[Today's Guide]
○Environmental protection supervision started again, helping to advance supply-side reform
○Planning for agricultural modernization issued, informatization becomes important driver
○Price of DRAM memory hikes, short market supply to continue
○Special Electric Motor and etc. expect performance growth in annual reports, AVIC Real Estate Holding to sell real estate development business
[SSN Focus]
○Environmental protection supervision started again, helping to advance supply-side reform
------
SSN learns that from Oct. 21, the Ministry of Environmental Protection will dispatch 10 supervision teams to 20 provinces and cities for supervising the enforcement of environment laws. The supervision of environmental protection is constantly intensified since 2016. The central government piloted supervision of environmental protection in Hebei province in early 2016, and another 8 supervision teams were dispatched to various places in July. A number of enterprises with heavy pollution are forced to shut down, and the prices of various products like chemicals and non-ferrous metals soon rise.
Comment: Supervision of environmental protection urges enterprises to increase input in environmental protection, forces outdated capacity to exit the market, and advances the implementation of supply-side reform. For chemicals market, the limited supply in the short run will push up product prices and help to boost the profit earned by leading enterprises which are qualified in environmental protection. Large glyphosate producers like Hubei province and Sichuan province and large melamine producers like Shandong province will all be supervised this time. At present, the inventory of glyphosate is low, while South America market sees peak period of purchasing. Institutions are quite rosy about the recurring industrial prosperity. Relevant listed companies include Nantong Jiangshan Agrochemical ＆ Chemicals Co., Ltd. (600389.SH) and Zhejiang Xinan Chemical Industrial Group Co., Ltd. (600596.SH). Downstream plates also drive up the demand on melamine, and relevant companies include Anhui Jinhe Industrial Co., Ltd. (002597.SZ).
[SSN Selection]
○The opening ceremony of 2016 World Robot Conference (WRC) was held in Beijing on Oct. 20. Data shows that national output of industrial robots in September saw a year-on-year increase of 35.1 percent.
○State Administration of Grain on Oct. 20 issued notice to suspend the sales of national policy corn. The lowest sales price will be determined on the principle of not hurting corn market after May 2017.
○US company Qualcomm Inc. established an innovation center in Shenzhen on Oct. 20 and demonstrated its first wireless communication and the Internet of Things technology exhibition center outside the U.S.
○It is learnt that the National Development and Reform Commission (NDRC) recently issued draft opinions proposing to lift relevant subsidies for distributed photovoltaic power generation, and it is made clear that there is no need for electricity producers to pay the subsidies first and get repaid later.
○European Central Bank decides to keep interest rates and the scale of QE unchanged, in line with market expectation.
TOP
[Industry Information]
○Planning for agricultural modernization issued, informatization becomes important driver
------
The State Council recently issued the Planning for National Agricultural Modernization (2016-2020). It is proposed that by 2020, national agricultural modernization achieves great progress, national grain security is effectively guaranteed, and the quality and efficiency of agricultural products supply system largely improve. It is also proposed to advance in-depth integration of informatization and the agriculture, build a national agricultural data investigation analytic system, release important supply-demand information of agricultural products regularly, basically build a national data cloud platform integrating data monitoring, analysis, release and services, reinforce construction of agricultural remote sensing infrastructure, and establish standing book system for important agricultural resources.
Comment: Institutions believe that the application of modern information technology will effectively advance the upgrading of traditional agriculture. From the perspective of commercial model, the "agricultural materials agricultural informatization" model sees more vitality. By participating in Beijing Xnong Fenghua Technology Co., Ltd., Loncin Motor Co., Ltd. (603766.SH) has completed its business arrangement in "unmanned aerial vehicle agricultural informatization"; a Shanghai-based subsidiary under Jiangsu Nonghua Intelligent Agriculture Technology Co., Ltd. (000816) is engaged in the software development, system integration and information services of agricultural informatization.
TOP
○Price of DRAM memory hikes, short market supply to continue
------
As a result of the short supply of the standard DRAM, the spot price of 4Gb DDR3/DDR4 has been surging. It witnessed an average increase of nearly 15 percent in October and increased by 45 to 50 percent in the third quarter. The module price surged over 20 percent this month. As the top three DRAM manufacturers have no plans to release new capacities, the short supply cannot be relieved before the first quarter of next year.
Comment: Institutes believe that Samsung, SK Hynix and Micron shifted their main capacities to the production of Mobile DRAM, which resulted in the short supply of standard DRAM in the second half. In addition, the sales of personal computers in the second half performed better than the first half, which supported the demand for standard DRAM memories. In terms of listed companies, a subsidiary of Wuxi Taiji Industry Company Ltd. (600667.SH) provides post-procedure services to DRAM products. Payton Technology (Shenzhen) Co., Ltd. under Shenzhen Kaifa Technology Co., Ltd. (000021.SZ) is a leading DRAM sealing and testing enterprise.
TOP
[Financial Reports Express]
○ Special Electric Motor and others expect performance growth in annual report
------
Jiangxi Special Electric Motor Co., Ltd. (002176.SZ) predicts a performance growth of 400 percent to 450 percent in its annual report, mainly due to financial statements of Joylong Automobile and Hangzhou Mige Electric Co., Ltd. combined; a growth forecast of 367 percent to 412 percent for Shenzhen Comix Group Co., Ltd. (002301.SZ), mainly due to more revenue from SaaS software which can provide cloud video conference service; a growth forecast of 220 percent to 270 percent for Zhejiang Haers Vacuum Containers Co., Ltd. (002615.SZ), mainly due to sales growth; a growth forecast of 110 percent to 140 percent for Anhui Sinonet ＆ Xinlong Science ＆ Technology Co., Ltd. (002298.SZ), mainly due to growth of public security and smart city businesses; a growth forecast of 100 percent to 130 percent for (002708.SZ), mainly due to financial statement combined with that of Tianjin Tanhas Technology Co., Ltd.
Henan Xinye Textile Co., Ltd. (002087.SZ) expects a performance growth of 170 percent to 190 percent, mainly as it stocks a large amount of cotton with low price to reduce the costs; a growth forecast of 70 percent to 100 percent for Beijing Orient Landscape ＆ Environment Co., Ltd. (002310.SZ), mainly due to more revenue from solid waste treatment and water company; a growth forecast of 50 percent to 100 percent for Shandong Sacred Sun Power Sources Co., Ltd. (002580.SZ), mainly due to sales growth; a growth forecast of 80 percent to 130 percent for Shenzhen Sunyes Electronic Manufacturing Holding Co., Ltd. (002388.SZ), mainly due to sales growth.
Additionally, Cefc Anhui International Holding Co., Ltd. (002018.SZ) expects its performance in the first three quarters to increase over eight times, with annual performance going to double, mainly due to more revenues from its energy and factoring businesses.
[Announcement Interpretation]
○AVIC Real Estate Holding to sell real estate development business for RMB2.3 bln
------
AVIC Real Estate Holding Company Limited (000043.SZ) proposes to sell its assets and liabilities related to real estate development business to Poly Real Estate Group Co., Ltd. (600048.SH). This transaction prices at 2,323 million yuan on the whole, with 293 million yuan more than book value. After the restructuring, AVIC Real Estate Holding will focus on real estate asset management business, and highlight on development for three businesses, such as real estate, equipment ＆ facility management, asset operation, customized integration service outsourcing.
○ Controlling shareholder of Chuangli Group to acquire Epower Electronic
------
Zhongmei Machinery Group, controlling shareholder of Shanghai Chuangli Group Co., Ltd. (603012.SH), plans to obtain 70.37 percent equities of Huizhou Epower Electronic Co., Ltd. through capital increment and stake acquisition. The transaction consideration is 598 million yuan. Chuangli Group and Epower Electronic can carry out integration within 12 months after the transaction, including that Zhongmei Machinery Group is required to preferentially transfer all its held shareholdings of Epower Electronic to the listed company.
Comment: Epower Electronic has become a professional e-car power management system provider with advanced technologies and high market share domestically. It achieved a net profit of 63,169,200 yuan and 11,897,300 yuan for the first half year of 2015 and 2016.
○LingNan Landscape and others sign big projects
------
LingNan Landscape Co., Ltd. (002717.SZ) expects to win a PPP project to comprehensively improve and treat the environment of Ylin River-Guan Shi Men Reservoir-Cao Jia Tan region and their branches. This project will receive around 800 million yuan for investment, accounting for 42.35 percent of the total revenues in 2015.
Shenzhen Wenke Landscape Co., Ltd. (002775.SZ) wins a PPP project II to comprehensively improve and treat the environment for banks along the Toudun River of Changji city, and construct infrastructures within the region, with a total investment of 171.4 million yuan, taking up 16.39 percent of the revenues in 2015.
Shenzhen Ecobeauty Co., Ltd. (000010.SZ) wins a tourism infrastructure construction project for Plum Blossom Hill in Zhongshan district of Liu Pan Shui city in Guizhou province. And the project investment is temporarily determined as 310 million yuan.
[Trading Trends]
○ Zhongji Investment Holding bought through two institutional seats
------
The trading volume ranking list on Oct. 20 shows that Shanghai Zhongji Investment Holding Co., Ltd. (600634.SH) was bought through two institutional seats with a total of 53.42 million yuan, accounting for 6 percent of its intraday turnover.
Comment: It plans to acquire the 51 percent equities of Hongtou Network Technology, parent company of overseas game giant Jagex. The target operates the biggest webgame in Europe and the U.S. which is called as RuneScape. After the transaction, the listed company will transform to culture ＆ entertainment industry, continue to positively pursue for extensive development opportunities, and make deployments in upstream and downstream of game and culture ＆ entertainment industries.
[Trading Alarms]
○ Ligong Guangke to issue new shares on Oct. 21
------
Wuhan Ligong Guangke Co. Ltd. (300557.SZ) will issue new shares at 13.91 yuan per share, with a P/E ratio of 22.99 times and upper subscription limit of 14,000 shares. It is mainly engaged in safety monitoring system for optical fiber sensing technology.
TOP
○Environmental protection supervision started again, helping to advance supply-side reform
○Planning for agricultural modernization issued, informatization becomes important driver
○Price of DRAM memory hikes, short market supply to continue
○Special Electric Motor and etc. expect performance growth in annual reports, AVIC Real Estate Holding to sell real estate development business
[SSN Focus]
○Environmental protection supervision started again, helping to advance supply-side reform
------
SSN learns that from Oct. 21, the Ministry of Environmental Protection will dispatch 10 supervision teams to 20 provinces and cities for supervising the enforcement of environment laws. The supervision of environmental protection is constantly intensified since 2016. The central government piloted supervision of environmental protection in Hebei province in early 2016, and another 8 supervision teams were dispatched to various places in July. A number of enterprises with heavy pollution are forced to shut down, and the prices of various products like chemicals and non-ferrous metals soon rise.
Comment: Supervision of environmental protection urges enterprises to increase input in environmental protection, forces outdated capacity to exit the market, and advances the implementation of supply-side reform. For chemicals market, the limited supply in the short run will push up product prices and help to boost the profit earned by leading enterprises which are qualified in environmental protection. Large glyphosate producers like Hubei province and Sichuan province and large melamine producers like Shandong province will all be supervised this time. At present, the inventory of glyphosate is low, while South America market sees peak period of purchasing. Institutions are quite rosy about the recurring industrial prosperity. Relevant listed companies include Nantong Jiangshan Agrochemical ＆ Chemicals Co., Ltd. (600389.SH) and Zhejiang Xinan Chemical Industrial Group Co., Ltd. (600596.SH). Downstream plates also drive up the demand on melamine, and relevant companies include Anhui Jinhe Industrial Co., Ltd. (002597.SZ).
[SSN Selection]
○The opening ceremony of 2016 World Robot Conference (WRC) was held in Beijing on Oct. 20. Data shows that national output of industrial robots in September saw a year-on-year increase of 35.1 percent.
○State Administration of Grain on Oct. 20 issued notice to suspend the sales of national policy corn. The lowest sales price will be determined on the principle of not hurting corn market after May 2017.
○US company Qualcomm Inc. established an innovation center in Shenzhen on Oct. 20 and demonstrated its first wireless communication and the Internet of Things technology exhibition center outside the U.S.
○It is learnt that the National Development and Reform Commission (NDRC) recently issued draft opinions proposing to lift relevant subsidies for distributed photovoltaic power generation, and it is made clear that there is no need for electricity producers to pay the subsidies first and get repaid later.
○European Central Bank decides to keep interest rates and the scale of QE unchanged, in line with market expectation.
TOP
[Industry Information]
○Planning for agricultural modernization issued, informatization becomes important driver
------
The State Council recently issued the Planning for National Agricultural Modernization (2016-2020). It is proposed that by 2020, national agricultural modernization achieves great progress, national grain security is effectively guaranteed, and the quality and efficiency of agricultural products supply system largely improve. It is also proposed to advance in-depth integration of informatization and the agriculture, build a national agricultural data investigation analytic system, release important supply-demand information of agricultural products regularly, basically build a national data cloud platform integrating data monitoring, analysis, release and services, reinforce construction of agricultural remote sensing infrastructure, and establish standing book system for important agricultural resources.
Comment: Institutions believe that the application of modern information technology will effectively advance the upgrading of traditional agriculture. From the perspective of commercial model, the "agricultural materials agricultural informatization" model sees more vitality. By participating in Beijing Xnong Fenghua Technology Co., Ltd., Loncin Motor Co., Ltd. (603766.SH) has completed its business arrangement in "unmanned aerial vehicle agricultural informatization"; a Shanghai-based subsidiary under Jiangsu Nonghua Intelligent Agriculture Technology Co., Ltd. (000816) is engaged in the software development, system integration and information services of agricultural informatization.
TOP
○Price of DRAM memory hikes, short market supply to continue
------
As a result of the short supply of the standard DRAM, the spot price of 4Gb DDR3/DDR4 has been surging. It witnessed an average increase of nearly 15 percent in October and increased by 45 to 50 percent in the third quarter. The module price surged over 20 percent this month. As the top three DRAM manufacturers have no plans to release new capacities, the short supply cannot be relieved before the first quarter of next year.
Comment: Institutes believe that Samsung, SK Hynix and Micron shifted their main capacities to the production of Mobile DRAM, which resulted in the short supply of standard DRAM in the second half. In addition, the sales of personal computers in the second half performed better than the first half, which supported the demand for standard DRAM memories. In terms of listed companies, a subsidiary of Wuxi Taiji Industry Company Ltd. (600667.SH) provides post-procedure services to DRAM products. Payton Technology (Shenzhen) Co., Ltd. under Shenzhen Kaifa Technology Co., Ltd. (000021.SZ) is a leading DRAM sealing and testing enterprise.
TOP
[Financial Reports Express]
○ Special Electric Motor and others expect performance growth in annual report
------
Jiangxi Special Electric Motor Co., Ltd. (002176.SZ) predicts a performance growth of 400 percent to 450 percent in its annual report, mainly due to financial statements of Joylong Automobile and Hangzhou Mige Electric Co., Ltd. combined; a growth forecast of 367 percent to 412 percent for Shenzhen Comix Group Co., Ltd. (002301.SZ), mainly due to more revenue from SaaS software which can provide cloud video conference service; a growth forecast of 220 percent to 270 percent for Zhejiang Haers Vacuum Containers Co., Ltd. (002615.SZ), mainly due to sales growth; a growth forecast of 110 percent to 140 percent for Anhui Sinonet ＆ Xinlong Science ＆ Technology Co., Ltd. (002298.SZ), mainly due to growth of public security and smart city businesses; a growth forecast of 100 percent to 130 percent for (002708.SZ), mainly due to financial statement combined with that of Tianjin Tanhas Technology Co., Ltd.
Henan Xinye Textile Co., Ltd. (002087.SZ) expects a performance growth of 170 percent to 190 percent, mainly as it stocks a large amount of cotton with low price to reduce the costs; a growth forecast of 70 percent to 100 percent for Beijing Orient Landscape ＆ Environment Co., Ltd. (002310.SZ), mainly due to more revenue from solid waste treatment and water company; a growth forecast of 50 percent to 100 percent for Shandong Sacred Sun Power Sources Co., Ltd. (002580.SZ), mainly due to sales growth; a growth forecast of 80 percent to 130 percent for Shenzhen Sunyes Electronic Manufacturing Holding Co., Ltd. (002388.SZ), mainly due to sales growth.
Additionally, Cefc Anhui International Holding Co., Ltd. (002018.SZ) expects its performance in the first three quarters to increase over eight times, with annual performance going to double, mainly due to more revenues from its energy and factoring businesses.
[Announcement Interpretation]
○AVIC Real Estate Holding to sell real estate development business for RMB2.3 bln
------
AVIC Real Estate Holding Company Limited (000043.SZ) proposes to sell its assets and liabilities related to real estate development business to Poly Real Estate Group Co., Ltd. (600048.SH). This transaction prices at 2,323 million yuan on the whole, with 293 million yuan more than book value. After the restructuring, AVIC Real Estate Holding will focus on real estate asset management business, and highlight on development for three businesses, such as real estate, equipment ＆ facility management, asset operation, customized integration service outsourcing.
○ Controlling shareholder of Chuangli Group to acquire Epower Electronic
------
Zhongmei Machinery Group, controlling shareholder of Shanghai Chuangli Group Co., Ltd. (603012.SH), plans to obtain 70.37 percent equities of Huizhou Epower Electronic Co., Ltd. through capital increment and stake acquisition. The transaction consideration is 598 million yuan. Chuangli Group and Epower Electronic can carry out integration within 12 months after the transaction, including that Zhongmei Machinery Group is required to preferentially transfer all its held shareholdings of Epower Electronic to the listed company.
Comment: Epower Electronic has become a professional e-car power management system provider with advanced technologies and high market share domestically. It achieved a net profit of 63,169,200 yuan and 11,897,300 yuan for the first half year of 2015 and 2016.
○LingNan Landscape and others sign big projects
------
LingNan Landscape Co., Ltd. (002717.SZ) expects to win a PPP project to comprehensively improve and treat the environment of Ylin River-Guan Shi Men Reservoir-Cao Jia Tan region and their branches. This project will receive around 800 million yuan for investment, accounting for 42.35 percent of the total revenues in 2015.
Shenzhen Wenke Landscape Co., Ltd. (002775.SZ) wins a PPP project II to comprehensively improve and treat the environment for banks along the Toudun River of Changji city, and construct infrastructures within the region, with a total investment of 171.4 million yuan, taking up 16.39 percent of the revenues in 2015.
Shenzhen Ecobeauty Co., Ltd. (000010.SZ) wins a tourism infrastructure construction project for Plum Blossom Hill in Zhongshan district of Liu Pan Shui city in Guizhou province. And the project investment is temporarily determined as 310 million yuan.
[Trading Trends]
○ Zhongji Investment Holding bought through two institutional seats
------
The trading volume ranking list on Oct. 20 shows that Shanghai Zhongji Investment Holding Co., Ltd. (600634.SH) was bought through two institutional seats with a total of 53.42 million yuan, accounting for 6 percent of its intraday turnover.
Comment: It plans to acquire the 51 percent equities of Hongtou Network Technology, parent company of overseas game giant Jagex. The target operates the biggest webgame in Europe and the U.S. which is called as RuneScape. After the transaction, the listed company will transform to culture ＆ entertainment industry, continue to positively pursue for extensive development opportunities, and make deployments in upstream and downstream of game and culture ＆ entertainment industries.
[Trading Alarms]
○ Ligong Guangke to issue new shares on Oct. 21
------
Wuhan Ligong Guangke Co. Ltd. (300557.SZ) will issue new shares at 13.91 yuan per share, with a P/E ratio of 22.99 times and upper subscription limit of 14,000 shares. It is mainly engaged in safety monitoring system for optical fiber sensing technology.
TOP
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