[Today's Guide]
○ Energy development plan proposes reforms, oil reform plan to release this year
○ Supply-side reform produces desired results, supply-demand structure of polyester fiber industry keeps improving
○ Harbin Air Conditioning's equity to be transferred, Gangtai Holding to buy top Italian jeweler
○ Shaanxi Coal Industry, Baoshan Iron ＆ Steel and others announce growth forecast, Doron Technology and Yongli Belting propose high share conversion and dividend in annual report
[SSN Focus]
○ Energy development plan proposes reforms, oil reform plan to release this year
------
The 13th Five-year Plan on Energy Development was officially released on Jan. 17. It proposes to optimize the energy consumption structure. The consumption proportion of non-fossil energy and natural gas will be increased to over 15 percent and 10 percent while the coal consumption will be reduced to below 58 percent. The Plan also mentioned the systematic reform in energy price, power, oil and gas industries. It requires advancing the oil and gas systematic reform, introduce plans on the reform of the oil and gas systems to gradually expand the pilot reform.
Comment: Niu Li, director of the Economic Forecast Department of the State Information Center, expects that the detailed plans on the oil and gas systematic reform will be released this year. Institutes believe that the core in the oil and gas reform plans will be breaking the monopoly and loosen the market access to give full play to the role of the market. Specifically, it will deregulate the right for the exploration, development and import of crude and regulate the exit and transfer of mining rights in the upper stream. In the middle stream, it will further the separation of the networking and operation of oil and gas pipelines and open the pipeline to third parties in a fair way. In the downstream, it will introduce social capitals in the distribution of oil and gas and conduct the mixed ownership reform to improve the efficiency in the sale of oil and gas.
[SSN Selection]
○ The regulatory authorities are mulling relevant policies on re-financing, Xinhua News Agency reported in an article on how to view the new normal of IPOs on Jan. 17.
○ The State Council recently released a circular on expanding opening to the outside with the focus on loosening the access restrictions on foreign-funded banks, securities and insurance companies as well as other financial institutes.
○ The Ministry of Industry and Information Technology (MIIT) released the 5-year development plan for the information and communications industry on Jan. 17, proposing clearly to initiate the commercial services of 5G at the end of the "13th five-year" plan period (2016-2020).
○ The outflow of securities margin in last week stood at 36.9 billion yuan, representing a net outflow for the third consecutive week.
○ As reported by www.caixin.com, China Petrochemical Corporation Group (Sinopec Group) invested 5 billion yuan in JZ Securities, further expanding its financing business.
○ The official website of Shenzhen Stock Exchange reported on Jan. 16 that Dong Mingzhu, chairwoman of China's largest air conditioning manufacturer Gree Electric Appliances Inc., purchased 130,000 shares of Zhuhai Gree Electric Appliances Inc. (000651.SZ) at the price of 23.58 yuan per share.
TOP
[Industry Information]
○ Supply-side reform produces desired results, supply-demand structure of polyester fiber industry keeps improving
------
Tongkun Group Co., Ltd. (601233.SH) announced on Jan. 17 evening that it forecasts an annual growth of 855-907 percent. Based on this, its net profit in the fourth quarter of 2016 recorded around 540 million yuan, increasing sharply by 157 percent from previous quarter. The company claimed that thanks to the state's supply-side reform, sound results are produced in cutting the capacity and inventory of the polyester filament yarn (PFY) industry. Domestic demand for textile grows steadily, driving constant growth on the demand for PFY.
Comment: PFY prices have risen remarkably in last December. Points out in its research report that growth in oil prices is a major driver for this round of price hike. The polyester fiber industry is expected its newly added capacity increase less than 3 percent and demands expand over 5 percent in the next two years. The industry's supply and demand conditions are expected to improve more than expected. Leading companies with high polyester fiber productivity and flexible performance are expected to benefit first. Hengyi Petrochemical Co., Ltd. (000703.SZ) and Rongsheng Petrochemical Co., Ltd. (002493.SZ) respectively own 1.65-million-tonne and 1-million-tonne PFY productivity
○ China increases support for major science and technology project, domestication of numerically-controlled machine tool to speed up
------
SSN learnt that relevant authorities approved the special project in high-end numerically-controlled machine tool and basic manufacturing equipment as one of major national science and technology projects, and will appropriate more national fund for the project during the 13th Five-Year Plan period. Most of the fund will be appropriated from 2017 to 2018 so that the project may achieve progress in 2020. The project has also been included into the "brain exchange program". That is to say, the project will take the lead to replace imported numerical control system with domestically-made one in national defense and military industry. The Ministry of Industry and Information Technology (MIIT) will hold a promotion conference on Jan. 18.
Comment: National defense and military industry has tough requirements on performance of equipment including numerically-controlled machine tool. According to research report of "brain exchange program", 6,000 sets of numerically-controlled machine tools need to change domestic numerical control system. Industrial insiders think that the special project might reach peak in 2018. Among A-share listed companies, Wuhan Huazhong Numerical Control Co., Ltd. (300161.SZ) is one of the 5 enterprises receiving major support from the special project. Sales of i5 machine tool of Shenyang Machine Tool Co., Ltd. (000410.SZ) surge significantly after adopting independent numerical control system.
TOP
[Announcement Interpretation]
○ Harbin Air Conditioning's equity to be transferred with VAM on performance
------
Harbin Industrial Investment Group Co., Ltd., controlling shareholder of Harbin Air Conditioning Co., Ltd. (600202.SH), plans to publicly transfer its 25 percent equity of the listed company at a price of 11.74 yuan per share at least, making its shareholding proportion down to 9.03 percent. The transferee needs to sign valuation adjustment mechanism (VAM) on performance with Harbin Industrial Investment to ensure that total operating revenues and net profits of air conditioning sector of the listed company shouldn't be less than 2 billion yuan and 600 million yuan respectively during 2017 and 2019; otherwise, the differential in net profits should be compensated by the transferee to Harbin Industrial Investment. Net profits of Harbin Air Conditioning recorded about 14 million yuan in 2015 and the company suffered a loss worth around 82 million yuan in the first three quarters of last year. The company's stock price was 12.10 yuan per share before trading suspension.
○ Gangtai Holding to buy top Italian jeweler
------
Gansu Gangtai Holding (Group) Co., Ltd. (600687.SH) proposes to issue shares at 15.42 yuan per share to its largest shareholder Gangtai Group through private placement. The fundraising will be used to acquire the entire equities of Yuelong Industries Co., Ltd. held by Gangtai Group. At the same time, it proposes to raise no more than 1.36 million yuan at the same price from Gangtai Group and Hangzhou Zhenyuan for the construction of marketing networks. Upon completion of the transaction, the listed company will hold 85 percent equities of BHI through Yuelong Industries. BHI is top Italian Jeweler with hundred years of history which primarily operates the Buccellati brand.
○ Property developer CIFI Group buys Yang Guang to 5 pct on secondary market
------
Yang Guang Co., Ltd. (000608.SZ) announced that Shanghai Yongpan Industries from Nov. 2, 2016 to Jan. 17, 2017 increased holding 37,495,600 shares of the company on the secondary market, accounting for 5 percent of the company's total share capital. It is learnt that Shanghai Yongpan is a wholly-owned subsidiary of property developer CIFI Group.
○ Actual controllers of several companies increase shareholding
------
Actual controller of Europol Intelligent Network Co., Ltd. (002711.SZ) proposes to increase no more than 500 million yuan value of shares of the company in the next four month. Controlling shareholder and actual controller of Hand Enterprise Solution Co., Ltd. (300170.SZ) proposes to increase holding no more than 70 million yuan value of shares of the company in the next six months.
Controlling shareholder of Suzhou Tianma Specialty Chemicals Co., Ltd. (002453.SZ) from Jan. 12 to 17 increased holding 8.98 million shares of the company. Zhejiang Dian Diagnostics Co., Ltd. (300244.SZ) announced that the company had repurchased 3.48 million shares so far. Actual controller of Beijing BEILU Pharmaceutical Co., Ltd. (300016.SZ) from Jan. 10 to 17 increased holding 4.11 million shares of the company. Secretary of the board of Palm Eco-Town Development Co., Ltd. (002431.SZ) on Jan. 17 increased holding 1.22 million shares of the company.
TOP
[Financial Reports Express]
○ Shaanxi Coal Industry, Baoshan Iron ＆ Steel and others announce growth forecast
------
Shaanxi Coal Industry Company Limited (601225.SH) announces a profit forecast of 2.5 to 3.0 billion yuan in its annual report, greatly stopping the loss due to increasing coal price; a growth forecast of 770 percent for Baoshan Iron ＆ Steel Co., Ltd. (600019.SH) mainly due to sales volume of advanced and strategic products outperforming the targets; a growth forecast up to 500 to 550 percent for Goldenmax International Technology Ltd. (002636.SZ) mainly due to its growth in product price; a growth forecast of 100 to 125 percent for Kyland Technology Co., Ltd. (300353.SZ) mainly due to strong uptrend of military business; a growth forecast of 196 to 246 percent for Hunan Investment Group Co., Ltd. (000548.SZ) mainly due to determined interest income of land project.
○ Doron Technology and Yongli Belting propose high share conversion and dividend in annual report
------
The actual controller of Nanjing Doron Technology Corporation Ltd. (603528.SH) proposes a 10-for-10 conversion of capital surplus into shares combined with 5 yuan dividend and additional 10 shares for every 10 shares according to its annual report; a 26-for-10 conversion of capital surplus into shares combined with 1.5 yuan dividend for every 10 shares proposed by the controlling shareholder of Shanghai Yongli Belting Co., Ltd. (300230.SZ).
[Trading Alarms]
○ IPOs of Qijing Machinery, Bio-Chem and Golden Sun Abrasives on Jan. 18
------
Qijing Machinery Co., Ltd. (732677.SH) mainly engaged in components for household appliances will issue new shares at 21.13 yuan per share with upper subscription limit of 20,000 shares; an offering price of 9.24 yuan per share and upper subscription limit of 13,000 shares for Dalian Bio-Chem Co., Ltd. (732360.SH) mainly engaged in industrial bactericide; an offering price of 8.36 yuan per share and upper subscription limit of 8,000 shares for Dongguan Golden Sun Abrasives CO., Ltd. (300606.SZ) mainly engaged in coated abrasive tools.
TOP
○ Energy development plan proposes reforms, oil reform plan to release this year
○ Supply-side reform produces desired results, supply-demand structure of polyester fiber industry keeps improving
○ Harbin Air Conditioning's equity to be transferred, Gangtai Holding to buy top Italian jeweler
○ Shaanxi Coal Industry, Baoshan Iron ＆ Steel and others announce growth forecast, Doron Technology and Yongli Belting propose high share conversion and dividend in annual report
[SSN Focus]
○ Energy development plan proposes reforms, oil reform plan to release this year
------
The 13th Five-year Plan on Energy Development was officially released on Jan. 17. It proposes to optimize the energy consumption structure. The consumption proportion of non-fossil energy and natural gas will be increased to over 15 percent and 10 percent while the coal consumption will be reduced to below 58 percent. The Plan also mentioned the systematic reform in energy price, power, oil and gas industries. It requires advancing the oil and gas systematic reform, introduce plans on the reform of the oil and gas systems to gradually expand the pilot reform.
Comment: Niu Li, director of the Economic Forecast Department of the State Information Center, expects that the detailed plans on the oil and gas systematic reform will be released this year. Institutes believe that the core in the oil and gas reform plans will be breaking the monopoly and loosen the market access to give full play to the role of the market. Specifically, it will deregulate the right for the exploration, development and import of crude and regulate the exit and transfer of mining rights in the upper stream. In the middle stream, it will further the separation of the networking and operation of oil and gas pipelines and open the pipeline to third parties in a fair way. In the downstream, it will introduce social capitals in the distribution of oil and gas and conduct the mixed ownership reform to improve the efficiency in the sale of oil and gas.
[SSN Selection]
○ The regulatory authorities are mulling relevant policies on re-financing, Xinhua News Agency reported in an article on how to view the new normal of IPOs on Jan. 17.
○ The State Council recently released a circular on expanding opening to the outside with the focus on loosening the access restrictions on foreign-funded banks, securities and insurance companies as well as other financial institutes.
○ The Ministry of Industry and Information Technology (MIIT) released the 5-year development plan for the information and communications industry on Jan. 17, proposing clearly to initiate the commercial services of 5G at the end of the "13th five-year" plan period (2016-2020).
○ The outflow of securities margin in last week stood at 36.9 billion yuan, representing a net outflow for the third consecutive week.
○ As reported by www.caixin.com, China Petrochemical Corporation Group (Sinopec Group) invested 5 billion yuan in JZ Securities, further expanding its financing business.
○ The official website of Shenzhen Stock Exchange reported on Jan. 16 that Dong Mingzhu, chairwoman of China's largest air conditioning manufacturer Gree Electric Appliances Inc., purchased 130,000 shares of Zhuhai Gree Electric Appliances Inc. (000651.SZ) at the price of 23.58 yuan per share.
TOP
[Industry Information]
○ Supply-side reform produces desired results, supply-demand structure of polyester fiber industry keeps improving
------
Tongkun Group Co., Ltd. (601233.SH) announced on Jan. 17 evening that it forecasts an annual growth of 855-907 percent. Based on this, its net profit in the fourth quarter of 2016 recorded around 540 million yuan, increasing sharply by 157 percent from previous quarter. The company claimed that thanks to the state's supply-side reform, sound results are produced in cutting the capacity and inventory of the polyester filament yarn (PFY) industry. Domestic demand for textile grows steadily, driving constant growth on the demand for PFY.
Comment: PFY prices have risen remarkably in last December. Points out in its research report that growth in oil prices is a major driver for this round of price hike. The polyester fiber industry is expected its newly added capacity increase less than 3 percent and demands expand over 5 percent in the next two years. The industry's supply and demand conditions are expected to improve more than expected. Leading companies with high polyester fiber productivity and flexible performance are expected to benefit first. Hengyi Petrochemical Co., Ltd. (000703.SZ) and Rongsheng Petrochemical Co., Ltd. (002493.SZ) respectively own 1.65-million-tonne and 1-million-tonne PFY productivity
○ China increases support for major science and technology project, domestication of numerically-controlled machine tool to speed up
------
SSN learnt that relevant authorities approved the special project in high-end numerically-controlled machine tool and basic manufacturing equipment as one of major national science and technology projects, and will appropriate more national fund for the project during the 13th Five-Year Plan period. Most of the fund will be appropriated from 2017 to 2018 so that the project may achieve progress in 2020. The project has also been included into the "brain exchange program". That is to say, the project will take the lead to replace imported numerical control system with domestically-made one in national defense and military industry. The Ministry of Industry and Information Technology (MIIT) will hold a promotion conference on Jan. 18.
Comment: National defense and military industry has tough requirements on performance of equipment including numerically-controlled machine tool. According to research report of "brain exchange program", 6,000 sets of numerically-controlled machine tools need to change domestic numerical control system. Industrial insiders think that the special project might reach peak in 2018. Among A-share listed companies, Wuhan Huazhong Numerical Control Co., Ltd. (300161.SZ) is one of the 5 enterprises receiving major support from the special project. Sales of i5 machine tool of Shenyang Machine Tool Co., Ltd. (000410.SZ) surge significantly after adopting independent numerical control system.
TOP
[Announcement Interpretation]
○ Harbin Air Conditioning's equity to be transferred with VAM on performance
------
Harbin Industrial Investment Group Co., Ltd., controlling shareholder of Harbin Air Conditioning Co., Ltd. (600202.SH), plans to publicly transfer its 25 percent equity of the listed company at a price of 11.74 yuan per share at least, making its shareholding proportion down to 9.03 percent. The transferee needs to sign valuation adjustment mechanism (VAM) on performance with Harbin Industrial Investment to ensure that total operating revenues and net profits of air conditioning sector of the listed company shouldn't be less than 2 billion yuan and 600 million yuan respectively during 2017 and 2019; otherwise, the differential in net profits should be compensated by the transferee to Harbin Industrial Investment. Net profits of Harbin Air Conditioning recorded about 14 million yuan in 2015 and the company suffered a loss worth around 82 million yuan in the first three quarters of last year. The company's stock price was 12.10 yuan per share before trading suspension.
○ Gangtai Holding to buy top Italian jeweler
------
Gansu Gangtai Holding (Group) Co., Ltd. (600687.SH) proposes to issue shares at 15.42 yuan per share to its largest shareholder Gangtai Group through private placement. The fundraising will be used to acquire the entire equities of Yuelong Industries Co., Ltd. held by Gangtai Group. At the same time, it proposes to raise no more than 1.36 million yuan at the same price from Gangtai Group and Hangzhou Zhenyuan for the construction of marketing networks. Upon completion of the transaction, the listed company will hold 85 percent equities of BHI through Yuelong Industries. BHI is top Italian Jeweler with hundred years of history which primarily operates the Buccellati brand.
○ Property developer CIFI Group buys Yang Guang to 5 pct on secondary market
------
Yang Guang Co., Ltd. (000608.SZ) announced that Shanghai Yongpan Industries from Nov. 2, 2016 to Jan. 17, 2017 increased holding 37,495,600 shares of the company on the secondary market, accounting for 5 percent of the company's total share capital. It is learnt that Shanghai Yongpan is a wholly-owned subsidiary of property developer CIFI Group.
○ Actual controllers of several companies increase shareholding
------
Actual controller of Europol Intelligent Network Co., Ltd. (002711.SZ) proposes to increase no more than 500 million yuan value of shares of the company in the next four month. Controlling shareholder and actual controller of Hand Enterprise Solution Co., Ltd. (300170.SZ) proposes to increase holding no more than 70 million yuan value of shares of the company in the next six months.
Controlling shareholder of Suzhou Tianma Specialty Chemicals Co., Ltd. (002453.SZ) from Jan. 12 to 17 increased holding 8.98 million shares of the company. Zhejiang Dian Diagnostics Co., Ltd. (300244.SZ) announced that the company had repurchased 3.48 million shares so far. Actual controller of Beijing BEILU Pharmaceutical Co., Ltd. (300016.SZ) from Jan. 10 to 17 increased holding 4.11 million shares of the company. Secretary of the board of Palm Eco-Town Development Co., Ltd. (002431.SZ) on Jan. 17 increased holding 1.22 million shares of the company.
TOP
[Financial Reports Express]
○ Shaanxi Coal Industry, Baoshan Iron ＆ Steel and others announce growth forecast
------
Shaanxi Coal Industry Company Limited (601225.SH) announces a profit forecast of 2.5 to 3.0 billion yuan in its annual report, greatly stopping the loss due to increasing coal price; a growth forecast of 770 percent for Baoshan Iron ＆ Steel Co., Ltd. (600019.SH) mainly due to sales volume of advanced and strategic products outperforming the targets; a growth forecast up to 500 to 550 percent for Goldenmax International Technology Ltd. (002636.SZ) mainly due to its growth in product price; a growth forecast of 100 to 125 percent for Kyland Technology Co., Ltd. (300353.SZ) mainly due to strong uptrend of military business; a growth forecast of 196 to 246 percent for Hunan Investment Group Co., Ltd. (000548.SZ) mainly due to determined interest income of land project.
○ Doron Technology and Yongli Belting propose high share conversion and dividend in annual report
------
The actual controller of Nanjing Doron Technology Corporation Ltd. (603528.SH) proposes a 10-for-10 conversion of capital surplus into shares combined with 5 yuan dividend and additional 10 shares for every 10 shares according to its annual report; a 26-for-10 conversion of capital surplus into shares combined with 1.5 yuan dividend for every 10 shares proposed by the controlling shareholder of Shanghai Yongli Belting Co., Ltd. (300230.SZ).
[Trading Alarms]
○ IPOs of Qijing Machinery, Bio-Chem and Golden Sun Abrasives on Jan. 18
------
Qijing Machinery Co., Ltd. (732677.SH) mainly engaged in components for household appliances will issue new shares at 21.13 yuan per share with upper subscription limit of 20,000 shares; an offering price of 9.24 yuan per share and upper subscription limit of 13,000 shares for Dalian Bio-Chem Co., Ltd. (732360.SH) mainly engaged in industrial bactericide; an offering price of 8.36 yuan per share and upper subscription limit of 8,000 shares for Dongguan Golden Sun Abrasives CO., Ltd. (300606.SZ) mainly engaged in coated abrasive tools.
TOP
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