This afternoon, the group of state issued a clarification on its official WeChat official account: the relevant content of the company’s application for bankruptcy is false information. The majority of investors should be subject to the company’s public disclosure of information and should not be credulous of rumors. For malicious acts that spread rumors and damage the interests of investors, the company will reserve the right to safeguard the legitimate rights and interests of the company through legal channelsp align=”center” style=”text-align:center;”> Clarification of relevant clarifications (source: WeChat official account)
Zhengbang group is a giant in China’s pig industry in 2021, the Jiangxi Zhengbang Technology Co.Ltd(002157) pigs under Zhengbang group sold 149267 million pigs, ranking second in China after Muyuan Foods Co.Ltd(002714)
Previously, Jiangxi Zhengbang Technology Co.Ltd(002157) released the performance forecast, and estimated that the net profit attributable to the shareholders of the listed company in 2021 would be RMB 18.2-19.7 billion . This is also interpreted by some market participants as “losing 100 million every two days”.
“Since last year, pork prices have continued to fall, while feed prices are still rising. The life of the pig industry is extremely difficult, especially for those enterprises with rapid expansion in the early stage!” A researcher of securities companies interviewed by reporters said that it is expected that the bitter days of the industry will last for some time.
a paper announcement triggered “rumors”
On February 28, Jiangxi Zhengbang Technology Co.Ltd(002157) announced that the company plans to sell all the shares of its holding subsidiaries Deyang Zhengbang agricultural and animal husbandry technology Co., Ltd., Danling Zhengbang Feed Co., Ltd., Chongqing Guanglian agricultural and animal husbandry technology Co., Ltd., Yunnan Guanglian livestock and poultry Co., Ltd., Kunming Xinhao Agricultural Technology Co., Ltd., Yunnan Dajing Technology Co., Ltd Guiyang Zhengbang animal husbandry Co., Ltd. and Yunnan Guangde Feed Co., Ltd. have 51% equity of the above five companies.
announced that the total amount of asset transactions of this cooperation is about 2-2.5 billion yuan. The specific transaction amount is based on the audit and determined by both parties through negotiation. After the equity transfer is completed, the above eight target companies will no longer be included in the scope of the company’s consolidated statements and become the subordinate holding subsidiaries of Beijing Dabeinong Technology Group Co.Ltd(002385) . The assets and liabilities of other subsidiaries of the target company and branches not engaged in feed business are not included in the scope of this cooperation, and the company is responsible for stripping them
The subject matter of this transaction (source: Jiangxi Zhengbang Technology Co.Ltd(002157) announcement)
According to Jiangxi Zhengbang Technology Co.Ltd(002157) announcement, the company plans to form an industrial synergy with complementary advantages through this cooperation, create greater commercial value and economic benefits for both sides, jointly promote the healthy, sustainable and coordinated development of the industry and jointly create a good industrial development order.
Jiangxi Zhengbang Technology Co.Ltd(002157) it is estimated that the investment income from this transaction will be 1.1-1.9 billion yuan
Beijing Dabeinong Technology Group Co.Ltd(002385) said that in order to respond to the strategic layout of the company’s large-scale development, increase the market competitiveness of the feed industry, seize the market in Southwest China, give full play to the company’s technical advantages and scale effect, reshape the market competition pattern, the company increased the M & A of the feed industry and rapidly increased the company’s production capacity.
the industry as a whole fell into a loss
Since the second quarter of 2021, with the decline of pig prices, the pig breeding industry has entered a “cold winter”. Although the good news such as the short-term purchase and storage policy has boosted the pig price, according to the analysis of insiders, the pig price may improve at least until the second half of 2022.
Trend of foreign Sanyuan pig price in recent 12 months (source: China pig breeding network)
According to the estimation of the third party, the breeding cost of Jiangxi Zhengbang Technology Co.Ltd(002157) is about 18 yuan per kilogram of live pigs. According to the current pig price, the loss per kilogram may be about 5 yuan.
Dragged down by factors such as pig prices, the operation of major pig breeding enterprises in 2021 was not satisfactory. Even Muyuan Foods Co.Ltd(002714) , which is relatively leading in pig breeding scale and cost, is expected to lose 700 million-2.2 billion yuan in the fourth quarter of 2021.
Comparison of operation of some pig breeding enterprises in 2021 (source: company announcement)
Huge losses, the cash flow situation of pig breeding enterprises has also aroused widespread concern. Previously, pig breeding enterprises have said that the company is increasing revenue and reducing expenditure to ensure the normal operation of the enterprise.
Previously, Jiangxi Zhengbang Technology Co.Ltd(002157) announced that the company plans to apply for comprehensive credit with a total amount of no more than 60 billion yuan from banks and other financial institutions in 2022. In addition, Jiangxi Zhengbang Technology Co.Ltd(002157) plans to issue US $60 million bonds and supply chain finance to ensure the normal operation of the enterprise.
But this does not make the market “completely at ease”. In January this year, Jiangxi Zhengbang Technology Co.Ltd(002157) fell into the rumor of “breeding loan” — with the help of the name of employees (handling breeding loan), we can quickly obtain cash payment to suppliers. Subsequently, Jiangxi Zhengbang Technology Co.Ltd(002157) clarified that the online content was inconsistent with the facts, and explained the business model of “company + farm + settlement”.
According to media reports, on January 30, Zhengbang Group signed a cooperation agreement of no less than 10 billion with Jiangxi railway Aviation Investment Group Co., Ltd at present, Jiangxi railway aviation investment subsidiary has collected about 80 million yuan of feed for Jiangxi Zhengbang Technology Co.Ltd(002157) on behalf of . The two sides will continue to carry out specific business on the basis of the amount agreed in the overall cooperation agreement to provide support for Zhengbang feed procurement and other supply chains, which will greatly alleviate the pressure on Zhengbang’s capital demand and help Zhengbang cope with the continuously depressed market environment.
