.SZ), Kunwu Jiuding Investment Holdings Co., Ltd. (600053.SH) and Henan Huanghe Whirlwind Co., Ltd. (6000172.SH) are expected to grow by 100 percent, 200 percent, 500 percent and 73 percent, respectively.
[Trading Trends]
○ Tianrun Digital Entertainment ＆ Cultural Media bought through three institutional seats
------
The trading volume ranking list on Aug. 9 shows that Hunan Tianrun Digital Entertainment ＆ Cultural Media Co., Ltd. (002113.SZ) was bought through three institutional seats with 240 million yuan, accounting for 29.8 percent of its intraday turnover.
Comment: Tianrun Digital Entertainment ＆ Cultural Media is determined in making arrangement in Internet-based culture industry, starts with R＆D and operation, integrates content innovation, market promotion and cultural transmission together, and will make arrangement in general entertainment area later. The implementation of the new acquisition might bring down current valuation of the company, according to institutions.
[Trading Alarms]
○ Shenleng Liquefaction Plant and Andeli Department Store to launch IPO on Aug. 10
------
Chengdu Shenleng Liquefaction Plant Co., Ltd. (300540.SZ), principally engaged in the equipment for liquefied natural gas, will issue shares at the price of 16.67 yuan per share. The P/E ratio is 23 times. The up-limit of subscription is 20,000 shares per account. Anhui Andeli Department Store Co., Ltd. (732031), principally engaged in retailing stores, will issue shares at 11.71 yuan per share. The P/E ratio is 23 times. The up-limit of subscription is 20,000 shares per account.
TOP
○ Various provinces stress to expand investment in H2, focusing on PPP mode
○ Promotion for oil gas pipeline project speeds up, related companies likely to gain orders
○ Xinlong Holding to acquire medicine enterprises, JSTI to acquire US environment detection service provider
○ Firstar Panel Technology to expand principal business, Rongsheng Petrochemical and Qixing Iron Tower expect large performance growth
[SSN Focus]
○ Various provinces stress to expand investment in H2, focusing on PPP mode
------
Recently, many provinces in China consecutively hold the economic trend analysis meeting to arrange and deploy the economic work for the second half year. Infrastructure investment of most provinces kept a two-digital growth rate in the first half year, higher than those of real estate and manufacturing industries, SSN statistics shows. When describing the detailed measures, many provinces commonly put effective investment expansion in the first place, focusing on investment in major projects. Only in the latest month, at least six provinces, including Guizhou, Gansu, Anhui, Sichuan, Shandong and Inner Mongolia, have launched PPP demonstration projects, with a total investment over 750 billion yuan. Many provinces also establish PPP guidance funds to boost the social capital's enthusiasm for PPP projects.
Comment: Each government greatly promoting PPP mode plays double roles, which can solve the funds problem of some local governments, but also allows private capital involving in industries previously monopolized by governments to incent private investment enthusiasm, according to experts in the interview. Institutions are optimistic on private infrastructure enterprises powerful in PPP capability to improve their market shares; urban landscape enterprises are also likely to improve payment receiving expectation to enhance the project operability.
[SSN Selection]
○ CPI increased 1.8 percent year on year in July; pig price growth obviously fell back, but influence from non-food price growth increased.
○ Securities industry achieved a net profit of 62.5 billion yuan for the first half year, and net revenue of businesses, such as financial consultant, investment consultant, assets management and etc., increased year on year.
○ Major premium of China Life Insurance Company Limited (601628.SH) and Ping An Insurance (Group) Company Of China, Ltd. (601318.SH) have respectively increased 250 percent and 40 percent year on year since January to July, with insurance orders sale environment constantly turning good.
○ Last week, securities margin realized net inflow for the second week, and daily average balance of settlement funds for securities trading continued to call back.
○ Evergrande Group raises the sales contract target of 2016 to 300 billion yuan from 200 billion yuan, and indicates that it does not form the persons acting in concert with other first ten largest shareholders of China Vanke Co., Ltd. (000002.SZ).
TOP
[Industry Information]
○ Promotion for oil gas pipeline project speeds up, related companies likely to gain orders
------
Recently, four-line gas transmission pipeline project of Shaanxi-Beijing starts construction, marking that this national major project comprehensively starts the site construction. It is an important way to import Central Asian gas and transmit domestically-produced gas, which includes one mainline and three sub lines. This phase of construction will cover one main line and one sub line. Additionally, China Petroleum ＆ Chemical Corp. (600028.SH) has invested nearly 130 billion yuan in Xinjiang-Guangdong-Zhejiang pipeline project, which is officially approved by National Development and Reform Commission. This project will raise the demands of main pipeline to over 4.20 million tons, and the demands for sub pipelines and urban ones are four to seven times of that for main line.
Comment: Along with speeding-up promotion for oil gas pipeline project, related enterprises will see support from more orders, institutions believed. In terms of listed companies, Jiangsu Yulong Steel Pipe Co., Ltd. (601028.SH) is mainly engaged in longitudinally submerged arc welded pipe and other products, and Xinjiang-Guangdong-Zhejiang pipeline project will bring in the average annual orders of 250,000 tons for the company according to securities companies' research report; Zhejiang Kingland Pipeline and Technologies Co., Ltd. (002443.SZ) is mainly engaged in producing galvanized steel pipe, helical weld pipe and etc., with important experience in supplying oil gas pipeline in the world.
○ Cyclic Development Guiding Plan searches for public opinions, renewable resources field sees RMB2.7 trln market
------
Resource saving and environment protection department under the National Development and Reform Commission issued a notice on August 9 to search for public opinions on Cyclic Development Guiding Plan. It proposes to improve output rate of the main resources by 15 percent up to 2020 when compared to that of 2015; comprehensive utilization rate of industrial solid wastes to 73 percent; that of agriculture straw to 85 percent; industrial output of cyclic resources utilization to 3 trillion yuan; and 75 percent of national parks and 50 percent of provincial ones realize cyclized renewal.
Comment: Institutions expect the output of renewable resources field to reach 2.7 trillion yuan by 2020, with favorable growth space for automobile disassembling and electronic wastes utilization. Miracle Automation Engineering Co., Ltd. (002009.SZ) constantly deploys the automobile disassembling industry, likely to benefit from uptrend cycle of large-scaled automobile liquidation in China. Shaanxi Qinling Cement (Group) Co., Ltd. (600217.SH) transforms to recycle the wasted electronics after restructuring, and its controlling shareholder China Recycling Development Corporation Ltd. is the largest enterprise to recycle and utilize renewable resources.
TOP
[Announcement Interpretation]
○ Xinlong Holding to acquire two traditional Chinese medicine enterprises with RMB830 mln
------
Xinlong Holding (Group) Company Ltd. (000955.SZ) proposes to acquire 100 percent equities of Shanxi Huawei Pharmaceutical Industry Co., Ltd. and 70 percent equities of Anhui Dechang Pharmaceutical Industry Co., Ltd. with 830 million yuan. 610 million yuan will be paid by issuing shares at 6.91 yuan per share. Meanwhile, the company will raise a supporting fund of 610 million yuan through private placement at the same offering price. Substantial shareholder of the company will subscribe with 443 million yuan.
Original shareholder of Huawei Pharmaceutical which is principally engaged in safflower injection promises that the net profit of the company during the 2016-2019 period will be no less than 28 million yuan, 55 million yuan, 80 million yuan and 100 million yuan, respectively. Original shareholder of Dechang Pharmaceutical which is principally engaged in prepared herbal medicine in small pieces ready for decoction promises that the net profit of the company during the 2016-2018 period will be no less than 35.2 million yuan, 39.50 million yuan and 44.2 million yuan, respectively.
○ JSTI to acquire US environment detection service provider with USD132 mln
------
JSTI Group (300284.SZ) proposes to acquire 100 percent equities of Test America, an US environment detection service provider, at the cost around 132 million U.S. dollars. Ranking top in the US environment detection field, the latter owns complete industrial chain of environment detection service and takes up a market share of around 11 percent. Test America pocketed 1,434 million yuan revenue in recent fiscal year. JSTI indicates that the acquisition can not only introduce advanced environment detection technology from the target firm but also help the company to expand its current infrastructure detection business into the U.S.
TOP
○ Firstar Panel Technology to raise over RMB2.3 bln through private placement to expand principal business
------
Zhejiang Firstar Panel Technology Co., Ltd. (300256.SZ) proposes to raise 2.34 billion yuan through private placement by issuing 300 million shares. The raised fund will be invested in new-type integrated touch-display module project, fingerprint identification module project, metal CNC precision components, production base project and etc. Ye Yuxian, actual controller of the company, will subscribe no less than 20 percent of the private placement.
○ Sanjin Pharm. gets nod for clinic use of its new targeted anti-cancer drug
------
It is learnt that Guilin Sanjin Pharmaceutical Co., Ltd. (002275.SZ) has obtained approval for the clinic use of recombinant anti-EGFR human-mouse chimeric monoclonal antibody injection (known as "Erbitux"). Erbitux, a molecular targeted drug developed by Dragonboat Biopharmaceutical (Shanghai) Co., Ltd. under Sanjin Pharmaceutical, targets at curing metastatic colorectal cancer as well as head and neck cancers. Most Erbitux is now produced by ImClone owned by Eli Lilly and Company and the German-based company Merck Drugs ＆ Biotechnology. The global sales of Erbitux in 2015 recorded 1.5 billion U.S. dollars.
[Financial Reports Express]
○ Rongsheng Petrochemical and Qixing Iron Tower expect large performance growth in first three quarters
------
Rongsheng Petrochemical Co., Ltd. (002493.SZ) expects a performance growth of 300 percent and 2,000 percent-2,200 percent, respectively, in the first half and in the first three quarters. Shandong Qixing Iron Tower Co., Ltd. (002359.SZ) expects a performance growth of 2,300 percent and 1,100 percent-1,600 percent, respectively, in the first half and in the first three quarters. Moso Power Supply Technology Co., Ltd. (002660.SZ) expects a performance growth of 126 percent and 200 percent, respectively, in the first half and in the first three quarters. C＆s Paper Co., Ltd. (002511.SZ) expects a performance growth of 131 percent and 136 percent-166 percent, respectively, in the first half and in the first three quarters.
As to the performance growth in the first half, Beijing Sanju Environmental Protection ＆ New Materials Co., Ltd. (300072.SZ), Toyou Feiji Electronics Co., Ltd. (300302.SZ), Kunwu Jiuding Investment Holdings Co., Ltd. (600053.SH) and Henan Huanghe Whirlwind Co., Ltd. (6000172.SH) are expected to grow by 100 percent, 200 percent, 500 percent and 73 percent, respectively.
[Trading Trends]
○ Tianrun Digital Entertainment ＆ Cultural Media bought through three institutional seats
------
The trading volume ranking list on Aug. 9 shows that Hunan Tianrun Digital Entertainment ＆ Cultural Media Co., Ltd. (002113.SZ) was bought through three institutional seats with 240 million yuan, accounting for 29.8 percent of its intraday turnover.
Comment: Tianrun Digital Entertainment ＆ Cultural Media is determined in making arrangement in Internet-based culture industry, starts with R＆D and operation, integrates content innovation, market promotion and cultural transmission together, and will make arrangement in general entertainment area later. The implementation of the new acquisition might bring down current valuation of the company, according to institutions.
[Trading Alarms]
○ Shenleng Liquefaction Plant and Andeli Department Store to launch IPO on Aug. 10
------
Chengdu Shenleng Liquefaction Plant Co., Ltd. (300540.SZ), principally engaged in the equipment for liquefied natural gas, will issue shares at the price of 16.67 yuan per share. The P/E ratio is 23 times. The up-limit of subscription is 20,000 shares per account. Anhui Andeli Department Store Co., Ltd. (732031), principally engaged in retailing stores, will issue shares at 11.71 yuan per share. The P/E ratio is 23 times. The up-limit of subscription is 20,000 shares per account.
TOP
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