[Today's Guide]
○ Detailed rules on PPP investment procurement bidding to introduced soon, traditional infrastructure expected to be main investment field
○ NVIDIA share prices hit new high, demands for CPU are booming
○ SBS Zipper Science ＆ Tech transfers controlling shares for RMB2.5 bln., Cedar Holdings to propose to takeover Qixiang Tengda Chemical
○ Actual controller of Baoguang Vacuum Electronic Apparatus likely to change, largest shareholder of Dagang Road Machinery to transfer equities
[SSN Focus]
○ Detailed rules on PPP investment procurement bidding to introduced soon, traditional infrastructure expected to be main investment field
------
SSN learnt that in order to promote better implementation of the PPP project, the National Development and Reform Commission (NDRC) has been studying policies on franchise bidding management and are now soliciting consultation. These policies are designed to better guide the implementation and operation of social capital by clarifying detailed rules on investment procurement bidding. Industry insiders said that the introduction of detailed rules on investment procurement bidding will improve the PPP system and remove investors' concerns so as to attract more private capital.
Comment: Recently, the NDRC has taken positive efforts in PPP: it issued the guidelines for PPP project, made innovations in major municipal PPP projects, selected typical PPP project. Minsheng Securities pointed out in its research report that the top design and policies on PPP project are advancing significantly faster. Regulation, laws and policies on PPP are more and more clear. The next year will still be a honeymoon period for PPP. With the introduction of detailed rules on investment procurement bidding, industry insiders believe that traditional infrastructure projects (transport and municipal projects) is expected to become the main field of PPP investment.
[SSN Selection]
○ The China Securities Regulatory Commission on Nov. 11 approved the IPO of 15 enterprises including Hua'an Securities. They will raise no more than 11.2 billion yuan.
○ Most of the 651.3 billion yuan new renminbi loans in October are mortgage. The China Banking Regulatory Commission plans to conduct a overall inspection on bank's real estate business in 16 cities.
○ Economic Observer reported that the pilot plans on state-owned capital investment company formulated by China Metals Corporation (CMC), China Communications Construction Company Limited and other central state-owned companies are basically completed and are expected to be submitted to the State-owned Assets Supervision and Administration Commission for review before the year end.
○ Shenzhen Stock Exchanged declared on Nov. 11 that it has taken a series of regulatory measures against Evergrande's abnormal transaction behavior (its acquisition in the secondary market is suspected to be speculative trading), and suspended its trading.
○ Guangzhou Zhongqin Investment Co., Ltd. owned by Evergrande was inquired by Shanghai Stock Exchange on Nov. 10 as it bought 5 percent shares in Guangdong Meiyan Jixiang Hydropower Co., Ltd. (600868.SH). The announcement also shows that Evergrande Group's stake in Vanke increased to 8.95 percent.
○ The senior management and key staff of Leshi Internet Information ＆ Technology Corp., Beijing (300104.SZ) propose to increase shareholding in the company for no less than 300 million yuan within half a year. Gree Electric Appliances,Inc.of Zhuhai (000651.SZ) said that Dong Mingzhu resigned as the chairman of Gree Group.
TOP
[Industry Information]
○ NVIDIA share prices hit new high, demands for CPU are booming
------
As NVIDIA reported better-than-expected earnings, the company's share prices rose nearly 30 percent on Nov. 11, again hitting a record high. Driven by a surge in demand for graphics processing units (GPUs) from games and automobiles, NVIDIA surpassed market expectations and witnessed the highest gain in operating revenue in the third quarter in more than six years. NVIDIA said that its new Pascal GPU is fully put in operation and has been successful in games, autopilot vehicles, data center AI computing and virtual reality.
Comment: Brokerage securities indicated in their research reports that as GPU can respond quickly, deal with a lot of trivial information in parallel and analyze massive amount of data at high-speed, it has a wide application prospect in AR/VR games, automatic driving and other fields. As for listed companies, Changsha Jingjia Microelectronics Co., Ltd. (300474.SZ) has achieved the domestication of CPU. It has announced an 163 million yuan investment in CPU project. Nantong Fujitsu Microelectronics Co., Ltd. (002156.SZ) has developed the GPU packaging and testing field by respectively acquiring 85 percent shares in Suzhou AMD and AMD Penang.
TOP
[Announcement Interpretation]
○ SBS Zipper Science ＆ Tech transfers controlling shares for RMB2.5 bln.
------
Fujian SBS Group,the controlling shareholder of Fujian SBS Zipper Science ＆ Technology Co., Ltd. (002098.SZ), has signed an agreement with Tianjin Huizefeng Enterprise Management Co., Ltd. under which the former will transfer 89.5 million shares of the listed companies, or 25 percent of its total share capital to the latter. After the deal, SBS' shareholding in the company will decrease from 32.38 percent to 7.38 percent. Huizefeng Enterprise Management will hold 25 percent shares in the company. The company's actual controller will become Wang Lijun the legal representative of Huizefeng Enterprise Management. Huizefeng Enterprise Management is established in this September with a total registration capital of 1 billion yuan. The deal is made at 2.5 billion yuan, or about 27.93 yuan per share, at about 120 percent premium over the company's share price before trading suspension.
○ Cedar Holdings to propose to takeover Qixiang Tengda Chemical
------
48 shareholders of Zibo Qixiang Tengda Chemical Co., Ltd. (002408.SZ), including the actual controller Che Chengju, have signed equity transfer agreement with Junhua Group, which will take over 80 percent equities of Qixiang Tengda Chemical. After the completion of the equity alteration, Junhua Group will indirectly hold 41.9 percent equity of the company. Junhua Group is 71.5 percent owned by Cedar Holdings. Zhang Jin holds 99.91 percent equities of Cedar Holdings and 28.5 percent equities of Junhua Group, thus Zhang will become the new actual controller of Qixiang Tengda Chemical.The valuation of the share transfer is 4,818 million yuan, representing price of 6.48 yuan per share. With the maximum amount of 5211 million yuan, the equity transfer has triggered takeover.
Junhua Group is a large scale comprehensive private enterprise group. It has been engaged in real estate and commodity supply chain management, supply chain finance, financial investment, automobile sales and services and community operation.
○ Second largest shareholder of Baoguang Vacuum Electronic Apparatus proposes to increase shareholding, likely to result in change of actual controller
------
Xizang Fenghong, shareholder of Shaanxi Baoguang Vacuum Electronic Apparatus Co., Ltd. (600379.SH) will increase no less than 50 million shares of the company in the next 12 months. On Oct. 28, Xizang Fenghong acquired 11 million shares of Baoguang Vacuum Electronic Apparatus at 19.6 yuan per share held by Li Yuan at 19.6 yuan per share. On Oct. 29, Zhang Min, party acting in concert with Xizang Fenghong, also bought 4.05 million shares of the company held by Beijing Rongchang through auction. So far, Xizang Fenghong in total holds 19.97 percent shares of the listed company. The largest shareholder of the company currently holds 20.04 percent equities of the company. Once Xizang Fenghong implement its shareholding increase plan, it may result in the change of actual controller.
In addition, Hengliantai Investment, shareholder of Shantou Dongfeng Printing Co., Ltd. (601515.SH) increased holding 16.44 million shares of the company.
TOP
○ Largest shareholder of Dagang Road Machinery to transfer no less than 20 percent equities
------
Shangu Group, the largest shareholder of Xi'an Dagang Road Machinery Co., Ltd. (300103.SZ), proposes to transfer no less than 42,346,800 shares of the company (20 percent of the company's total share capital) held by it to third parties through agreement in the next six months. Upon completion of the share transfer, Shangu Group will no longer be the largest shareholder of the company. Shangu Group currently holds 63,414,300 shares of the company, representing 29.95 percent of the total share capital.
Sun Jianxi and his spouse Li Taijie currently holds 29.9 percent equities of the company, and they are the actual controlling shareholder and actual controller of Dagang Road Machinery. In June 2014, Shangu Group and the couple signed an agreement to take over 29.95 percent of Dagang Road Machinery and became the largest shareholder. The company indicates that the reason for the share transfer is primarily due to the adjustment of strategic plan and future business development requirements of Shangu Group.
○ Actual controller strongly support private placement of Beijing Trust ＆ Far Technology
------
Beijing Trust ＆ Far Technology Co., Ltd. (300231.SZ) proposes to issue 30.84 million shares to its actual controller Zhan Lixiong at 18.16 yuan per share through private placement, to raise 560 million yuan, which will be used for the SMEs cloud service management operations, intelligent integration operational service system project and supplementing working capital.
[Trading Alarm]
○ Great-sun Foods offer for subscription from Nov. 14
------
Great-sun Foods Co., Ltd. (732336.SZ) will offer for subscription at 9.31 yuan per share with the upper limit for each applicant of 12,000 shares. The company is primarily engaged in grocery.
[Weekly Review]
○ Great changes bring investment opportunities
------
After a long period when a vast majority of stocks were trading sideways, the A-share market finally see apparent upside trend. Mixed-ownership reform concept stock China United Network Communications Limited (600050.SH), infrastructure stock China Communications Construction Company Limited (601800.SH), non-ferrous metal stock Yunnan Copper Co., Ltd. (000878.SZ), which are all large cap stocks, have surged to the daily limits for several trading sessions. In fact, economic data including PMI, automobile sales, and railway freight volume have picked up for several months, which provides momentum for stock market climbing. Once great changes take place, investment opportunities will emerge.
Firstly, the production restriction for the sake of environment protection is extremely rigorous at present. Since the second half of the year, the State Council, the Ministry of Environmental Protection and Hebei provincial government have conducted monitoring of environment in various forms, ordering substandard enterprises to halt production. This has not only pushed up the prices of iron, glyphosate and tungsten, but also raised the threshold of environment protection, leaving more space for leading enterprises.
Secondly, the strictest overload ban was implemented. Logistics are unprepared and hurriedly increased procurement of heavy truck, or transfer the cargo to railway transportation. Even so, ports of the Bohai Region still confronted with shortage of coal supply, resulting in the coal price to increase rapidly. Heavy truck enterprises such as CNHTC Jinan Truck Co., Ltd. (000951.SZ) and Daqin Railway Co., Ltd. (601006.SH) are pleased to see this situation. The policy has been implemented for two months now, but the impact is still expanding.
Thirdly, the controversial candidate Trump won the US presidency. Though the panic caused by this election result subsided in just one day, the substantial changes coming afterwards are more critical. On Nov. 11 local time, Trump said that he will create jobs by developing infrastructure construction. The US congress also announced that it will vote on the TPP. What are the impacts on the supply and demand of global commodities and China's "Belt and Road" Initiative if the US shift the focus from outside to itself is worthy of attention.
TOP
○ Detailed rules on PPP investment procurement bidding to introduced soon, traditional infrastructure expected to be main investment field
○ NVIDIA share prices hit new high, demands for CPU are booming
○ SBS Zipper Science ＆ Tech transfers controlling shares for RMB2.5 bln., Cedar Holdings to propose to takeover Qixiang Tengda Chemical
○ Actual controller of Baoguang Vacuum Electronic Apparatus likely to change, largest shareholder of Dagang Road Machinery to transfer equities
[SSN Focus]
○ Detailed rules on PPP investment procurement bidding to introduced soon, traditional infrastructure expected to be main investment field
------
SSN learnt that in order to promote better implementation of the PPP project, the National Development and Reform Commission (NDRC) has been studying policies on franchise bidding management and are now soliciting consultation. These policies are designed to better guide the implementation and operation of social capital by clarifying detailed rules on investment procurement bidding. Industry insiders said that the introduction of detailed rules on investment procurement bidding will improve the PPP system and remove investors' concerns so as to attract more private capital.
Comment: Recently, the NDRC has taken positive efforts in PPP: it issued the guidelines for PPP project, made innovations in major municipal PPP projects, selected typical PPP project. Minsheng Securities pointed out in its research report that the top design and policies on PPP project are advancing significantly faster. Regulation, laws and policies on PPP are more and more clear. The next year will still be a honeymoon period for PPP. With the introduction of detailed rules on investment procurement bidding, industry insiders believe that traditional infrastructure projects (transport and municipal projects) is expected to become the main field of PPP investment.
[SSN Selection]
○ The China Securities Regulatory Commission on Nov. 11 approved the IPO of 15 enterprises including Hua'an Securities. They will raise no more than 11.2 billion yuan.
○ Most of the 651.3 billion yuan new renminbi loans in October are mortgage. The China Banking Regulatory Commission plans to conduct a overall inspection on bank's real estate business in 16 cities.
○ Economic Observer reported that the pilot plans on state-owned capital investment company formulated by China Metals Corporation (CMC), China Communications Construction Company Limited and other central state-owned companies are basically completed and are expected to be submitted to the State-owned Assets Supervision and Administration Commission for review before the year end.
○ Shenzhen Stock Exchanged declared on Nov. 11 that it has taken a series of regulatory measures against Evergrande's abnormal transaction behavior (its acquisition in the secondary market is suspected to be speculative trading), and suspended its trading.
○ Guangzhou Zhongqin Investment Co., Ltd. owned by Evergrande was inquired by Shanghai Stock Exchange on Nov. 10 as it bought 5 percent shares in Guangdong Meiyan Jixiang Hydropower Co., Ltd. (600868.SH). The announcement also shows that Evergrande Group's stake in Vanke increased to 8.95 percent.
○ The senior management and key staff of Leshi Internet Information ＆ Technology Corp., Beijing (300104.SZ) propose to increase shareholding in the company for no less than 300 million yuan within half a year. Gree Electric Appliances,Inc.of Zhuhai (000651.SZ) said that Dong Mingzhu resigned as the chairman of Gree Group.
TOP
[Industry Information]
○ NVIDIA share prices hit new high, demands for CPU are booming
------
As NVIDIA reported better-than-expected earnings, the company's share prices rose nearly 30 percent on Nov. 11, again hitting a record high. Driven by a surge in demand for graphics processing units (GPUs) from games and automobiles, NVIDIA surpassed market expectations and witnessed the highest gain in operating revenue in the third quarter in more than six years. NVIDIA said that its new Pascal GPU is fully put in operation and has been successful in games, autopilot vehicles, data center AI computing and virtual reality.
Comment: Brokerage securities indicated in their research reports that as GPU can respond quickly, deal with a lot of trivial information in parallel and analyze massive amount of data at high-speed, it has a wide application prospect in AR/VR games, automatic driving and other fields. As for listed companies, Changsha Jingjia Microelectronics Co., Ltd. (300474.SZ) has achieved the domestication of CPU. It has announced an 163 million yuan investment in CPU project. Nantong Fujitsu Microelectronics Co., Ltd. (002156.SZ) has developed the GPU packaging and testing field by respectively acquiring 85 percent shares in Suzhou AMD and AMD Penang.
TOP
[Announcement Interpretation]
○ SBS Zipper Science ＆ Tech transfers controlling shares for RMB2.5 bln.
------
Fujian SBS Group,the controlling shareholder of Fujian SBS Zipper Science ＆ Technology Co., Ltd. (002098.SZ), has signed an agreement with Tianjin Huizefeng Enterprise Management Co., Ltd. under which the former will transfer 89.5 million shares of the listed companies, or 25 percent of its total share capital to the latter. After the deal, SBS' shareholding in the company will decrease from 32.38 percent to 7.38 percent. Huizefeng Enterprise Management will hold 25 percent shares in the company. The company's actual controller will become Wang Lijun the legal representative of Huizefeng Enterprise Management. Huizefeng Enterprise Management is established in this September with a total registration capital of 1 billion yuan. The deal is made at 2.5 billion yuan, or about 27.93 yuan per share, at about 120 percent premium over the company's share price before trading suspension.
○ Cedar Holdings to propose to takeover Qixiang Tengda Chemical
------
48 shareholders of Zibo Qixiang Tengda Chemical Co., Ltd. (002408.SZ), including the actual controller Che Chengju, have signed equity transfer agreement with Junhua Group, which will take over 80 percent equities of Qixiang Tengda Chemical. After the completion of the equity alteration, Junhua Group will indirectly hold 41.9 percent equity of the company. Junhua Group is 71.5 percent owned by Cedar Holdings. Zhang Jin holds 99.91 percent equities of Cedar Holdings and 28.5 percent equities of Junhua Group, thus Zhang will become the new actual controller of Qixiang Tengda Chemical.The valuation of the share transfer is 4,818 million yuan, representing price of 6.48 yuan per share. With the maximum amount of 5211 million yuan, the equity transfer has triggered takeover.
Junhua Group is a large scale comprehensive private enterprise group. It has been engaged in real estate and commodity supply chain management, supply chain finance, financial investment, automobile sales and services and community operation.
○ Second largest shareholder of Baoguang Vacuum Electronic Apparatus proposes to increase shareholding, likely to result in change of actual controller
------
Xizang Fenghong, shareholder of Shaanxi Baoguang Vacuum Electronic Apparatus Co., Ltd. (600379.SH) will increase no less than 50 million shares of the company in the next 12 months. On Oct. 28, Xizang Fenghong acquired 11 million shares of Baoguang Vacuum Electronic Apparatus at 19.6 yuan per share held by Li Yuan at 19.6 yuan per share. On Oct. 29, Zhang Min, party acting in concert with Xizang Fenghong, also bought 4.05 million shares of the company held by Beijing Rongchang through auction. So far, Xizang Fenghong in total holds 19.97 percent shares of the listed company. The largest shareholder of the company currently holds 20.04 percent equities of the company. Once Xizang Fenghong implement its shareholding increase plan, it may result in the change of actual controller.
In addition, Hengliantai Investment, shareholder of Shantou Dongfeng Printing Co., Ltd. (601515.SH) increased holding 16.44 million shares of the company.
TOP
○ Largest shareholder of Dagang Road Machinery to transfer no less than 20 percent equities
------
Shangu Group, the largest shareholder of Xi'an Dagang Road Machinery Co., Ltd. (300103.SZ), proposes to transfer no less than 42,346,800 shares of the company (20 percent of the company's total share capital) held by it to third parties through agreement in the next six months. Upon completion of the share transfer, Shangu Group will no longer be the largest shareholder of the company. Shangu Group currently holds 63,414,300 shares of the company, representing 29.95 percent of the total share capital.
Sun Jianxi and his spouse Li Taijie currently holds 29.9 percent equities of the company, and they are the actual controlling shareholder and actual controller of Dagang Road Machinery. In June 2014, Shangu Group and the couple signed an agreement to take over 29.95 percent of Dagang Road Machinery and became the largest shareholder. The company indicates that the reason for the share transfer is primarily due to the adjustment of strategic plan and future business development requirements of Shangu Group.
○ Actual controller strongly support private placement of Beijing Trust ＆ Far Technology
------
Beijing Trust ＆ Far Technology Co., Ltd. (300231.SZ) proposes to issue 30.84 million shares to its actual controller Zhan Lixiong at 18.16 yuan per share through private placement, to raise 560 million yuan, which will be used for the SMEs cloud service management operations, intelligent integration operational service system project and supplementing working capital.
[Trading Alarm]
○ Great-sun Foods offer for subscription from Nov. 14
------
Great-sun Foods Co., Ltd. (732336.SZ) will offer for subscription at 9.31 yuan per share with the upper limit for each applicant of 12,000 shares. The company is primarily engaged in grocery.
[Weekly Review]
○ Great changes bring investment opportunities
------
After a long period when a vast majority of stocks were trading sideways, the A-share market finally see apparent upside trend. Mixed-ownership reform concept stock China United Network Communications Limited (600050.SH), infrastructure stock China Communications Construction Company Limited (601800.SH), non-ferrous metal stock Yunnan Copper Co., Ltd. (000878.SZ), which are all large cap stocks, have surged to the daily limits for several trading sessions. In fact, economic data including PMI, automobile sales, and railway freight volume have picked up for several months, which provides momentum for stock market climbing. Once great changes take place, investment opportunities will emerge.
Firstly, the production restriction for the sake of environment protection is extremely rigorous at present. Since the second half of the year, the State Council, the Ministry of Environmental Protection and Hebei provincial government have conducted monitoring of environment in various forms, ordering substandard enterprises to halt production. This has not only pushed up the prices of iron, glyphosate and tungsten, but also raised the threshold of environment protection, leaving more space for leading enterprises.
Secondly, the strictest overload ban was implemented. Logistics are unprepared and hurriedly increased procurement of heavy truck, or transfer the cargo to railway transportation. Even so, ports of the Bohai Region still confronted with shortage of coal supply, resulting in the coal price to increase rapidly. Heavy truck enterprises such as CNHTC Jinan Truck Co., Ltd. (000951.SZ) and Daqin Railway Co., Ltd. (601006.SH) are pleased to see this situation. The policy has been implemented for two months now, but the impact is still expanding.
Thirdly, the controversial candidate Trump won the US presidency. Though the panic caused by this election result subsided in just one day, the substantial changes coming afterwards are more critical. On Nov. 11 local time, Trump said that he will create jobs by developing infrastructure construction. The US congress also announced that it will vote on the TPP. What are the impacts on the supply and demand of global commodities and China's "Belt and Road" Initiative if the US shift the focus from outside to itself is worthy of attention.
TOP
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