[Today's Guide]
○Innovative measures frequently seen in Shanghai state-owned assets reform, integration of group assets sees promising prospect
○Acquisitions frequently seen in automotive electronics field, Samsung agrees to acquire Harman with 28 pct premium
○IC production rise remarkably, market demands for packaging ＆ testing and materials raise
○Evergrande Life Assurance increases shareholdings in five listed companies again, Guoxuan High-Tech to invest in new energy through private placement
[SSN Focus]
○Innovative measures frequently seen in Shanghai state-owned assets reform, integration of group assets sees promising prospect
------
Shanghai Electric Group Company Limited (601727.SH), which is still in trading suspension, announced its preliminary scheme for acquisition of major assets on Nov. 14 evening. A great innovative point of the scheme is that besides acquiring the equities of brother companies, the company also proposes to acquire 26 pieces of land resources. Innovative measures were frequently seen in Shanghai state-owned enterprises (SOEs) reform earlier. The spin-off listing of Shanghai SMI Holding Co., Ltd. (600649.SH) was nodded; Shanghai 3F New Materials Company Limited (600636.SH) expands to the education and culture industry through acquisition; Shanghai Pudong Science and Technology Investment Co., Ltd. acquired Shanghai Xinmei Real Estate Co., Ltd. (600732.SH), which temporarily suspended listing, through leverage; Shanghai Chinafortune Co., Ltd. (600621.SH) gave up real estate business and acquired China Fortune Securities Co., Ltd.
Comment: Diversified means and great efforts are seen in Shanghai's state-owned assets reform. More market-oriented and effective ways of reorganization are used to revitalize the assets of SOE groups in a bid to make listed companies bigger and stronger. Pudong Science and Technology Investment has invested real money in Shanghai Wanye Enterprises Co., Ltd. (600641.SH) and Shang Gong Group Co., Ltd. (600843.SH). Shang Gong terminated acquisition of overseas listed company on July 25 and promised no planning for major asset reorganization in next six months. Shanghai Feilo Acoustics Co., Ltd. (600651.SH) now holds 24 percent equities of China Fortune Securities and will get involved in the private placement of Shanghai Chinafortune.
[SSN Selection]
○Foreign Ministry spokesman indicated on Nov. 14 that China takes an active and open attitude towards the cooperation between China and the U.S. in infrastructure construction.
○The General Office of the State Council recently released the contingency plan for local governments' debt risks. Financial restructuring would be done for local governments where the risks are high if necessary.
○The Ministry of Industry and Information Technology (MIIT) on Nov.14 released the five-year plan for the adjustment and upgrading of the iron ＆ steel industry, proposing a slew of policy measures to guarantee de-capacity and support the reduction and reorganization of iron ＆ steel producers.
○The China Securities Regulatory Commission (CBRC) on Nov. 14 announced that the IPO applications of 7 companies will be deliberated on Nov. 18 together.
○On Nov.14, the exchange rate of on-shore yuan against the US dollar dropped below 6.84, representing a seven-year new low. It is expected that the downward pressure of RMB will be eased after the Fed raises interest rates in December.
TOP
[Industry Information]
○Acquisitions frequently seen in automotive electronics field, Samsung agrees to acquire Harman with 28 pct premium
------
According to US media, Samsung Electronics announced an 8 billion US dollars deal on Monday to buy Harman International Industries. Samsung agreed to acquire Harman for 112 US dollars per share in cash, a 28 percent premium to the company's closing price on last Friday. Harman is a high-end acoustics manufacturer and also a leading Internet vehicles solution provider. At present, Harman's Internet vehicle and audio systems, with embedded information entertainment, vehicle-mounted information and Internet security services included, are installed in over 30 million vehicles. Upon completion of the transaction, Samsung will soon gain market shares in the automotive electronics field.
Comment: In recent period, acquisitions are frequently seen in automotive electronics field. Qualcomm Inc. also announced acquisition of automotive semiconductor producer NXP Semiconductors. According to Deloitte Consulting, China's automotive electronics market is expected to reach a scale of 74.06 billion US dollars in 2016, representing a compound annual growth rate of 14.6 percent since 2012. As the progress of vehicle intellectualization accelerates, the penetration rate of automotive electronics will increase from current 30 percent to above 50 percent by 2020. A subsidiary under Guangdong Shenglu Telecommunication Tech. Co., Ltd. (002446.SZ) is engaged in the R＆D and production of vehicle-mounted intelligent equipment; products of Edifier Technology Co., Ltd. (002351.SZ) cover auto audios and etc.; Navinfo Co., Ltd. (002405.SZ) proposes to acquire AutoChips Inc. so as to make arrangement in vehicle-mounted information system.
TOP
○IC production rise remarkably, market demands for packaging ＆ testing and materials raise
------
According to major production data of the industrial enterprises above designated size for October released by the National Bureau of Statistics (NBS), the production of integrated circuit (IC) in October was 12 billion, up by 34 percent year on year, faster than the 19.7 growth rate from January to October. Driven by increasing demands for semiconductor and domestication, China's IC industry has seen a high period of investment. Shanghai Huali Microelectronics Corporation and Semiconductor Manufacturing International Corporation have launched 12-inch IC production line projects since November.
Comment: Currently, China's IC market takes up 60 percent of the global market, and its self-sufficiency rate is 27 percent. According to policy goals, China's self-sufficiency rate of chips should reach 40 percent in 2020, and 50 percent in 2025. There is still huge space for import substitution of material equipment and packaging ＆ testing. As for companies, Tianshui Huatian Technology Co., Ltd. (002185.SZ) is engaged in IC packaging ＆ testing, and is expected to benefit from investment in storage project of Wuhan Xinxin Semiconductor Manufacturing Corporation. Hubei Dinglong Co., Ltd. (300054.SZ) has set foot in the semiconductor consumable field through its self-developed CMP polishing pad.
TOP
[Announcement Interpretation]
○Evergrande Life Assurance increased shareholdings in five listed companies again
------
After Guangdong Meiyan Jixiang Hydropower Co., Ltd. (600868.SH), Evergrande Life Assurance Co., Ltd. also greatly decreased the shareholdings in Zhejiang Dongliang New Material Co., Ltd. (002082.SZ), Nationz Technologies Inc. (300077.SZ), Wuhan Zhongyuan Huadian Science ＆ Technology Co., Ltd. (300018.SZ), Zhejiang Kingland Pipeline and Technologies Co., Ltd. (002443.SZ) and Integrated Electronic Systems Lab Co., Ltd. (002339.SZ), and these five companies listed in the A-share market announced successively that Evergrande Life Assurance increased their shareholdings in November again, and committed to lock up these shares for six months.
Comment: Evergrande Life Assurance under Evergrande Group had successively held 4.95 percent equities of Dongliang New Material, Nationz Technologies and Zhongyuan Huadian Science ＆ Technology respectively, and also 4.96 percent equities of Integrated Electronic Systems Lab and Kingland Pipeline and Technologies, sparking the market speculation. After the Q3 reports, Evergrande Life Assurance decreased the shareholdings in some stocks, arousing the attention from regulators. It increases the shareholdings again, due to pressure from the public and regulators. It also announced to follow the long-term investment conception of insurance funds, and planned to hold these shareholdings for a long run.
○Guoxuan High-Tech to raise RMB3.6 bln to deep deployment for new energy field
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Guoxuan High-Tech Co., Ltd. (002074.SZ) proposes to issue 115 million shares at 31.18 yuan per share through private placement to raise 3.6 billion yuan, which will be used for industrialization project of new-generation power lithium battery with height ratio. Li Zhen, actual controller of the listed company, plans to subscribe the shares with 1.25 billion yuan. Eight institutions, including SAIC Capital, Bosera Funds, Cornerstone Investors and Jinniu Capital, will participate in the private placement.
Comment: Orders are sufficient for power lithium battery of Guoxuan High-Tech, based on recent SSN surveys. Fundraising for production expansion will benefit the company to achieve the second wave of high growth in the new energy automobile field in next three years.
○CRRC Corporation and others win major contracts
------
CRRC Corporation Limited (601766.SH) has signed a series of major contracts from July to November, totaling at 25.24 billion yuan, which accounts for 10.4 percent of revenue in 2015. China Railway Construction Corporation Limited (601186.SH) jointly with others wins the capital attracting PPP project to socialize the railway line to new airport of Beijing, totaling at nearly 15 billion yuan.
Additionally, Longjian Road＆Bridge Co., Ltd. (600853.SH) wins a PPP project of 165 million yuan; self-lifting offshore construction platform project of 128 million yuan for Bestway Marine ＆ Energy Technology Co., Ltd. (300008.SZ); seabed photo-electricity recombined cable project of 298 million yuan for Jiangsu Zhongtian Technology Co., Ltd. (600522.SH). Enjoyor Co., Ltd. (300020.SZ) is expected to win smart-city video monitoring PPP project of 100 million yuan.
[Trading Alarms]
○Kaizhong Precision Technology and Shenli Electrical Machine to issue new shares on Nov. 15
------
The offering price for Shenzhen Kaizhong Precision Technology Co., Ltd. (002823.SZ) is 13.73 yuan per share, with upper subscription limit of 14,000 shares; that for Changzhou Shenli Electrical Machine Incorporated Company (603819.SH) is 8.77 yuan per share, with upper subscription limit of 9,000 shares. The two companies are mainly engaged in accessories for electric motor.
TOP
○Innovative measures frequently seen in Shanghai state-owned assets reform, integration of group assets sees promising prospect
○Acquisitions frequently seen in automotive electronics field, Samsung agrees to acquire Harman with 28 pct premium
○IC production rise remarkably, market demands for packaging ＆ testing and materials raise
○Evergrande Life Assurance increases shareholdings in five listed companies again, Guoxuan High-Tech to invest in new energy through private placement
[SSN Focus]
○Innovative measures frequently seen in Shanghai state-owned assets reform, integration of group assets sees promising prospect
------
Shanghai Electric Group Company Limited (601727.SH), which is still in trading suspension, announced its preliminary scheme for acquisition of major assets on Nov. 14 evening. A great innovative point of the scheme is that besides acquiring the equities of brother companies, the company also proposes to acquire 26 pieces of land resources. Innovative measures were frequently seen in Shanghai state-owned enterprises (SOEs) reform earlier. The spin-off listing of Shanghai SMI Holding Co., Ltd. (600649.SH) was nodded; Shanghai 3F New Materials Company Limited (600636.SH) expands to the education and culture industry through acquisition; Shanghai Pudong Science and Technology Investment Co., Ltd. acquired Shanghai Xinmei Real Estate Co., Ltd. (600732.SH), which temporarily suspended listing, through leverage; Shanghai Chinafortune Co., Ltd. (600621.SH) gave up real estate business and acquired China Fortune Securities Co., Ltd.
Comment: Diversified means and great efforts are seen in Shanghai's state-owned assets reform. More market-oriented and effective ways of reorganization are used to revitalize the assets of SOE groups in a bid to make listed companies bigger and stronger. Pudong Science and Technology Investment has invested real money in Shanghai Wanye Enterprises Co., Ltd. (600641.SH) and Shang Gong Group Co., Ltd. (600843.SH). Shang Gong terminated acquisition of overseas listed company on July 25 and promised no planning for major asset reorganization in next six months. Shanghai Feilo Acoustics Co., Ltd. (600651.SH) now holds 24 percent equities of China Fortune Securities and will get involved in the private placement of Shanghai Chinafortune.
[SSN Selection]
○Foreign Ministry spokesman indicated on Nov. 14 that China takes an active and open attitude towards the cooperation between China and the U.S. in infrastructure construction.
○The General Office of the State Council recently released the contingency plan for local governments' debt risks. Financial restructuring would be done for local governments where the risks are high if necessary.
○The Ministry of Industry and Information Technology (MIIT) on Nov.14 released the five-year plan for the adjustment and upgrading of the iron ＆ steel industry, proposing a slew of policy measures to guarantee de-capacity and support the reduction and reorganization of iron ＆ steel producers.
○The China Securities Regulatory Commission (CBRC) on Nov. 14 announced that the IPO applications of 7 companies will be deliberated on Nov. 18 together.
○On Nov.14, the exchange rate of on-shore yuan against the US dollar dropped below 6.84, representing a seven-year new low. It is expected that the downward pressure of RMB will be eased after the Fed raises interest rates in December.
TOP
[Industry Information]
○Acquisitions frequently seen in automotive electronics field, Samsung agrees to acquire Harman with 28 pct premium
------
According to US media, Samsung Electronics announced an 8 billion US dollars deal on Monday to buy Harman International Industries. Samsung agreed to acquire Harman for 112 US dollars per share in cash, a 28 percent premium to the company's closing price on last Friday. Harman is a high-end acoustics manufacturer and also a leading Internet vehicles solution provider. At present, Harman's Internet vehicle and audio systems, with embedded information entertainment, vehicle-mounted information and Internet security services included, are installed in over 30 million vehicles. Upon completion of the transaction, Samsung will soon gain market shares in the automotive electronics field.
Comment: In recent period, acquisitions are frequently seen in automotive electronics field. Qualcomm Inc. also announced acquisition of automotive semiconductor producer NXP Semiconductors. According to Deloitte Consulting, China's automotive electronics market is expected to reach a scale of 74.06 billion US dollars in 2016, representing a compound annual growth rate of 14.6 percent since 2012. As the progress of vehicle intellectualization accelerates, the penetration rate of automotive electronics will increase from current 30 percent to above 50 percent by 2020. A subsidiary under Guangdong Shenglu Telecommunication Tech. Co., Ltd. (002446.SZ) is engaged in the R＆D and production of vehicle-mounted intelligent equipment; products of Edifier Technology Co., Ltd. (002351.SZ) cover auto audios and etc.; Navinfo Co., Ltd. (002405.SZ) proposes to acquire AutoChips Inc. so as to make arrangement in vehicle-mounted information system.
TOP
○IC production rise remarkably, market demands for packaging ＆ testing and materials raise
------
According to major production data of the industrial enterprises above designated size for October released by the National Bureau of Statistics (NBS), the production of integrated circuit (IC) in October was 12 billion, up by 34 percent year on year, faster than the 19.7 growth rate from January to October. Driven by increasing demands for semiconductor and domestication, China's IC industry has seen a high period of investment. Shanghai Huali Microelectronics Corporation and Semiconductor Manufacturing International Corporation have launched 12-inch IC production line projects since November.
Comment: Currently, China's IC market takes up 60 percent of the global market, and its self-sufficiency rate is 27 percent. According to policy goals, China's self-sufficiency rate of chips should reach 40 percent in 2020, and 50 percent in 2025. There is still huge space for import substitution of material equipment and packaging ＆ testing. As for companies, Tianshui Huatian Technology Co., Ltd. (002185.SZ) is engaged in IC packaging ＆ testing, and is expected to benefit from investment in storage project of Wuhan Xinxin Semiconductor Manufacturing Corporation. Hubei Dinglong Co., Ltd. (300054.SZ) has set foot in the semiconductor consumable field through its self-developed CMP polishing pad.
TOP
[Announcement Interpretation]
○Evergrande Life Assurance increased shareholdings in five listed companies again
------
After Guangdong Meiyan Jixiang Hydropower Co., Ltd. (600868.SH), Evergrande Life Assurance Co., Ltd. also greatly decreased the shareholdings in Zhejiang Dongliang New Material Co., Ltd. (002082.SZ), Nationz Technologies Inc. (300077.SZ), Wuhan Zhongyuan Huadian Science ＆ Technology Co., Ltd. (300018.SZ), Zhejiang Kingland Pipeline and Technologies Co., Ltd. (002443.SZ) and Integrated Electronic Systems Lab Co., Ltd. (002339.SZ), and these five companies listed in the A-share market announced successively that Evergrande Life Assurance increased their shareholdings in November again, and committed to lock up these shares for six months.
Comment: Evergrande Life Assurance under Evergrande Group had successively held 4.95 percent equities of Dongliang New Material, Nationz Technologies and Zhongyuan Huadian Science ＆ Technology respectively, and also 4.96 percent equities of Integrated Electronic Systems Lab and Kingland Pipeline and Technologies, sparking the market speculation. After the Q3 reports, Evergrande Life Assurance decreased the shareholdings in some stocks, arousing the attention from regulators. It increases the shareholdings again, due to pressure from the public and regulators. It also announced to follow the long-term investment conception of insurance funds, and planned to hold these shareholdings for a long run.
○Guoxuan High-Tech to raise RMB3.6 bln to deep deployment for new energy field
------
Guoxuan High-Tech Co., Ltd. (002074.SZ) proposes to issue 115 million shares at 31.18 yuan per share through private placement to raise 3.6 billion yuan, which will be used for industrialization project of new-generation power lithium battery with height ratio. Li Zhen, actual controller of the listed company, plans to subscribe the shares with 1.25 billion yuan. Eight institutions, including SAIC Capital, Bosera Funds, Cornerstone Investors and Jinniu Capital, will participate in the private placement.
Comment: Orders are sufficient for power lithium battery of Guoxuan High-Tech, based on recent SSN surveys. Fundraising for production expansion will benefit the company to achieve the second wave of high growth in the new energy automobile field in next three years.
○CRRC Corporation and others win major contracts
------
CRRC Corporation Limited (601766.SH) has signed a series of major contracts from July to November, totaling at 25.24 billion yuan, which accounts for 10.4 percent of revenue in 2015. China Railway Construction Corporation Limited (601186.SH) jointly with others wins the capital attracting PPP project to socialize the railway line to new airport of Beijing, totaling at nearly 15 billion yuan.
Additionally, Longjian Road＆Bridge Co., Ltd. (600853.SH) wins a PPP project of 165 million yuan; self-lifting offshore construction platform project of 128 million yuan for Bestway Marine ＆ Energy Technology Co., Ltd. (300008.SZ); seabed photo-electricity recombined cable project of 298 million yuan for Jiangsu Zhongtian Technology Co., Ltd. (600522.SH). Enjoyor Co., Ltd. (300020.SZ) is expected to win smart-city video monitoring PPP project of 100 million yuan.
[Trading Alarms]
○Kaizhong Precision Technology and Shenli Electrical Machine to issue new shares on Nov. 15
------
The offering price for Shenzhen Kaizhong Precision Technology Co., Ltd. (002823.SZ) is 13.73 yuan per share, with upper subscription limit of 14,000 shares; that for Changzhou Shenli Electrical Machine Incorporated Company (603819.SH) is 8.77 yuan per share, with upper subscription limit of 9,000 shares. The two companies are mainly engaged in accessories for electric motor.
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