[Today's Guide]
○Premier Li promotes interconnection, infrastructure construction at home and abroad to accelerate
○Frequent attack of fog and haze forces more efforts made in treatment of environmental problems, coal cleaning and treatment of tail gas attract attention
○Dingli to acquire Esim Technology at RMB666 mln, Ming Jewelry invests RMB2.4 bln in e-commerce of real estate industry
○Quanxin Cable Technology to buy Quanxin Cable Technology at RMB726 mln, First Capital International Business Consulting buys shares of Jinlu Group to 5 pct. limit through secondary acquisition
[SSN Focus]
○Premier Li promotes interconnection, infrastructure construction at home and abroad to accelerate
------
Chinese Premier Li Keqiang attended the Fifth Summit of China and Central and Eastern European Countries in Latvia on Nov. 5 afternoon (local time) and proposed four suggestions for the future development of "16 1" cooperation. "Deepening cooperation in infrastructure and interconnection" is highly prioritized. China encourages enterprises with strength to participate in infrastructure construction in central and eastern European countries through various ways; China is willing to advance the construction of Hungary-Serbia Railway and China-Europe Land-Sea Express Route as well as support the construction of transport routes between Asia and Europe.
Comment: Since the second half, China has singed memorandums of understanding related to the "Belt and Road" initiatives with surrounding countries. Q3 reports also show that contracts newly signed by central state-owned enterprises (SOEs) engaged in infrastructure experience rapid growth. A good example is that China Railway Group Limited (601390.SH) sees a large year-on-year growth of 118.7 percent in terms of newly-signed contracts. China plans an investment of 800 billion yuan in railway in 2016, but by the end of the first three quarters, only 542.3 billion yuan investment has been completed. Media reported that investment in railway might skyrocket at end 2016. Companies engaged in rail transit equipment, such as Zhejiang Yonggui Electric Equipment Co., Ltd. (300351.SZ) and Beijing Dinghan Technology Co., Ltd. (300011.SZ), attract attention of multiple institutions.
[SSN Selection]
○China Securities Regulatory Commission (CSRC) on Nov. 4 nodded the IPO applications of 9 enterprises. The total fundraising is expected to be no more than 4.5 billion yuan.
○Two departments raised the export tax rebate rate of over 400 products with electromechanical products and refined oil products included to 17 percent, highlighting the positive significance of stabilizing foreign trading and promoting export.
○Relevant officials from the Ministry of Finance on Nov. 4 indicated that at present, the risks of local debts are controllable on the whole. As of end September, totally, swap bonds worth 7.2 trillion yuan have been completed.
○50 million tons of newly-built coal mine capacity under Inner Mongolia Eerduosi Resources Co., Ltd. (600295.SH) sees joint pilot production. Effective implementation of measures concerning coal price regulation might help to improve tight coal supply.
○China International Capital Corporation Limited (CICC) proposes to acquire China Investment Securities with 16.7 billion yuan, marking that integration of two securities companies under Central Huijin Investment Ltd. is kicked off.
TOP
[Industry Information]
○Frequent attack of fog and haze forces more efforts made in treatment of environmental problems, coal cleaning and treatment of tail gas attract attention
------
Chen Jining, minister of Environmental Protection, on Nov. 5 held special meeting to arrange relevant work again. It is required to attach great importance to severe weather caused by pollution, take measures timely and strengthen supervision. Aiming at the continuous severe weather caused by pollution in northeast and northern China during Nov. 2-5, the Ministry of Environmental Protection organized experts for discussion and sent 12 supervision teams to heavy pollution areas for supervision and inspection. Results show that main malefactors behind PM2.5 pollution in northeast China are fire coal, biomass burning and emission of automotive vehicles, while emission of tail gas by automotive vehicles is among the main contributors of pollution in Beijing.
Comment: Pushed by frequent attack of fog and haze in winter, more efforts will be made in treating environmental problems. New fuel standards for vehicles in Beijing, the Jing-VI standards, will be implemented in January 2017. Relevant industries like coal cleaning and the treatment of tail gas might embrace more market opportunities. As to listed companies, Keda Clean Energy Co., Ltd. (600499.SH) actively makes arrangement in the cleaning and high-efficient utilization of coal as well as the end treatment of exhaust gas. SCR and EGR products under Zhejiang Yinlun Machinery Co., Ltd. (002126.SZ) enjoy competitiveness in the treatment of tail gas produced by vehicles.
○Plan on curbing greenhouse gas emissions launched, quota management over carbon emission proven effective
------
The State Council recently issued a plan to curb greenhouse gas emissions during the 13th Five-Year Plan period. According to the plan, by 2020, the level of carbon dioxide emissions per unit of GDP will be 18 percent lower than in 2015, and total carbon emissions will be effectively controlled. The level of carbon dioxide emissions produced by large-scale power generation companies should be controlled within 550g carbon dioxide per kilowatt-hour. The national carbon emission rights trading market has been initiated. It is proposed to advance the piloting of capture, utilization and storage of carbon in industrial areas, do a good job in the evaluation of environmental risks, and carry out quota management over key vehicle producers based on production responsibility for new energy vehicle producers.
Comment: Institutions believe that in national electricity market alone, around 400 million tons of carbon emission, totaling a trading volume around 8 billion yuan, will be reduced in next five years. The trading volume of 18 key industries covered by the whole market might be increased to 1 billion to 2 billion tons, aggregating a trading volume of 20 billion to 40 billion yuan. Along with gradual development of domestic carbon emission market, institutions are rosy about Zhejiang Juhua Co., Ltd. (600160.SH) which might gain profit from Chinese Certified Emission Reductions (CCER) and Shenwu Environmental Technology Co., Ltd. (300156.SZ) which holds car emission technologies and proposes to participate in China Hubei Emission Exchange. In addition, quota management over car emissions will benefit car enterprises seeing great sales of new energy vehicles.
TOP
[Announcement Interpretation]
○Dingli to acquire Esim Technology at RMB666 mln
------
Dingli Corp., Ltd. (300050.SZ) plans to purchase 100 percent equity of Esim Technology Co., Ltd. at 666 million yuan by issuing shares at a price of 12.31yuan per share through private placement and paying in cash. And it also intends to raise 460 million yuan by issuing shares at a price of 12.73 yuan per share through private placement.
Esim Technology is engaged in producing industrial robot based on RFID and providing product and service related to solution to RFID and Internet of Things. According to commitment, its net profit will not be less than 35 million yuan, 50 million yuan, 60 million yuan and 80 million yuan during 2016 and 2019 respectively.
○Ming Jewelry invests RMB2.4 bln in e-commerce of real estate industry
------
Zhejiang Ming Jewelry Co., Ltd. (002574.SZ) plans to purchase 75 percent equity of Haowu.com at 2.4 billion yuan by issuing 159 million shares at a price of 10.55 yuan per share through private placement and paying 720 million yuan in cash. After the deal is done, the company will hold 100 percent stake in Haowu.com. At the same time, the company intends to raise supporting funds of 760 million yuan.
Haowu.com is a famous e-commerce platform of real estate industry in China. Its net profit was 4,298,400 yuan, 2,496,400 yuan and 81,507,200 yuan in 2014, 2015 and the first half of this year. The counterparty promises that net profit after extraordinary gains and losses of Haowu.com will not be less than 190 million yuan, 250 million yuan, 320 million yuan and 400 million yuan during 2016 and 2019 respectively.
TOP
○Quanxin Cable Technology to buy Quanxin Cable Technology at RMB726 mln
------
Nanjing Quanxin Cable Technology Co., Ltd. (300447.SZ) plans to buy 100 percent equity of Changzhou Connect Environmental ＆ Technology Co., Ltd. at 726 million yuan by issuing shares at a price of 35.88 yuan per share and paying in cash. In addition, it is going to raise 271 million yuan.
Changzhou Connect Environmental ＆ Technology is one of the major manufacturers of sea water desalting equipment for warships in China and its terminal clients are military industrial enterprises. It gained 114 million yuan of operating revenues and 57,025,600 yuan of net profit in 2015. The counterparty promises that net profit after extraordinary gains and losses of Changzhou Connect Environmental ＆ Technology will not be less than 48 million yuan, 59 million yuan and 67 million yuan during 2016 and 2018 respectively, which will be totally 174 million yuan at least in three years.
○First Capital International Business Consulting buys shares of Jinlu Group to 5 pct. limit through secondary acquisition
------
Shenzhen First Capital International Business Consulting Co., Ltd. bought 1.79 percent equity of Sichuan Jinlu Group Co., Ltd. (000510.SZ) on Nov. 4, making its shareholding proportion reach 5 percent, and it is likely to buy more shares in the future. First Capital International Business Consulting became one of the ten biggest shareholders of the company in the third quarterly financial report of this year. Information shows that shareholder of First Capital International Business Consulting is China First Capital International Holding Co., Ltd., the latter of which is a wholly-owned subsidiary of Hong Kong-listed China First Capital Group Limited. At present, Liu Jiangdong, actual controller of Jinlu Group, holds 10 percent equity in the company.
○Xingyuan Environment Technology Co., Ltd. (300266.SZ) signs a contract of PPP project of renovating and repairing marine ecological corridor in Bendao, Dongtou district, Wenzhou city. The contract amount is 800 million yuan, accounting for 90.46 percent of operating revenues of the company in 2015.
○Lin Rujie, actual controller of Fujian Snowman Co., Ltd. (002639.SZ), bought 420,000 shares of the company on Nov. 4 at a price of 11.90 yuan per share at average.
○Everyday Network Co., Ltd. (300295.SZ) and Happigo Home Shopping Co., Ltd. (300413.SZ) terminates major asset restructuring and resumes trading.
[Trading Alarms]
○Lifesense Medical Electronics and Lai Mu Electronics to launch IPO on Nov. 7
------
Guangdong Lifesense Medical Electronics Co., Ltd. is going to launch IPO at a price of 15.63 yuan per share with an upper subscription limit of 14,500 shares for a single account. The PE ratio is 22.99 time. The company is engaged in household medical electronic health products.
Shanghai Lai Mu Electronics Co., Ltd. is going to launch IPO at a price of 6.75 yuan per share with an upper subscription limit of 12,000 shares for a single account. The PE ratio is 22.98 time. The company is engaged in connector and other precision electronic components.
[Weekly Review]
○Get better understanding on evolution of theme
------
The stock market shows signs of recovery recently, but return on investment of many investors do not seem to see much improvement, which may be caused by undesirable understanding on recent themes.
Generally speaking, it is the time for the main themes to experience ups and downs when the market is at the end of bearish situation but at the beginning of bullish trend. On the one hand, features of market themes need switch. Most of the themes activating bearish trend is related to defensive sectors, which focus on performance, high share conversion and dividend and reorganization. But the bullish theme is more open and aggressive, and big policy and new technology is easier to be favored by the market. The market is currently under the transitional period with theme switch.
On the other hand, the funds in the market are still frightened and will sell out ignoring costs at the moment that rising trend changes. But looking back into the past one and two months, the themes and sectors which suffered bearish impact didn't experience sell-into-corrections. Instead, they picked up after short-term plunge amid fluctuation. This indicates that market capital supply is recovering and investors' mentality is also restoring gradually.
Therefore, at present, the key is to keep patient and make medium and long-term judgment on evolution of themes. Secondly, it is suggested to embrace new policies and new technologies more actively. SSN noticed ice sports planning and price hike of rare earth last week, which showed better market performance. We will make more efforts in tracking information and better service for readers in the future.
TOP
○Premier Li promotes interconnection, infrastructure construction at home and abroad to accelerate
○Frequent attack of fog and haze forces more efforts made in treatment of environmental problems, coal cleaning and treatment of tail gas attract attention
○Dingli to acquire Esim Technology at RMB666 mln, Ming Jewelry invests RMB2.4 bln in e-commerce of real estate industry
○Quanxin Cable Technology to buy Quanxin Cable Technology at RMB726 mln, First Capital International Business Consulting buys shares of Jinlu Group to 5 pct. limit through secondary acquisition
[SSN Focus]
○Premier Li promotes interconnection, infrastructure construction at home and abroad to accelerate
------
Chinese Premier Li Keqiang attended the Fifth Summit of China and Central and Eastern European Countries in Latvia on Nov. 5 afternoon (local time) and proposed four suggestions for the future development of "16 1" cooperation. "Deepening cooperation in infrastructure and interconnection" is highly prioritized. China encourages enterprises with strength to participate in infrastructure construction in central and eastern European countries through various ways; China is willing to advance the construction of Hungary-Serbia Railway and China-Europe Land-Sea Express Route as well as support the construction of transport routes between Asia and Europe.
Comment: Since the second half, China has singed memorandums of understanding related to the "Belt and Road" initiatives with surrounding countries. Q3 reports also show that contracts newly signed by central state-owned enterprises (SOEs) engaged in infrastructure experience rapid growth. A good example is that China Railway Group Limited (601390.SH) sees a large year-on-year growth of 118.7 percent in terms of newly-signed contracts. China plans an investment of 800 billion yuan in railway in 2016, but by the end of the first three quarters, only 542.3 billion yuan investment has been completed. Media reported that investment in railway might skyrocket at end 2016. Companies engaged in rail transit equipment, such as Zhejiang Yonggui Electric Equipment Co., Ltd. (300351.SZ) and Beijing Dinghan Technology Co., Ltd. (300011.SZ), attract attention of multiple institutions.
[SSN Selection]
○China Securities Regulatory Commission (CSRC) on Nov. 4 nodded the IPO applications of 9 enterprises. The total fundraising is expected to be no more than 4.5 billion yuan.
○Two departments raised the export tax rebate rate of over 400 products with electromechanical products and refined oil products included to 17 percent, highlighting the positive significance of stabilizing foreign trading and promoting export.
○Relevant officials from the Ministry of Finance on Nov. 4 indicated that at present, the risks of local debts are controllable on the whole. As of end September, totally, swap bonds worth 7.2 trillion yuan have been completed.
○50 million tons of newly-built coal mine capacity under Inner Mongolia Eerduosi Resources Co., Ltd. (600295.SH) sees joint pilot production. Effective implementation of measures concerning coal price regulation might help to improve tight coal supply.
○China International Capital Corporation Limited (CICC) proposes to acquire China Investment Securities with 16.7 billion yuan, marking that integration of two securities companies under Central Huijin Investment Ltd. is kicked off.
TOP
[Industry Information]
○Frequent attack of fog and haze forces more efforts made in treatment of environmental problems, coal cleaning and treatment of tail gas attract attention
------
Chen Jining, minister of Environmental Protection, on Nov. 5 held special meeting to arrange relevant work again. It is required to attach great importance to severe weather caused by pollution, take measures timely and strengthen supervision. Aiming at the continuous severe weather caused by pollution in northeast and northern China during Nov. 2-5, the Ministry of Environmental Protection organized experts for discussion and sent 12 supervision teams to heavy pollution areas for supervision and inspection. Results show that main malefactors behind PM2.5 pollution in northeast China are fire coal, biomass burning and emission of automotive vehicles, while emission of tail gas by automotive vehicles is among the main contributors of pollution in Beijing.
Comment: Pushed by frequent attack of fog and haze in winter, more efforts will be made in treating environmental problems. New fuel standards for vehicles in Beijing, the Jing-VI standards, will be implemented in January 2017. Relevant industries like coal cleaning and the treatment of tail gas might embrace more market opportunities. As to listed companies, Keda Clean Energy Co., Ltd. (600499.SH) actively makes arrangement in the cleaning and high-efficient utilization of coal as well as the end treatment of exhaust gas. SCR and EGR products under Zhejiang Yinlun Machinery Co., Ltd. (002126.SZ) enjoy competitiveness in the treatment of tail gas produced by vehicles.
○Plan on curbing greenhouse gas emissions launched, quota management over carbon emission proven effective
------
The State Council recently issued a plan to curb greenhouse gas emissions during the 13th Five-Year Plan period. According to the plan, by 2020, the level of carbon dioxide emissions per unit of GDP will be 18 percent lower than in 2015, and total carbon emissions will be effectively controlled. The level of carbon dioxide emissions produced by large-scale power generation companies should be controlled within 550g carbon dioxide per kilowatt-hour. The national carbon emission rights trading market has been initiated. It is proposed to advance the piloting of capture, utilization and storage of carbon in industrial areas, do a good job in the evaluation of environmental risks, and carry out quota management over key vehicle producers based on production responsibility for new energy vehicle producers.
Comment: Institutions believe that in national electricity market alone, around 400 million tons of carbon emission, totaling a trading volume around 8 billion yuan, will be reduced in next five years. The trading volume of 18 key industries covered by the whole market might be increased to 1 billion to 2 billion tons, aggregating a trading volume of 20 billion to 40 billion yuan. Along with gradual development of domestic carbon emission market, institutions are rosy about Zhejiang Juhua Co., Ltd. (600160.SH) which might gain profit from Chinese Certified Emission Reductions (CCER) and Shenwu Environmental Technology Co., Ltd. (300156.SZ) which holds car emission technologies and proposes to participate in China Hubei Emission Exchange. In addition, quota management over car emissions will benefit car enterprises seeing great sales of new energy vehicles.
TOP
[Announcement Interpretation]
○Dingli to acquire Esim Technology at RMB666 mln
------
Dingli Corp., Ltd. (300050.SZ) plans to purchase 100 percent equity of Esim Technology Co., Ltd. at 666 million yuan by issuing shares at a price of 12.31yuan per share through private placement and paying in cash. And it also intends to raise 460 million yuan by issuing shares at a price of 12.73 yuan per share through private placement.
Esim Technology is engaged in producing industrial robot based on RFID and providing product and service related to solution to RFID and Internet of Things. According to commitment, its net profit will not be less than 35 million yuan, 50 million yuan, 60 million yuan and 80 million yuan during 2016 and 2019 respectively.
○Ming Jewelry invests RMB2.4 bln in e-commerce of real estate industry
------
Zhejiang Ming Jewelry Co., Ltd. (002574.SZ) plans to purchase 75 percent equity of Haowu.com at 2.4 billion yuan by issuing 159 million shares at a price of 10.55 yuan per share through private placement and paying 720 million yuan in cash. After the deal is done, the company will hold 100 percent stake in Haowu.com. At the same time, the company intends to raise supporting funds of 760 million yuan.
Haowu.com is a famous e-commerce platform of real estate industry in China. Its net profit was 4,298,400 yuan, 2,496,400 yuan and 81,507,200 yuan in 2014, 2015 and the first half of this year. The counterparty promises that net profit after extraordinary gains and losses of Haowu.com will not be less than 190 million yuan, 250 million yuan, 320 million yuan and 400 million yuan during 2016 and 2019 respectively.
TOP
○Quanxin Cable Technology to buy Quanxin Cable Technology at RMB726 mln
------
Nanjing Quanxin Cable Technology Co., Ltd. (300447.SZ) plans to buy 100 percent equity of Changzhou Connect Environmental ＆ Technology Co., Ltd. at 726 million yuan by issuing shares at a price of 35.88 yuan per share and paying in cash. In addition, it is going to raise 271 million yuan.
Changzhou Connect Environmental ＆ Technology is one of the major manufacturers of sea water desalting equipment for warships in China and its terminal clients are military industrial enterprises. It gained 114 million yuan of operating revenues and 57,025,600 yuan of net profit in 2015. The counterparty promises that net profit after extraordinary gains and losses of Changzhou Connect Environmental ＆ Technology will not be less than 48 million yuan, 59 million yuan and 67 million yuan during 2016 and 2018 respectively, which will be totally 174 million yuan at least in three years.
○First Capital International Business Consulting buys shares of Jinlu Group to 5 pct. limit through secondary acquisition
------
Shenzhen First Capital International Business Consulting Co., Ltd. bought 1.79 percent equity of Sichuan Jinlu Group Co., Ltd. (000510.SZ) on Nov. 4, making its shareholding proportion reach 5 percent, and it is likely to buy more shares in the future. First Capital International Business Consulting became one of the ten biggest shareholders of the company in the third quarterly financial report of this year. Information shows that shareholder of First Capital International Business Consulting is China First Capital International Holding Co., Ltd., the latter of which is a wholly-owned subsidiary of Hong Kong-listed China First Capital Group Limited. At present, Liu Jiangdong, actual controller of Jinlu Group, holds 10 percent equity in the company.
○Xingyuan Environment Technology Co., Ltd. (300266.SZ) signs a contract of PPP project of renovating and repairing marine ecological corridor in Bendao, Dongtou district, Wenzhou city. The contract amount is 800 million yuan, accounting for 90.46 percent of operating revenues of the company in 2015.
○Lin Rujie, actual controller of Fujian Snowman Co., Ltd. (002639.SZ), bought 420,000 shares of the company on Nov. 4 at a price of 11.90 yuan per share at average.
○Everyday Network Co., Ltd. (300295.SZ) and Happigo Home Shopping Co., Ltd. (300413.SZ) terminates major asset restructuring and resumes trading.
[Trading Alarms]
○Lifesense Medical Electronics and Lai Mu Electronics to launch IPO on Nov. 7
------
Guangdong Lifesense Medical Electronics Co., Ltd. is going to launch IPO at a price of 15.63 yuan per share with an upper subscription limit of 14,500 shares for a single account. The PE ratio is 22.99 time. The company is engaged in household medical electronic health products.
Shanghai Lai Mu Electronics Co., Ltd. is going to launch IPO at a price of 6.75 yuan per share with an upper subscription limit of 12,000 shares for a single account. The PE ratio is 22.98 time. The company is engaged in connector and other precision electronic components.
[Weekly Review]
○Get better understanding on evolution of theme
------
The stock market shows signs of recovery recently, but return on investment of many investors do not seem to see much improvement, which may be caused by undesirable understanding on recent themes.
Generally speaking, it is the time for the main themes to experience ups and downs when the market is at the end of bearish situation but at the beginning of bullish trend. On the one hand, features of market themes need switch. Most of the themes activating bearish trend is related to defensive sectors, which focus on performance, high share conversion and dividend and reorganization. But the bullish theme is more open and aggressive, and big policy and new technology is easier to be favored by the market. The market is currently under the transitional period with theme switch.
On the other hand, the funds in the market are still frightened and will sell out ignoring costs at the moment that rising trend changes. But looking back into the past one and two months, the themes and sectors which suffered bearish impact didn't experience sell-into-corrections. Instead, they picked up after short-term plunge amid fluctuation. This indicates that market capital supply is recovering and investors' mentality is also restoring gradually.
Therefore, at present, the key is to keep patient and make medium and long-term judgment on evolution of themes. Secondly, it is suggested to embrace new policies and new technologies more actively. SSN noticed ice sports planning and price hike of rare earth last week, which showed better market performance. We will make more efforts in tracking information and better service for readers in the future.
TOP
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