[Today's Guide]
○ CIRC strengthens regulation on insurance funds, investment in stocks not to reduce
○ MIIT promotes domestication of aviation aluminum, strives to achieve major progress in 2017
○ Suzhou TFC Optical Communication to launch private placement, GEM to expand recycling of power battery through private placement
○ Dowstone Technology to extend new energy industrial chain, Sunac China Holdings increases shareholdings in Jinke Property Group
[SSN Focus]
○ CIRC strengthens regulation on insurance funds, investment in stocks not to reduce
------
China Insurance Regulatory Commission (CIRC) released the circular on further strengthening the regulation on investment in stocks with insurance funds on Jan. 24. It will implement differentiated regulation based on the shareholding changes. Those meeting the criteria for significant investments shall conduct after-filing while those involved acquisitions shall be approved in advance. There are industries prohibited to be invested in. The temporary bail-outs introduced in the second half of 2015 (increasing the proportion of individual blue chips and equity assets) will resume normal.
Comment: The regulation by the CIRC is to prevent radical investment and concentration risks of individual companies and promote diversified investment, value investment and long-term investment by insurance funds. As the overall proportion of equity investment in the insurance industry is far below the upper limit, premium will remain stable growth. The market still sees shortage of quality assets. It is expected that the investment in A shares will expand, but the investment method will change. The shareholding increase and participation in the operation and management of listed companies will reduce. They will conduct more diversified investments in quality listed companies with low valuation and high dividends.
[SSN Selection]
○ The State Council recently issued the 13th five-year plan (2016-2020) for the development of ethnic minorities, proposing to strengthen infrastructure construction, cultivate and develop distinctive industries that minority areas have a competitive edge in, and etc.
○ China's central bank raised the interest rate of medium-term lending facility (MLF) by 10 basis points on Jan. 24. Industry insiders believed that the central bank aims to further cut leverage and curb asset bubbles.
○ Securities margin saw a net inflow of 45.6 billion yuan in last week, ending the three-week net outflow.
○ Funds flew to Hong Kong stock market through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect recorded 3.5 billion HK dollars on Jan. 24, the highest in January. Blue-chip Hong Kong stocks were still favored.
○ According to foreign media, China plans to cut 30 percent of the electrolytic aluminum capacity in four provinces located in its northern part. By the time the news is released, the price of aluminum futures in London hikes around 1 percent, hitting a new high in over a year.
TOP
[Industry Information]
○ MIIT promotes domestication of aviation aluminum, strives to achieve major progress in 2017
------
The Ministry of Industry and Information Technology (MIIT) should prepare plans for the key works in 2017, and producers should accelerate the development and application of major aviation aluminum brands, striving to achieve major progress in 2017, indicated MIIT Vice Minister Xu Lejiang at the annual work conference on the civil aircraft aluminum upstream and downstream cooperative mechanism held on Jan. 23. Commercial Aircraft Corporation of China Ltd., Aviation Industry Corporation of China, Aluminum Corporation of China Limited and Shandong Nanshan Aluminum Co., Ltd. (600219.SH) reported the progress of the application and preparation of aluminum products for civil aircraft use and gave some suggestions.
Comment: Currently, the aluminum lithium alloy applied in C919 passenger airliner accounts for about 65 percent of all materials in the airliner. Most of the materials are imported, and only few are made in home. Institutions believe that as the production of China's large airliner accelerates and the demands for general aircraft increase gradually, the aviation aluminum market is expected to grow rapidly. Among listed companies, Henan Mingtai Aluminum Industrial Co., Ltd. (601677.SH) and Nanshan Aluminum (600219.SH) are aviation aluminum manufacturers.
TOP
[Announcement Interpretation]
○ Suzhou TFC Optical Communication to raise RMB718 mln through private placement to increase production of high-speed optical device
------
Suzhou TFC Optical Communication Co., Ltd. (300394.SZ) plans to raise 1.78 billion yuan by issuing 30 million shares at most through private placement to invest in high-speed optical device project. After reaching designed capacity, this project is able to annually produce 30.6 million high-speed optical devices, which will help consolidate the company's advantageous position in optical communication segmented market. The pricing benchmark of this time is based on the first day of issuance.
○ GEM to expand recycling of power battery through private placement
------
GEM Co., Ltd. (002340.SZ) plans to raise 2.951 billion yuan at most by issuing no more than 500 million shares at a price of no less than 5.90 yuan per share through private placement to invest in project of dismantlement and recycling of power battery. Xu Kaihua, one of the company's actual controllers, intends to subscribe no less than 13.50 percent of the total shares in the private placement.
TOP
○ Dowstone Technology to raise RMB800 mln by private placement to extend new energy industrial chain
------
Guangdong Dowstone Technology Co., Ltd. (300409.SZ) proposes to issue no more than 26 million shares to raise 802 million yuan for comprehensive lepidolite development ＆ utilization industrialized project. Especially, its controlling shareholder Rong Jihua committed to carry out a subscription no less than 10 percent but no more than 40 percent. The pricing benchmark date is the first day of issuance. The listed company indicated the project invested by raised funds could reach an annual lithium carbonate output of 10,000 tons after it realizes design capacity.
○ Sunac China Holdings continues to increase shareholdings in Jinke Property Group
------
Jinke Property Group Co., Ltd. (000656.SZ) announces that Tianjin Runze Property Co., Ltd. and Tianjin Runding Property Co., Ltd. under Sunac China Holdings Limited have totally held 3.14 percent equities of the listed company since Nov. 30, 2016 to Jan. 24, 2017. Up to now, Sunac China Holdings has held 23.15 percent equities of the listed company in total.
[Financial Reports Express]
○ Hengtong Optic-electric forecasts growth
------
Hengtong Optic-electric Co., Ltd. (600487.SH) forecasted 120 percent to 170 percent growth in the annual report, primarily due to continuous improvement of profitability of the optical communication industry. Shandong Xiantan Co., Ltd. (002746.SZ) revised upwardly the forecasted annual growth to 964 percent to 1008 percent, primarily due to sharp decline of the price of raw materials. Zhejiang Jingxing Paper Joint Stock Co., Ltd. (002067.SZ) revised the forecasted annual growth higher to 2,632 percent to 2,680 percent due to the prices of its products increased. Norinco International Cooperation Ltd. (000065.SZ) forecasted 128 percent to 133 percent growth in the annual report, primarily due to increase of revenue from international projects.
○ Anxin Trust Co., Ltd. (600816.SH) reported 76 percent growth in the annual report. The board of directors has passed the distribution plan of 12-for-10 conversion of capital surplus into shares.
[Trading Alarm]
○ Three new shares offer for IPOs on Jan. 25
------
Chahua Modern Housewares Co., Ltd. (732615.SZ) will offer for subscription at the 8.37 yuan per share. The upper limit for each applicant is 24,000 shares. The company is primarily engaged in plastic housewares. Shanghai Tianyang Hotmelt Adhesives Co., ltd (732330.SZ) will offer for subscription at 18.19 yuan per share. The upper limit for each applicant is 15,000 shares. The company is primarily engaged in hotmelt adhesive materials. Yangzhou Chenhua New Material Co., Ltd. (300610.SZ) will offer for subscription at 10.57 yuan per share. The upper limit for each applicant is 10,000 shares. The company is primarily engaged in fine chemical materials.
○ CIRC strengthens regulation on insurance funds, investment in stocks not to reduce
○ MIIT promotes domestication of aviation aluminum, strives to achieve major progress in 2017
○ Suzhou TFC Optical Communication to launch private placement, GEM to expand recycling of power battery through private placement
○ Dowstone Technology to extend new energy industrial chain, Sunac China Holdings increases shareholdings in Jinke Property Group
[SSN Focus]
○ CIRC strengthens regulation on insurance funds, investment in stocks not to reduce
------
China Insurance Regulatory Commission (CIRC) released the circular on further strengthening the regulation on investment in stocks with insurance funds on Jan. 24. It will implement differentiated regulation based on the shareholding changes. Those meeting the criteria for significant investments shall conduct after-filing while those involved acquisitions shall be approved in advance. There are industries prohibited to be invested in. The temporary bail-outs introduced in the second half of 2015 (increasing the proportion of individual blue chips and equity assets) will resume normal.
Comment: The regulation by the CIRC is to prevent radical investment and concentration risks of individual companies and promote diversified investment, value investment and long-term investment by insurance funds. As the overall proportion of equity investment in the insurance industry is far below the upper limit, premium will remain stable growth. The market still sees shortage of quality assets. It is expected that the investment in A shares will expand, but the investment method will change. The shareholding increase and participation in the operation and management of listed companies will reduce. They will conduct more diversified investments in quality listed companies with low valuation and high dividends.
[SSN Selection]
○ The State Council recently issued the 13th five-year plan (2016-2020) for the development of ethnic minorities, proposing to strengthen infrastructure construction, cultivate and develop distinctive industries that minority areas have a competitive edge in, and etc.
○ China's central bank raised the interest rate of medium-term lending facility (MLF) by 10 basis points on Jan. 24. Industry insiders believed that the central bank aims to further cut leverage and curb asset bubbles.
○ Securities margin saw a net inflow of 45.6 billion yuan in last week, ending the three-week net outflow.
○ Funds flew to Hong Kong stock market through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect recorded 3.5 billion HK dollars on Jan. 24, the highest in January. Blue-chip Hong Kong stocks were still favored.
○ According to foreign media, China plans to cut 30 percent of the electrolytic aluminum capacity in four provinces located in its northern part. By the time the news is released, the price of aluminum futures in London hikes around 1 percent, hitting a new high in over a year.
TOP
[Industry Information]
○ MIIT promotes domestication of aviation aluminum, strives to achieve major progress in 2017
------
The Ministry of Industry and Information Technology (MIIT) should prepare plans for the key works in 2017, and producers should accelerate the development and application of major aviation aluminum brands, striving to achieve major progress in 2017, indicated MIIT Vice Minister Xu Lejiang at the annual work conference on the civil aircraft aluminum upstream and downstream cooperative mechanism held on Jan. 23. Commercial Aircraft Corporation of China Ltd., Aviation Industry Corporation of China, Aluminum Corporation of China Limited and Shandong Nanshan Aluminum Co., Ltd. (600219.SH) reported the progress of the application and preparation of aluminum products for civil aircraft use and gave some suggestions.
Comment: Currently, the aluminum lithium alloy applied in C919 passenger airliner accounts for about 65 percent of all materials in the airliner. Most of the materials are imported, and only few are made in home. Institutions believe that as the production of China's large airliner accelerates and the demands for general aircraft increase gradually, the aviation aluminum market is expected to grow rapidly. Among listed companies, Henan Mingtai Aluminum Industrial Co., Ltd. (601677.SH) and Nanshan Aluminum (600219.SH) are aviation aluminum manufacturers.
TOP
[Announcement Interpretation]
○ Suzhou TFC Optical Communication to raise RMB718 mln through private placement to increase production of high-speed optical device
------
Suzhou TFC Optical Communication Co., Ltd. (300394.SZ) plans to raise 1.78 billion yuan by issuing 30 million shares at most through private placement to invest in high-speed optical device project. After reaching designed capacity, this project is able to annually produce 30.6 million high-speed optical devices, which will help consolidate the company's advantageous position in optical communication segmented market. The pricing benchmark of this time is based on the first day of issuance.
○ GEM to expand recycling of power battery through private placement
------
GEM Co., Ltd. (002340.SZ) plans to raise 2.951 billion yuan at most by issuing no more than 500 million shares at a price of no less than 5.90 yuan per share through private placement to invest in project of dismantlement and recycling of power battery. Xu Kaihua, one of the company's actual controllers, intends to subscribe no less than 13.50 percent of the total shares in the private placement.
TOP
○ Dowstone Technology to raise RMB800 mln by private placement to extend new energy industrial chain
------
Guangdong Dowstone Technology Co., Ltd. (300409.SZ) proposes to issue no more than 26 million shares to raise 802 million yuan for comprehensive lepidolite development ＆ utilization industrialized project. Especially, its controlling shareholder Rong Jihua committed to carry out a subscription no less than 10 percent but no more than 40 percent. The pricing benchmark date is the first day of issuance. The listed company indicated the project invested by raised funds could reach an annual lithium carbonate output of 10,000 tons after it realizes design capacity.
○ Sunac China Holdings continues to increase shareholdings in Jinke Property Group
------
Jinke Property Group Co., Ltd. (000656.SZ) announces that Tianjin Runze Property Co., Ltd. and Tianjin Runding Property Co., Ltd. under Sunac China Holdings Limited have totally held 3.14 percent equities of the listed company since Nov. 30, 2016 to Jan. 24, 2017. Up to now, Sunac China Holdings has held 23.15 percent equities of the listed company in total.
[Financial Reports Express]
○ Hengtong Optic-electric forecasts growth
------
Hengtong Optic-electric Co., Ltd. (600487.SH) forecasted 120 percent to 170 percent growth in the annual report, primarily due to continuous improvement of profitability of the optical communication industry. Shandong Xiantan Co., Ltd. (002746.SZ) revised upwardly the forecasted annual growth to 964 percent to 1008 percent, primarily due to sharp decline of the price of raw materials. Zhejiang Jingxing Paper Joint Stock Co., Ltd. (002067.SZ) revised the forecasted annual growth higher to 2,632 percent to 2,680 percent due to the prices of its products increased. Norinco International Cooperation Ltd. (000065.SZ) forecasted 128 percent to 133 percent growth in the annual report, primarily due to increase of revenue from international projects.
○ Anxin Trust Co., Ltd. (600816.SH) reported 76 percent growth in the annual report. The board of directors has passed the distribution plan of 12-for-10 conversion of capital surplus into shares.
[Trading Alarm]
○ Three new shares offer for IPOs on Jan. 25
------
Chahua Modern Housewares Co., Ltd. (732615.SZ) will offer for subscription at the 8.37 yuan per share. The upper limit for each applicant is 24,000 shares. The company is primarily engaged in plastic housewares. Shanghai Tianyang Hotmelt Adhesives Co., ltd (732330.SZ) will offer for subscription at 18.19 yuan per share. The upper limit for each applicant is 15,000 shares. The company is primarily engaged in hotmelt adhesive materials. Yangzhou Chenhua New Material Co., Ltd. (300610.SZ) will offer for subscription at 10.57 yuan per share. The upper limit for each applicant is 10,000 shares. The company is primarily engaged in fine chemical materials.
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