[Today's Guide]
○ Aero-Engine Group of China officially set up, aiming to develop independent technology in this field
○ Supply on spandex market tight following production restriction, Some breast cancer patients can avoid chemotherapy with help from genome testing
○ Controlling shareholder of Polymer Biochemicals transfer shares at premium of more than 70 pct, Yi Qiao Sea Cucumber tap into Internet industry
○ Aurora Opto Electronics to raise RMB2 bln to develop main business, three institutional seats buy Soyea Technology
[SSN Focus]
○ Aero-Engine Group of China officially set up, aiming to develop independent technology in this field
------
Aero-Engine Group of China was officially set up in Beijing on August 28. China's cabinet, Beijing municipal government, the Aviation Industry Corp of China (AVIC) and Commercial Aircraft Corp of China are investors in the new Aero-Engine Group of China, with registered capital of 50 billion yuan. President Xi Jinping gave important instructions and emphasized that China should accelerate independent R＆D and manufacturing of aero-engine and gas turbine, and strive to build the nation into an aviation power. Avic Aviation Engine Corporation Plc. (600893.SH), Sichuan Chengfa Aero Science ＆ Technology Co., Ltd. (600391.SH) and AVIC Aero-Engine Controls Co., Ltd. (000738.SZ), which are subsidiaries under the AVIC, have all made announcement on the changes of actual controllers in the night.
Comment: the aero-engine industry has a long industry chain and broad coverage, involving various industries, such as machinery, materials, electronics and information. It can significantly drive the development of basic industry and science and technology, as well as related industries. Institutions indicated in the research reports that in the next 20 years, China's military and civil aero-engine has a potential market size of more than hundreds of billions yuan. When the aero-engine industry developed, related sectors such as metallic material, metallurgical processing, numerically-controlled machine tool and dynamic control will also achieve rapid progress.
◆ China National Building Material Group Corporation Limited, which formed after the merging of China National Building Material Group Corporation and China National Materials Group Corporation Ltd., was established on August 26. Chairman of the new company says that reorganization will process in an orderly way, and realize synergy effect as soon as possible.
[SSN Selection]
○ The Shenzhen Stock Exchange has held a press conference on soliciting public opinions for the related business rules of Shenzhen-Hong Kong Stock Connect. It aims to complete the preparation work in the beginning of November, to meet the requirement for the launch.
○ The China Securities Regulatory Commission has held a press conference on revision of articles of associations by some companies to avoid hostile takeover, saying that listed companies shall not restrict the legal rights of shareholders by taking advantage of the anti-takeover clauses.
○ Industrial enterprises above the designated size have realized 11 percent year on year profit growth in June, the second highest level during the year. Iron and steel, nonferrous metals and automobile industry stood out.
○ Zhejiang Key Construction Project 13th Five-Year Plan was issued recently. Boeing's plant Zhoushan City is among the list.
○ The first proposal on China's Internet lottery research report was held in Beijing on August 26. The report focus on discussing the influence and role of Internet on lottery.
○ Federal Reserve Chair Yellen on August 26 said that the case for another rates hike strengthened in recent months. After her speech, the dollar index surged.
TOP
[Industry Information]
○ Supply on spandex market tight following production restriction
------
The SSN learnt that as spandex enterprises restrict production, downstream enterprises have stronger intention to make up the order. Certain types of products of spandex enterprises face short of supply, and low price goods supply in the market reduced. The quote of spandex 20D ranges from 35,000 yuan to 39,000 yuan per ton. Currently, the overall rate of operation of the spandex industry exceeds 80 percent, and the average inventory is for about 40 days, a relatively low level.
Comment: institutions are in the view that as the production capacity of spandex gradually released, the supply and demand is expected to be rationalized. In addition, as the traditional peak season of demand approaches, the market can also gain some support. Zhejiang Huafon Spandex Co., Ltd. (002064.SZ) and Yantai Tayho Advanced Materials Co., Ltd. (002254.SZ) are leading players in the Chinese market in terms of the capacity.
○ Some breast cancer patients can avoid chemotherapy with help from genome testing
------
Researchers from the U.S. and Europe issued a research on the latest New England Journal of Medicine, saying that genome testing can identify that some breast cancer patients in the early stage have very low risk of recurrence, and can avoid chemotherapy after operation. This method could be used to test the health condition of cancer patients, providing basis for doctors and patients for the selection of therapeutic regimen.
Comment: though the genome testing cannot cure breast cancer, it can to some extend help patients avoid the pain from chemotherapy, thus it still have broad prospect for application. Institutions believe that the gene sequencing service is expected to see a market size of 20 billion dollars in the next few years. The genome sequencing platform of Da An Gene Co., Ltd. of Sun Yat-Sen University (002030.SZ) has been approved by relevant authorities, and the company has 8 approved clinical laboratory centers nation-wide. The genetic memory board produced by Shenzhen Changhong Technology Co., ltd. (300151.SZ) is core consumable for Genetic testing project, boasting high technologic barrier.
TOP
[Announcement Interpretation]
○ Controlling shareholder of Polymer Biochemicals transfer shares at premium of more than 70 pct
------
Changan Group, controlling shareholder of Shandong Polymer Biochemicals Co., Ltd. (002476.SZ), and its parties acting in concert, namely Kangqian Investment and chairman of the company Xia Chunliang, signed a share transfer agreement with natural person Wu Hao, to transfer in aggregate 34,145,200 shares (5.58 percent of the total shareholding of the listed company) to the latter at the price of 14.33 yuan per share. The total consideration is 489.3 million yuan. The latest price of Polymer Biochemicals is 8.25 yuan per share.
At the same time, Changan Group relegated the voting right of 16.11 percent shareholding of Polymer Biochemicals to Wu Hao, who therefore has voting right of 21.69 percent of the total shareholding, and will become the controlling shareholder and actual controller of the listed company.
○ Yi Qiao Sea Cucumber to buy 55 percent equities of Halcyon Network
------
Dalian Yi Qiao Sea Cucumber Co., Ltd. (002447.SZ) proposes to replace part of its inventory assets with 55 percent equities of Halcyon Network. The valuation of the replaced assets is 990 million yuan. Halcyon Network is primarily engaged in the release of mobile games. According to the performance commitment, Halcyon Network's net profits deducted of non-recurring profits or losses from 2016 to 2018 will be 86 million yuan, 192 million yuan and 292 million yuan.
Yi Qiao Sea Cucumber indicated that through the assets replacement, the exchanged out the sea cucumber cultivation and processing businesses with higher risks and develops mobile Internet-based pan-entertainment industry.
TOP
○ Aurora Opto Electronics to raise RMB2 bln to develop automatic equipment and new materials
------
Aurora Opto Electronics Co., Ltd. (600666.SH) proposes to raise 2 billion yuan by issuing 65.91 million shares at no less than 30.67 yuan per share through private placement. The proceeds wil be used in the colorful nano-zirconia ceramics industrialization project, the new type of 3D glass bender industrialization project and supplementing the working capital. The company indicated that the demand for zirconia ceramics will surge with the increasing demand for consumer electronics. The growing demand for replacing imported benders with domestic ones will become a trend.
○ Actual controller increase shareholding in Fuchunjiang Environmental Thermoelectric
------
Sun Qingyan, the actual controller of Zhejiang Fuchunjiang Environmental Thermoelectric Co., Ltd. (002479.SZ), increased the shareholding in the company with 1,614,100 shares in the company on Aug. 25 with over 20 million yuan, accounting for 0.2 percent of the total share capital of the company. It may further increase the shareholding in the following 12 months with the total shareholding increase of no more than 2 percent of the total share capital of the company.
[Financial Reports Express]
○ Rainbow Fine Chemical proposes high share conversion
------
Shenzhen Rainbow Fine Chemical Industry Co., Ltd. (002256.SZ) records an increase of 100 percent in net profit and proposes a 30-for-10 conversion of capital surplus into shares according to its interim report. It estimates an increase of 100 to 150 percent in the first three quarters. Chongqing Zaisheng Technology Co., Ltd. (603601.SH) records an increase of 100 percent in net profit and proposes a 12-for-10 conversion of capital surplus into shares with 5 yuan dividend for every 10 shares according to its interim report. Hebei Sitong New Metal Material Co., Ltd. (300428.SZ) records an increase of 2.6 percent in net profit and proposes a 20-for-10 conversion of capital surplus into shares according to its interim report.
Global Infotech Co., Ltd. (300465.SZ) records a decrease of 65 percent in net profit and proposes a 22-for-10 conversion of capital surplus into shares according to its interim report. Wutong Holding Group Co., Ltd. (300292.SZ) records an increase of 100 percent in net profit and proposes a 30-for-10 conversion of capital surplus into shares according to its interim report. Guangdong Vtr Bio-Tech Co., Ltd. (300381.SZ) records an increase of 27 percent in net profit and proposes a 20-for-10 conversion of capital surplus into shares with 1 yuan dividend for every 10 shares according to its interim report.
○ BYD expects growth in first three quarters
------
BYD Company Limited (01211.HK; 002594.SZ) records an increase of 384 percent in net profit according to its interim report and expects an increase of 83 to 91 percent in the first three quarters. Hengtong Optic-electric Co., Ltd. (600487.SH) records an increase of 172 percent in net profit according to its interim report and expects an increase of 100 to 200 percent in the first three quarters. Geron Co., Ltd. (002722.SZ) records an increase of 100 percent in net profit according to its interim report and expects an increase of 100 percent in the first three quarters.
Kweichow Moutai Co., Ltd. (600519.SH) records an increase of 11.6 percent in performance in its interim report. As at the end of June, it has recorded an advance account receivables of up to 11.48 billion yuan, hitting a new high. Zhejiang Sunflower Light Energy Science ＆ Technology Limited Liability Company (300111.SZ) records an increase of 2,600 percent in performance in its interim report. Guangdong Sky Dragon Printing Ink Group Co., Ltd. (300063.SZ) records an increase of nearly 4,500 percent in performance in its interim report.
[Trading Trends]
○ Three institutional seats buy Soyea Technology
------
The trading volume ranking list on Aug. 26 shows that three institutional seats bought Soyea Technology Co., Ltd. (000909.SZ) with a total of 112 million yuan, accounting for 41.1 percent of its intraday turnoer.
Comment: Haitong Securities Company Limited (06837.HK; 600837.SH) previously pointed out that more policies on new energy vehicles and charging piles in Hangzhou City as well as the adoption of electronic logistics into the category of subsidizes will greatly benefit West Lake Electronics Group. As the only listed platform under the group, the company will benefit directly.
○ "National teams" funds rosy about SOEs reform opportunities
------
All public funds have published their interim reports by this weekend. The details of the investment of five "national team" funds and their strategies in the second half also came out. After the significant fluctuation and gradual recovery in the first half, such funds adopted defensive strategies with the shareholding amount decreased. For example, the individual stocks held by E Fund Ruihui decreased by 20 percent compared with half a year ago while Harvest New Opportunities just bought two stocks. Such funds are medium to active about the future market. They are rosy about the state-owned enterprises (SOEs) reform, the mixed ownership reform of state-owned technical enterprises in particular, as well as traditional industrial opportunities recovering from the bottom.
[Weekly Review]
○ False withdrawal of RMB600 bln vs true investment of RMB1 trln
------
The hottest topic in the A-share market last week is the "withdrawal of 600 billion yuan of universal insurance". After the releasing of the document for soliciting opinions by the China Insurance Regulatory Commission (CIRC), some overestimated the market value of universal insurances. Some media indicated that the regulatory measures will drive 600 billion yuan withdrawing from the A-share market. As a result, investors were anxious and the stock index plunged. Fortunately, the CIRC denied the rumor in time. SSN also pointed out that "the improvement in the regulation on universal insurances has limited effects". The market confidence recovered to certain extent.
The investment opportunities with most money-making effects in the A-share market last week is environmental protection and infrastructure promoted by "the PPP project with 1 trillion yuan". The National Development and Reform Commission (NDRC) announced on Aug. 23 that the two batches of PPP projects have signed for an amount of 1,001.9 billion yuan. SSN made comments on the positive effects of PPP models in environmental protection and underground pipeline on Aug. 23 and 24. As at the weekend, certain environmental protection stocks have surged by over 10 percent.
Some say that it is a time of attention. Media often catch the attention with catchy words. However, as ordinary investors, we should be responsible for our money and be calm. No matter it is insurance, social insurance, pension or enterprise annuities, it is a trend to invest in the stock market. Compared with focusing on detailed policies on universal insurances, it is better to spend more time looking for such investment opportunities as PPP models, which can fundamentally affect the fundamentals.
TOP
○ Aero-Engine Group of China officially set up, aiming to develop independent technology in this field
○ Supply on spandex market tight following production restriction, Some breast cancer patients can avoid chemotherapy with help from genome testing
○ Controlling shareholder of Polymer Biochemicals transfer shares at premium of more than 70 pct, Yi Qiao Sea Cucumber tap into Internet industry
○ Aurora Opto Electronics to raise RMB2 bln to develop main business, three institutional seats buy Soyea Technology
[SSN Focus]
○ Aero-Engine Group of China officially set up, aiming to develop independent technology in this field
------
Aero-Engine Group of China was officially set up in Beijing on August 28. China's cabinet, Beijing municipal government, the Aviation Industry Corp of China (AVIC) and Commercial Aircraft Corp of China are investors in the new Aero-Engine Group of China, with registered capital of 50 billion yuan. President Xi Jinping gave important instructions and emphasized that China should accelerate independent R＆D and manufacturing of aero-engine and gas turbine, and strive to build the nation into an aviation power. Avic Aviation Engine Corporation Plc. (600893.SH), Sichuan Chengfa Aero Science ＆ Technology Co., Ltd. (600391.SH) and AVIC Aero-Engine Controls Co., Ltd. (000738.SZ), which are subsidiaries under the AVIC, have all made announcement on the changes of actual controllers in the night.
Comment: the aero-engine industry has a long industry chain and broad coverage, involving various industries, such as machinery, materials, electronics and information. It can significantly drive the development of basic industry and science and technology, as well as related industries. Institutions indicated in the research reports that in the next 20 years, China's military and civil aero-engine has a potential market size of more than hundreds of billions yuan. When the aero-engine industry developed, related sectors such as metallic material, metallurgical processing, numerically-controlled machine tool and dynamic control will also achieve rapid progress.
◆ China National Building Material Group Corporation Limited, which formed after the merging of China National Building Material Group Corporation and China National Materials Group Corporation Ltd., was established on August 26. Chairman of the new company says that reorganization will process in an orderly way, and realize synergy effect as soon as possible.
[SSN Selection]
○ The Shenzhen Stock Exchange has held a press conference on soliciting public opinions for the related business rules of Shenzhen-Hong Kong Stock Connect. It aims to complete the preparation work in the beginning of November, to meet the requirement for the launch.
○ The China Securities Regulatory Commission has held a press conference on revision of articles of associations by some companies to avoid hostile takeover, saying that listed companies shall not restrict the legal rights of shareholders by taking advantage of the anti-takeover clauses.
○ Industrial enterprises above the designated size have realized 11 percent year on year profit growth in June, the second highest level during the year. Iron and steel, nonferrous metals and automobile industry stood out.
○ Zhejiang Key Construction Project 13th Five-Year Plan was issued recently. Boeing's plant Zhoushan City is among the list.
○ The first proposal on China's Internet lottery research report was held in Beijing on August 26. The report focus on discussing the influence and role of Internet on lottery.
○ Federal Reserve Chair Yellen on August 26 said that the case for another rates hike strengthened in recent months. After her speech, the dollar index surged.
TOP
[Industry Information]
○ Supply on spandex market tight following production restriction
------
The SSN learnt that as spandex enterprises restrict production, downstream enterprises have stronger intention to make up the order. Certain types of products of spandex enterprises face short of supply, and low price goods supply in the market reduced. The quote of spandex 20D ranges from 35,000 yuan to 39,000 yuan per ton. Currently, the overall rate of operation of the spandex industry exceeds 80 percent, and the average inventory is for about 40 days, a relatively low level.
Comment: institutions are in the view that as the production capacity of spandex gradually released, the supply and demand is expected to be rationalized. In addition, as the traditional peak season of demand approaches, the market can also gain some support. Zhejiang Huafon Spandex Co., Ltd. (002064.SZ) and Yantai Tayho Advanced Materials Co., Ltd. (002254.SZ) are leading players in the Chinese market in terms of the capacity.
○ Some breast cancer patients can avoid chemotherapy with help from genome testing
------
Researchers from the U.S. and Europe issued a research on the latest New England Journal of Medicine, saying that genome testing can identify that some breast cancer patients in the early stage have very low risk of recurrence, and can avoid chemotherapy after operation. This method could be used to test the health condition of cancer patients, providing basis for doctors and patients for the selection of therapeutic regimen.
Comment: though the genome testing cannot cure breast cancer, it can to some extend help patients avoid the pain from chemotherapy, thus it still have broad prospect for application. Institutions believe that the gene sequencing service is expected to see a market size of 20 billion dollars in the next few years. The genome sequencing platform of Da An Gene Co., Ltd. of Sun Yat-Sen University (002030.SZ) has been approved by relevant authorities, and the company has 8 approved clinical laboratory centers nation-wide. The genetic memory board produced by Shenzhen Changhong Technology Co., ltd. (300151.SZ) is core consumable for Genetic testing project, boasting high technologic barrier.
TOP
[Announcement Interpretation]
○ Controlling shareholder of Polymer Biochemicals transfer shares at premium of more than 70 pct
------
Changan Group, controlling shareholder of Shandong Polymer Biochemicals Co., Ltd. (002476.SZ), and its parties acting in concert, namely Kangqian Investment and chairman of the company Xia Chunliang, signed a share transfer agreement with natural person Wu Hao, to transfer in aggregate 34,145,200 shares (5.58 percent of the total shareholding of the listed company) to the latter at the price of 14.33 yuan per share. The total consideration is 489.3 million yuan. The latest price of Polymer Biochemicals is 8.25 yuan per share.
At the same time, Changan Group relegated the voting right of 16.11 percent shareholding of Polymer Biochemicals to Wu Hao, who therefore has voting right of 21.69 percent of the total shareholding, and will become the controlling shareholder and actual controller of the listed company.
○ Yi Qiao Sea Cucumber to buy 55 percent equities of Halcyon Network
------
Dalian Yi Qiao Sea Cucumber Co., Ltd. (002447.SZ) proposes to replace part of its inventory assets with 55 percent equities of Halcyon Network. The valuation of the replaced assets is 990 million yuan. Halcyon Network is primarily engaged in the release of mobile games. According to the performance commitment, Halcyon Network's net profits deducted of non-recurring profits or losses from 2016 to 2018 will be 86 million yuan, 192 million yuan and 292 million yuan.
Yi Qiao Sea Cucumber indicated that through the assets replacement, the exchanged out the sea cucumber cultivation and processing businesses with higher risks and develops mobile Internet-based pan-entertainment industry.
TOP
○ Aurora Opto Electronics to raise RMB2 bln to develop automatic equipment and new materials
------
Aurora Opto Electronics Co., Ltd. (600666.SH) proposes to raise 2 billion yuan by issuing 65.91 million shares at no less than 30.67 yuan per share through private placement. The proceeds wil be used in the colorful nano-zirconia ceramics industrialization project, the new type of 3D glass bender industrialization project and supplementing the working capital. The company indicated that the demand for zirconia ceramics will surge with the increasing demand for consumer electronics. The growing demand for replacing imported benders with domestic ones will become a trend.
○ Actual controller increase shareholding in Fuchunjiang Environmental Thermoelectric
------
Sun Qingyan, the actual controller of Zhejiang Fuchunjiang Environmental Thermoelectric Co., Ltd. (002479.SZ), increased the shareholding in the company with 1,614,100 shares in the company on Aug. 25 with over 20 million yuan, accounting for 0.2 percent of the total share capital of the company. It may further increase the shareholding in the following 12 months with the total shareholding increase of no more than 2 percent of the total share capital of the company.
[Financial Reports Express]
○ Rainbow Fine Chemical proposes high share conversion
------
Shenzhen Rainbow Fine Chemical Industry Co., Ltd. (002256.SZ) records an increase of 100 percent in net profit and proposes a 30-for-10 conversion of capital surplus into shares according to its interim report. It estimates an increase of 100 to 150 percent in the first three quarters. Chongqing Zaisheng Technology Co., Ltd. (603601.SH) records an increase of 100 percent in net profit and proposes a 12-for-10 conversion of capital surplus into shares with 5 yuan dividend for every 10 shares according to its interim report. Hebei Sitong New Metal Material Co., Ltd. (300428.SZ) records an increase of 2.6 percent in net profit and proposes a 20-for-10 conversion of capital surplus into shares according to its interim report.
Global Infotech Co., Ltd. (300465.SZ) records a decrease of 65 percent in net profit and proposes a 22-for-10 conversion of capital surplus into shares according to its interim report. Wutong Holding Group Co., Ltd. (300292.SZ) records an increase of 100 percent in net profit and proposes a 30-for-10 conversion of capital surplus into shares according to its interim report. Guangdong Vtr Bio-Tech Co., Ltd. (300381.SZ) records an increase of 27 percent in net profit and proposes a 20-for-10 conversion of capital surplus into shares with 1 yuan dividend for every 10 shares according to its interim report.
○ BYD expects growth in first three quarters
------
BYD Company Limited (01211.HK; 002594.SZ) records an increase of 384 percent in net profit according to its interim report and expects an increase of 83 to 91 percent in the first three quarters. Hengtong Optic-electric Co., Ltd. (600487.SH) records an increase of 172 percent in net profit according to its interim report and expects an increase of 100 to 200 percent in the first three quarters. Geron Co., Ltd. (002722.SZ) records an increase of 100 percent in net profit according to its interim report and expects an increase of 100 percent in the first three quarters.
Kweichow Moutai Co., Ltd. (600519.SH) records an increase of 11.6 percent in performance in its interim report. As at the end of June, it has recorded an advance account receivables of up to 11.48 billion yuan, hitting a new high. Zhejiang Sunflower Light Energy Science ＆ Technology Limited Liability Company (300111.SZ) records an increase of 2,600 percent in performance in its interim report. Guangdong Sky Dragon Printing Ink Group Co., Ltd. (300063.SZ) records an increase of nearly 4,500 percent in performance in its interim report.
[Trading Trends]
○ Three institutional seats buy Soyea Technology
------
The trading volume ranking list on Aug. 26 shows that three institutional seats bought Soyea Technology Co., Ltd. (000909.SZ) with a total of 112 million yuan, accounting for 41.1 percent of its intraday turnoer.
Comment: Haitong Securities Company Limited (06837.HK; 600837.SH) previously pointed out that more policies on new energy vehicles and charging piles in Hangzhou City as well as the adoption of electronic logistics into the category of subsidizes will greatly benefit West Lake Electronics Group. As the only listed platform under the group, the company will benefit directly.
○ "National teams" funds rosy about SOEs reform opportunities
------
All public funds have published their interim reports by this weekend. The details of the investment of five "national team" funds and their strategies in the second half also came out. After the significant fluctuation and gradual recovery in the first half, such funds adopted defensive strategies with the shareholding amount decreased. For example, the individual stocks held by E Fund Ruihui decreased by 20 percent compared with half a year ago while Harvest New Opportunities just bought two stocks. Such funds are medium to active about the future market. They are rosy about the state-owned enterprises (SOEs) reform, the mixed ownership reform of state-owned technical enterprises in particular, as well as traditional industrial opportunities recovering from the bottom.
[Weekly Review]
○ False withdrawal of RMB600 bln vs true investment of RMB1 trln
------
The hottest topic in the A-share market last week is the "withdrawal of 600 billion yuan of universal insurance". After the releasing of the document for soliciting opinions by the China Insurance Regulatory Commission (CIRC), some overestimated the market value of universal insurances. Some media indicated that the regulatory measures will drive 600 billion yuan withdrawing from the A-share market. As a result, investors were anxious and the stock index plunged. Fortunately, the CIRC denied the rumor in time. SSN also pointed out that "the improvement in the regulation on universal insurances has limited effects". The market confidence recovered to certain extent.
The investment opportunities with most money-making effects in the A-share market last week is environmental protection and infrastructure promoted by "the PPP project with 1 trillion yuan". The National Development and Reform Commission (NDRC) announced on Aug. 23 that the two batches of PPP projects have signed for an amount of 1,001.9 billion yuan. SSN made comments on the positive effects of PPP models in environmental protection and underground pipeline on Aug. 23 and 24. As at the weekend, certain environmental protection stocks have surged by over 10 percent.
Some say that it is a time of attention. Media often catch the attention with catchy words. However, as ordinary investors, we should be responsible for our money and be calm. No matter it is insurance, social insurance, pension or enterprise annuities, it is a trend to invest in the stock market. Compared with focusing on detailed policies on universal insurances, it is better to spend more time looking for such investment opportunities as PPP models, which can fundamentally affect the fundamentals.
TOP
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