[Today's Guide]
○ China's car sales maintain high growth, self-owned brands stand out
○ Telecom operators make active investment in IoT, demands for eSIM expected to explode gradually
○ Production restriction for environmental protection and peak demand drive glyphosate price higher
○ Equities of Guanghe Landscape Culture Communication auctioned at premium, Chinese All Digital Publishing proposes high share conversion and dividend
[SSN Focus]
○ China's car sales maintain high growth, self-owned brands stand out
------
Data China Passenger Vehicle Association from shows that China sold 2.42 million units of passenger vehicles in November, representing a year-on-year increase of 19.8 percent; the cumulative sales from January to November was 21.09 million units, representing a year-on-year increase of 15.7 percent. According to public statistics, among 19 major automobile enterprises, SAIC Motor Corporation Limited (600104.SH), Zhejiang Geely Holding Group (00175.HK) and Dongfeng Automobile Co., Ltd. (600006.SH) rank top three with the growth of passenger vehicle sales at 107 percent, 699 percentand48 percent, respectively. The self-owned brand passenger vehicles of Great Wall Motor Company Limited (600133.SH) and Guangzhou Automobile Group Co., Ltd. (601238.SH) also maintained a high growth rate.
Comment: At the beginning of this year, China Automobile Dealers Association (CADA) and China Association of Automobile Manufactures expected China's vehicle sale to rise 6 percent year on year. Yet the actual vehicle sales released in recent months surpassed their expectations. Institutions believes that it is not only because of the contribution from purchase tax incentives but also from a strong endogenous growth in the auto market. The demands for buy first car are expanding to third and fourth-tire cities. First and second-tier cities have increasing needs for changing cars. They are bullish on automobile blue chips with high dividends that see rapid development of their own brands.
[SSN Selection]
○ SSN learnt that policies on the adjusted subsidies for new energy vehicles are expected to be released in the near future and may not be later than the middle of this month.
○ An official from the Insurance Asset Management Association of China said that currently the insurance funds' investment in domestic equity market only accounts for one third of its upper limit, and that its involvement in Hong Kong stock connect program will not impact its allocation in the mainland stock market.
○ The China Banking Regulatory Commission (CBRC) said that it has approved establishment of 11 private bank, and the first five pilot banks have begun to make profit.
○ China's imports and exports denominated in US dollar saw positive growth in November on a yearly basis. China's foreign trade conditions are likely to continue to improve next year.
○ Industrial and Commercial Bank of China Limited (ICBC, 01398.HK; 601398.SH) plans to invest 12 billion yuan to set up an asset management company to carry out debt-to-equity swap.
TOP
[Industry Information]
○ Telecom operators make active investment in IoT, demands for eSIM expected to explode gradually
------
At the 2016 Global Network Technology Conference (CNTC) on Dec. 8, Hu Yun, director of the Internet of Things (IoTs)Technology R＆D Center of China Unicom Research Institute, said that with the freezing of NB-IoT standards, domestic operators have been promoting relevant IoTs experiments and pilot program. 2017 is the first year of an incubation period and the first year for the commercialization of IOTs. He hoped to work with local governments to jointly promote the application of NB-IoT in public utilities, smart city and other fields. In addition, 2016 IoT Developers Conference will be held in Beijing on Dec. 9. International Internet giants, including Microsoft, Intel and IBM, will attend the event.
Comment: According to Huawei's estimate, the IoT connection based on cellular network accounts for only 5 -8 percent in the market. As the standards for cellular network are formulated and cellular network technologies become mature, the proportion is expected to rise above 30 percent in 2025. China Merchants Securities believes that SIM card is an important part for identifying users' identity. Demands for eSIM in the domestic market will outbreak from 2017. Wuhan Tianyu Information Industry Co., Ltd. (300205.SZ) and HengBao Co., Ltd. (002104.SZ) are actively making investment in the industry. The status of the industrial chain status is expected to improve significantly.
TOP
○ Production restriction for environmental protection and peak demand drive glyphosate price higher
------
The trading price of glyphosate surged 2 percent on Dec. 7. It has increased 12 percent in recent month. The current quoted price from suppliers is 25,000 to 25,500 yuan/tonne and the dominant trading price in the market is 23,000 to 23,500 yuan/tonne. Some small orders even traded at 25,000 to 25,500 yuan/tonne.
Comment: As Hebei Province took strong measures to control haze, and environmental protection inspection teams entered Hubei, the supply gap of glycine has widened, dampening operation rate of glyphosate enterprises. Currently, the mainstream quoted price of glyphosate is 25,000 yuan/tonne, over 40 percent higher than this year's low of 16,9000 yuan/tonne. In addition, purchasing demands from overseas also prop up the glyphosate market. Among listed companies, (600389.SH) and (600596.SH) are engaged in glyphosate production.
TOP
[Announcement Interpretation]
○ Equities of Guanghe Landscape Culture Communication auctioned at premium, actual controller to change
------
Nanjing Sente Paisi has won the bid for 20 million shares (9.88 percent of the total capital) of Guanghe Landscape Culture Communication Co., Ltd, ShanXi (600234.SH) held by its original controlling shareholder Huang Guozhong with 469.2 million yuan, representing 23.46 yuan per share, 18 percent premium compared with the latest price of the company of 19.9 yuan per share. As the current actual controllers Lin Yuehui and Xu Yongfeng exercise shareholders' rights on behalf of Huang Guozhong, if Huang no longer holds equities of the company, the actual controllers of the company will change. Currently, the largest shareholder Zhong Ansheng and parties acting in concert in total hold 18.04 percent equities of the company, the second largest shareholder Shenzhen Paidegao and parties acting in concert hold in total 10 percent equities of the company.
○ Xiangtan Electric Manufacturing proposes to set up military equipment subsidiary
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Xiangtan Electric Manufacturing Co., Ltd. (600416.SH) proposes to set up Xiangtan Electric Military Equipment Company with its controlling shareholder Xiangtan Electric Group, Hunan Ordnance Industries Group Co., Ltd., Hunan SOE Reform Fund and Hunan Military and Civil Integration Equipment Technology Innovation Center. The initial registered capital will be 3 billion yuan. The listed company will contribute 1.53 billion yuan in the form of assets injection, accounting for 51 percent of the registered capital. The company plans to bring in strategic investor through the investment, to integrate military production lines and special projects of its own and its controlling shareholder.
○ Foshan Electrical and Lighting Co., Ltd. (000541.SZ) has sold 29.27 million shares of Hefei Guoxuan Hi-tech Power Energy Co., Ltd. (000541.SZ) and gained profits of 850 million yuan, which can increase 722.5 million yuan net profit for 2016.
○ Yilong Magnets, controlling shareholder of Dalian Insulator Group Co., Ltd. (002606.SZ) on Dec. 7 increased holding 800,000 shares of the company, accounting for 0.39 percent of the total share capital of the company. The average price is 48.51 yuan per share. After increasing shareholding, Yilong Magnets' shareholding in the company reached 20 percent. Yilong Magnets indicated that it is confident about the development prospect of the listed company in the future and recognize the value of the company.
[Financial Reports Express]
○ Chinese All Digital Publishing proposes high share conversion and dividend
------
Chinese All Digital Publishing Group Co., Ltd. (300364.SZ) forecast 10 percent to 40 percent growth in its annual report. The actual controller Tong Zhilei proposes the distribution plan of 15-for-10 conversion of capital surplus into shares combined with 0.4 yuan dividend for every 10 shares.
[Trading Trends]
○ Capitals of Northbound Trading Link under Shenzhen-Hong Kong Stock Connect favor "white-horse" stocks, home appliance and liquor industry are highlights
------
The Shenzhen-Hong Kong Stock Connect has operated smoothly for four trading sessions. SSN's statistics on the trading data shows that large-cap white-horse stocks with good performance on the Shenzhen bourse continuously draw attention from foreign capitals.
Data shows that since the implementation of the Shenzhen-Hong Kong Stock Connect, Gree Electric Appliances,Inc.of Zhuhai (000651.SZ) has been on the list of top-ten active stocks of the Northbound Trading Link for four consecutive days, receiving in total 1.1 billion net capital inflow. Midea Group Co., Ltd. (000333.SZ) has also been on the list for four days, which sees a capital inflow of 700 million yuan. Except for the home appliance sector, the liquor sector is also favored by foreign capitals. Wuliangye Yibin Co., Ltd. (000858.SZ) and Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. (002304.SZ) also see 318 million yuan and 233 million yuan capital inflows in the four trading days respectively. Luzhou Laojiao Co., Ltd. (000568.SZ) on Dec. 8 entered the list of top-ten active stocks for the first time on Dec. 8 with net capital inflow of 60 million yuan.
[Trading Alarms]
○ Chenxi Aviation Technology and Huijintong Power Equipment IPO offer for subscription on Dec. 9
------
Xian Chenxi Aviation Technology Corp., Ltd. (300581.SZ) will offer for subscription at 24.23 yuan per share. The upper limit for each applicant is 11,000 shares. The company is primarily involved in aerospace mechanical and electrical products. Qingdao Huijintong Power Equipment Co., Ltd. (732577.SZ) will offer for subscription at 11.1 yuan per share. The upper limit for each applicant is 11,000 shares for each applicant. The company is primarily engaged in transmission line towers.
TOP
○ China's car sales maintain high growth, self-owned brands stand out
○ Telecom operators make active investment in IoT, demands for eSIM expected to explode gradually
○ Production restriction for environmental protection and peak demand drive glyphosate price higher
○ Equities of Guanghe Landscape Culture Communication auctioned at premium, Chinese All Digital Publishing proposes high share conversion and dividend
[SSN Focus]
○ China's car sales maintain high growth, self-owned brands stand out
------
Data China Passenger Vehicle Association from shows that China sold 2.42 million units of passenger vehicles in November, representing a year-on-year increase of 19.8 percent; the cumulative sales from January to November was 21.09 million units, representing a year-on-year increase of 15.7 percent. According to public statistics, among 19 major automobile enterprises, SAIC Motor Corporation Limited (600104.SH), Zhejiang Geely Holding Group (00175.HK) and Dongfeng Automobile Co., Ltd. (600006.SH) rank top three with the growth of passenger vehicle sales at 107 percent, 699 percentand48 percent, respectively. The self-owned brand passenger vehicles of Great Wall Motor Company Limited (600133.SH) and Guangzhou Automobile Group Co., Ltd. (601238.SH) also maintained a high growth rate.
Comment: At the beginning of this year, China Automobile Dealers Association (CADA) and China Association of Automobile Manufactures expected China's vehicle sale to rise 6 percent year on year. Yet the actual vehicle sales released in recent months surpassed their expectations. Institutions believes that it is not only because of the contribution from purchase tax incentives but also from a strong endogenous growth in the auto market. The demands for buy first car are expanding to third and fourth-tire cities. First and second-tier cities have increasing needs for changing cars. They are bullish on automobile blue chips with high dividends that see rapid development of their own brands.
[SSN Selection]
○ SSN learnt that policies on the adjusted subsidies for new energy vehicles are expected to be released in the near future and may not be later than the middle of this month.
○ An official from the Insurance Asset Management Association of China said that currently the insurance funds' investment in domestic equity market only accounts for one third of its upper limit, and that its involvement in Hong Kong stock connect program will not impact its allocation in the mainland stock market.
○ The China Banking Regulatory Commission (CBRC) said that it has approved establishment of 11 private bank, and the first five pilot banks have begun to make profit.
○ China's imports and exports denominated in US dollar saw positive growth in November on a yearly basis. China's foreign trade conditions are likely to continue to improve next year.
○ Industrial and Commercial Bank of China Limited (ICBC, 01398.HK; 601398.SH) plans to invest 12 billion yuan to set up an asset management company to carry out debt-to-equity swap.
TOP
[Industry Information]
○ Telecom operators make active investment in IoT, demands for eSIM expected to explode gradually
------
At the 2016 Global Network Technology Conference (CNTC) on Dec. 8, Hu Yun, director of the Internet of Things (IoTs)Technology R＆D Center of China Unicom Research Institute, said that with the freezing of NB-IoT standards, domestic operators have been promoting relevant IoTs experiments and pilot program. 2017 is the first year of an incubation period and the first year for the commercialization of IOTs. He hoped to work with local governments to jointly promote the application of NB-IoT in public utilities, smart city and other fields. In addition, 2016 IoT Developers Conference will be held in Beijing on Dec. 9. International Internet giants, including Microsoft, Intel and IBM, will attend the event.
Comment: According to Huawei's estimate, the IoT connection based on cellular network accounts for only 5 -8 percent in the market. As the standards for cellular network are formulated and cellular network technologies become mature, the proportion is expected to rise above 30 percent in 2025. China Merchants Securities believes that SIM card is an important part for identifying users' identity. Demands for eSIM in the domestic market will outbreak from 2017. Wuhan Tianyu Information Industry Co., Ltd. (300205.SZ) and HengBao Co., Ltd. (002104.SZ) are actively making investment in the industry. The status of the industrial chain status is expected to improve significantly.
TOP
○ Production restriction for environmental protection and peak demand drive glyphosate price higher
------
The trading price of glyphosate surged 2 percent on Dec. 7. It has increased 12 percent in recent month. The current quoted price from suppliers is 25,000 to 25,500 yuan/tonne and the dominant trading price in the market is 23,000 to 23,500 yuan/tonne. Some small orders even traded at 25,000 to 25,500 yuan/tonne.
Comment: As Hebei Province took strong measures to control haze, and environmental protection inspection teams entered Hubei, the supply gap of glycine has widened, dampening operation rate of glyphosate enterprises. Currently, the mainstream quoted price of glyphosate is 25,000 yuan/tonne, over 40 percent higher than this year's low of 16,9000 yuan/tonne. In addition, purchasing demands from overseas also prop up the glyphosate market. Among listed companies, (600389.SH) and (600596.SH) are engaged in glyphosate production.
TOP
[Announcement Interpretation]
○ Equities of Guanghe Landscape Culture Communication auctioned at premium, actual controller to change
------
Nanjing Sente Paisi has won the bid for 20 million shares (9.88 percent of the total capital) of Guanghe Landscape Culture Communication Co., Ltd, ShanXi (600234.SH) held by its original controlling shareholder Huang Guozhong with 469.2 million yuan, representing 23.46 yuan per share, 18 percent premium compared with the latest price of the company of 19.9 yuan per share. As the current actual controllers Lin Yuehui and Xu Yongfeng exercise shareholders' rights on behalf of Huang Guozhong, if Huang no longer holds equities of the company, the actual controllers of the company will change. Currently, the largest shareholder Zhong Ansheng and parties acting in concert in total hold 18.04 percent equities of the company, the second largest shareholder Shenzhen Paidegao and parties acting in concert hold in total 10 percent equities of the company.
○ Xiangtan Electric Manufacturing proposes to set up military equipment subsidiary
------
Xiangtan Electric Manufacturing Co., Ltd. (600416.SH) proposes to set up Xiangtan Electric Military Equipment Company with its controlling shareholder Xiangtan Electric Group, Hunan Ordnance Industries Group Co., Ltd., Hunan SOE Reform Fund and Hunan Military and Civil Integration Equipment Technology Innovation Center. The initial registered capital will be 3 billion yuan. The listed company will contribute 1.53 billion yuan in the form of assets injection, accounting for 51 percent of the registered capital. The company plans to bring in strategic investor through the investment, to integrate military production lines and special projects of its own and its controlling shareholder.
○ Foshan Electrical and Lighting Co., Ltd. (000541.SZ) has sold 29.27 million shares of Hefei Guoxuan Hi-tech Power Energy Co., Ltd. (000541.SZ) and gained profits of 850 million yuan, which can increase 722.5 million yuan net profit for 2016.
○ Yilong Magnets, controlling shareholder of Dalian Insulator Group Co., Ltd. (002606.SZ) on Dec. 7 increased holding 800,000 shares of the company, accounting for 0.39 percent of the total share capital of the company. The average price is 48.51 yuan per share. After increasing shareholding, Yilong Magnets' shareholding in the company reached 20 percent. Yilong Magnets indicated that it is confident about the development prospect of the listed company in the future and recognize the value of the company.
[Financial Reports Express]
○ Chinese All Digital Publishing proposes high share conversion and dividend
------
Chinese All Digital Publishing Group Co., Ltd. (300364.SZ) forecast 10 percent to 40 percent growth in its annual report. The actual controller Tong Zhilei proposes the distribution plan of 15-for-10 conversion of capital surplus into shares combined with 0.4 yuan dividend for every 10 shares.
[Trading Trends]
○ Capitals of Northbound Trading Link under Shenzhen-Hong Kong Stock Connect favor "white-horse" stocks, home appliance and liquor industry are highlights
------
The Shenzhen-Hong Kong Stock Connect has operated smoothly for four trading sessions. SSN's statistics on the trading data shows that large-cap white-horse stocks with good performance on the Shenzhen bourse continuously draw attention from foreign capitals.
Data shows that since the implementation of the Shenzhen-Hong Kong Stock Connect, Gree Electric Appliances,Inc.of Zhuhai (000651.SZ) has been on the list of top-ten active stocks of the Northbound Trading Link for four consecutive days, receiving in total 1.1 billion net capital inflow. Midea Group Co., Ltd. (000333.SZ) has also been on the list for four days, which sees a capital inflow of 700 million yuan. Except for the home appliance sector, the liquor sector is also favored by foreign capitals. Wuliangye Yibin Co., Ltd. (000858.SZ) and Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. (002304.SZ) also see 318 million yuan and 233 million yuan capital inflows in the four trading days respectively. Luzhou Laojiao Co., Ltd. (000568.SZ) on Dec. 8 entered the list of top-ten active stocks for the first time on Dec. 8 with net capital inflow of 60 million yuan.
[Trading Alarms]
○ Chenxi Aviation Technology and Huijintong Power Equipment IPO offer for subscription on Dec. 9
------
Xian Chenxi Aviation Technology Corp., Ltd. (300581.SZ) will offer for subscription at 24.23 yuan per share. The upper limit for each applicant is 11,000 shares. The company is primarily involved in aerospace mechanical and electrical products. Qingdao Huijintong Power Equipment Co., Ltd. (732577.SZ) will offer for subscription at 11.1 yuan per share. The upper limit for each applicant is 11,000 shares for each applicant. The company is primarily engaged in transmission line towers.
TOP
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