On the 10th, Winall Hi-Tech Seed Co.Ltd(300087) announced that the controlling shareholder of the company had been changed from modern agriculture to China seed group (hereinafter referred to as “Zhongzhong group”), and the actual controller was still SASAC of the State Council.
Winall Hi-Tech Seed Co.Ltd(300087) is the leader of China’s seed industry. What impact does the change of controlling shareholder have on the company?
“This equity change will help Syngenta straighten out the management caliber and equity relationship, and help the company improve the influence and industrial status of the seed industry.” On the afternoon of the 11th, the relevant person in charge of the company told the Shanghai Securities News.
Zhongzhong group becomes the controlling shareholder of the company
According to the announcement, before the equity change, modern agriculture directly held 92.521 million shares of the company and controlled the voting rights of 35.406 million shares of the company through voting power entrustment and concerted action. The total number of shares controlled by the company was 128 million shares (accounting for 28.17% of the total number of issued shares of the company and 28.74% of the total number of shares after excluding the number of shares in the special repurchase account).
The controlling shareholder of the company is modern agriculture, and the actual controller is SASAC of the State Council. The equity structure is shown in the figure below:
After this equity change, Zhongzhong group directly held 128 million shares and voting rights of modern agriculture (accounting for 28.17% of the total issued shares of the company and 28.74% of the total shares of the company after excluding the number of shares in the special repurchase account).
The controlling shareholder of the company is changed to Zhongzhong group, and the actual controller is still SASAC of the State Council. The equity relationship is shown in the figure below:
It is reported that Zhongzhong group is an integrated enterprise of breeding, propagation and promotion with crop seeds as the main business. It is a wholly-owned subsidiary of Syngenta group. Previously, there were 11 core seed companies directly or indirectly controlled by China seed group.
Winall Hi-Tech Seed Co.Ltd(300087) is a leading enterprise in China’s seed industry. In the first three quarters of this year, the company achieved an operating revenue of nearly 1.2 billion yuan, a year-on-year increase of 35.49%. If the amortization expense of employee stock ownership plan is excluded, the net profit will increase by more than 5 times year-on-year.
It is noteworthy that in recent years, Winall Hi-Tech Seed Co.Ltd(300087) has become bigger and stronger through a series of mixed reforms, mergers and acquisitions.
In December 2018, Sinochem Group took a strategic stake in the company, and its wholly-owned subsidiary Sinochem modern agriculture became the largest shareholder of the company. In January 2020, all shares of modern agriculture held by Sinochem Group were transferred to Zhongnong Technology (renamed Syngenta group), and the company became a member of Syngenta seed industry. In December 2020, Jia Guilan and Wang Yulin entrusted the voting rights of all the shares of the company to modern agriculture. The company has changed from no controlling shareholder and no actual controller to modern agriculture as the controlling shareholder and SASAC of the State Council as the actual controller.
At the same time, the company continues to acquire high-quality targets. At present, it has participated in and controlled more than 10 companies, most of which are concentrated in the main rice planting areas in the middle and lower reaches of the Yangtze River.
build a “seed industry aircraft carrier”
straighten out the management caliber
What is the purpose of this equity change for the two companies in the seed industry of Syngenta?
In an interview with reporters, the relevant person in charge of the company said that the equity change is conducive to Syngenta to straighten out the management caliber and equity relationship, and to improve the influence and industrial status of the seed industry.
“The seed industry is the link with the highest scientific and technological content in the agricultural industry chain. In order to improve the competitiveness of China’s seed industry, the state has frequently issued policies to encourage the merger and reorganization of seed enterprises and cultivate seed industry leaders with international competitiveness.” An industry insider said that the former controlling shareholder of Winall Hi-Tech Seed Co.Ltd(300087) modern agriculture was mainly engaged in agricultural services. Through this equity change, Syngenta seed industry sector is expected to be further resource integration and technical coordination, which is conducive to China seed group to build a national seed industry enterprise of “China’s first and world-class” and improve the comprehensive competitiveness of Winall Hi-Tech Seed Co.Ltd(300087) industry.
It is worth mentioning that on October 12, the Shanghai Stock Exchange resumed the audit of Syngenta group’s issuance and listing.
In the seed industry, Syngenta group has the world’s leading breeding technology, is at the world’s leading level in transgenic R & D, and has been widely used all over the world. “China is the market with the most growth potential for the global seed industry. Syngenta group relies on the world’s leading biological breeding technology and China’s local resources to achieve leapfrog development and accelerate the transformation of China’s seed industry.” Syngenta group has said in the prospectus.
Previously, Winall Hi-Tech Seed Co.Ltd(300087) said in a survey with specific investors that the company has more and more coordination with Syngenta, and the company will increase its coordination with Syngenta in seed research and market development in the future. In the research report, many securities companies believe that in the future, Winall Hi-Tech Seed Co.Ltd(300087) is expected to make use of Syngenta’s advanced technology and management experience to overtake on the curve.
Straightening out the management caliber may include solving the problem of horizontal competition in the seed industry within Sinochem holdings.
According to the report, in the field of domestic rice seeds, China seed group, Guangdong Golden Rice Seed Industry Co., Ltd. and China seed science and technology innovation service (Hubei) Co., Ltd. have a certain degree of horizontal competition with Winall Hi-Tech Seed Co.Ltd(300087) ; In the domestic wheat seed field, China seed group has a certain degree of horizontal competition with Winall Hi-Tech Seed Co.Ltd(300087) .
In the field of overseas business, Syngenta group’s current business and Winall Hi-Tech Seed Co.Ltd(300087) the sub project of “integrated construction project of overseas cultivation, propagation and promotion of crop seeds”, a raised investment project that issues shares to specific objects, may have certain horizontal competition after the completion and operation of Bangladesh integrated base project of cultivation, propagation and promotion of crop seeds.
Except for the above enterprises, Zhongzhong group and other related parties do not engage in the same or similar business as Winall Hi-Tech Seed Co.Ltd(300087) and constitute competition.
Previously, the company also replied to relevant questions on the investor interaction platform.
According to the report, in order to avoid horizontal competition with the company after the completion of this equity change, Zhongzhong group has issued the letter of commitment on avoiding horizontal competition with Winall Hi-Tech Seed Co.Ltd(300087) , which includes that within five years from the date of the previous equity change, based on the principle of being conducive to the development of listed companies and safeguarding the interests of shareholders, especially the interests of minority shareholders, Comprehensive use of asset restructuring, business adjustment, entrusted management, establishment of joint ventures and other ways to gradually and steadily promote relevant business integration.
(Shanghai Securities News)
