Sanqi Mutual Entertainment (002555) Company In-Depth Report: First-Class Breakthrough Beyond Legends & Miracles of Entertainment for the Middle-aged

Sanqi Mutual Entertainment (002555) Company In-Depth Report: First-Class Breakthrough Beyond Legends & Miracles of Entertainment for the Middle-aged

First, game users: middle-aged people with a scale of over 100 million have high gold mining power, legends and miracles are the main purchasers1, legends and miracles users: registered users of terminal games are ceilings, and game purchases are the main means for users to acquire legends, miraclesMost of the game players evolved from the end-game players of the early classics “Legend of Blood”, “Legend World” and “Miracle MU”.

Registered users of the early version of the terminal game can understand its user limit.
There are about 7 registered users in 2018.

90 million; “Legendary World” from 2003?
There were about 70 million registered users in 2018; the number of registered users in the first month of “Miracle MU” has reached 杭州桑拿网 1.

50 million.

2. Age composition: Targeting middle-aged groups, with a high ability to earn gold. Legendary and miracle-oriented middle-aged people generally have a stable income, and have a higher ability to earn gold compared to other age groups.

Taking the ARPPU of each game as an indicator, in 2018, the legendary and miracle month ARPPU supported by middle-aged players is about 600 yuan per person; the game month ARPPU for second-level players is about 200?
300 yuan / person; while the Tencent games for a wider range of users have about 100 ARPPU per month?
200 yuan / person.

Second, the ability to buy: Legend and miracle merge “reproducibility”, the number of “head purchase games” on March 7 increased steadily, how to buy on March 7: the purchase company and the purchase channel and price advantage increase 杭州桑拿 according to the application,Sanqi Mutual Entertainment mainly buys Quantum Company for Jiangsu Zhiming and Anhui Shangqu. The representative purchase games are “Slaying the Dragon and Dawn”, “Continental Land” and “Sword Passed to the World”; the main platforms for launch are Baidu information flow, huge amountEngine and Baidu Baiyi; the main media software is mobile phone Baidu, today’s headlines and Douyin; as the head customer of each media and platform, its purchase volume has a price advantage.

2. Buying capacity: from the App growth and sales expenses, the growth of the Panchi buying plate According to the growth of the App, from the average monthly advertising volume in the past year, 1349 articles were released in H2 in 18 years and 3163 in 19H1. Articles, rising 134% each year.

From the perspective of buying games, the buying volume is concentrated in the main self-developed mobile games, and the number of games that can be purchased increases. From the perspective of the self-developed MAU, 17M1?
The total MAU of 19M5 is gradually decreasing. It is expected that the total MAU will pick up in 19H2 due to a number of new self-developed mobile games. Under the circumstances of a serious increase in sales expenses and operating cash flow, monetary cash 19Q1 is still rising, showing its purchase volume.with potential.

3、单款买量游戏预测:基于半衰期的传奇&奇迹预测各类自研手游MAU 衰减近似于指数函数,以y=h*a^(t-b)(0 三、品类突破:《斗罗大陆”Achievement of game category breakthrough in novel IP, 19H2 net interest rate rises due to” delivery cycle “1, fiction IP category:” Failure Selection “and” Mortal Cultivation “failed,” Douloland “for the first time successfully achieved novel IP category””Douloland” has been in the top ten role-playing mobile games on iOS for 7 consecutive months since its launch. Compared to the earlier legendary mobile game “One Sword”, the success of “Douloland” may open the Sanqi Mutual Entertainment novelNew IP game mode.

In the novel IP game, Sanqi has researched “Selected Days” and “Mortal Cultivation”. Among them, “Selected Days” expanded the scale to attract a large number of users, but due to the low quality of the content, the user retention is very low,The MAU of 2 months was reduced to less than 50%, and the MAU of 8 months after the launch was less than 10%. Judging from the ranking of the best-selling list, “Mortal Cultivation” also failed.

2, 19 years of purchase & flow: Yidao handed down / Douro mainland is the basic disk, Elf Festival / Archangel’s sword is incremental According to App Growing, “One knife handed down” after the launch of the purchase amount is more stable, “Douro mainland”In the 5 months before the launch, there was not much difference between the purchase volume and “One Blade”, and the purchase volume increased significantly in the 6th and 7th months.

Judging from the amount of three self-developed mobile games “One Blade Passed Down”, “Dolo Continent” and “Elven Festival” in H1 in 19, “Doul Continent” and “One Passed” were launched at the end of 18 years, and the main users increasedBoth the volume and the purchase volume are at the beginning of 19 and are at the same purchase stage.

3. Net profit forecast based on the life cycle of the game: 19H2 is expected to pick up statistics. Sanqi mutual entertainment 8 head self-developed mobile games 18M1?
The monthly activities of 19M5 are weighted by their respective MAU percentages, and are multiplied by the net interest margin of each stage after the various games are launched.In the head self-developed game, the net profit margin will increase in 19Q2.

Fourth, investment advice From the perspective of product categories, the success of Dolo Continental will become the core purchase volume of Sanqi Mutual Entertainment. Instead of replacing legendary and miracle products, the category can be extended to novel IP (China has a rich networkNovel IP).

From the product cycle point of view, in terms of flow, Sanqi Interactive Entertainment ‘s just-launched “Elven Festival” has outstanding quality. It is expected to launch the “Angel Sword” mobile game twice in the second half of the year. In terms of net interest rate, the overall net interest rate in 19H2 is expected to rebound.

Sanqi Mutual Entertainment is expected to have a net profit of 19 in 2019.

3 billion, corresponding to the current sustainability of 15.

5 times.

Risk reminder: The Elves’ Festival is slower than expected, and the novel IP adaptation game is lower than expected

Juhua (600160): Weak demand dragged down the company’s refrigerants

Juhua (600160): Weak demand dragged down the company’s refrigerants

Investment Highlights: The company released the third quarter report of 2019, and its performance was in line with expectations.

In 1-3Q19, the company realized operating income of 113.

110 thousand yuan, (-5 years ago.

80%), net profit attributable to mother is 8.

910,000 yuan (-46.

32%), and management costs increase by 25 per year.

19% to 3.

99 ppm, but R & D costs are reduced by 10 per year due to changes in project structure and schedule.

53% to 3.

4 ppm, performance is in line with expectations (the above data is adjusted data).

The net profit after deduction can be replaced by 54.

74% to 6.

7.6 billion, with non-recurring gains and losses of 2.

03 trillion, mainly 1Q19 received the government’s F23 incineration subsidy1.

5.9 billion.

The main reason for the decline in net profit attributable to mothers is that the prices and gross margins of major products such as refrigerants, fluoropolymers, food packaging materials, and caustic soda have replaced locations.

Among them, 3Q19 single quarter realized operating income of 37.

3.1 billion (-4% year-on-year.

QoQ-2, accounting for 32%.

06%), net profit attributable to mother is 1.

8.5 billion (68.

84%, QoQ-44.

73%).

Downstream air conditioning and weak automobile demand dragged down refrigerant prices, and the company’s main product prices and gross profit margins deviated significantly.

Domestic air conditioners in the first three quarters of 19, the output of automobiles increased by one every two years.

2%, 11.

37%, downstream air-conditioning, and weak automobile demand have caused the price of refrigerants to continue to fall.

From January 1st to March 19th, the company’s main products such as refrigerants, fluoropolymers, fluorinated raw materials (mainly nitric acid chloride), and food packaging materials, the tax-free prices fell each time.

87%, 19.

66%, 22.

44%, 3.

46%.

In terms of raw material procurement, the 杭州桑拿 supply of fluorite was replaced by the mine disasters in Inner Mongolia and strict environmental protection in various places during the first three quarters of 1919, and the average purchase price of fluorite increased by 20.

97%, although the purchase price of anhydrous hydrofluoric acid decreased by 7.

77%, but the company’s overall sales gross margin will still increase.

In the third quarter of 1919, the sales volume of the company’s refrigerants and fluoropolymers decreased by 4 each.

48%, 1.

34%. In the long run, 2020 will be the time window for the second-generation refrigerant agents to reschedule. Subsequently, companies will increase production of three-generation refrigerants to replace the replacement of the third-generation refrigerants. The company is the largest third-generation refrigerant manufacturer in China.

According to the latest timetable for HCFC phase-out in the amendment to the Montreal Protocol, China ‘s second-generation refrigerants have been reduced from 20% to 45% in 2015, and R22 domestic production replacement in 2015 was 27.

4 Expected to reduce to 20 in 2020.

The lowest price is 55. At that time, the price of R22 is expected to bottom out and at the same time, there will be partial replacement demand for the third-generation refrigerants. However, due to the continuous expansion of the production scale of third-generation refrigerants by domestic manufacturers, it is expected that the prices of the third-generation refrigerants will remain under pressure.
Adjust the product structure, vigorously develop fluoropolymers, extend the industrial chain to the mid-to-high-end value, and smoothen the transformation of refrigerants.

The company’s current construction projects focus on technological transformation and expansion of high value-added fluoropolymer production capacity and types, mainly including 23.

5kt / a fluorine-containing new materials, 270kt / a environmentally friendly fluorine products, 100kt / a polyvinylidene chloride advanced barrier materials, and other projects.

In 2019, the company’s new mixed refrigerant JRX-2, PVDC emulsion for drug packs and other new products were put on the market in batches. The focus was on the implementation of fluoropolymer, PVDC and other projects, fluorinated materials such as AHF, and the third-generation fluorine refrigerants.Its blending projects, technological upgrading and upgrading projects for existing equipment, and 36 additional technical patents will continue to extend to the mid-to-high-end products of the industrial chain. Successive production of fluoropolymers will bring new vitality to performance.

Earnings forecast and investment grade: domestic fluorination industry leader, product structure adjustment, industry chain extended to mid-to-high value, we maintain the company’s 2019-2021 net profit return to its mother at 12.

49, 14.

98, 18.

73 trillion, corresponding to EPS are 0.

45, 0.

55, 0.

68 yuan, the current market value corresponding to PE is 15, 13, 10 times, maintaining the level of overweight.

Risk Warning: 1.

Downstream air-conditioning, automobile production and sales continued to grow significantly; 2.

Refrigerant prices have fallen sharply; 3 Third-generation refrigerant expansion has exceeded expectations; 4.

The price of raw materials has soared.

Ren Zeping’s Five Proposals to Revitalize the Capital Market

Ren Zeping’s Five Proposals to Revitalize Capital Market: Cancel Stamp Duty and Implement Registration System

Five Proposals for Revitalizing the Capital Market: Introduction to Evergrande Research Institute Ren Zeping Matunan Recently, the Politburo Conference focused on capital market reforms, strengthening institutional construction, and stimulating market vitality.

What is the crux of the current national stock market?

How to solve?

  Summary I. The capital market has the role of taking the lead and moving the whole body. The Central Economic Working Conference pointed out that the capital market has the role of taking the lead and move the whole body. It is necessary to deepen reform to create a standardized, transparent, open, energetic, and costlyCapital market.

Capital markets play a very important role in the economic and social transformation and development of developing countries: 1.
The capital market is an important channel for financing of private enterprises.

It is difficult for private enterprises to obtain sufficient financing through the credit market, and the capital market is an important channel for financing of private enterprises.

From 2014 to 2018, a total of 1,118 companies in the A-share market went public, and gradually raised 6,867 net funds.

6 trillion, of which the issuer’s actual controller is a private company of a total of 968 private enterprises, and gradually raised 4,335 net funds.

700 million yuan, accounting for 86.

6% and 63.

1%.

  2.The capital market is an important support for the vigorous development of the new economy.

Undoubtedly, many important high-tech companies have obtained important assistance for corporate development through IPO financing.

In the early stages of enterprise development, multi-level capital markets represented by PE and VC played a more important role.

Unlike bank credit, which tends to be traditional, PE and VC investments are clearly biased towards high-tech, high-tech manufacturing and other fields, which have created advantages in Internet +, artificial intelligence, and 5G.

The number of China’s new economy unicorn companies is second only to the United States in the world, and is closely related to the support of the capital market.

  3.The capital market is an important hand to prevent and resolve financial risks.

In 2018, the risks of equity pledge deposits were widely exposed. The important reason was that the stock fell and the equity pledge deposit plunged into a negative feedback loop.

To resolve the risks of equity pledge business, we must alleviate the difficulties of listed companies through various methods such as equity, debt, and hybrid.

But it is more important to restore the vitality of the stock market, to date the source of funds, to prosper the market, and to fundamentally resolve the crisis of equity pledge.

  Second, the five recommendations to activate the capital market The current average A-share market is estimated to be relatively low, and risks have been released to some extent.

Appropriately adopt the five major reform measures to revive market confidence, activate market sentiment, enhance market potential, and make the capital market better serve the real economy.

  1.Restore market mechanisms, reduce administrative intervention, stabilize market expectations, and restore market confidence.

In order to ensure stock disasters and maintain stability, regulators continue to strengthen supervision of the capital market. Due to the inadequate institutionalized supervision system, temporary policy interventions have been introduced, and window guidance has increased.

For example, some public funds reflect window guidance received, are restricted from net selling, and large-selling actions are prohibited.

Although these measures are intended to maintain market order, they objectively increase the arbitrariness of regulatory policies, resulting in expected market variables and market mechanisms being suppressed, which is not conducive to the long-term healthy development of the market.

From international experience, the core of securities supervision in developed capital markets is to establish market-oriented, clear, predictable regulatory rules, and vigorously punish violations, rather than directly intervening in the market through administrative means.

  We suggest that we should gradually reduce administrative intervention in the market, lower transaction restrictions, enhance market liquidity, stabilize market expectations, and “unbundle” market participants who have suffered excessive restrictions in the early stage.

For market-neutral trading methods such as short selling mechanisms, leveraged trading (margin financing and margin trading), and high-frequency trading, it is necessary to establish and improve institutional standards and reduce one-size-fits-all measures.

  2.Accelerate the reform of the stock issuance registration system.

At present, the general stock market adopts an approval system for listing of enterprises.

From the perspective of implementation effects, it is easy to cause enterprises to over-packing, unreasonable pricing, speculation on shell resources, and the four major problems of energy rent-seeking and corruption.

  The registration system is the reform direction of stock issuing systems in developing countries.

We believe that to do a good job in the reform of the registration system, we must first improve the market-oriented issuance system and require the development of supporting systems.

It is necessary to establish a market-based delisting mechanism to ensure that the market can continue to adopt new ideas and form a healthy competition mechanism.

It is necessary to establish a strict information disclosure system to ensure true, complete and timely information disclosure.

It is necessary to increase supervision, increase the level of supervision during and after the event, and increase the deterrent effect of supervision.
  3.Improve the investor structure of A shares.
In the current year, the proportion of positions held by institutional investors in the A-share market is only 16.

1%, significantly lower than the previous market.

The turnover of individual investors accounted for as high as 82%, and the average annual turnover of Shanghai and Shenzhen cities reached 189.

6%, which is significantly higher than the major developed markets. The pricing of the A-share market was intervened by individual investors, and the speculative atmosphere was too strong.

The A-share market volatility caused by an excessively high proportion of individual investor transactions; three major issues, such as focusing on policy trends and ignoring fundamental analysis; and institutionalization of retail investors.

  The initial low proportion of institutional investors in the A-share market is that at the beginning of the establishment of the internal stock market, there were no institutional investors specializing in securities and securities investment for a long time.

Since 2000, the proportion of long-term professional institutional investor positions has increased, but the overall can still be replaced.

It is precisely because of the long-term stable sources of funding for institutional investors, and because of the intertwined and thick A-share speculation, that under the constraints of fiduciary responsibilities, institutional investors have reduced their positions and risks.

  We propose to appropriately relax the limit on the proportion of the occupational population of pensions not to exceed 30%, and accelerate the speed at which pensions in various provinces and cities invest in the stock market in the form of agreement with the social security fund.

When assessing pension benefits, the focus should be on the mid-to-long term and absolute returns as the focus of assessment, and to provide a stable medium- and long-term source of funds for the stock market.

In addition, it is recommended to pilot the fund industry from a short-term performance ranking to a long-term absolute performance assessment on the basis of full research, change the short-term behavior trend of the fund industry, gradually form the concept of long-term investment, value investment, and increase the institutional investor’s shareholding ratio.Promote the healthy development of stock markets in developing countries.

  4.Improve the design of the trading system.

1) Further regulate the suspension of listed companies.

The suspension of trading by listed companies at random, the long-term suspension of trading seriously affects the liquidity of the stocks, and the damage to investors’ right to know and trading rights is an important issue for stocks.

At present, the regulatory agencies have resolved related issues and solved them by improving the institutional system and strengthening supervision.

We believe that strengthening supervision and emphasizing implementation, the exchange can compulsory relisting for listed companies that have no clear reason to suspend trading for a long time, or have multiple vague reasons for suspension.

For major asset reorganizations or asset reorganizations, the time limit for suspension of trading shall be appropriately extended, and the suspension of trading shall be prolonged at will for general reasons such as the complexity of the transaction and the involvement of many parties.

When the market is significantly abnormal and liquidity collapses, the exchange should deal decisively and suspend the application for suspension of enterprises to ensure the normal operation of market functions.

2) Cancel stamp tax on stock transactions and reduce market transaction costs.

With the advent of the era of electronic and paperless transactions, the tax base of stamp duty has changed significantly, and the rationality of continuing to levy stamp duty on stock transactions has declined.

Historically, the adjustment of the stamp duty rate was adjusted to the name of the supplementary market, but it could not change the overall trend of the stock market, but intensified short-term changes.

Emerging markets such as the United States, Germany, and Japan have eliminated stamp duty on securities transactions.

It is suggested to cancel stamp duty on securities transactions in a timely manner according to market conditions.

There are two advantages: reduction. According to the 2018 data, the stamp duty on securities transactions accounts for only 0% of general budget revenue.

After the cancellation, there will be little financial pressure.

At the same time, the abolition of stamp duty on securities transactions will reduce market transaction costs, enhance investor confidence and capital market vitality, and promote healthy market development.

  5.Improve the legal system and strengthen investor protection.

The current Securities Law increases the upper limit for many illegal activities to 600,000 yuan.

The Criminal Law has a maximum sentence of 10 years for high-level inside information, but the actual sentencing is generally 3-5 years.

With the developed capital market index, the previous relevant laws imposed relatively light sanctions on illegal and criminal acts, making it difficult to effectively protect investors.

In addition, through the continuous development of the market, the existing securities law still has the problem of being unable to adapt to the new market conditions, so it needs to be resolved through amendments.

  We propose to speed up the revision of the Securities Law, significantly reduce regulations in areas such as securities issuance, and at the same time strengthen law enforcement, increase penalties for securities violations and crimes, and strengthen regulatory deterrence.

Improve the level of supervision during and after the event.

In terms of criminal responsibility, for the serious crimes of securities, the sentencing standards should be appropriately raised, the behavior of disrupting the market order, manipulating prices, and fraudulent acts should be continuously improved to continuously improve the legal environment of the securities market.

  Risk reminder: Policy promotion is less than expected. 1 Capital markets have a direct effect on the whole body1.

1 The capital market is an important channel for financing of private enterprises.

2 The capital market is an important support for the vigorous development of the new economy.

3 The capital market is an important tool to prevent and mitigate financial risks 2 Five suggestions for activating the capital market 2.

1 Restore market mechanisms, reduce administrative intervention, stabilize market expectations, and restore market confidence 2.
1.
1 Administrative intervention disrupts market expectations, market mechanisms cannot function, and market efficiency is reduced.

1.

2 Reduce administrative intervention and strengthen institution building 2.

2 Accelerate the reform of the registration system for stock issuance 2.

2.

There are four major shortcomings in the approval system: excessive packaging, irrational pricing, and speculation in shell resources, which has led to energy rent-seeking and corruption.

2.

2 The approval system is the result of the incomplete marketization of the stock issuance system.

2.

3 The reform of the registration system is conducive to the formation of a more market-oriented institutional system in the stock market2.

3 Improve the structure of investors in the A-share market

3.

1 Institutional investors in the A-share market hold a low proportion of the stock market value and transaction size2.

3.

2 The strong speculation baseline and long-term continuous funding sources make it difficult for institutional investors to grow.

3.

3 Continue to encourage pensions to enter the market, and improve the institutional investor evaluation method2.

4 Improve the construction of the trading system 2.

4.

1 Further regulate the suspension of listed companies 2.

4.

2 Cancel stamp tax on securities transactions and reduce market transaction costs 2.

5 Improve the legal system and strengthen investor protection 2.

5,

The one-year law was suspected of overreporting some securities violations. On October 31, 2018, the Political Bureau of the Central Committee of the Communist Party of China focused on capital market reforms, strengthening institutional construction, stimulating market vitality, and promoting long-term healthy development of the capital market.

The Central Economic Work Conference pointed out that the capital market has a direct effect on the financial operation. It is necessary to deepen reforms to create a standardized, transparent, open, dynamic, and powerful capital market.

Recently, the vitality of the long-term capital market has improved due to the externalities, overlapping market and policy factors.

There is a need to further improve policies to stimulate the vitality of the capital market.

  1 The capital market has the effect of affecting the whole body.

1 The capital market is an important channel for private enterprise financing. The private economy has an important position in the entire economic system, contributing more than 50% of the variables, more than 60% of GDP, more than 70% of technological innovation, and more than 80% of urban labor employment.More than 90% of new jobs and businesses.

However, because the amount of collateral cannot meet the bank’s credit requirements and the government’s “hidden guarantee”, the difficulty of financing for private enterprises in the credit field is outstanding.

The data from the sample survey conducted by the Chinese Academy of Fiscal Sciences shows that from 2015 to 2017, the ratio of private enterprises in the sample to the current number of bank loans obtained by the company declined rapidly from 63% to only 15%.

Credit resources are clearly tilted towards state-owned enterprises.

In fact, in the context of tight financial supervision, the expansion of non-standard financing that private enterprises rely on has shrunk, and the proportion of non-standard financing of sample companies in the financing scale of private enterprises has dropped from 43% to 15%, and the increase in bank credit cannot hedge the shrinking of non-standard financing, Resulting in a decline in the total scale of private enterprise financing.

Traditional loans are the highest, and non-standard financing tightens the financing difficulties of all private enterprises.

  However, under the role of the market mechanism, private enterprises with better qualifications or development prospects can obtain capital market recognition through adequate information disclosure and sound corporate governance.

Therefore, the capital market is an important way for private enterprises to obtain financing.

As of the end of 2018, there were a total of 3,580 listed companies in the Shanghai and Shenzhen A-share markets, and there were 2,298 private listed companies whose natural controllers were natural persons, accounting for 64%.

From the perspective of financing, from 2014 to 2018, a total of 1,118 companies in the A-share market went public, and gradually raised 6,867 net funds.

6 trillion, of which the issuer’s actual controller is a private company of a total of 968 private enterprises, and gradually raised 4,335 net funds.700 million yuan, accounting for 86.

6% and 63.

1%.

The capital market has become an important source of financing for private enterprises.

  1.

2 The capital market is an important support for the vigorous development of the new economy. The pre-development stage cannot be separated from innovation.

The new economy, which is definitely represented by the Internet economy and high-tech medical services, is booming and has become a key engine for gradual economic transformation and industrial upgrading.

Such companies are often early in the life cycle and have difficulty accessing banking system financing.

Capital markets can better solve this problem.

Many important high-tech companies, such as BAT, JD.com, Xiaomi, etc., have obtained important assistance for corporate development through IPO financing.

However, due to equity structure, 厦门夜网 regulatory rules and other reasons, these companies have instead entered the domestic A-share market, so domestic investors have lost the opportunity to directly share the development dividends of these companies.

From the side, this highlights the importance of improving the capital market system and attracting outstanding internal companies to go public.

  At the start-up stage of new economy enterprises, multi-level capital markets played a more critical role.

Absolutely, the rapid development of the venture capital industry represented by PE and VC has provided an important guarantee for the vigorous development of the new economy.

The total annual PE and VC investment in 2018 reached 1.

17 trillion yuan, an increase of 72% in ten years.

From the perspective of industry investment, unlike bank credit, which tends to be more traditional, PE and VC investment is obviously biased toward information technology, new retail, new energy vehicles, medical care and other high-tech and high-tech manufacturing industries.

Among them, the Internet software and services and information technology consulting industries accounted for 17% of funds.

5% and 15.

7%, replacing pre-shipment in all sub-sectors.

The continuous development and growth of these high-tech companies has provided high returns for high-risk expected funds, and at the same time promoted each other, creating complementary advantages in the fields of Internet +, artificial intelligence, 5G, etc.The world is second only to the United States and is closely related to the support of capital markets.

  1.

3 The capital market is an important tool to prevent and mitigate financial risks. Preventing and mitigating major risks is the first of the three major battles, and financial risk is an important part of it.

In 2018, A-shares continued to fall, and the risks of equity pledge by major shareholders were widely exposed, forming a negative feedback cycle with the decline in stock prices.

The ownership of equity distribution is mainly private enterprises, and the proportion of equity distribution of some enterprises breaks through. Once the liquidation line is reached and a forced liquidation is triggered, corporate control will be transferred. Therefore, the exposure of allocation pledge risk to market confidence and liquidity will cause certainShock.

In 2018, there were more than 1984 A-share listed companies participating in equity pledge, accounting for 55% of the total number of listed companies, of which 1666 were private companies, accounting for 46% of the total number of listed companies, and 72 of the number of private companies.

5%, indicating that most private companies in the market have already participated in the equity pledge business, so once the risks are exposed, the impact will occur.

  Part of the reason for the exposure of equity quality risk is that the risks of shareholders of some listed companies have increased too high, and their operating style is radical. They use stock pledge financing to increase their holdings or use them for businesses that are not related to the company’s main business.There will be a liquidity crisis.

However, there are also some private enterprises that participate in fair pledges because normal channel financing is blocked.

In the context of tight supervision, non-standard financing has shrunk and targeted issuance has been blocked, while bond financing has high costs due to frequent occurrences of defaults by private enterprises, lowering bank risks and severely harming private enterprise loans.

Approximately, before the Shanghai Stock Exchange issued the “Measures on Stock Pledged Repo Transactions and Registration and Settlement Business” in March 2018, equity pledge financing was relatively convenient, and there were no strict restrictions on the use of funds, so it was favored by listed companies.

  To resolve the risks of equity pledge business, it is necessary to provide temporary liquidity assistance to companies with good development prospects, and provide relief through various methods such as equity, debt, and mixing.

The “Notice Concerning Issues Related to Stock Pledged Repo Transactions” was recently issued, optimizing the contract extension arrangements for default contracts, and relaxing restrictions on the concentration of single ticket institutions, the upper limit of the pledge ratio, and the upper limit of the pledge rate.

It can also play an important role in defusing stock pledge risks.

But it is more important to restore the vitality of the stock market, to date the source of funds, to prosper the market, and to fundamentally resolve the crisis of equity pledge.

Currently, the A-share market is expected to be at a relatively low level, and risks have been released to some extent.

Appropriately through further reforms, revitalize market confidence, activate market sentiment, enhance market potential, and make the capital market better serve the real economy.

  2 Five recommendations for activating capital markets 2.

1 Restore market mechanisms, reduce administrative intervention, stabilize market expectations, and restore market confidence 2.

1.1 Administrative intervention disrupted market expectations, the market mechanism could not function, and market efficiency was reorganized. In order to cope with stock disasters and maintain stability, regulators continued to strengthen supervision of the capital market, and gradually played an important role in cracking down on securities violations and laws and boosting market confidence.
However, in this process, due to the inadequate institutionalized regulatory system, the introduction of temporary policy reforms and increased window guidance.

Have a certain impact on normal market financing and transactions.

  From the perspective of the issuance budget, in order to improve the quality of listed companies and protect small and medium investors, the supervisory authorities have strengthened the verification of financial indicators of listed companies and refinancing companies.

However, in the actual process, the problem of repeated changes in financial data standards has arisen.

State media reports that regulators often predict window indicators for financial indicators when conducting IPO and refinancing reviews, and relevant personnel will proactively contact companies that do not meet the requirements, and sometimes will actively dismiss issuers.

This leaves market participants feeling at a loss, adding excessive transaction and communication costs.

  From the perspective of trading expectations, after the abnormal fluctuation of the stock market in 2015, the supervisors attach great importance to stabilizing the market, and the window guidance for trading has increased significantly.

According to media reports, at the end of 2017, “some stocks that had experienced large gains in the earlier period entered an adjustment period, causing some market members to panic.

Public funds intervention window guidance, that day was restricted to net selling, large-selling behavior was prohibited.

“When the market is growing rapidly, there is also a window of guidance. A person in charge of private equity investment stated that” there is a limit buying, and the regulatory authorities have called ‘advised’. ”

“At the same time, many quantitative funds have also received guidance from the window. For those transactions that are more alternative, the regulatory authority will take the form of oral notification, hoping to reduce the frequency of transactions and stabilize market fluctuations.

In fact, the high turnover rate of stocks does not necessarily cause price fluctuations, but too many window indications may cause market expectations to be unstable, inhibiting market participants’ trading intentions, leading to reduced liquidity, and increasing market risk.

  2.

1.

2 Reduce administrative intervention and strengthen system construction. Although the above-mentioned supervision measures are intended to improve the quality of listed companies and maintain market order, they objectively increase the arbitrariness of regulatory policies, resulting in expected market consequences, and market mechanisms are suppressed.Conducive to the long-term healthy development of the market.
In fact, the qualification determination of listed companies is completed by the regulatory authority, or should be given to professional institutions and investors in the market. The regulatory authority is responsible for the system construction to ensure the integrity and authenticity of information disclosure.

Otherwise, no matter how strict and strict financial standards are formulated, once there is a problem with the authenticity of financial information, it will seriously affect investors.

From a trading perspective, the market in developing countries already has a limit system. If the window guidance is used to restrict transactions, it will only further expand market liquidity and inhibit the market’s price discovery function, which is not conducive to the long-term healthy development of the market.

  From international experience, the core of securities supervision in developed capital markets is to establish market-oriented, clear, predictable regulatory rules, and vigorously punish violations, rather than directly intervening in the market through administrative means.

In addition, if a large number of regulatory forces are concentrated on examination and approval and window guidance, the power of the audit system and the judicial system will be relatively insufficient, and it will be difficult to form an effective deterrent effect on acts that disrupt market order, and it will be difficult to form truly effective supervision.

  We suggest that we should gradually reduce administrative intervention in the market, lower transaction restrictions, enhance market liquidity, stabilize market expectations, and “unbundle” market participants who have suffered excessive restrictions in the early stage.

The current stock market is estimated to be low, and the market risk has been greatly reduced from the baseline.

Continuing to implement the preliminary temporary supervision policy will not be conducive to the restoration of market confidence and the accumulation of popularity, and will not help prevent and resolve financial risks.

For market-neutral trading methods such as short selling mechanisms, leveraged trading (margin financing and margin trading), and high-frequency trading, it is necessary to establish and improve institutional standards and reduce one-size-fits-all measures.

  2.

2 Accelerate the reform of the registration system for stock issuance 2.

2.

1 The approval system has four systems: excessive packaging, unreasonable pricing, speculation on shell resources, and the four shortcomings of energy rent-seeking and corruption.

The CSRC formulated the “Administrative Measures for the Initial Public Offering of Shares and Listing” (referred to as the “Measures”) to review the application for listing of enterprises, and to approve the public offering of shares after passing.

From the actual effect, the approval system has the following problems.

  First, it is easy to cause enterprises to over-pack.

The Securities Regulatory Commission clearly stipulates in the Measures and supplements the company’s certification: 1) the net profit in the last 3 fiscal years can be converted into a positive number and gradually exceeds RMB 30 million; 2) the net cash flow from operating activities in the last 3 fiscal yearsThe amount has increased by more than RMB 50 million; or the operating income in the last three fiscal years has exceeded RMB 300 million; 3) The total share capital before issuance has exceeded RMB 30 million; 4) The intangible assets at the end of the most recent period (investment in land use rights, surface culture)Rights and mining rights, etc.) The proportion of net assets is not higher than 20%; 5) There is no unsubstituted compensation at the end of the most recent period.

The original intention of these financial requirements is to ensure that the listed companies are in good operating conditions, prevent the company from being listed on the market, and protect the legitimate rights and interests of investors.

However, in practice, some companies will meet the above requirements by beautifying their financial statements, and even suspect financial fraud, which infringes on the legitimate rights and interests of investors.

  Second, it is easy to cause the issue pricing to be unreasonable.

Because companies need to go through the approval process for listing, the primary market is prone to over-priced companies that have passed the approval process.

After the listing, the secondary market prices of stocks continued to drop, causing injustice to secondary market investors.

In order to solve this problem, the CSRC issued the “Notice on Issues Related to the Pricing of New Shares Issuance” in 2012, requiring that the price-earnings ratio of the issue price prepared based on the inquiry result be higher than the average price-earnings ratio of listed companies in the industry by 25%.The board of directors confirmed the issue pricing and discussed and analyzed the risk factors of pricing and their related effects. In fact, it provided guidance on the upper limit of the issue price.

Rather, it has limited the issue prices of some companies, causing stocks to rise and fall continuously after listing, and other problems such as irrational transactions in the secondary market.The approval system weakened the market-based pricing mechanism and interfered with the pricing of the primary stock market.

  The third is to promote the speculation of shell resources in the A-share market.

Under the approval system, the value of listed companies is fully reflected in the company’s performance, and the listing qualification itself is also possible.

This has led to the speculation of shell resources that has invaded the A-share market for many years.

Some listed companies have poor operating performance and should be gradually eliminated by the market. However, under the existing system, these companies have improved their financial statements through mergers and reorganizations, thereby avoiding the fate of being delisted.

There are also some companies listed on the curve through the acquisition of listed shell companies.

However, in this process, a series of problems such as financial fraud have arisen.

For example, in order to prevent stocks from being specially dealt with by the Shenzhen Stock Exchange and to maintain the qualifications for restructuring and listing, the listed company of Shenzhen Stock Exchange, Sun Leda, conducted a series of financial frauds in 2015 through inflated income and profits.Fines such as market bans and fines were imposed.

Judging from the performance of the secondary market, recently, the continuous daily limit of shell stocks such as Hengli Industrial, * ST Changsheng (right protection), significantly changed the company’s fundamentals, showing that the problem of shell stock speculation still exists.

  The fourth is to breed power rent-seeking and corruption.

Listing financing is critical to the development of many enterprises. Under the approval system, staff of the relevant departments of the Securities and Futures Commission have a significant say in whether the company can be listed, which naturally leads to rent-seeking and corruption.

Judging from the situation of the officials of the Securities and Futures Commission system that has been disclosed since the 18th National Congress of the Communist Party of China, most of the officials have a relationship with the issuance and approval of corporate listings, and most of their crimes of corruption and bribery occurred during their tenure or in charge of the issuance department.

  2.

2.

2 The approval system is the result of the unfinished marketization of the stock issuance system. The recognition system of the A-share market is the result of the unfinished marketization reform.

Looking back at the reform history of the A-share market, the IPO system has gone through a process of multi-department approval to the approval system of the CSRC and then to the approval system. Although the degree of marketization has continued to improve, a comprehensive marketization system has not yet been formed.

  From 1990 to 1992, the right to approve the issuance and listing of new shares belonged to different government departments: the reform of the company’s shareholding system was approved by the Planning Commission, the Reform Commission, the issue of shares was approved by the People’s Bank of China, and the listing of shares was approved by the Shanghai and Shenzhen Stock Exchanges.

  In April 1993, the listing of A shares was changed to the approval system.

The “Interim Regulations on the Administration of Stock Issuance and Transaction Management” stipulates that the competent departments of central enterprises and local governments shall review and approve the issuance applications of relevant enterprises according to their affiliations, and the CSRC will review and copy them to the Securities Commission.

The Regulation establishes a two-level administrative approval system and unifies the foundation of the IPO review structure across the country.

  In 1999, the A-share issuance system was changed to an approval system.

The “Securities Law of the People’s Republic of China” formally implemented in July stated that “the securities regulatory authority of the State Council is responsible for approving applications for stock issuance in accordance with statutory conditions, the approval procedures are properly disclosed, and supervision is conducted according to law”, “the date of the appropriate application documents for own securities issuanceA decision is made within three months from the beginning; if it is not approved or approved, an explanation is given as appropriate.

The marketization of IPOs has increased significantly.

The submission of the “Interim Measures for the Sponsorship System for Securities Issuance and Listing” in February 2004 marked the entry of new shares into the sponsorship stage.

Since then, the CSRC has further improved market-oriented reforms in establishing a sponsorship system, pricing of new shares, and the scale of issuance. However, it still retains the power to finally approve the company’s listing.

The issue mechanism of the A-share market has not been fully market-oriented.

  2.

2.

3 The reform of the registration system is conducive to the formation of a more market-oriented system of the stock market. Due to the above-mentioned problems with the approval system, registration has become the reform direction of the listing system.

The information disclosure requirements and basic market standards formulated by the CSRC under the registration system and the approval system are responsible for reviewing the authenticity of the information disclosed by listed companies, and do not impose requirements on the operating performance and qualifications of listed companies, as long as the enterprise meets the basic standards,If the information provided is true, it can be registered and listed, and the pricing is also done by the market independently.

The registration system has played the role of the market mechanism in the listing process of enterprises, and at the same time reduced the problems of excessive packaging for listing, unreasonable pricing and power rent-seeking by the market.

At present, the major expected stock markets in the world, such as the New York Stock Exchange, Nasdaq, and London Stock Exchange, all adopt registration systems.

  Since the reform of China’s registration system started in 2013, it has been moving forward in twists and turns.

In November 2013, the Third Plenary Session of the Eighteenth Central Committee resolved to advance the reform of the registration system for stock issuance.

In May 2014, Nine Articles of the New Country proposed to actively and steadily advance the reform of the registration system for stock issuance.

In March 2015, the CSRC meeting stated that the first draft of the reform plan for the registration system had been completed and submitted to the State Council.

Subsequent fluctuations in the stock market occurred and reform of the registration system was hindered.

In March 2018, the Standing Committee of the National People’s Congress decided to extend the authorization for the reform of the stock issuance registration system by two years.

  On November 5, 2018, General Secretary Xi Jinping proposed at the China Import Expo that the Shanghai Stock Exchange establish a science and technology board and pilot registration system.

The higher-ranked stock reform ideas are incremental reforms.The change of thinking reflects a more prudent policy orientation.

At present, the scale of the main board market is competitive, and the difficulty of reform is increasing. Reforming the registration system directly in the main board market is likely to have an impact on the existing financial system.

Add science and technology board and implement the registration system reform, explore effective rules and measures of issuance, listing, trading, information disclosure, supervision, delisting, etc., and obtain successful experience, and then promote to the main board market in a timely manner, which will effectively reduce the minimum capitalThe cost of market reforms is conducive to the advancement of market-oriented reforms.

  On January 23, 2019, the Sixth Meeting of the Central Committee of Comprehensive and Deepening Reform passed the “General Implementation Plan for Establishing a Science and Technology Innovation Board on the Shanghai Stock Exchange and Pilot Registration System”,Regarding the implementation of the pilot registration system and other important documents, the reform of the registration system continued to advance.

We believe that if the registration system is to achieve its due effect, we must not just replace the listing and reform, but must establish a series of alternative supporting measures such as trading, supervision, and delisting to ensure that the registration system reform can achieve the correspondingeffect.

  (1) The construction of the listing system and the delisting system is equally important.

Taking measures can effectively reduce regulatory intervention in the listing process and effectively reduce corruption and rent-seeking.

At the same time, only if an effective delisting system is established and strictly enforced, and new ideas are continuously introduced to form healthy competition, the market can continue to maintain vitality.

If a large number of enterprises with low qualifications and low turnover are flooded into the market, it will inevitably weaken the market’s vitality and will not be conducive to the long-term stable development of the market.

Establish a proper delisting system appropriately, specify the destination of delisted enterprises, and strictly enforce it.

At the same time, we must prevent malicious delisting and protect the legitimate rights and interests of investors.

  (2) Strict information disclosure system is the core of the registration system.

Under the registration system, the focus of the supervision department is no longer on reviewing the qualifications of listed companies, but on the quality of corporate information disclosure.

Therefore, it is necessary to establish a unified, standardized, and efficient information disclosure system that seriously violates information disclosure rules and discloses false information.

  (3) Improve the legal system of the capital market.

At present, the upper limit of the number of alleged degrees stipulated in the “Securities Law” is only 60 million U.S. dollars in the capital market where illegal gains are hundreds of millions. Too low an alleged degree cannot overcome the impact of regulatory shocks. Instead, it has created a variety of infringements on investorsEquity behavior.

A new round of amendments to the Securities Law was initiated as early as 2014. However, due to the constantly changing market environment, the replacement of the Securities Law has been postponed, which has hindered the progress of related reforms.

Taking the establishment of the Science and Technology Innovation Board as an opportunity, we will accelerate the relevant legislative work and promote the gradual construction of the legal system of the capital market.

  2.

3 Improve the structure of investors in the A-share market

3.

1 Institutional investors’ shareholding value and transaction scale are relatively low in the A-share market. With the developed market index, the main problem facing the A-share market is that institutional investors ‘shareholding value is relatively low. General legal persons and individual investors (retails)The proportion is high, and the volume of individual investor transactions is relatively high.

A large number of retail-led transactions led to a serious herd effect in the A-share market, which caused excessive market price fluctuations.

  According to the data displayed by the Shanghai Stock Exchange, the proportion of institutional investors holding stock market value at the end of 2017 was 16.

1%, of which the market value of investment funds accounts for only 3.

3%.

Individual investors hold 21% of the shares.

2%, general corporate (industrial capital) shares accounted for up to 61.

5%.

  In summary, institutional investors in the stock market account for a higher percentage of overall returns.

At the end of 2017, the market value of institutional investor stocks in the US stock market (Nasdaq and NYSE) accounted for 61% of the total market, of which 23% were held by mutual funds, and 11 by government and private pensions.

9%, with foreign investors accounting for 15%.

Individual investors hold 39% of the stock market value.

  Institutional investors in the British stock market account for 83% of the market value.

3%, of which the proportion of domestic institutional investors.

4%, foreign investors accounted for 53.

9%, mainly including various international financial institutions, pensions, charities, investment funds, etc., indicating that the UK’s capital market is more open.

Individual investors hold only 12.

3%.

The UK stock market has exhibited the characteristics of an expected institutional shift.  Japanese institutional investors hold 61% of the stock market value, of which domestic and international institutions each account for 30%.

General legal person shares account for 21%, which is relatively high in the overall market, but still far below the previous level of 61%.

  Because the institutional investor’s shareholding ratio is low, and some of the shares held by legal entities are restricted from circulating, the transaction ratio of individual investors in the secondary market is significantly higher.

In 2017, individual investors accounted for 82% of the transaction volume, while professional institutional investors accounted for 14.

76%, of which the trading volume of investment funds accounts for only 4.

15%.

  Judging from the turnover rate, the turnover rate of the A-share market continues to exceed that of other major stock exchanges.

The average annualized turnover of the Shanghai Stock Exchange since 2009 replaced 194.

1%, Shenzhen Stock Exchange is 335.

9%, higher than 108 on the NYSE.

6% and 63% on the London Stock Exchange.

During the abnormal fluctuations of the stock market in 2015, the turnover rate of the Shenzhen Stock Exchange exceeded 800% at one time, and the market speculative fluctuations were strong.

  The relatively high proportion of individual investors ‘transactions indicates that the pricing of A shares has been interfered by individual investors, leading to three problems: First, the characteristics of individual investors’ transactions exist and cause them to chase up and down.Market prices fluctuated.

Second, professional investors were rated. Individual investors lacked in-depth understanding of the company’s financial and operating conditions, paid little attention to trading technology, and paid too much attention to subject speculation and policies, which easily overestimated stock prices.

Third, because institutional investors need to accept the market prices of individual investors and play games with them for a long time, some institutions have gradually shown a “retailing” trend in transactions.

  2.

3.

2 The speculation has strong pores, long-term sustainable sources of funds, and other reasons that make it difficult for institutional investors to develop and grow the stock market. Retailing is inseparable from this development process.

In the early days of the establishment of the traditional securities market, influenced by the ideas of the planned economy, the stock market was subject to administrative control of intervention.

For example, the “Decision of the Central Committee of the Communist Party of China and the State Council on Grasping Several Tasks in the Recent Breakthrough of Anti-Corruption” issued in 1993 pointed out that cadres at and above the county level buy and sell stocks.

The “Regulations on the Reorganization of State-owned Enterprises and Listed Companies’ Speculation in Stocks”, which was issued in 1997, clearly states that this enterprise must not speculate in stocks.

Bank funds and insurance funds are also prohibited from entering the market.

In addition, the fund industry has not yet been established, and there is no distance for the A-share market to specialize in professional institutional investors.

Dating foreign institutional investors is even more difficult to talk about.

In this context, individual investors have naturally become the main investors in the A-share market.

  In 1998, the first batch of public fund companies was established, and it is hoped that through the appointment of professional institutional investors, it will attract social funds and gradually develop and expand the institutional investor group.

In 2003, the social security fund officially entered the stock market.

Since then, the proportion of institutional investors has increased.

But at present, due to various regulatory restrictions, institutional investors still lack long-term, stable funding sources.

Coupled with issues such as the quality of listed companies and market pricing mechanisms, the stock market has undergone strong “stock speculation” changes, long-term investment, value investment concepts have not yet been formed, and the market has a poor profit-making effect.

And because most institutional investors have assumed fiduciary responsibilities, in the face of this environment, positions have been reduced, and risks have been avoided, leading to a long-term low market share of A-share institutional investors.

  2.

3.

3 Continue to encourage pensions to enter the market and improve the assessment method for institutional investors. (1) Increase the upper limit of the proportion of pension insurance fund investment stocks on a regular basis. Larger-scale capital entry into the market will help stabilize market confidence and help the long-term healthy development of the stock market.
Pensions are an important source of long-term funding, and US pensions have a great deal of success entering the market.

Pensions in the United States are divided into basic social pensions, 401K supplementary pension plans, and commercial insurance and pensions. Of these, 401K accounts for about 50% of the entire pension scale, and the scale reached 8 at the end of 2017.

$ 5 trillion.

The funds in 401K have been invested in the stock market for a long period of time, which has significantly increased the share of US institutional investors in the stock market, provided a long-term stable source of funds for US stock market transactions, and has become a stabilizer of the US stock market.

Currently, 67% of the funds in 401K are invested in the stock market. The main investment methods are stock funds, individual stocks of companies, and stocks in mixed funds.

Even in the 2008 financial crisis, the proportion of stock investment in 401K reached about 56%.Long-term capital investment is an important cornerstone of the sustained and healthy development of the US stock market.

  The pension investment stock markets of various countries are currently facing huge strict constraints. According to the “Administrative Measures for the Investment of Basic Pension Insurance Funds” issued by the State Council in 2015, the proportion of investment stocks, stock funds, mixed funds, and stock-type pension products must not total.30% higher than the net asset value of pension funds.

From the actual situation of pensions entering the market, as of the end of September 2018, 15 provincial (regional, municipal) governments across the country have signed entrusted investment contracts with the Social Security Fund, with a total contract value of $ 715 billion, of which 4166.

500 million funds have been received and investment has begun.

It is recommended to appropriately relax the limit of the net value ratio of pension investment in the stock market, and accelerate the signing of unsigned provinces and social security funds to intervene in entrusted investment contracts. When assessing pension benefits, focus on mid-to-long-term and absolute returns as the focus of evaluation, and for the stock marketDating stable medium-to-long-term funding sources.

  (2) Change the short-term trend of performance evaluation of the fund industry. Public funds are mainly funded by retail investors and rely on sales channels. Based on sales pressure and other factors, the evaluation of the fund industry is polarized, leading to gradual investment behavior.Short-term, the estimated short-term income exceeds the long-term value, and the strategic interests of the fund industry as a cornerstone investor and value investor are brought into full play.

It is suggested that on the basis of full research, the pilot fund industry be transformed from short-term performance ranking to long-term absolute performance assessment, change the short-term behavior trend of the fund industry, and gradually form the concept of long-term investment and value investment to promote the healthy development of the stock market.

  2.

4 Improve the construction of the trading system 2.

4.

1 Further standardize the suspension of trading of listed companies (1) The random suspension of listed companies affects the normal trading of the stock market. The random suspension of listed companies is one of the outstanding issues facing the A-share market.

The original intention of the stock suspension is to prevent major issues planned by listed companies from being resolved in advance, which will have a significant impact and adversely affect small and medium investors.

However, in practice, the suspension of listed companies is too random, the time is too long, the reasons for the suspension are ambiguous, and the problems have been expanded, resulting in lock-in re-issuance prices and avoiding special market conditions.

  Suspension of trading by listed companies at random, the long-term suspension seriously affects the liquidity of the stock, and harms investors’ right to know and trade.

By studying the suspension cases of A shares, we find that most of the reasons for long-term suspension are due to reorganization or major asset reorganization.

The SSE’s “Guidelines for Suspension and Resumption of Listed Companies’ Plan for Suspension of Trading” has required that, except for major asset reorganizations that require prior approval in accordance with laws or regulations, or that there is no major precedent, the time for a listed company to plan a major asset reorganization to be gradually suspended should not exceed 5Months.

But in fact, some listed companies have been suspended for more than five months.

For example, Shagang Co., Ltd. announced that it had suspended trading due to major events on September 19, 2016. On June 15, the following year, Shagang Co., Ltd. disclosed a major asset reorganization plan, but it is still suspended.

In this regard, the Shenzhen Stock Exchange has repeatedly sent letters to pay attention, saying that the related behavior of Shagang shares violated the Shenzhen Stock Exchange’s “Stock Listing Rules (2014 Revision)” on page 17.

According to Article 1, the responsibility caused him to apply for the resumption of stock trading in time, but did not receive any regulatory effect.

  In extreme market conditions, the random suspension of listed companies may also have a significant impact on the entire market’s liquidity and price discovery mechanism.

During the unusual fluctuation of stocks in 2015, many stocks chose to temporarily suspend trading to avoid being sold by investors, and some stocks were suspended for ambiguous reasons.

At its worst, the number of A-share suspensions on more than 1,000 trading days was referred to as a “thousand-share suspension.”

When the market liquidity is extremely scarce, the suspension of 1,000 shares has amplified the panic in the market. Some public offerings have encountered severe redemption pressure. Due to the sale of unsold stocks, these stocks also fell quickly and the market liquidityQuickly frozen, the stock market price discovery mechanism was almost interrupted.

More importantly, the suspension of trading can only temporarily avoid the risk of falling stock prices and cannot change investor expectations. Once the stock resumes trading, it will still face the risk of supplementary losses.

  The overall capital market also has a suspension and resumption system, but the system design is different from the A-share market.

Taking the United States as an example, the suspension of trading of stocks in the U.S. market is divided into two cases. The first is a transaction interruption (trading suspension), which is executed by the exchange. The most common case is when a listed company issues an announcement during trading hours.The transaction will be temporarily interrupted, and the duration is generally 15-30 minutes.

Its main purpose is to ensure the full dissemination of information and prevent arbitrage behaviors caused by different traders acquiring information at different times.

The other is trading suspension (Trading Suspension), which is executed by the SEC and is a regulatory measure.

It is used when the SEC finds or suspects that the company has a major information leakage problem (incomplete information disclosure or false information), insider trading, market manipulation, etc., and the duration is 2-3 weeks.

On the whole, the US market has strict supervision over the suspension and resumption of trading of listed companies, and the time limit for suspension is overall.

  (2) Improving the supervision system to prevent arbitrary suspension of trading In fact, in view of the problem of arbitrary suspension of trading by listed companies, relevant departments have continuously improved the construction of relevant systems.

In 2016, the Shanghai Stock Exchange and the Shenzhen Stock Exchange respectively issued the “Guidelines on Suspension and Resumption of Business of Listed Companies Planning for Suspension and Resumption of Trading” and the “Guidelines for Suspension and Resumption of Business of Listed Companies” respectively, which regulate the scope of trading suspension, the time limit for suspension and the procedures for suspension of trading.

On November 6, 2018, the China Securities Regulatory Commission issued the “Guiding Opinions on Improving the Suspension and Resumption System for Listed Companies’ Shares”, which stipulates that listed companies should take the principle of non-suspension as the exception, suspension as an exception, short-term suspension as the principle, and long-term suspension as an exception, intermittent.Suspension is the principle, continuous suspension is the exception, and the suspension of trading shall not be arbitrarily suspended or delayed for no reason.

The new regulations also regulate the suspension period, information disclosure, and supporting mechanisms to improve the basic system of the capital market, optimize transaction supervision, reduce transaction offsets, and enhance market liquidity.

  Strengthen supervision and focus on implementation.

The relevant mechanisms have been gradually improved, and the key to achieving the expected results lies in implementation.

For long-term suspension of trading without clear reasons, or multiple vague listed companies, the exchange may compulsively resume trading.

For major asset reorganizations or asset reorganizations, the time limit for suspension of trading shall be appropriately extended, and the suspension of trading shall be prolonged at will for general reasons such as the complexity of the transaction and the involvement of many parties.

When the market is significantly abnormal and liquidity collapses, the exchange should deal decisively and suspend the application for suspension of enterprises to ensure the normal operation of market functions.  2.

4.

2 Cancellation of stamp duty on securities transactions and reduction of market transaction cost Stamp duty is an ancient tax established in the Netherlands in the 17th century.

The main purpose of its establishment is that a large number of papers, contracts and other paper vouchers require government endorsement to enhance credibility. In case of disputes, vouchers with “stamps” usually have legal effect, so the government can give a certain percentage in return.

In the era of paper vouchers, the transfer of stock transactions, etc. requires more use of paper stocks “decal endorsed” by the government, so it is reasonable to pay stamp duty.

However, through the advent of the era of electronic and paperless transactions, the taxation basis has changed significantly, and the rationality of levying stamp taxes on stock transactions has continued to decline.

  As an important tax on the A-share market, the stock transaction stamp tax has historically been given the function of regulating market conditions in addition to the basic role of increasing government revenue.

However, judging from the results, the adjustment of the stamp duty rate cannot change the long-term trend of the stock market, but rather exacerbates the short-term fluctuations.

  On January 24, 2005, the stamp duty rate on securities transactions was lowered from 2 ‰ to 1 ‰, and the Shanghai stock index closed up by 1.

73%, but since then continued the downward trend, eventually hitting 998 in June.

23-point historical low.

  On May 30, 2007, the stamp duty rate was raised from 1 ‰ to 3 ‰, and the Shanghai Stock Index opened lower by 5 the next day.

69%, down 6 throughout the day.

5%, will fundamentally change the course of the A-share bull market. The Shanghai Composite Index continued to grow and reached 6124 in October of that year.

04 at the top.

  On April 24, 2008, the stamp duty on securities transactions was lowered from 3 ‰ to 1 ‰. On the same day, the Shanghai Stock Exchange Index hit an upper limit and almost all stocks went up and down. However, the broader market continued to move in a narrow range and the overall trend remained unchanged.

  On September 19, 2008, the stamp duty on securities transactions was levied unilaterally in lieu of supplementary collections, and the Shanghai stock index closed up as much as 9 on the day.

46%, the individual stocks almost reached the daily limit, but in the next two months, the market still fell to 1664.

The low of 93.

  From the international experience, since the 1990s, through the electronicization of stock trading, the United States, Germany, Japan, Australia and other countries have successively cancelled the stamp duty on securities transactions.

Currently, countries that are still collecting stamp duty include China, India, and the United Kingdom, but the United Kingdom adopts preferential policies for stamp duty reduction and exemption on some small and medium board stocks.

  It is suggested to cancel stamp duty on securities transactions in a timely manner according to market conditions.
The highest, from the perspective of fiscal revenue, the fiscal revenue raised through stamp duty accounted for a relatively small amount. In 2018, the national stamp duty on securities transactions totaled $ 97.7 billion, while the general public budget revenue during the same period was $ 18,352.5 billion, and the stamp duty on securities transactions only accounted for zero.

5%.

There is not much pressure on fiscal revenue after the cancellation.

At the same time, the abolition of stamp duty on securities transactions will reduce stock market transaction costs, enhance investor confidence and capital market vitality, and promote healthy development.

  2.

5 Improve the legal system and strengthen investor protection 2.

5,

1Asian law is suspected of underplaying some securities violations. The Securities Law and the Criminal Law are the main laws that regulate the securities market and protect the legitimate rights and interests of investors.

However, the main problem currently facing is that the punishment of some illegal acts is too light.

One of the most controversial is that the Securities Law has an administrative limit of 600,000 for many illegal acts.

Illegal actions in the securities market are often profitable by hundreds of millions, and the default rate prescribed by securities laws is too low to effectively deter illegal actions in the securities market.

  For example, in December 2017, the China Securities Regulatory Commission announced the decision to replace Yabaite. Yabaite gradually increased the number of fictitious overseas engineering projects, fictitious international trade, and domestic trade from 2015 to September 2016.Operating income 5.

800 million yuan, profit 2.

US $ 5.6 billion is one of the most serious financial fraud cases in the history of the securities industry in developing countries.

But even if it was deviated from the top grid, the company could only bear 60 million points, and the responsible person marked only 300,000, which was difficult to form enough vibrations to stop.

At the same time, investors are suspected of being faced with unfavorable filing and difficulty in proving evidence, so there are few cases of civil compensation for securities fraud, and it is difficult to effectively protect legal rights and interests.

  In terms of criminal responsibility, Article 181 of the Criminal Law of the People’s Republic of China provides for insider trading, and the maximum sentence for changing inside information is 10 years.

In practice, Ma Le, the largest rat warehouse in developing countries, involved up to 10 cases.
50,000 yuan, illegal profits of nearly 20 million yuan, and ultimately sentenced to three years in prison.
The Xu Xiang case law enforcement nationals, from 2010 to 2015, successively conspired with the chairman or actual controller of 13 listed companies to manipulate the stock transactions of listed companies, control 139 securities accounts, and illegally make profits93.

3.8 billion, sentenced to five and six months in prison.

  In some cases, developed capital markets have severe penalties for illegal cases in securities markets.

Take the United States as an example. In 2001, Enron’s inflated profit of $ 600 million was exposed, and financial fraud caused a worldwide sensation. A representative of the US Securities and Exchange Commission pointed out that $ 500 million led to the company’s bankruptcy and liquidation.

Relevant intermediaries such as Andersen, Citi, JP Morgan Chase, etc. were held accountable.

Among them, Andersen, the auditing agency, was investigated by the US Department of Justice because it was suspected of colluding with Enron and concealing criminal evidence.

In the end, Arthur Andersen was established with a reputation for justice and justice, was fined $ 500,000, and was unable to engage in business for five years.

Since then, most customers have terminated their business dealings with Arthur Andersen, and Arthur Andersen was forced to close its offices around the world and went bankrupt in 2002.

  From the perspective of criminal liability, US law is extremely severe in cases of securities violations.

Take the crime of insider trading as an example. The Sarbanes-Oxley Act of 2002 provides that anyone who gains interest in the securities market through insider trading or price manipulation constitutes a crime of securities fraud and can be imprisoned for up to 25 years or be fined 5 million.

At the same time, the recognition of insiders in the United States is very extensive: directors, supervisors, executives and their partners, trustees of the company; shareholders who own more than 10% of their shares, and their partners, trustees; company employees and spouses of the above,Immediate blood relatives and family trustees; presumed insiders include anyone outside the company who knows inside information through the above positions; information aligners and substitute insiders, etc.

In 2011, Sailing Fund Rajaratnam was charged with insider trading, involving a value of more than $ 30 million, and sentenced to 11 years in prison.

Dozens of corporate executives, including Intel’s strategic investment director, director of McKinsey Consulting, and senior vice president of IBM, were also involved in the case.

Twenty-one people have been arrested and pleaded guilty.

  In fact, in addition to under-infringement of some illegal acts, existing securities laws also have excessively strict controls on securities issuance, the role of the capital market in serving the real economy has been effectively exerted, and the lack of necessary institutional arrangements for cross-border securities issuance and trading activities.The market constraint mechanism is not perfect, investors are not well protected, and the quality of information disclosure is not high.

Therefore, it has become a consensus from all walks of life to amend the Securities Law, establish a sound market mechanism, increase supervision, and strengthen the deterrence of illegal and criminal acts.

This round of amendments to the Securities Law was launched in 2013, but due to the wide range of issues, investigation issues need to be resolved, and the rapid changes in the market environment are still in the process of occurring.

  We propose to speed up the amendment of the Securities Law, significantly reduce the control of securities issuance and other areas, and at the same time strengthen law enforcement, increase penalties for securities violations and crimes, strengthen regulatory deterrence, and enhance the level of in-event and post-event supervision.

In terms of criminal responsibility, for the serious crimes of securities, the sentencing standards should be appropriately raised, the behavior of disrupting the market order, manipulating prices, and fraudulent acts should be continuously improved to continuously improve the legal environment of the securities market.

Xinbao shares (002705): rapid growth in domestic sales and recovery in external sales

Xinbao shares (002705): rapid growth in domestic sales and recovery in external sales

The company disclosed the semi-annual report for 2019: revenue, return to mother, deduction 40.

4 billion, 2.

4 billion, 2.

400 million, previously +7.

4%, +73.

9%, +48.

9%; corresponding to 2019Q2: income, return to mother, deduct 21.

6 billion, 1.

5 billion, 1.

700 million, previously +11.

2%, +59.

2%, +34.

1%.

Performance is in line with expectations.

  First, domestic sales have grown rapidly. It is estimated that Mofei has more than doubled in revenue by region. Domestic sales revenue in 19H1 was 7.

600 million, ten years +28.

9%; export revenue 32.

800 million, previously +3.

4%.

  The company’s internal sales are mainly targeted at independent brand operations, which account for 60-70% of domestic sales.

The company implements a professional brand strategy and has established multiple brand divisions, including cost-effective brands targeted at mass consumption.
Donglim, Morphy Richards (Mofei), coffee machine brand Barsetto, tea appliance brand Tweezers, and water purifier brand Laica.

  Independent brands operate mainly through online channels (including Taobao Tmall, JD.com, Weishang, Xiaohongshu, Douyin, etc.).

The company set up a special team to conduct market analysis and product planning, streamline SKUs, label customer marketing, and launch a number of new products each year.

2019H1, Tmall Taobao platform data shows that the sales volume of Tmall Taobao platform Mofei brand is +355 respectively.

0%, +390.

3%, we estimate that Mofei brand’s omni-channel revenue has more than doubled.

  In addition, the company strengthened its cooperation with Internet companies, including Xiaomi, Mingchuang, Pinduoduo, etc.

  Internet companies provide products with higher intermediate conversion rates, higher efficiency, and richer categories.

  Take Xiaomi as an example. The company’s current cooperation with Xiaomi mainly includes water purifiers, electric kettles, electric toothbrushes, and ovens. There are certain scale products mainly electric kettles and water purifiers (the majority of the production of millet water purifiers areCooperation with the company), from the perspective of the product line, there is still room for cooperation, such as coffee machines, thermos cups, etc. At present, there are several product projects under negotiation with Xiaomi.

  Domestic sales in the second quarter basically maintained the initial target, and it is expected to grow close to 30%.

In the future, the company will gradually break through the design and manufacturing and operation experience of explosive models, and continue to create more explosive models.

At present, the company’s new product reserve capacity is in the leading position in the industry, including new products 重庆耍耍网 of Mofei car vacuum cleaners, Gelan personal care brand, etc.

  At the same time, the scope of cooperation products with well-known Internet companies will be further expanded, and domestic ODM orders are expected to accelerate growth.

  Second, the recovery of export sales has resumed. The resumption of Sino-US trade talks has helped the company’s export business in 19H1, accounting for about 80% of export sales revenue, +3.

4%, in the recovery growth stage.

  The resumption of Sino-US trade talks is good for the company’s export business.

The company’s current US revenue accounts for 25% -30%. With reference to the situation in 2018, the sales in the two rounds of taxation lists only accounted for about 3% of the main business in 2018.
At present, most of the global small household appliance production capacity is concentrated in China, which has a comprehensive competitive advantage. It is difficult for overseas brand companies to find matching alternative resources in the short term. It is unlikely that orders will be transferred to other countries or regions on a large scale.
Based on the company’s global ODM advantage, the time lost for orders to the United States.

The resumption of Sino-U.S. Trade talks is favorable for export business.

  In the future, the company will extend to product lines such as home care appliances, baby appliances, and health and beauty appliances on the basis of consolidating existing categories such as kitchen appliances.

With large-scale costs and supporting industrial chain advantages, it is expected that the export business will grow steadily.

  Third, the structure of exported products has improved, and the proportion of domestic brands has increased. The net profit margin is expected to increase steadily by 19H1, and the company’s gross profit margin is 21.

4%, one year +2.

8 points, of which the gross profit margin for export is 18.

8%, +2 per year.

7 points; domestic gross profit margin 32.

3%, ten years +1.

0pct; net interest rate 6.

0%, ten years +2.

3pct; selling expense ratio 4.

9%, ten years +1.

0pct (increased due to personnel salary bonus and advertising expenses); management expense ratio 9.

1%, ten years +0.

5pct (due to increased R & D expenses); financial expense ratio is 0.

2% per year -0.

3pct (increased interest income due to reduced exchange losses).

  The structure of export products has improved, the proportion of domestic brands has increased (Mofei ‘s net interest rate has reached 15%, far exceeding the company ‘s overall net interest rate of 6%), and the automation rate has been improved to promote the continuous enhancement of profitability.

  It is expected that the company’s gross margin improvement trend will continue, leading to a gradual increase in net profit margin.

  Fourth, payables and advance receipts increased, and cash flow improved significantly in 19H1 company inventory12.

0 billion, previous + 13%; payable 21.

800 million, previously +2.

5%; receivables 10.

400 million, previously +2.

3%, advance payment 1.

700 million, previously +71.

0%; inventory turnover rate from 2.

96 expected 2.

67, the receivable turnover rate was 4.

25 likes 3.

91.

Net cash flow from operating activities is -1.

0 billion to 5.

1 billion, previously +584.

6%.

  The increase in net cash flows from operating activities was mainly due to the increase in sales income and the increase in payables and advance receipts.

The decline in the inventory turnover rate and receivables turnover rate was mainly due to the cooperation with Internet companies such as Xiaomi in terms of domestic sales, increased stocks, and certain credit.
  V. Profit forecast It is expected that the company will realize net profit attributable to mothers in 2019/2020/20216.
0/7.

0/8.

0 million yuan, corresponding to EPS0.

75/0.

87/1.

00 yuan, currently corresponding to the corresponding PE14 / 12 / 11x.

Maintain “Buy” rating.

  Sixth, the risk prompts that the independent brand exceeds expectations, domestic ODM orders stall, changes in export orders, and exchange rate changes

Wuliangye (000858) 2018 Annual Report Commentary: Pu Wu Controlled by Volume and Efforts to Unleash Growth Potential

Wuliangye (000858) 2018 Annual Report Commentary: Pu Wu Controlled by Volume and Efforts to Unleash Growth Potential

[Investment Highlights]The company released its annual report. In 2018, the company achieved a total operating income of 400.

3 billion, a year-on-year increase of +32.

61%; net profit attributable to mother 133.

840,000 yuan, +38.

36%.

In the fourth quarter of 2018, the company’s revenue was 107.

8 billion, +31.

32%; net profit attributable to mother 38.

900,000 yuan, a year-on-year increase of +43.

59%.

The company’s performance is in line with market expectations.

In addition, the company plans to achieve a total operating income of 50 billion yuan in 2019, maintaining a growth rate of about 25% and maintaining rapid growth.

The volume of Wuliangye and a series of wines increased significantly, and the advance receipts increased significantly.

In 2018, under the brand strategy system of “1 + 3” and “4 + 4”, Wuliangye and its series of wines achieved significant volume.

The shipment volume of Wuliangye Liquor reached about 20,000 tons, an annual increase of about 11%.

Wuliangye series of wines achieved tens of billions of revenues, sales of about 170,000 tons, an annual increase of about 5%.

The company’s gross profit margin increased by 1.

80 to 73.

80%, mainly because the company initially modified the internal and external proportions of the delivery plan, disguisedly increasing the ex-factory price.

The sales expense ratio drops by 2 every year.

57 to 13.

13%, mainly due to the company’s channel price rationalization and good 杭州桑拿 sales of products, resulting in reduced market expenses.

In addition, the company’s advance receipts increased by 44 compared to last year.

36%, up to 67.

07 million yuan, reflecting the company’s channel confidence is full of vitality.

Wuliangye’s volume control is quite pricey, unlocking growth potential.

Judging from the feedback from the company’s dealer conference, Wuliangye liquor is expected to leave the factory in 2 in 19 years.

3 Growth rate, 15% per year.

As of now, the seventh generation Wuliangye has completed the planned payment, and the average undelivered amount is less than one month.

The channel approval price is around 820-830 yuan, and the dealer’s inventory is around January.

In March, the company has launched the seventh-generation Wuliangye Collector’s Edition, accounting for 9% of the previously planned volume, and the price is 859 yuan.

A new Wuliangye will be launched in June to improve the wine body and change the new packaging. Gradually the amount will be 35% to 5,250 tons, a decrease of 33 over the same period of previous year.

33% -41.

6%, but the price is 20-30 yuan higher than the collection.

In addition, the company’s organizational structure is hierarchical, from a large-area system to a provincial-level marketing theater system, and it has begun to fully introduce a digital platform to refine dealers, inventory and market-level management, and participate in profit distribution through corresponding channels of digital association.And strive to continue to boost the channel profits.

The company’s “price increase, production suspension, stock control, and channel management” expansion is expected to gradually increase the rigid price increase of Wuliangye Wine and Wine Terminals, thereby releasing the company’s future growth potential.

[Investment recommendation]Increase revenue and gross profit margin.

Estimated operating income for 19/20/21 is 491.21/585.

76/695.

1.3 billion, net profit attributable to mother is 168.

04/199.

51/239.

30,000 yuan, EPS 4.

33/5.

14/6.

16 yuan, corresponding to PE 20.

32/17.

12/14.

29 times, maintain “Buy” rating.

[Risk reminder]Expansion of production capacity is less than expected; macroeconomic expansion is high; related national policy risks.

Zhenjiang shares (603507) in-depth report: The turning point of the sea breeze has come!

Zhenjiang shares (603507) in-depth report: The turning point of the sea breeze has come!

As a global high-quality offshore wind power component supplier, the company’s reading guide has obvious advantages in process technology and binds the world’s top offshore wind power leading companies.

The company’s “new production capacity + new products + new customers” has developed smoothly and is expected to usher in a turning point in performance.

Investment Highlights Global wind power is developing rapidly, and offshore wind power has great potential for new installations worldwide in 201851.

3GW, of which 46 were newly installed onshore.

8 GW, additional installed capacity at sea4.

5GW; global wind power installed capacity is 591GW, of which 23GW is offshore installed capacity.

According to GWEC forecast, the total number of global offshore wind power installations in 2019-2023 is 39.

8GW, CAGR reached 17.

5%.

Take the offshore wind power Dongfeng, sound the company once again take off the horn (1) bind Siemens, the global leader in offshore wind power, relying on domestic offshore wind power leader Shanghai Electric, the growth of offshore wind power.

(2) Enercon, a new major overseas customer (the sixth new installation in the world in 2018), continues to develop high-quality wind turbine manufacturers at home and abroad, with promising future performance.

(3) High technical barriers for offshore wind power steel structures, building a company moat; accelerating the construction of fund-raising projects, and capacity growth to support performance growth.

(4) Expansion of wind power business synergy, acquisition of Shanghai Dete to expand wind turbine fastener business, acquisition of Shanghe Offshore entered the offshore wind power operation and maintenance market.

The global photovoltaic industry has grown steadily, and the “scenery” two-wheel drive is reported to have predicted that China’s photovoltaic industry association will add 240-305GW of new photovoltaic installations across the country in 2019-2025, with a CAGR of 6% -9%.

From 2014 to 2018, the company’s photovoltaic equipment product revenue CAGR reached 61%. The company’s photovoltaic brackets have successively supplied solar power in batches. The United States and other well-known photovoltaic companies at home and abroad such as ATI and Unimacts.

Earnings Forecast and Estimates We forecast the company’s net profit for 2019-2021 to be zero.

45/1.

92/2.

970,000 yuan, corresponding to 0 EPS.

36/1.

50/2.

32 yuan.

Considering that the company, as a global high-quality supplier of offshore wind power steel structures, has expanded its technology, production, and management capabilities, expanded its capacity to expand production, and expanded its major customers, the company’s performance has promoted stable growth, and its coverage has been given a “Buy” rating for the first time.

Risks indicate 淡水桑拿网 fluctuations in raw material prices, escalating trade frictions, major changes in industry policies, and synergistic risks in acquisitions.

Zhejiang Dingli (603338): Benefiting from the continued growth of domestic demand

Zhejiang Dingli (603338): Benefiting from the continued growth of domestic demand

Event: The company released its 2018 annual report and realized real revenue17.

08 million yuan, an increase of 49 in ten years.

89%, net profit attributable to mother 4.

80 ppm, a 69-year increase of 69.

69%.

  The net profit is slightly lower than the previous annual report forecast, which is generally in line with expectations: the company realized revenue in 201817.

08 million yuan, an increase of 49 in ten years.

89%, net profit attributable to mother 4.

80 ppm, a 69-year increase of 69.

69%, net profit is slightly lower than the previous annual report of 20 million, generally in line with expectations.

The company’s gross and net profit margins are 41.

52% / 28.

14%, a decrease of 0 from the previous year.

46 / -3.

28 units; in terms of expenses, the sales / management and R & D / financial expense ratios are 5 respectively.

38% / 6.

92% /-2.

09%, respectively, down -0 from the previous year.

92 / -0.

62/2.

09 averages.

  The revenue share of arm-type products increased, and the proportion of domestic revenue increased: from the perspective of business, the revenue of scissor, arm and mast platforms was 12.
.

8.3 billion, 2.

07 billion and 1.

510,000 yuan, an increase of 50 each year.

32%, 103.

23% and 4.

97%, the growth rate of arm-type products is higher, the proportion of revenue increased to 12%.

By region, domestic and foreign incomes are 7 respectively.

1.6 billion and 9.

2.5 billion, an increase of 84 each year.

23% and 30.

18%, the proportion of domestic income increased to 42%.

At present, there are only about 90,000 domestic aerial platforms, and the industry is in an outbreak period. The company strengthens cooperation with domestic high-quality leasing companies and reached strategic cooperation with Shanghai Hongxin to further accelerate the domestic market development.

  The arm product investment and investment project has been steadily advancing, enhancing the company’s high-end product competitive advantage: At the 2018 厦门夜网 bamua exhibition in Shanghai, the company released 10 new arm upgrade products developed by Magni. At present, it has been produced in small quantities and put on the market.good.
The company’s fund-raising project “Large Intelligent Aerial Work Platform Construction Project” has also completed the construction of the main plant, and is currently in the final stage of construction and equipment procurement.

Considering that the equipment procurement and delivery and installation and commissioning still need to extend the period, the company will extend the completion period of the investment projects to May 2020, at which time the production capacity of arm-type products will be significantly improved, enhancing the company’s competitive advantage in the high-end market.
  Profit forecast and investment advice: We expect the company’s net profit for 2019-2021 to be 6, respectively.
4.0 billion, 8.

09 billion and 10.

9.7 billion, corresponding to 32 times, 24 times and 18 times the corresponding PE, maintaining the “buy” level.

  Risk warning: intensifying market competition leading to falling profit margins, etc.

Zhenhua Technology (000733): Low Interest Loan Supports Independent Controllable Main Business Equity Incentive Landing Injects Performance Improvement

Zhenhua Technology (000733): Low Interest Loan Supports Independent Controllable Main Business Equity Incentive Landing Injects Performance Improvement

The company released an announcement: 1) China Zhenhua received the annual interest rate of the loan from China Electronics, the actual controller, for a period of two years.

61% (previous loan benchmark interest rate of 3pct) 武汉夜生活网 of 8.
.

$ 2 million loan, totaling 6 of them.

35 billion USD was re-loaned to 7 subsidiaries involved in military high-tech electronics business, using high-tech business liquidity and loan replacement.

2) The company changed the equity incentive exercise plan, raised the assessment benchmark from 2017 performance year to 2018, and extended the assessment period from 2019-2021 to 2020-2022.

Key points of investment: Low interest rate loans supplement high-tech electronic component liquidity funds and replace high-cost expenditures. Focusing on the core main business of continuous high R & D expansion and scalable expansion accelerates the automatic controllable process of core components.

Zhenhua Technology will receive 8.

6 of 20 ppm low interest rate loans.

35 billion was re-loaned to the 7 subsidiaries of the 杭州桑拿 military high-tech electronics business to be used for liquidity supplements and loan replacement of high-tech businesses.

Based on the interest expenses and debt conditions disclosed in the 2018 annual report, its average debt interest rate is 7.

10%.

The low interest rate is 8.

A 2 billion loan is expected to reduce financial costs by approximately 0.

20 ppm, supporting savings in operating costs and effectively reducing the company’s financial costs.

The high-tech electronics industry in which the company is located has the characteristics of capital-intensive and technology-intensive. The investment of this capital may meet the company’s operating activities’ demand for capital.

As an independent and controllable pioneer of military electronic components, the company’s high R & D expansion and industrialization practice may help the company’s internal low-end products to transform and upgrade to high-end products, and capture the value of high-end core components in the military-civilian dual-use market.

The extension of the exercise period and the upward evaluation benchmarks demonstrate the company’s confidence in future performance, and the performance evaluation further stimulates the internal vitality to inject sufficient benefits for upward performance.

The exercise performance evaluation benchmark of the equity incentive plan will be adjusted based on the company’s 2018 performance level: the net profit deducted from non-attribution will be deducted from 1.

530,000 yuan changed to 1.

80 ppm will deduct unexpected average return on equity from 3.

76% changed to 4.

20%.

The performance evaluation period was changed from the original 2019-2021 to 2020-2022.

The exercise benchmark and extended exercise period reflect the company’s confidence in the continued performance of the future, further realize the integration of the company’s development and indirect direct incentives, optimize the company’s comprehensive governance structure and incentive and restraint mechanisms under the state-owned enterprise background, and participate in the market in the companyIn the process of economic competition, the company’s endogenous driving force is constantly stimulated.

At the same time, good internal control is more conducive to promoting the company’s progress in the implementation of its strategic plan of “focusing on the core and increasing quality”, and the two-wheel drive will inject sufficient responses to the company’s future performance.

Focusing on the core investment logic of the company’s mid- and long-term value for the first time: 1) Relying on the first-mover advantage of “three-line construction” and the background of the military industry central enterprise channel, the company supplemented the raised projects to achieve product upgrades and capacity expansion, and reorganized the organizational relationships of subsidiaries to stimulate business vitality and synergyEffect, it is expected to further consolidate the core competitiveness of military components; 2) shareholders have high-quality independent controllable component assets, the company as the only and only platform, the future does not rule out the possibility of playing a key role in the group’s asset securitization process, plus the companyRevising the stock budget incentive plan to further improve the assessment standards, making the larger market value compatible with the high incentives of related interests, and the company’s long-term development is expected.

Downgrade profit forecast and maintain Buy rating: Considering that the company’s operating activities rely heavily on subsidiaries to develop, in order to focus on the main business and gradually reduce inefficient assets, during this period, the possibility of wide changes in performance is not ruled out, so we downgrade the company 19 /20-year return to mother’s net profit forecast to 2.

84/3.

55 (Original value: 3.

10/3.

91) billion yuan, plus a 21-year forecast of 4.

2.8 billion, 19/20/21 EPS are 0.

55/0.

69/0.

83 yuan / share, currently sustainable (2019/08/09, 14.

04) Corresponding PE is 26/20/17 times.

However, while realizing the company’s advantages in the field of military electronic components, it continued to promote the main business of new electronic components, compressing low-value-added business strategies, having both distribution incentive plans and autonomous controllable asset integration expectations.Controllable Pioneer’s future performance will grow steadily under the focus on its main business strategy.
Therefore, maintain BUY rating.
Risk reminders: 1) Zhenhua Telecom’s operating conditions have greatly improved performance risks; 2) the equity incentive plan still needs to be reviewed by the shareholders’ meeting and the SASAC; 3) the decision-making risks of the actual controller and controlling shareholders on the company’s development;) Uncertainty in the release of demand for military products and changes in the competitive landscape; 5) Progress in the construction of capacity expansion projects and progress in production and production are less than expected.

China Merchants Securities (600999): Strong business control risk performance and quality both increase

China Merchants Securities (600999): Strong business control risk performance and quality both increase

Strong business controls risks, and performance has grown significantly.

In 2019H1, the company achieved net profit of 3.5 billion yuan (YoY + 94%), operating income of 8.5 billion yuan (YoY + 78%), and EPS 0.

46 yuan / share, ROE 4.

61% (+2 YoY).

45pt), adjusted financial leverage ratio2.

48 times.

In terms of structure, brokerage and wealth management business, investment banking business, investment management business, investment and trading business, and other business operating income were US $ 3.9 billion (+ 9% year-on-year) / US $ 600 million (+ 9% year-on-year) / 10 US $ 100 million (+ 57% year-on-year) / US $ 2 billion (from negative to positive) / US $ 1.1 billion (+ 57% year-on-year), accounting for 45% / 7% / 11% / 23% / 13% of operating revenue respectively.

Improved brokerage business and enhanced wealth management effectiveness.

In the first half of the year, the company’s brokerage business program fee net income was 2.2 billion, a year-on-year increase of 17%.

First of all, although the company’s commission rate is still decreasing, it has further increased its market share in an active market for shares, continuing the company’s market share of stock fund trading volume at the end of June.

14%, + 20bp year-on-year, ranking stable at 7th place.

At the same time, the company accelerated the transformation of wealth management, with 2.57 million wealth management customers, a year-on-year increase of 3%.

The sales of various financial management products reached 4,642 trillion, an increase of 10% year-on-year, and brought in net sales of 87.81 million yuan, ranking fourth in the industry.

In addition, the company’s stock budget brokerage business has accumulated market share in the number of accounts opened.

9%, ranked 1st, with 12.35 million cumulative transactions in the first half of the year, + 180% year-on-year.

The growth of self-operated business increased and the layout of innovative business.

In the first half of the year, the company realized a self-investment income (investment income-investment income to associates + income from changes in fair value) of 30 ‰, accounting for 35% of operating income, and a loss of 0 in the same period last year.

2 ppm (calculated using 19-year interim report restatement data).

At the same time, the company obtained market qualification for corn budget and cotton budget for Zhengshang Institute, and market qualification for sugar futures and cotton futures for Zhengshang Institute.

In terms of FICC business, the average daily domestic market making of corporate bonds ranks 11th among the 55 attempted market-making institutions, becoming one of the first 8 government bond futures market makers in the market.

Investment bank business grew against the trend, IPO, bond underwriting dazzling.

In the first half of the year, the company’s investment banking business net income was 70,000 yuan, a year-on-year increase of 12%.

At the scale of the IPO scale in the whole market, the company’s IPO underwriting amount was US $ 4.5 billion, an increase of 37% year-on-year. The IPO underwriting amount and number of companies ranked third in the industry; the bond underwriting amount was US $ 2007 billion, + 19% year-on-year, ranking the industry number4. Among them, the underwriting amount of asset-backed securities was 102.1 billion, an increase of 15% year-on-year, ranking first in the industry; the amount of M & A transactions was 41 billion, + 14% year-on-year, ranking 5th in the industry.

But the refinancing scale is 42 ppm, at least 51% per year.

By adding two financial control pledges, the overall risk can be controlled.

^ Net income 10.

1 ppm, YoY-2%, the reduction was mainly due to the two financings, lower stock pledge interest rates, and shrinking stock pledge scale.

As of the end of June, the balance of the company’s two financial services was US $ 46.1 billion, an increase of 19% over the end of the previous year and a market share of 5.

1%; the balance of stock pledge was 29.9 billion, of which the balance of self-funded capital was 17.7 billion, a decrease of 22% from the end of the previous year.

The overall performance guarantee ratio of stock pledged own funds is 340%, an increase of 85pt from the end of the year.

Under the prudent credit risk control, benefiting from the stock and debt activity in the first half of the year, the company’s credit impairment in the first half of the year reversed to 31.04 million yuan, reducing impairment losses by 126% each year.

Among them, the impairment loss of the two financings was reversed to RMB 49.33 million, which reduces the impairment loss by 230% each year; the impairment loss on financial assets purchased 杭州夜生活网 under resale agreements was 22.07 million yuan, a reduction of 73%.

Deepening transformation of asset management business.

In the first half of the year, the company’s net income from asset management business was 500 million yuan, a year-on-year increase of 16%.

The decline in asset management business income was due to the company’s initiative to adjust its business structure.

As of the end of June, the company’s asset management scale was 6,348 trillion, an earlier decline of 11%, ranking the industry’s fifth.

Among them, the scale of active management was 1,513 trillion, accounting for 24%, a year-on-year increase of +4 points.

The supplementary capital is the first to diversify development + the release of policy dividends, and the performance is expected to achieve high growth.The company announced in 南京夜网 March that it plans to raise no more than US $ 15 billion through a rights issue, all of which will be used for capital increase and diversification of subsidiaries, capital intermediary business, capital investment business, and supplementary operating capital.

In June, the company’s outstanding short-term financing bond balance limit was gradually increased from 7 billion US dollars to 31.6 billion; in July, the expansion agreed that the company issue no more than 5 billion financial debt.

The expansion and reduction of financing costs helped the company to diversify.

Since this year’s mergers and acquisitions and reorganizations, business policies such as Liangrong have been loosened, capital strength has been reintegrated, and brokers with business capabilities have more business opportunities.

The company is expected to replenish the potential for capital tightening and achieve high growth in performance.

The current forecast of China Merchants Securities P / B 2019 is 1.

4 times, continue to maintain the recommended level.

Risk Warning: The policy advancement is less than expected, and the market is subject to major fluctuation risks.

Weir shares (603501): Q3 results readjusted and part of Howwell will continue to embrace the wave of optics in the future

Weir shares (603501): Q3 results readjusted and part of Howwell will continue to embrace the wave of optics in the future
The company released the third quarter report of 2019, and the consolidated report was reorganized and adjusted to Beijing Haowei Data Company.Data from 重庆耍耍网 January to September 2019. Under this caliber, the company achieved a total of 94 revenues in the first three quarters of 2019.0.6 billion, net profit 3.79 trillion, net profit attributable to mother 1.350,000 yuan, including 37 in the third quarter of 2019.30,000 yuan, net profit 1.140,000 yuan, net profit attributable to mother is 59.33 million yuan. In general, the company’s CIS business has grown steadily and will continue to embrace the wave of optics in the future. We believe that in the first three quarters of 2019, due to the clearing of inventory by Weir AG’s distribution business and the merger of Beijing Hawe and Spike, certain profit items existed.Certain pressure, but Beijing Haowei, which is mainly engaged in CIS, still achieved steady growth in performance.Looking forward to the future, we believe that the rapid growth of CIS demand for smartphones and the continued wave of optics will continue to be the core performance drivers of Weir Shares: changing multi-camera penetration and continuous improvement drive the rapid growth of demand for smartphone CIS, which requires a high level of accountability.Compared with the general trend of improvement, the launch of new 48M products has brought significant improvements in ASP and profitability.The acquisition of Beijing Haowei, the third largest CIS manufacturer in the world by Weir shares, will continue to embrace the wave of optics and usher in growth. The profit forecast and rating of the combined Weil + Hawwell + Spyco combined statements are expected to be 0 for the company’s 2019-2021.70/2.80/3.66 yuan, corresponding PE is 158/39/30 times. Considering that comparable companies evaluate the company to grant 45xPE for 20 years, the reasonable value is 126 yuan / share. Maintain “Buy” rating. Risk reminder integration is less than expected risk; Sino-US trade war affects downstream demand risk; smartphone sales risk; three-shot penetration rate is less than expected risk; intensified improvement is less than expected risk; security automobile CIS development is less than expected risk; industry competition intensified risk; technology updateSubstitution risk; exchange rate risk.