Early Bird

Early Bird 08-November-2016

XFA Premium News
2016-11-08 13:43

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[Today's Guide]
○ Toyota to achieve mass production of purely electric vehicles, ternary lithium battery to become development trend
○ Cyberspace security to see policy supports, power sale reform schedule set
○ Tongda Venture Capital plans to transfer controlling right, Baolingbao Biology transfers equities at premium
○Jiangxi Special Electric Motor to expand new energy vehicles, substantial shareholder of Avic Aviation Engine actively subscribe shares

[SSN Focus]
○ Toyota to achieve mass production of purely electric vehicles, ternary lithium battery to become development trend

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Japanese media reported on Nov. 7 that Toyota plans to establish and improve the bulk production system of purely electric vehicles by 2020 and officially advance into the purely electric vehicle market. Toyota also plans to develop purely electric vehicles which can drive for over 300 kilometers after charging once. Its target markets include the Japanese market which will hold the 2020 Olympics and other markets advancing the popularization of electric vehicles. The previous environmental vehicle strategies of Toyota focused on hybrid vehicles and fuel-cell vehicles.

Comment: Purely electric vehicles place higher requirements on the performance of power batteries. Institutes believe that considering the endurance mileage, the battery life and the charging convenience, nickelic ternary power battery will be the trend for the development of lithium batteries in the future. EVE Energy Co., Ltd. (300014.SZ) currently owns a power battery capacity of 0.7GWh and will continue to expand the capacity of nickelic ternary power battery to 3 to 3.5GWh. Tianpeng Energy, a subsidiary of Jiangsu Aucksun Co., Ltd. (002245.SZ), owns an effective capacity of 0.7GWh this year. Its new plant will put into production in early 2017 and be under full production in the second half of 2017. Its annual capacity is expected to reach 3.25GWh.

[SSN Selection]
○ The State Council recently approved the 13th Five-year Plan on Revitalizing the Northeast China, requiring coordinately advancing the new type of industrialization, IT application, urbanization and agricultural modernization. 
○ Shenzhen Stock Exchange and China Securities Depository and Clearing (CSDC) Shenzhen Branch plan to implements the technical system for Shenzhen-Hong Kong Stock Connect after closing hours on Nov. 11. Relevant technical systems of Shenzhen-Hong Kong Stock Connect will put into uses on Nov. 20.
○ China Banking Regulatory Commission (CBRC) released the list of local asset management companies in five provinces. Zhejiang and Shanghai are the second local asset management companies within the area.
○ XuanHua Construction Machinery Co., Ltd. (000923.SZ) announced trading suspension from Nov. 8 due to the surging growth. Guangdong Yantang Dairy Co., Ltd. (002732.SZ) will resume trading on Nov. 8 as there are no matters to be disclosed.
○ Gree Electric Appliances, Inc. of Zhuhai (000651.SZ) announced that it will reduce or cancel the supporting fundraising and will continue trading suspension due to the purchase of assets by issuing shares from Nov. 8.
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[Industry Information]
○ Cyberspace security to see policy supports, institutes inspect relevant companies

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The 24th meeting of the 12th session of the Standing Committee of the National People's Congress passed the Cyberspace Security Law of the People's Republic of China on Nov. 7. It is the fundamental law in the cyberspace industry in China. It highlights the protection of individual information and cracks down internet frauds. The law will come into effect from June 1, 2017.

Comment: Institutes believe that with the introduction of the Cyberspace Security Law and the advancing of the domestication, the cyberspace security industry in China will see rapid development. The fourth quarter is the traditional settlement cycle in the cyberspace security industry. Institutes have made more inspections on the cyberspace security industry. Westone Information Industry Inc. (002268.SZ) indicated in an inspection that its special terminal program with proprietary brand and high security and cyberspace information security businesses are under stable progress. Venustech Group Inc. (002439.SZ) indicated that the gateway, testing and security management platform of the company maintained high growth. It is also actively developing the military engineering industry. 

○ 13th Five-year Plan on Power Development released, power sale reform schedule set
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The National Energy Administration held a press conference on the 13th Five-year Plan on Power Development on Nov. 7. It is reported that in terms of the power system reform, it will establish independent power trading agency with regulatory operation and establish a fair and orderly power market rules to preliminarily form a power market with complete functions. It will complete the fostering of competition participants in the power sale market by the end of 2018.

Comment: The power sale reform is one of the highlights in this round of power reform. The reform dividends will be gradually released with the acceleration of the overall power reform. It is estimated that with the opening of the power sale market, about 1 trillion yuan of the purchase and sale difference will be reallocated. Institutes are rosy about Guangzhou Zhiguang Electric Co., Ltd. (002169.SZ), Beijing Creative Distribution Automation Co., Ltd. (002350.SZ) and Hangzhou Sunrise Technology Co., Ltd. (300360.SZ) and other companies with power service technologies and customers. They will obtain market shares by providing quality value-added services. 
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[Announcement Interpretation]
○ Controlling shareholder of Tongda Venture Capital plans to transfer controlling right

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Dongxinda Investment Co., Ltd., the controlling shareholder of Shanghai Tongda Venture Capital Co., Ltd. (600647.SH), plans to transfer some of its shares in the listed companies via public bidding, which will lead to a change in the listed company's controlling right. It is in the process of approval and review. Tongda Venture Capital has a narrow main business. Its net profit mainly comes from investment returns.

○ Baolingbao Biology transfers 9.78 pct. equities at premium
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Liu Zongli, the controlling shareholder of Baolingbao Biology Co., Ltd. (002286.SZ), and some of its senior management, transferred their 9.78 percent shares to Ningbo Baopu Futong Assets Management Center at 20 yuan per share. The deal totals at 722 million yuan. Ningbo Baopu Futong Assets Management Center is mainly engaged in asset management, investment management, investment consulting and industrial investment. The latest stock price of the listed company is 17.18 yuan per share.
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○ Jiangxi Special Electric Motor to raise RMB1.84 bln. to expand new energy vehicles
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Jiangxi Special Electric Motor Co., Ltd. (002176.SZ) proposes to raise 1.84 billion yuan by issuing 163 million shares at price no less than 11.26 yuan per share. Among them, 840 million yuan will be used for the lithium mica project to produce 10,000 tons of lithium carbonate and by-product rubidium cesium annually. 500 million yuan will be used for new energy automotive motor project with an annual output of 200,000 units of vehicles. 500 million will be used for intelligent technical improvement project for the Joylong Automobile. After the three projects are put into production, they are estimated to garner a net profit of 294 million yuan, 115 million yuan and 2.07 billion yuan, respectively, which will improve the company's "mineral-lithium battery materials-motor driving system-electric vehicles-intelligent automobile" chain.

○ Avic Aviation Engine to raise RMB10 bln. through private placement, substantial shareholder to subscribe nearly half of shares
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Avic Aviation Engine Corporation Plc. (600893.SH) proposes to raise 10 billion yuan by issuing 311 million shares at 32.11 yuan per share to repay loans in financial institutions and supplement working capital. The company's actual controller AVIC Commercial Aircraft Engine Co., Ltd. (ACAE) will subscribe 4.5 billion yuan shares in cash. AVIC Fund controlled the ACAE will subscribe 300 million yuan shares in cash. Other subscribers include Shaanxi Aviation Industry Development Group Co., Ltd. which is owned by the State-owned Assets Supervision and Administration Commission of the People's Government of Shaanxi Province, Guizhou Industrial Investment Corporation Co., Ltd. and Guiyang Industry Investment Group Co., Ltd. which are owned by the State-owned Assets Supervision and Administration Commission of Guizhou Province and Hunan Guofa Fund which is owned by the State-owned Assets Supervision and Administration Commission of the People's Government of Hunan Province.

○ Chuangyue Group, the substantial shareholder of Xinjiang Zhundong Petroleum Technology Co., Ltd. (002207.SZ), plans to transfer its equities and controlling right in the listed company via judicial sale.

○ Shenzhen Topray Solar Co., Ltd. (002218.SZ) jointly wins the bidding for photovoltaic power generation projects in Qinghai with a total amount of over 540 million yuan. The company recorded an operating revenue of 728 million yuan in 2015.

○ Shenzhen O-film Tech Co., Ltd. (002456.SZ) proposes to acquire 100 percent equities of Sony Electronics South China Co., Ltd. The target company is mainly engaged in the production and sales of micro camera and relevant parts. It garnered a net profit of 109 million yuan in 2015.

[Trading Alarms]
○ Buchang Pharm and Guifaxiang Food to conduct IPO on Nov. 8

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Buchang Pharmaceutical Co., Ltd. (732858) will offer shares at 55.88 yuan per share with an upper limit of 20,000 shares for each applicant. The company's PE ratio is 22.99 times. The company is mainly engaged in  Chinese patent cardiovascular medicine. Guifaxiang Food Co., Ltd. (002820.SZ) will offer shares at 16.6 yuan per share with an upper limit of 12,00 shares for each applicant. The company's PE ratio is 22.99 times. The company is mainly engaged in snack food.
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