[Today's Guide]
○ Two building material SOEs to implement restructuring, prospect attracts attention
○ Anhui accelerates SOEs reform, overall listing to become key work
○ Fangda Jinhua Chemical Technology invest in military electronics, new shareholder of Shuangma Cement starts general offer for acquisition
○ Ygsoft deploys energy Internet, Arcplus Group to injected with real estate assets
[SSN Focus]
○ Two building material SOEs to implement restructuring, prospect attracts attention
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The State-owned Assets Supervision and Administration Commission (SASAC) of the State Council approved China National Building Materials Group Corporation (CNBM) and China National Materials Group Corporation (Sinoma) to implement restructuring. CNBM's Chinese name will change from "中国建筑材料集团" to "中国建材集团". CNBM will become the parent company after restructuring, and Sinoma's assets will be transferred to the new company at no cost. Multiple listed companies under the two companies made announcement on the restructuring on Aug. 22 night.
Comment: After the restructuring, CNBM will become the only central state-owned enterprise (SOE) in the building material industry of the SASAC. Its cement productivity accounts for over over 30 percent of the total productivity across the nation. Their combination will effectively reduce vicious competition in the industry. Sinoma currently owns three A-share listed companies in the cement industry, including Xinjiang Tianshan Cement Co., Ltd. (000877.SZ), Ningxia Building Materials Group Co., Ltd. (600499.SH) and Gansu Qilianshan Cement Group Co., Ltd. (600720.SH). The three companies have overlapping in some regions. Sinoma promised to solve the horizontal competition by September 7. In the glass fiber industry, CNBM and Sinoma respectively own China Jushi Co., Ltd. (600176.SH) and Sinoma Science ＆ Technology Co., Ltd. (002080.SZ). In addition, the restructuring of Xinjiang Guotong Pipeline Co., Ltd. (002205.SZ) and Ruitai Materials Technology Co., Ltd. (002066.SZ), with a total valuation of less than 4 billion yuan, also attracts much attention from institutions.
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○ Anhui accelerates SOEs reform, overall listing to become key work
------
Since the beginning of the third quarter, Anhui Province has accelerated in promoting SOEs reform at all levels. For example, it held a work conference on the supply-side structural reform and SOEs reform; the SASAC of Hefei Municipal Government proposes to make full use of state-owned capital operation platform to guide limited resources to gather in key sectors gathering; Tongling City announced the recent key tasks in the supply-side structural reform and proposed to set up a large agricultural, industrial and commercial group; Huainan Mining Industry (Group) Co., Ltd., the controlling shareholder of Anhui Wanjiang Logistics (Group) Co., Ltd. (600575.SH), announced the launch listing works.
Comment: Based on information and plans disclosed, overall listing will be the key work in the SOEs reform in Anhui Province in the coming years. According to Anhui Provincial Government's requirements, provincial SOEs, including Magang (Group) Holding Co., Ltd., Anhui Conch Cement Company Limited and Tongling Nonferrous Metals Group Holding Co. Ltd., will go overall listing. Anhui Huamao Textile Company Limited (000850.SZ) and Anhui Heli Co., Ltd. (600761.SH) that have launched plans for SOEs reform but failed for some reasons will resume reform after adjusting their plans.
[SSN Selection]
○ The State Council has issued a work plan to reduce costs for enterprises engaged in the real economy. It also proposes to increase efforts in treating non-performing assets and vigorously carry out direct electricity transaction.
○ The National Development and Reform Commission issued the three-year plan for the revitalization of the northeast China. It will formulate special plans for the SOEs reform in northeast China and plans for the supply-side reform to cut productivity.
○ Panzhihua Taihai Technology Co., Ltd. on Aug. 22 announced lifting titanium dioxide price by 500 yuan per ton. So far, it is the tenth price hike in domestic titanium dioxide market.
○ Foreign media reported that the world's largest Pfizer will acquire anticancer drug giant Medivation for 14 billion U.S. dollars.
○ Zhou Hongwei, president of Qihoo 360 Technology Co., Ltd., indicated at a press conference on Aug. 22 that the company will further split its intelligent hardware business.
[Industry Information]
○ Major acquisition in chips for vehicles to happen, industry to see higher demands
------
Foreign media reported on Aug. 22 that Renesas Electronics, a leading Japanese semiconductor chips manufacturer, proposes to acquire Intersil, a U.S. chip manufacturer. The two sides are under final negotiation on the acquisition and are expected to reach an agreement by the end of August at the soonest. The acquisition amount is expected to be up to 3 billion U.S. dollars. It is reported that Renesas plans to develop chips for vehicles, which sees surging demands, through the acquisition of Intersil.
Comment: Institutions estimate that the global intelligent vehicle market will reach a scale of 700 billion U.S. dollars in 2020. Chip manufacturers will enjoy the highest gross profit in the industry thanks to their high threshold and technology. The revenue from automobile electronic chips will account for about 25 percent of the industry's total revenue. Datang NXP Semiconductor Co., Ltd. owned by Datang Telecom Technology Co., Ltd. (600198.SH) is engaged in automobile electronic chips. All Winner Technology Co., Ltd. (300458.SZ) owns a variety of chips which are applied in automobile data recorder and vehicle. Its T-series chips have become mainstream chip solutions in the market.
○ Domestic sales of air conditioners saw positive growth first time, industry continues to boom
------
The latest data from www.chinaiol.com shows that the output of air conditioners in July was 9.31 million units, up by 15.19 percent, and the sale was 9.16 million units up by 14.27 percent. Specifically, 5.99 million air conditioners were sold in domestic market, up by 15.76 percent, and 3.17 million were exported, up by 11.56 percent. It is noteworthy that it is the first time that the domestic sales for July recorded positive growth since June 2015.
Comment: Multiple institutions said in their research reports that due to the high temperature across the country and the delayed effects in the house market, end demands have increased notably, reducing lots of inventories. Inventory reduction in channels has gradually come to an end. Meanwhile, as the sales were low at the same period last year, the domestic sales of air conditioners in July improved remarkably both on a monthly and yearly basis. It is expected that the supply growth will recover gradually.
TOP
[Announcement Interpretation]
○ Fangda Jinhua Chemical Technology to buy three military electronics companies with RMB2 bln
------
Fangda Jinhua Chemical Technology Co., Ltd. (000818.SZ) proposes to buy the entire equities of three companies, namely Changsha Shaoguang Semiconductor Company Ltd., Wellcore and Chengdu Chuangxinda at the total valuation of 1,992.5 million yuan, which will be paid by additional issuance and cash. At the same time, the company proposes to raise 1,157 million yuan supporting fund, which will be used to pay for the cash payment and other projects. The issuing prices of shares issued to buy assets and private placement are all 6 yuan per share. The committed net profits of the three subject companies from 2016 to 2018 will be no less than 150 million yuan, 205 million yuan and 280 million yuan in total respectively. Through this acquisition, Fangda Jinhua Chemical Technology will expand into military electronics area.
○IDG's partner to buy Shuangma Cement, starting general offer for acquisition
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Larfarge China, a substantial shareholder of Sichuan Shuangma Cement Co., ltd. (000935.SZ), proposes to transfer 25.92 percent of the shares of the listed company held by it to Beijing Hexie Hengyuan Technology Company Ltd. at the same time, Lafarge China and Lafarge Sichuan proposes to transfer 12.91 percent and 12.1 percent shareholding held by them respectively to Tianjin Saikehuan. Hexie Hengyuan and Tianjin Saikehuan are parties acting in concert. Upon completion of the transaction, the two parties will hold 50.93 percent equities of Shuangma Cement in total and become the controlling shareholder. This triggers the obligation of general offer for acquisition of the listed company. Therefore, the parties acting in concert proposes to purchase 31.53 percent of the outstanding shares of the listed company at 8.09 yuan per share, on the precondition that the listed company will not be delisted.
Comment: the actual controller of Hexie Hengyuan and Tianjin Saikehuan is Lin Dongliang. Public information shows that Lin is a partner of IDG, and primarily in charge of investment in IT sector. Hexie Hengyuan and Tianjin Saikehuan indicated that they will decide whether to continue increase shareholding according to market condition and the development need of Shuangma Cement in the following 12 months.
TOP
○Ygsoft deploys energy Internet with fundraising of RMB600 mln
------
Ygsoft Inc. (002063.SZ) proposes to issue 45,180,000 shares through private placement at no less than 13.17 yuan to raise 595 million yuan, which will be used for intelligent enterprise management software project based on artificial intelligence (AI), smart energy service project (phase I) based on BDaaS model, R＆D training complex building project of energy industry park. The company indicated that after this private placement, it will further optimize the company's business structure and profit model through deploying in energy Internet.
○ Arcplus Group to buy real estate of biggest shareholder with RMB970 mln
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Arcplus Group PLC (600629.SH) proposes to issue shares at 16.36 yuan per share through private placement to raise 970.7 million yuan to acquire building (located in the downtown of Shanghai) owned by Shanghai Xian Dai Architectural Design Group, controlling shareholder of the listed company; at the same time, the company proposes to raise 280 million yuan supporting fund through private placement for the informatization renovation of building. The price determination day of the issuance will be the first day of issuance.
○ Evergrande Life appear in list of shareholder of CITIC Offshore Helicopter
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Interim report of CITIC Offshore Helicopter Co., Ltd. (000099.SZ) shows that Evergrande Life－Wangneng Zuhe B held 3,480,000 shares, representing 0.57 percent of the company's total share capital of the listed company, becoming the six largest shareholder. It is the first time that Evergrande Life appears in a list of shareholders. CITIC Offshore Helicopter thus become a new "Evergrande" concept stock.
[Financial Reports Express]
○ Lithium electricity companies expect substantial growth in first three quarters
------
Tianqi Lithium Industries, Inc. (002466.SZ) reported 17 times growth in its interim report, and expects 17 to 18 times growth for the first three quarters. Jiangxi Ganfeng Lithium Co., Ltd. (002460.SZ) reported 445 percent growth in its interim report, and expects 450 percent to 500 percent growth for the first three quarters. Guangzhou Tinci Materials Technology Co., Ltd. (002709.SZ) reported 5 times growth in its interim report, and expects 5 times growth for the first three quarters. Cangzhou Mingzhu Plastic Co., ltd. (002108.SZ) reported 185 percent growth in the interim report, and expects 140 percent to 180 percent growth for the first three quarters. Guoxuan High-Tech Co., Ltd. (002074.SZ) reported 141 percent growth in the interim report, and expects 1 time growth for the first three quarters. Shen Zhen Mindata Holding Co., Ltd. (002137.SZ) reported 73 times growth in the interim report, and expects 47 to 48 times growth for the first three quarters. Yaxia Automobile Corporation (002607.SZ) reported 11 times growth in the interim report, and expects 29 times growth for the first three quarters. Hunan Gold Corporation Limited (002155.SZ) reported 193 percent growth in the interim report, and expects 350 percent to 400 percent growth for the first three quarters. Dehua TB New Decoration Material Co., Ltd. (002043.SZ) reported 2.76 percent growth in the interim report, and expects 2 times growth for the first three quarters.
○ Fastprint Circuit Tech proposes high share conversion and dividend
------
Shenzhen Fastprint Circuit Tech Co., Ltd. (002436.SZ) reported 39 percent growth in its interim report. The board of shareholders of the company has approved the distribution plan of 20-for-10 conversion of capital surplus into shares. Controlling shareholders of Shanghai RAAS Blood Products Co., Ltd. (002252.SZ) proposes a distribution plan of 8-for-10 conversion of capital surplus into shares in the interim report.
TOP
○ Two building material SOEs to implement restructuring, prospect attracts attention
○ Anhui accelerates SOEs reform, overall listing to become key work
○ Fangda Jinhua Chemical Technology invest in military electronics, new shareholder of Shuangma Cement starts general offer for acquisition
○ Ygsoft deploys energy Internet, Arcplus Group to injected with real estate assets
[SSN Focus]
○ Two building material SOEs to implement restructuring, prospect attracts attention
------
The State-owned Assets Supervision and Administration Commission (SASAC) of the State Council approved China National Building Materials Group Corporation (CNBM) and China National Materials Group Corporation (Sinoma) to implement restructuring. CNBM's Chinese name will change from "中国建筑材料集团" to "中国建材集团". CNBM will become the parent company after restructuring, and Sinoma's assets will be transferred to the new company at no cost. Multiple listed companies under the two companies made announcement on the restructuring on Aug. 22 night.
Comment: After the restructuring, CNBM will become the only central state-owned enterprise (SOE) in the building material industry of the SASAC. Its cement productivity accounts for over over 30 percent of the total productivity across the nation. Their combination will effectively reduce vicious competition in the industry. Sinoma currently owns three A-share listed companies in the cement industry, including Xinjiang Tianshan Cement Co., Ltd. (000877.SZ), Ningxia Building Materials Group Co., Ltd. (600499.SH) and Gansu Qilianshan Cement Group Co., Ltd. (600720.SH). The three companies have overlapping in some regions. Sinoma promised to solve the horizontal competition by September 7. In the glass fiber industry, CNBM and Sinoma respectively own China Jushi Co., Ltd. (600176.SH) and Sinoma Science ＆ Technology Co., Ltd. (002080.SZ). In addition, the restructuring of Xinjiang Guotong Pipeline Co., Ltd. (002205.SZ) and Ruitai Materials Technology Co., Ltd. (002066.SZ), with a total valuation of less than 4 billion yuan, also attracts much attention from institutions.
TOP
○ Anhui accelerates SOEs reform, overall listing to become key work
------
Since the beginning of the third quarter, Anhui Province has accelerated in promoting SOEs reform at all levels. For example, it held a work conference on the supply-side structural reform and SOEs reform; the SASAC of Hefei Municipal Government proposes to make full use of state-owned capital operation platform to guide limited resources to gather in key sectors gathering; Tongling City announced the recent key tasks in the supply-side structural reform and proposed to set up a large agricultural, industrial and commercial group; Huainan Mining Industry (Group) Co., Ltd., the controlling shareholder of Anhui Wanjiang Logistics (Group) Co., Ltd. (600575.SH), announced the launch listing works.
Comment: Based on information and plans disclosed, overall listing will be the key work in the SOEs reform in Anhui Province in the coming years. According to Anhui Provincial Government's requirements, provincial SOEs, including Magang (Group) Holding Co., Ltd., Anhui Conch Cement Company Limited and Tongling Nonferrous Metals Group Holding Co. Ltd., will go overall listing. Anhui Huamao Textile Company Limited (000850.SZ) and Anhui Heli Co., Ltd. (600761.SH) that have launched plans for SOEs reform but failed for some reasons will resume reform after adjusting their plans.
[SSN Selection]
○ The State Council has issued a work plan to reduce costs for enterprises engaged in the real economy. It also proposes to increase efforts in treating non-performing assets and vigorously carry out direct electricity transaction.
○ The National Development and Reform Commission issued the three-year plan for the revitalization of the northeast China. It will formulate special plans for the SOEs reform in northeast China and plans for the supply-side reform to cut productivity.
○ Panzhihua Taihai Technology Co., Ltd. on Aug. 22 announced lifting titanium dioxide price by 500 yuan per ton. So far, it is the tenth price hike in domestic titanium dioxide market.
○ Foreign media reported that the world's largest Pfizer will acquire anticancer drug giant Medivation for 14 billion U.S. dollars.
○ Zhou Hongwei, president of Qihoo 360 Technology Co., Ltd., indicated at a press conference on Aug. 22 that the company will further split its intelligent hardware business.
[Industry Information]
○ Major acquisition in chips for vehicles to happen, industry to see higher demands
------
Foreign media reported on Aug. 22 that Renesas Electronics, a leading Japanese semiconductor chips manufacturer, proposes to acquire Intersil, a U.S. chip manufacturer. The two sides are under final negotiation on the acquisition and are expected to reach an agreement by the end of August at the soonest. The acquisition amount is expected to be up to 3 billion U.S. dollars. It is reported that Renesas plans to develop chips for vehicles, which sees surging demands, through the acquisition of Intersil.
Comment: Institutions estimate that the global intelligent vehicle market will reach a scale of 700 billion U.S. dollars in 2020. Chip manufacturers will enjoy the highest gross profit in the industry thanks to their high threshold and technology. The revenue from automobile electronic chips will account for about 25 percent of the industry's total revenue. Datang NXP Semiconductor Co., Ltd. owned by Datang Telecom Technology Co., Ltd. (600198.SH) is engaged in automobile electronic chips. All Winner Technology Co., Ltd. (300458.SZ) owns a variety of chips which are applied in automobile data recorder and vehicle. Its T-series chips have become mainstream chip solutions in the market.
○ Domestic sales of air conditioners saw positive growth first time, industry continues to boom
------
The latest data from www.chinaiol.com shows that the output of air conditioners in July was 9.31 million units, up by 15.19 percent, and the sale was 9.16 million units up by 14.27 percent. Specifically, 5.99 million air conditioners were sold in domestic market, up by 15.76 percent, and 3.17 million were exported, up by 11.56 percent. It is noteworthy that it is the first time that the domestic sales for July recorded positive growth since June 2015.
Comment: Multiple institutions said in their research reports that due to the high temperature across the country and the delayed effects in the house market, end demands have increased notably, reducing lots of inventories. Inventory reduction in channels has gradually come to an end. Meanwhile, as the sales were low at the same period last year, the domestic sales of air conditioners in July improved remarkably both on a monthly and yearly basis. It is expected that the supply growth will recover gradually.
TOP
[Announcement Interpretation]
○ Fangda Jinhua Chemical Technology to buy three military electronics companies with RMB2 bln
------
Fangda Jinhua Chemical Technology Co., Ltd. (000818.SZ) proposes to buy the entire equities of three companies, namely Changsha Shaoguang Semiconductor Company Ltd., Wellcore and Chengdu Chuangxinda at the total valuation of 1,992.5 million yuan, which will be paid by additional issuance and cash. At the same time, the company proposes to raise 1,157 million yuan supporting fund, which will be used to pay for the cash payment and other projects. The issuing prices of shares issued to buy assets and private placement are all 6 yuan per share. The committed net profits of the three subject companies from 2016 to 2018 will be no less than 150 million yuan, 205 million yuan and 280 million yuan in total respectively. Through this acquisition, Fangda Jinhua Chemical Technology will expand into military electronics area.
○IDG's partner to buy Shuangma Cement, starting general offer for acquisition
------
Larfarge China, a substantial shareholder of Sichuan Shuangma Cement Co., ltd. (000935.SZ), proposes to transfer 25.92 percent of the shares of the listed company held by it to Beijing Hexie Hengyuan Technology Company Ltd. at the same time, Lafarge China and Lafarge Sichuan proposes to transfer 12.91 percent and 12.1 percent shareholding held by them respectively to Tianjin Saikehuan. Hexie Hengyuan and Tianjin Saikehuan are parties acting in concert. Upon completion of the transaction, the two parties will hold 50.93 percent equities of Shuangma Cement in total and become the controlling shareholder. This triggers the obligation of general offer for acquisition of the listed company. Therefore, the parties acting in concert proposes to purchase 31.53 percent of the outstanding shares of the listed company at 8.09 yuan per share, on the precondition that the listed company will not be delisted.
Comment: the actual controller of Hexie Hengyuan and Tianjin Saikehuan is Lin Dongliang. Public information shows that Lin is a partner of IDG, and primarily in charge of investment in IT sector. Hexie Hengyuan and Tianjin Saikehuan indicated that they will decide whether to continue increase shareholding according to market condition and the development need of Shuangma Cement in the following 12 months.
TOP
○Ygsoft deploys energy Internet with fundraising of RMB600 mln
------
Ygsoft Inc. (002063.SZ) proposes to issue 45,180,000 shares through private placement at no less than 13.17 yuan to raise 595 million yuan, which will be used for intelligent enterprise management software project based on artificial intelligence (AI), smart energy service project (phase I) based on BDaaS model, R＆D training complex building project of energy industry park. The company indicated that after this private placement, it will further optimize the company's business structure and profit model through deploying in energy Internet.
○ Arcplus Group to buy real estate of biggest shareholder with RMB970 mln
------
Arcplus Group PLC (600629.SH) proposes to issue shares at 16.36 yuan per share through private placement to raise 970.7 million yuan to acquire building (located in the downtown of Shanghai) owned by Shanghai Xian Dai Architectural Design Group, controlling shareholder of the listed company; at the same time, the company proposes to raise 280 million yuan supporting fund through private placement for the informatization renovation of building. The price determination day of the issuance will be the first day of issuance.
○ Evergrande Life appear in list of shareholder of CITIC Offshore Helicopter
------
Interim report of CITIC Offshore Helicopter Co., Ltd. (000099.SZ) shows that Evergrande Life－Wangneng Zuhe B held 3,480,000 shares, representing 0.57 percent of the company's total share capital of the listed company, becoming the six largest shareholder. It is the first time that Evergrande Life appears in a list of shareholders. CITIC Offshore Helicopter thus become a new "Evergrande" concept stock.
[Financial Reports Express]
○ Lithium electricity companies expect substantial growth in first three quarters
------
Tianqi Lithium Industries, Inc. (002466.SZ) reported 17 times growth in its interim report, and expects 17 to 18 times growth for the first three quarters. Jiangxi Ganfeng Lithium Co., Ltd. (002460.SZ) reported 445 percent growth in its interim report, and expects 450 percent to 500 percent growth for the first three quarters. Guangzhou Tinci Materials Technology Co., Ltd. (002709.SZ) reported 5 times growth in its interim report, and expects 5 times growth for the first three quarters. Cangzhou Mingzhu Plastic Co., ltd. (002108.SZ) reported 185 percent growth in the interim report, and expects 140 percent to 180 percent growth for the first three quarters. Guoxuan High-Tech Co., Ltd. (002074.SZ) reported 141 percent growth in the interim report, and expects 1 time growth for the first three quarters. Shen Zhen Mindata Holding Co., Ltd. (002137.SZ) reported 73 times growth in the interim report, and expects 47 to 48 times growth for the first three quarters. Yaxia Automobile Corporation (002607.SZ) reported 11 times growth in the interim report, and expects 29 times growth for the first three quarters. Hunan Gold Corporation Limited (002155.SZ) reported 193 percent growth in the interim report, and expects 350 percent to 400 percent growth for the first three quarters. Dehua TB New Decoration Material Co., Ltd. (002043.SZ) reported 2.76 percent growth in the interim report, and expects 2 times growth for the first three quarters.
○ Fastprint Circuit Tech proposes high share conversion and dividend
------
Shenzhen Fastprint Circuit Tech Co., Ltd. (002436.SZ) reported 39 percent growth in its interim report. The board of shareholders of the company has approved the distribution plan of 20-for-10 conversion of capital surplus into shares. Controlling shareholders of Shanghai RAAS Blood Products Co., Ltd. (002252.SZ) proposes a distribution plan of 8-for-10 conversion of capital surplus into shares in the interim report.
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