[Today's Guide]
○ Rural collective assets reform to advance, land resources to catch more attention
○ Price of soda ash raised in some places, output cut expectations boost oil prices
○ Jilin Forest Industry to invest in mineral water and landscaping, Boyun New Materials to acquire Youfin Auto Parts
○ Ruifeng Chemical to acquire Heshili New Material, Zhongyuan Special Steel revises earnings forecasts higher and applies to remove "Special Treatment"
[SSN Focus]
○ Rural collective assets reform to advance, land resources to catch more attention
------
China will strive to complete the verification of all collective assets and improve the book account management system in about three years from 2017, indicated Han Changfu, head of the Ministry of Agriculture, at a press conference held on Jan. 3. It will quantize operating assets to all members in the form of shares and advance the shareholding reform of operating assets in an orderly way and strive to complete the reform on the whole in about five years. Statistics show that the land and other resources assets currently collectively owned in rural areas are 6.69 billion mu with a carrying value of 2.86 trillion yuan.
Comment: The reform of the collective property system in rural areas is a significant reform covering long terms and the overall situation. Huatai Securities Co., Ltd. (601688.SH) believes that the reform will turn farmers into shareholders through the quantization of collective assets in rural areas and will promote the transfer of operating rights. It is rosy about agricultural and forestry subjects with huge land resources.
[SSN Selection]
○ The Food Safety Commission of the State Council held the fourth meeting on Jan. 3, proposing to release and implement the national food safety planning during the 13th Five-year Plan period.
○ The General Office of the State Council released the plan on implementing the system on the extension of the manufacturers' responsibilities, proposing to establish a system for the recycling of power batteries for electric vehicles.
○ China Railway held a work conference on Jan. 3, proposing to promote the capitalized operation of railway assets and the mixed ownership reform.
○ It is decided by the authorities that stricter differential electricity price policies will be implemented in the iron ＆ steel industry from Jan. 1 so as to facilitate the supply-side structural reform.
○ The securities margin witnessed a net outflow of 44.4 billion yuan in the week before the New Year, apparently lower than it was in the same period of previous two years.
○ China's central bank conducted a net withdraw of 155 billion yuan in the open market on Jan. 3. Market participants still expect a tight balance of capital supply in the market in January.
TOP
[Industry Information]
○ Price of soda ash raised in some places, supply-demand structure to improve
------
According to Baiinfo.com Inc., some places saw price hike of soda ash on Jan. 3. The price of soda ash dense was raised by 175 yuan per ton, or 8.5 percent, in Jiangsu province; North China and Central China experienced a price hike of 50 yuan per ton and 25 yuan per ton, respectively. At present, Tianjin Bohai Chemical Industry Group Co., Ltd., Guangdong Nanfang Soda Ash Industrial Co., Ltd. and the two big soda producers in Henan province have not completely resumed production yet, and the supply-demand structure will gradually improve along with the resumption of production in the soda producers.
Comment: Research reports by institutions claim that for the demand side of soda ash, the completed floor space of the real estate industry in 2017 will see significant growth from last year and boost the demand on glass for building purposes. Meanwhile, the depreciation of RMB will boost the development of the printing and dyeing industry. For the supply side, outdated capacity moved faster in obsoleting in 2016, while time is required for new capacity to be added. Therefore, the price of soda ash will be higher than that of 2016. The soda ash business constitutes a large part of the business under Shandong Haihua Company Limited (000822.SZ) and Tangshan Sanyou Chemical Industries Co., Ltd. (600409.SH).
○ Oil prices hit over-one-year high as output cut expectations boost confidence
------
As of the press time on Jan. 1 evening, major crude contracts in the US market rose over 2 percent to its more-than-one-year high of 55.24 US dollars a barrel. Brent major crude contracts also hit its more-than-one-year high of 58.37 US dollars a barrel. Kuweit Petroleum Corporation CEO recently noted that Kuweit will close 80-90 oil wellsand cut 130,000 bpd to 2,750,000 bpd from Jan. 2017 according to the production cut deal reached before.
Comment: According to research report, if oil prices continue to rise in a moderate pace, oil refiners will gain stable profit. When oil prices come to neutral zone, ethylene will make good profit. In addition, high crude oil prices will boost the price of dacron. Currently, as the price of PTA and other raw materials of dacron remains stable, it will improve the profitability of the entire dacron industry.
TOP
[Announcement Interpretation]
○ Jilin Forest Industry to acquire mineral water and landscaping assets for RMB1.686 bln.
------
Jilin Forest Industry Co., Ltd. (600189.SH) plans to respectively acquire 75.45 percent equities in New Quanyangquan Mineral Water Co., Ltd. and 100 percent equities in Suzhou Yuanqu Yuanlin Landscaping Co., Ltd. for 884 million yuan and 802 million yuan by issuing additional shares at 10.14 yuan per share. Meanwhile, it will raise 820 million yuan supportive funds by issuing additional shares to at 10.09 yuan per share.
New Quanyangquan Mineral Water is mainly engaged in mineral water; while Yuanqu Yuanlin Landscaping is mainly gaged in landscaping. According to performance commitment, the net profit of New Quanyangquan Mineral Water from 2016 to 2019 should reach 78,804,600 yuan, 83,956,500 yuan, 98,465,200 yuan and 110,687,600 yuan, respectively. The net profit of Yuanqu Yuanlin Landscaping after deducting non-currency gains and losses from 2017 to 2019 should be no less than 75 million yuan, 105 million yuan and 150 million yuan, respectively.
○ Boyun New Materials to acquire Youfin Auto Parts to expand major business
------
Hunan Boyun New Materials Co., Ltd. (002297.SZ) plans to acquire 100 percent equity of Wuhan Youfin Auto Parts Co., Ltd. at 600 million yuan by issuing shares at a price of 10.44 yuan per share through private placement and paying in cash. It will also raise 309 million yuan by issuing shares at the same price through private placement. Youfin Auto Parts is engaged in automobile disk brake, which is quite matching with business of Boyun New Materials. It promises that net profits of Youfin Auto Parts will be 50 million yuan, 60 million yuan and 70 million yuan during 2017 and 2019 respectively. In order to further consolidate its controlling position, its largest shareholder Powder Metallurgy Research Institute of Central South University signed concerted action agreement with Hunan Daboyun Investment Partnership; hence it totally holds 26.60 percent equity in the company.
TOP
○ Ruifeng Chemical to acquire Heshili New Material at RMB800 mln to develop in new material industry
------
Shandong Ruifeng Chemical Co., Ltd. (300243.SZ) plans acquire 99.88 percent equity of Jiangsu Heshili New Material Co., Ltd. at 799 million yuan by issuing shares at a price of 13.60 yuan per share through private placement and paying in cash, and intends to raise supporting funds of 389 million yuan by issuing shares at a price of 13.7 yuan per share through private placement to its actual controller Zhou Shibin and others. Main products of Heshili New Material include chemical fiber and resin. The counterparty promises that net profit of Heshili New Material won't be less than 50 million yuan, 65 million yuan and 78 million yuan during 2016 and 2018 respectively.
○ Sinomine Resource Exploration Co., Ltd. (002738.SZ) signed the contract for military camp and regional headquarter financing, design and construction project for the Seventh Regiment of Zambia land force with the Ministry of Defence of Zambia. The contract sum is 247 million U.S. dollars, representing 165 percent of the company's operational revenue in 2015.
○ Meihua Holdings launches ESOP and forecasts growth in annual report
------
Meihua Holdings Group Co., Ltd. (600873.SH) launches the first phase of employee stock-ownership plan (ESOP) for 2017, to raise fund up to 200 million yuan. The lockup period is 12 months. The company forecasts 120 percent to 150 percent growth in the annual report, primarily due to the reduction of purchase price of corn.
[Financial Reports Express]
○ Zhongyuan Special Steel revises earnings forecasts higher and applies to remove "Special Treatment"
------
Zhongyuan Special Steel Co., Ltd. (002423.SZ) released an announcement to revise its performance. As the company received government grants of 57.98 million yuan in the fourth quarter of 2016, and obtained earnings of 67,377,500 yuan by transferring part of equities of China South Industries Group Finance Co., ltd. held by it, its performance beats the previous expectation of losses of 100 million yuan to 120 million yuan and records profit of 4 million yuan to 10 million yuan for 2016. The company applies to remove delisting risk warning.
○ Ceepower announces growth forecast
------
Ceepower Co., Ltd. (300062.SZ) announces growth forecast of 270 percent to 300 percent in annual report, mainly due to rapid growth of power distribution business.
○ Board of directors under Shanghai Beite Technology Co., Ltd. (603009.SH) approves a preplan of a 15-for-10 conversion of capital surplus into shares according to its annual report.
○ Shanghai Pudong Development Bank Co., Ltd. (600000.SH) is the first mover as a listed bank to release A-share financial report for 2016, and it has realized the annual net profit of 53,099 million yuan, up 4.93 percent year on year.
[Trading Alarms]
○ IPOs of Huali Industries, Suplet Power and Jianglong Shipbuilding on Jan. 4
------
Huali Industries Co., Ltd. (732038.SH) is mainly engaged in edge banking composite materials for decoration, with offering price of 23.26 yuan per share and upper subscription limit of 16,000 shares; 6.53 yuan per share and 11,500 shares for Suplet Power Co., Ltd. (300593.SZ) mainly engaged in power supply products; 6.34 yuan per share and 8,500 shares for Jianglong Shipbuilding Co., Ltd. (300589.SZ) mainly engaged in ships and boats for official affairs and touring.
TOP
○ Rural collective assets reform to advance, land resources to catch more attention
○ Price of soda ash raised in some places, output cut expectations boost oil prices
○ Jilin Forest Industry to invest in mineral water and landscaping, Boyun New Materials to acquire Youfin Auto Parts
○ Ruifeng Chemical to acquire Heshili New Material, Zhongyuan Special Steel revises earnings forecasts higher and applies to remove "Special Treatment"
[SSN Focus]
○ Rural collective assets reform to advance, land resources to catch more attention
------
China will strive to complete the verification of all collective assets and improve the book account management system in about three years from 2017, indicated Han Changfu, head of the Ministry of Agriculture, at a press conference held on Jan. 3. It will quantize operating assets to all members in the form of shares and advance the shareholding reform of operating assets in an orderly way and strive to complete the reform on the whole in about five years. Statistics show that the land and other resources assets currently collectively owned in rural areas are 6.69 billion mu with a carrying value of 2.86 trillion yuan.
Comment: The reform of the collective property system in rural areas is a significant reform covering long terms and the overall situation. Huatai Securities Co., Ltd. (601688.SH) believes that the reform will turn farmers into shareholders through the quantization of collective assets in rural areas and will promote the transfer of operating rights. It is rosy about agricultural and forestry subjects with huge land resources.
[SSN Selection]
○ The Food Safety Commission of the State Council held the fourth meeting on Jan. 3, proposing to release and implement the national food safety planning during the 13th Five-year Plan period.
○ The General Office of the State Council released the plan on implementing the system on the extension of the manufacturers' responsibilities, proposing to establish a system for the recycling of power batteries for electric vehicles.
○ China Railway held a work conference on Jan. 3, proposing to promote the capitalized operation of railway assets and the mixed ownership reform.
○ It is decided by the authorities that stricter differential electricity price policies will be implemented in the iron ＆ steel industry from Jan. 1 so as to facilitate the supply-side structural reform.
○ The securities margin witnessed a net outflow of 44.4 billion yuan in the week before the New Year, apparently lower than it was in the same period of previous two years.
○ China's central bank conducted a net withdraw of 155 billion yuan in the open market on Jan. 3. Market participants still expect a tight balance of capital supply in the market in January.
TOP
[Industry Information]
○ Price of soda ash raised in some places, supply-demand structure to improve
------
According to Baiinfo.com Inc., some places saw price hike of soda ash on Jan. 3. The price of soda ash dense was raised by 175 yuan per ton, or 8.5 percent, in Jiangsu province; North China and Central China experienced a price hike of 50 yuan per ton and 25 yuan per ton, respectively. At present, Tianjin Bohai Chemical Industry Group Co., Ltd., Guangdong Nanfang Soda Ash Industrial Co., Ltd. and the two big soda producers in Henan province have not completely resumed production yet, and the supply-demand structure will gradually improve along with the resumption of production in the soda producers.
Comment: Research reports by institutions claim that for the demand side of soda ash, the completed floor space of the real estate industry in 2017 will see significant growth from last year and boost the demand on glass for building purposes. Meanwhile, the depreciation of RMB will boost the development of the printing and dyeing industry. For the supply side, outdated capacity moved faster in obsoleting in 2016, while time is required for new capacity to be added. Therefore, the price of soda ash will be higher than that of 2016. The soda ash business constitutes a large part of the business under Shandong Haihua Company Limited (000822.SZ) and Tangshan Sanyou Chemical Industries Co., Ltd. (600409.SH).
○ Oil prices hit over-one-year high as output cut expectations boost confidence
------
As of the press time on Jan. 1 evening, major crude contracts in the US market rose over 2 percent to its more-than-one-year high of 55.24 US dollars a barrel. Brent major crude contracts also hit its more-than-one-year high of 58.37 US dollars a barrel. Kuweit Petroleum Corporation CEO recently noted that Kuweit will close 80-90 oil wellsand cut 130,000 bpd to 2,750,000 bpd from Jan. 2017 according to the production cut deal reached before.
Comment: According to research report, if oil prices continue to rise in a moderate pace, oil refiners will gain stable profit. When oil prices come to neutral zone, ethylene will make good profit. In addition, high crude oil prices will boost the price of dacron. Currently, as the price of PTA and other raw materials of dacron remains stable, it will improve the profitability of the entire dacron industry.
TOP
[Announcement Interpretation]
○ Jilin Forest Industry to acquire mineral water and landscaping assets for RMB1.686 bln.
------
Jilin Forest Industry Co., Ltd. (600189.SH) plans to respectively acquire 75.45 percent equities in New Quanyangquan Mineral Water Co., Ltd. and 100 percent equities in Suzhou Yuanqu Yuanlin Landscaping Co., Ltd. for 884 million yuan and 802 million yuan by issuing additional shares at 10.14 yuan per share. Meanwhile, it will raise 820 million yuan supportive funds by issuing additional shares to at 10.09 yuan per share.
New Quanyangquan Mineral Water is mainly engaged in mineral water; while Yuanqu Yuanlin Landscaping is mainly gaged in landscaping. According to performance commitment, the net profit of New Quanyangquan Mineral Water from 2016 to 2019 should reach 78,804,600 yuan, 83,956,500 yuan, 98,465,200 yuan and 110,687,600 yuan, respectively. The net profit of Yuanqu Yuanlin Landscaping after deducting non-currency gains and losses from 2017 to 2019 should be no less than 75 million yuan, 105 million yuan and 150 million yuan, respectively.
○ Boyun New Materials to acquire Youfin Auto Parts to expand major business
------
Hunan Boyun New Materials Co., Ltd. (002297.SZ) plans to acquire 100 percent equity of Wuhan Youfin Auto Parts Co., Ltd. at 600 million yuan by issuing shares at a price of 10.44 yuan per share through private placement and paying in cash. It will also raise 309 million yuan by issuing shares at the same price through private placement. Youfin Auto Parts is engaged in automobile disk brake, which is quite matching with business of Boyun New Materials. It promises that net profits of Youfin Auto Parts will be 50 million yuan, 60 million yuan and 70 million yuan during 2017 and 2019 respectively. In order to further consolidate its controlling position, its largest shareholder Powder Metallurgy Research Institute of Central South University signed concerted action agreement with Hunan Daboyun Investment Partnership; hence it totally holds 26.60 percent equity in the company.
TOP
○ Ruifeng Chemical to acquire Heshili New Material at RMB800 mln to develop in new material industry
------
Shandong Ruifeng Chemical Co., Ltd. (300243.SZ) plans acquire 99.88 percent equity of Jiangsu Heshili New Material Co., Ltd. at 799 million yuan by issuing shares at a price of 13.60 yuan per share through private placement and paying in cash, and intends to raise supporting funds of 389 million yuan by issuing shares at a price of 13.7 yuan per share through private placement to its actual controller Zhou Shibin and others. Main products of Heshili New Material include chemical fiber and resin. The counterparty promises that net profit of Heshili New Material won't be less than 50 million yuan, 65 million yuan and 78 million yuan during 2016 and 2018 respectively.
○ Sinomine Resource Exploration Co., Ltd. (002738.SZ) signed the contract for military camp and regional headquarter financing, design and construction project for the Seventh Regiment of Zambia land force with the Ministry of Defence of Zambia. The contract sum is 247 million U.S. dollars, representing 165 percent of the company's operational revenue in 2015.
○ Meihua Holdings launches ESOP and forecasts growth in annual report
------
Meihua Holdings Group Co., Ltd. (600873.SH) launches the first phase of employee stock-ownership plan (ESOP) for 2017, to raise fund up to 200 million yuan. The lockup period is 12 months. The company forecasts 120 percent to 150 percent growth in the annual report, primarily due to the reduction of purchase price of corn.
[Financial Reports Express]
○ Zhongyuan Special Steel revises earnings forecasts higher and applies to remove "Special Treatment"
------
Zhongyuan Special Steel Co., Ltd. (002423.SZ) released an announcement to revise its performance. As the company received government grants of 57.98 million yuan in the fourth quarter of 2016, and obtained earnings of 67,377,500 yuan by transferring part of equities of China South Industries Group Finance Co., ltd. held by it, its performance beats the previous expectation of losses of 100 million yuan to 120 million yuan and records profit of 4 million yuan to 10 million yuan for 2016. The company applies to remove delisting risk warning.
○ Ceepower announces growth forecast
------
Ceepower Co., Ltd. (300062.SZ) announces growth forecast of 270 percent to 300 percent in annual report, mainly due to rapid growth of power distribution business.
○ Board of directors under Shanghai Beite Technology Co., Ltd. (603009.SH) approves a preplan of a 15-for-10 conversion of capital surplus into shares according to its annual report.
○ Shanghai Pudong Development Bank Co., Ltd. (600000.SH) is the first mover as a listed bank to release A-share financial report for 2016, and it has realized the annual net profit of 53,099 million yuan, up 4.93 percent year on year.
[Trading Alarms]
○ IPOs of Huali Industries, Suplet Power and Jianglong Shipbuilding on Jan. 4
------
Huali Industries Co., Ltd. (732038.SH) is mainly engaged in edge banking composite materials for decoration, with offering price of 23.26 yuan per share and upper subscription limit of 16,000 shares; 6.53 yuan per share and 11,500 shares for Suplet Power Co., Ltd. (300593.SZ) mainly engaged in power supply products; 6.34 yuan per share and 8,500 shares for Jianglong Shipbuilding Co., Ltd. (300589.SZ) mainly engaged in ships and boats for official affairs and touring.
TOP
Latest comments