[Today's Guide]
○ State Council executive meeting to boost development in central regions and improve new types of urbanization
○ Guotong fund with RMB 100 bln established, state-owned capitals reform to speed up by year-end
○ Tight supply and equipment overhauls drive methyl alcohol price high
○ Aier Eye Hospital raises fund via private placement, Jinyu Bio-tech. buys Tocilizumab bio-tech drug technology
[SSN Focus]
○ State Council executive meeting to boost development in central regions and improve new types of urbanization
------
The executive meeting of the State Council held on Dec. 7 passed a plan to boost development in the country's central regions for the 13th Five-Year Plan period. The meeting detailed major tasks for the plan, including guiding transfer of industries from the more developed coastal regions to inland central regions, supporting the development of advanced manufacturing industry in central regions and the establishment of comprehensive bonded areas, improving the new type of urbanization and accelerating the establishment of metropolitan areas.
Comment: The development of the central regions is a key part in promoting balanced regional development. Based on the information and signals from the plan, the urbanization in central regions and key areas is highly expected. The infrastructure in transportation and other industries will see highs.
◆ The meeting also approved the 13th Five-year Plan on National IT Application, proposing 12 priority actions, including speeding up in the construction of high-speed broadband network, conducting the research and development of key 5G technologies and the industrialization and the application of Beidou navigation system. It also approved the revised law on the prevention and water pollution. It will introduce stricter measures in the prevention of water pollution and increase the punishment on excessive emission of pollutants.
TOP
○ Guotong fund with RMB 100 bln established, state-owned capitals reform to speed up by year-end
------
It is announced on the website of the State-owned Assets Supervision and Administration Commission (SASAC) that the meeting of the partners of the Guoxin Guotong Investment Fund (Phase-I) was held in Beijing recently. It marks the establishment of the Guotong Fund to promote the internationalization of Chinese enterprises. The total size of the fund is 150 billion yuan.
Comment: 2016 saw practices in the reform of state-owned capitals. Through one year of exploration, outstanding results have been achieved in the consolidation and reorganization of central enterprises, vitalizing internal resources of central enterprises and local innovation in the reform of state-owned capitals. In terms of the mixed ownership reform, the National Development and Reform Commission (NDRC) and the SASAC have selected China Eastern Airlines, China Unicom, China Southern Power Grid, Harbin Power Electric Corporation, China Nuclear Engineering Corporation and China Shipbuilding Industry Corporation to conduct mixed ownership reform first. The SASAC is expected to continue with the new round of state-owned capitals reform based on past experiences in the end of 2016.
[SSN Selection]
○ SSN learnt that many securities companies have suspended the IPO applications for enterprises with a decline of over 30 percent in profit in the latest period.
○ The trade index released on the global dairy products trade platform surged 3.5 percent on Dec. 7. The expectation on production cut resulted in eight hikes of the index in recent nine auctions.
○ China's foreign exchange declined 69.1 billion U.S. dollars in November. The capital output in November in November increased but it is still under control.
○ Shanghai Bill Exchange will be officially established on Dec. 8, which will be significant in the market-based reform of the interest rate and reducing the financing cost of real economies.
○ Leshi Internet Information ＆ Technology Corp., Beijing (300104.SZ) issued an announcement on trading suspension, indicating that it is mulling the consolidation of industrial resources.
TOP
[Industry Information]
○ Tight supply and equipment overhauls drive methyl alcohol price high
------
Methyl alcohol enterprises in eastern China and other regions raise their quoted prices on Dec. 7. The price of methyl alcohol has surged over 50 percent this year. In terms of the demand, the methyl alcohol olefin facilities and other programs are putting into production. The methyl alcohol market is experiencing tight supply and downstream enterprises are increasing the procurement of methyl alcohol. As for the supply, many methyl alcohol facilities in the northwest area suspended production unexpectedly and the environmental inspection intensified in the north region.
Comment: With more snowy days in the future and the increasing transportation cost, the supply and demand in eastern area may continue to be tight. The interim reports show that the methyl alcohol business accounts for 24.9 percent, 13.25 percent and 10.2 percent of the business revenue of Enn Ecological Holdings Co., Ltd. (600803.SH), Inner Mongolia Yuan Xing Energy Company Limited (000683.SZ) and Baotailong New Materials Co., Ltd. (601011.SH).
○ 13th Five-Year Plan on intelligent manufacturing released and proposes ten key tasks
------
The Ministry of Industry and Information Technology (MIIT) released the Intelligent Manufacturing Development Plan (2016-2020) at the Word Intelligent Manufacturing Cooperation and Development Summit held on Dec. 7. The Plan proposes ten key tasks in intelligent manufacturing, including making breakthroughs in key technologies and equipment, achieve industrial Internet, establish cloud manufacturing and service platforms and achieve digital plants and intelligent factories.
Comment: Intelligent manufacturing is a key orientation in the "Made in China 2025". The output of intelligent manufacturing in China reached 1 trillion yuan in 2015 and is expected to exceed 3 trillion yuan in 2020. Insiders indicated that under the current development of the Chinese manufacturing industry, intelligent equipment and systematic integration will see highest growth in performance. In terms of companies, the electrical spindle of machine tool of Guangzhou Haozhi Industrial Co., Ltd. (300503.SZ) is an upgraded product of traditional spindles. Its expanded program has been put into operation in September. Shenzhen Yinghe Technology Co., Ltd. (300457.SZ) is principally engaged in major equipment in the automatic production line for lithium batteries and will benefit from the growth of the new energy vehicle industry.
TOP
[Announcement Interpretation]
○ Aier Eye Hospital raises fund via private placement to expand main business
------
Aier Eye Hospital Group Co., Ltd. (300015.SZ) proposes to raise no more than 2,426 million yuan by issuing no more than 100 million shares via private placement. The proceeds will be used for the construction of its headquarter, the relocation and expansion of two eye hospitals, the acquisition of nine eye hospitals, the information-based renovation of its infrastructure and construction of IT clouding. The company's actual controller Chen Bang promised to subscribe no less than 20 percent shares.
○ Jinyu Bio-tech. buys Tocilizumab bio-tech drug technology for RMB 65.18mln.
------
Jinyu Bio-technology Co., Ltd. (600201.SH) signed at technology (know-how) transfer contract with Taizhou Maibo Taike Pharmaceutical Co., Ltd on Dec. 6. The company will pay 65.18 million yuan royalty to Maibo Taike Pharmaceutical for the mass clinic use of its anti-IL-6R monoclonal antibody drug Tocilizumab, and Maibo Taike Pharmaceutical will provide related technical services and guidance.
Tocilizumab is mainly used for the treatment of rheumatoid arthritis and other immune disease. Its mechanism of action is the same with Roche' Actemra whose sales reached 1,617 million US dollars in2015. Currently, there are no similar products in the domestic market. Jinyu Bio-technology's Tocilizumab was the first project gaining approval in China.
○ Saturday changes reorganization method, proposes to acquire assets in cash
------
Saturday Co., Ltd. (002291.SZ) decides to terminate its plan to buy controlling rights of Beijing Fashion Fengxun Information Technology Co., Ltd. and Beijing Shixin Information Technology Co., Ltd. by issuing shares and paying in cash, but to only pay in cash. The company said that the move will shorten the acquisition process as it wants to promote upgrading if its operation strategy and business mode as soon as possible. Previously, the company proposes to acquire 80 percent equities of Fengxun Information Technology and 70 percent equities of Shixin Information Technology for a total of 371 million yuan. Both the two companies mainly rely on the sales of advertisement resources on its network platform to win operation revenue.
○ Baoshan Iron ＆ Steel and others gain approval for reorganization
------
Baoshan Iron ＆ Steel Co., Ltd. (600019.SH) and Wuhan Iron And Steel Company Limited (600005.SH) gained unconditional approval from the China Securities Regulatory Commission (CSRC) for their consolidation. Shengxing Group Co.,Ltd. (002752.SZ) gained unconditional approval from the CSRC for its reorganization. Shenzhen Soling Industrial Co., Ltd. (002766.SZ) and Est Tools Co., Ltd. (300488.SZ) gained conditional approval from the CSRC for their reorganization.
○ Keda Group and Shuangta Food see shareholding increase
------
Keda Group, the substantial shareholder of Keda Group Co., Ltd. (600986.SH), will increase shareholding in the company by no less than one million shares but no more than one percent of its total shares in one month from Dec. 8, 2016. Yang Junmin, the chairman of Yantai Shuangta Food Co., Ltd. (002481.SZ), increased shareholding in the company by 11.58 million shares on Dec. 6 at an average price of 8.058 yuan per share, and plans to continue to increase shareholding in the company with no less than 300 million yuan in the coming 6 months.
In addition, the party in concert with the controlling shareholder of Yinchuan Xinhua Commercial (Group) Co., Ltd. (600785.SH) increased shareholding in the company by 4.51 million shares, accounting for 2 percent of its total share capital. Guofeng Group, the controlling shareholder of Tibet Tourism Co., Ltd. (600749.SH) increased shareholding in the company by 5.576 million shares. Kaishan Holding Co., Ltd., the controlling shareholder of Zhejiang Kaishan Compressor Co., Ltd. (300257.SZ), increased shareholding in the company by 747,600 shares.
[Trading Trends]
○ Iron ＆ steel stocks bought by institutional seats, supply decrease pushes up steel prices
------
The iron ＆ steel sector led gain the stock market on Dec. 7. The trading volume ranking list shows that Angang Steel Company Limited (000898.SZ; 00347.HK) was bought with 43.33 million yuan through two institutional seats, accounting for 5.8 percent of its intraday turnover; one institutional seat sold 9.48 million yuan shares. Fujian Sansteel Minguang Co., Ltd. (002110.SZ) was bought with 17.34 million yuan through one institutional seat, accounting for 3.3 percent of its intraday turnover.
Comment: Hebei Province issued an urgent notice on further troubleshooting steel bar in illegal producing areas on Dec. 6. Impacted by the news, the price of all iron and steel products rose on Dec. 7. The price of building materials in Shanghai rose 60 yuan to 80 yuan per ton. Analysts interviewed noted that the screening of illegal steel bar not only leaves room for legal steel plants but also eliminates cheap and inferior steel's destruction to the market order. As environmental problems are worsening, expectations for supply decrease will continue to be a highlight of the market.
[Trading Alarms]
○ Kairun and Xinjie Electric to conduct IPO on Dec. 8
------
Anhui Kairun Co., Ltd. (300577.SZ) will offer shares at 19.58 yuan per share with an upper limit of 16,500 shares for each applicant. The company is mainly engaged in luggage and bags. Wuxin Xinjie Electric Company Limited (732416) will offer shares at 17.85 yuan per share with an upper limit of 10,000 shares for each applicant. The company is mainly engaged in industrial automatic control products.
TOP
○ State Council executive meeting to boost development in central regions and improve new types of urbanization
○ Guotong fund with RMB 100 bln established, state-owned capitals reform to speed up by year-end
○ Tight supply and equipment overhauls drive methyl alcohol price high
○ Aier Eye Hospital raises fund via private placement, Jinyu Bio-tech. buys Tocilizumab bio-tech drug technology
[SSN Focus]
○ State Council executive meeting to boost development in central regions and improve new types of urbanization
------
The executive meeting of the State Council held on Dec. 7 passed a plan to boost development in the country's central regions for the 13th Five-Year Plan period. The meeting detailed major tasks for the plan, including guiding transfer of industries from the more developed coastal regions to inland central regions, supporting the development of advanced manufacturing industry in central regions and the establishment of comprehensive bonded areas, improving the new type of urbanization and accelerating the establishment of metropolitan areas.
Comment: The development of the central regions is a key part in promoting balanced regional development. Based on the information and signals from the plan, the urbanization in central regions and key areas is highly expected. The infrastructure in transportation and other industries will see highs.
◆ The meeting also approved the 13th Five-year Plan on National IT Application, proposing 12 priority actions, including speeding up in the construction of high-speed broadband network, conducting the research and development of key 5G technologies and the industrialization and the application of Beidou navigation system. It also approved the revised law on the prevention and water pollution. It will introduce stricter measures in the prevention of water pollution and increase the punishment on excessive emission of pollutants.
TOP
○ Guotong fund with RMB 100 bln established, state-owned capitals reform to speed up by year-end
------
It is announced on the website of the State-owned Assets Supervision and Administration Commission (SASAC) that the meeting of the partners of the Guoxin Guotong Investment Fund (Phase-I) was held in Beijing recently. It marks the establishment of the Guotong Fund to promote the internationalization of Chinese enterprises. The total size of the fund is 150 billion yuan.
Comment: 2016 saw practices in the reform of state-owned capitals. Through one year of exploration, outstanding results have been achieved in the consolidation and reorganization of central enterprises, vitalizing internal resources of central enterprises and local innovation in the reform of state-owned capitals. In terms of the mixed ownership reform, the National Development and Reform Commission (NDRC) and the SASAC have selected China Eastern Airlines, China Unicom, China Southern Power Grid, Harbin Power Electric Corporation, China Nuclear Engineering Corporation and China Shipbuilding Industry Corporation to conduct mixed ownership reform first. The SASAC is expected to continue with the new round of state-owned capitals reform based on past experiences in the end of 2016.
[SSN Selection]
○ SSN learnt that many securities companies have suspended the IPO applications for enterprises with a decline of over 30 percent in profit in the latest period.
○ The trade index released on the global dairy products trade platform surged 3.5 percent on Dec. 7. The expectation on production cut resulted in eight hikes of the index in recent nine auctions.
○ China's foreign exchange declined 69.1 billion U.S. dollars in November. The capital output in November in November increased but it is still under control.
○ Shanghai Bill Exchange will be officially established on Dec. 8, which will be significant in the market-based reform of the interest rate and reducing the financing cost of real economies.
○ Leshi Internet Information ＆ Technology Corp., Beijing (300104.SZ) issued an announcement on trading suspension, indicating that it is mulling the consolidation of industrial resources.
TOP
[Industry Information]
○ Tight supply and equipment overhauls drive methyl alcohol price high
------
Methyl alcohol enterprises in eastern China and other regions raise their quoted prices on Dec. 7. The price of methyl alcohol has surged over 50 percent this year. In terms of the demand, the methyl alcohol olefin facilities and other programs are putting into production. The methyl alcohol market is experiencing tight supply and downstream enterprises are increasing the procurement of methyl alcohol. As for the supply, many methyl alcohol facilities in the northwest area suspended production unexpectedly and the environmental inspection intensified in the north region.
Comment: With more snowy days in the future and the increasing transportation cost, the supply and demand in eastern area may continue to be tight. The interim reports show that the methyl alcohol business accounts for 24.9 percent, 13.25 percent and 10.2 percent of the business revenue of Enn Ecological Holdings Co., Ltd. (600803.SH), Inner Mongolia Yuan Xing Energy Company Limited (000683.SZ) and Baotailong New Materials Co., Ltd. (601011.SH).
○ 13th Five-Year Plan on intelligent manufacturing released and proposes ten key tasks
------
The Ministry of Industry and Information Technology (MIIT) released the Intelligent Manufacturing Development Plan (2016-2020) at the Word Intelligent Manufacturing Cooperation and Development Summit held on Dec. 7. The Plan proposes ten key tasks in intelligent manufacturing, including making breakthroughs in key technologies and equipment, achieve industrial Internet, establish cloud manufacturing and service platforms and achieve digital plants and intelligent factories.
Comment: Intelligent manufacturing is a key orientation in the "Made in China 2025". The output of intelligent manufacturing in China reached 1 trillion yuan in 2015 and is expected to exceed 3 trillion yuan in 2020. Insiders indicated that under the current development of the Chinese manufacturing industry, intelligent equipment and systematic integration will see highest growth in performance. In terms of companies, the electrical spindle of machine tool of Guangzhou Haozhi Industrial Co., Ltd. (300503.SZ) is an upgraded product of traditional spindles. Its expanded program has been put into operation in September. Shenzhen Yinghe Technology Co., Ltd. (300457.SZ) is principally engaged in major equipment in the automatic production line for lithium batteries and will benefit from the growth of the new energy vehicle industry.
TOP
[Announcement Interpretation]
○ Aier Eye Hospital raises fund via private placement to expand main business
------
Aier Eye Hospital Group Co., Ltd. (300015.SZ) proposes to raise no more than 2,426 million yuan by issuing no more than 100 million shares via private placement. The proceeds will be used for the construction of its headquarter, the relocation and expansion of two eye hospitals, the acquisition of nine eye hospitals, the information-based renovation of its infrastructure and construction of IT clouding. The company's actual controller Chen Bang promised to subscribe no less than 20 percent shares.
○ Jinyu Bio-tech. buys Tocilizumab bio-tech drug technology for RMB 65.18mln.
------
Jinyu Bio-technology Co., Ltd. (600201.SH) signed at technology (know-how) transfer contract with Taizhou Maibo Taike Pharmaceutical Co., Ltd on Dec. 6. The company will pay 65.18 million yuan royalty to Maibo Taike Pharmaceutical for the mass clinic use of its anti-IL-6R monoclonal antibody drug Tocilizumab, and Maibo Taike Pharmaceutical will provide related technical services and guidance.
Tocilizumab is mainly used for the treatment of rheumatoid arthritis and other immune disease. Its mechanism of action is the same with Roche' Actemra whose sales reached 1,617 million US dollars in2015. Currently, there are no similar products in the domestic market. Jinyu Bio-technology's Tocilizumab was the first project gaining approval in China.
○ Saturday changes reorganization method, proposes to acquire assets in cash
------
Saturday Co., Ltd. (002291.SZ) decides to terminate its plan to buy controlling rights of Beijing Fashion Fengxun Information Technology Co., Ltd. and Beijing Shixin Information Technology Co., Ltd. by issuing shares and paying in cash, but to only pay in cash. The company said that the move will shorten the acquisition process as it wants to promote upgrading if its operation strategy and business mode as soon as possible. Previously, the company proposes to acquire 80 percent equities of Fengxun Information Technology and 70 percent equities of Shixin Information Technology for a total of 371 million yuan. Both the two companies mainly rely on the sales of advertisement resources on its network platform to win operation revenue.
○ Baoshan Iron ＆ Steel and others gain approval for reorganization
------
Baoshan Iron ＆ Steel Co., Ltd. (600019.SH) and Wuhan Iron And Steel Company Limited (600005.SH) gained unconditional approval from the China Securities Regulatory Commission (CSRC) for their consolidation. Shengxing Group Co.,Ltd. (002752.SZ) gained unconditional approval from the CSRC for its reorganization. Shenzhen Soling Industrial Co., Ltd. (002766.SZ) and Est Tools Co., Ltd. (300488.SZ) gained conditional approval from the CSRC for their reorganization.
○ Keda Group and Shuangta Food see shareholding increase
------
Keda Group, the substantial shareholder of Keda Group Co., Ltd. (600986.SH), will increase shareholding in the company by no less than one million shares but no more than one percent of its total shares in one month from Dec. 8, 2016. Yang Junmin, the chairman of Yantai Shuangta Food Co., Ltd. (002481.SZ), increased shareholding in the company by 11.58 million shares on Dec. 6 at an average price of 8.058 yuan per share, and plans to continue to increase shareholding in the company with no less than 300 million yuan in the coming 6 months.
In addition, the party in concert with the controlling shareholder of Yinchuan Xinhua Commercial (Group) Co., Ltd. (600785.SH) increased shareholding in the company by 4.51 million shares, accounting for 2 percent of its total share capital. Guofeng Group, the controlling shareholder of Tibet Tourism Co., Ltd. (600749.SH) increased shareholding in the company by 5.576 million shares. Kaishan Holding Co., Ltd., the controlling shareholder of Zhejiang Kaishan Compressor Co., Ltd. (300257.SZ), increased shareholding in the company by 747,600 shares.
[Trading Trends]
○ Iron ＆ steel stocks bought by institutional seats, supply decrease pushes up steel prices
------
The iron ＆ steel sector led gain the stock market on Dec. 7. The trading volume ranking list shows that Angang Steel Company Limited (000898.SZ; 00347.HK) was bought with 43.33 million yuan through two institutional seats, accounting for 5.8 percent of its intraday turnover; one institutional seat sold 9.48 million yuan shares. Fujian Sansteel Minguang Co., Ltd. (002110.SZ) was bought with 17.34 million yuan through one institutional seat, accounting for 3.3 percent of its intraday turnover.
Comment: Hebei Province issued an urgent notice on further troubleshooting steel bar in illegal producing areas on Dec. 6. Impacted by the news, the price of all iron and steel products rose on Dec. 7. The price of building materials in Shanghai rose 60 yuan to 80 yuan per ton. Analysts interviewed noted that the screening of illegal steel bar not only leaves room for legal steel plants but also eliminates cheap and inferior steel's destruction to the market order. As environmental problems are worsening, expectations for supply decrease will continue to be a highlight of the market.
[Trading Alarms]
○ Kairun and Xinjie Electric to conduct IPO on Dec. 8
------
Anhui Kairun Co., Ltd. (300577.SZ) will offer shares at 19.58 yuan per share with an upper limit of 16,500 shares for each applicant. The company is mainly engaged in luggage and bags. Wuxin Xinjie Electric Company Limited (732416) will offer shares at 17.85 yuan per share with an upper limit of 10,000 shares for each applicant. The company is mainly engaged in industrial automatic control products.
TOP
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