[Today's Guide]
○ Power transmission and distribution to set price independently, power reform makes key progress
○ Go account "Master" wins 56 games, penetration rate of AI to improve
○ Lithium carbonate prices on restrictions of lithium extraction in winter
○ Wanfang Aluminum Manufacturing bought by Jaiyi Investment to 5 pct again through secondary market acquisition, Hongbaoli wholly controls Xionglin New Material Technology
[SSN Focus]
○ Power transmission and distribution to set price independently, power reform makes key progress
------
The National Development and Reform Commission (NDRC) indicated on Jan. 4 that it has issued the method on the pricing of power transmission and distribution across provincial grids (for trial implementation). It is the first pricing method on the power monopoly industry in China. In addition, based on the coal-power linkage mechanism, the benchmark on-grid price of electricity generated by coal-fired plants will remain unchanged this year.
Comment: The introduction of the method and the method on review of power transmission and distribution pricing cost marks that China has preliminarily established a scientific, standard and transparent regulatory framework on the on-grid power transmission and distribution, which laid solid foundation for the institutional regulation on on-grid enterprises and the development of the power market in the future. Institutes are bullish about power companies with local grid assets and power equipment companies under transformation. For power consumers in the downstream, the reform will significantly reduce their electricity fees, which account for nearly half of the cost of the electrolytic aluminium industry.
[SSN Selection]
○ By the time the news was released, offshore RMB hiked 0.8 percent against the US dollar, the highest single-day appreciation since January 2016.
○ The executive meeting of the State Council held on Jan. 4 approved the 13th five-year plan for market supervision, and made arrangement for the innovation of government management and the improvement of governmental service.
○ The management methods over the development and construction of offshore wind power were released recently, encouraging scale development and construction of offshore wind power projects.
○ Chinese bike-sharing startup Mobike announced on Jan. 4 that it has raised 215 million US dollars in a new round of equity financing. The company will move faster in its expansion in China and the overseas.
○ Bitcoin sees a price hike over 12 percent after the New Year. Analysts hold that it is because block chain technology is further accepted.
TOP
[Industry Information]
○ Go account "Master" wins 56 games, penetration rate of AI to improve
------
A mysterious account named as "Master" beat elite Go players like Nie Weiping, Chen Yaoye and Zhao Hanchen on Jan. 4. From Dec. 29 to date, Master has won 56 games against human players. It is widely believed in the Go circle that Master is an artificial intelligent Go player similar to Alpha Go developed by Google. Last March, Google's AlphaGo scored 4-1 against South Korean Go player Lee Se-dol.
Comment: Master's continuously beating of human being players demonstrates the strong learning and computing capability of artificial intelligence (AI). Institutes points out that AI can make intelligent decisions based on deep learning. Scenes with great number of data and clear feedback mechanism will take the initiative to carry forward intelligentialization. Currently, security, game, marketing and other industries in relation to voice and vision have opportunities to improve the penetration rate of AI. Among listed companies, Wisesoft Co., Ltd. (002253.SZ) developed China's first 3D face recognition system. Suzhou SLAC Precision Equipment Co., Ltd. (300382.SZ) and Shenzhen JT Automation Equipment Co., Ltd. (300400.SZ) made investment in robot visual intelligent detection.
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○ Lithium carbonate prices on restrictions of lithium extraction in winter
------
Data from www.sunsirs.com shows that lithium carbonate prices rise slightly by about 500 yuan on Jan. 4. Blossom Lithium Industrial (Sichuan) Limited lifted the price of its industrial lithium carbonate to 121,000 yuan a tonne and its battery carbonate to 136,000 yuan a tonne. Sichuan State Lithium Co., Ltd. lifted the price of its industrial lithium carbonate to 119,000 yuan a tonne and its battery carbonate to 134,000 yuan a tonne. It is learnt that as extraction of lithium is restricted in the winter, lithium supply has decreased slightly. Currently, most major manufacturers see their orders arrange around the Spring Festival. Supply in the spot market is tight. The average price of lithium carbonate has risen nearly 3 percent since the fourth quarter last year.
Comment: Recently, policies including new energy vehicle promotion category, subsidy for enterprises and adjustment on fiscal subsidy are intensively launched. Institutions think that this round of policy adjustment will allow subsidy for passenger vehicle to cover battery cost and earnings of automakers producing electric vehicles will still be better than that of the competitively traditional passenger vehicle market. It is predicted that the volume of new energy passenger vehicles will reach 100,000 units to 200,000 units; that of passenger vehicles may grow by about 40 percent to 450,000 units; and that of special vehicles is expected to be about 150,000 units this year, which will boost demand for lithium carbonate.
TOP
[Announcement Interpretation]
○ Hongbaoli wholly controls Xionglin New Material Technology to be domestic TPU membrane tycoon
------
Hongbaoli Group Corporation, Ltd. (002165.SZ) plans to acquire 88 percent equity of Dongguan Xionglin New Material Technology Co., Ltd. at 640 million yuan by issuing shares at a price of 7.69 yuan per share through private placement and paying in cash. In addition, it will raise no more than 332 million yuan by issuing 43.16 million shares at most at a price of 7.69 yuan per share at least through private placement.
Xionglin New Material Technology is a tycoon in membrane products for thermoplastic polyurethanes (TPU) in China. This transaction will make Hongbaoli directly and indirectly hold 100 percent equity in Xionglin New Material Technology. The counterparty promises that net profit after tax of Xionglin New Material Technology won't be less than 48 million yuan, 60 million yuan and 69 million yuan during 2017 and 2019 respectively. Net profit of Hongbaoli recorded 74.5 million yuan during Jan.-Sept. 2016.
○ Wanfang Aluminum Manufacturing bought by Jaiyi Investment to 5 pct again through secondary market acquisition
------
Jiayi Investment from Dec. 30, 2016 to Jan. 4, 2017 bought in 59.61 million shares of Jiaozuo Wanfang Aluminum Manufacturing Co., Ltd. (000612.SH) through secondary market acquisition. It holds in total 119 million shares (representing 10 percent of the total share capital) of the company. Jiayi Investment is the controlling shareholder of CRED Holding Co., Ltd. (600890.SH). It will likely continue to increase shareholding in the company in the future.
Hangzhou Jintou Jinzhou Investment Partnership (LLP) is the largest shareholder of Jiaozuo Wanfang Aluminum Manufacturing, holding 15.96 percent equities of the company. Geo-jade Petroleum Corporation (600759.SH) is the second largest shareholder of the company, and it plans to transfer 8.77 percent equities of the company by it. Jiayi Investment's acquisition on the secondary market has already threatened the controlling status of Jintou Jinzhong.
○ Keda Clean Energy to increase investment in lithium battery with RMB473 mln
------
Keda Clean Energy Co., Ltd. (600499.SH) has bought 62 percent equities of Qinghai Fozhao Lithium Co., Ltd. and 53.62 percent equities and Qinghai Weili New Energy Material Co., Ltd. respectively with self-owned capitals of 309 million yuan and 164 million yuan. The main assets of the above two subject companies are equity investment in Qinghai Saltlake Fozhao Lake Lithium Co., Ltd. Therefore, Keda Clean Energy indirectly holds 27.69 percent equities of Qinghai Saltlake Fozhao Lake Lithium. Qinghai Saltlake Fozhao Lake Lithium primarily sells lithium carbonate extracted from the salt lake brine of Qarhan Salt Lake in Qinghai Province.
○ Zhangzhou Development conducts private placement with nearly 10 pct premium to offering price
------
Fujian Zhangzhou Development Co., Ltd. (000753.SZ) has successfully raised 600 million yuan through private placement of 107 million shares at 5.59 yuan per share. Its controlling shareholder Fujian Zhanglong Group and partner Beijing Originwater Technology Co., Ltd. (300070.SZ) carry out subscription with 400 million yuan and 200 million yuan respectively, and this part of shares will be locked up in next 36 months. Its stock price was 5.07 yuan at the closing of Jan. 4, 10 percent lower than the offering price.
○ The restructuring of Wuhan P＆S Information Technology Co., Ltd. (300184.SZ) has been unconditionally approved by China Securities Regulatory Commission, with that of Tongfu Microelectronics Co., Ltd. (002156.SZ) conditionally approved.
[Financial Reports Express]
○ Jiangsu Changjiang Electronics Technology Co., Ltd. (600584.SH) announces growth forecast of 90 percent to 120 percent in its annual report, mainly due to a number of orders.
[Trading Alarms]
○ IPOs of Tianma Science and Technology Group, Rongsheng Environmental Protection Paper and Xianglu Tungsten on Jan. 5
------
Fujian Tianma Science and Technology Group Co., Ltd. (732668.SH) is mainly engaged in special aquatic feeds, with offering price of 6.21 yuan per share and upper subscription limit of 21,000 shares; recycled packaging paper, 10.44 yuan per share and 12,000 shares for Zhejiang Rongsheng Environmental Protection Paper Co., Ltd. (732165.SH); wolfram-based products, 11.42 yuan per share and 10,000 shares for Guangdong Xianglu Tungsten Co., Ltd. (002842.SZ).
TOP
○ Power transmission and distribution to set price independently, power reform makes key progress
○ Go account "Master" wins 56 games, penetration rate of AI to improve
○ Lithium carbonate prices on restrictions of lithium extraction in winter
○ Wanfang Aluminum Manufacturing bought by Jaiyi Investment to 5 pct again through secondary market acquisition, Hongbaoli wholly controls Xionglin New Material Technology
[SSN Focus]
○ Power transmission and distribution to set price independently, power reform makes key progress
------
The National Development and Reform Commission (NDRC) indicated on Jan. 4 that it has issued the method on the pricing of power transmission and distribution across provincial grids (for trial implementation). It is the first pricing method on the power monopoly industry in China. In addition, based on the coal-power linkage mechanism, the benchmark on-grid price of electricity generated by coal-fired plants will remain unchanged this year.
Comment: The introduction of the method and the method on review of power transmission and distribution pricing cost marks that China has preliminarily established a scientific, standard and transparent regulatory framework on the on-grid power transmission and distribution, which laid solid foundation for the institutional regulation on on-grid enterprises and the development of the power market in the future. Institutes are bullish about power companies with local grid assets and power equipment companies under transformation. For power consumers in the downstream, the reform will significantly reduce their electricity fees, which account for nearly half of the cost of the electrolytic aluminium industry.
[SSN Selection]
○ By the time the news was released, offshore RMB hiked 0.8 percent against the US dollar, the highest single-day appreciation since January 2016.
○ The executive meeting of the State Council held on Jan. 4 approved the 13th five-year plan for market supervision, and made arrangement for the innovation of government management and the improvement of governmental service.
○ The management methods over the development and construction of offshore wind power were released recently, encouraging scale development and construction of offshore wind power projects.
○ Chinese bike-sharing startup Mobike announced on Jan. 4 that it has raised 215 million US dollars in a new round of equity financing. The company will move faster in its expansion in China and the overseas.
○ Bitcoin sees a price hike over 12 percent after the New Year. Analysts hold that it is because block chain technology is further accepted.
TOP
[Industry Information]
○ Go account "Master" wins 56 games, penetration rate of AI to improve
------
A mysterious account named as "Master" beat elite Go players like Nie Weiping, Chen Yaoye and Zhao Hanchen on Jan. 4. From Dec. 29 to date, Master has won 56 games against human players. It is widely believed in the Go circle that Master is an artificial intelligent Go player similar to Alpha Go developed by Google. Last March, Google's AlphaGo scored 4-1 against South Korean Go player Lee Se-dol.
Comment: Master's continuously beating of human being players demonstrates the strong learning and computing capability of artificial intelligence (AI). Institutes points out that AI can make intelligent decisions based on deep learning. Scenes with great number of data and clear feedback mechanism will take the initiative to carry forward intelligentialization. Currently, security, game, marketing and other industries in relation to voice and vision have opportunities to improve the penetration rate of AI. Among listed companies, Wisesoft Co., Ltd. (002253.SZ) developed China's first 3D face recognition system. Suzhou SLAC Precision Equipment Co., Ltd. (300382.SZ) and Shenzhen JT Automation Equipment Co., Ltd. (300400.SZ) made investment in robot visual intelligent detection.
TOP
○ Lithium carbonate prices on restrictions of lithium extraction in winter
------
Data from www.sunsirs.com shows that lithium carbonate prices rise slightly by about 500 yuan on Jan. 4. Blossom Lithium Industrial (Sichuan) Limited lifted the price of its industrial lithium carbonate to 121,000 yuan a tonne and its battery carbonate to 136,000 yuan a tonne. Sichuan State Lithium Co., Ltd. lifted the price of its industrial lithium carbonate to 119,000 yuan a tonne and its battery carbonate to 134,000 yuan a tonne. It is learnt that as extraction of lithium is restricted in the winter, lithium supply has decreased slightly. Currently, most major manufacturers see their orders arrange around the Spring Festival. Supply in the spot market is tight. The average price of lithium carbonate has risen nearly 3 percent since the fourth quarter last year.
Comment: Recently, policies including new energy vehicle promotion category, subsidy for enterprises and adjustment on fiscal subsidy are intensively launched. Institutions think that this round of policy adjustment will allow subsidy for passenger vehicle to cover battery cost and earnings of automakers producing electric vehicles will still be better than that of the competitively traditional passenger vehicle market. It is predicted that the volume of new energy passenger vehicles will reach 100,000 units to 200,000 units; that of passenger vehicles may grow by about 40 percent to 450,000 units; and that of special vehicles is expected to be about 150,000 units this year, which will boost demand for lithium carbonate.
TOP
[Announcement Interpretation]
○ Hongbaoli wholly controls Xionglin New Material Technology to be domestic TPU membrane tycoon
------
Hongbaoli Group Corporation, Ltd. (002165.SZ) plans to acquire 88 percent equity of Dongguan Xionglin New Material Technology Co., Ltd. at 640 million yuan by issuing shares at a price of 7.69 yuan per share through private placement and paying in cash. In addition, it will raise no more than 332 million yuan by issuing 43.16 million shares at most at a price of 7.69 yuan per share at least through private placement.
Xionglin New Material Technology is a tycoon in membrane products for thermoplastic polyurethanes (TPU) in China. This transaction will make Hongbaoli directly and indirectly hold 100 percent equity in Xionglin New Material Technology. The counterparty promises that net profit after tax of Xionglin New Material Technology won't be less than 48 million yuan, 60 million yuan and 69 million yuan during 2017 and 2019 respectively. Net profit of Hongbaoli recorded 74.5 million yuan during Jan.-Sept. 2016.
○ Wanfang Aluminum Manufacturing bought by Jaiyi Investment to 5 pct again through secondary market acquisition
------
Jiayi Investment from Dec. 30, 2016 to Jan. 4, 2017 bought in 59.61 million shares of Jiaozuo Wanfang Aluminum Manufacturing Co., Ltd. (000612.SH) through secondary market acquisition. It holds in total 119 million shares (representing 10 percent of the total share capital) of the company. Jiayi Investment is the controlling shareholder of CRED Holding Co., Ltd. (600890.SH). It will likely continue to increase shareholding in the company in the future.
Hangzhou Jintou Jinzhou Investment Partnership (LLP) is the largest shareholder of Jiaozuo Wanfang Aluminum Manufacturing, holding 15.96 percent equities of the company. Geo-jade Petroleum Corporation (600759.SH) is the second largest shareholder of the company, and it plans to transfer 8.77 percent equities of the company by it. Jiayi Investment's acquisition on the secondary market has already threatened the controlling status of Jintou Jinzhong.
○ Keda Clean Energy to increase investment in lithium battery with RMB473 mln
------
Keda Clean Energy Co., Ltd. (600499.SH) has bought 62 percent equities of Qinghai Fozhao Lithium Co., Ltd. and 53.62 percent equities and Qinghai Weili New Energy Material Co., Ltd. respectively with self-owned capitals of 309 million yuan and 164 million yuan. The main assets of the above two subject companies are equity investment in Qinghai Saltlake Fozhao Lake Lithium Co., Ltd. Therefore, Keda Clean Energy indirectly holds 27.69 percent equities of Qinghai Saltlake Fozhao Lake Lithium. Qinghai Saltlake Fozhao Lake Lithium primarily sells lithium carbonate extracted from the salt lake brine of Qarhan Salt Lake in Qinghai Province.
○ Zhangzhou Development conducts private placement with nearly 10 pct premium to offering price
------
Fujian Zhangzhou Development Co., Ltd. (000753.SZ) has successfully raised 600 million yuan through private placement of 107 million shares at 5.59 yuan per share. Its controlling shareholder Fujian Zhanglong Group and partner Beijing Originwater Technology Co., Ltd. (300070.SZ) carry out subscription with 400 million yuan and 200 million yuan respectively, and this part of shares will be locked up in next 36 months. Its stock price was 5.07 yuan at the closing of Jan. 4, 10 percent lower than the offering price.
○ The restructuring of Wuhan P＆S Information Technology Co., Ltd. (300184.SZ) has been unconditionally approved by China Securities Regulatory Commission, with that of Tongfu Microelectronics Co., Ltd. (002156.SZ) conditionally approved.
[Financial Reports Express]
○ Jiangsu Changjiang Electronics Technology Co., Ltd. (600584.SH) announces growth forecast of 90 percent to 120 percent in its annual report, mainly due to a number of orders.
[Trading Alarms]
○ IPOs of Tianma Science and Technology Group, Rongsheng Environmental Protection Paper and Xianglu Tungsten on Jan. 5
------
Fujian Tianma Science and Technology Group Co., Ltd. (732668.SH) is mainly engaged in special aquatic feeds, with offering price of 6.21 yuan per share and upper subscription limit of 21,000 shares; recycled packaging paper, 10.44 yuan per share and 12,000 shares for Zhejiang Rongsheng Environmental Protection Paper Co., Ltd. (732165.SH); wolfram-based products, 11.42 yuan per share and 10,000 shares for Guangdong Xianglu Tungsten Co., Ltd. (002842.SZ).
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