[Today's Guide]
○Environmental protection law to be levied, monitoring equipment industry to see new opportunities
○Draft of TCM law submitted for deliberation, simplified approval procedure to boost TCM development
○OLED expected to see quick penetration, demand for upstream material expected to be boosted
○Huaguang Boiler to merge Guolian Environment ＆ Energy, Start Group to acquire Eastaeon Technology to expand mobile intelligent terminal design
[SSN Focus]
○Environmental protection law to be levied, monitoring equipment industry to see new opportunities
------
The draft of the environmental protection law is submitted to the Standing Committee of the National People's Congress for approval on August 29. According to the draft, China plans to levy environmental protection tax and set the current standard on sewage charge as the lower limit for environmental protection tax amount. Pollutants included in the tax cover air pollutants, water pollutants, solid waste and noise.
Comment: This is the first draft of taxation law submitted to the Standing Committee of NPC after implementing principle of law-based taxation was put forward in the third plenary session of the 18th Central Committee of the CPC. Compared with sewage charge system, taxation system is more enforceable and its applicable tax amount can further float upwards, which will drive enterprises to pay more attention to prevent and treat pollution when developing production. Institutions believe that monitoring equipment enterprises as the major executors of tax law will benefit from it. In terms of listed companies, Hebei Sailhero Environmental Protection High-tech Co., Ltd. (300137.SZ) is principally engaged in environmental monitoring systems and is actively developing operation and maintenance services. Focused Photonics (Hangzhou), Inc. (300203.SZ) sees rapid growth in the laboratory analytical instrument businesses and is also developing PPP environmental protection projects.
TOP
○Draft of TCM law submitted for deliberation, simplified approval procedure to boost TCM development
------
The draft of traditional Chinese medicine (TCM) law is submitted to the Standing Committee of the National People's Congress for approval on August 29. In a legislative form, the draft specifies the government's role in boosting TCM development and simplifies approval procedure of TCM. When applying for drug approval number for compound traditional medicine preparation, which is qualified for production and originated from ancient and classic famous prescription, enterprises are required to only provide non-clinical safety study data.
Comment: Simplifying approval procedure will encourage enterprises to develop and utilize TCM resource. With introduction of such important documents as the 13th Five-year Plan on the Development of Traditional Chinese Medicine and Outline of Traditional Chinese Medicine Development Strategic Planning (2016-2030), institutions believe that TCM caters better to the medical demand of ordinary people than western medicine and it will embrace booming development during the 13th Five-year Plan period due to promotion of hierarchical medical system. The TCM enterprises such as Beijing Tongrentang Co., Ltd. (600085.SH) and Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited (600332.SH), which own a great many of classical prescription, will see larger market opportunities.
[SSN Selection]
○The General Secretary Xi Jinping inspects strategic support forces on Aug. 29, emphasizing making efforts to build a strong and modernized strategic support force.
○General Office of the State Council releases methods on reviewing works of food safety and reinforces regional governments' responsibilities in organizing, supervising and managing food safety on Aug. 29.
○Asset Management Association of China releases a circular on Aug. 29 that there will be a self-examination and correction activity among private funds industry from today on till the end of September.
○Shanghai Municipal Commission of Housing and Urban-rural Development responded to the rumor on new policy of credit for house purchase on Aug. 29, denying that it has never studied such policy yet.
○Dalian Wanda Commercial Properties Co., Ltd. (03699.SZ) stated that the Hong Kong stock exchange has approved that the company's H shares will have the last trading on Sept. 13 and will be delisted from Hong Kong bourse on Sept. 20.
○Nexus Capital bought 4.1 million shares of H shares of China Vanke Co., Ltd. again on Aug. 22 and its shareholding proportion in China Vanke H share increases to 10.17 percent.
TOP
[Industry Information]
○OLED expected to see quick penetration, demand for upstream material expected to be boosted
------
According to the announcement of TCL Corporation on the evening of Aug. 29, the company plans to jointly develop production line project of the 11th generation of TFT-LCD and AMOLED new displayer with Shenzhen China Star Optoelectronics Technology Co., Ltd. (CSOT) and Economy, Trade and Information Commission of Shenzhen Municipality. The total investment is about 46.5 billion yuan. In addition, United States Patent and Trademark Office recently released a new patent submitted by Apple Inc. It mainly serves electric equipment with OLED screen, verifying the news that the new iPhone will be equipped with OLED screen.
Comment: OLED boasts advantages with lightness, thinness, short response time and large visual angle. TCL once indicated that it had invested printing display filed, which is able to lower OLED cost much more. Led by Apple, OLED is expected to enter other fields quickly and demand for upstream liquid crystal material and display driver may boom in the future. Valiant Co., Ltd. (002643.SZ) is engaged in production and sales of OLED intermediates. Sino Wealth Electronic Ltd. (300327.SZ) can produce AMOLED drive chips.
TOP
[Announcement Interpretation]
○Huaguang Boiler to merge Guolian Environment ＆ Energy for RMB5,913 mln
------
Wuxi Huaguang Boiler Co., Ltd. (600475.SH) proposes to issue 427 million shares to Guolian Group with 13.84 yuan per share to absorb and merge its parent company Guolian Environment ＆ Energy Group with 5,913 million yuan, so that Guolian Environment ＆ Energy can realize overall listing, after that, Guolian Group will directly hold 73.17 percent equities of Huaguang Boiler, making it as controlling shareholder and actual controller.
The listed company also plans to acquire 25 percent equities of Tianjin Youlian Thermal Power Co., Ltd. and Wuxi Huilian Thermal Power Co., Ltd. respectively with cash, and predicted assets values of the two targets are 107 million and 83.75 million yuan respectively. Main businesses of Guolian Environment ＆ Energy include energy and environmental protection businesses, with revenue of 4.05 billion yuan and net profit of around 620 million yuan in 2015, and the figures are about 1.54 billion yuan and 310 million yuan respectively for January to May in 2016.
○Start Group to acquire Eastaeon Technology to expand mobile intelligent terminal design
------
Shenzhen Xinfei Technology Co., Ltd., wholly owned by Fujian Start Group Co., Ltd. (600734.SH), has raised 300 million yuan to acquire 100 percent equities of Shenzhen Eastaeon Technology Co., Ltd. Eastaeon Technology has always paid attention to design and R＆D of mobile intelligent terminal products, and promises a net profit after deduction of no less than 35 million yuan, 42 million yuan and 50 million yuan respectively for 2016 to 2018. After the transaction, mobile intelligent terminal business of the listed company, ODM based on Xinfei Technology, will be reinforced.
○Controlling shareholder of Heilongjiang Transport Development to transfer parts of shareholdings
------
Coland Holdings Company Limited, controlling shareholder of Heilongjiang Transport Development Co., Ltd. (601188.SH), proposes to transfer parts of its equities through public invitation for transferee. This equity transfer will not cause alteration in controlling right of the listed company. Coland Holdings holds 686 million shares, accounting for 52.17 percent equities of the listed company, and 103 million shares are non-tradable ones, according to semi-annual report of Heilongjiang Transport Development.
○Chendian International Development to raise water prices
------
Chenzhou Water Supply Co., Ltd., wholly owned by Hunan Chendian International Development Co., Ltd. (600969.SH), will raise the prices by 23 percent for civil and non-civil water usages as well as special industries from September 1. After that, Water Supply is expected to increase about 26.79 million yuan for its revenue annually.
○Xingyuan Environment Technology won PPP project
------
Zhongyi Landscape Co., Ltd., wholly owned by Xingyuan Environment Technology Co., Ltd. (300266.SZ), built up a combo, winning a PPP project for ocean ecological corridor renovation ＆ restoration engineering in Dongtou county of Wenzhou city, and the local housing ＆ urban-rural planning department will implement this project, with transaction price of 800 million yuan.
[Financial Reports Express]
○Limin Chemical and others announced semi-annual reports
------
Limin Chemical Co., Ltd. (002734.SZ) announced a performance growth of 100 percent in its semi-annual report, expecting to gain profits greatly from losses for the first three quarters; performance growth of 28 times for Teamax Smart City Technology Corporation Limited (000662.SZ), with great profits from losses for the first three quarters; performance growth of 1.5 times for Nantong Jinghua Pharmaceutical Co., Ltd. (002349.SZ) with predicted performance growth of 1 to 1.4 times for the first three quarters.
Tsinghua Tongfang Co., Ltd. (600100.SH) gained performance growth of 462 percent in its semi-annual report; over 10 times of performance growth for Shandong Gold Mining Co., Ltd. (600547.SH); performance growth of 290 percent for Zhongjin Gold Corp., Ltd. (600489.SH); around 27 times of performance growth for GuangYuYuan Chinese Herbal Medicine Co., Ltd. (600771.SH); performance growth of 77 percent for Beijing Tiantan Biological Products Corporation Limited (600161.SH).
[Trading Trends]
○Meichen Science ＆ Technology bought through five institutional seats
------
The trading volume ranking list on Aug. 29 shows that Shandong Meichen Science ＆ Technology Co., Ltd. (300237.SZ) was bought through five institutional seats with a total of 189 million yuan, accounting for 39.7 percent of its intraday turnover. Meanwhile, it has been sold by two institutional seats for 28,421,800 yuan.
Comment: PPP conceptual stocks performed so well on Aug. 29. The listed company announced a revenue growth of 72 percent year on year in its semi-annual report, with performance growth of 187 percent, as some signed PPP project orders have been implemented, construction output increases, and gross margin of PPP projects is higher than that of traditional ones.
[Trading Alarms]
○Triangle Tyre and Asiantime International Construction to issue new shares
------
Triangle Tyre Co., Ltd. (601163.SH) is mainly engaged in tire products, with offering price of 22.07 yuan, P/E ratio of 23 times and upper subscription limit of 60,000 shares. Shenzhen Asiantime International Construction Co., Ltd. (002811.SZ) is mainly engaged in hotel decoration projects, with offering price of 13.99 yuan, P/E ratio of 23 times and upper subscription limit of 18,000 shares.
TOP
○Environmental protection law to be levied, monitoring equipment industry to see new opportunities
○Draft of TCM law submitted for deliberation, simplified approval procedure to boost TCM development
○OLED expected to see quick penetration, demand for upstream material expected to be boosted
○Huaguang Boiler to merge Guolian Environment ＆ Energy, Start Group to acquire Eastaeon Technology to expand mobile intelligent terminal design
[SSN Focus]
○Environmental protection law to be levied, monitoring equipment industry to see new opportunities
------
The draft of the environmental protection law is submitted to the Standing Committee of the National People's Congress for approval on August 29. According to the draft, China plans to levy environmental protection tax and set the current standard on sewage charge as the lower limit for environmental protection tax amount. Pollutants included in the tax cover air pollutants, water pollutants, solid waste and noise.
Comment: This is the first draft of taxation law submitted to the Standing Committee of NPC after implementing principle of law-based taxation was put forward in the third plenary session of the 18th Central Committee of the CPC. Compared with sewage charge system, taxation system is more enforceable and its applicable tax amount can further float upwards, which will drive enterprises to pay more attention to prevent and treat pollution when developing production. Institutions believe that monitoring equipment enterprises as the major executors of tax law will benefit from it. In terms of listed companies, Hebei Sailhero Environmental Protection High-tech Co., Ltd. (300137.SZ) is principally engaged in environmental monitoring systems and is actively developing operation and maintenance services. Focused Photonics (Hangzhou), Inc. (300203.SZ) sees rapid growth in the laboratory analytical instrument businesses and is also developing PPP environmental protection projects.
TOP
○Draft of TCM law submitted for deliberation, simplified approval procedure to boost TCM development
------
The draft of traditional Chinese medicine (TCM) law is submitted to the Standing Committee of the National People's Congress for approval on August 29. In a legislative form, the draft specifies the government's role in boosting TCM development and simplifies approval procedure of TCM. When applying for drug approval number for compound traditional medicine preparation, which is qualified for production and originated from ancient and classic famous prescription, enterprises are required to only provide non-clinical safety study data.
Comment: Simplifying approval procedure will encourage enterprises to develop and utilize TCM resource. With introduction of such important documents as the 13th Five-year Plan on the Development of Traditional Chinese Medicine and Outline of Traditional Chinese Medicine Development Strategic Planning (2016-2030), institutions believe that TCM caters better to the medical demand of ordinary people than western medicine and it will embrace booming development during the 13th Five-year Plan period due to promotion of hierarchical medical system. The TCM enterprises such as Beijing Tongrentang Co., Ltd. (600085.SH) and Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited (600332.SH), which own a great many of classical prescription, will see larger market opportunities.
[SSN Selection]
○The General Secretary Xi Jinping inspects strategic support forces on Aug. 29, emphasizing making efforts to build a strong and modernized strategic support force.
○General Office of the State Council releases methods on reviewing works of food safety and reinforces regional governments' responsibilities in organizing, supervising and managing food safety on Aug. 29.
○Asset Management Association of China releases a circular on Aug. 29 that there will be a self-examination and correction activity among private funds industry from today on till the end of September.
○Shanghai Municipal Commission of Housing and Urban-rural Development responded to the rumor on new policy of credit for house purchase on Aug. 29, denying that it has never studied such policy yet.
○Dalian Wanda Commercial Properties Co., Ltd. (03699.SZ) stated that the Hong Kong stock exchange has approved that the company's H shares will have the last trading on Sept. 13 and will be delisted from Hong Kong bourse on Sept. 20.
○Nexus Capital bought 4.1 million shares of H shares of China Vanke Co., Ltd. again on Aug. 22 and its shareholding proportion in China Vanke H share increases to 10.17 percent.
TOP
[Industry Information]
○OLED expected to see quick penetration, demand for upstream material expected to be boosted
------
According to the announcement of TCL Corporation on the evening of Aug. 29, the company plans to jointly develop production line project of the 11th generation of TFT-LCD and AMOLED new displayer with Shenzhen China Star Optoelectronics Technology Co., Ltd. (CSOT) and Economy, Trade and Information Commission of Shenzhen Municipality. The total investment is about 46.5 billion yuan. In addition, United States Patent and Trademark Office recently released a new patent submitted by Apple Inc. It mainly serves electric equipment with OLED screen, verifying the news that the new iPhone will be equipped with OLED screen.
Comment: OLED boasts advantages with lightness, thinness, short response time and large visual angle. TCL once indicated that it had invested printing display filed, which is able to lower OLED cost much more. Led by Apple, OLED is expected to enter other fields quickly and demand for upstream liquid crystal material and display driver may boom in the future. Valiant Co., Ltd. (002643.SZ) is engaged in production and sales of OLED intermediates. Sino Wealth Electronic Ltd. (300327.SZ) can produce AMOLED drive chips.
TOP
[Announcement Interpretation]
○Huaguang Boiler to merge Guolian Environment ＆ Energy for RMB5,913 mln
------
Wuxi Huaguang Boiler Co., Ltd. (600475.SH) proposes to issue 427 million shares to Guolian Group with 13.84 yuan per share to absorb and merge its parent company Guolian Environment ＆ Energy Group with 5,913 million yuan, so that Guolian Environment ＆ Energy can realize overall listing, after that, Guolian Group will directly hold 73.17 percent equities of Huaguang Boiler, making it as controlling shareholder and actual controller.
The listed company also plans to acquire 25 percent equities of Tianjin Youlian Thermal Power Co., Ltd. and Wuxi Huilian Thermal Power Co., Ltd. respectively with cash, and predicted assets values of the two targets are 107 million and 83.75 million yuan respectively. Main businesses of Guolian Environment ＆ Energy include energy and environmental protection businesses, with revenue of 4.05 billion yuan and net profit of around 620 million yuan in 2015, and the figures are about 1.54 billion yuan and 310 million yuan respectively for January to May in 2016.
○Start Group to acquire Eastaeon Technology to expand mobile intelligent terminal design
------
Shenzhen Xinfei Technology Co., Ltd., wholly owned by Fujian Start Group Co., Ltd. (600734.SH), has raised 300 million yuan to acquire 100 percent equities of Shenzhen Eastaeon Technology Co., Ltd. Eastaeon Technology has always paid attention to design and R＆D of mobile intelligent terminal products, and promises a net profit after deduction of no less than 35 million yuan, 42 million yuan and 50 million yuan respectively for 2016 to 2018. After the transaction, mobile intelligent terminal business of the listed company, ODM based on Xinfei Technology, will be reinforced.
○Controlling shareholder of Heilongjiang Transport Development to transfer parts of shareholdings
------
Coland Holdings Company Limited, controlling shareholder of Heilongjiang Transport Development Co., Ltd. (601188.SH), proposes to transfer parts of its equities through public invitation for transferee. This equity transfer will not cause alteration in controlling right of the listed company. Coland Holdings holds 686 million shares, accounting for 52.17 percent equities of the listed company, and 103 million shares are non-tradable ones, according to semi-annual report of Heilongjiang Transport Development.
○Chendian International Development to raise water prices
------
Chenzhou Water Supply Co., Ltd., wholly owned by Hunan Chendian International Development Co., Ltd. (600969.SH), will raise the prices by 23 percent for civil and non-civil water usages as well as special industries from September 1. After that, Water Supply is expected to increase about 26.79 million yuan for its revenue annually.
○Xingyuan Environment Technology won PPP project
------
Zhongyi Landscape Co., Ltd., wholly owned by Xingyuan Environment Technology Co., Ltd. (300266.SZ), built up a combo, winning a PPP project for ocean ecological corridor renovation ＆ restoration engineering in Dongtou county of Wenzhou city, and the local housing ＆ urban-rural planning department will implement this project, with transaction price of 800 million yuan.
[Financial Reports Express]
○Limin Chemical and others announced semi-annual reports
------
Limin Chemical Co., Ltd. (002734.SZ) announced a performance growth of 100 percent in its semi-annual report, expecting to gain profits greatly from losses for the first three quarters; performance growth of 28 times for Teamax Smart City Technology Corporation Limited (000662.SZ), with great profits from losses for the first three quarters; performance growth of 1.5 times for Nantong Jinghua Pharmaceutical Co., Ltd. (002349.SZ) with predicted performance growth of 1 to 1.4 times for the first three quarters.
Tsinghua Tongfang Co., Ltd. (600100.SH) gained performance growth of 462 percent in its semi-annual report; over 10 times of performance growth for Shandong Gold Mining Co., Ltd. (600547.SH); performance growth of 290 percent for Zhongjin Gold Corp., Ltd. (600489.SH); around 27 times of performance growth for GuangYuYuan Chinese Herbal Medicine Co., Ltd. (600771.SH); performance growth of 77 percent for Beijing Tiantan Biological Products Corporation Limited (600161.SH).
[Trading Trends]
○Meichen Science ＆ Technology bought through five institutional seats
------
The trading volume ranking list on Aug. 29 shows that Shandong Meichen Science ＆ Technology Co., Ltd. (300237.SZ) was bought through five institutional seats with a total of 189 million yuan, accounting for 39.7 percent of its intraday turnover. Meanwhile, it has been sold by two institutional seats for 28,421,800 yuan.
Comment: PPP conceptual stocks performed so well on Aug. 29. The listed company announced a revenue growth of 72 percent year on year in its semi-annual report, with performance growth of 187 percent, as some signed PPP project orders have been implemented, construction output increases, and gross margin of PPP projects is higher than that of traditional ones.
[Trading Alarms]
○Triangle Tyre and Asiantime International Construction to issue new shares
------
Triangle Tyre Co., Ltd. (601163.SH) is mainly engaged in tire products, with offering price of 22.07 yuan, P/E ratio of 23 times and upper subscription limit of 60,000 shares. Shenzhen Asiantime International Construction Co., Ltd. (002811.SZ) is mainly engaged in hotel decoration projects, with offering price of 13.99 yuan, P/E ratio of 23 times and upper subscription limit of 18,000 shares.
TOP
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