[Today's Guide]
○ China Mobile plans to launch 5G pilot in 2018, promoting upgrading of communication technology
○ Administration methods on recycling scraped car to revised, construction of general airport enters peak season
○ Fuchun Communications to acquire mobile game company, Tianli High ＆ New Tech acquires engineering construction assets
○ Nanhua Bio-medicine acquires energy conservation and environment protection asset, Sunnystone Garden and Guanghe Landscape Culture Communication were bought to 5 pct. limit
[SSN Focus]
○ China Mobile plans to launch 5G pilot in 2018, promoting upgrading of communication technology
------
The Shanghai municipal government on Sept. 21 signed a strategic cooperation framework agreement with China Mobile Limited (00941.SZ), aiming to promote "Internet Plus." According to the agreement, China Mobile (Shanghai) will build the new generation of Internet and information infrastructure, and to be the first to launch 5G pilot in China. Besides, at the Wire Less China Industry Summit hosted on Sept. 7, the three telecommunication operators in China indicated that they will strive to put the 5G network into commercial uses by 2020.
Comment: as further development of 4G though, 5G is not simply a wireless access technology. It is instead an integrated network in the real sense. Indicators such as the transmission rate, time delay, power dissipation and the number of devices available for connection could be significantly improved in comparison with 4G. it will open the era of Internet of everything. Institutions indicated in the research report that the filter produced by Shenzhen Microgate Technology Co., Ltd. (300319.SZ) will benefit from the significant increase of communication frequency bands of 5G mobile phone; the base station antenna business of Tongyu Communication Inc. (002792.SZ) is expected to grow rapidly when large scale construction of 5G commenced.
[SSN Selection]
○ The Ministry of Culture issued Opinions on Promoting the Transformation and Upgrading Work of the Cultural and Entertainment Industry, and proposed to support the China Cultural ＆ Entertainment Industry Association to conduct game and entertainment competitions.
○ The SSN learnt that the Administration Method of Information Disclosure of Insurance Companies will be revised soon. Insurance companies are required to disclose the actual controller and business structure.
○ China's central bank on Sept. 21 continue to put money into the market by conducting a 200 billion yuan reverse repo. But tax payment of enterprises and regulatory review may lead to liquidity squeeze at the end of the month.
○ The price of steam coal of the Bohai Rim Region increased by 17 yuan per ton month to month. It is the 13th consecutive price hike, primarily due to continuous short of supply and low inventory.
○ Bank of Japan on Sept. 21 announced to introduce QQE policy and revise upwardly the inflation target. The Nikkei Index closed 1.92 percent higher.
TOP
[Industry Information]
○ Administration methods on recycling scraped car to revised, expecting to release industrial space
------
Public opinions were recently solicited for the Decision of the State Council on Revising 'Administration Methods on Recycling Scraped Car (Exposure Draft). One of the highlights of the Exposure Draft is allowing the five major assemblies of scrapped car to be sold to remanufacturing enterprises. The five major assemblies are macro-frame including engine, speed changing box, front axle and frame.
Comment: China is entering the explosive growth period of scraped cars, but the recycling of remanufacturing enterprises for a long time cannot meet their capacity. Once the new rule is implemented, sources of old parts for remanufacturing enterprises will increase. Institutions believe that the scale of China's scraped car recycling industry is expected to exceed 200 billion yuan by 2020. Jiangsu Huahong Technology Co., Ltd. (002645.SZ) is a leading enterprise of scrap steel processing equipment; Miracle Automation Engineering Co., Ltd. (002009.SZ) deploys in whole industrial chain of car dismantling by acquiring Hubei Lidi Machine Tool Co., Ltd. and Ningbo Recycling.
○ Construction of general airport enters peak season, air traffic control system likely to benefit first
------
The National Development and Reform Commission (NDRC) on Sept. 21 approved the construction project of Chongqing Wulong Airport, phase III of expansion project of Guiyang Longdongbao Airport and relocation of Guangxi Wuzhou Airport. The total investment amounts to 20 billion yuan. The SSN also learnt that the NDRC is implementing Guiding Opinions on Promoting the Development of General Airline Business, and requiring local regions to promptly prepare layout planning of general airports, to orderly advance the construction of general airports.
Comment: the Opinions proposes to build over 500 general airports by 2020. So far, no more than 90 (including temporary landing points) have been built. Institutions believe that the construction of general airport will enter the peak season during the 13th Five-year period, and the air traffic control system likely to be the first to benefit. Weihai Guangtai Airport Equipment Co., Ltd. (002111.SZ) is primarily engaged in the production of ground equipment for airport, and part of its products account for 40 to 60 percent of China's market share; Wisesoft Co., Ltd. (002253.SZ) is a leading enterprise in the automatic system industry for air traffic control system.
TOP
[Trading Trends]
○ Fuchun Communications to acquire mobile game company Moqikaka Technology with RMB1 bln
------
Fuchun Communications Co., Ltd. (300299.SZ) proposes buy the entire equities of Chengdu Moqikaka Technology Co., Ltd. at the valuation of 1.05 billion yuan, which will be satisfied by cash payment of 368 million yuan and additional issuance of 23,830,300 shares at 28.64 yuan per share. The appreciation rate is 5246.6 percent. At the same time, Fuchun Communications proposes to raise supporting fund of 400 million yuan at the same price. Moqikaka is primarily engaged in the R＆D and production of mobile games. The counterparty committed that Moqikaka's net profits from 2016 to 2019 will be no less than 70 million yuan, 91 million yuan, 120 million yuan and 120 million yuan respectively.
○ Tianli High ＆ New Tech acquires engineering construction assets from CNPC
------
Xinjiang Dushanzi Tianli High ＆ New Tech Co., Ltd. (600339.SH) proposes to buy 100 percent equities of seven companies under China National Petroleum Corporation (CNPC) via private placement and in cash for a total of 25.1 billion yuan after selling all its major assets to become a shell source. The company also proposes to raise 6 billion yuan supporting fund by issuing shares at no less than 4.73 yuan per share through private placement.
Among the target assets, China Petroleum Pipeline Bureau, Sinopec Engineering Incorporation and China Huanqiu Contracting ＆ Engineering Corp. with good profitability recorded a net profit of 273 million yuan, 208 million yuan and 134 million yuan, respectively in the first half of this year. After the deal, Tianli High ＆ New Tech will become CNPC's core platform of engineering construction business.
TOP
○ Nanhua Bio-medicine acquires Fanyu Industries to transform to energy conservation and environment protection
------
Nanhua Bio-medicine Co., Ltd. (000504.SZ) proposes to sell five of its assets to CCID Publishing and Media Co., Ltd. under China Center for Information Industry Development (CCID) for 2,712,200 yuan. Meanwhile, Nanhua Bio-medicine proposes to buy 100 percent equities of Fanyu Industries Co., Ltd. for 54,483,300 yuan. The main business asset of Fanyu Industries is City Light Co., Ltd., a company listed on the National Equities Exchange and Quotations and mainly engaged in energy conservation and environment protection services. After the deal, Nanhua Bio-medicine will indirectly hold a 45.61 percent stake in City Light and become its controlling shareholder.
○ Sunnystone Garden and Guanghe Landscape Culture Communication were bought to 5 pct. limit
------
Hangzhou Sunnystone Garden Group Co., Ltd. and its party acting in concert Hangzhou Sanshi Advertising Co., Ltd. bought the share of Xi'an Tourism Co., Ltd. (000610.SZ) through secondary market acquisition to the 5 percent limit at 12.38 to 14.60 yuan per share. The two together hold 11,868,300 shares in the latter. Sunnystone Garden also holds a 8.64 percent stake in Shandong Meichen Science ＆ Technology Co., Ltd. (300237.SZ).
Natural person Wu Taijiao and its parties acting in concert (three natural persons) bought 10.12 million shares of Shanxi Guanghe Landscape Culture Communication Co., Ltd. (600234.SH) through secondary market acquisition to the 5 percent limit. Wu Taijiao said that the acquisition is to gaining returns on investment, and that they will continue to increase no less than 8 million shares of Guanghe Landscape Culture Communication in the next 12 months.
○ Sanlux to raise RMB520 mln. to invest unmanned underwater vehicle
------
Sanlux Co., Ltd. (002224.SZ) proposes raise about 520 million yuan by issuing shares through private placement at no less than 17.67 yuan per share to invest in the intelligent unmanned underwater vehicle project with an annual production of 150 sets. The project has a construction cycle of 18 months. The project, after reaching designed productivity, is estimated to bring a sales revenue of 580 million yuan and a net profit of about 84 million yuan each year.
○ Shenke Slide Bearing Corp. to acquire Internet-based advertiser
------
Shenke Slide Bearing Corporation (002633.SZ) proposes to buy 100 percent equities in Internet-based advertiser Zibolan Network Technology Co., Ltd. for 2.1 billion yuan. 774 million yuan will be paid in cash and the reminder will be paid with funds by issuing 85,501,000 shares at 15.51 yuan per share. Meanwhile, the company will raise 832 million yuan supporting funds by issuing shares to Beijing Huachuang Yisheng Asset Management Co., Ltd. at 15.51 yuan per share. According to the counterpart's commitment, the net profit of Zibolan Network Tech from 2016 to 2018 should be no less than 130 million yuan, 170 million yuan and 220 million yuan, respectively. After the deal, Huachuang Yisheng Asset Management will hold a 25.69 percent stake in the company and become its controlling shareholder. Zhong Sheng will become the company's actual controller.
○ Yabao Pharm. acquires Qingsong Pharm. for RMB 600mln.
------
Yabao Pharmaceutical Group Co., Ltd. (600351.SH) proposes to buy 75 percent equities of Shanghai Qingsong Pharmaceutical Co., Ltd. for about 612 million yuan via transfer. Qingsong Pharmaceutical is mainly engaged in the production and sales of finished drugs, bulk pharmaceutical chemicals and intermediates. The company garnered a net profit of 31,538,000 yuan and 16,895,700 yuan respectively in 2015 and from Jan. to June, 2016.
It committed that its net profit after deducting extraordinary gains and losses from 2016 to 2018 should be no less than 530 million yuan, 636 million yuan and 763.2 million yuan, respectively.
○ Anhui Wantong Technology Co., Ltd. (002331.SZ) plans to launch employee stock ownership plan with no more than 75 million yuan.
○ Lin Rujie, the actual controller of Fujian Snowman Co., Ltd. (002639.SZ), and some of its senior management, proposes to increase shareholdings in the company by no more than 100 million yuan. Ni Zugeng, the actual controller of KingClean Electric Co., Ltd. (603355.SH), proposes to increase shareholdings in the company by no more than 5 million shares.
○ The pre-coating basilemma production line of Anhui Guofeng Plastic Industry Co., Ltd. (000859.SZ) conducted successful trial production, and started to do mass-production.
[Financial Reports Express]
○ Fangda Group forecasts growth from Q1 to Q3
------
China Fangda Group Co., Ltd. (000055.SZ) forecasts a growth of 50 to 100 percent in net profit for the first three quarters mainly due to increasing profits from underground shield door, curtain wall system and material industry.
[Trading Alarms]
○ Suntak Circuit Tech. and Topscomm Communication to conduct IPO on Sept. 22
------
Shenzhen Suntak Circuit Technology Co., Ltd. (002815.SZ) will offer shares at 16.31 yuan per share with an upper limit of 15,000 shares for each applicant. The company's PE ratio is 23 times. The company is mainly engaged in printed-circuit board. Qingdao Topscomm Communication Co., Ltd. (732421) will offer shares at 14.02 yuan per share with an upper limit of 13,000 shares for each applicant. The company's PE ratio is 23 times. The company is mainly engaged in low-voltage carrier communication product.
TOP
○ China Mobile plans to launch 5G pilot in 2018, promoting upgrading of communication technology
○ Administration methods on recycling scraped car to revised, construction of general airport enters peak season
○ Fuchun Communications to acquire mobile game company, Tianli High ＆ New Tech acquires engineering construction assets
○ Nanhua Bio-medicine acquires energy conservation and environment protection asset, Sunnystone Garden and Guanghe Landscape Culture Communication were bought to 5 pct. limit
[SSN Focus]
○ China Mobile plans to launch 5G pilot in 2018, promoting upgrading of communication technology
------
The Shanghai municipal government on Sept. 21 signed a strategic cooperation framework agreement with China Mobile Limited (00941.SZ), aiming to promote "Internet Plus." According to the agreement, China Mobile (Shanghai) will build the new generation of Internet and information infrastructure, and to be the first to launch 5G pilot in China. Besides, at the Wire Less China Industry Summit hosted on Sept. 7, the three telecommunication operators in China indicated that they will strive to put the 5G network into commercial uses by 2020.
Comment: as further development of 4G though, 5G is not simply a wireless access technology. It is instead an integrated network in the real sense. Indicators such as the transmission rate, time delay, power dissipation and the number of devices available for connection could be significantly improved in comparison with 4G. it will open the era of Internet of everything. Institutions indicated in the research report that the filter produced by Shenzhen Microgate Technology Co., Ltd. (300319.SZ) will benefit from the significant increase of communication frequency bands of 5G mobile phone; the base station antenna business of Tongyu Communication Inc. (002792.SZ) is expected to grow rapidly when large scale construction of 5G commenced.
[SSN Selection]
○ The Ministry of Culture issued Opinions on Promoting the Transformation and Upgrading Work of the Cultural and Entertainment Industry, and proposed to support the China Cultural ＆ Entertainment Industry Association to conduct game and entertainment competitions.
○ The SSN learnt that the Administration Method of Information Disclosure of Insurance Companies will be revised soon. Insurance companies are required to disclose the actual controller and business structure.
○ China's central bank on Sept. 21 continue to put money into the market by conducting a 200 billion yuan reverse repo. But tax payment of enterprises and regulatory review may lead to liquidity squeeze at the end of the month.
○ The price of steam coal of the Bohai Rim Region increased by 17 yuan per ton month to month. It is the 13th consecutive price hike, primarily due to continuous short of supply and low inventory.
○ Bank of Japan on Sept. 21 announced to introduce QQE policy and revise upwardly the inflation target. The Nikkei Index closed 1.92 percent higher.
TOP
[Industry Information]
○ Administration methods on recycling scraped car to revised, expecting to release industrial space
------
Public opinions were recently solicited for the Decision of the State Council on Revising 'Administration Methods on Recycling Scraped Car (Exposure Draft). One of the highlights of the Exposure Draft is allowing the five major assemblies of scrapped car to be sold to remanufacturing enterprises. The five major assemblies are macro-frame including engine, speed changing box, front axle and frame.
Comment: China is entering the explosive growth period of scraped cars, but the recycling of remanufacturing enterprises for a long time cannot meet their capacity. Once the new rule is implemented, sources of old parts for remanufacturing enterprises will increase. Institutions believe that the scale of China's scraped car recycling industry is expected to exceed 200 billion yuan by 2020. Jiangsu Huahong Technology Co., Ltd. (002645.SZ) is a leading enterprise of scrap steel processing equipment; Miracle Automation Engineering Co., Ltd. (002009.SZ) deploys in whole industrial chain of car dismantling by acquiring Hubei Lidi Machine Tool Co., Ltd. and Ningbo Recycling.
○ Construction of general airport enters peak season, air traffic control system likely to benefit first
------
The National Development and Reform Commission (NDRC) on Sept. 21 approved the construction project of Chongqing Wulong Airport, phase III of expansion project of Guiyang Longdongbao Airport and relocation of Guangxi Wuzhou Airport. The total investment amounts to 20 billion yuan. The SSN also learnt that the NDRC is implementing Guiding Opinions on Promoting the Development of General Airline Business, and requiring local regions to promptly prepare layout planning of general airports, to orderly advance the construction of general airports.
Comment: the Opinions proposes to build over 500 general airports by 2020. So far, no more than 90 (including temporary landing points) have been built. Institutions believe that the construction of general airport will enter the peak season during the 13th Five-year period, and the air traffic control system likely to be the first to benefit. Weihai Guangtai Airport Equipment Co., Ltd. (002111.SZ) is primarily engaged in the production of ground equipment for airport, and part of its products account for 40 to 60 percent of China's market share; Wisesoft Co., Ltd. (002253.SZ) is a leading enterprise in the automatic system industry for air traffic control system.
TOP
[Trading Trends]
○ Fuchun Communications to acquire mobile game company Moqikaka Technology with RMB1 bln
------
Fuchun Communications Co., Ltd. (300299.SZ) proposes buy the entire equities of Chengdu Moqikaka Technology Co., Ltd. at the valuation of 1.05 billion yuan, which will be satisfied by cash payment of 368 million yuan and additional issuance of 23,830,300 shares at 28.64 yuan per share. The appreciation rate is 5246.6 percent. At the same time, Fuchun Communications proposes to raise supporting fund of 400 million yuan at the same price. Moqikaka is primarily engaged in the R＆D and production of mobile games. The counterparty committed that Moqikaka's net profits from 2016 to 2019 will be no less than 70 million yuan, 91 million yuan, 120 million yuan and 120 million yuan respectively.
○ Tianli High ＆ New Tech acquires engineering construction assets from CNPC
------
Xinjiang Dushanzi Tianli High ＆ New Tech Co., Ltd. (600339.SH) proposes to buy 100 percent equities of seven companies under China National Petroleum Corporation (CNPC) via private placement and in cash for a total of 25.1 billion yuan after selling all its major assets to become a shell source. The company also proposes to raise 6 billion yuan supporting fund by issuing shares at no less than 4.73 yuan per share through private placement.
Among the target assets, China Petroleum Pipeline Bureau, Sinopec Engineering Incorporation and China Huanqiu Contracting ＆ Engineering Corp. with good profitability recorded a net profit of 273 million yuan, 208 million yuan and 134 million yuan, respectively in the first half of this year. After the deal, Tianli High ＆ New Tech will become CNPC's core platform of engineering construction business.
TOP
○ Nanhua Bio-medicine acquires Fanyu Industries to transform to energy conservation and environment protection
------
Nanhua Bio-medicine Co., Ltd. (000504.SZ) proposes to sell five of its assets to CCID Publishing and Media Co., Ltd. under China Center for Information Industry Development (CCID) for 2,712,200 yuan. Meanwhile, Nanhua Bio-medicine proposes to buy 100 percent equities of Fanyu Industries Co., Ltd. for 54,483,300 yuan. The main business asset of Fanyu Industries is City Light Co., Ltd., a company listed on the National Equities Exchange and Quotations and mainly engaged in energy conservation and environment protection services. After the deal, Nanhua Bio-medicine will indirectly hold a 45.61 percent stake in City Light and become its controlling shareholder.
○ Sunnystone Garden and Guanghe Landscape Culture Communication were bought to 5 pct. limit
------
Hangzhou Sunnystone Garden Group Co., Ltd. and its party acting in concert Hangzhou Sanshi Advertising Co., Ltd. bought the share of Xi'an Tourism Co., Ltd. (000610.SZ) through secondary market acquisition to the 5 percent limit at 12.38 to 14.60 yuan per share. The two together hold 11,868,300 shares in the latter. Sunnystone Garden also holds a 8.64 percent stake in Shandong Meichen Science ＆ Technology Co., Ltd. (300237.SZ).
Natural person Wu Taijiao and its parties acting in concert (three natural persons) bought 10.12 million shares of Shanxi Guanghe Landscape Culture Communication Co., Ltd. (600234.SH) through secondary market acquisition to the 5 percent limit. Wu Taijiao said that the acquisition is to gaining returns on investment, and that they will continue to increase no less than 8 million shares of Guanghe Landscape Culture Communication in the next 12 months.
○ Sanlux to raise RMB520 mln. to invest unmanned underwater vehicle
------
Sanlux Co., Ltd. (002224.SZ) proposes raise about 520 million yuan by issuing shares through private placement at no less than 17.67 yuan per share to invest in the intelligent unmanned underwater vehicle project with an annual production of 150 sets. The project has a construction cycle of 18 months. The project, after reaching designed productivity, is estimated to bring a sales revenue of 580 million yuan and a net profit of about 84 million yuan each year.
○ Shenke Slide Bearing Corp. to acquire Internet-based advertiser
------
Shenke Slide Bearing Corporation (002633.SZ) proposes to buy 100 percent equities in Internet-based advertiser Zibolan Network Technology Co., Ltd. for 2.1 billion yuan. 774 million yuan will be paid in cash and the reminder will be paid with funds by issuing 85,501,000 shares at 15.51 yuan per share. Meanwhile, the company will raise 832 million yuan supporting funds by issuing shares to Beijing Huachuang Yisheng Asset Management Co., Ltd. at 15.51 yuan per share. According to the counterpart's commitment, the net profit of Zibolan Network Tech from 2016 to 2018 should be no less than 130 million yuan, 170 million yuan and 220 million yuan, respectively. After the deal, Huachuang Yisheng Asset Management will hold a 25.69 percent stake in the company and become its controlling shareholder. Zhong Sheng will become the company's actual controller.
○ Yabao Pharm. acquires Qingsong Pharm. for RMB 600mln.
------
Yabao Pharmaceutical Group Co., Ltd. (600351.SH) proposes to buy 75 percent equities of Shanghai Qingsong Pharmaceutical Co., Ltd. for about 612 million yuan via transfer. Qingsong Pharmaceutical is mainly engaged in the production and sales of finished drugs, bulk pharmaceutical chemicals and intermediates. The company garnered a net profit of 31,538,000 yuan and 16,895,700 yuan respectively in 2015 and from Jan. to June, 2016.
It committed that its net profit after deducting extraordinary gains and losses from 2016 to 2018 should be no less than 530 million yuan, 636 million yuan and 763.2 million yuan, respectively.
○ Anhui Wantong Technology Co., Ltd. (002331.SZ) plans to launch employee stock ownership plan with no more than 75 million yuan.
○ Lin Rujie, the actual controller of Fujian Snowman Co., Ltd. (002639.SZ), and some of its senior management, proposes to increase shareholdings in the company by no more than 100 million yuan. Ni Zugeng, the actual controller of KingClean Electric Co., Ltd. (603355.SH), proposes to increase shareholdings in the company by no more than 5 million shares.
○ The pre-coating basilemma production line of Anhui Guofeng Plastic Industry Co., Ltd. (000859.SZ) conducted successful trial production, and started to do mass-production.
[Financial Reports Express]
○ Fangda Group forecasts growth from Q1 to Q3
------
China Fangda Group Co., Ltd. (000055.SZ) forecasts a growth of 50 to 100 percent in net profit for the first three quarters mainly due to increasing profits from underground shield door, curtain wall system and material industry.
[Trading Alarms]
○ Suntak Circuit Tech. and Topscomm Communication to conduct IPO on Sept. 22
------
Shenzhen Suntak Circuit Technology Co., Ltd. (002815.SZ) will offer shares at 16.31 yuan per share with an upper limit of 15,000 shares for each applicant. The company's PE ratio is 23 times. The company is mainly engaged in printed-circuit board. Qingdao Topscomm Communication Co., Ltd. (732421) will offer shares at 14.02 yuan per share with an upper limit of 13,000 shares for each applicant. The company's PE ratio is 23 times. The company is mainly engaged in low-voltage carrier communication product.
TOP
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