[Today's Guide]
○ Shanghai advances listing of state-owned assets, mixed-ownership reform of competitive enterprises to speed up
○ Policies to favor charging facilities for electric vehicles, facilities construction expected to accelerate
○ Commercial aerospace industry advances, market expected to expand continuously
○ Leshi Internet Information ＆ Technology gains financing worth RMB16.8 bln from 3 firms including Sunac China Holdings, Lingzi Equity Investment Fund buys shares of New Huang Pu Real Estate at 5 pct limit through secondary market acquisition
[SSN Focus]
○ Shanghai advances listing of state-owned assets, mixed-ownership reform of competitive enterprises to speed up
------
The Fifth Session of the 14th Municipal People's Congress of Shanghai kicked off on Jan. 15. Yang Xiong, mayor of Shanghai, indicated during his government work report that in 2017, Shanghai will deepen the reform of state-owned assets and state-owned enterprises (SOEs), move faster in advancing the overall listing or the listing of core business/assets of enterprises, pilot the professional manager salary system reform, and encourage non-publicly-owned assets to get involved in the mixed-ownership reform of SOEs. It is also proposed in the report that Shanghai will pool efforts of the whole city to build Chongming island into a world-class eco-island, fully facilitate the construction of technology innovation center, and concentrate on the construction of a comprehensive national science center in Zhangjiang.
Comment: The reform of state-owned assets and SOEs in Shanghai has always attracted wide attention. According to the meeting spirit and relevant work arrangement of the Central Economic Work Conference, Shanghai will further boost the mixed-ownership reform of local competitive enterprises. By the end of the 13th five-year plan period (2016-2020), enterprises achieving overall-listing will take up over 50 percent of all competitive enterprises. Institutions will pay great attention to listed SOEs whose equities have been transferred to Shanghai International Group and Guosheng Group, platform SOEs "which are small but subordinate to big groups", and SOEs with poor performance that might see equity transfer.
[SSN Selection]
○ China Securities Regulatory Commission (CSRC) approved the IPO applications of 13 enterprises on Jan. 13. No more than 4.1 billion yuan will be raised in total.
○ The CRSC will speed up in the formulation of the regulation rules on the businesses of regional equity markets, indicated the CSRC at the press conference held on Jan. 13.
○ The central bank of China conducted an MLF with 305.5 billion yuan on Jan. 13 and most of them have a period of one year. It shows that the central will tighten the short-term policies while loosen long-term ones.
○ The opinions on facilitating the healthy and orderly development of the mobile Internet has been issued recently, proposing to speed up in the coverage of 4G network and the research and development of 5G technologies.
○ The work report of the government of Beijing released on Jan. 14 proposed to promote the joint establishment of technical parks and industrial bases in Beijing, Tianjin and Hebei.
○ Chongqing will adjust the policies on the property tax from Jan. 14. The ley of property taxes on certain buyers will expand from the second house to the first house.
TOP
[Industry Information]
○ Policies to favor charging facilities for electric vehicles, facilities construction expected to speed up
------
China will strive to build 800,000 new charging piles in 2017, among which 700,000 will be for specific use and 100,000 for public use, Zheng Zhajie, deputy director of the National Energy Administration said at the China EV 100 Forum 2017 held on Jan. 14. Meanwhile, China will guide the industry to explore into reasonable business model and strictly carry out preferential electricity price. Subsidy will be inclined to charging from car purchasing.
Comment: Data shoes that in 2016 public charging piles across the country increased to 150,000 from less than 50,000 at the beginning of the year. Over 80 percent of the newly installed charging piles were private. Institutes estimate that with the rapid construction of charging network, China's charging facilities market will reach a size of 132 billion yuan by 2020. XJ Electric Co., Ltd. (000400.SZ) undertook the construction of the electric vehicle fast-charging network along Beijing-Hong Kong-Macao Expressway, Beijing-Shanghai Expressway and Qingdao-Ningxia Expressway. Shenzhen Auto Electric Power Plant Co., Ltd. (002227.SZ) owns a matrix flexible charging pile which is characterized by modularization, standardization, pre-installation and integration.
TOP
○ Commercial aerospace industry advances, market expected to expand continuously
------
SSN learnt that Beijing Landscape Technology Corporation and Denmark company GomSpace signed a cooperation agreement on rocket launching service in Hangzhou on Jan. 13. It is the first order in commercial launching service that Chinese private enterprise obtained from the international market. Not long before China Aerospace Science and Industry Corporation (CASIC) successfully launched its KZ-1A carrier rocket, becoming China's first commercial rocket.
Comment: Evidences show that China's commercial aerospace industry is booming. According to the Space Report 2015 published by the US Space Foundation, the aggregate global aerospace economy is around 330 billion U.S. dollars. The proportion of commercial aerospace industry is as high as 76 percent. Institutes note in their research report that as China gradually removes its policy barriers and the business model becomes clearer, the commercial aerospace market will expand continuously. They are bullish for satellite launching and application.
TOP
[Announcement Interpretation]
○ Leshi Internet Information ＆ Technology gains financing worth RMB16.8 bln from 3 firms including Sunac China Holdings
------
Leshi Internet Information ＆ Technology Corp., Beijing (300104.SZ) and relevant entities related to Leshi gained more than 16.8 billion yuan of capitals from Sunac China Holdings Limited, Leran Investment Management Co., Ltd. and Hua Insurance Co., Ltd. The listed company and its holding subsidiary will receive capitals worth about 7.1 billion yuan. Specifically, Jia Yueting will transfer its 8.61 percent equity of Leshi Internet Information ＆ Technology to Jiarui Huixin Co., Ltd, which is actually controlled by Sunac China Holdings, at a price of 35.39 yuan per share. So the transaction will cost 6.041 billion yuan. And Sunac China Holdings becomes the second largest shareholder of Leshi Internet Information ＆ Technology. Jiarui Huixin gets 15 percent equity of Le Vision Pictures at 1.05 billion yuan; and it also becomes the second largest shareholder of Leshi Zhixin Electronic Technology (Tianjin) Co., Ltd. by getting 33.5 percent equity at 7.95 billion yuan. Leran Investment Management and Hua Insurance invest 1.43 billion yuan and 400 million yuan in Leshi Zhixin Electronic Technology, and Leshi Internet Information ＆ Technology is still the controlling shareholder of Leshi Zhixin Electronic Technology.
Leshi Internet Information ＆ Technology and Sunac China Holdings conduct cooperation in fields such as intelligent hardware, Internet plus real estate, Internet eco-town themed with automobile and films and movies, smart home and smart community. The listed company indicated that this move tackles the capital bottleneck issue during implementing strategy.
○ Lingzi Equity Investment Fund buys shares of New Huang Pu Real Estate at 5 pct limit through secondary market acquisition
------
Shanghai New Huang Pu Real Estate Co., Ltd. recently received a notice that Shanghai Lingzi Equity Investment Fund Partnership (Limited Partnership) bought 28,058,200 shares of the listed company during Jan. 10 and 13, with equity proportion among the total share capital reaching 5 percent limit through secondary market acquisition. Lingzi Equity Investment Fund stated that it had the shareholding increase mainly because it was rosy about the company's future development prospect, and would continue to buy more shares depending on situation in next 12 months. Substantial shareholder of Lingzi Equity Investment Fund is Xiamen International Trust Co., Ltd holding 99.9 percent equity.
○ Electric Company to raise RMB1 bln by private placement for investing in main business
------
Guoguang Electric Company Limited (002045.SZ) proposes to issue no more than 92,592,600 shares to Nantong Juda Investment Co., Ltd., Beijing Genimous Deguang Investment Center (Limited Partnership) and Tibet Genimous Investment Co., Ltd. through private placement at 10.80 yuan per share so as to raise no more than 1 billion yuan, which will be used for technical improvement projects of mini loudspeaker products and intelligent sound products. The latter two are persons in concerted action, and will totally hold 10.90 percent equities of the listed company after private placement.
○ The controlling shareholder of Haimo Technologies Group Corp. (300084.SZ) on Jan. 12 bought 3.85 million shares of the latter. Fujian Snowman Co., Ltd. (002639.SZ) announces, up to Jan. 13, its actual controller and senior management had totally increased 4,436,500 shareholdings in the listed company.
[Financial Reports Express]
○ Summit Resources and others announce growth forecast
------
Tibet Summit Resources Co., Ltd. (600338.SH) announces growth forecast of 287 to 337 percent in its annual report, mainly due to rebounding lead and zinc princes; net profit forecast of 600 to 700 million yuan for China Enterprise Company Limited (600675.SH), greatly gaining profits from losses mainly due to selling 30 percent equities of Tianjin Xinghuacheng Property Co., Ltd.; growth forecast of 201 to 229 percent for Xuzhou Handler Special Vehicle Co., Ltd. (300201.SZ) mainly due to combined financial statement with Shenzhen Lianshuo Automation Technology Co., Ltd.; growth forecast of 130 to 150 percent for Shenzhen Sunway Communication Co., Ltd. (300136.SZ) mainly due to sales scale expansion; growth forecast of 87 to 112 percent for Jiangsu Xiuqiang Glasswork Co., Ltd. (300160.SZ) mainly due to combined financial statement with Hangzhou Whole Person Education Group; performance forecast of 356 to 378 million yuan for Teamax Smart City Technology Corporation Limited (000662.SZ), greatly gaining profits from losses mainly due to combined financial statement with Teamax Technology Group.
[Trading Alarms]
○ IPOs of BizConf Telecom, Ruite Electric and Add Industry on Jan. 16
------
BizConf Telecom Co., Ltd. (300578.SZ) mainly engaged in telecommunication cooperation service will issue new shares at an offering price of 9.7 yuan per share with upper subscription limit of 18,000 shares; offering price of 13.73 yuan per share and upper subscription limit of 10,000 shares for Changshu Ruite Electric Co., Ltd. (300600.SZ) mainly engaged in marine electronics system; 11.63 yuan per share and 9,000 shares respectively for Add Industry (Zhejiang) Corporation Limited (732089.SH) mainly engaged in damper for vehicle suspension system.
[Weekly review]
○ Wait for the market to restore confidence
------
The major indexes of the Shanghai and Shenzhen bourses last week declined for four consecutive days, and the money effect of the market continue to weaken. In Western economics, the relationship between supply and demand is a key emphasis. People adhering to this belief thus attributed the market declines to the increase of IPOs of new shares. In fact, according to historic experience, the new IPOs and up and downs of stock indexes are not so relevant. A quick turn from plummet to surge doesn't necessarily require significant improvement of fundamentals or relation between supply and demand, but key events that can restore the confidence of the market are indispensable.
The Treasury bond futures showed a V-shape trend last year, from shocking decline to the daily limit to continuous rebound. It is the improvement of market confident rather than prudent and neutral monetary policy that lifted the market. On Dec. 20, Sealand Securities and various institutions involved in unauthorized transactions reached a consensus to jointly assume the responsibility, and eased the investors' concern that liquidity might be frozen due to default events. Steel futures also experienced an up and down at the beginning of the year. The turning point came on Jan. 10 when the National Development and Reform Commission (NDRC) required that all the outdated capacity of steel production should be cleaned in the first half of 2017. Thus steel market participants' confidence on de-capacity policy reignited.
Concerns on the implementation of policy execution, foreign exchange fluctuation, tight money supply. all these are unassailable in explaining the decline of the stock, bond and futures market after it happened. However, investors who put money into the market should not focus on such broad themes. Instead, they should observe carefully iconic events that could restore the market confidence.
TOP
○ Shanghai advances listing of state-owned assets, mixed-ownership reform of competitive enterprises to speed up
○ Policies to favor charging facilities for electric vehicles, facilities construction expected to accelerate
○ Commercial aerospace industry advances, market expected to expand continuously
○ Leshi Internet Information ＆ Technology gains financing worth RMB16.8 bln from 3 firms including Sunac China Holdings, Lingzi Equity Investment Fund buys shares of New Huang Pu Real Estate at 5 pct limit through secondary market acquisition
[SSN Focus]
○ Shanghai advances listing of state-owned assets, mixed-ownership reform of competitive enterprises to speed up
------
The Fifth Session of the 14th Municipal People's Congress of Shanghai kicked off on Jan. 15. Yang Xiong, mayor of Shanghai, indicated during his government work report that in 2017, Shanghai will deepen the reform of state-owned assets and state-owned enterprises (SOEs), move faster in advancing the overall listing or the listing of core business/assets of enterprises, pilot the professional manager salary system reform, and encourage non-publicly-owned assets to get involved in the mixed-ownership reform of SOEs. It is also proposed in the report that Shanghai will pool efforts of the whole city to build Chongming island into a world-class eco-island, fully facilitate the construction of technology innovation center, and concentrate on the construction of a comprehensive national science center in Zhangjiang.
Comment: The reform of state-owned assets and SOEs in Shanghai has always attracted wide attention. According to the meeting spirit and relevant work arrangement of the Central Economic Work Conference, Shanghai will further boost the mixed-ownership reform of local competitive enterprises. By the end of the 13th five-year plan period (2016-2020), enterprises achieving overall-listing will take up over 50 percent of all competitive enterprises. Institutions will pay great attention to listed SOEs whose equities have been transferred to Shanghai International Group and Guosheng Group, platform SOEs "which are small but subordinate to big groups", and SOEs with poor performance that might see equity transfer.
[SSN Selection]
○ China Securities Regulatory Commission (CSRC) approved the IPO applications of 13 enterprises on Jan. 13. No more than 4.1 billion yuan will be raised in total.
○ The CRSC will speed up in the formulation of the regulation rules on the businesses of regional equity markets, indicated the CSRC at the press conference held on Jan. 13.
○ The central bank of China conducted an MLF with 305.5 billion yuan on Jan. 13 and most of them have a period of one year. It shows that the central will tighten the short-term policies while loosen long-term ones.
○ The opinions on facilitating the healthy and orderly development of the mobile Internet has been issued recently, proposing to speed up in the coverage of 4G network and the research and development of 5G technologies.
○ The work report of the government of Beijing released on Jan. 14 proposed to promote the joint establishment of technical parks and industrial bases in Beijing, Tianjin and Hebei.
○ Chongqing will adjust the policies on the property tax from Jan. 14. The ley of property taxes on certain buyers will expand from the second house to the first house.
TOP
[Industry Information]
○ Policies to favor charging facilities for electric vehicles, facilities construction expected to speed up
------
China will strive to build 800,000 new charging piles in 2017, among which 700,000 will be for specific use and 100,000 for public use, Zheng Zhajie, deputy director of the National Energy Administration said at the China EV 100 Forum 2017 held on Jan. 14. Meanwhile, China will guide the industry to explore into reasonable business model and strictly carry out preferential electricity price. Subsidy will be inclined to charging from car purchasing.
Comment: Data shoes that in 2016 public charging piles across the country increased to 150,000 from less than 50,000 at the beginning of the year. Over 80 percent of the newly installed charging piles were private. Institutes estimate that with the rapid construction of charging network, China's charging facilities market will reach a size of 132 billion yuan by 2020. XJ Electric Co., Ltd. (000400.SZ) undertook the construction of the electric vehicle fast-charging network along Beijing-Hong Kong-Macao Expressway, Beijing-Shanghai Expressway and Qingdao-Ningxia Expressway. Shenzhen Auto Electric Power Plant Co., Ltd. (002227.SZ) owns a matrix flexible charging pile which is characterized by modularization, standardization, pre-installation and integration.
TOP
○ Commercial aerospace industry advances, market expected to expand continuously
------
SSN learnt that Beijing Landscape Technology Corporation and Denmark company GomSpace signed a cooperation agreement on rocket launching service in Hangzhou on Jan. 13. It is the first order in commercial launching service that Chinese private enterprise obtained from the international market. Not long before China Aerospace Science and Industry Corporation (CASIC) successfully launched its KZ-1A carrier rocket, becoming China's first commercial rocket.
Comment: Evidences show that China's commercial aerospace industry is booming. According to the Space Report 2015 published by the US Space Foundation, the aggregate global aerospace economy is around 330 billion U.S. dollars. The proportion of commercial aerospace industry is as high as 76 percent. Institutes note in their research report that as China gradually removes its policy barriers and the business model becomes clearer, the commercial aerospace market will expand continuously. They are bullish for satellite launching and application.
TOP
[Announcement Interpretation]
○ Leshi Internet Information ＆ Technology gains financing worth RMB16.8 bln from 3 firms including Sunac China Holdings
------
Leshi Internet Information ＆ Technology Corp., Beijing (300104.SZ) and relevant entities related to Leshi gained more than 16.8 billion yuan of capitals from Sunac China Holdings Limited, Leran Investment Management Co., Ltd. and Hua Insurance Co., Ltd. The listed company and its holding subsidiary will receive capitals worth about 7.1 billion yuan. Specifically, Jia Yueting will transfer its 8.61 percent equity of Leshi Internet Information ＆ Technology to Jiarui Huixin Co., Ltd, which is actually controlled by Sunac China Holdings, at a price of 35.39 yuan per share. So the transaction will cost 6.041 billion yuan. And Sunac China Holdings becomes the second largest shareholder of Leshi Internet Information ＆ Technology. Jiarui Huixin gets 15 percent equity of Le Vision Pictures at 1.05 billion yuan; and it also becomes the second largest shareholder of Leshi Zhixin Electronic Technology (Tianjin) Co., Ltd. by getting 33.5 percent equity at 7.95 billion yuan. Leran Investment Management and Hua Insurance invest 1.43 billion yuan and 400 million yuan in Leshi Zhixin Electronic Technology, and Leshi Internet Information ＆ Technology is still the controlling shareholder of Leshi Zhixin Electronic Technology.
Leshi Internet Information ＆ Technology and Sunac China Holdings conduct cooperation in fields such as intelligent hardware, Internet plus real estate, Internet eco-town themed with automobile and films and movies, smart home and smart community. The listed company indicated that this move tackles the capital bottleneck issue during implementing strategy.
○ Lingzi Equity Investment Fund buys shares of New Huang Pu Real Estate at 5 pct limit through secondary market acquisition
------
Shanghai New Huang Pu Real Estate Co., Ltd. recently received a notice that Shanghai Lingzi Equity Investment Fund Partnership (Limited Partnership) bought 28,058,200 shares of the listed company during Jan. 10 and 13, with equity proportion among the total share capital reaching 5 percent limit through secondary market acquisition. Lingzi Equity Investment Fund stated that it had the shareholding increase mainly because it was rosy about the company's future development prospect, and would continue to buy more shares depending on situation in next 12 months. Substantial shareholder of Lingzi Equity Investment Fund is Xiamen International Trust Co., Ltd holding 99.9 percent equity.
○ Electric Company to raise RMB1 bln by private placement for investing in main business
------
Guoguang Electric Company Limited (002045.SZ) proposes to issue no more than 92,592,600 shares to Nantong Juda Investment Co., Ltd., Beijing Genimous Deguang Investment Center (Limited Partnership) and Tibet Genimous Investment Co., Ltd. through private placement at 10.80 yuan per share so as to raise no more than 1 billion yuan, which will be used for technical improvement projects of mini loudspeaker products and intelligent sound products. The latter two are persons in concerted action, and will totally hold 10.90 percent equities of the listed company after private placement.
○ The controlling shareholder of Haimo Technologies Group Corp. (300084.SZ) on Jan. 12 bought 3.85 million shares of the latter. Fujian Snowman Co., Ltd. (002639.SZ) announces, up to Jan. 13, its actual controller and senior management had totally increased 4,436,500 shareholdings in the listed company.
[Financial Reports Express]
○ Summit Resources and others announce growth forecast
------
Tibet Summit Resources Co., Ltd. (600338.SH) announces growth forecast of 287 to 337 percent in its annual report, mainly due to rebounding lead and zinc princes; net profit forecast of 600 to 700 million yuan for China Enterprise Company Limited (600675.SH), greatly gaining profits from losses mainly due to selling 30 percent equities of Tianjin Xinghuacheng Property Co., Ltd.; growth forecast of 201 to 229 percent for Xuzhou Handler Special Vehicle Co., Ltd. (300201.SZ) mainly due to combined financial statement with Shenzhen Lianshuo Automation Technology Co., Ltd.; growth forecast of 130 to 150 percent for Shenzhen Sunway Communication Co., Ltd. (300136.SZ) mainly due to sales scale expansion; growth forecast of 87 to 112 percent for Jiangsu Xiuqiang Glasswork Co., Ltd. (300160.SZ) mainly due to combined financial statement with Hangzhou Whole Person Education Group; performance forecast of 356 to 378 million yuan for Teamax Smart City Technology Corporation Limited (000662.SZ), greatly gaining profits from losses mainly due to combined financial statement with Teamax Technology Group.
[Trading Alarms]
○ IPOs of BizConf Telecom, Ruite Electric and Add Industry on Jan. 16
------
BizConf Telecom Co., Ltd. (300578.SZ) mainly engaged in telecommunication cooperation service will issue new shares at an offering price of 9.7 yuan per share with upper subscription limit of 18,000 shares; offering price of 13.73 yuan per share and upper subscription limit of 10,000 shares for Changshu Ruite Electric Co., Ltd. (300600.SZ) mainly engaged in marine electronics system; 11.63 yuan per share and 9,000 shares respectively for Add Industry (Zhejiang) Corporation Limited (732089.SH) mainly engaged in damper for vehicle suspension system.
[Weekly review]
○ Wait for the market to restore confidence
------
The major indexes of the Shanghai and Shenzhen bourses last week declined for four consecutive days, and the money effect of the market continue to weaken. In Western economics, the relationship between supply and demand is a key emphasis. People adhering to this belief thus attributed the market declines to the increase of IPOs of new shares. In fact, according to historic experience, the new IPOs and up and downs of stock indexes are not so relevant. A quick turn from plummet to surge doesn't necessarily require significant improvement of fundamentals or relation between supply and demand, but key events that can restore the confidence of the market are indispensable.
The Treasury bond futures showed a V-shape trend last year, from shocking decline to the daily limit to continuous rebound. It is the improvement of market confident rather than prudent and neutral monetary policy that lifted the market. On Dec. 20, Sealand Securities and various institutions involved in unauthorized transactions reached a consensus to jointly assume the responsibility, and eased the investors' concern that liquidity might be frozen due to default events. Steel futures also experienced an up and down at the beginning of the year. The turning point came on Jan. 10 when the National Development and Reform Commission (NDRC) required that all the outdated capacity of steel production should be cleaned in the first half of 2017. Thus steel market participants' confidence on de-capacity policy reignited.
Concerns on the implementation of policy execution, foreign exchange fluctuation, tight money supply. all these are unassailable in explaining the decline of the stock, bond and futures market after it happened. However, investors who put money into the market should not focus on such broad themes. Instead, they should observe carefully iconic events that could restore the market confidence.
TOP
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