news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Yangtze Business Daily News●Huang Cong, reporter of Yangtze Business Daily

An acquisition by Da Beinong has temporarily come to an end through settlement.

On the evening of July 28, Da Beinong (002385.SZ) and Zhengbang Technology (002157.SZ) both issued announcements that recently, the two parties and related parties reached a settlement on the equity transfer dispute and signed a "Settlement Agreement".

Da Beinong stated that it has confirmed that the company's debt to Zhengbang Technology is 577 million yuan, which will be repaid by Zhengbang Technology in accordance with the provisions of the Zhengbang Technology reorganization plan approved by the court.

It is worth mentioning that in the second quarter, Da Beinong’s net profit attributable to shareholders of listed companies (referred to as “net profit”) reached 29 million to 59 million yuan, marking the first time the company has achieved profitability in nearly a year and a half.

Da Beinong said that the pig market rebounded in the second quarter, and the company's pig production indicators continued to improve. At the same time, the prices of bulk raw materials such as corn and soybean meal fell, and the company's pig farming costs decreased.

With its improving performance, on July 13, Da Beinong issued a prospectus for a private placement. The company plans to raise 1 billion yuan to be used for feed production projects, etc.

Da Beinong said that after the completion of this issuance, the company will be able to further improve its product structure, enhance its product production and supply capabilities, help the company maintain long-term stable business development, and improve its sustainable profitability.

Achieving debt settlement

A two-and-a-half-year acquisition between two listed companies ended with a settlement.

On the evening of July 28, Da Beinong and Zhengbang Technology both issued announcements that recently, the two parties and related parties reached a settlement on the equity transfer dispute, signed a "Settlement Agreement", and received the "Civil Mediation Book" from the Beijing No. 1 Intermediate People's Court.

According to the announcement of Da Beinong, on February 27, 2022, the company signed the "Equity Transfer Agreement on the Target Company between Jiangxi Zhengbang Technology Co., Ltd. and Other Companies and Beijing Da Beinong Technology Group Co., Ltd." with Zhengbang Technology and related parties, stipulating that the company will acquire the equity of 8 companies under Zhengbang Technology (collectively referred to as "target companies"). Zhengbang Technology's former controlling shareholder Zhengbang Group Co., Ltd. and Zhengbang Technology's former chairman and general manager Lin Feng shall assume joint and several liability guarantees for the responsibilities and obligations of Zhengbang Technology and the target company in the transaction.

After the Equity Transfer Agreement came into effect, Da Beinong paid Zhengbang Technology an advance payment of RMB 500 million for the equity transfer in accordance with the provisions of the Equity Transfer Agreement.

However, the "Equity Transfer Agreement" failed to proceed normally afterwards. On September 29, 2022, Da Beinong held the 43rd (extraordinary) meeting of the Fifth Board of Directors, and reviewed and passed the "Proposal on Terminating the Equity Transfer Agreement of Some Holding Subsidiaries of Jiangxi Zhengbang Technology Co., Ltd. and Terminating the Acquisition". On the same day, it filed a lawsuit with the Beijing No. 1 Intermediate People's Court, requesting the counterparty to return the advance payment, pay the corresponding interest and bear the corresponding liquidated damages, etc.

After the above case was accepted by the Beijing No. 1 Intermediate People's Court, Zhengbang Technology entered the reorganization procedure. The "Reorganization Plan of Jiangxi Zhengbang Technology Co., Ltd." has been approved by the court and will be implemented on December 15, 2023.

After Zhengbang Technology entered the reorganization process, Da Beinong declared its claims to the reorganization administrator of Zhengbang Technology. The claims were listed as temporarily suspended claims because the litigation between the company and Zhengbang Technology was pending.

In order to speed up the recovery of claims and protect the interests of the company, Da Beinong held the 20th (extraordinary) meeting of the Sixth Board of Directors on July 25, 2024, and reviewed and approved the "Proposal on the Proposed Signing of the <Settlement Agreement>", agreeing that the company will sign a settlement agreement with Zhengbang Technology and related parties. The parties confirmed that the company's claims against Zhengbang Technology amount to 577 million yuan, which will be repaid by Zhengbang Technology in accordance with the provisions of the Zhengbang Technology reorganization plan approved by the court.

In this regard, Zhengbang Technology stated in the announcement that the signing of the "Settlement Agreement" and the acquisition of the "Civil Mediation Agreement" followed the principles of fairness and justice, which is conducive to promoting further debt settlement between the company and Da Beinong, and can effectively protect the legitimate rights and interests of listed companies. It is in line with the interests of listed companies and all shareholders, especially small and medium-sized shareholders.

Second quarter profit expected to be 29 million to 59 million

Da Beinong’s main businesses include the production and sales of seeds, feed, live pigs and animal health vaccines and other products.

In 2023, Da Beinong achieved operating income of 33.39 billion yuan, an increase of 3.07% over the same period last year, setting a historical high; net profit loss was 2.174 billion yuan.

In this regard, Da Beinong stated that in 2023, the company's losses were relatively large, mainly affected by the losses in the pig farming business and the impairment losses and credit impairment losses of various assets. The company's feed business and seed business had good operating performance, among which the net profit of the feed business increased by more than 60% year-on-year.

Recently, Da Beinong released its 2024 semi-annual performance forecast, showing that the company's net profit loss in the first half of the year was 150 million to 180 million yuan, a loss of 774 million yuan in the same period last year, a reduction of 76.75% to 80.62%.

Da Beinong said that in the first half of 2024, the company's net profit was much lower than the same period last year, and it achieved profitability in the second quarter, mainly due to the normal operation of the company's feed and seed businesses and the reduction of losses in the pig business. In the second quarter, the pig market rebounded, the company's pig production indicators continued to improve, and at the same time, the prices of bulk raw materials such as corn and soybean meal fell, and the company's pig farming costs fell.

In the first quarter of 2024, Da Beinong’s net profit loss was 209 million yuan.

From this point of view, Da Beinong's net profit in the second quarter reached 29 million to 59 million yuan, marking the first time the company has made a profit in nearly a year and a half.

Recently, a brief report on pig sales released by Da Beinong showed that the number of pigs sold by the company's holding and affiliated companies in June totaled 358,300 heads, and the cumulative total from January to June was 2.8482 million heads; the sales revenue totaled 703 million yuan that month, and the cumulative total from January to June was 4.631 billion yuan; the average sales price of commercial fat pigs of the company's holding and affiliated companies in June was 18.11 yuan/kg.

It is worth noting that the average sales price of Da Beinong's commercial fat pigs in June was the highest in the past year, and had never exceeded 17 yuan/kg before.

As its performance improved, Da Beinong began to implement a private placement and plan for further development.

On July 13, Da Beinong released the 2022 Prospectus for the Issuance of Shares to Specific Objects, which showed that the total amount of funds raised from the issuance to specific objects will not exceed 1 billion yuan (including principal). The net amount of funds raised after deducting issuance expenses will be used entirely for feed production projects (544 million yuan of raised funds will be used), breeding research and development projects (78.9413 million yuan of raised funds will be used), information system upgrade and transformation projects (76.713 million yuan of raised funds will be used), and replenishment of working capital (300 million yuan of raised funds will be used).

Among them, Da Beinong's feed production projects include a 240,000-ton annual pig compound feed production line project, a 120,000-ton annual pig feed processing plant construction project, the Liaoning Shengde Da Beinong ruminant feed production base project, the Da Beinong Liaoning District core science and technology park construction project and an annual production of 180,000 tons of microecological functional biological feed construction project.

Da Beinong said that after the completion of this issuance, the company will be able to further improve its product structure, enhance its product production and supply capabilities, help the company maintain long-term stable business development, and improve its sustainable profitability.

Visual China Image