[Today's Guide]
○ CIRC stresses friendly investors, insurance companies prevented from aggressive investments
○ Five-year plan on reinvigorating China through science and technology released, self-sufficiency rate of high-end equipment to improve
○ Salt industry reform to launch, salt producers allowed to distribute and sell salts
○ Jikai Equipment Manufacturing and Langsha Holding bought through secondary market acquisition to five percent threshold, several companies see increase of shareholding by shareholders and senior management
[SSN Focus]
○ CIRC stresses friendly investors, insurance companies prevented from aggressive investments
------
At a panel held on Dec. 13, China Insurance Regulatory Commission (CIRC) set its regulatory tone that insurance companies should play a role as friendly investors instead of barbarians in the capital market, as well-meaning financial investors instead of hostile acquirers. That is their investment should mainly focus on financial investment supplemented by strategic investment. Strategic investment should be mainly be stake-taken. As for the governance of insurance companies, it should strictly prevent investors with "impure motives" from investing the insurance sector and strengthen penetrating regulations on shareholders.
Comment: Speaking of the latest regulatory tone, senior management of insurance companies participating the panel said that their future investment style is likely to gradually transform from centralized to diverged. They will decrease aggressive investments, such as acquiring shares through secondary market and intervening in the operation and management of listed companies. Instead, they will diversify investment in quality companies and adopt more friendly investment style via block trade, agreement transfer or participation in private placement. The restriction that universal life insurance should not pay high interest rates to attract deposits will extend investment horizon of insurance funds and restrain fast investment and withdrawal.
[SSN Selection]
○ According to statistics, the National Development and Reform Commission (NDRC) approved 264.2 billion yuan fixed-income assets investment in November, up by 45.4 billion yuan from October.
○ Shanghai Futures Exchange launches commodity index series on Dec. 13 and indicated that domestic fund companies have accelerated the development of commodity futures fund.
○ The bidding for national rare earth reserves was held on Dec. 13, and reached a total of above 1,400 tonne deals in praseodymium oxide, neodymium oxide, dysprosium oxide and other products.
○ Wuhan Iron And Steel Company Limited (600005.SH) announced that it will raise the prices of its major plate products by 500 yuan a tonne from January. Previously Baoshan Iron ＆ Steel Co., Ltd. (600019.SH) announced a price hike by 350 yuan to 360 yuan a tonne.
○ Last week the banking securities transaction recorded a net outflow of 23.7 billion yuan. The number of new accounts and transaction activities have decreased remarkably.
TOP
[Industry Information]
○ Five-year plan on reinvigorating China through science and technology released, self-sufficiency rate of high-end equipment to improve
------
The State Oceanic Administration released the plan on reinvigorating the country through science and technology (2016-2020) on Dec. 13, propose to form a long-term mechanism that can facilitate innovation-driven development in2020. It also proposes that over 55 percent ocean scientific and technological achievements should be transformed, the contribution rate of marine scientific and technological progress to marine economic growth should exceed 60 percent, the average annual growth rate of ownership of patents for invention should reach 20 percent and the self-sufficiency rate of high-end equipment should reach 50 percent.
Comment: With increasingly scarcity of land resources, exploitation of marine resources is growing around the globe. The marine engineering equipment manufacturing industry is a strategic industry to provide equipment for marine development. As marine development accelerates, the industry will see a wide range of development opportunities. Among listed companies, China Shipbuilding Industry Company Limited (601989.SH) can build offshore platforms, floating production structure, FPSO, marine special vessels, marine supporting equipment and other products. CEC CoreCast Corporation Limited (600764.SH) plans to purchase the underwater acoustic transmission equipment and special equipment for underwater weapons systems from Great Wall Electronics.
TOP
○ Salt industry reform to launch, salt producers allowed to distribute and sell salts
------
Zhao Chenxin, spokesperson for the National Development and Reform Commission (NDRC), said on Dec. 13 that the implementation plan on the salt industry reform in the first batch f 13 provinces and municipalities is being countersigned by the Ministry of Industry and Information Technology (MIIT) which is expected to give an official reply before Dec. 20. According to the salt industry reform plan released earlier, restrictions on the price of all salt products will be lifted from January 1, and salt navicerts will be canceled. All salt producers will be allowed to distribute and sell salt. Salt wholesalers will be allowed to carry out business across regions.
Comment: China's designated salt enterprises has a capacity of about 48 million tons in 2015, but the demand for salt is about only 10 million tons each year. Analysts are in the view that as China's salt capacity is rather large, enterprises may compete for market presence with price war, and salt price is expected to decrease. In the long run, the exclusive sales of salt is expected to be terminated. Enterprises may have stronger motivation to fill the market void once they can sell salt independently, and through which their competiveness will improve.
TOP
[Announcement Interpretation]
○ Jikai Equipment Manufacturing and Langsha Holding bought through secondary market acquisition to five percent threshold
------
Jikai Equipment Manufacturing Co., Ltd. (002691.SZ) announced that natural person Jing Hua from Feb. 16 to Dec. 13 increased holding in total 10 million shares of the company to the 5 percent threshold through his own securities account and Chongqing Xinsanwei-Runze No.2. Jing indicates that he is optimistic about the future development of the company and recognize the value of the company, and seeks for the value-added space of long-term investment. Jing Hua is a large individual investor on the secondary market. He has previously bought Zhejiang Honglei Copper Co., Ltd. (002647.SZ) through secondary market acquisition to the five percent threshold twice.
Tibet Julang Science and Technology increased 4,861,900 shares of Sichuan Langsha Holding Ltd. (600137.SH) from Nov. 3 to Dec. 13, accounting for 5 percent of the total share capital of the company. The purchase prices range from 41.32 yuan to 50.15 yuan. Julang is rosy on Langsha's long-term performance, and optimistic about the stock market. In the next 12 months, Julang proposes to continue to hold no less than 100,000 and no more than 20 million shares of the company.
○ Several companies see increase of shareholding by shareholders and senior management
------
Chairman of a subsidiary of Shenzhen Comix Group Co., Ltd. (002301.SZ) once again launches a plan to increase holding no more than 200 million yuan worth of shares of the company in the next six months. Actual controller of Avit., Ltd. (300264.SZ) will increase no less than 15 million yuan worth of shares of the company in the next three months. Actual controller of China TransInfo Technology Co., Ltd. (002373.SZ) on Dec. 13 increased holding 70,000 shares of the company and plans to increase holding no more than 1 percent of the total share capital and no less than 2 million shares of the company. Actual controller of Shenzhen Sunrise New Energy Co., Ltd. (002256.SZ) on Dec. 13 increased holding 918,000 shares of the company. Suzhou Hesheng Special Material Co., Ltd. (002290.SZ) from Oct. 28 to Dec, 13 increased holding 2,427,000 shares of the company.
○ Jinguan Electric plans to invest 1,504 million yuan to tap into new energy car charging pile field
------
Jilin Jinguan Electric Co., Ltd. (300510.SZ) proposes to buy the entire equities of Nengrui Automation Equipment through "private placement and cash payment" with the consideration of 1,504 million yuan. The issuing price of the private placement is 36.18 yuan per share. At the same time, the company proposes to raise supporting fund of no more than 500 million yuan, the price determination date will be the first day of issuance.
Nengrui Automation Equipment is primarily engaged in the research and manufacturing of charging system. The committed net profits of the company from 2016 to 2018 are 80 million yuan, 90 million yuan and 100 million yuan respectively. Upon completion of the transaction, Jinguan Electric will tap into the new energy car charging facility manufacturing and charging network operating field.
○ China National Complete Plant Import ＆ Export Corp., Ltd. (000151.SZ) signed a heavy soda ash EPC contract in Lake Shala in Ethiopia. The contract sum is 450 million U.S. dollars. The total revenue of the company in 2015 is 1.21 billion yuan. Palm Eco-Town Development Co., Ltd. (002431.SZ) is expected to win to the bid for the comprehensive reclamation PPP project of Wulong river basin in Laiyang City. The contract sum of the project is 2 billion yuan. The revenue of the company in 2015 was 4.4 billion yuan.
○ Chen Hankang, actual controller of Zhejiang Kangsheng Co., Ltd. (002418.SZ) and Zhejiang Runcheng, a party acting in concert, decided to cancel the plan of decreasing holding no more than 50 million shares of the company in the next 6 months.
[Trading Alarm]
○ Hangcha Group and Biem.L.Fdlkk Garment IPOs offer for subscription on Dec. 14
------
Hangcha Group Co., ltd. (732298.SZ) will offer for subscription at 12.67 yuan per share. The upper limit for each applicant is 25,000 shares. The company is primarily engaged in industrial vehicle such as forklift. Biem.L.Fdlkk Garment Co., Ltd. (002832.SZ) will offer for subscription at 26.17 yuan per share. The upper limit for each applicant is 10,500 shares. The company is primarily engaged in Golf clothing.
TOP
○ CIRC stresses friendly investors, insurance companies prevented from aggressive investments
○ Five-year plan on reinvigorating China through science and technology released, self-sufficiency rate of high-end equipment to improve
○ Salt industry reform to launch, salt producers allowed to distribute and sell salts
○ Jikai Equipment Manufacturing and Langsha Holding bought through secondary market acquisition to five percent threshold, several companies see increase of shareholding by shareholders and senior management
[SSN Focus]
○ CIRC stresses friendly investors, insurance companies prevented from aggressive investments
------
At a panel held on Dec. 13, China Insurance Regulatory Commission (CIRC) set its regulatory tone that insurance companies should play a role as friendly investors instead of barbarians in the capital market, as well-meaning financial investors instead of hostile acquirers. That is their investment should mainly focus on financial investment supplemented by strategic investment. Strategic investment should be mainly be stake-taken. As for the governance of insurance companies, it should strictly prevent investors with "impure motives" from investing the insurance sector and strengthen penetrating regulations on shareholders.
Comment: Speaking of the latest regulatory tone, senior management of insurance companies participating the panel said that their future investment style is likely to gradually transform from centralized to diverged. They will decrease aggressive investments, such as acquiring shares through secondary market and intervening in the operation and management of listed companies. Instead, they will diversify investment in quality companies and adopt more friendly investment style via block trade, agreement transfer or participation in private placement. The restriction that universal life insurance should not pay high interest rates to attract deposits will extend investment horizon of insurance funds and restrain fast investment and withdrawal.
[SSN Selection]
○ According to statistics, the National Development and Reform Commission (NDRC) approved 264.2 billion yuan fixed-income assets investment in November, up by 45.4 billion yuan from October.
○ Shanghai Futures Exchange launches commodity index series on Dec. 13 and indicated that domestic fund companies have accelerated the development of commodity futures fund.
○ The bidding for national rare earth reserves was held on Dec. 13, and reached a total of above 1,400 tonne deals in praseodymium oxide, neodymium oxide, dysprosium oxide and other products.
○ Wuhan Iron And Steel Company Limited (600005.SH) announced that it will raise the prices of its major plate products by 500 yuan a tonne from January. Previously Baoshan Iron ＆ Steel Co., Ltd. (600019.SH) announced a price hike by 350 yuan to 360 yuan a tonne.
○ Last week the banking securities transaction recorded a net outflow of 23.7 billion yuan. The number of new accounts and transaction activities have decreased remarkably.
TOP
[Industry Information]
○ Five-year plan on reinvigorating China through science and technology released, self-sufficiency rate of high-end equipment to improve
------
The State Oceanic Administration released the plan on reinvigorating the country through science and technology (2016-2020) on Dec. 13, propose to form a long-term mechanism that can facilitate innovation-driven development in2020. It also proposes that over 55 percent ocean scientific and technological achievements should be transformed, the contribution rate of marine scientific and technological progress to marine economic growth should exceed 60 percent, the average annual growth rate of ownership of patents for invention should reach 20 percent and the self-sufficiency rate of high-end equipment should reach 50 percent.
Comment: With increasingly scarcity of land resources, exploitation of marine resources is growing around the globe. The marine engineering equipment manufacturing industry is a strategic industry to provide equipment for marine development. As marine development accelerates, the industry will see a wide range of development opportunities. Among listed companies, China Shipbuilding Industry Company Limited (601989.SH) can build offshore platforms, floating production structure, FPSO, marine special vessels, marine supporting equipment and other products. CEC CoreCast Corporation Limited (600764.SH) plans to purchase the underwater acoustic transmission equipment and special equipment for underwater weapons systems from Great Wall Electronics.
TOP
○ Salt industry reform to launch, salt producers allowed to distribute and sell salts
------
Zhao Chenxin, spokesperson for the National Development and Reform Commission (NDRC), said on Dec. 13 that the implementation plan on the salt industry reform in the first batch f 13 provinces and municipalities is being countersigned by the Ministry of Industry and Information Technology (MIIT) which is expected to give an official reply before Dec. 20. According to the salt industry reform plan released earlier, restrictions on the price of all salt products will be lifted from January 1, and salt navicerts will be canceled. All salt producers will be allowed to distribute and sell salt. Salt wholesalers will be allowed to carry out business across regions.
Comment: China's designated salt enterprises has a capacity of about 48 million tons in 2015, but the demand for salt is about only 10 million tons each year. Analysts are in the view that as China's salt capacity is rather large, enterprises may compete for market presence with price war, and salt price is expected to decrease. In the long run, the exclusive sales of salt is expected to be terminated. Enterprises may have stronger motivation to fill the market void once they can sell salt independently, and through which their competiveness will improve.
TOP
[Announcement Interpretation]
○ Jikai Equipment Manufacturing and Langsha Holding bought through secondary market acquisition to five percent threshold
------
Jikai Equipment Manufacturing Co., Ltd. (002691.SZ) announced that natural person Jing Hua from Feb. 16 to Dec. 13 increased holding in total 10 million shares of the company to the 5 percent threshold through his own securities account and Chongqing Xinsanwei-Runze No.2. Jing indicates that he is optimistic about the future development of the company and recognize the value of the company, and seeks for the value-added space of long-term investment. Jing Hua is a large individual investor on the secondary market. He has previously bought Zhejiang Honglei Copper Co., Ltd. (002647.SZ) through secondary market acquisition to the five percent threshold twice.
Tibet Julang Science and Technology increased 4,861,900 shares of Sichuan Langsha Holding Ltd. (600137.SH) from Nov. 3 to Dec. 13, accounting for 5 percent of the total share capital of the company. The purchase prices range from 41.32 yuan to 50.15 yuan. Julang is rosy on Langsha's long-term performance, and optimistic about the stock market. In the next 12 months, Julang proposes to continue to hold no less than 100,000 and no more than 20 million shares of the company.
○ Several companies see increase of shareholding by shareholders and senior management
------
Chairman of a subsidiary of Shenzhen Comix Group Co., Ltd. (002301.SZ) once again launches a plan to increase holding no more than 200 million yuan worth of shares of the company in the next six months. Actual controller of Avit., Ltd. (300264.SZ) will increase no less than 15 million yuan worth of shares of the company in the next three months. Actual controller of China TransInfo Technology Co., Ltd. (002373.SZ) on Dec. 13 increased holding 70,000 shares of the company and plans to increase holding no more than 1 percent of the total share capital and no less than 2 million shares of the company. Actual controller of Shenzhen Sunrise New Energy Co., Ltd. (002256.SZ) on Dec. 13 increased holding 918,000 shares of the company. Suzhou Hesheng Special Material Co., Ltd. (002290.SZ) from Oct. 28 to Dec, 13 increased holding 2,427,000 shares of the company.
○ Jinguan Electric plans to invest 1,504 million yuan to tap into new energy car charging pile field
------
Jilin Jinguan Electric Co., Ltd. (300510.SZ) proposes to buy the entire equities of Nengrui Automation Equipment through "private placement and cash payment" with the consideration of 1,504 million yuan. The issuing price of the private placement is 36.18 yuan per share. At the same time, the company proposes to raise supporting fund of no more than 500 million yuan, the price determination date will be the first day of issuance.
Nengrui Automation Equipment is primarily engaged in the research and manufacturing of charging system. The committed net profits of the company from 2016 to 2018 are 80 million yuan, 90 million yuan and 100 million yuan respectively. Upon completion of the transaction, Jinguan Electric will tap into the new energy car charging facility manufacturing and charging network operating field.
○ China National Complete Plant Import ＆ Export Corp., Ltd. (000151.SZ) signed a heavy soda ash EPC contract in Lake Shala in Ethiopia. The contract sum is 450 million U.S. dollars. The total revenue of the company in 2015 is 1.21 billion yuan. Palm Eco-Town Development Co., Ltd. (002431.SZ) is expected to win to the bid for the comprehensive reclamation PPP project of Wulong river basin in Laiyang City. The contract sum of the project is 2 billion yuan. The revenue of the company in 2015 was 4.4 billion yuan.
○ Chen Hankang, actual controller of Zhejiang Kangsheng Co., Ltd. (002418.SZ) and Zhejiang Runcheng, a party acting in concert, decided to cancel the plan of decreasing holding no more than 50 million shares of the company in the next 6 months.
[Trading Alarm]
○ Hangcha Group and Biem.L.Fdlkk Garment IPOs offer for subscription on Dec. 14
------
Hangcha Group Co., ltd. (732298.SZ) will offer for subscription at 12.67 yuan per share. The upper limit for each applicant is 25,000 shares. The company is primarily engaged in industrial vehicle such as forklift. Biem.L.Fdlkk Garment Co., Ltd. (002832.SZ) will offer for subscription at 26.17 yuan per share. The upper limit for each applicant is 10,500 shares. The company is primarily engaged in Golf clothing.
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