[Today's Guide]
○ Public funds judge future market in Q3 research reports: deploy in stocks of reform, transformation and growth concepts
○ Development of biomass energy to accelerate during 13th "Five-year" period, five key tasks to see progress
○Tong-Da Cable to expand aviation parts through private placement, Liaison Interactive Information Technology proposes to control e-commerce platform Newegg Business
○ Huangshan Jinma to acquire Zitye Auto, Guanhao Biotech to acquire Huidisen Phar.
[SSN Focus]
○ Public funds judge future market in Q3 research reports: deploy in stocks of reform, transformation and growth concepts
------
Public funds under various large fund companies on Oct. 24b issued the Q3 report. Viewing from fund manager's opinions on future market, the competition between stock funds can hardly see substantial changes in the near term. Currently, there's no apparent sign of capital flow into the stock market, and also no capital flow out of the market at faster speed. While the room for lowering interest is limited, outside force is needed to break the current trading sideways.
As to investment opportunities, the market is rosy on reform, transformation and growth concepts. Managers of Bosera Asset Management's state-owned reform fund says that four main investment directions, including merging and restructuring, governance and optimization, performance improvement and asset revaluation, should be closely tracked. Manager of Fullgoal Fund Management's high-tech industry fund says that the penetration rate of new energy vehicle is still low, and the industry is far from entering the mature period. Military informationization industry is also at the starting stage of growth period. Manager of Guotai Asset Management's Jinding value selection fund indicates that priority should be given to blue-chip sector that may benefit from SOEs reform and supply-side reform, or resource enterprises that are at the bottom of the cycle and likely to rebound in the future; growth industries such information service, environment protection, media and high-end equipment manufacturing which conform to the direction of economic structure transformation are also worthy of attention.
[SSN Selection]
○ The SSN learnt that relevant planning outline on "Healthy China 2030" is expected to be issued soon. Information service systems on health will be established.
○ The National Development and Reform Commission (NDRC) will call together responsible persons of 22 large coal enterprises for a meeting. It is estimated that the meeting will make research on de-capacity, ensuring supply, transformation and upgrading and sound development.
○ Zhengzhou Commodity Exchange decides to increase the transaction fee of thermal coal from 4 yuan per lot to 6 yuan per lot from the night session trading of Oct. 24.
○ Foreign media reported that the first cross-border transaction via multiple block chain in the banking industry has completed between Commonwealth Bank of Australia and Wells Fargo ＆ Company.
○ Sichuan Shuangma Cement Co., Ltd. (000935.SZ) announced that it will suspend trading from Oct. 25 for self-checking, due to its share price soared recently.
TOP
[Industry Information]
○ Development of biomass energy to accelerate during 13th "Five-year" period, five key tasks to see progress
------
At the 2016 International Biomass Conference and Expo held recently, Ren Dongming, director of the energy research institute and renewable energy development center under the NDRC, says that China will take various measures to promote the development of biomass energy during the 13th Five-year period. Ren reveals that five important tasks are to be done during the 13th Five-year period: replace urban coal-fired heating with biomass energy heating; introduce biomass into the natural gas market; promote the combined heat and power generation reconstruction work of biomass power generation project; push forward the promotion and demonstration of biology liquid fuel; strengthen the plan on utilization of biomass development, enhance the construction of ensuring, policy and regulatory system of resource supply.
Comment: according to the 13th Five-year biomass energy development plan, the utilization amount of biomass energy, biomass natural gas and biomass liquid fuel will hit 57 million ton standard coal, 10 billion cubic meters and 6 million tons respectively
by 2020. Institutions' research reports show that Guangdong Chant Group Inc. (002616.SZ) has signed biomass power generation agreement in succession this year, and is expected to benefit from preferential policy, fuel cost control and the improvement of thermoelectric efficiency; Small high efficiency steam turbines produced by JiangSu Jin Tong Ling Fluid Machinery Technology Co., Ltd. (300091.SZ), which have high technical barrier, are primarily used in new energy sector such as biomass power generation.
TOP
[Announcement Interpretation]
○ Tong-Da Cable to expand aviation parts through private placement
------
Henan Tong-Da Cable Co., Ltd. (002560.SZ) proposes to issue 85,420,000 shares at no less than 10.62 yuan per share through private placement, to raise 907 million yuan. The company's vice general manager Ren Jian will subscribe with self-owned fund of 20 million yuan. Fundraising projects of this private placement include rail road transportation, high-end manufacturing of special cables and aviation part manufacturing base projects. Such projects will promote the company to improve the intellectualization of aviation parts production, production efficiency as well as production scale, consolidating the company's leading position in China's aviation parts market.
○ Liaison Interactive Information Technology proposes to control e-commerce platform Newegg Business
------
Hangzhou Liaison Interactive Information Technology Co., Ltd. (002280.SZ) proposes to buy 55.7 percent equities (which will later diluted to 51.17 percent) of Newegg Business cash payment of 264 million dollars. Newegg Business is an e-commerce platform which sells computer software and hardware and external devices. According to the announcement, the target earnings before interest, taxes，depreciation and amortization (EBITDA) of Newegg Business in 2016, 2017 and 2018 are 8.5 million dollars, 22.6 million dollars and 39 million dollars respectively.
TOP
○ Huangshan Jinma to acquire Zitye Auto with RMB11.6 bln
------
Huangshan Jinma Co., Ltd. (000980.SZ) proposes to acquire 100 percent equities of Zitye Auto by issuing shares. The subject asset is priced at 11.6 billion yuan. It will issue approximately 1.3 billion shares based on the issuing price of 8.91 yuan per share. The company also plans to raise a supporting fund of 2 billion yuan by issuing shares at no less than 9.14 yuan per share through private placement. The proceeds will be used in the development new energy vehicles by Zitye Auto. Tech-New Group, the substantial shareholder of the subject asset, commits to subscribe with 500 million yuan
Zitye Auto is principally engaged in the production of traditional energy and new energy vehicles. It recorded business revenue of 13.7 billion yuan and a net profit of 900 million yuan in 2015. Tech-New Group committed that the net profit after deducting extraordinary items from 2016 to 2018 will be no less than 1.21 billion yuan, 1.41 billion yuan and 1.61 billion yuan, respectively.
○ Guanhao Biotech to acquire Huidisen Phar. with RMB1.85 bln through private placement
------
Guanhao Biotech Co., Ltd. (300238.SZ) intends to raise 1.85 billion yuan by issuing 70 million shares through private placement. 1.8 billion yuan of the proceeds will be used in acquiring 100 percent equities of Zhejiang Huidisen Pharmaceutical Co., Ltd. Huidisen Phar. is one of the two companies approved to produce Moxalactam for injection, which has been listed in the category of drugs in the national basic medical insurance and work-related injuries insurance. It recorded business revenue of 240 million yuan and a net profit of 73.91 million yuan in the first half. Its former shareholders committed that its net profit in 2016 and 2017 will be no less than 120 million yuan and 160 million yuan.
○ Tianan Coal Mining to transfer trade receivables from substantial shareholder to China Cinda Asset Management
------
Pingdingshan Tianan Coal Mining Co., Ltd. (601666.SH) proposes to transfer the trade receivable of 1,304 million yuan from Pingmei Shenma Group, its controlling shareholder, to China Cinda Asset Management at the original price. The move will revitalize the assets of Tianan Coal Mining, control the risks on trade receivables and recover the working capital in time. Tianan Coal Mining transferred its loss-making assets to its substantial shareholder and transferred trade receivables of approximately 1 billion yuan to Great Wall Asset Management in August. Such measures will improve the asset-debt structure of the company.
○ Evergrande Life increases shareholding in Nationz Technologies with nearly 5 pct
------
The third quarterly report of Nationz Technologies Inc. (300077.SZ) shows that Evergrande Life-Traditional Portfolio A and Evergrande Life-Universal Portfolio B are the third and fourth largest shareholders of the company with a shareholding proportion of 2.94 percent and 2.01 percent. They totally hold 4.95 percent of the shareholding in the company, which is close to the 5 percent limit. As the two products of Evergrande Life were not listed on the shareholder list in the interim report of Nationz Technologies, they will establish positions in the third quarter.
[Financial Reports Express]
○ Baoshan Iron ＆ Steel expects growth
------
Baoshan Iron ＆ Steel Co., Ltd. (600019.SH) expects an increase of 600 to 800 percent in its annual report thanks to the cost reduction and efficiency improvement. Xinjiang Zhongtai Chemical Co., Ltd. (002092.SZ) expects an increase of 148 to 162 times in its annual report thanks to the surging prices of its main products. Shenzhen Mindata Holding Co., Ltd. (002137.SZ) expects an increase of over 7 times in its annual report as a result of the consolidation of the financial statements of three subsidiaries. Guangdong Rongtai Industry Co., Ltd. (600589.SH) expects an increase of about 4 times in its annual report as a result of the consolidation of the financial statements of Forest Eternal. Jiangxi Ganfeng Lithium Co., Ltd. (002460.SZ) expects an increase of over 4 times in its annual report thanks to the surging sales volume and price of the lithium battery products. JPMF Guangdong Co., Ltd. (002600.SZ) expects an increase of about 4 times in its annual report as a result of the consolidation of the financial statements of DFLC. Ningbo Tech bank Co., Ltd. (002124.SZ) expects an increase of over 200 percent in its annual report thanks to the growth in its fodder business. Anhui Jinhe Industrial Co., Ltd. (002597.SZ) expects an increase of over 100 percent in its annual report thanks to the surging prices of its fine chemical products.
[Data Speaks]
○ RMB depreciation boosts performance of export-oriented companies
------
The central parity rate of RMB against declined to 6.7690 on Oct. 24, representing a new low in six years. Institutes believe that RMB depreciation will boost light manufacturing, electric appliance and equipment other export-oriented enterprises, boost the export competitiveness and improve orders. Zhejiang Haers Vacuum Containers Co., Ltd. (002615.SZ), a company principally engaged in stainless vacuum utensils, estimated in its third quarterly report that its net profit in 2016 will see an increase of 220 to 270 percent year on year, which is mainly attributed to the sales growth and RMB depreciation.
SSN's statistics show that among A-share companies with exports accounting for over 70 percent of the main business revenue, many forecast that they will achieve growth or turn losses into profits in the first three quarters. Jiangmen iDear-Hanyu Electrical Joint-Stock Co., Ltd. (300403.SZ), a leader in draining pumps for household appliance, estimated that its net profit in the first three quarters of 2016 will increase 25 to 40 percent year on year. Based on the third quarterly report of DEA General Aviation Holding Co., Ltd. (00260.SZ), a company principally engaged in small household appliance, released on Oct. 24 evening, it will turn losses into profits in 2016 thanks to RMB depreciation. Ken Holding Co., Ltd. (300126.SZ), a company principally engaged in electric tools, indicated that the gross margin of its products improved as a result of the changes in the product structure and the change of the exchange rate. The net profit of the company in the first three quarters will increase 0 to 30 percent year on year.
[Trading Alarms]
○ Haitian Precision Machinery and Fusen Noble-house Industrial to conduct IPOs on Oct. 25
------
Ningbo Haitian Precision Machinery Co., Ltd. (601882.SH) will issue shares at 1.5 yuan per share with a P/E ratio of 22.98 times and an upper subscription of 15,000 shares for each securities account. It is principally engaged in high-end numerically-controlled machine tools. Chengdu Fusen Noble-house Industrial Co., Ltd. (002818.SZ) will issue shares at 23.49 yuan per share with a P/E ratio of 22.99 times and an upper subscription of 13,000 shares for each securities account. The company provides leases in the building materials for decoration and household market.
TOP
○ Public funds judge future market in Q3 research reports: deploy in stocks of reform, transformation and growth concepts
○ Development of biomass energy to accelerate during 13th "Five-year" period, five key tasks to see progress
○Tong-Da Cable to expand aviation parts through private placement, Liaison Interactive Information Technology proposes to control e-commerce platform Newegg Business
○ Huangshan Jinma to acquire Zitye Auto, Guanhao Biotech to acquire Huidisen Phar.
[SSN Focus]
○ Public funds judge future market in Q3 research reports: deploy in stocks of reform, transformation and growth concepts
------
Public funds under various large fund companies on Oct. 24b issued the Q3 report. Viewing from fund manager's opinions on future market, the competition between stock funds can hardly see substantial changes in the near term. Currently, there's no apparent sign of capital flow into the stock market, and also no capital flow out of the market at faster speed. While the room for lowering interest is limited, outside force is needed to break the current trading sideways.
As to investment opportunities, the market is rosy on reform, transformation and growth concepts. Managers of Bosera Asset Management's state-owned reform fund says that four main investment directions, including merging and restructuring, governance and optimization, performance improvement and asset revaluation, should be closely tracked. Manager of Fullgoal Fund Management's high-tech industry fund says that the penetration rate of new energy vehicle is still low, and the industry is far from entering the mature period. Military informationization industry is also at the starting stage of growth period. Manager of Guotai Asset Management's Jinding value selection fund indicates that priority should be given to blue-chip sector that may benefit from SOEs reform and supply-side reform, or resource enterprises that are at the bottom of the cycle and likely to rebound in the future; growth industries such information service, environment protection, media and high-end equipment manufacturing which conform to the direction of economic structure transformation are also worthy of attention.
[SSN Selection]
○ The SSN learnt that relevant planning outline on "Healthy China 2030" is expected to be issued soon. Information service systems on health will be established.
○ The National Development and Reform Commission (NDRC) will call together responsible persons of 22 large coal enterprises for a meeting. It is estimated that the meeting will make research on de-capacity, ensuring supply, transformation and upgrading and sound development.
○ Zhengzhou Commodity Exchange decides to increase the transaction fee of thermal coal from 4 yuan per lot to 6 yuan per lot from the night session trading of Oct. 24.
○ Foreign media reported that the first cross-border transaction via multiple block chain in the banking industry has completed between Commonwealth Bank of Australia and Wells Fargo ＆ Company.
○ Sichuan Shuangma Cement Co., Ltd. (000935.SZ) announced that it will suspend trading from Oct. 25 for self-checking, due to its share price soared recently.
TOP
[Industry Information]
○ Development of biomass energy to accelerate during 13th "Five-year" period, five key tasks to see progress
------
At the 2016 International Biomass Conference and Expo held recently, Ren Dongming, director of the energy research institute and renewable energy development center under the NDRC, says that China will take various measures to promote the development of biomass energy during the 13th Five-year period. Ren reveals that five important tasks are to be done during the 13th Five-year period: replace urban coal-fired heating with biomass energy heating; introduce biomass into the natural gas market; promote the combined heat and power generation reconstruction work of biomass power generation project; push forward the promotion and demonstration of biology liquid fuel; strengthen the plan on utilization of biomass development, enhance the construction of ensuring, policy and regulatory system of resource supply.
Comment: according to the 13th Five-year biomass energy development plan, the utilization amount of biomass energy, biomass natural gas and biomass liquid fuel will hit 57 million ton standard coal, 10 billion cubic meters and 6 million tons respectively
by 2020. Institutions' research reports show that Guangdong Chant Group Inc. (002616.SZ) has signed biomass power generation agreement in succession this year, and is expected to benefit from preferential policy, fuel cost control and the improvement of thermoelectric efficiency; Small high efficiency steam turbines produced by JiangSu Jin Tong Ling Fluid Machinery Technology Co., Ltd. (300091.SZ), which have high technical barrier, are primarily used in new energy sector such as biomass power generation.
TOP
[Announcement Interpretation]
○ Tong-Da Cable to expand aviation parts through private placement
------
Henan Tong-Da Cable Co., Ltd. (002560.SZ) proposes to issue 85,420,000 shares at no less than 10.62 yuan per share through private placement, to raise 907 million yuan. The company's vice general manager Ren Jian will subscribe with self-owned fund of 20 million yuan. Fundraising projects of this private placement include rail road transportation, high-end manufacturing of special cables and aviation part manufacturing base projects. Such projects will promote the company to improve the intellectualization of aviation parts production, production efficiency as well as production scale, consolidating the company's leading position in China's aviation parts market.
○ Liaison Interactive Information Technology proposes to control e-commerce platform Newegg Business
------
Hangzhou Liaison Interactive Information Technology Co., Ltd. (002280.SZ) proposes to buy 55.7 percent equities (which will later diluted to 51.17 percent) of Newegg Business cash payment of 264 million dollars. Newegg Business is an e-commerce platform which sells computer software and hardware and external devices. According to the announcement, the target earnings before interest, taxes，depreciation and amortization (EBITDA) of Newegg Business in 2016, 2017 and 2018 are 8.5 million dollars, 22.6 million dollars and 39 million dollars respectively.
TOP
○ Huangshan Jinma to acquire Zitye Auto with RMB11.6 bln
------
Huangshan Jinma Co., Ltd. (000980.SZ) proposes to acquire 100 percent equities of Zitye Auto by issuing shares. The subject asset is priced at 11.6 billion yuan. It will issue approximately 1.3 billion shares based on the issuing price of 8.91 yuan per share. The company also plans to raise a supporting fund of 2 billion yuan by issuing shares at no less than 9.14 yuan per share through private placement. The proceeds will be used in the development new energy vehicles by Zitye Auto. Tech-New Group, the substantial shareholder of the subject asset, commits to subscribe with 500 million yuan
Zitye Auto is principally engaged in the production of traditional energy and new energy vehicles. It recorded business revenue of 13.7 billion yuan and a net profit of 900 million yuan in 2015. Tech-New Group committed that the net profit after deducting extraordinary items from 2016 to 2018 will be no less than 1.21 billion yuan, 1.41 billion yuan and 1.61 billion yuan, respectively.
○ Guanhao Biotech to acquire Huidisen Phar. with RMB1.85 bln through private placement
------
Guanhao Biotech Co., Ltd. (300238.SZ) intends to raise 1.85 billion yuan by issuing 70 million shares through private placement. 1.8 billion yuan of the proceeds will be used in acquiring 100 percent equities of Zhejiang Huidisen Pharmaceutical Co., Ltd. Huidisen Phar. is one of the two companies approved to produce Moxalactam for injection, which has been listed in the category of drugs in the national basic medical insurance and work-related injuries insurance. It recorded business revenue of 240 million yuan and a net profit of 73.91 million yuan in the first half. Its former shareholders committed that its net profit in 2016 and 2017 will be no less than 120 million yuan and 160 million yuan.
○ Tianan Coal Mining to transfer trade receivables from substantial shareholder to China Cinda Asset Management
------
Pingdingshan Tianan Coal Mining Co., Ltd. (601666.SH) proposes to transfer the trade receivable of 1,304 million yuan from Pingmei Shenma Group, its controlling shareholder, to China Cinda Asset Management at the original price. The move will revitalize the assets of Tianan Coal Mining, control the risks on trade receivables and recover the working capital in time. Tianan Coal Mining transferred its loss-making assets to its substantial shareholder and transferred trade receivables of approximately 1 billion yuan to Great Wall Asset Management in August. Such measures will improve the asset-debt structure of the company.
○ Evergrande Life increases shareholding in Nationz Technologies with nearly 5 pct
------
The third quarterly report of Nationz Technologies Inc. (300077.SZ) shows that Evergrande Life-Traditional Portfolio A and Evergrande Life-Universal Portfolio B are the third and fourth largest shareholders of the company with a shareholding proportion of 2.94 percent and 2.01 percent. They totally hold 4.95 percent of the shareholding in the company, which is close to the 5 percent limit. As the two products of Evergrande Life were not listed on the shareholder list in the interim report of Nationz Technologies, they will establish positions in the third quarter.
[Financial Reports Express]
○ Baoshan Iron ＆ Steel expects growth
------
Baoshan Iron ＆ Steel Co., Ltd. (600019.SH) expects an increase of 600 to 800 percent in its annual report thanks to the cost reduction and efficiency improvement. Xinjiang Zhongtai Chemical Co., Ltd. (002092.SZ) expects an increase of 148 to 162 times in its annual report thanks to the surging prices of its main products. Shenzhen Mindata Holding Co., Ltd. (002137.SZ) expects an increase of over 7 times in its annual report as a result of the consolidation of the financial statements of three subsidiaries. Guangdong Rongtai Industry Co., Ltd. (600589.SH) expects an increase of about 4 times in its annual report as a result of the consolidation of the financial statements of Forest Eternal. Jiangxi Ganfeng Lithium Co., Ltd. (002460.SZ) expects an increase of over 4 times in its annual report thanks to the surging sales volume and price of the lithium battery products. JPMF Guangdong Co., Ltd. (002600.SZ) expects an increase of about 4 times in its annual report as a result of the consolidation of the financial statements of DFLC. Ningbo Tech bank Co., Ltd. (002124.SZ) expects an increase of over 200 percent in its annual report thanks to the growth in its fodder business. Anhui Jinhe Industrial Co., Ltd. (002597.SZ) expects an increase of over 100 percent in its annual report thanks to the surging prices of its fine chemical products.
[Data Speaks]
○ RMB depreciation boosts performance of export-oriented companies
------
The central parity rate of RMB against declined to 6.7690 on Oct. 24, representing a new low in six years. Institutes believe that RMB depreciation will boost light manufacturing, electric appliance and equipment other export-oriented enterprises, boost the export competitiveness and improve orders. Zhejiang Haers Vacuum Containers Co., Ltd. (002615.SZ), a company principally engaged in stainless vacuum utensils, estimated in its third quarterly report that its net profit in 2016 will see an increase of 220 to 270 percent year on year, which is mainly attributed to the sales growth and RMB depreciation.
SSN's statistics show that among A-share companies with exports accounting for over 70 percent of the main business revenue, many forecast that they will achieve growth or turn losses into profits in the first three quarters. Jiangmen iDear-Hanyu Electrical Joint-Stock Co., Ltd. (300403.SZ), a leader in draining pumps for household appliance, estimated that its net profit in the first three quarters of 2016 will increase 25 to 40 percent year on year. Based on the third quarterly report of DEA General Aviation Holding Co., Ltd. (00260.SZ), a company principally engaged in small household appliance, released on Oct. 24 evening, it will turn losses into profits in 2016 thanks to RMB depreciation. Ken Holding Co., Ltd. (300126.SZ), a company principally engaged in electric tools, indicated that the gross margin of its products improved as a result of the changes in the product structure and the change of the exchange rate. The net profit of the company in the first three quarters will increase 0 to 30 percent year on year.
[Trading Alarms]
○ Haitian Precision Machinery and Fusen Noble-house Industrial to conduct IPOs on Oct. 25
------
Ningbo Haitian Precision Machinery Co., Ltd. (601882.SH) will issue shares at 1.5 yuan per share with a P/E ratio of 22.98 times and an upper subscription of 15,000 shares for each securities account. It is principally engaged in high-end numerically-controlled machine tools. Chengdu Fusen Noble-house Industrial Co., Ltd. (002818.SZ) will issue shares at 23.49 yuan per share with a P/E ratio of 22.99 times and an upper subscription of 13,000 shares for each securities account. The company provides leases in the building materials for decoration and household market.
TOP
Latest comments