[Today's Guide]
○ Guidance on mixed ownership reform in NORINCO Group released, more central enterprises to initiate mixed ownership reform
○ 13th Five-year Planning for agricultural mechanization development issued, high-end demand to escalate
○ Intel launches first 5G communication chip, boost industry development
○ Insigma Tech. wholly controls Watone Cloud Data, Tianyuan Dic Information Technology to acquire Vive ＆ Best Technology
[SSN Focus]
○ Guidance on mixed ownership reform in NORINCO Group released, more central enterprises to initiate mixed ownership reform
------
The guidance on the development of mixed ownership economy in China North Industries Group Corporation (NORINCO Group) (for trial implementation) was released recently. It proposes to improve the modern enterprise system and the corporate governance structure, promote the enterprise to transform the operation system and strengthen the functions of state-owned capitals to achieve the value preservation and increase and promote the joint development of capitals with different ownerships.
Comment: The central economic work held last December proposed that the mixed ownership reform in railway and military engineering industries shall make substantial progresses. China Railway indicated at a work conference that it will advance the mixed ownership reform. Institutes believe that this round of mixed ownership reform targets at monopolized industries. As a belt connecting real economies and social capitals, the capital market will plat an essential role in the mixed ownership reform. There are 11 A-share companies under NORINCO Group. The Group held a training program with Shenzhen Stock Exchange on capital operation. The market expects that more mixed ownership plans on central enterprises in other industries will be released later.
[SSN Selection]
○ A five-year plan (2016-2020) to save energy and cut emissions was recently issued by the State Council. Goals for total energy consumption and intensity have been assigned to provinces (autonomous regions and municipalities).
○ The 13th five-year national energy saving action plan, jointly released by 13 departments, proposed 10 key energy saving projects in areas like waste-heat utilization.
○ A net withdrawal of 435 billion yuan was conducted by China's central bank in the first three trading days of 2017, but capital supply is still relatively easing in the market.
○ China Banking Regulatory Commission (CBRC) recently released the guidance on the supervision over private banks, requiring complementary development of private banks and existing commercial banks.
○ On Jan. 5, China Construction Bank entered into market-oriented debt-to-equity swap framework cooperation agreement with Shaanxi Coal and Chemical Industry Group Co., Ltd., Shaanxi Energy Group Co., Ltd. and Shaanxi Non-ferrous Metals Holding Group Co., Ltd, respectively. The agreements total 50 billion yuan.
TOP
[Industry Information]
○ 13th Five-year Planning for agricultural mechanization development issued, high-end demand to escalate
------
The Ministry of Agriculture issued the 13th Five-year Planning for national agricultural mechanization development on Jan. 5. According to the planning, remarkable progress should be achieved in full-process mechanization of major crop production and planting mechanization by 2020. Comprehensive mechanization rate of cultivating and harvesting wheat, rice and corn should reach and be stabilized at over 80 percent. Statistics show that comprehensive mechanization rate of cultivating and harvesting crops across the country is 63 percent. In addition, the planning requires improvement in agricultural machinery equipment level.
Comment: Institutions think that it is difficult to sustain the extensive agricultural development path relying on resources and input due to increasing agricultural production costs. It is predicted that demand for high-end agricultural machinery which are advanced, applicable and high-tech will grow continuously, so will demand for agricultural informatization. Loncin Motor Co., Ltd. (603766.SH) is involved in operating unmanned planting and agricultural informatization. Zoomlion Heavy Industry Science And Technology Co., Ltd. (000157.SZ) finds solutions to full-process mechanization for agricultural production through making deployment in medium and high-end agricultural machinery products.
TOP
○ Intel launches first 5G communication chip, boost industry development
------
Intel launched its first communication chip for 5G network on Wednesday (Jan. 4). The company plans to produce 5G modem chips in limited quantities in the next half of 2017, aiming to promote the test and deployment of preliminary 5G frequency band across the world. Previously, Qualcomm launched its 5G modem chips, and will produce the chips in in limited quantities in the next half of this year.
Comment: Institute believe that with the increasing penetration of 4G and the coming of 5G, radio frequency (RF) devices on mobile and other 5G terminals will become more complicated and have higher requirements on integration. The value of stand-alone RF will improve remarkably. GSMA expects that there will be over 20 million sets of networking devices around the globe by 2020, and 2.9 sets for per capita mainly due to expansion in Internet of Things (IoT) devices. As most wireless connections need RF modules, RF devices will greatly benefit from the growth in IoT devices.
TOP
[Announcement Interpretation]
○ Insigma Tech. controls Watone Cloud Data for RMB 1.8bln.
------
Insigma Technology Co., Ltd. (600797.SH) plans to acquire 80 percent equities of for 1.8 billion yuan which will be paid by issuing additional shares via private placement at 12.96 yuan per share and in cash. The listed company will hold 100 percent equities in the latter after the transaction. The company also plans to raise about 750 million yuan supportive fund for cash payment.
The latter mainly provides IDC trusteeship, internet resource accelerating, and cloud computing services, and is also specialized political affairs based cloud service provider for The People's Government of Zhejiang Province and other governmental organizations. Its clients cover Tmall.com, Taobao.com, Alibaba cloud computing, Wasu Media Holding Co., Ltd. (000156.SZ), Wasu Broadcasting ＆ TV Network Co., Ltd. and etc. It promises to achieve no less than 158 million yuan, 197.5 million yuan and 247 million yuan as net profit after deduction from 2017 to 2019 respectively.
○ Tianyuan Dic Information Technology to acquire Vive ＆ Best Technology with RMB800 mln
------
Shenzhen Tianyuan Dic Information Technology Co., Ltd. (300047.SZ) proposes to acquire 94.94 percent equities of Vive ＆ Best Technology Co., Ltd. with 798 million yuan; especially, 728 million yuan will be raised by issuing 42.62 million shares at 17.07 yuan per share, while 70 million yuan will be paid in cash. It also plans to raise no more than 137 million yuan as supporting fund through private placement. Vive ＆ Best Technology is a software company mainly providing IT and application services for financial institutions and enterprises, and it promises to gain a net profit no less than 38 million yuan, 47.50 million yuan and 59.40 million yuan from 2016 to 2018 respectively.
○ Thunder Software Technology to merge and acquire vehicle-mounted software supplier with 64 mln euros
------
Thunder Software Technology Co., Ltd. (300496.SZ) plans to acquire the 100 percent equities of Rightware with 64 million euros. The latter is a globally leading supplier providing car user interface design tools and embedded graphics engine software products, which also maintains favorable cooperation with around 20 famous automobile manufacturers worldwide. The transaction can help the listed company transform to vehicle-mounted software product provider from vehicle-mounted service designer.
○ Two companies signed big orders
------
Wuxi Xuelang Environmental Technology Co., Ltd. (300385.SZ) has won the bid for flue gas purification system equipment procurement project with an amount of 220 million yuan, representing 38 percent of the company's operating revenue in 2015. Montnets Rongxin Technology Group CO., Ltd. (002123.SZ) has won the bid for State Grid networking equipment open tender project with an amount of 575 million yuan, representing 32 percent of the company's operating revenue in 2015.
○ Prices of titanium pigment products of Billions Chemicals continue to rise
------
The selling prices of various types titanium dioxide of Henan Billions Chemicals Co., Ltd. (002601.SZ) increased by 700 yuan per ton since Jan. 5. The price for foreign customers is up by 100 dollars per ton.
[Financial Reports Express]
○ Lingyuan Iron ＆ Steel Co., Ltd. (600231.SH) reported 100 percent to 200 percent growth in its annual report, primarily due to the pickup of the steel market.
[Trading Alarm]
○ Three new shares offer for IPO on Jan. 6
------
China Science Publishing＆ Media Ltd. (780858.SZ) will offer for subscription at 6.84 yuan per share. The upper limit of subscription is 39,000 shares. The company operates in the publishing industry. Autek China Inc. (300595.sz) will offer for subscription at 23.81 yuan per share. The upper limit for each applicant is 17,000 shares. The company is a player in the non-surgical vision correction area. Rianlon Corporation (300596.SZ) will offer for subscriptin at 11.29 yuan per share. The upper limit for each applicant is 12000 shares. The company is primarily involved in chemical additive.
TOP
○ Guidance on mixed ownership reform in NORINCO Group released, more central enterprises to initiate mixed ownership reform
○ 13th Five-year Planning for agricultural mechanization development issued, high-end demand to escalate
○ Intel launches first 5G communication chip, boost industry development
○ Insigma Tech. wholly controls Watone Cloud Data, Tianyuan Dic Information Technology to acquire Vive ＆ Best Technology
[SSN Focus]
○ Guidance on mixed ownership reform in NORINCO Group released, more central enterprises to initiate mixed ownership reform
------
The guidance on the development of mixed ownership economy in China North Industries Group Corporation (NORINCO Group) (for trial implementation) was released recently. It proposes to improve the modern enterprise system and the corporate governance structure, promote the enterprise to transform the operation system and strengthen the functions of state-owned capitals to achieve the value preservation and increase and promote the joint development of capitals with different ownerships.
Comment: The central economic work held last December proposed that the mixed ownership reform in railway and military engineering industries shall make substantial progresses. China Railway indicated at a work conference that it will advance the mixed ownership reform. Institutes believe that this round of mixed ownership reform targets at monopolized industries. As a belt connecting real economies and social capitals, the capital market will plat an essential role in the mixed ownership reform. There are 11 A-share companies under NORINCO Group. The Group held a training program with Shenzhen Stock Exchange on capital operation. The market expects that more mixed ownership plans on central enterprises in other industries will be released later.
[SSN Selection]
○ A five-year plan (2016-2020) to save energy and cut emissions was recently issued by the State Council. Goals for total energy consumption and intensity have been assigned to provinces (autonomous regions and municipalities).
○ The 13th five-year national energy saving action plan, jointly released by 13 departments, proposed 10 key energy saving projects in areas like waste-heat utilization.
○ A net withdrawal of 435 billion yuan was conducted by China's central bank in the first three trading days of 2017, but capital supply is still relatively easing in the market.
○ China Banking Regulatory Commission (CBRC) recently released the guidance on the supervision over private banks, requiring complementary development of private banks and existing commercial banks.
○ On Jan. 5, China Construction Bank entered into market-oriented debt-to-equity swap framework cooperation agreement with Shaanxi Coal and Chemical Industry Group Co., Ltd., Shaanxi Energy Group Co., Ltd. and Shaanxi Non-ferrous Metals Holding Group Co., Ltd, respectively. The agreements total 50 billion yuan.
TOP
[Industry Information]
○ 13th Five-year Planning for agricultural mechanization development issued, high-end demand to escalate
------
The Ministry of Agriculture issued the 13th Five-year Planning for national agricultural mechanization development on Jan. 5. According to the planning, remarkable progress should be achieved in full-process mechanization of major crop production and planting mechanization by 2020. Comprehensive mechanization rate of cultivating and harvesting wheat, rice and corn should reach and be stabilized at over 80 percent. Statistics show that comprehensive mechanization rate of cultivating and harvesting crops across the country is 63 percent. In addition, the planning requires improvement in agricultural machinery equipment level.
Comment: Institutions think that it is difficult to sustain the extensive agricultural development path relying on resources and input due to increasing agricultural production costs. It is predicted that demand for high-end agricultural machinery which are advanced, applicable and high-tech will grow continuously, so will demand for agricultural informatization. Loncin Motor Co., Ltd. (603766.SH) is involved in operating unmanned planting and agricultural informatization. Zoomlion Heavy Industry Science And Technology Co., Ltd. (000157.SZ) finds solutions to full-process mechanization for agricultural production through making deployment in medium and high-end agricultural machinery products.
TOP
○ Intel launches first 5G communication chip, boost industry development
------
Intel launched its first communication chip for 5G network on Wednesday (Jan. 4). The company plans to produce 5G modem chips in limited quantities in the next half of 2017, aiming to promote the test and deployment of preliminary 5G frequency band across the world. Previously, Qualcomm launched its 5G modem chips, and will produce the chips in in limited quantities in the next half of this year.
Comment: Institute believe that with the increasing penetration of 4G and the coming of 5G, radio frequency (RF) devices on mobile and other 5G terminals will become more complicated and have higher requirements on integration. The value of stand-alone RF will improve remarkably. GSMA expects that there will be over 20 million sets of networking devices around the globe by 2020, and 2.9 sets for per capita mainly due to expansion in Internet of Things (IoT) devices. As most wireless connections need RF modules, RF devices will greatly benefit from the growth in IoT devices.
TOP
[Announcement Interpretation]
○ Insigma Tech. controls Watone Cloud Data for RMB 1.8bln.
------
Insigma Technology Co., Ltd. (600797.SH) plans to acquire 80 percent equities of for 1.8 billion yuan which will be paid by issuing additional shares via private placement at 12.96 yuan per share and in cash. The listed company will hold 100 percent equities in the latter after the transaction. The company also plans to raise about 750 million yuan supportive fund for cash payment.
The latter mainly provides IDC trusteeship, internet resource accelerating, and cloud computing services, and is also specialized political affairs based cloud service provider for The People's Government of Zhejiang Province and other governmental organizations. Its clients cover Tmall.com, Taobao.com, Alibaba cloud computing, Wasu Media Holding Co., Ltd. (000156.SZ), Wasu Broadcasting ＆ TV Network Co., Ltd. and etc. It promises to achieve no less than 158 million yuan, 197.5 million yuan and 247 million yuan as net profit after deduction from 2017 to 2019 respectively.
○ Tianyuan Dic Information Technology to acquire Vive ＆ Best Technology with RMB800 mln
------
Shenzhen Tianyuan Dic Information Technology Co., Ltd. (300047.SZ) proposes to acquire 94.94 percent equities of Vive ＆ Best Technology Co., Ltd. with 798 million yuan; especially, 728 million yuan will be raised by issuing 42.62 million shares at 17.07 yuan per share, while 70 million yuan will be paid in cash. It also plans to raise no more than 137 million yuan as supporting fund through private placement. Vive ＆ Best Technology is a software company mainly providing IT and application services for financial institutions and enterprises, and it promises to gain a net profit no less than 38 million yuan, 47.50 million yuan and 59.40 million yuan from 2016 to 2018 respectively.
○ Thunder Software Technology to merge and acquire vehicle-mounted software supplier with 64 mln euros
------
Thunder Software Technology Co., Ltd. (300496.SZ) plans to acquire the 100 percent equities of Rightware with 64 million euros. The latter is a globally leading supplier providing car user interface design tools and embedded graphics engine software products, which also maintains favorable cooperation with around 20 famous automobile manufacturers worldwide. The transaction can help the listed company transform to vehicle-mounted software product provider from vehicle-mounted service designer.
○ Two companies signed big orders
------
Wuxi Xuelang Environmental Technology Co., Ltd. (300385.SZ) has won the bid for flue gas purification system equipment procurement project with an amount of 220 million yuan, representing 38 percent of the company's operating revenue in 2015. Montnets Rongxin Technology Group CO., Ltd. (002123.SZ) has won the bid for State Grid networking equipment open tender project with an amount of 575 million yuan, representing 32 percent of the company's operating revenue in 2015.
○ Prices of titanium pigment products of Billions Chemicals continue to rise
------
The selling prices of various types titanium dioxide of Henan Billions Chemicals Co., Ltd. (002601.SZ) increased by 700 yuan per ton since Jan. 5. The price for foreign customers is up by 100 dollars per ton.
[Financial Reports Express]
○ Lingyuan Iron ＆ Steel Co., Ltd. (600231.SH) reported 100 percent to 200 percent growth in its annual report, primarily due to the pickup of the steel market.
[Trading Alarm]
○ Three new shares offer for IPO on Jan. 6
------
China Science Publishing＆ Media Ltd. (780858.SZ) will offer for subscription at 6.84 yuan per share. The upper limit of subscription is 39,000 shares. The company operates in the publishing industry. Autek China Inc. (300595.sz) will offer for subscription at 23.81 yuan per share. The upper limit for each applicant is 17,000 shares. The company is a player in the non-surgical vision correction area. Rianlon Corporation (300596.SZ) will offer for subscriptin at 11.29 yuan per share. The upper limit for each applicant is 12000 shares. The company is primarily involved in chemical additive.
TOP
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