[Today's Guide]
○ Output and sales of passenger vehicles surge in July, expected to maintain strong growth
○ Shenzhou XI spacecraft arrives at launching site, manned spacecraft to see rapid development
○ B-soft to acquire IT operation and maintenance service provider, Markor International Home Furnishings proposes to expand main business
○ Bauing Construction Holding Group to cooperate with Evergrande Life Assurance, Multiple companies expect significant growth in Q3
[SSN Focus]
○ Output and sales of passenger vehicles surge in July, expected to maintain strong growth
------
Chen Shihua, assistant secretary general of the China Association of Automobile Manufactures, indicated at the press conference held on Aug. 12 that the output and sales of passenger vehicles in July respectively expanded 31.8 percent and 26.3 percent year on year. The market share of Chinese brand passenger vehicles is higher than the same period last year. The output and sales of commercial vehicles continued to grow year on year. Driven by half cut in purchase tax and rapid growth in demands for SUV, the output and sales of vehicles have maintained stable growth.
Comment: China International Capital Corporation Limited noted in its research report that the increment of vehicle demands this year mainly comes from replacing old cars in first-tier cities and purchasing car for the first time in central and southwest China. Gaohua Securities expects that vehicle sales may maintain strong growth in August and September as demands are increasing driven by the low base of competition and the stimulus announced at the end of last September (purchase tax for passenger vehicles with 1.6 L and lower displacement will cut 5 percent). In terms of companies, various mainstream securities companies gave buying ratings to SAIC Motor Corporation Limited (600104.SZ), Chongqing Changan Automobile Company Limited (000625.SZ) and Great Wall Motor Company Limited (601633.SH;02333.HK).
[SSN Selection]
○ The spokesperson for the China Securities Regulatory Commission (CSRC) indicated on Aug. 12 that the Shenzhen - Hong Kong Stock Connect program will be launched at a proper time this year.
○ The renminbi loans increased 463.6 billion yuan in July, much lower than market expected. The increment mainly comes from mortgage loans.
○The investment, consumption, industrial added value and other economic indicators in July shrank year on year from June. Analysts believe that there is necessary for further easing of fiscal policies.
○ The No. 2 nuclear unit of Hainan Nuclear Power Co., Ltd. controlled by China National Nuclear Power Co., Ltd. (601985.SH) was allowed for commercial operation on Aug. 12, becoming the southernmost nuclear power station in China.
○ The trading volume ranking list on Aug. 12 shows that Chian Vanke Co., Ltd. (000002.SZ) was bought by the business department of Essence Securities Co., Ltd. At Lede Avenue, Guangzhou. Vanke previously was bought by the business department with a net amount of 439 million yuan on Aug. 4.
○ The Bank of Guiyang announced at its listing statement that it will conduct IPO on Aug. 16.
TOP
[Industry Observation]
○ Shenzhou XI spacecraft arrives at launching site, manned spacecraft to see rapid development
------
According to the China Manned Space Engineering Office, the Shenzhou XI manned spacecraft arrived at Jiuquan Satellite Launch Center on Aug. 13. It is now under assembly and testing on the launching site, and is scheduled to launch in mid-October launch. During its flight in orbit, the astronauts will conduct aerospace medicine and space science experiments and space technology applications, in-orbit servicing technology, science and space station technology test activities.
Comment: Manned spacecraft is a major demonstration of China's aerospace and military technology. Aerospace resource has become the focus of national contention. China has set up "China Aerospace Day" this year. A series of actions in space program reflects that China has attached great importance to aerospace development. China's aerospace equipment is mainly developed by China Aerospace Science and Technology Corporation and China Aerospace Science ＆ Industry Corp. Gf Securities Co., Ltd. (000776.SZ) noted in its research report that it is bullish about state-owned spacecraft manufacturers, including China Spacesat Co., Ltd. (600118.SH), Shanghai Aerospace Automobile Electromechanical Co., Ltd. (600151.SH) and China Aerospace Times Electronics Co., Ltd. (600879.SH).
◆ CCTV News reported on Aug. 14 that China's first quantum communications experimental satellite have basically completed its preparatory works, and will be launched in mid to end of this month. This will be the 76th launching task conducted at Jiuquan Satellite Launch Center.
○ Tourism consumption and investment boom, new ear of mas tourism coming soon
------
Xinhua News Agency reported that China's tourism economy operate smoothly in the first half of this year. Both consumption and investment in domestic tourism have boomed. Inbound tourism has achieved growth for six consecutive quarters. The National Tourism Administration has announced that by 2016, China will build about 500 self-driving RV camps, which will bring an investment of about 35 billion yuan. According to survey, 83.02 percent residents plan to travel in the third quarter of this year, a number higher than the second quarter.
Comment: Relevant officials from the indicated that tourism is becoming a powerful engine for economic growth, transformation and upgrading and mass innovation and entrepreneurship. In recent years, as policies have been taking effects, a new era of "mass tourism" is coming soon. Among listed companies, institutions believe that China International Travel Service Corporation Limited (601888.SH) is expected to win the bid of duty free business from Beijing-Capital International Airport, which will bring higher earnings to the former. China CYTS Tours Holding Co., Ltd. (600138.SH) is expected to see the tourists to Beijing W Town benefiting from the stable growth in tourist flow in Wuzhen Town.
TOP
[Announcement Interpretation]
○ B-soft proposes to acquire IT operation and maintenance service provider for over RMB1.2 bln.
------
B-soft Co., Ltd. (300451.SZ) proposes to acquire 100 equities of IT operation and maintenance service provider Hangzhou Poly Technology Co., Ltd. for 1,238 million yuan in cash and through private placement. It will raise 81.9 million yuan supporting fund by issuing shares to the company's actual controller Ge Hang and Poly Tech's actual controller Zhou Jianxin. The price of the private placement is 39.37 yuan per share.
According to its performance commitment, the net profit after deducting non-recurring gains and losses of Poly Tech. from 2016 to 2018 should reach 86.5 million yuan, 99.5 million yuan and 114 million yuan, respectively. The aggregate net profit should be no less than 300 million yuan. The net profit of B-soft was 49.68 million yuan last year. Poly Tech. mainly provides outsourcing services in financial information technology and financing business process. The acquisition will help B-soft expand from the field of health care to IT services in the financial sector.
○ Markor International Home Furnishings proposes to raise RMB1.6 bln through private placement to expand main business
------
Markor International Home Furnishings Co., Ltd. (600337.SH) proposes to issue 132 million shares through private placement at no less than 12.14 yuan per share to special objects, including its controlling shareholder Markor Investment Group, to raise about 1.6 billion yuan. The proceeds will be used for "Markor International Home Furnishings Tianjin manufacturing base upgrading and expansion project". Markor Investment Group will subscribe no less than 200 million yuan and no more than 600 million yuan.
The total investment of the above project of Markor International Home Furnishings is estimated to be 1.85 billion yuan. The construction period will be three years. According to calculation, the project will realize sales revenue of 2,631 million yuan and net profits of 385 million yuan respectively after reached the designed capacity.
TOP
○ Bauing Construction Holding Group entered into strategic cooperation with Evergrande Life Assurance
------
Shenzhen Bauing Construction Holding Group Co., Ltd. (002047.SZ) and Evergrande Life Assurance Co., Ltd. have entered into strategic cooperation. Both parties will develop all-around cooperation by combining advantages in information, channels and resources of their own and their shareholders.
Comment: the listed company is primarily engaged in decoration, Evergrande Group and Evergrande Life Insurance are respectively the biggest customer and the shareholder of the listed company. Evergrande Life Insurance is now participating in the listed company's private placement issuance.
○ MeiDu Energy Corporation to expand into Lithium battery sector
------
Meidu Moxi, a subsidiary of MeiDu Energy Corporation (600175.SH), proposes to spend 100 million yuan to set up a joint venture Meidu Dongli. The latter will buy 49.6 percent shareholding of DLG Power Battery (Shanghai) Co. Ltd., and become the largest shareholder of the company. DLG Power Battery (Shanghai) primarily offers lithium-ion battery. As of June 30, the company's net assets was 212 million yuan. The company has realized revenue of 385 million yuan and net profits of 8.54 million yuan during the first half year. Through this transaction, Meidu Energy Cooperation will introduce new energy battery business, and advance the "traditional energy plus new energy" strategy.
○ Yuntou Ecology and Environment Technology and Hunan Baili Engineering Sci ＆ Tech sign big orders.
------
Yunnan Yuntou Ecology and Environment Technology Co., Ltd. (002200.SZ) and its partner was designated as the top pick for the "sponge city PPP project of Renli Ancient Town, Hedong New District, Suining City". The total investment of the project is 1.32 billion yuan. The project is expected to have positive impacts on the company's performance in 2016 and afterwards.
Wuhan Petrochemical Engineering Co., Ltd., a subsidiary of Hunan Baili Engineering Sci ＆ Tech Co., Ltd. (603959.SH), was awarded lump-sum contracting for clean coal deep processing project from Xinjiang Yuanhao New Energy Co., Ltd. The contract value is 850 million yuan. The company's total revenue for 2015 is 450 million yuan.
[Financial Reports Express]
○ Multiple companies expect significant growth in Q3
------
Zhejiang Jinggong Science＆Technology Co., Ltd. (002006.SZ) expects 5 times performance growth in its interim report, and the growth for the first three quarters is expected to be about 9 times. Shandong Xiantan Co., ltd. (002746.SZ) expects 788 percent growth in its interim report, and the growth for the first three quarters is expected to be about 8 times. Jiangxi Zhengbang Technology Co., Ltd. (002157.SZ) reports net profits of more than 600 million yuan, turning deficit into profits, and its growth for the first three quarters is expected to be about 4 times. The board of directors of the company has approved the interim distribution plan of 20-for-10 conversion of capital surplus into shares.
[Weekly Review]
○ Surge of blue chip stocks expected to strengthen
------
Last week, the SSE Composite Index, Shenzhen Component Index and ChiNext Index have risen 2.48 percent, 1.8 percent and 0.7 percent respectively. The land scape of "strong Shanghai bourse and weak Shenzhen bourse" and "boom of large cap stocks" has further strengthened. At present, this market situation can hardly reversed.
Firstly, support from the bullish news. Last week, New China Life Insurance Company Ltd. (601336.SH) announced that it was bought by Fosun Group to the 5 percent threshold for the first time. A shares of New China Life Insurance on August 11 soared to the daily limit of ten percent, and send the whole insurance sector higher. On the other hand, the opening of Shenzhen-Hong Kong Stock Connect is approaching. It is another stimulus to securities companies and other blue chip stocks on the Shenzhen bourse. In contrast, ChiNext is gloomy. Guangdong Golden Glass Technologies Limited (300093.SZ) in the night of August 10 announced that its restructuring was rejected by the regulator, and on the next trading session, its shares plummeted to the daily limit of ten percent. For a number of small cap companies that hope to avoid shell borrowing by capital operation, it was indeed a bad news.
Secondly, capital continues to flow to blue chip stocks. High yield of offline new share subscription is attracting high-net-worth individual investors to the market. In order to access the market, investors must hold shares of the two bourses with market value of 20 million yuan, and high quality blue chip stocks with reasonable valuation and defensive potential are of no doubt the preferred choices. In addition, yield of China's 10 year Treasury bond hit record low on August 12. In comparison, yield of some blue chip stocks are more attractive. Such stocks are expected to be bought by long term investment capitals.
In the current market condition, the SSN inclined to strengthen the planning and report of macroeconomic information, SOEs reform and surge themes, striving to offer you more information on blue chip stocks and traditional industries. In the future, we will continue to stick to this thinking and keep an eye on opportunities in emerging industries. We devote to provide you with better insight in the current market.
TOP
○ Output and sales of passenger vehicles surge in July, expected to maintain strong growth
○ Shenzhou XI spacecraft arrives at launching site, manned spacecraft to see rapid development
○ B-soft to acquire IT operation and maintenance service provider, Markor International Home Furnishings proposes to expand main business
○ Bauing Construction Holding Group to cooperate with Evergrande Life Assurance, Multiple companies expect significant growth in Q3
[SSN Focus]
○ Output and sales of passenger vehicles surge in July, expected to maintain strong growth
------
Chen Shihua, assistant secretary general of the China Association of Automobile Manufactures, indicated at the press conference held on Aug. 12 that the output and sales of passenger vehicles in July respectively expanded 31.8 percent and 26.3 percent year on year. The market share of Chinese brand passenger vehicles is higher than the same period last year. The output and sales of commercial vehicles continued to grow year on year. Driven by half cut in purchase tax and rapid growth in demands for SUV, the output and sales of vehicles have maintained stable growth.
Comment: China International Capital Corporation Limited noted in its research report that the increment of vehicle demands this year mainly comes from replacing old cars in first-tier cities and purchasing car for the first time in central and southwest China. Gaohua Securities expects that vehicle sales may maintain strong growth in August and September as demands are increasing driven by the low base of competition and the stimulus announced at the end of last September (purchase tax for passenger vehicles with 1.6 L and lower displacement will cut 5 percent). In terms of companies, various mainstream securities companies gave buying ratings to SAIC Motor Corporation Limited (600104.SZ), Chongqing Changan Automobile Company Limited (000625.SZ) and Great Wall Motor Company Limited (601633.SH;02333.HK).
[SSN Selection]
○ The spokesperson for the China Securities Regulatory Commission (CSRC) indicated on Aug. 12 that the Shenzhen - Hong Kong Stock Connect program will be launched at a proper time this year.
○ The renminbi loans increased 463.6 billion yuan in July, much lower than market expected. The increment mainly comes from mortgage loans.
○The investment, consumption, industrial added value and other economic indicators in July shrank year on year from June. Analysts believe that there is necessary for further easing of fiscal policies.
○ The No. 2 nuclear unit of Hainan Nuclear Power Co., Ltd. controlled by China National Nuclear Power Co., Ltd. (601985.SH) was allowed for commercial operation on Aug. 12, becoming the southernmost nuclear power station in China.
○ The trading volume ranking list on Aug. 12 shows that Chian Vanke Co., Ltd. (000002.SZ) was bought by the business department of Essence Securities Co., Ltd. At Lede Avenue, Guangzhou. Vanke previously was bought by the business department with a net amount of 439 million yuan on Aug. 4.
○ The Bank of Guiyang announced at its listing statement that it will conduct IPO on Aug. 16.
TOP
[Industry Observation]
○ Shenzhou XI spacecraft arrives at launching site, manned spacecraft to see rapid development
------
According to the China Manned Space Engineering Office, the Shenzhou XI manned spacecraft arrived at Jiuquan Satellite Launch Center on Aug. 13. It is now under assembly and testing on the launching site, and is scheduled to launch in mid-October launch. During its flight in orbit, the astronauts will conduct aerospace medicine and space science experiments and space technology applications, in-orbit servicing technology, science and space station technology test activities.
Comment: Manned spacecraft is a major demonstration of China's aerospace and military technology. Aerospace resource has become the focus of national contention. China has set up "China Aerospace Day" this year. A series of actions in space program reflects that China has attached great importance to aerospace development. China's aerospace equipment is mainly developed by China Aerospace Science and Technology Corporation and China Aerospace Science ＆ Industry Corp. Gf Securities Co., Ltd. (000776.SZ) noted in its research report that it is bullish about state-owned spacecraft manufacturers, including China Spacesat Co., Ltd. (600118.SH), Shanghai Aerospace Automobile Electromechanical Co., Ltd. (600151.SH) and China Aerospace Times Electronics Co., Ltd. (600879.SH).
◆ CCTV News reported on Aug. 14 that China's first quantum communications experimental satellite have basically completed its preparatory works, and will be launched in mid to end of this month. This will be the 76th launching task conducted at Jiuquan Satellite Launch Center.
○ Tourism consumption and investment boom, new ear of mas tourism coming soon
------
Xinhua News Agency reported that China's tourism economy operate smoothly in the first half of this year. Both consumption and investment in domestic tourism have boomed. Inbound tourism has achieved growth for six consecutive quarters. The National Tourism Administration has announced that by 2016, China will build about 500 self-driving RV camps, which will bring an investment of about 35 billion yuan. According to survey, 83.02 percent residents plan to travel in the third quarter of this year, a number higher than the second quarter.
Comment: Relevant officials from the indicated that tourism is becoming a powerful engine for economic growth, transformation and upgrading and mass innovation and entrepreneurship. In recent years, as policies have been taking effects, a new era of "mass tourism" is coming soon. Among listed companies, institutions believe that China International Travel Service Corporation Limited (601888.SH) is expected to win the bid of duty free business from Beijing-Capital International Airport, which will bring higher earnings to the former. China CYTS Tours Holding Co., Ltd. (600138.SH) is expected to see the tourists to Beijing W Town benefiting from the stable growth in tourist flow in Wuzhen Town.
TOP
[Announcement Interpretation]
○ B-soft proposes to acquire IT operation and maintenance service provider for over RMB1.2 bln.
------
B-soft Co., Ltd. (300451.SZ) proposes to acquire 100 equities of IT operation and maintenance service provider Hangzhou Poly Technology Co., Ltd. for 1,238 million yuan in cash and through private placement. It will raise 81.9 million yuan supporting fund by issuing shares to the company's actual controller Ge Hang and Poly Tech's actual controller Zhou Jianxin. The price of the private placement is 39.37 yuan per share.
According to its performance commitment, the net profit after deducting non-recurring gains and losses of Poly Tech. from 2016 to 2018 should reach 86.5 million yuan, 99.5 million yuan and 114 million yuan, respectively. The aggregate net profit should be no less than 300 million yuan. The net profit of B-soft was 49.68 million yuan last year. Poly Tech. mainly provides outsourcing services in financial information technology and financing business process. The acquisition will help B-soft expand from the field of health care to IT services in the financial sector.
○ Markor International Home Furnishings proposes to raise RMB1.6 bln through private placement to expand main business
------
Markor International Home Furnishings Co., Ltd. (600337.SH) proposes to issue 132 million shares through private placement at no less than 12.14 yuan per share to special objects, including its controlling shareholder Markor Investment Group, to raise about 1.6 billion yuan. The proceeds will be used for "Markor International Home Furnishings Tianjin manufacturing base upgrading and expansion project". Markor Investment Group will subscribe no less than 200 million yuan and no more than 600 million yuan.
The total investment of the above project of Markor International Home Furnishings is estimated to be 1.85 billion yuan. The construction period will be three years. According to calculation, the project will realize sales revenue of 2,631 million yuan and net profits of 385 million yuan respectively after reached the designed capacity.
TOP
○ Bauing Construction Holding Group entered into strategic cooperation with Evergrande Life Assurance
------
Shenzhen Bauing Construction Holding Group Co., Ltd. (002047.SZ) and Evergrande Life Assurance Co., Ltd. have entered into strategic cooperation. Both parties will develop all-around cooperation by combining advantages in information, channels and resources of their own and their shareholders.
Comment: the listed company is primarily engaged in decoration, Evergrande Group and Evergrande Life Insurance are respectively the biggest customer and the shareholder of the listed company. Evergrande Life Insurance is now participating in the listed company's private placement issuance.
○ MeiDu Energy Corporation to expand into Lithium battery sector
------
Meidu Moxi, a subsidiary of MeiDu Energy Corporation (600175.SH), proposes to spend 100 million yuan to set up a joint venture Meidu Dongli. The latter will buy 49.6 percent shareholding of DLG Power Battery (Shanghai) Co. Ltd., and become the largest shareholder of the company. DLG Power Battery (Shanghai) primarily offers lithium-ion battery. As of June 30, the company's net assets was 212 million yuan. The company has realized revenue of 385 million yuan and net profits of 8.54 million yuan during the first half year. Through this transaction, Meidu Energy Cooperation will introduce new energy battery business, and advance the "traditional energy plus new energy" strategy.
○ Yuntou Ecology and Environment Technology and Hunan Baili Engineering Sci ＆ Tech sign big orders.
------
Yunnan Yuntou Ecology and Environment Technology Co., Ltd. (002200.SZ) and its partner was designated as the top pick for the "sponge city PPP project of Renli Ancient Town, Hedong New District, Suining City". The total investment of the project is 1.32 billion yuan. The project is expected to have positive impacts on the company's performance in 2016 and afterwards.
Wuhan Petrochemical Engineering Co., Ltd., a subsidiary of Hunan Baili Engineering Sci ＆ Tech Co., Ltd. (603959.SH), was awarded lump-sum contracting for clean coal deep processing project from Xinjiang Yuanhao New Energy Co., Ltd. The contract value is 850 million yuan. The company's total revenue for 2015 is 450 million yuan.
[Financial Reports Express]
○ Multiple companies expect significant growth in Q3
------
Zhejiang Jinggong Science＆Technology Co., Ltd. (002006.SZ) expects 5 times performance growth in its interim report, and the growth for the first three quarters is expected to be about 9 times. Shandong Xiantan Co., ltd. (002746.SZ) expects 788 percent growth in its interim report, and the growth for the first three quarters is expected to be about 8 times. Jiangxi Zhengbang Technology Co., Ltd. (002157.SZ) reports net profits of more than 600 million yuan, turning deficit into profits, and its growth for the first three quarters is expected to be about 4 times. The board of directors of the company has approved the interim distribution plan of 20-for-10 conversion of capital surplus into shares.
[Weekly Review]
○ Surge of blue chip stocks expected to strengthen
------
Last week, the SSE Composite Index, Shenzhen Component Index and ChiNext Index have risen 2.48 percent, 1.8 percent and 0.7 percent respectively. The land scape of "strong Shanghai bourse and weak Shenzhen bourse" and "boom of large cap stocks" has further strengthened. At present, this market situation can hardly reversed.
Firstly, support from the bullish news. Last week, New China Life Insurance Company Ltd. (601336.SH) announced that it was bought by Fosun Group to the 5 percent threshold for the first time. A shares of New China Life Insurance on August 11 soared to the daily limit of ten percent, and send the whole insurance sector higher. On the other hand, the opening of Shenzhen-Hong Kong Stock Connect is approaching. It is another stimulus to securities companies and other blue chip stocks on the Shenzhen bourse. In contrast, ChiNext is gloomy. Guangdong Golden Glass Technologies Limited (300093.SZ) in the night of August 10 announced that its restructuring was rejected by the regulator, and on the next trading session, its shares plummeted to the daily limit of ten percent. For a number of small cap companies that hope to avoid shell borrowing by capital operation, it was indeed a bad news.
Secondly, capital continues to flow to blue chip stocks. High yield of offline new share subscription is attracting high-net-worth individual investors to the market. In order to access the market, investors must hold shares of the two bourses with market value of 20 million yuan, and high quality blue chip stocks with reasonable valuation and defensive potential are of no doubt the preferred choices. In addition, yield of China's 10 year Treasury bond hit record low on August 12. In comparison, yield of some blue chip stocks are more attractive. Such stocks are expected to be bought by long term investment capitals.
In the current market condition, the SSN inclined to strengthen the planning and report of macroeconomic information, SOEs reform and surge themes, striving to offer you more information on blue chip stocks and traditional industries. In the future, we will continue to stick to this thinking and keep an eye on opportunities in emerging industries. We devote to provide you with better insight in the current market.
TOP
Latest comments