[Today's Guide]
○ CIRC denies market rumor, universal life insurance regulation improvement has limited effects
○ Domestication of integrated circuits under steady advancing, UHV project commences construction
○ Top Choice Medical Investment to launch SEOP, Hodgen Tech. invest in intelligent hardware
○ Multiple steel companies record growth in earnings, Linyang Energy proposes high share conversion and dividend
[SSN Focus]
○ CIRC denies market rumor, universal life insurance regulation improvement has limited effects
------
China Insurance Regulatory Commission (CIRC) released the answers to questions from the press on its website on Aug. 25 afternoon, saying that the rumor that "600 billion yuan of universal life insurance will withdraw from the A-share market" is untrue. It emphasized that insurance capitals play important roles in supporting the capital market development, promoting the transformation of the real economy and facilitating industrial restructuring. It will further give play to the advantages of long-term investments and provide long-term and stable capitals for the development of the real economy and the capital market.
Comments: As the CIRC said, the improvement of the regulation system is to reasonably control the liquidity risks of insurance companies rather than forbidding universal life insurance or de-leveraging. As a result, it will not result in the plunge in new insurance fees growth or the withdrawal of stock insurance funds from the A-share market. Considering that the insurance industry has sufficient money with few assets, it is a trend that insurance capitals will continue to invest in blue-chip stocks with low valuation and high dividend rates. The "600 billion yuan" in the rumor is over-estimated based on the specific size of the universal life insurance in the stock market. As at the end of the first quarter, universal life insurance products are in the top ten circulation shareholders of more than 130 listed companies, holding a total market value of 113.1 billion yuan.
[SSN Selection]
○ The executive meeting of the State Council held on Aug. 24 made arrangements on promoting the improvement on the standards and quality of consumer products. It will advance the same standards and quality for products for domestic and overseas sales.
○ China will ensure the launching of Shenzhen-Hong Kong Stock Connect within the year, indicated Fang Xinghai, leader of the special working group on Shenzhen-Hong Kong Stock Connect of the China Securities Regulatory Commission (CSRC).
○ The National Development and Reform Commission (NDRC) disclosed at the press conference on Aug. 25 that the 13th Five-year Plan on the development of strategic and emerging industries will be released soon.
○ The Party committee of the National Energy Administration proposed to stably advance the reform of the energy system on Aug. 25. The certain opinions on deepening the reform of the petroleum and natural gas system will be released by the end of the year.
○ The 600,000 individual limits on new energy vehicles in Beijing for 2016 have been applied. Applicants have to wait for next round in 2017.
○ The interim report of Bank of Communications Co., Ltd. (03328.HK; 601328.SH) shows that China Securities Finance Corporation Limited increased the shareholding in the company by 144 million shares in the second quarter. The date from the Hong Kong Exchanges and Clearing Limited shows that social insurance funds increased the shareholding in the Bank of Communications with 11.80 million H shares.
TOP
[Industry Information]
○ Domestication of integrated circuits under steady advancing, industry continues to boom
------
SSN learnt that Wuhan Xinxin Semiconductor Manufacturing Corporation (XMC) and the Institute of Microelectronics of Chinese Academy of Sciences completed the establishment and the 39-story 3D-NAND processes and the development of the prototype structure. As all structural parameters meet the requirements, it is conducting pilot production. Besides, Xiamen City formulated the planning guidance on the development of the integrated circuit industry recently, proposing to strengthen the integrated development with the integrated circuit industry in Taiwan and form a regional industrial clustering place with 100 billion yuan.
Comments: Signs show that the domestication of integrated circuits is under stable progress. The latest data shows that the shipment ratio of semi-conductors in the North America hiked to 1.05 in July from the 1.0 in June. The industry continues to boom. Tsinghua Unigroup has acquired most equities of XMC and Unigroup Guoxin Co., Ltd. (002049.SZ) is a platform of the group for the consolidation of memories. Shanghai Sinyang Semiconductor Materials Co., Ltd. (300236.SZ) is a leader in the domestic semi-conductor wafer and chemical products. Xiamen Sanan Integrated Circuit Company, a subsidiary of Sanan Optoelectronics Co., Ltd. (600703.SH), has shipped products to certain clients.
○ UHV project commences construction, orders delivery to boost company performance
------
The Jarvd-Qingzhou ?800KV ultra high voltage (UHV) DC project officially commenced construction on Aug. 25. The line is 1,234km long with a total investment of 22.1 billion yuan. It is planned to put into operation in 2017. The GIL comprehensive pipeline of the Huainan-Nanjing-Shanghai 1,000KV UHV AC project also commenced construction in Changshu on Aug. 16.
Comments: Institutes believe that the State Grid Corporation of China plans to complete the early works in the UHV project in 2016 and 2017 with a total investment of over 600 billion yuan. Transformers, GIS, converter valve and other equipment manufacturers will see significant growth in orders. Dalian Insulator Group Co., Ltd. (002606.SZ), a company principally engaged in the production of insulators, sees significant growth in UHV orders. The delivery of products in the first three quarters contributed to an increase of approximately 300 percent in the performance. Henan Pinggao Electric Co., Ltd. (600312.SH), a GIS leader, has UHV orders with over 6 billion yuan.
○ China makes breakthroughs in quantum computing
------
CCTV News reported that the scientific research team of the University of Science and Technology of China measured about 600 pairs of ultra-cold atomic bit entanglements with its ultra-cold atomic microscope, marking a significant step in the quantum computing technology. It is the first time in the world and makes the quantum computing possible.
Comment: Institutions believe that quantum computing is expected to play a revolutionary role with its subversive computing power and low energy requirement. Sanlux Co., Ltd. (002224.SZ) announced in January the establishment of quantum technology industry fund which will mainly invest in quantum communication network construction and quantum computing. Institutions are optimistic about the application of the ultra-low-temperature helium refrigeration technology of Yantai Moon Co., Ltd. (000811.SZ) in the cooling system of quantum computer.
TOP
[Announcement Interpretation]
○ Top Choice Medical Investment to launch RMB 300mln SEOP
------
Top Choice Medical Investment Co., Inc. (600763.SH) released the draft of its first phase employee stock ownership plan (SEOP). The plan will establish preferred stocks and inferior stocks at a proportion of 1:1. The employee employee stock ownership will subscribe all the inferior stocks with a subscription of 150 milion yuan. The plan will raise 150 million yuan preferred capital to establish a 300 million yuan collective plan to buy the company's shares.
○ Hodgen Tech. plans to raise RMB 1.5bln to invest in intelligent hardware
------
Wuxi Hodgen Technology Co., Ltd. (300279.SZ) proposes to raise 1,521 million yuan by issuing 38.98 million shares at 39.02 yuan per share to Chen Bolin, Shenzhen Hairun No. 9 Investment Partners and Hairun Hodgen Technology No. 2 Private Placement Investment Fund. The proceeds will be invested in the industrial and automotive intelligent controller project with an annual production of 3.1 million, the intelligent home terminal devices with an annual output of 2.6 million and the construction of intelligent terminal promotion and value-added services R＆D platform.
The projects are expected to bring an annual profit of 168 million yuan to the company after putting into production. The company said it will serve as an intelligent hardware manufacturing base, striving to create a family-centered ecosystem that integrates with intelligent hardware, platform operation and content providing.
○ Eastcompeace Tech. to raise RMB 546bln to invest in health insurance platform construction
------
Eastcompeace Technology Co., Ltd. (002017.SZ) proposes to raise about 546 million yuan by shares at prices no less than 14.07 yuan per share through private placement. 384 million yuan will be used for the construction and operation of the consumer endpoint security management platform for health insurance fund. 89.67 million yuan will be used for the intelligent transformation and upgrading of production. 17.5 million yuan will be used for the R＆D of NB-IoT-based security access solutions. The move will facilitate the the company to transform itself to a consumer endpoint security management platform operator for health insurance fund
○ Changhai Composite Materials to acquire 40.42 pct. stake in Tianma Group
------
Jiangsu Changhai Composite Materials Co., Ltd. (300196.SZ) plans to acquire 40.42 percent stake in Changzhou Tianma Group Co., Ltd. for about about 223 million yuan to take full control of the latter. Tianma Group is a fiberglass and composite material production base that has the most extensive product coverage in China. It has been an important supplier of raw materials forChanghai Composite Materials. Its net profit in 2015 and in the first half of 2016 was 27.68 million yuan and 18.56 million yuan, respectively.
○ Actual controller of Sunnada Communication increase shareholding
------
Zhou Shiping, the actual controller of Fujian Sunnada Communication Co., Ltd. (002417.SZ), increased shareholding in the company by 4,487,800 shares from Aug.24 to 25 via his trust plan and securities accounts, accounting for 1.66 percent of its total shares.
TOP
[Financial Reports Express]
○ Multiple steel companies record growth as steel market recovers
------
Fujian Sansteel Minguang Co., Ltd. (002110.SZ) garnered a net profit of 360 million yuan for the first half of this year while recording a loss of 269 million yuan in the same period last year. Benefiting from the supply-side reform, its overcapacity in iron and steel has reduced gradually, easing the contradiction between supply and demand. The company expects to earn a net profit of 409 million to 603 million yuan for the first three quarter, while it lost over 600 million yuan in the same period last year.
Companies that disclosed their interim reports on the same day include Shandong Iron And Steel Company Ltd. (600022.SH) that recorded a year-on-year growth of 211 percent in net profit during the reporting period, Liuzhou Iron and Steel Co., Ltd. (601003.SH) that recorded a net profit of 79 million yuan for the first half and recorded a loss of 630 million yuan in the same period last year and Baotou Steel shares Inner Mongolia BaoTou Steel Union Co., Ltd. (600010.SH) that recorded a year-on-year growth of in earnings for the first half.
○ Vtron Technologies forecasts to surge from Q1-Q3
------
Vtron Technologies Ltd. (002308.SZ) reported a growth of nearly 300 percent in earnings in its interim report, and forecasts a growth of about 300 percent for the first three quarters. Zhejiang Dilong New Material Co., Ltd. (002247.SZ) reported a growth of 160 percent in earnings in its interim report, and forecasts a growth of 200 percent for the first three quarters. Zhejiang Dilong New Material Co., Ltd. (002069.SZ) reported a growth of 200 percent in earnings in its interim report, and forecasts a growth of 600 to 800 percent for the first three quarters. Jiangsu Bicon Pharmaceutical Listed Company (002411.SZ) reported a growth of 153 percent in earnings in its interim report, and forecasts a growth of 160 to 195 percent for the first three quarters.
○ Linyang Energy proposes high share conversion and dividend
------
Jiangsu Linyang Energy Co., Ltd. (601222.SH) reported a growth of 30 percent in earnings in its interim report, and proposes a 25-for-10 conversion of capital surplus into shares combined with 2 yuan dividend for every 10 shares. Tianjin Chase Sun Pharmaceutical Co., Ltd. (300026.SZ) reported a growth of 26 percent in earnings in its interim report, and proposes a 20-for-10 conversion of capital surplus into shares.
Zhejiang Talent Television ＆ Film Co., Ltd. (300426.SZ) reported a growth of 4 percent in earnings in its interim report. Shenzhen Das Intellitech Co., Ltd. (002421.SZ) reported a growth of 81 percent in earnings in its interim report, and proposes a 20-for-10 conversion of capital surplus into shares. Sunwoda Electronic Co., Ltd. (300207.SZ) reported a growth of 159 percent in earnings in its interim report, and proposes a 10-for-10 conversion of capital surplus into shares.
TOP
○ CIRC denies market rumor, universal life insurance regulation improvement has limited effects
○ Domestication of integrated circuits under steady advancing, UHV project commences construction
○ Top Choice Medical Investment to launch SEOP, Hodgen Tech. invest in intelligent hardware
○ Multiple steel companies record growth in earnings, Linyang Energy proposes high share conversion and dividend
[SSN Focus]
○ CIRC denies market rumor, universal life insurance regulation improvement has limited effects
------
China Insurance Regulatory Commission (CIRC) released the answers to questions from the press on its website on Aug. 25 afternoon, saying that the rumor that "600 billion yuan of universal life insurance will withdraw from the A-share market" is untrue. It emphasized that insurance capitals play important roles in supporting the capital market development, promoting the transformation of the real economy and facilitating industrial restructuring. It will further give play to the advantages of long-term investments and provide long-term and stable capitals for the development of the real economy and the capital market.
Comments: As the CIRC said, the improvement of the regulation system is to reasonably control the liquidity risks of insurance companies rather than forbidding universal life insurance or de-leveraging. As a result, it will not result in the plunge in new insurance fees growth or the withdrawal of stock insurance funds from the A-share market. Considering that the insurance industry has sufficient money with few assets, it is a trend that insurance capitals will continue to invest in blue-chip stocks with low valuation and high dividend rates. The "600 billion yuan" in the rumor is over-estimated based on the specific size of the universal life insurance in the stock market. As at the end of the first quarter, universal life insurance products are in the top ten circulation shareholders of more than 130 listed companies, holding a total market value of 113.1 billion yuan.
[SSN Selection]
○ The executive meeting of the State Council held on Aug. 24 made arrangements on promoting the improvement on the standards and quality of consumer products. It will advance the same standards and quality for products for domestic and overseas sales.
○ China will ensure the launching of Shenzhen-Hong Kong Stock Connect within the year, indicated Fang Xinghai, leader of the special working group on Shenzhen-Hong Kong Stock Connect of the China Securities Regulatory Commission (CSRC).
○ The National Development and Reform Commission (NDRC) disclosed at the press conference on Aug. 25 that the 13th Five-year Plan on the development of strategic and emerging industries will be released soon.
○ The Party committee of the National Energy Administration proposed to stably advance the reform of the energy system on Aug. 25. The certain opinions on deepening the reform of the petroleum and natural gas system will be released by the end of the year.
○ The 600,000 individual limits on new energy vehicles in Beijing for 2016 have been applied. Applicants have to wait for next round in 2017.
○ The interim report of Bank of Communications Co., Ltd. (03328.HK; 601328.SH) shows that China Securities Finance Corporation Limited increased the shareholding in the company by 144 million shares in the second quarter. The date from the Hong Kong Exchanges and Clearing Limited shows that social insurance funds increased the shareholding in the Bank of Communications with 11.80 million H shares.
TOP
[Industry Information]
○ Domestication of integrated circuits under steady advancing, industry continues to boom
------
SSN learnt that Wuhan Xinxin Semiconductor Manufacturing Corporation (XMC) and the Institute of Microelectronics of Chinese Academy of Sciences completed the establishment and the 39-story 3D-NAND processes and the development of the prototype structure. As all structural parameters meet the requirements, it is conducting pilot production. Besides, Xiamen City formulated the planning guidance on the development of the integrated circuit industry recently, proposing to strengthen the integrated development with the integrated circuit industry in Taiwan and form a regional industrial clustering place with 100 billion yuan.
Comments: Signs show that the domestication of integrated circuits is under stable progress. The latest data shows that the shipment ratio of semi-conductors in the North America hiked to 1.05 in July from the 1.0 in June. The industry continues to boom. Tsinghua Unigroup has acquired most equities of XMC and Unigroup Guoxin Co., Ltd. (002049.SZ) is a platform of the group for the consolidation of memories. Shanghai Sinyang Semiconductor Materials Co., Ltd. (300236.SZ) is a leader in the domestic semi-conductor wafer and chemical products. Xiamen Sanan Integrated Circuit Company, a subsidiary of Sanan Optoelectronics Co., Ltd. (600703.SH), has shipped products to certain clients.
○ UHV project commences construction, orders delivery to boost company performance
------
The Jarvd-Qingzhou ?800KV ultra high voltage (UHV) DC project officially commenced construction on Aug. 25. The line is 1,234km long with a total investment of 22.1 billion yuan. It is planned to put into operation in 2017. The GIL comprehensive pipeline of the Huainan-Nanjing-Shanghai 1,000KV UHV AC project also commenced construction in Changshu on Aug. 16.
Comments: Institutes believe that the State Grid Corporation of China plans to complete the early works in the UHV project in 2016 and 2017 with a total investment of over 600 billion yuan. Transformers, GIS, converter valve and other equipment manufacturers will see significant growth in orders. Dalian Insulator Group Co., Ltd. (002606.SZ), a company principally engaged in the production of insulators, sees significant growth in UHV orders. The delivery of products in the first three quarters contributed to an increase of approximately 300 percent in the performance. Henan Pinggao Electric Co., Ltd. (600312.SH), a GIS leader, has UHV orders with over 6 billion yuan.
○ China makes breakthroughs in quantum computing
------
CCTV News reported that the scientific research team of the University of Science and Technology of China measured about 600 pairs of ultra-cold atomic bit entanglements with its ultra-cold atomic microscope, marking a significant step in the quantum computing technology. It is the first time in the world and makes the quantum computing possible.
Comment: Institutions believe that quantum computing is expected to play a revolutionary role with its subversive computing power and low energy requirement. Sanlux Co., Ltd. (002224.SZ) announced in January the establishment of quantum technology industry fund which will mainly invest in quantum communication network construction and quantum computing. Institutions are optimistic about the application of the ultra-low-temperature helium refrigeration technology of Yantai Moon Co., Ltd. (000811.SZ) in the cooling system of quantum computer.
TOP
[Announcement Interpretation]
○ Top Choice Medical Investment to launch RMB 300mln SEOP
------
Top Choice Medical Investment Co., Inc. (600763.SH) released the draft of its first phase employee stock ownership plan (SEOP). The plan will establish preferred stocks and inferior stocks at a proportion of 1:1. The employee employee stock ownership will subscribe all the inferior stocks with a subscription of 150 milion yuan. The plan will raise 150 million yuan preferred capital to establish a 300 million yuan collective plan to buy the company's shares.
○ Hodgen Tech. plans to raise RMB 1.5bln to invest in intelligent hardware
------
Wuxi Hodgen Technology Co., Ltd. (300279.SZ) proposes to raise 1,521 million yuan by issuing 38.98 million shares at 39.02 yuan per share to Chen Bolin, Shenzhen Hairun No. 9 Investment Partners and Hairun Hodgen Technology No. 2 Private Placement Investment Fund. The proceeds will be invested in the industrial and automotive intelligent controller project with an annual production of 3.1 million, the intelligent home terminal devices with an annual output of 2.6 million and the construction of intelligent terminal promotion and value-added services R＆D platform.
The projects are expected to bring an annual profit of 168 million yuan to the company after putting into production. The company said it will serve as an intelligent hardware manufacturing base, striving to create a family-centered ecosystem that integrates with intelligent hardware, platform operation and content providing.
○ Eastcompeace Tech. to raise RMB 546bln to invest in health insurance platform construction
------
Eastcompeace Technology Co., Ltd. (002017.SZ) proposes to raise about 546 million yuan by shares at prices no less than 14.07 yuan per share through private placement. 384 million yuan will be used for the construction and operation of the consumer endpoint security management platform for health insurance fund. 89.67 million yuan will be used for the intelligent transformation and upgrading of production. 17.5 million yuan will be used for the R＆D of NB-IoT-based security access solutions. The move will facilitate the the company to transform itself to a consumer endpoint security management platform operator for health insurance fund
○ Changhai Composite Materials to acquire 40.42 pct. stake in Tianma Group
------
Jiangsu Changhai Composite Materials Co., Ltd. (300196.SZ) plans to acquire 40.42 percent stake in Changzhou Tianma Group Co., Ltd. for about about 223 million yuan to take full control of the latter. Tianma Group is a fiberglass and composite material production base that has the most extensive product coverage in China. It has been an important supplier of raw materials forChanghai Composite Materials. Its net profit in 2015 and in the first half of 2016 was 27.68 million yuan and 18.56 million yuan, respectively.
○ Actual controller of Sunnada Communication increase shareholding
------
Zhou Shiping, the actual controller of Fujian Sunnada Communication Co., Ltd. (002417.SZ), increased shareholding in the company by 4,487,800 shares from Aug.24 to 25 via his trust plan and securities accounts, accounting for 1.66 percent of its total shares.
TOP
[Financial Reports Express]
○ Multiple steel companies record growth as steel market recovers
------
Fujian Sansteel Minguang Co., Ltd. (002110.SZ) garnered a net profit of 360 million yuan for the first half of this year while recording a loss of 269 million yuan in the same period last year. Benefiting from the supply-side reform, its overcapacity in iron and steel has reduced gradually, easing the contradiction between supply and demand. The company expects to earn a net profit of 409 million to 603 million yuan for the first three quarter, while it lost over 600 million yuan in the same period last year.
Companies that disclosed their interim reports on the same day include Shandong Iron And Steel Company Ltd. (600022.SH) that recorded a year-on-year growth of 211 percent in net profit during the reporting period, Liuzhou Iron and Steel Co., Ltd. (601003.SH) that recorded a net profit of 79 million yuan for the first half and recorded a loss of 630 million yuan in the same period last year and Baotou Steel shares Inner Mongolia BaoTou Steel Union Co., Ltd. (600010.SH) that recorded a year-on-year growth of in earnings for the first half.
○ Vtron Technologies forecasts to surge from Q1-Q3
------
Vtron Technologies Ltd. (002308.SZ) reported a growth of nearly 300 percent in earnings in its interim report, and forecasts a growth of about 300 percent for the first three quarters. Zhejiang Dilong New Material Co., Ltd. (002247.SZ) reported a growth of 160 percent in earnings in its interim report, and forecasts a growth of 200 percent for the first three quarters. Zhejiang Dilong New Material Co., Ltd. (002069.SZ) reported a growth of 200 percent in earnings in its interim report, and forecasts a growth of 600 to 800 percent for the first three quarters. Jiangsu Bicon Pharmaceutical Listed Company (002411.SZ) reported a growth of 153 percent in earnings in its interim report, and forecasts a growth of 160 to 195 percent for the first three quarters.
○ Linyang Energy proposes high share conversion and dividend
------
Jiangsu Linyang Energy Co., Ltd. (601222.SH) reported a growth of 30 percent in earnings in its interim report, and proposes a 25-for-10 conversion of capital surplus into shares combined with 2 yuan dividend for every 10 shares. Tianjin Chase Sun Pharmaceutical Co., Ltd. (300026.SZ) reported a growth of 26 percent in earnings in its interim report, and proposes a 20-for-10 conversion of capital surplus into shares.
Zhejiang Talent Television ＆ Film Co., Ltd. (300426.SZ) reported a growth of 4 percent in earnings in its interim report. Shenzhen Das Intellitech Co., Ltd. (002421.SZ) reported a growth of 81 percent in earnings in its interim report, and proposes a 20-for-10 conversion of capital surplus into shares. Sunwoda Electronic Co., Ltd. (300207.SZ) reported a growth of 159 percent in earnings in its interim report, and proposes a 10-for-10 conversion of capital surplus into shares.
TOP
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