[Today's Guide]
○ Ministry of Finance published third batch of PPP demonstration projects with higher investments
○ Block chain whitepaper to released soon, industry to see more drivers
○ TSMC sees new high net profit in single quarter, chips industry to benefit
○ Several companies acquire big orders, actual controller of Hesheng Special Material changed
[SSN Focus]
○ Ministry of Finance published third batch of PPP demonstration projects with higher investments
------
Based on the information on the website of the Ministry of Finance on Oct. 13, 20 ministries, including the Ministry of Finance, published the third batch of public-private partnership (PPP) demonstration projects with a total investment of 1,170.8 billion yuan. The 516 newly-announced projects will complete procurement by end-September 2017 in principle. Based on the requirements of relevant systems, it will choose outstanding social capitals and encourage choosing private capitals under the same conditions. High-speed roads and other transportation projects involve large sums in individual projects while the sewerage and rubbish treatment, underground pipeline and other municipal projects account for a large proportion.
Comment: The total investment in the first two batches of demonstration projects reached 180 billion yuan and 658.9 billion yuan, respectively. The investment in the third batch surged significantly. Experts believe that the requirements on implementation and whether the projects meet the development of the region and industries are main criteria in the selection of projects. The operation of local PPP funds and the subsequent policies will provide more guarantee to investment returns. Based on incomplete statistics, two smart cities and one hospital and aged care integrated project won by Beijing E-Hualu Info Technology Co., Ltd. (300212.SZ) and the high-speed road from Suihua to Daqing constructed by China Design Group Co., Ltd. (603018.SH) are on the list of demonstration projects. Anshan Senyuan Road ＆ Bridge Co., Ltd. (300210.SZ) recently announced that it has won the bidding for a comprehensive underground pipeline PPP project in Jilin City. Shenzhen Huakong Seg Co., Ltd. (000068.SZ), Tianjin Capital Environmental Protection Group Company Limited (01065.HK; 600874.SH) and Longjian Road＆Bridge Co., Ltd. (600853.SH) recently also won the bidding for PPP projects.
[SSN Selection]
○ The General Office of the State Council recently published the plan on prevention of Internet-based financial risks, specifying that online loan platforms shall not conduct offline marketing.
○ The National Development and Reform Commission (NDRC) indicated that much progress has been made in de-capacity. As at the end of September, the iron ＆ steel and coal industries have completed over 80 percent of the annual targets in de-capacity.
○ The technical preparations in all systems of the Shenzhen-Hong Kong Stock Connect are expected to complete in mid-November, indicated Wang Hong, assistant general manager of Shenzhen Stock Exchange on Oct. 13.
○ The central bank conducted an MLF operation with 301 billion yuan on Oct. 13. The interest rate remains unchanged with the last batch.
○ China Securities Regulatory Commission (CSRC) approved four QFIIs in September. The number of QFIIs reached 304.
TOP
[Industry Information]
○ Block chain whitepaper to released soon, industry to see more drivers
------
SSN learnt that the whitepaper on block chain technologies and their application will be released soon. The whitepaper will interpret the technical progress and international standards on block chain technologies and provide various policy and technical advices. Ant Financial will establish a platform for public welfare with block chain technologies to demonstrate and trade financial assets for public welfare, indicated Tong Ling, chief architect of Ant Financial, at the 2016 Computing Conference held on Oct. 13. In addition, the ceremony of the establishment of the forum on block chain technologies and industrial development under the leadership of the Ministry of Industry and Information Technology (MIIT) will be held in Beijing on Oct. 18.
Comment: Institutes believe that with its information security and other features, block chains are playing significant roles in solving the monopoly of central platforms and asymmetric information as well as other difficulties in the industry. It enjoys a bright future in the application in Internet-based finance, big data and cloud computing. Feitian Technologies Co., Ltd. (300386.SZ) has been developing security encryption technologies, which will coordinate with the development of block chain technologies. A subsidiary of Qingdao Haili Metal One Co., Ltd. (002537.SZ) has become a member of the Financial Blockchain Shenzhen Consortium and the Zhongguancun Blockchain Industry Alliance.
TOP
○ TSMC sees new high net profit in single quarter, chips industry to benefit
------
Taiwan Semiconductor Manufacturing Company Limited (TSMC), a chips manufacturer, announced on Oct. 13 that driven by the manufacturing of chips and processors for iPhone 7, it recorded a combined business revenue of 260.41 billion NT dollars in the third quarter, representing an increase of 22.5 percent year on year and 17.4 percent quarter on quarter. Its net profit after taxes reached 96.8 billion NT dollars, representing an increase of 28.4 percent year on year and 33.4 percent quarter on quarter and hitting a new high. Thanks to the strong demand in the smartphone market, TSMC expects its performance to continue improving in the fourth quarter. In addition, Semiconductor Manufacturing International Corporation (00981.HK) held the foundation stone laying ceremony for a plant of the new 12 inch integrated circuit in Shanghai on Oct. 13.
Comment: The strong performance of TSMC will have active influence on the upper and down streams of the industry. The amount of imported chips in China surpasses oil and it enjoys a huge market. Among listed companies, Shanghai Sinyang Semiconductor Materials Co., Ltd. (300236.SZ) is engaged in the research and development as well as the sale of electronic chemical products and ancillary equipment. It is one of the qualified suppliers of TSMC. Jiangsu Changjiang Electronics Technology Co., Ltd. (600584.SH) is principally engaged in the sealing and packaging of chips. It proposes to introduce Semiconductor Manufacturing as its biggest shareholder to strengthen strategic cooperation.
TOP
[Announcement Interpretation]
○ Several companies acquire big orders
------
Jiang Su Etern Co., ltd. (600105.SH) jointly contract the expansion, reconstruction and upgrading of Bangladesh state grid system in the way of energy performance contracting (EPC). The contract sum is about 1,141 million dollars. The company's revenue for 2015 is 2.26 billion yuan. Beijing Orient Landscape＆ Ecology Co., ltd. (002310.SZ) signed the ecological environmental protection PPP project for the whole area for Meili Jinhu. The total investment of the project is 1,028 million yuan, representing 19.1 percent of the company's revenue in 2015. China National Complete Plant Import ＆ Export Corp., ltd. (000151.SZ) signed the contract for the turnkey project of a Barcelona beach hotel project, and the contract sum is no more than 109 million euros.
○ Hesheng Special Material completed private placement, actual controller changed
------
Suzhou Hesheng Special Material Co., Ltd. (002290.SZ) completed share issuance through private placement. Zhongkechuang Asset subscribed 26.24 million shares, representing 27.42 percent of the company's shareholding, and become controlling shareholder. Zhang Wei, who holds 100 percent equities of Zhongkechuang Asset, becomes actual controller of the company. Zhang Wei founded Zhongkechuang Financial Holding Group in 2004. The main businesses of enterprises controlled by Zhang include equity investment and management, Internet financing, financing assurance, micro credit, real estate development and investment and artwork investment.
○ Chongqing Department Store to raise RMB4.8 bln yuan through private placement, no sole actual controller after share issuance
------
Chongqing Department Store Co., Ltd. (600729.SH) plans to issue 205 million shares to Wumei Investment, etter Life Commercial Chain Share Co., Ltd. (002251.SZ) and Chongqing Huamao, which is controlled by Chongqing State-owned Assets Supervision and Administration Commission (SASAC) at 23.81 yuan per share through private placement. The total fundraising will be no more than 4.88 billion yuan, which will all be used for the upgrading and reconstruction of outlets and new development projects. Upon completion of the share issuance, the above three subscribers will hold 21.32 percent, 10.91 percent and 2.27 percent equities of the company respectively. Chongqing trading company (group) co., Ltd., the largest shareholder of the company, holds 29.95 percent equites of the company. The company said that no shareholder can control the company solely.
○ CNNC Hua Yuan Titanium Dioxide again raises price of rutile titanium dioxide
------
CNNC Hua Yuan Titanium Dioxide Co., Ltd. (002145.SZ) decides to raise the price of rutile titanium dioxide again from Oct. 13. The selling price in the Chinese market and overseas markets will be increased by 500 yuan per ton and 50 dollars per ton respectively. During the year, the company has raised the prices of its main products for several times. The price was first raised in August. The price hike of main products can help improve the company's operation.
○ Anhui Wantong Technology introduces ESOP
------
Anhui Wantong Technology Co., Ltd. (002331.SZ) proposes to introduce the first phase of employee stock ownership plan (ESOP) with an amount of 75 million yuan.
○ Controlling shareholders of Jilin Power Share Co., Ltd. (000875.SZ) has increased holding 14,522,100 shares of the company from July 10, 2015 to Oct. 13, 2016, representing 0.99 percent of the company's total shareholding.
[Financial Reports Express]
○ Tianyu Information expects growth
------
Wuhan Tianyu Information Industry Co., Ltd. (300205.SZ) expects 370 to 385 percent growth for the first three quarters, primarily due to significant increase of revenue from data security business and communication smart card. Fuan Pharmaceutical (group) Co., Ltd. (300194.SZ) expects two times performance growth for the first three quarters, primarily due to the combination of Yantai Justaware Pharmaceutical Co., Ltd. in its financial statements. Guangzhou Yuexiu Financial Holdings Group CO., Ltd. (000987.SZ) expects 130 percent to 160 percent performance growth for the first three quarters, primarily due to combination of financial statements. Shenzhen Agricultural Products Co., Ltd. (000061.SZ) expects 353 percent to 398 percent growth for the first three quarters, primarily due to revenue from the transfer of equities of Shenzhen Agricultural Products Trading Building Co., Ltd.
Goldenmax International Technology Ltd. (002636.SZ) revised the 170 to 220 percent growth for the first three quarters upwardly to 230 percent to 260 percent growth, primarily due to the increase of selling price of its products. Beijing Ultrapower Software Co., Ltd. (300002.SZ) expects 80 percent to 110 percent growth for the first three quarters, primarily due to increase of revenue from games. Ceepower CO., Ltd. (300062.SZ) expects 135 percent to 160 percent growth for the first three quarters, primarily due to profit growth of the power distribution segment. China Hi-Tech Group Co., Ltd. (600730.SH) expects 8 to 9 times of growth for the first three quarters, primarily due to revenue derived from disposing equities of Renrui Industrial.
[Data Speaks]
○ Conceptual hype of debt-for-equity swap continues, rare metal stocks with high liability highlights
------
Since the State Council issued relevant documents and proposed to implement market-based debt-for-equity swap in an orderly way, this concept soon heats up. Relevant documents expressly encourage three categories of enterprises to implement debt-for-equity swap. High priority are given to enterprises which suffered cyclical fluctuation of the industry but still expected to make a turnaround. Rate metal enterprises which have strategic resource value are expected to implement debt-for-equity swap first.
According to statistics from the SSN, according to Shenwan Hongyuan's industry classification, in the 24 rare metal enterprises, 8 reported asset-liability ratio of more than 50 percent in the interim report of 2016, with the financial costs accounting for high percentage of the profits. Rising Nonferrous Metals Share Co., Ltd. (600259.SH), Zhejiang Huayou Cobalt Co., ltd. (603799.SH) and China Tungsten and Hightech Materials Co., Ltd. (000657.SZ) rank among the top. These three companies have leading position in the market in terms of rare earth, cobalt and tungsten metal products, and their performance are at loss or meager profits.
[Trading Alarms]
○ Bank of Hangzhou IPO to debut from Oct. 14
------
Bank of Hangzhou (930926.SZ) will offer for subscription at 14.39 yuan per share, representing PE ratio of 10.23 times. The upper limit of subscription is 78,000 shares.
TOP
○ Ministry of Finance published third batch of PPP demonstration projects with higher investments
○ Block chain whitepaper to released soon, industry to see more drivers
○ TSMC sees new high net profit in single quarter, chips industry to benefit
○ Several companies acquire big orders, actual controller of Hesheng Special Material changed
[SSN Focus]
○ Ministry of Finance published third batch of PPP demonstration projects with higher investments
------
Based on the information on the website of the Ministry of Finance on Oct. 13, 20 ministries, including the Ministry of Finance, published the third batch of public-private partnership (PPP) demonstration projects with a total investment of 1,170.8 billion yuan. The 516 newly-announced projects will complete procurement by end-September 2017 in principle. Based on the requirements of relevant systems, it will choose outstanding social capitals and encourage choosing private capitals under the same conditions. High-speed roads and other transportation projects involve large sums in individual projects while the sewerage and rubbish treatment, underground pipeline and other municipal projects account for a large proportion.
Comment: The total investment in the first two batches of demonstration projects reached 180 billion yuan and 658.9 billion yuan, respectively. The investment in the third batch surged significantly. Experts believe that the requirements on implementation and whether the projects meet the development of the region and industries are main criteria in the selection of projects. The operation of local PPP funds and the subsequent policies will provide more guarantee to investment returns. Based on incomplete statistics, two smart cities and one hospital and aged care integrated project won by Beijing E-Hualu Info Technology Co., Ltd. (300212.SZ) and the high-speed road from Suihua to Daqing constructed by China Design Group Co., Ltd. (603018.SH) are on the list of demonstration projects. Anshan Senyuan Road ＆ Bridge Co., Ltd. (300210.SZ) recently announced that it has won the bidding for a comprehensive underground pipeline PPP project in Jilin City. Shenzhen Huakong Seg Co., Ltd. (000068.SZ), Tianjin Capital Environmental Protection Group Company Limited (01065.HK; 600874.SH) and Longjian Road＆Bridge Co., Ltd. (600853.SH) recently also won the bidding for PPP projects.
[SSN Selection]
○ The General Office of the State Council recently published the plan on prevention of Internet-based financial risks, specifying that online loan platforms shall not conduct offline marketing.
○ The National Development and Reform Commission (NDRC) indicated that much progress has been made in de-capacity. As at the end of September, the iron ＆ steel and coal industries have completed over 80 percent of the annual targets in de-capacity.
○ The technical preparations in all systems of the Shenzhen-Hong Kong Stock Connect are expected to complete in mid-November, indicated Wang Hong, assistant general manager of Shenzhen Stock Exchange on Oct. 13.
○ The central bank conducted an MLF operation with 301 billion yuan on Oct. 13. The interest rate remains unchanged with the last batch.
○ China Securities Regulatory Commission (CSRC) approved four QFIIs in September. The number of QFIIs reached 304.
TOP
[Industry Information]
○ Block chain whitepaper to released soon, industry to see more drivers
------
SSN learnt that the whitepaper on block chain technologies and their application will be released soon. The whitepaper will interpret the technical progress and international standards on block chain technologies and provide various policy and technical advices. Ant Financial will establish a platform for public welfare with block chain technologies to demonstrate and trade financial assets for public welfare, indicated Tong Ling, chief architect of Ant Financial, at the 2016 Computing Conference held on Oct. 13. In addition, the ceremony of the establishment of the forum on block chain technologies and industrial development under the leadership of the Ministry of Industry and Information Technology (MIIT) will be held in Beijing on Oct. 18.
Comment: Institutes believe that with its information security and other features, block chains are playing significant roles in solving the monopoly of central platforms and asymmetric information as well as other difficulties in the industry. It enjoys a bright future in the application in Internet-based finance, big data and cloud computing. Feitian Technologies Co., Ltd. (300386.SZ) has been developing security encryption technologies, which will coordinate with the development of block chain technologies. A subsidiary of Qingdao Haili Metal One Co., Ltd. (002537.SZ) has become a member of the Financial Blockchain Shenzhen Consortium and the Zhongguancun Blockchain Industry Alliance.
TOP
○ TSMC sees new high net profit in single quarter, chips industry to benefit
------
Taiwan Semiconductor Manufacturing Company Limited (TSMC), a chips manufacturer, announced on Oct. 13 that driven by the manufacturing of chips and processors for iPhone 7, it recorded a combined business revenue of 260.41 billion NT dollars in the third quarter, representing an increase of 22.5 percent year on year and 17.4 percent quarter on quarter. Its net profit after taxes reached 96.8 billion NT dollars, representing an increase of 28.4 percent year on year and 33.4 percent quarter on quarter and hitting a new high. Thanks to the strong demand in the smartphone market, TSMC expects its performance to continue improving in the fourth quarter. In addition, Semiconductor Manufacturing International Corporation (00981.HK) held the foundation stone laying ceremony for a plant of the new 12 inch integrated circuit in Shanghai on Oct. 13.
Comment: The strong performance of TSMC will have active influence on the upper and down streams of the industry. The amount of imported chips in China surpasses oil and it enjoys a huge market. Among listed companies, Shanghai Sinyang Semiconductor Materials Co., Ltd. (300236.SZ) is engaged in the research and development as well as the sale of electronic chemical products and ancillary equipment. It is one of the qualified suppliers of TSMC. Jiangsu Changjiang Electronics Technology Co., Ltd. (600584.SH) is principally engaged in the sealing and packaging of chips. It proposes to introduce Semiconductor Manufacturing as its biggest shareholder to strengthen strategic cooperation.
TOP
[Announcement Interpretation]
○ Several companies acquire big orders
------
Jiang Su Etern Co., ltd. (600105.SH) jointly contract the expansion, reconstruction and upgrading of Bangladesh state grid system in the way of energy performance contracting (EPC). The contract sum is about 1,141 million dollars. The company's revenue for 2015 is 2.26 billion yuan. Beijing Orient Landscape＆ Ecology Co., ltd. (002310.SZ) signed the ecological environmental protection PPP project for the whole area for Meili Jinhu. The total investment of the project is 1,028 million yuan, representing 19.1 percent of the company's revenue in 2015. China National Complete Plant Import ＆ Export Corp., ltd. (000151.SZ) signed the contract for the turnkey project of a Barcelona beach hotel project, and the contract sum is no more than 109 million euros.
○ Hesheng Special Material completed private placement, actual controller changed
------
Suzhou Hesheng Special Material Co., Ltd. (002290.SZ) completed share issuance through private placement. Zhongkechuang Asset subscribed 26.24 million shares, representing 27.42 percent of the company's shareholding, and become controlling shareholder. Zhang Wei, who holds 100 percent equities of Zhongkechuang Asset, becomes actual controller of the company. Zhang Wei founded Zhongkechuang Financial Holding Group in 2004. The main businesses of enterprises controlled by Zhang include equity investment and management, Internet financing, financing assurance, micro credit, real estate development and investment and artwork investment.
○ Chongqing Department Store to raise RMB4.8 bln yuan through private placement, no sole actual controller after share issuance
------
Chongqing Department Store Co., Ltd. (600729.SH) plans to issue 205 million shares to Wumei Investment, etter Life Commercial Chain Share Co., Ltd. (002251.SZ) and Chongqing Huamao, which is controlled by Chongqing State-owned Assets Supervision and Administration Commission (SASAC) at 23.81 yuan per share through private placement. The total fundraising will be no more than 4.88 billion yuan, which will all be used for the upgrading and reconstruction of outlets and new development projects. Upon completion of the share issuance, the above three subscribers will hold 21.32 percent, 10.91 percent and 2.27 percent equities of the company respectively. Chongqing trading company (group) co., Ltd., the largest shareholder of the company, holds 29.95 percent equites of the company. The company said that no shareholder can control the company solely.
○ CNNC Hua Yuan Titanium Dioxide again raises price of rutile titanium dioxide
------
CNNC Hua Yuan Titanium Dioxide Co., Ltd. (002145.SZ) decides to raise the price of rutile titanium dioxide again from Oct. 13. The selling price in the Chinese market and overseas markets will be increased by 500 yuan per ton and 50 dollars per ton respectively. During the year, the company has raised the prices of its main products for several times. The price was first raised in August. The price hike of main products can help improve the company's operation.
○ Anhui Wantong Technology introduces ESOP
------
Anhui Wantong Technology Co., Ltd. (002331.SZ) proposes to introduce the first phase of employee stock ownership plan (ESOP) with an amount of 75 million yuan.
○ Controlling shareholders of Jilin Power Share Co., Ltd. (000875.SZ) has increased holding 14,522,100 shares of the company from July 10, 2015 to Oct. 13, 2016, representing 0.99 percent of the company's total shareholding.
[Financial Reports Express]
○ Tianyu Information expects growth
------
Wuhan Tianyu Information Industry Co., Ltd. (300205.SZ) expects 370 to 385 percent growth for the first three quarters, primarily due to significant increase of revenue from data security business and communication smart card. Fuan Pharmaceutical (group) Co., Ltd. (300194.SZ) expects two times performance growth for the first three quarters, primarily due to the combination of Yantai Justaware Pharmaceutical Co., Ltd. in its financial statements. Guangzhou Yuexiu Financial Holdings Group CO., Ltd. (000987.SZ) expects 130 percent to 160 percent performance growth for the first three quarters, primarily due to combination of financial statements. Shenzhen Agricultural Products Co., Ltd. (000061.SZ) expects 353 percent to 398 percent growth for the first three quarters, primarily due to revenue from the transfer of equities of Shenzhen Agricultural Products Trading Building Co., Ltd.
Goldenmax International Technology Ltd. (002636.SZ) revised the 170 to 220 percent growth for the first three quarters upwardly to 230 percent to 260 percent growth, primarily due to the increase of selling price of its products. Beijing Ultrapower Software Co., Ltd. (300002.SZ) expects 80 percent to 110 percent growth for the first three quarters, primarily due to increase of revenue from games. Ceepower CO., Ltd. (300062.SZ) expects 135 percent to 160 percent growth for the first three quarters, primarily due to profit growth of the power distribution segment. China Hi-Tech Group Co., Ltd. (600730.SH) expects 8 to 9 times of growth for the first three quarters, primarily due to revenue derived from disposing equities of Renrui Industrial.
[Data Speaks]
○ Conceptual hype of debt-for-equity swap continues, rare metal stocks with high liability highlights
------
Since the State Council issued relevant documents and proposed to implement market-based debt-for-equity swap in an orderly way, this concept soon heats up. Relevant documents expressly encourage three categories of enterprises to implement debt-for-equity swap. High priority are given to enterprises which suffered cyclical fluctuation of the industry but still expected to make a turnaround. Rate metal enterprises which have strategic resource value are expected to implement debt-for-equity swap first.
According to statistics from the SSN, according to Shenwan Hongyuan's industry classification, in the 24 rare metal enterprises, 8 reported asset-liability ratio of more than 50 percent in the interim report of 2016, with the financial costs accounting for high percentage of the profits. Rising Nonferrous Metals Share Co., Ltd. (600259.SH), Zhejiang Huayou Cobalt Co., ltd. (603799.SH) and China Tungsten and Hightech Materials Co., Ltd. (000657.SZ) rank among the top. These three companies have leading position in the market in terms of rare earth, cobalt and tungsten metal products, and their performance are at loss or meager profits.
[Trading Alarms]
○ Bank of Hangzhou IPO to debut from Oct. 14
------
Bank of Hangzhou (930926.SZ) will offer for subscription at 14.39 yuan per share, representing PE ratio of 10.23 times. The upper limit of subscription is 78,000 shares.
TOP
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