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CSCI Morning News Circular - 20180524

1. Macro News

• Trade talks to expand US exports to China. China and the United States will implement the specific elements of the joint statement released on Saturday in Washington, covering the purchase of agricultural and energy products, the Ministry of Commerce said on Wednesday.  [China Daily]       
• China’s Trade Deal With U.S. Leaves Germany Squeezed in Middle. China’s pledge to buy more American goods as part of a deal to avert a trade war with the U.S. puts Germany on the spot. As China’s biggest European trading partner, with a total volume of some $179bn last year, Germany is first in line to suffer the impact of any reduction in business.  [Bloomberg]  
• Spain Works on a Plan for Regions to Return to Bond Market. The Spanish Budget Ministry is working on a plan to reorganize the debt of the country’s regional governments to help them sell bonds in the public markets again after a six-year absence.  [Bloomberg]  

1. Industry News

• China’s Latest Move on Trade Is a Massive Cut to Car Tariffs. China will cut the import duty on passenger cars to 15 percent. The Finance Ministry said the levy will be lowered effective July 1 from the current 25 percent that has been in place for more than a decade.  [Bloomberg]    
• China Regulator Seeks to Lower Benchmark Coal Price. The authority aims to guide 5,500 kcal/kg thermal coal price at northern port to below 570 yuan per ton before June 10, Shanghai Securities News reports. Regulator urges major power producers to refrain from buying coal at high prices.  [Bloomberg]     
• China Alumina Exports Triple After Rusal Sanctions Boost Prices. China’s alumina exports tripled in April to the highest in almost two years, offering a foretaste of what may prove to be a torrent of shipments following U.S. sanctions on United Rusal Co.  [Bloomberg]    
• Corporate News
• ZTE estimates at least US$3bn in losses from US ban. ZTE Corp. is estimating losses of at least 20bn yuan (US$3.1bn) from a US technology ban. The company however is hopeful of striking a deal soon and already has a plan in place - dubbed “T0” - to swing idled factories into action within hours once Washington agrees to lift its seven-year moratorium on purchases of American chips and components.  [SCMP]    
• Didi Chuxing said to consider HK listing in second half of 2018. Didi Chuxing is considering an initial public offering in Hong Kong that is expected to value the company at US$70bn to US$80bn. The company is preparing to list as early as the 2H of this year and is open to options including weighted voting rights, said a report.  [SCMP]    
• Apple partner TSMC is said to start making chips for new iPhones. Apple Inc. manufacturing partner Taiwan Semiconductor Manufacturing Co. has started mass production of next-generation processors for new iPhones launching later this year.  [SCMP]    
• Foxconn to set up R&D center in Nanjing. Foxconn Technology Group has planned to launch a new R&D center in Nanjing in East China's Jiangsu province. The project, with a planned investment of 4.58bn yuan ($720mn), covers an area of 3.8 hectares in the China (Nanjing) Software Valley.  [China Daily]       
• Hon Hai’s FII to Raise $4.3 Billion in Marquee Chinese IPO. Foxconn Industrial Internet Co. plans to raise 27.1 billion yuan ($4.3 billion) selling stock in an initial public offering, kicking off the largest mainland Chinese debut since the 2015 stock market crash.  [Bloomberg]     
• China Railway Construction Halts Maglev Train Project. China Railway Construction halted its magnetic-levitation train production project in Changsha in early May after NDRC summoned some train producers on overcapacity concern, Caixin reports.  [Bloomberg]    
• Shell Sells Stake in China Coal Gasification Plant to Sinopec. Royal Dutch Shell Plc sold its stake in a coal gasification project in China to Sinopec, ending an almost two-decade long partnership in the venture and adding to a string of asset disposals by the oil major.  [Bloomberg]    
• China Grand Pharma, CDH Genetech Plan to Buy Sirtex Medical. The two companies plan to acquire entire Sirtex by way of scheme arrangement, China Grand Pharmaceutical says in Hong Kong stock exchange filing. China Grand Pharmaceutical plans to provide A$473.9m, or 49% of the equity funding for the acquisition.  [Bloomberg]    
• Sinopec to Buy 50% Stake in Coal Gasification JV From Shell. Equity transaction allows Sinopec to own entire stake in Yueyang-based coal gasification venture, Sinopec says in statement on its website, citing agreement with Shell.  [Bloomberg]    
• Japan’s MS&AD Enters China Insurance Market in $680 Million Deal. A unit of Japan’s MS&AD Insurance Group Holdings Inc. agreed to buy a minority stake in China’s BoCommLife Insurance Co. for 4.3 billion yuan ($680 million), entering the world’s third-largest life insurance market.  [Bloomberg]    
• Logan Property Proposes Additional Sale of USD Senior Notes. Aggregate principal amount and the offer price will be determined through book building, company says in Hong Kong stock exchange filing. The company plans to use proceeds to refinance existing debts and for general corporate purposes.  [Bloomberg]    
• BOC Aviation to Sell 15 Aircraft for $551mn. The company agreed to sell 15 aircraft to unidentified third-party buyer for aggregate consideration of $551m, it says in filing to Hong Kong stock exchange. The deal is expected to be closed during 2018. The proceeds to be used for future aircraft investment.  [Bloomberg]    
• Top China Wind Power Producer Shines as Fewer Turbines Idled. The Chinese government’s moves to ramp up renewable energy consumption have sparked optimism over the future of China Longyuan Power Group Corp., the country’s biggest wind power producer.  [Bloomberg]  
• SIM Tech To Pay Special Div 4 Cents per Share. SIM Tech announced that at the Board meeting held on 23 May 2018, the Board resolved to declare a special dividend of 4 cents per Share, amounting to approximately $102.4 million in total. First Special Dividend payment date will be 28 June 2018.  [AAStocks]        
• Baidu Spins Off & Sells Most Stakes in Utility Apps & Mobile Ads. Baidu announced to spin off its Global DU, responsible for utility apps and mobile advertisements, and sell most of its equity interests in the department, in order to develop its artificial intelligence business.  [AAStocks]    
• Report says Xiaomi confirms cornerstone investors. Xiaomi has confirmed that its cornerstone investors include the state-owned Assets Supervision and Administration Commission, Singapore sovereign wealth fund GIC Private and China Life Insurance Company, according to a mainland media report, citing sources.  [The Standard]