[Today's Guide]
○ Lower threshold on power battery capacity brings higher requirements on performance
○ New list of drugs covered by medical insurance to released soon, Chinese patent medicine and children's drug become highlight
○ Liaoning SG Automotive to see new controlling shareholder at premium
○ Controlling shareholders of several companies to increase shareholding, Kibing Group and others announce growth forecast
[SSN Focus]
○ Lower threshold on power battery capacity brings higher requirements on performance
------
SSN learnt that the conditions on the regulation of the power batteries for vehicles has solicited opinions and will be released soon. Compared with the draft for opinions issued by the Ministry of Industry and Information Technology (MIIT), the revised version has two major changes. Firstly, it lowered the capacity threshold from "no more than 8 billion watt-hours" to 3 to 5 billion watt-hours. Secondly, it raised the requirements on the research and development and the performance of power batteries.
Comment: If the threshold is set at no more than 8 billion watt-hours, only BYD Company Limited (01211.HK; 002594.SZ) and other few companies can meet the requirements. Guoxuan High-Tech Co., Ltd. (002074.SZ), China Aviation Lithium Battery CO., Ltd., Optimum Nano and EVE Energy Co., Ltd. (300014.SZ) have a capacity of 3 to 8 billion watt-hours. The lower threshold will bring in more excellent enterprises. In addition, the higher requirements on the performance of power batteries will see more policy supports. The newly released policies on the subsidies on new energy vehicles will consider the energy density. Tertiary materials and other industries will catch more attention from institutes.
○ ChiNext Price Index down for eight consecutive days, insurance, banking and other blue-chips performed well
------
The ChiNext Price Index closed 3.64 percent lower on Jan. 16. It has been declining for eight consecutive days and is close to the lowest level in the second half of 2015. Driven by the insurance, banking and other blue-chip stocks, the SSE 50 Index increased for the second consecutive trading days.
Analysts believe that the recent fluctuation experienced by the ChiNext Board is under the backdrop of the repair of valuation. The market is worried about the rising prices of commodities and the tightening of capital supply. At present, retail investors are not quite willing to buy in more shares, and the incremental capital in the market mainly comes from institutions with low risk preference, such as banks and insurance companies. These institutions prefer value stocks with sound performance and cyclical stocks with sufficiently cleared supply and improving industrial concentration ratio.
[SSN Selection]
○ Under a guideline issued by the State Council on Jan. 16, the paid use system of state-owned natural resources like land, water and mineral resources will be improved.
○ Five departments recently teamed up for a special rectification action about illegally refitted goods wagons. Such move might boost the demand for the heavy truck industry.
○ Baidu Inc. announced the establishment of its augmented reality (AR) laboratory on Jan. 16, involving technologies like image technology, vision localization and tracking, and face recognition.
○ Shanghai Municipal Transportation Commission indicated on Jan. 16 that the guidance on the development of public rental bike system (public-sharing bike) is under formulation.
○ China Petrochemical Corporation held its annual work conference on Jan. 16, proposing to advance the mixed-ownership reform in an active and steady way.
TOP
[Industry Information]
○ New list of drugs covered by medical insurance to released soon, Chinese patent medicine and children's drug become highlight
------
SSN learnt that the circular on issuing the list of drugs covered by medical insurance (2017 version) has been sent to all local governments which are required to give feedback before Jan. 16. Industry insiders point that this would be the last time that the new list of drugs covered by medical insurance solicits public opinions, and is expected to be released soon.
Comment: In addition to innovative drugs with excellent clinical effect, another highlight in the new list is Chinese patent medicine and children's drug. Relevant medicine enterprises expected to benefit from medicines that are very likely to be included in the list. Among listed companies, Tasly Pharmaceutical Group Co., Ltd. (600535.SH) and Tianjin Chase Sun Pharmaceutical Co., Ltd. (300026.SZ) own exclusive Chinese patent medicines. Yabao Pharmaceutical Group Co., Ltd. (600351.SH), Honz Pharmaceutical Co., Ltd. (300086.SZ), Sunflower Pharmaceutical Group Co., Ltd. (002732.SZ) and Hubei Jumpcan Pharmaceutical Co., Ltd. (600566.SH) are engaged in the research and development of children's drug. Their hit products of children's drug are very likely to be included.
○ MoA to increase subsidies on purchase of agricultural machinery, green machinery gains support
------
Vice Minister of Agriculture Zhang Taolin indicated at the work conference on national agricultural mechanization on Jan 16 that the Ministry of Agriculture (MoA) will increase the subsidies on the purchase of agricultural machinery. It will introduce open subsidies on high-efficient agricultural machinery for soil deep loosening, concentrated fertilization and film retrieving. In addition, it will expand the scope of subsidies on waste agricultural machinery and eliminate old machinery with high energy consumption and heavy pollution. It will promote the application of National III power equipment and promote the energy saving and emission cut of agricultural machinery.
Comment: It is introduced that comprehensive mechanization ratio of cultivation, plantation and harvest of crops in China is expected to be more than 65 percent last year, up by about 2 percentage points year on year. But according to action plan on agricultural machinery and equipment development, agricultural mechanization ratio should reach 75 percent by 2525. Analysts point out that there is still growth potential for agricultural machinery on the whole. Enterprises with technological advantages and leading in high-end agricultural machinery manufacturing ability will benefit from industrial development and improvement in market concentration.
TOP
[Announcement Interpretation]
○ Liaoning SG Automotive to see new controlling shareholder at premium
------
Liaoning SG Group Co., Ltd., controlling shareholder of Liaoning SG Automotive Group Co., Ltd. (600303.SH), plans to transfer 97.895 million shares of the listed company (accounting for 14.49 percent of total share capital of the company) at a price of 23.21 yuan per share to Hawtai Motor Group and entrusts the voting right of 45,818,300 shares to the latter. With this deal done, Hawtai Motor will become controlling shareholder of Liaoning SG Automotive and the listed company's actual controllers will be Zhang Xiugen and Zhang Hongliang. Stock price of Liaoning SG Automotive was 9.02 yuan per share before trading suspension and transfer price is 157 percent of that price.
○ Shareholders of Meida Nylon transfer shares at 97 percent premium
------
Tianchang Investment and Tagen Group, the third and fourth largest shareholder of Guangdong Xinhui Meida Nylon Co., Ltd. (000782.SZ), proposes to transfer 9.81 percent and 5.68 percent of the listed company held by them to Qingdao New Energy Solutions Inc. (NESI) at 19.93 yuan per share, representing premium of 97 percent compared with the price before suspension of trading of 10.14 yuan per share; at the same time, the largest shareholder Junhe Investment also proposes to entrust voting rights of 13 percent equities held by it to NESI. The two transferors and one entrusting party are all controlled by the actual controller Liang Weidong. Upon completion of the transaction, NESI will hold 15.49 percent equities of the company and 28.49 percent voting rights of the company. Li Jianzhi will become actual controller of the company. NESI is primarily engaged in solar photoelectric product. It has a net asset of 848 million yuan and recorded loss of 4.58 million yuan in 2016.
TOP
○ Controlling shareholders of several companies to increase shareholding
------
Zhou Shiping, actual controller of Fujian Sunnada Communication Co., Ltd. (002417.SZ) plans to increase shareholding in the company in the next 12 months at no more than 18 yuan per share with a total of no more than 200 million yuan. Controlling shareholder Henan Kedi Dairy CO., Ltd. (002770.SZ) on Jan. 16 increased holding 4.13 million shares of the company, and plans to increase holding no less than 1 percent and no more than 2 percent shareholding in the company in the next year. CRRC Guiyang Co., Ltd., party acting in concert with South Huiton Company Limited (000920.SZ), on Jan. 13 and Jan. 16 in total bought in 2.03 million shares of the company. In the next year, CRRC Guiyang will increase holding no more than 2 percent of the total share capital of the listed company, at no more than 18 yuan per share. In addition, controlling shareholder of ORG Packaging Co., Ltd. (002701.SZ) on Jan. 16 increased holding 3.78 million shares of the company. Actual controller of Meinian Onehealth Healthcare Holdings Co., Ltd. (002044.SZ) on Jan. 13 and Jan. 16 continued to increase in total 1 million shares of the company. Controlling shareholder of Kaidi Ecological and Environmental Technology Co., Ltd. (000939.SZ) on Jan. 16 increased holding 1.06 million shares of the company.
○ Kemen Noodle Manufacturing launches ESOP
------
Kemen Noodle Manufacturing Co., Ltd. (002661.SZ) proposes to launch an employee stock ownership trust plan (ESOP) at the cap of 350 million yuan. The plan will be divided into prime and subprime units. No more than 285 employees, including directors, supervisors and senior management will subscribe the whole subprime unit of 117 million yuan. Chen Keming, chairman of the company, and Chen Kezhong, vice chairman of the company will subscribe 15.88 percent respectively. The ESOP will raise 233 million yuan prime fund in the market.
[Financial Reports Express]
○ Kibing Group and others announce growth forecast in annual report
------
Zhuzhou Kibing Group Co., Ltd. (601636.SH) announces a growth forecast of 390 to 410 percent in its annual report, mainly due to sales growth; a growth forecast of 180 to 210 percent for Guangdong Biolight Meditech Co., Ltd. (300246.SZ), mainly due to great revenue growth of main businesses; a growth forecast of 182 to 208 percent for Beijing Sinnet Technology Co., Ltd. (300383.SZ), mainly due to expectation that Beijing Meganest Technology Co., Ltd. and Beijing Agrantsem Technology Co., Ltd. will realize the performance commitment; a growth forecast up to 155 to 165 percent for Anhui Jinhe Industrial Co., Ltd. (002597.SZ), mainly due to chemical product price uptrend; a growth forecast up to 320 to 370 percent for Henan Billions Chemicals Co., Ltd. (002601.SZ), mainly due to price uptrend of its main product titanium dioxide; a growth forecast of 285 to 323 percent for Fujian Fynex Textile Science ＆ Technology Co., Ltd. (600493.SH), mainly due to investment dividends.
○ Ceepower, Cihang Group, and others propose high share conversion and dividend in annual report
------
Ceepower Co., Ltd. (300062.SZ) announces a growth forecast of 270 to 300 percent in annual report, and its actual controller proposes a 20-for-10 conversion of capital surplus into shares; a growth forecast of 236 to 253 percent for Jinzhou Cihang Group Co., Ltd. (000587.SZ), with its controlling shareholder proposing a 10-for-10 conversion of capital surplus into shares combined with 1.5 yuan dividend for every 10 shares; a growth forecast of 50 to 60 percent for Shandong Sinocera Functional Material Co., Ltd. (300285.SZ), with its actual controller proposing a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares; a growth forecast of 50 to 80 percent for Shenzhen JT Automation Equipment Co., Ltd. (300400.SZ), with its actual controller proposing a 5-for-10 conversion of capital surplus into shares combined with 1 yuan dividend and additional 5 shares for every 10 shares; a net profit forecast of 220 million to 260 million yuan for Shenzhen Capstone Industrial Co., Ltd. (000038.SZ) with its chairman proposing a 6-for-10 conversion of capital surplus into shares.
[Trading Alarms]
○ IPOs of Athub, Frd Science ＆ Techonology and Leon Technology on Jan. 17
------
Shanghai Athub Co., Ltd. (732881.SH) will issue new shares at 7.8 yuan per share, with upper subscription limit of 21,000 shares, and it is mainly engaged in data center service; an offering price of 14.82 yuan per share and upper subscription limit of 10,000 shares for Shenzhen Frd Science ＆ Techonology Co., Ltd. (300602.SZ) mainly engaged in electromagnetic shielding ＆ heat conducting components; an offering price of 4.55 yuan per share and upper subscription limit of 10,000 shares for Leon Technology Co., Ltd. (300603.SZ) mainly engaged in communication network technical service.
TOP
○ Lower threshold on power battery capacity brings higher requirements on performance
○ New list of drugs covered by medical insurance to released soon, Chinese patent medicine and children's drug become highlight
○ Liaoning SG Automotive to see new controlling shareholder at premium
○ Controlling shareholders of several companies to increase shareholding, Kibing Group and others announce growth forecast
[SSN Focus]
○ Lower threshold on power battery capacity brings higher requirements on performance
------
SSN learnt that the conditions on the regulation of the power batteries for vehicles has solicited opinions and will be released soon. Compared with the draft for opinions issued by the Ministry of Industry and Information Technology (MIIT), the revised version has two major changes. Firstly, it lowered the capacity threshold from "no more than 8 billion watt-hours" to 3 to 5 billion watt-hours. Secondly, it raised the requirements on the research and development and the performance of power batteries.
Comment: If the threshold is set at no more than 8 billion watt-hours, only BYD Company Limited (01211.HK; 002594.SZ) and other few companies can meet the requirements. Guoxuan High-Tech Co., Ltd. (002074.SZ), China Aviation Lithium Battery CO., Ltd., Optimum Nano and EVE Energy Co., Ltd. (300014.SZ) have a capacity of 3 to 8 billion watt-hours. The lower threshold will bring in more excellent enterprises. In addition, the higher requirements on the performance of power batteries will see more policy supports. The newly released policies on the subsidies on new energy vehicles will consider the energy density. Tertiary materials and other industries will catch more attention from institutes.
○ ChiNext Price Index down for eight consecutive days, insurance, banking and other blue-chips performed well
------
The ChiNext Price Index closed 3.64 percent lower on Jan. 16. It has been declining for eight consecutive days and is close to the lowest level in the second half of 2015. Driven by the insurance, banking and other blue-chip stocks, the SSE 50 Index increased for the second consecutive trading days.
Analysts believe that the recent fluctuation experienced by the ChiNext Board is under the backdrop of the repair of valuation. The market is worried about the rising prices of commodities and the tightening of capital supply. At present, retail investors are not quite willing to buy in more shares, and the incremental capital in the market mainly comes from institutions with low risk preference, such as banks and insurance companies. These institutions prefer value stocks with sound performance and cyclical stocks with sufficiently cleared supply and improving industrial concentration ratio.
[SSN Selection]
○ Under a guideline issued by the State Council on Jan. 16, the paid use system of state-owned natural resources like land, water and mineral resources will be improved.
○ Five departments recently teamed up for a special rectification action about illegally refitted goods wagons. Such move might boost the demand for the heavy truck industry.
○ Baidu Inc. announced the establishment of its augmented reality (AR) laboratory on Jan. 16, involving technologies like image technology, vision localization and tracking, and face recognition.
○ Shanghai Municipal Transportation Commission indicated on Jan. 16 that the guidance on the development of public rental bike system (public-sharing bike) is under formulation.
○ China Petrochemical Corporation held its annual work conference on Jan. 16, proposing to advance the mixed-ownership reform in an active and steady way.
TOP
[Industry Information]
○ New list of drugs covered by medical insurance to released soon, Chinese patent medicine and children's drug become highlight
------
SSN learnt that the circular on issuing the list of drugs covered by medical insurance (2017 version) has been sent to all local governments which are required to give feedback before Jan. 16. Industry insiders point that this would be the last time that the new list of drugs covered by medical insurance solicits public opinions, and is expected to be released soon.
Comment: In addition to innovative drugs with excellent clinical effect, another highlight in the new list is Chinese patent medicine and children's drug. Relevant medicine enterprises expected to benefit from medicines that are very likely to be included in the list. Among listed companies, Tasly Pharmaceutical Group Co., Ltd. (600535.SH) and Tianjin Chase Sun Pharmaceutical Co., Ltd. (300026.SZ) own exclusive Chinese patent medicines. Yabao Pharmaceutical Group Co., Ltd. (600351.SH), Honz Pharmaceutical Co., Ltd. (300086.SZ), Sunflower Pharmaceutical Group Co., Ltd. (002732.SZ) and Hubei Jumpcan Pharmaceutical Co., Ltd. (600566.SH) are engaged in the research and development of children's drug. Their hit products of children's drug are very likely to be included.
○ MoA to increase subsidies on purchase of agricultural machinery, green machinery gains support
------
Vice Minister of Agriculture Zhang Taolin indicated at the work conference on national agricultural mechanization on Jan 16 that the Ministry of Agriculture (MoA) will increase the subsidies on the purchase of agricultural machinery. It will introduce open subsidies on high-efficient agricultural machinery for soil deep loosening, concentrated fertilization and film retrieving. In addition, it will expand the scope of subsidies on waste agricultural machinery and eliminate old machinery with high energy consumption and heavy pollution. It will promote the application of National III power equipment and promote the energy saving and emission cut of agricultural machinery.
Comment: It is introduced that comprehensive mechanization ratio of cultivation, plantation and harvest of crops in China is expected to be more than 65 percent last year, up by about 2 percentage points year on year. But according to action plan on agricultural machinery and equipment development, agricultural mechanization ratio should reach 75 percent by 2525. Analysts point out that there is still growth potential for agricultural machinery on the whole. Enterprises with technological advantages and leading in high-end agricultural machinery manufacturing ability will benefit from industrial development and improvement in market concentration.
TOP
[Announcement Interpretation]
○ Liaoning SG Automotive to see new controlling shareholder at premium
------
Liaoning SG Group Co., Ltd., controlling shareholder of Liaoning SG Automotive Group Co., Ltd. (600303.SH), plans to transfer 97.895 million shares of the listed company (accounting for 14.49 percent of total share capital of the company) at a price of 23.21 yuan per share to Hawtai Motor Group and entrusts the voting right of 45,818,300 shares to the latter. With this deal done, Hawtai Motor will become controlling shareholder of Liaoning SG Automotive and the listed company's actual controllers will be Zhang Xiugen and Zhang Hongliang. Stock price of Liaoning SG Automotive was 9.02 yuan per share before trading suspension and transfer price is 157 percent of that price.
○ Shareholders of Meida Nylon transfer shares at 97 percent premium
------
Tianchang Investment and Tagen Group, the third and fourth largest shareholder of Guangdong Xinhui Meida Nylon Co., Ltd. (000782.SZ), proposes to transfer 9.81 percent and 5.68 percent of the listed company held by them to Qingdao New Energy Solutions Inc. (NESI) at 19.93 yuan per share, representing premium of 97 percent compared with the price before suspension of trading of 10.14 yuan per share; at the same time, the largest shareholder Junhe Investment also proposes to entrust voting rights of 13 percent equities held by it to NESI. The two transferors and one entrusting party are all controlled by the actual controller Liang Weidong. Upon completion of the transaction, NESI will hold 15.49 percent equities of the company and 28.49 percent voting rights of the company. Li Jianzhi will become actual controller of the company. NESI is primarily engaged in solar photoelectric product. It has a net asset of 848 million yuan and recorded loss of 4.58 million yuan in 2016.
TOP
○ Controlling shareholders of several companies to increase shareholding
------
Zhou Shiping, actual controller of Fujian Sunnada Communication Co., Ltd. (002417.SZ) plans to increase shareholding in the company in the next 12 months at no more than 18 yuan per share with a total of no more than 200 million yuan. Controlling shareholder Henan Kedi Dairy CO., Ltd. (002770.SZ) on Jan. 16 increased holding 4.13 million shares of the company, and plans to increase holding no less than 1 percent and no more than 2 percent shareholding in the company in the next year. CRRC Guiyang Co., Ltd., party acting in concert with South Huiton Company Limited (000920.SZ), on Jan. 13 and Jan. 16 in total bought in 2.03 million shares of the company. In the next year, CRRC Guiyang will increase holding no more than 2 percent of the total share capital of the listed company, at no more than 18 yuan per share. In addition, controlling shareholder of ORG Packaging Co., Ltd. (002701.SZ) on Jan. 16 increased holding 3.78 million shares of the company. Actual controller of Meinian Onehealth Healthcare Holdings Co., Ltd. (002044.SZ) on Jan. 13 and Jan. 16 continued to increase in total 1 million shares of the company. Controlling shareholder of Kaidi Ecological and Environmental Technology Co., Ltd. (000939.SZ) on Jan. 16 increased holding 1.06 million shares of the company.
○ Kemen Noodle Manufacturing launches ESOP
------
Kemen Noodle Manufacturing Co., Ltd. (002661.SZ) proposes to launch an employee stock ownership trust plan (ESOP) at the cap of 350 million yuan. The plan will be divided into prime and subprime units. No more than 285 employees, including directors, supervisors and senior management will subscribe the whole subprime unit of 117 million yuan. Chen Keming, chairman of the company, and Chen Kezhong, vice chairman of the company will subscribe 15.88 percent respectively. The ESOP will raise 233 million yuan prime fund in the market.
[Financial Reports Express]
○ Kibing Group and others announce growth forecast in annual report
------
Zhuzhou Kibing Group Co., Ltd. (601636.SH) announces a growth forecast of 390 to 410 percent in its annual report, mainly due to sales growth; a growth forecast of 180 to 210 percent for Guangdong Biolight Meditech Co., Ltd. (300246.SZ), mainly due to great revenue growth of main businesses; a growth forecast of 182 to 208 percent for Beijing Sinnet Technology Co., Ltd. (300383.SZ), mainly due to expectation that Beijing Meganest Technology Co., Ltd. and Beijing Agrantsem Technology Co., Ltd. will realize the performance commitment; a growth forecast up to 155 to 165 percent for Anhui Jinhe Industrial Co., Ltd. (002597.SZ), mainly due to chemical product price uptrend; a growth forecast up to 320 to 370 percent for Henan Billions Chemicals Co., Ltd. (002601.SZ), mainly due to price uptrend of its main product titanium dioxide; a growth forecast of 285 to 323 percent for Fujian Fynex Textile Science ＆ Technology Co., Ltd. (600493.SH), mainly due to investment dividends.
○ Ceepower, Cihang Group, and others propose high share conversion and dividend in annual report
------
Ceepower Co., Ltd. (300062.SZ) announces a growth forecast of 270 to 300 percent in annual report, and its actual controller proposes a 20-for-10 conversion of capital surplus into shares; a growth forecast of 236 to 253 percent for Jinzhou Cihang Group Co., Ltd. (000587.SZ), with its controlling shareholder proposing a 10-for-10 conversion of capital surplus into shares combined with 1.5 yuan dividend for every 10 shares; a growth forecast of 50 to 60 percent for Shandong Sinocera Functional Material Co., Ltd. (300285.SZ), with its actual controller proposing a 10-for-10 conversion of capital surplus into shares combined with 1 yuan dividend for every 10 shares; a growth forecast of 50 to 80 percent for Shenzhen JT Automation Equipment Co., Ltd. (300400.SZ), with its actual controller proposing a 5-for-10 conversion of capital surplus into shares combined with 1 yuan dividend and additional 5 shares for every 10 shares; a net profit forecast of 220 million to 260 million yuan for Shenzhen Capstone Industrial Co., Ltd. (000038.SZ) with its chairman proposing a 6-for-10 conversion of capital surplus into shares.
[Trading Alarms]
○ IPOs of Athub, Frd Science ＆ Techonology and Leon Technology on Jan. 17
------
Shanghai Athub Co., Ltd. (732881.SH) will issue new shares at 7.8 yuan per share, with upper subscription limit of 21,000 shares, and it is mainly engaged in data center service; an offering price of 14.82 yuan per share and upper subscription limit of 10,000 shares for Shenzhen Frd Science ＆ Techonology Co., Ltd. (300602.SZ) mainly engaged in electromagnetic shielding ＆ heat conducting components; an offering price of 4.55 yuan per share and upper subscription limit of 10,000 shares for Leon Technology Co., Ltd. (300603.SZ) mainly engaged in communication network technical service.
TOP
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