[Today's Guide]
○ Four trustee agencies for pension insurance funds selected, investment with local pension insurance funds to advance
○ Milk powder industry speeds up in reshuffling, leaders to see more advantages
○ CEC CoreCast acquires military electronics asset, East Crystal Electronic transfers equities
○ Substantial shareholder of Yunnan Tourism sells shares to OCT, Wire Rope bought to 5pct. limit in secondary market
[SSN Focus]
○ Four trustee agencies for pension insurance funds selected, investment with local pension insurance funds to advance
------
The National Council for Social Security Fund (NCSSF) released the four trustee agencies for pension insurance funds on its website on Nov. 29. They are the Industrial and Commercial Bank of China, the Bank of China, the Bank of Communications and China Merchants Bank. The spokesperson of the Ministry of Human Resources and Social Security indicated that it would arrange the first trustee provinces to sign contracts with the NCSSF. The capitals available for investment and operation are totaled at approximately 2 trillion yuan.
Comment: The selection of trustee agencies marks another progress in making investments with basic pension insurance funds. Based on the administration method released last year, the upper limit of investment in the stock market with pension insurance funds is 30 percent. Analysts believe that three to five provinces may sign contracts first with a total entrusted size of 200 to 300 billion yuan. But they are unlikely to flow into the stock market before the end of the year. Institutes believe the investment choices of pension funds are similar with that of social insurance funds, but they have lower tolerance over risks and higher requirements on liquidity. It is expected that they would prefer big-cap blue-chip stocks.
[SSN Selection]
○ The 13th Five-year Plan on the development of hydropower and wind power has been released recently. It is expected that the investment in the construction of hydropower and wind power facilities will reach 500 billion yuan and 700 billion yuan during the 13th Five-year Plan period.
○ The receipt certificates for the first FOFs have been issued on Nov. 28, marking a significant step in the development of FOFs.
○ The stock-bank transaction recorded a net transfer-in of 6.6 billion yuan last week. The number of investors with positions at the end of the period remained unchanged compared with the previous week.
○ China Evergrande Group (03333.HK) acquired 510 million shares of China Vanke Co., Ltd. (02202.HK; 000002.SZ) with 14.01 billion yuan from Nov. 18 to 29. It currently holds 14.07 percent of the total share capital of China Vanke.
○ Italy will hold a referendum on constitutional reform on Dec. 4. Sentix's statistics show that the chances of Italy's leaving the eurozone hit new high in four years.
TOP
[Industry Information]
○ Milk powder industry speeds up in reshuffling, leaders to see more advantages
------
The system for the registration of the recipe of milk powder for babies has been officially implemented from Oct. 1. Despite the transitional period for milk powder enterprises, it has effects on the milk powder market. SSN learnt from insiders that milk powder enterprises have been busy in promoting and clearing the inventory. The production enterprises and agents are expected to speed up in reshuffling.
Comment: Securities companies believe that the registration system will eliminate 70 percent of the current 2,000 milk powder recipes in the market. Enterprises with brand and license advantages will embrace higher development potentials in the future. Xinjiang Western Animal Husbandry Co., Ltd. (300106.SZ) is one of the enterprises with license for milk powder for babies in Xinjiang. The market expects that the company will speed up in expanding sales channels by taking advantage of the reshuffling of the industry to increase the sales of its milk powder. Beingmate Baby ＆ Child Food Co., Ltd. (002570.SZ) currently owns 11 recipes for milk powder. Institutes believe that the retaining of its core recipe will improve the market recognition over the brand of the company.
○ State Council supports entrepreneurship in hometown, inclusive finance in rural areas to become driver
------
The General Office of the State Council released the opinions on supporting entrepreneurship and innovation in hometowns to promote the integrated development of the first, secondary and tertiary industries in rural areas on Nov. 29. In terms of policies and measures, the opinions propose to improve financial services. It will promote the development of inclusive finance in rural areas and strengthen the financial services to people in rural areas included in the credit appraisal system. It will further develop and promote agricultural insurance products and encourage qualified areas to explore the price index insurance, income insurance, credit guarantee and insurance, agricultural products quality guarantee insurance and the insurance for poultry and aquatic products to meet the demands of people in rural areas in risk guarantees.
Comment: The No. 1 Central Document of 2016 proposes to invest more financial resources into rural areas. The establishment of the inclusive financial system enjoys priority in the development of inclusive finance, indicated Li Dongrong, director of the National Internet Finance Association of China, at the Summit on the Innovation and Development of Inclusive Finance held in Zhejiang. A subsidiary of Jiangsu Huifeng Agrochemical Co., Ltd. (002496.SZ) and the Bank of China Jiangsu Branch signed a cooperation agreement on comprehensive financial services stations in rural areas in June. Beijing Dabeinong Technology Group Co., Ltd. (002385.SZ) has preliminarily established an intelligent ecosphere with three complete modules, including "date-e-commerce-finance".
TOP
[Announcement Interpretation]
○ CEC CoreCast acquires military electronics asset
------
CEC CoreCast Corporation Limited (600764.SH) proposes to sell all its assets and liabilities to China Electronics Corporation (CEC) for 730 million yuan. The company also proposes to acquire 100 percent equities of Beijing Changcheng Electric Engineering Technology Co., Ltd. from China Shipbuilding Industry Corporation and 29.94 percent equities of Beijing Cisco System Engineering Co., Ltd. from Civil-Military Integration Fund for 1,166 million yuan by issuing additional shares at 16.12 yuan per share. Changcheng Electric Engineering Technology is a military electronics company engaged in the development and production of underwater sound information equipment and electronic control system. China Shipbuilding Industry Corporation promises that its net profit after deducting non-recurring profit and loss should be no less than 61.6 million, 74.88 million and 86.28 million yuan in the next three years.
China Shipbuilding Industry Corporation made registration on its acquisition of 53.47 percent equities of CEC CoreCast from CEC on Oct. 19. The controlling shareholder of the listed company changed from CEC to China Shipbuilding Industry Corporation.
○ East Crystal Electronic transfers equities, actual controller to change
------
The actual controller and other three natural person shareholders of Zhejiang East Crystal Electronic Co., Ltd. (002199.SZ) propose to transfer 5.03 percent equities to Lanhai Investment Management Co., Ltd. at 20 yuan per share, and irrevocably transfer their voting right corresponding to 15.08 percent shares to Lanhai Investment Management. After the deal, Lanhai Investment Management will become the company's controlling shareholder, and Su Sitong will become its actual controller. The company's stock price closed at 18.59 yuan per share before trading suspension.
TOP
○ Substantial shareholder of Yunnan Tourism sells shares to OCT, become takeover bid
------
Yunnan Expo Tourism Group Holding Co., Ltd., the substantial shareholder of Yunnan Tourism Co., Ltd. (002059.SZ), issued additional shares to Overseas Chinese Town Enterprises Co. (OCT). After the deal, OCT will hold 51 equities of Yunnan Expo Tourism, thus indirectly holding 49.52 percent issued shares of Yunnan Tourism. Thus it will become a takeover bid at 9.07 yuan per share. The company's stock price closed at 8.56 yuan per share before trading suspension.
○ Wire Rope and Yawei Machine Tool bought to 5pct. limit in secondary market
------
Guizhou Wire Rope Co., Ltd. (600992.SH) announces that Kancheng Investment Center increased holdings in the company by 12,254,5 shares from Nov. 15 to 29 at an average price of 15.46 yuan per share, accounting from 5 percent of its total share capital, and it will continue to increase holding in the company with no less than 10 million yuan in the next 12 months.
Suzhou Fengying Yinyue Investment Center, the second largest shareholder of Jiangsu Yawei Machine Tool Co., Ltd. (002559.SZ), increased holdings in the company by 148,500 shares on Nov. 28 at an average price of 14.55 yuan per share, accounting from 5 percent of its total share capital. Fengying Yinyue Investment Center, a company under Hejun Consulting Co., Ltd., acquired 18,425,200 shares of Yawei Machine from Yawei Technology, accounting from 5.0323 percent of its total share capital. Latter, its share was diluted under the acquisition limit of 5 percent due to stock ownership incentive.
○ Teamax Smart City Tech. splits cosmetics asset to focus on smart city business
------
Teamax Smart City Technology Corporation Limited(000662.SZ) proposes to publicly sell the 100 percent equities it holds in Angelcare Cosmetics Co., Ltd. for 398 million yuan. Angelcare Cosmetics is mainly engaged in the production and sales of cosmetics as well as the circulation of drugs. It has a weak profitability. After the deal, the listed company can concentrate its resources in the expansion in smart city business.
○ Jointown Pharm. and others conduct private placement
------
Jointown Pharmaceutical Group Co., Ltd. (600998.SH) plans to raise no more than 4 billion yuan by issuing shares at 19.65 yuan per share to a company under its actual controller, Changcheng Guotai (Zhoushan) Industry Acquisition and Reorganization Fund, Huaxia Life Insurance to supplement working capital.
Beijing Interact Technology Co., Ltd. (300419.SZ) plans to raise no more than 1,438 million yuan through private placement for the construction of hotel multimedia interaction platform and business visualized communication platform.
Shandong Lukang Pharmaceutical Co., Ltd. (600789.SH) plans to raise no more than 1,058 million yuan by issuing shares at no less than 9.27 yuan per share for three medical projects.
Zhejiang Jiaao Enprotech Stock Co., Ltd. (603822.SH) plans to raise no more than 400 Million yuan by issuing shares at no less than 67.62 yuan per share to acquire 100 percent equities of Eastriver Energy Co., Ltd. and invest in the environmentally friendly plasticizer with an annual production of 20,000 tons.
[Trading Trends]
○ Treasury futures dive, expectations for tight balance of money supply stand strong
------
The dominant ten-year Treasury bond futures fell 0.71 percent to a record low of the year on Nov. 29, the biggest decline in a single day in the year. China's central bank recorded net withdrawal of capital from the open market for the 4th consecutive day, making the amount of capital shrinking yet more expensive. Some market participants still have strong expectations for a tight balance of money supply in the short and medium term. Analysts surveyed noted that if institutions' expectations that "the central bank will certainly maintain low interest rates unchanged" were missed, it may cause further deleverage in the bond market. It is expected that as the year comes to an end, money supply may swing due to a surge in demands for capital at the turning of the year.
[Trading Alarms]
○ Jiajiayue and Anysoft Information Technology to conduct IPO on Nov. 30
------
Jiajiayue Corporation Co., Ltd. (732708) will offer shares at 13.64yuan per share with an upper limit of 376,000 shares for each applicant. The company is mainly engaged in the operation of supermarket chain. Hangzhou Anysoft Information Technology Co., Ltd. (300571.SZ) will offer shares at 12.04 yuan per share with an upper limit of 10,000 shares for each applicant. The company is mainly engaged in mobile reading platform.
TOP
○ Four trustee agencies for pension insurance funds selected, investment with local pension insurance funds to advance
○ Milk powder industry speeds up in reshuffling, leaders to see more advantages
○ CEC CoreCast acquires military electronics asset, East Crystal Electronic transfers equities
○ Substantial shareholder of Yunnan Tourism sells shares to OCT, Wire Rope bought to 5pct. limit in secondary market
[SSN Focus]
○ Four trustee agencies for pension insurance funds selected, investment with local pension insurance funds to advance
------
The National Council for Social Security Fund (NCSSF) released the four trustee agencies for pension insurance funds on its website on Nov. 29. They are the Industrial and Commercial Bank of China, the Bank of China, the Bank of Communications and China Merchants Bank. The spokesperson of the Ministry of Human Resources and Social Security indicated that it would arrange the first trustee provinces to sign contracts with the NCSSF. The capitals available for investment and operation are totaled at approximately 2 trillion yuan.
Comment: The selection of trustee agencies marks another progress in making investments with basic pension insurance funds. Based on the administration method released last year, the upper limit of investment in the stock market with pension insurance funds is 30 percent. Analysts believe that three to five provinces may sign contracts first with a total entrusted size of 200 to 300 billion yuan. But they are unlikely to flow into the stock market before the end of the year. Institutes believe the investment choices of pension funds are similar with that of social insurance funds, but they have lower tolerance over risks and higher requirements on liquidity. It is expected that they would prefer big-cap blue-chip stocks.
[SSN Selection]
○ The 13th Five-year Plan on the development of hydropower and wind power has been released recently. It is expected that the investment in the construction of hydropower and wind power facilities will reach 500 billion yuan and 700 billion yuan during the 13th Five-year Plan period.
○ The receipt certificates for the first FOFs have been issued on Nov. 28, marking a significant step in the development of FOFs.
○ The stock-bank transaction recorded a net transfer-in of 6.6 billion yuan last week. The number of investors with positions at the end of the period remained unchanged compared with the previous week.
○ China Evergrande Group (03333.HK) acquired 510 million shares of China Vanke Co., Ltd. (02202.HK; 000002.SZ) with 14.01 billion yuan from Nov. 18 to 29. It currently holds 14.07 percent of the total share capital of China Vanke.
○ Italy will hold a referendum on constitutional reform on Dec. 4. Sentix's statistics show that the chances of Italy's leaving the eurozone hit new high in four years.
TOP
[Industry Information]
○ Milk powder industry speeds up in reshuffling, leaders to see more advantages
------
The system for the registration of the recipe of milk powder for babies has been officially implemented from Oct. 1. Despite the transitional period for milk powder enterprises, it has effects on the milk powder market. SSN learnt from insiders that milk powder enterprises have been busy in promoting and clearing the inventory. The production enterprises and agents are expected to speed up in reshuffling.
Comment: Securities companies believe that the registration system will eliminate 70 percent of the current 2,000 milk powder recipes in the market. Enterprises with brand and license advantages will embrace higher development potentials in the future. Xinjiang Western Animal Husbandry Co., Ltd. (300106.SZ) is one of the enterprises with license for milk powder for babies in Xinjiang. The market expects that the company will speed up in expanding sales channels by taking advantage of the reshuffling of the industry to increase the sales of its milk powder. Beingmate Baby ＆ Child Food Co., Ltd. (002570.SZ) currently owns 11 recipes for milk powder. Institutes believe that the retaining of its core recipe will improve the market recognition over the brand of the company.
○ State Council supports entrepreneurship in hometown, inclusive finance in rural areas to become driver
------
The General Office of the State Council released the opinions on supporting entrepreneurship and innovation in hometowns to promote the integrated development of the first, secondary and tertiary industries in rural areas on Nov. 29. In terms of policies and measures, the opinions propose to improve financial services. It will promote the development of inclusive finance in rural areas and strengthen the financial services to people in rural areas included in the credit appraisal system. It will further develop and promote agricultural insurance products and encourage qualified areas to explore the price index insurance, income insurance, credit guarantee and insurance, agricultural products quality guarantee insurance and the insurance for poultry and aquatic products to meet the demands of people in rural areas in risk guarantees.
Comment: The No. 1 Central Document of 2016 proposes to invest more financial resources into rural areas. The establishment of the inclusive financial system enjoys priority in the development of inclusive finance, indicated Li Dongrong, director of the National Internet Finance Association of China, at the Summit on the Innovation and Development of Inclusive Finance held in Zhejiang. A subsidiary of Jiangsu Huifeng Agrochemical Co., Ltd. (002496.SZ) and the Bank of China Jiangsu Branch signed a cooperation agreement on comprehensive financial services stations in rural areas in June. Beijing Dabeinong Technology Group Co., Ltd. (002385.SZ) has preliminarily established an intelligent ecosphere with three complete modules, including "date-e-commerce-finance".
TOP
[Announcement Interpretation]
○ CEC CoreCast acquires military electronics asset
------
CEC CoreCast Corporation Limited (600764.SH) proposes to sell all its assets and liabilities to China Electronics Corporation (CEC) for 730 million yuan. The company also proposes to acquire 100 percent equities of Beijing Changcheng Electric Engineering Technology Co., Ltd. from China Shipbuilding Industry Corporation and 29.94 percent equities of Beijing Cisco System Engineering Co., Ltd. from Civil-Military Integration Fund for 1,166 million yuan by issuing additional shares at 16.12 yuan per share. Changcheng Electric Engineering Technology is a military electronics company engaged in the development and production of underwater sound information equipment and electronic control system. China Shipbuilding Industry Corporation promises that its net profit after deducting non-recurring profit and loss should be no less than 61.6 million, 74.88 million and 86.28 million yuan in the next three years.
China Shipbuilding Industry Corporation made registration on its acquisition of 53.47 percent equities of CEC CoreCast from CEC on Oct. 19. The controlling shareholder of the listed company changed from CEC to China Shipbuilding Industry Corporation.
○ East Crystal Electronic transfers equities, actual controller to change
------
The actual controller and other three natural person shareholders of Zhejiang East Crystal Electronic Co., Ltd. (002199.SZ) propose to transfer 5.03 percent equities to Lanhai Investment Management Co., Ltd. at 20 yuan per share, and irrevocably transfer their voting right corresponding to 15.08 percent shares to Lanhai Investment Management. After the deal, Lanhai Investment Management will become the company's controlling shareholder, and Su Sitong will become its actual controller. The company's stock price closed at 18.59 yuan per share before trading suspension.
TOP
○ Substantial shareholder of Yunnan Tourism sells shares to OCT, become takeover bid
------
Yunnan Expo Tourism Group Holding Co., Ltd., the substantial shareholder of Yunnan Tourism Co., Ltd. (002059.SZ), issued additional shares to Overseas Chinese Town Enterprises Co. (OCT). After the deal, OCT will hold 51 equities of Yunnan Expo Tourism, thus indirectly holding 49.52 percent issued shares of Yunnan Tourism. Thus it will become a takeover bid at 9.07 yuan per share. The company's stock price closed at 8.56 yuan per share before trading suspension.
○ Wire Rope and Yawei Machine Tool bought to 5pct. limit in secondary market
------
Guizhou Wire Rope Co., Ltd. (600992.SH) announces that Kancheng Investment Center increased holdings in the company by 12,254,5 shares from Nov. 15 to 29 at an average price of 15.46 yuan per share, accounting from 5 percent of its total share capital, and it will continue to increase holding in the company with no less than 10 million yuan in the next 12 months.
Suzhou Fengying Yinyue Investment Center, the second largest shareholder of Jiangsu Yawei Machine Tool Co., Ltd. (002559.SZ), increased holdings in the company by 148,500 shares on Nov. 28 at an average price of 14.55 yuan per share, accounting from 5 percent of its total share capital. Fengying Yinyue Investment Center, a company under Hejun Consulting Co., Ltd., acquired 18,425,200 shares of Yawei Machine from Yawei Technology, accounting from 5.0323 percent of its total share capital. Latter, its share was diluted under the acquisition limit of 5 percent due to stock ownership incentive.
○ Teamax Smart City Tech. splits cosmetics asset to focus on smart city business
------
Teamax Smart City Technology Corporation Limited(000662.SZ) proposes to publicly sell the 100 percent equities it holds in Angelcare Cosmetics Co., Ltd. for 398 million yuan. Angelcare Cosmetics is mainly engaged in the production and sales of cosmetics as well as the circulation of drugs. It has a weak profitability. After the deal, the listed company can concentrate its resources in the expansion in smart city business.
○ Jointown Pharm. and others conduct private placement
------
Jointown Pharmaceutical Group Co., Ltd. (600998.SH) plans to raise no more than 4 billion yuan by issuing shares at 19.65 yuan per share to a company under its actual controller, Changcheng Guotai (Zhoushan) Industry Acquisition and Reorganization Fund, Huaxia Life Insurance to supplement working capital.
Beijing Interact Technology Co., Ltd. (300419.SZ) plans to raise no more than 1,438 million yuan through private placement for the construction of hotel multimedia interaction platform and business visualized communication platform.
Shandong Lukang Pharmaceutical Co., Ltd. (600789.SH) plans to raise no more than 1,058 million yuan by issuing shares at no less than 9.27 yuan per share for three medical projects.
Zhejiang Jiaao Enprotech Stock Co., Ltd. (603822.SH) plans to raise no more than 400 Million yuan by issuing shares at no less than 67.62 yuan per share to acquire 100 percent equities of Eastriver Energy Co., Ltd. and invest in the environmentally friendly plasticizer with an annual production of 20,000 tons.
[Trading Trends]
○ Treasury futures dive, expectations for tight balance of money supply stand strong
------
The dominant ten-year Treasury bond futures fell 0.71 percent to a record low of the year on Nov. 29, the biggest decline in a single day in the year. China's central bank recorded net withdrawal of capital from the open market for the 4th consecutive day, making the amount of capital shrinking yet more expensive. Some market participants still have strong expectations for a tight balance of money supply in the short and medium term. Analysts surveyed noted that if institutions' expectations that "the central bank will certainly maintain low interest rates unchanged" were missed, it may cause further deleverage in the bond market. It is expected that as the year comes to an end, money supply may swing due to a surge in demands for capital at the turning of the year.
[Trading Alarms]
○ Jiajiayue and Anysoft Information Technology to conduct IPO on Nov. 30
------
Jiajiayue Corporation Co., Ltd. (732708) will offer shares at 13.64yuan per share with an upper limit of 376,000 shares for each applicant. The company is mainly engaged in the operation of supermarket chain. Hangzhou Anysoft Information Technology Co., Ltd. (300571.SZ) will offer shares at 12.04 yuan per share with an upper limit of 10,000 shares for each applicant. The company is mainly engaged in mobile reading platform.
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