[Today's Guide]
○10-year plan for ice-snow sports industry released, industrial scale to reach RMB1 trln
○Yellow phosphorus prices continue to rise, totaling monthly surge to over 20 pct
○Heavy truck sees large y-o-y sales growth, Hebei to adjust and control production of steel enterprises
○Fujitsu Microelectronics to acquire integrated circuit sealing ＆ test asset, Motimo Membrane Technology to extend industrial chain
[SSN Focus]
○10-year plan for ice-snow sports industry released, industrial scale to reach RMB1 trln
------
On Nov. 2, the General Administration of Sport of China released the Development Plan for Ice-Snow Sports (2016-2025) and the Planning for the Construction of National Ice-Snow Ground (2016-2020). For the development of ice-snow sports industry by 2025, it is proposed to make its foundation more solid, greatly improve its popularity, enhance its competitive strength by a large margin, and make its industrial system more complete. The number of people directly involved in ice-snow sports will exceed 50 million, and 300 million people will get involved in ice-snow sports. The total scale of the ice-snow sports industry will hit 600 billion yuan by 2020 and 1 trillion yuan by 2025.
Comment: Beijing's success in winning the bid for the 2022 Winter Olympic Games might become an important opportunity to popularize ice-snow sports. Institutions point out that the US ice-snow sports market totals around 120 billion yuan with people involved in skiing accounting for around 2.5 percent of the total population in the U.S. The output value of China's skiing market in 2015 aggregated around 12 billion yuan with people involved in skiing accounting for only around 0.9 percent of China's total population, suggesting great development potential. Changbai Mountain Tourism Co., Ltd. (603099.SH) is the exclusive passenger transport operator in Changbai mountain scenic spot, and it is focusing on building a great resort of ice-snow sports; Toread Holdings Group Co., Ltd. (300005.SZ) is principally engaged in outdoor sports articles and now it is making arrangement in ice-snow sports.
[SSN Selection]
○The Ministry of Environmental Protection recently released the Outline of the 13th Five-Year Plan for National Ecological Protection. It is proposed to basically build ecological monitoring database and supervision platform.
○The experiment device for "artificial sun", a national scientific project, recently achieved great breakthrough, and it will provide nuclear fusion reactor with important reference in the future.
○China United Network Communications Limited (600050.SH) on Nov. 2 entered into strategic cooperation agreement with Baidu Inc.; it is learnt that Robin Li Yanhong, chief executive officer of Baidu Inc, and Pony Ma Huateng, founder of Tencent Holdings Co., Ltd., will attend China United Network Communications' partnership conference to be held on Nov. 3.
○Shanghai Navigation Forum 2016 was held on Nov. 2. Experts attending the forum introduced that the total output of China's Beidou industry has surpassed 200 billion yuan.
○The pure electric passenger vehicle project under Chery New Energy Automobile Technology Co., Ltd. is recently nodded by the National Development and Reform Commission (NDRC); Wuhu Conch Profiles and Science Co., Ltd. (000619.SZ) once intended to acquire equities of the company.
TOP
[Industry Information]
○Yellow phosphorus prices continue to rise, totalling monthly surge to over 20 pct
------
Data from www.baiinfo.com shows that the price of yellow phosphorus in provinces like Guizhou and Yunnan continued to rise on Nov. 2, representing an increase of over 20 percent in the recent month. This round of price hike, on the one hand, is due to rising costs in raw materials, including anthracite and coke. The other reason is that electricity prices are also on the rise. Some enterprises in Sichuan province will adopt electricity prices for dry reason, which are usually higher. In addition, the prices of downstream products, such as phosphoric acid and glyphosate, are also rising, propping up yellow phosphorus prices.
Comment: Driving by rising cost and smooth price transmission in the downstream, further price hike of yellow phosphorus is still expected. At present, the operating rate and inventory of the whole industry is low. Tight goods supply might further push up prices of yellow phosphorus. Enterprises with advantages in electricity and phosphorite resources will benefit from the rising price of yellow phosphorus. Jiangsu ChengXing Phosph-Chemical Co., Ltd. (600078.SH) owns advantages in yellow phosphorus, phosphoric acid and power plant industrial chain. Hubei Xingfa Chemicals Group Co., Ltd. (600141.SH) is a leading company in China's phosphorus chemical industry. It owns notable competitive advantages in phosphate ore, phosphate and electricity.
TOP
○Heavy truck sees large y-o-y sales growth, positive trend to continue
------
As reported by www.cvworld.cn, around 67,400 vehicles of various models are sold in domestic heavy truck market in October, indicating a year-on-year growth of 49 percent and a growth of 27 percent from September. The year-on-year sales growth of 49 percent in October breaks the record of a year-on-year growth of 44 percent achieved in August. The figure also records the highest monthly growth since 2016.
Comment: Research reports released by China International Capital Corporation Limited believe that along with strict implementation of supervision over the overloading of heavy trucks, production scheduling of important heavy truck manufacturers and component producers will experience further month-on-month growth in November. Optimistically, the unexpected sales of heavy truck might continue to March next year. As to listed companies, Weifu High-Technology Group Co., Ltd. (000581.SZ) is a leading company in areas like fuel injection system and exhaust gas after-treatment components; Weichai Power Co., Ltd. (000338.SZ) is primarily engaged in three business sectors which are power assembly, finished automobile and other components; Tianrun Crankshaft Co., Ltd. (002283.SZ) is a leading company in bent axle for heavy-duty engine.
○Hebei to adjust and control production of steel enterprises, environmental protection to push down capacity
------
Unfavorable weather conditions of this winter and next spring may bring in heavy pollution. In order to deal with such situation, Hebei province will adjust and control the production of industrial enterprises of some major cities in electric power, steel, concrete and other fields from this November and next January, so as to shut down the enterprises which cannot stably meet the emission standards in the heavily-polluted weather. Those meeting the said standards shall also stop or limit the production based on emergency pre-scheme. Additionally, Beijing city has released yellow-grade early warnings for both heavy air pollution and haze. The air quality is expected to be medium and heavily polluted from Nov. 3 to 5.
Comment: The steel industry has speeded up the pace of de-capacity since August. The market previously concerned whether the capacity task can be finished or not, but now such concern fades away. Based on current trend, the task of reducing over-capacity in steel industry nationwide is likely to be finished in advance. Several authorities led by China Development and Reform Commission have studied the target for reducing over-capacity in 2017. Production adjustment and control caused by environmental protection pressure will further force the exit of lagged capacity, which will benefit the leading enterprises to improve their profits. The steel enterprises with integration expectation attract much attention of institutions.
TOP
[Announcement Interpretation]
○Fujitsu Microelectronics to acquire integrated circuit sealing ＆ test asset for RMB1.9 bln
------
Nantong Fujitsu Microelectronics Co., Ltd. (002156.SZ) plans to acquire 49.48 percent equities of Suzhou Farrate Telecommunication Co., Ltd. and 47.63 percent equities of Tarrate Technology Co., Ltd. from integrate circuit industrial fund through private placement at 1,921 million and 1,061 million yuan respectively. Meanwhile, it also proposes to raise 969 million yuan as supporting funds at a bottom price of 11.74 yuan per share for integrated circuit sealing ＆ test project, high-performance CPU and other projects.
The listed company will directly and indirectly hold the 100 percent equities of the said two companies after transaction, so as to indirectly hold 85 percent equities of Tongfu Chaowei Suzhou and Tongfu Chaowei Bincheng respectively. As main AMD sealing ＆ test providers, the latter two have advanced technologies, stable quality and matured teams. AMD promised in April to support 36-month project of the latter two companies, and make them realize the profit target of 20 million U.S. dollars for each fiscal year.
○Motimo Membrane Technology to acquire two industrial-chain companies for RMB1,427 mln
------
Tianjin Motimo Membrane Technology Co., Ltd. (300334.SZ) plans to acquire the 100 percent equities of Jiangsu Kaimi Membrane Technology Co., Ltd. and Gaosu Jinqiao Water Technology (Group) Limited by Share Ltd. respectively at a price of 1,427 million yuan through private placement and cash. Meanwhile, it also proposes to raise 378 million yuan through private placement. The price is 15.22 yuan per share for the both said private placements.
Kaimi Membrane Technology is mainly engaged in membrane product development, membrane equipment manufacture, membrane application engineering and etc., and it commits to realize a net profit after deduction of 60 million, 75 million and 93.75 million yuan from 2016 to 2019. Jinqiao Water Technology is mainly engaged in providing whole-industrial chain services in the water-related field, such as surface water treatment, urban sewage treatment and other issues, and it promises to achieve a net profit after deduction of 25 million, 32.50 million and 42.25 million yuan from 2016 to 2019.
○The restructuring schemes of China Zhonghua Geotechnical Engineering Co., Ltd. (002542.SZ), Dalian Zeus Entertainment Co., Ltd. (002354.SZ) and Noblift Equipment Joint Stock Co., Ltd. (603611.SH) have been unconditionally approved by China Securities Regulatory Commission.
○The titles of Heilongjiang Heihua Co., Ltd. (600179.SH) and Hengli Petrochemical Co., Ltd. (600346.SH) are removed, and the two have resumed the trading.
○Jilin Power Share Co., Ltd. (000875.SZ) has signed a PPP cooperative contract with Dragon Crown Group Holdings Ltd. for comprehensively-intelligent energy supply and increment power distribution grid in new district of Changchun city. The total investment is estimated to reach 8.3 billion yuan, and total revenue of the former was 4.3 billion yuan in 2015.
[Trading Alarms]
○Exciton Technology to issue new shares on Nov. 3
------
Ningbo Exciton Technology Co., Ltd. (300566.SZ) will issue new shares at 14.94 yuan per share, with a P/E ratio of 22.98 times and upper subscription limit of 19,500 shares. It is mainly engaged in optical film for liquid crystal display.
TOP
○10-year plan for ice-snow sports industry released, industrial scale to reach RMB1 trln
○Yellow phosphorus prices continue to rise, totaling monthly surge to over 20 pct
○Heavy truck sees large y-o-y sales growth, Hebei to adjust and control production of steel enterprises
○Fujitsu Microelectronics to acquire integrated circuit sealing ＆ test asset, Motimo Membrane Technology to extend industrial chain
[SSN Focus]
○10-year plan for ice-snow sports industry released, industrial scale to reach RMB1 trln
------
On Nov. 2, the General Administration of Sport of China released the Development Plan for Ice-Snow Sports (2016-2025) and the Planning for the Construction of National Ice-Snow Ground (2016-2020). For the development of ice-snow sports industry by 2025, it is proposed to make its foundation more solid, greatly improve its popularity, enhance its competitive strength by a large margin, and make its industrial system more complete. The number of people directly involved in ice-snow sports will exceed 50 million, and 300 million people will get involved in ice-snow sports. The total scale of the ice-snow sports industry will hit 600 billion yuan by 2020 and 1 trillion yuan by 2025.
Comment: Beijing's success in winning the bid for the 2022 Winter Olympic Games might become an important opportunity to popularize ice-snow sports. Institutions point out that the US ice-snow sports market totals around 120 billion yuan with people involved in skiing accounting for around 2.5 percent of the total population in the U.S. The output value of China's skiing market in 2015 aggregated around 12 billion yuan with people involved in skiing accounting for only around 0.9 percent of China's total population, suggesting great development potential. Changbai Mountain Tourism Co., Ltd. (603099.SH) is the exclusive passenger transport operator in Changbai mountain scenic spot, and it is focusing on building a great resort of ice-snow sports; Toread Holdings Group Co., Ltd. (300005.SZ) is principally engaged in outdoor sports articles and now it is making arrangement in ice-snow sports.
[SSN Selection]
○The Ministry of Environmental Protection recently released the Outline of the 13th Five-Year Plan for National Ecological Protection. It is proposed to basically build ecological monitoring database and supervision platform.
○The experiment device for "artificial sun", a national scientific project, recently achieved great breakthrough, and it will provide nuclear fusion reactor with important reference in the future.
○China United Network Communications Limited (600050.SH) on Nov. 2 entered into strategic cooperation agreement with Baidu Inc.; it is learnt that Robin Li Yanhong, chief executive officer of Baidu Inc, and Pony Ma Huateng, founder of Tencent Holdings Co., Ltd., will attend China United Network Communications' partnership conference to be held on Nov. 3.
○Shanghai Navigation Forum 2016 was held on Nov. 2. Experts attending the forum introduced that the total output of China's Beidou industry has surpassed 200 billion yuan.
○The pure electric passenger vehicle project under Chery New Energy Automobile Technology Co., Ltd. is recently nodded by the National Development and Reform Commission (NDRC); Wuhu Conch Profiles and Science Co., Ltd. (000619.SZ) once intended to acquire equities of the company.
TOP
[Industry Information]
○Yellow phosphorus prices continue to rise, totalling monthly surge to over 20 pct
------
Data from www.baiinfo.com shows that the price of yellow phosphorus in provinces like Guizhou and Yunnan continued to rise on Nov. 2, representing an increase of over 20 percent in the recent month. This round of price hike, on the one hand, is due to rising costs in raw materials, including anthracite and coke. The other reason is that electricity prices are also on the rise. Some enterprises in Sichuan province will adopt electricity prices for dry reason, which are usually higher. In addition, the prices of downstream products, such as phosphoric acid and glyphosate, are also rising, propping up yellow phosphorus prices.
Comment: Driving by rising cost and smooth price transmission in the downstream, further price hike of yellow phosphorus is still expected. At present, the operating rate and inventory of the whole industry is low. Tight goods supply might further push up prices of yellow phosphorus. Enterprises with advantages in electricity and phosphorite resources will benefit from the rising price of yellow phosphorus. Jiangsu ChengXing Phosph-Chemical Co., Ltd. (600078.SH) owns advantages in yellow phosphorus, phosphoric acid and power plant industrial chain. Hubei Xingfa Chemicals Group Co., Ltd. (600141.SH) is a leading company in China's phosphorus chemical industry. It owns notable competitive advantages in phosphate ore, phosphate and electricity.
TOP
○Heavy truck sees large y-o-y sales growth, positive trend to continue
------
As reported by www.cvworld.cn, around 67,400 vehicles of various models are sold in domestic heavy truck market in October, indicating a year-on-year growth of 49 percent and a growth of 27 percent from September. The year-on-year sales growth of 49 percent in October breaks the record of a year-on-year growth of 44 percent achieved in August. The figure also records the highest monthly growth since 2016.
Comment: Research reports released by China International Capital Corporation Limited believe that along with strict implementation of supervision over the overloading of heavy trucks, production scheduling of important heavy truck manufacturers and component producers will experience further month-on-month growth in November. Optimistically, the unexpected sales of heavy truck might continue to March next year. As to listed companies, Weifu High-Technology Group Co., Ltd. (000581.SZ) is a leading company in areas like fuel injection system and exhaust gas after-treatment components; Weichai Power Co., Ltd. (000338.SZ) is primarily engaged in three business sectors which are power assembly, finished automobile and other components; Tianrun Crankshaft Co., Ltd. (002283.SZ) is a leading company in bent axle for heavy-duty engine.
○Hebei to adjust and control production of steel enterprises, environmental protection to push down capacity
------
Unfavorable weather conditions of this winter and next spring may bring in heavy pollution. In order to deal with such situation, Hebei province will adjust and control the production of industrial enterprises of some major cities in electric power, steel, concrete and other fields from this November and next January, so as to shut down the enterprises which cannot stably meet the emission standards in the heavily-polluted weather. Those meeting the said standards shall also stop or limit the production based on emergency pre-scheme. Additionally, Beijing city has released yellow-grade early warnings for both heavy air pollution and haze. The air quality is expected to be medium and heavily polluted from Nov. 3 to 5.
Comment: The steel industry has speeded up the pace of de-capacity since August. The market previously concerned whether the capacity task can be finished or not, but now such concern fades away. Based on current trend, the task of reducing over-capacity in steel industry nationwide is likely to be finished in advance. Several authorities led by China Development and Reform Commission have studied the target for reducing over-capacity in 2017. Production adjustment and control caused by environmental protection pressure will further force the exit of lagged capacity, which will benefit the leading enterprises to improve their profits. The steel enterprises with integration expectation attract much attention of institutions.
TOP
[Announcement Interpretation]
○Fujitsu Microelectronics to acquire integrated circuit sealing ＆ test asset for RMB1.9 bln
------
Nantong Fujitsu Microelectronics Co., Ltd. (002156.SZ) plans to acquire 49.48 percent equities of Suzhou Farrate Telecommunication Co., Ltd. and 47.63 percent equities of Tarrate Technology Co., Ltd. from integrate circuit industrial fund through private placement at 1,921 million and 1,061 million yuan respectively. Meanwhile, it also proposes to raise 969 million yuan as supporting funds at a bottom price of 11.74 yuan per share for integrated circuit sealing ＆ test project, high-performance CPU and other projects.
The listed company will directly and indirectly hold the 100 percent equities of the said two companies after transaction, so as to indirectly hold 85 percent equities of Tongfu Chaowei Suzhou and Tongfu Chaowei Bincheng respectively. As main AMD sealing ＆ test providers, the latter two have advanced technologies, stable quality and matured teams. AMD promised in April to support 36-month project of the latter two companies, and make them realize the profit target of 20 million U.S. dollars for each fiscal year.
○Motimo Membrane Technology to acquire two industrial-chain companies for RMB1,427 mln
------
Tianjin Motimo Membrane Technology Co., Ltd. (300334.SZ) plans to acquire the 100 percent equities of Jiangsu Kaimi Membrane Technology Co., Ltd. and Gaosu Jinqiao Water Technology (Group) Limited by Share Ltd. respectively at a price of 1,427 million yuan through private placement and cash. Meanwhile, it also proposes to raise 378 million yuan through private placement. The price is 15.22 yuan per share for the both said private placements.
Kaimi Membrane Technology is mainly engaged in membrane product development, membrane equipment manufacture, membrane application engineering and etc., and it commits to realize a net profit after deduction of 60 million, 75 million and 93.75 million yuan from 2016 to 2019. Jinqiao Water Technology is mainly engaged in providing whole-industrial chain services in the water-related field, such as surface water treatment, urban sewage treatment and other issues, and it promises to achieve a net profit after deduction of 25 million, 32.50 million and 42.25 million yuan from 2016 to 2019.
○The restructuring schemes of China Zhonghua Geotechnical Engineering Co., Ltd. (002542.SZ), Dalian Zeus Entertainment Co., Ltd. (002354.SZ) and Noblift Equipment Joint Stock Co., Ltd. (603611.SH) have been unconditionally approved by China Securities Regulatory Commission.
○The titles of Heilongjiang Heihua Co., Ltd. (600179.SH) and Hengli Petrochemical Co., Ltd. (600346.SH) are removed, and the two have resumed the trading.
○Jilin Power Share Co., Ltd. (000875.SZ) has signed a PPP cooperative contract with Dragon Crown Group Holdings Ltd. for comprehensively-intelligent energy supply and increment power distribution grid in new district of Changchun city. The total investment is estimated to reach 8.3 billion yuan, and total revenue of the former was 4.3 billion yuan in 2015.
[Trading Alarms]
○Exciton Technology to issue new shares on Nov. 3
------
Ningbo Exciton Technology Co., Ltd. (300566.SZ) will issue new shares at 14.94 yuan per share, with a P/E ratio of 22.98 times and upper subscription limit of 19,500 shares. It is mainly engaged in optical film for liquid crystal display.
TOP
Latest comments