[Today's Guide]
○SOEs reform deepens, mixed-ownership reform to become important breakthrough
○Policies supporting development of robotics intensively launched, domestication of core components to advanced
○ Changchun Jingkai to see equity transfer publicly, Central China Equity Investment Management continuously increases shareholding in Xinxiang Chemical Fiber
○Jinan Diesel Engine applies to remove mark of "ST", Mergers and reorganization of Miteno Communication Technology and other firms approved
[SSN Focus]
○SOEs reform deepens, mixed-ownership reform to become important breakthrough
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Yunnan Baiyao Holding Company, substantial shareholder of Yunnan Baiyao Group Co., Ltd. (000538.SZ), proposes to introduce NewHuadu Industrial Group Co., Ltd. through capital increase, and the latter will hold 50 percent equities of the company. Yunnan Baiyao Holding therefore initiates tender offer, and the price is set at 64.98 yuan per share. The company claims that the introduction of strategic investor will help the company to further adjust and activate mechanisms and establish market-oriented corporate governance system.
Comment: It is another case of mixed-ownership reform implemented in local state-owned enterprises (SOEs). Research report by GF Securities believes that the Central Economic Work Conference recently highlighted the SOEs reform again and claimed that mixed-ownership reform will become an important breakthrough. It is learnt from the launch and implementation of framework policies that the SOEs reform has deepened. The policies for SOEs released in the second half of 2016 will be continued in 2017. Companies benefiting from mixed-ownership reform include central SOEs first piloting the mixed-ownership reform, small-cap SOEs expecting large room for improvement of fundamentals and listed companies under SOEs that have been approved by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) to pilot mixed-ownership reform.
[SSN Selection]
○The executive meeting of the State Council held on Dec. 28 approved the 13th five-year plan for the education sector, encouraging social forces and private capital to run schools and educational institutions.
○The China Insurance Regulatory Commission (CIRC) raised the threshold for the shareholders of insurance companies and meanwhile decreased the up-limit of equities held by a single shareholder from 51 percent to one third.
○The 13th five-year development plan for e-commerce, jointly released by three departments, proposes that e-commerce should serve both economic growth and social development.
○11 new currencies will be added to the currency basket of the China Foreign Exchange Trade System (CFETS) RMB Index from Jan. 1, 2017. The weight of the US dollar will be decreased from 0.2640 to 0.2240.
○The 13th five-year plan for the medicine circulation industry is released, proposing to advance "Internet plus medicine circulation".
TOP
[Industry Information]
○Policies supporting development of robotics intensively launched, domestication of core components to advanced
------
The Notice on Promoting Healthy Development of the Robotics Industry was jointly released by departments like the Ministry of Industry and Information Technology (MIIT) and the National Development and Reform Commission (NDRC) on Dec. 29. Aiming at problems like low-level repeated construction, the notice proposes to advance rational development of the robotics industry, make greater efforts in key weak areas like components, and strive to foster leading enterprises and etc. The MIIT also released the Standards and Conditions for the Industrial Robotics Industry that day. It is proposed that the annual revenue of industrial robotic body producers should be no less than 50 million yuan or the annual output should be no lower than 2,000 units, and the annual revenue of enterprises engaged in integrated application should be no lower than 100 million yuan.
Comment: The 13th five-year plan for the robotics industry proposes that by 2020, over 50 percent of critical components can be produced by China. Driven by rapidly rising demand of the industry and import substitution, the robotics industry might grow into a market of 100 billion yuan. RV decelerator products produced by Zhejiang Shuanghuan Driveline Co., Ltd. (002472.SZ) are put into small-scale mass production; Estun Automation Co., Ltd. (002747.SZ) is a leading company in the servo system and robotic controller technology.
○Supply tightens, carbon black enterprises mull on new round of price hike
------
Driven by low inventory in the market, carbon black enterprises mull on new round of price hike. The price of carbon black is expected to rise by 500 yuan per ton to 700 yuan per ton, representing a price hike of nearly 10 percent. The price of carbon black has totally surged 40 percent since 2016. Forced by the pressure on environmental protection, main production areas all see reduction of output to varying degrees. At present, carbon black enterprises in provinces like Shanxi and Hebei have lowered their production, further decreasing the supply of carbon black in the market and improving the bargaining power of enterprises.
Comment: According to research report of securities traders, as environmental protection rectification and supply-side reform are proceeding, annual production capacity of carbon black industry is expected to decline by more than 2 percent each year at average. Recently, several tire enterprises announced price hike, which also provides important support for carbon black market. Jiangxi Black Cat Carbon Black Inc., Ltd. (002068.SZ) has capacity with 1.06 million tons of carbon black and its net profit is predicted to increase by 107-154 percent. Longxing Chemical Stock Co., Ltd. (002442.SZ) produced 405,000 tons of carbon black last year, accounting for nearly 10 percent of total output of the whole country. Shanxi Yongdong Chemistry Industry Co., Ltd. (002753.SZ) is advantageous in the whole industrial chain of coal tar and carbon black.
TOP
[Announcement Interpretation]
○Changchun Jingkai to see equity transfer publicly
------
Controlling shareholder of Changchun Jingkai (Group) Co., Ltd. (600215.SH) plans to transfer all of his 21.88 percent shareholding in the company at a price of no less than 10.2 yuan per share through collecting transferees publicly. After the transfer is done, the company's actual controller will be changed.
○Central China Equity Investment Management continuously increases shareholding in Xinxiang Chemical Fiber
------
Central China Equity Investment Management Co., Ltd., a shareholder of Xinxiang Chemical Fiber Co., Ltd. (000949.SZ) holding over 5 percent equity in the company, increased shareholding in the company by 4,040,300 shares at an average price of 6.14-6.17 yuan per share during Dec. 28 and 29, accounting for 0.321 percent of total share capital of the company. By now, it has totally bought 19,320,300 shares of the company since Oct. 18, accounting for 1.54 percent of the company's total share capital.
TOP
○Jinan Diesel Engine applies to remove mark of "ST"
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Jinan Diesel Engine Company Limited (000617.SZ) is expected to turn losses into profits and gain profits of 5 billion to 5.5 billion yuan in 2016 as it has purchased 100 percent equity of China Petroleum Group Capital Co., Ltd. At the same time, it submits application to Shenzhen Stock Exchange proposing to remove the mark of "ST".
○Mergers and reorganization of Miteno Communication Technology and other firms approved
------
Proposal of Beijing Miteno Communication Technology Co., Ltd. (300038.SZ) on buying assets through issuing shares is approved by China Securities Regulatory Commission unconditionally, while those of Pubang Landscape Architecture Co., Ltd. (002663.SZ) and Guangdong Dongfang Precision Science ＆ Technology Co., Ltd. (002611.SZ) are approved with condition.
○Shareholder of Tong Hua Shuang Long Chemical Industry undertakes company's equity at premium
------
Sun Jun, shareholder of Tong Hua Shuang Long Chemical Industry Co., Ltd. (300108.SZ) with shareholding more than 5 percent, undertook 15.5 million shares from Shanghai Sinopharm Equity Investment Fund Partnership at a price of 9.2 yuan per share on Dec. 28, accounting for 2.44 percent of total share capital of the company. The latest stock price of the listed company is 8.92 yuan per share.
○Equity of controlling shareholder of Korla Pear transferred
------
51 percent equity of Xinjiang Chang Yuan Water Group Co., Ltd., indirect controlling shareholder of Xinjiang Korla Pear Co., Ltd. (600506.SH), will be transferred by China Water Group Co., Ltd. to Shenzhen Jianxin Co., Ltd., which won't cause change in the company's actual controller. Information shows that Shenzhen Jianxin is a subsidiary under China Cinda Asset Management Co., Ltd., and its core business is real estate finance and it also operates asset management and capital market business.
[Financial Reports Express]
○2016 profits of Tianyin Electromechanical expected to hike
------
Annual profit of Changshu Tianyin Electromechanical Co., Ltd. (300342.SZ) is expected to hike by 45-55 percent as starter without energy consumption, variable frequency controller and other products of the company see rapid growth in sales and it expands national defense informationization business through mergers and acquisitions.
[Trading Alarms]
○Hailir Pesticides and Chemicals and other two firms to launch IPOs on Dec. 30
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Hailir Pesticides and Chemicals Group Co., Ltd. is going to launch IPO at a price of 24.95 yuan per share with an upper limit of 12,000 shares for each account. It is engaged in pesticide. Nanjing Hicin Pharmaceutical Co., Ltd. is going to launch IPO at a price of 11.11 yuan per share with an upper limit of 12,000 shares for each account. Wuxi Best Precision Mechanism Co., Ltd. is going to launch IPO at a price of 9.59 yuan per share with an upper limit of 15,000 shares for each account. It is engaged in auto parts.
[Publication Suspension]
○Based on the holiday arrangement of Shanghai and Shenzhen stock exchanges, the Earlybird will suspend publication during the New Year's Day holiday and will resume normal on Jan. 2, 2017 Wish investors a happy holiday.
TOP
○SOEs reform deepens, mixed-ownership reform to become important breakthrough
○Policies supporting development of robotics intensively launched, domestication of core components to advanced
○ Changchun Jingkai to see equity transfer publicly, Central China Equity Investment Management continuously increases shareholding in Xinxiang Chemical Fiber
○Jinan Diesel Engine applies to remove mark of "ST", Mergers and reorganization of Miteno Communication Technology and other firms approved
[SSN Focus]
○SOEs reform deepens, mixed-ownership reform to become important breakthrough
------
Yunnan Baiyao Holding Company, substantial shareholder of Yunnan Baiyao Group Co., Ltd. (000538.SZ), proposes to introduce NewHuadu Industrial Group Co., Ltd. through capital increase, and the latter will hold 50 percent equities of the company. Yunnan Baiyao Holding therefore initiates tender offer, and the price is set at 64.98 yuan per share. The company claims that the introduction of strategic investor will help the company to further adjust and activate mechanisms and establish market-oriented corporate governance system.
Comment: It is another case of mixed-ownership reform implemented in local state-owned enterprises (SOEs). Research report by GF Securities believes that the Central Economic Work Conference recently highlighted the SOEs reform again and claimed that mixed-ownership reform will become an important breakthrough. It is learnt from the launch and implementation of framework policies that the SOEs reform has deepened. The policies for SOEs released in the second half of 2016 will be continued in 2017. Companies benefiting from mixed-ownership reform include central SOEs first piloting the mixed-ownership reform, small-cap SOEs expecting large room for improvement of fundamentals and listed companies under SOEs that have been approved by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) to pilot mixed-ownership reform.
[SSN Selection]
○The executive meeting of the State Council held on Dec. 28 approved the 13th five-year plan for the education sector, encouraging social forces and private capital to run schools and educational institutions.
○The China Insurance Regulatory Commission (CIRC) raised the threshold for the shareholders of insurance companies and meanwhile decreased the up-limit of equities held by a single shareholder from 51 percent to one third.
○The 13th five-year development plan for e-commerce, jointly released by three departments, proposes that e-commerce should serve both economic growth and social development.
○11 new currencies will be added to the currency basket of the China Foreign Exchange Trade System (CFETS) RMB Index from Jan. 1, 2017. The weight of the US dollar will be decreased from 0.2640 to 0.2240.
○The 13th five-year plan for the medicine circulation industry is released, proposing to advance "Internet plus medicine circulation".
TOP
[Industry Information]
○Policies supporting development of robotics intensively launched, domestication of core components to advanced
------
The Notice on Promoting Healthy Development of the Robotics Industry was jointly released by departments like the Ministry of Industry and Information Technology (MIIT) and the National Development and Reform Commission (NDRC) on Dec. 29. Aiming at problems like low-level repeated construction, the notice proposes to advance rational development of the robotics industry, make greater efforts in key weak areas like components, and strive to foster leading enterprises and etc. The MIIT also released the Standards and Conditions for the Industrial Robotics Industry that day. It is proposed that the annual revenue of industrial robotic body producers should be no less than 50 million yuan or the annual output should be no lower than 2,000 units, and the annual revenue of enterprises engaged in integrated application should be no lower than 100 million yuan.
Comment: The 13th five-year plan for the robotics industry proposes that by 2020, over 50 percent of critical components can be produced by China. Driven by rapidly rising demand of the industry and import substitution, the robotics industry might grow into a market of 100 billion yuan. RV decelerator products produced by Zhejiang Shuanghuan Driveline Co., Ltd. (002472.SZ) are put into small-scale mass production; Estun Automation Co., Ltd. (002747.SZ) is a leading company in the servo system and robotic controller technology.
○Supply tightens, carbon black enterprises mull on new round of price hike
------
Driven by low inventory in the market, carbon black enterprises mull on new round of price hike. The price of carbon black is expected to rise by 500 yuan per ton to 700 yuan per ton, representing a price hike of nearly 10 percent. The price of carbon black has totally surged 40 percent since 2016. Forced by the pressure on environmental protection, main production areas all see reduction of output to varying degrees. At present, carbon black enterprises in provinces like Shanxi and Hebei have lowered their production, further decreasing the supply of carbon black in the market and improving the bargaining power of enterprises.
Comment: According to research report of securities traders, as environmental protection rectification and supply-side reform are proceeding, annual production capacity of carbon black industry is expected to decline by more than 2 percent each year at average. Recently, several tire enterprises announced price hike, which also provides important support for carbon black market. Jiangxi Black Cat Carbon Black Inc., Ltd. (002068.SZ) has capacity with 1.06 million tons of carbon black and its net profit is predicted to increase by 107-154 percent. Longxing Chemical Stock Co., Ltd. (002442.SZ) produced 405,000 tons of carbon black last year, accounting for nearly 10 percent of total output of the whole country. Shanxi Yongdong Chemistry Industry Co., Ltd. (002753.SZ) is advantageous in the whole industrial chain of coal tar and carbon black.
TOP
[Announcement Interpretation]
○Changchun Jingkai to see equity transfer publicly
------
Controlling shareholder of Changchun Jingkai (Group) Co., Ltd. (600215.SH) plans to transfer all of his 21.88 percent shareholding in the company at a price of no less than 10.2 yuan per share through collecting transferees publicly. After the transfer is done, the company's actual controller will be changed.
○Central China Equity Investment Management continuously increases shareholding in Xinxiang Chemical Fiber
------
Central China Equity Investment Management Co., Ltd., a shareholder of Xinxiang Chemical Fiber Co., Ltd. (000949.SZ) holding over 5 percent equity in the company, increased shareholding in the company by 4,040,300 shares at an average price of 6.14-6.17 yuan per share during Dec. 28 and 29, accounting for 0.321 percent of total share capital of the company. By now, it has totally bought 19,320,300 shares of the company since Oct. 18, accounting for 1.54 percent of the company's total share capital.
TOP
○Jinan Diesel Engine applies to remove mark of "ST"
------
Jinan Diesel Engine Company Limited (000617.SZ) is expected to turn losses into profits and gain profits of 5 billion to 5.5 billion yuan in 2016 as it has purchased 100 percent equity of China Petroleum Group Capital Co., Ltd. At the same time, it submits application to Shenzhen Stock Exchange proposing to remove the mark of "ST".
○Mergers and reorganization of Miteno Communication Technology and other firms approved
------
Proposal of Beijing Miteno Communication Technology Co., Ltd. (300038.SZ) on buying assets through issuing shares is approved by China Securities Regulatory Commission unconditionally, while those of Pubang Landscape Architecture Co., Ltd. (002663.SZ) and Guangdong Dongfang Precision Science ＆ Technology Co., Ltd. (002611.SZ) are approved with condition.
○Shareholder of Tong Hua Shuang Long Chemical Industry undertakes company's equity at premium
------
Sun Jun, shareholder of Tong Hua Shuang Long Chemical Industry Co., Ltd. (300108.SZ) with shareholding more than 5 percent, undertook 15.5 million shares from Shanghai Sinopharm Equity Investment Fund Partnership at a price of 9.2 yuan per share on Dec. 28, accounting for 2.44 percent of total share capital of the company. The latest stock price of the listed company is 8.92 yuan per share.
○Equity of controlling shareholder of Korla Pear transferred
------
51 percent equity of Xinjiang Chang Yuan Water Group Co., Ltd., indirect controlling shareholder of Xinjiang Korla Pear Co., Ltd. (600506.SH), will be transferred by China Water Group Co., Ltd. to Shenzhen Jianxin Co., Ltd., which won't cause change in the company's actual controller. Information shows that Shenzhen Jianxin is a subsidiary under China Cinda Asset Management Co., Ltd., and its core business is real estate finance and it also operates asset management and capital market business.
[Financial Reports Express]
○2016 profits of Tianyin Electromechanical expected to hike
------
Annual profit of Changshu Tianyin Electromechanical Co., Ltd. (300342.SZ) is expected to hike by 45-55 percent as starter without energy consumption, variable frequency controller and other products of the company see rapid growth in sales and it expands national defense informationization business through mergers and acquisitions.
[Trading Alarms]
○Hailir Pesticides and Chemicals and other two firms to launch IPOs on Dec. 30
------
Hailir Pesticides and Chemicals Group Co., Ltd. is going to launch IPO at a price of 24.95 yuan per share with an upper limit of 12,000 shares for each account. It is engaged in pesticide. Nanjing Hicin Pharmaceutical Co., Ltd. is going to launch IPO at a price of 11.11 yuan per share with an upper limit of 12,000 shares for each account. Wuxi Best Precision Mechanism Co., Ltd. is going to launch IPO at a price of 9.59 yuan per share with an upper limit of 15,000 shares for each account. It is engaged in auto parts.
[Publication Suspension]
○Based on the holiday arrangement of Shanghai and Shenzhen stock exchanges, the Earlybird will suspend publication during the New Year's Day holiday and will resume normal on Jan. 2, 2017 Wish investors a happy holiday.
TOP
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