[Today's Guide]
○ NDRC pushes for key projects in 13th Five-Year Plan, PPP model expected to boost
○ MIIT pushes for network power strategic, optical network construction has a long way to go
○ Tech Semiconductors to acquire Runking Pictures, Shenhua Holdings to fully control Dongchang Automobile Investment
○ Oriental Nations to acquire medical information provider, Dalian Insulator to see new actual controller
[SSN Focus]
○ NDRC pushes for key projects in 13th Five-Year Plan, PPP model expected to boost
------
The National Development and Reform Commission (NDRC) on Sept. 19 released implementation opinions to require accelerating the construction of the 165 major projects specified in the outline of the national 13th Five-Year Plan and define various supporting measures. To raise construction fund, it will improve PPP mechanism and actively guide social capital to participate in project construction and operation by franchising. According to foreign media report, China has determined the third batch of over 500 PPP demonstration projects with a total investment of about 1 trillion yuan. Most are increment projects, which are expected to bring more investment compared with the first two batches of projects.
Comment: According to the outline of the national 13th Five-Year Plan, China will build and rebuild about 30,000km highway and build about 3,000km urban mass transit. Transportation construction constitutes large part in the key projects in the 13th Five-Year Plan. Among the first two batches of PPP demonstration projects, expressway, underground and other transportation projects have attracted most investment, accounting for nearly 70 percent. Design enterprises, such as JSTI Group (300284.SZ) and construction enterprises, such as Tengda Construction Group Co., Ltd. (600512.SH) and Shanghai Tunnel Engineering Co., Ltd. (600820.SH), have attracted attention from various institutions.
[SSN Selection]
○ The national publicity week on network security opened on Sept. 19. Liu Yunshan stressed promoting network security and network development at the same time.
○ The draft regulations on nuclear power administration prepared by two ministries have started to solicit public opinions from Sept. 19. The regulations specify the plan, location, investment, construction, operation and withdrawal of nuclear power project.
○ The 13th Five-Year Plan key project on stem cell and transformation launched on Sept. 19. It will build a diagnosis and treatment innovative research system with stem cell treatment as core.
○ The Hong Kong Stock Connect program saw a net inflow of 5.9 billion HK dollars on Sept. 19. Industry believes that the mainland capital will continue to flow to Hong Kong.
○ Baosteel Group Corporation proposes to transfer 403 million shares to respectively Beijing Chengtong Financial Control Investment Co., Ltd. and Guoxin Investment Co., Ltd. for free, accounting for 2.45 percent of its total share capital.
TOP
[Industry Information]
○ MIIT pushes for network power strategic, optical network construction has a long way to go
------
The 2016 China Information and Communication Industry Development Forum was held in Beijing on Sept. 19. Zhang Feng, chief engineer of the Ministry of Industry and Information Technology (MIIT), said that the MIIT will push forward the construction of a network power from various aspects, including implementing "Broadband China" Initiative; promoting optical network construction and 4G coverage; promoting breakthroughs and industrialization of 5G, high-end general chips and basic software by implementing national science and technology projects and other measures.
Comment: Officials from the MIIT recently pointed out that powerful optical network is the footstone for the new generation of information infrastructure. Yet the optical network of tale-communication operations only uses optical technology in transmission and access. Exchange is still based on electricity. Therefore, the construction of optical network is still a long way to go. Institutions believe that China is most hopeful to surpass and lead other countries in the optical communication field. Suzhou TFC Optical Communication Co., Ltd. (300394.SZ) is a manufacturer of optical network connections precision components. Tongding Interconnection Information Co., Ltd. (002491.SZ) will benefit from rising prices and lower costs of optical fiber.
○ Demand for replenishing inventory increases, quoted price of spot DRAM surges
------
The latest quoted price of spot DRAM has surged steadily for the fourth consecutive day. The highest price of leading DDR4 4Gb DRAM has recorded as high as 2.2 US dollars per unit in a single day. It is the greatest price hike for important components of semiconductors in two months. Memorizer distributors indicate that Samsung and SK Hynix Semiconductor Inc. recently are active in raising price of products. The contract price in the fourth quarter will move up 10 percent. Considering the contract price hike of 15 percent in the third quarter, DRAM will experience a total price hike around 25 percent in the second half.
Comment: Institutions believe that standard DRAM is in short supply due to that large producers in South Korea shift their focus to mobile DRAM and NAND. Superimposed that the inventory in the whole market is low, the demand for replenishing inventory is high; thus, the price of spot DRAM picks up. As to listed companies, Tianshui Huatian Technology Co., Ltd. (002185.SZ), which is a strategic cooperation partner of Wuhan Xinxin Semiconductor Manufacturing Corporation, will benefit from the demand of memorizer base; Payton Technology (Shenzhen) Co., Ltd. under Shenzhen Kaifa Technology Co., Ltd. (000021.SZ) is a leading company in the packaging ＆ testing of DRAM.
TOP
[Announcement Interpretation]
○ Tech Semiconductors to acquire Runking Pictures with RMB810 mln
------
Tech Semiconductors Co., Ltd. (300046.SZ) proposes to acquire 100 percent equities of Shanghai Runking Pictures Co., Ltd. by issuing 33.94 million shares at 19.67 yuan per share and making a payment of 142 million yuan in cash. The total price is 810 million yuan. Meanwhile, the company plans to raise a supporting fund of 620 million yuan by issuing shares at 15.83 yuan per share through private placement.
The revenue of Runking Pictures mainly comes from the sale of the copyright of TV series. Based on the performance commitment, the net profit (the lower of the amount before and after deducting extraordinary items) of the company from 2016 to 2019 will be 60 million yuan, 80 million yuan, 104 million yuan and 135 million yuan, respectively.
○ Shenhua Holdings to fully control Dongchang Automobile Investment with RMB1.55 bln
------
Shanghai Shenhua Holdings Co., Ltd. (600653.SH) plans to acquire 77.9 percent equities of Shanghai Dongchang Automobile Investment Co., Ltd. with 1,558 million yuan by issuing 371 million shares at 3.62 yuan per share and making a payment of 215 million yuan in cash. It will fully control the company after the transaction. Meanwhile, the company intends to raise a supporting fund of 245 million yuan by issuing shares at 3.62 yuan per share to Huachen Group, the controlling shareholder of the company.
Dongchang Automobile Investment is principally engaged in the sale, repairing, decoration and insurance of complete vehicles and components as well as agency services. Its committed net profit from 2016 to 2019 will be no less than 95 million yuan, 150 million yuan, 210 million yuan and 255 million yuan.
TOP
○ Oriental Nations to acquire medical information provider with RMB360 mln
------
Business-intelligence Of Oriental Nations Corporation Ltd. (300166.SZ) intends to acquire 100 percent equities of RuiSoft Technology, a medical information enterprise, with 364 million yuan by issuing 12.05 million shares at 21.76 yuan per share and making a payment of 102 million yuan in cash. The products on the handling of medical data developed by RuiSoft Technology have been applied in 44 hospitals under the National Health and Family Planning Commission and more than 200 hospitals above Class II. The asset is preliminarily expected to increase by 553 percent. The counterparty committed that the net profit of RuiSoft Technology from 2016 to 2019 will be no less than 25.80 million yuan, 33.50 million yuan, 43.60 million yuan and 56.70 million yuan, respectively.
○ Actual controller to transfer 40 mln shares, Dalian Insulator to see new actual controller
------
Liu Guixue, the actual controller of Dalian Insulator Group Co., Ltd. (002606.SZ), plans to transfer 40 million shares of the company or 19.61 percent of the total share capotals of the company at 28 yuan per share to Funing Rare Earth Yilong Magnetic Materials Co., Ltd., which will become the controlling shareholder of the company. Zhu Guancheng and Qiu Suzhen, a couple, will be the new actual controllers of the company. The latest stock price of Dalian Insulator is 27.20 yuan per share before trading suspension.
The couple owns many rare earth enterprises and they may further increase the shareholding in the company in the future.
○ Star Lake Bioscience to acquire 35 percent equities of Konzern Medicine
------
Star Lake Bioscience Co., Inc. Zhaoqing Guangdong (600866.SH) intends to acquire no more than 35 percent equities of Guangzhou Konzern Medicine Co., Ltd. in cash. The registered capital of Konzern Medicine is 116 million yuan. It is principally engaged in the wholesales of drugs and medical devices. Based on the financial conditions provided by Konzern Medicine, its total asset at the end of 2015 was 628 million yuan with a net asset of 103 million yuan. It recorded business revenue of 1,094 million in 2015 with a net profit of 34,759,400 yuan. Konzern Medicine applied for listing on the National Equities Exchange and Quotations (NEEQ) in mid-2016.
○ Qifeng New Material to expand paper business with RMB500 mln, connected parties to fully subscribe private placement
------
Qifeng New Material Co., Ltd. (002521.SZ) proposes to raise 500 million yuan by issuing 54.82 million shares at 9.12 yuan per share through private placement. The proceeds will be invested in a wholly-owned subsidiary and the implementation of two projects. The shares will be issued to Li Andong and Li Runsheng. Li Andong is a director, the general manager and chief financial officer of the company and is a son of Li Xuefeng. Li Runsheng is a grandson of Li Xuefeng.
○ Pci-suntek Technology obtains orders for metro equipment with RMB374 mln
------
A wholly-owned subsidiary of Pci-suntek Technology Co., Ltd. (600728.SH) and Guangzhou Metro signed six procurement contracts with a total amount of 374 million yuan, accounting for 14.03 percent of the business revenue in 2015 and 97.03 percent of the business revenue from intelligent rail transit business in 2015.
[Trading Alarms]
○ Changshu Rural Commercial Bank and Jouder Precision conducts IPOs on Sept. 20
------
Jiangsu Changshu Rural Commercial Bank Co., Ltd. (601128.SH) issues shares at 4.28 yuan per share with a P/E ratio of 10 times and an upper subscription limit of 66,000 share per account. Jouder Precision Industry (Kunshan) Co., Ltd. (300549.SZ) issues shares at 15.03 yuan per share with a P/E ratio of 23 times and an upper subscription limit of 16,500 share per account. The company is principally engaged in components of precision moulds.
TOP
○ NDRC pushes for key projects in 13th Five-Year Plan, PPP model expected to boost
○ MIIT pushes for network power strategic, optical network construction has a long way to go
○ Tech Semiconductors to acquire Runking Pictures, Shenhua Holdings to fully control Dongchang Automobile Investment
○ Oriental Nations to acquire medical information provider, Dalian Insulator to see new actual controller
[SSN Focus]
○ NDRC pushes for key projects in 13th Five-Year Plan, PPP model expected to boost
------
The National Development and Reform Commission (NDRC) on Sept. 19 released implementation opinions to require accelerating the construction of the 165 major projects specified in the outline of the national 13th Five-Year Plan and define various supporting measures. To raise construction fund, it will improve PPP mechanism and actively guide social capital to participate in project construction and operation by franchising. According to foreign media report, China has determined the third batch of over 500 PPP demonstration projects with a total investment of about 1 trillion yuan. Most are increment projects, which are expected to bring more investment compared with the first two batches of projects.
Comment: According to the outline of the national 13th Five-Year Plan, China will build and rebuild about 30,000km highway and build about 3,000km urban mass transit. Transportation construction constitutes large part in the key projects in the 13th Five-Year Plan. Among the first two batches of PPP demonstration projects, expressway, underground and other transportation projects have attracted most investment, accounting for nearly 70 percent. Design enterprises, such as JSTI Group (300284.SZ) and construction enterprises, such as Tengda Construction Group Co., Ltd. (600512.SH) and Shanghai Tunnel Engineering Co., Ltd. (600820.SH), have attracted attention from various institutions.
[SSN Selection]
○ The national publicity week on network security opened on Sept. 19. Liu Yunshan stressed promoting network security and network development at the same time.
○ The draft regulations on nuclear power administration prepared by two ministries have started to solicit public opinions from Sept. 19. The regulations specify the plan, location, investment, construction, operation and withdrawal of nuclear power project.
○ The 13th Five-Year Plan key project on stem cell and transformation launched on Sept. 19. It will build a diagnosis and treatment innovative research system with stem cell treatment as core.
○ The Hong Kong Stock Connect program saw a net inflow of 5.9 billion HK dollars on Sept. 19. Industry believes that the mainland capital will continue to flow to Hong Kong.
○ Baosteel Group Corporation proposes to transfer 403 million shares to respectively Beijing Chengtong Financial Control Investment Co., Ltd. and Guoxin Investment Co., Ltd. for free, accounting for 2.45 percent of its total share capital.
TOP
[Industry Information]
○ MIIT pushes for network power strategic, optical network construction has a long way to go
------
The 2016 China Information and Communication Industry Development Forum was held in Beijing on Sept. 19. Zhang Feng, chief engineer of the Ministry of Industry and Information Technology (MIIT), said that the MIIT will push forward the construction of a network power from various aspects, including implementing "Broadband China" Initiative; promoting optical network construction and 4G coverage; promoting breakthroughs and industrialization of 5G, high-end general chips and basic software by implementing national science and technology projects and other measures.
Comment: Officials from the MIIT recently pointed out that powerful optical network is the footstone for the new generation of information infrastructure. Yet the optical network of tale-communication operations only uses optical technology in transmission and access. Exchange is still based on electricity. Therefore, the construction of optical network is still a long way to go. Institutions believe that China is most hopeful to surpass and lead other countries in the optical communication field. Suzhou TFC Optical Communication Co., Ltd. (300394.SZ) is a manufacturer of optical network connections precision components. Tongding Interconnection Information Co., Ltd. (002491.SZ) will benefit from rising prices and lower costs of optical fiber.
○ Demand for replenishing inventory increases, quoted price of spot DRAM surges
------
The latest quoted price of spot DRAM has surged steadily for the fourth consecutive day. The highest price of leading DDR4 4Gb DRAM has recorded as high as 2.2 US dollars per unit in a single day. It is the greatest price hike for important components of semiconductors in two months. Memorizer distributors indicate that Samsung and SK Hynix Semiconductor Inc. recently are active in raising price of products. The contract price in the fourth quarter will move up 10 percent. Considering the contract price hike of 15 percent in the third quarter, DRAM will experience a total price hike around 25 percent in the second half.
Comment: Institutions believe that standard DRAM is in short supply due to that large producers in South Korea shift their focus to mobile DRAM and NAND. Superimposed that the inventory in the whole market is low, the demand for replenishing inventory is high; thus, the price of spot DRAM picks up. As to listed companies, Tianshui Huatian Technology Co., Ltd. (002185.SZ), which is a strategic cooperation partner of Wuhan Xinxin Semiconductor Manufacturing Corporation, will benefit from the demand of memorizer base; Payton Technology (Shenzhen) Co., Ltd. under Shenzhen Kaifa Technology Co., Ltd. (000021.SZ) is a leading company in the packaging ＆ testing of DRAM.
TOP
[Announcement Interpretation]
○ Tech Semiconductors to acquire Runking Pictures with RMB810 mln
------
Tech Semiconductors Co., Ltd. (300046.SZ) proposes to acquire 100 percent equities of Shanghai Runking Pictures Co., Ltd. by issuing 33.94 million shares at 19.67 yuan per share and making a payment of 142 million yuan in cash. The total price is 810 million yuan. Meanwhile, the company plans to raise a supporting fund of 620 million yuan by issuing shares at 15.83 yuan per share through private placement.
The revenue of Runking Pictures mainly comes from the sale of the copyright of TV series. Based on the performance commitment, the net profit (the lower of the amount before and after deducting extraordinary items) of the company from 2016 to 2019 will be 60 million yuan, 80 million yuan, 104 million yuan and 135 million yuan, respectively.
○ Shenhua Holdings to fully control Dongchang Automobile Investment with RMB1.55 bln
------
Shanghai Shenhua Holdings Co., Ltd. (600653.SH) plans to acquire 77.9 percent equities of Shanghai Dongchang Automobile Investment Co., Ltd. with 1,558 million yuan by issuing 371 million shares at 3.62 yuan per share and making a payment of 215 million yuan in cash. It will fully control the company after the transaction. Meanwhile, the company intends to raise a supporting fund of 245 million yuan by issuing shares at 3.62 yuan per share to Huachen Group, the controlling shareholder of the company.
Dongchang Automobile Investment is principally engaged in the sale, repairing, decoration and insurance of complete vehicles and components as well as agency services. Its committed net profit from 2016 to 2019 will be no less than 95 million yuan, 150 million yuan, 210 million yuan and 255 million yuan.
TOP
○ Oriental Nations to acquire medical information provider with RMB360 mln
------
Business-intelligence Of Oriental Nations Corporation Ltd. (300166.SZ) intends to acquire 100 percent equities of RuiSoft Technology, a medical information enterprise, with 364 million yuan by issuing 12.05 million shares at 21.76 yuan per share and making a payment of 102 million yuan in cash. The products on the handling of medical data developed by RuiSoft Technology have been applied in 44 hospitals under the National Health and Family Planning Commission and more than 200 hospitals above Class II. The asset is preliminarily expected to increase by 553 percent. The counterparty committed that the net profit of RuiSoft Technology from 2016 to 2019 will be no less than 25.80 million yuan, 33.50 million yuan, 43.60 million yuan and 56.70 million yuan, respectively.
○ Actual controller to transfer 40 mln shares, Dalian Insulator to see new actual controller
------
Liu Guixue, the actual controller of Dalian Insulator Group Co., Ltd. (002606.SZ), plans to transfer 40 million shares of the company or 19.61 percent of the total share capotals of the company at 28 yuan per share to Funing Rare Earth Yilong Magnetic Materials Co., Ltd., which will become the controlling shareholder of the company. Zhu Guancheng and Qiu Suzhen, a couple, will be the new actual controllers of the company. The latest stock price of Dalian Insulator is 27.20 yuan per share before trading suspension.
The couple owns many rare earth enterprises and they may further increase the shareholding in the company in the future.
○ Star Lake Bioscience to acquire 35 percent equities of Konzern Medicine
------
Star Lake Bioscience Co., Inc. Zhaoqing Guangdong (600866.SH) intends to acquire no more than 35 percent equities of Guangzhou Konzern Medicine Co., Ltd. in cash. The registered capital of Konzern Medicine is 116 million yuan. It is principally engaged in the wholesales of drugs and medical devices. Based on the financial conditions provided by Konzern Medicine, its total asset at the end of 2015 was 628 million yuan with a net asset of 103 million yuan. It recorded business revenue of 1,094 million in 2015 with a net profit of 34,759,400 yuan. Konzern Medicine applied for listing on the National Equities Exchange and Quotations (NEEQ) in mid-2016.
○ Qifeng New Material to expand paper business with RMB500 mln, connected parties to fully subscribe private placement
------
Qifeng New Material Co., Ltd. (002521.SZ) proposes to raise 500 million yuan by issuing 54.82 million shares at 9.12 yuan per share through private placement. The proceeds will be invested in a wholly-owned subsidiary and the implementation of two projects. The shares will be issued to Li Andong and Li Runsheng. Li Andong is a director, the general manager and chief financial officer of the company and is a son of Li Xuefeng. Li Runsheng is a grandson of Li Xuefeng.
○ Pci-suntek Technology obtains orders for metro equipment with RMB374 mln
------
A wholly-owned subsidiary of Pci-suntek Technology Co., Ltd. (600728.SH) and Guangzhou Metro signed six procurement contracts with a total amount of 374 million yuan, accounting for 14.03 percent of the business revenue in 2015 and 97.03 percent of the business revenue from intelligent rail transit business in 2015.
[Trading Alarms]
○ Changshu Rural Commercial Bank and Jouder Precision conducts IPOs on Sept. 20
------
Jiangsu Changshu Rural Commercial Bank Co., Ltd. (601128.SH) issues shares at 4.28 yuan per share with a P/E ratio of 10 times and an upper subscription limit of 66,000 share per account. Jouder Precision Industry (Kunshan) Co., Ltd. (300549.SZ) issues shares at 15.03 yuan per share with a P/E ratio of 23 times and an upper subscription limit of 16,500 share per account. The company is principally engaged in components of precision moulds.
TOP
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