On the evening of March 14, Hefei Fengle Seed Co.Ltd(000713) ( Hefei Fengle Seed Co.Ltd(000713) . SZ) announced that the company signed the agreement on capital increase and equity transfer of Sichuan Tianyu Xinghe Biotechnology Co., Ltd. (hereinafter referred to as “Tianyu Xinghe”) with Sichuan Tianyu Xinghe Biotechnology Co., Ltd. and its shareholders, and the listed company invested 27 million yuan in cash to increase the capital of Tianyu Xinghe, Obtain 4.5 million shares of the target company; At the same time, 1.5 million shares of the original shareholders were transferred in cash of 9 million yuan. After completing the above investment, Hefei Fengle Seed Co.Ltd(000713) holds 6 million shares of Tianyu Xinghe, accounting for 35.58% of its equity.
Hefei Fengle Seed Co.Ltd(000713) introduced that Tianyu Xinghe is an agricultural high-tech company led by Chinese American scientist Xu Nanfei after returning home. It focuses on the field of biological breeding and creates innovative new traits for agriculture, including unique innovative traits in herbicide resistance (functional gene), disease resistance, high yield and so on, At present, it has obtained two major key core technologies with completely independent intellectual property rights – cell evolution nitrosulfuron resistant rice and gene super evolution self optimization breeding glyphosate resistant rice.
However, the target company has not yet made a profit. In 2020 and January September 2021, the net profit of Tianyu Xinghe was -2.72 million yuan and -2.4404 million yuan respectively.
speed up the “neck” technological breakthrough of agricultural science and technology
With the change of production mode, “Fengliangyou” series varieties can no longer meet the market demand Hefei Fengle Seed Co.Ltd(000713) said that a batch of breakthrough breeding materials created by Tianyu Xinghe can effectively solve the “neck” pain point of seed industry research and development. After the acquisition, the company will accelerate the enrichment and improvement of its core technology system and the transformation of achievements, that is, to promote the industrialization of non transgenic sub organism breeding with commercial seed breeding system and provide a strong technical guarantee for China’s food security.
On March 14, Hefei Fengle Seed Co.Ltd(000713) signed a capital increase and equity transfer agreement with Tianyu Xinghe and its shareholders. In addition, the listed company signed the agreement on concerted action with Tianyu Taihe and Xu Nanfei, and Tianyu Taihe and Xu Nanfei became the persons acting in concert of Hefei Fengle Seed Co.Ltd(000713) . After the transaction is completed, Tianyu Xinghe will become a holding subsidiary within the scope of Hefei Fengle Seed Co.Ltd(000713) consolidated statements.
According to the announcement, Tianyu Xinghe is a high-tech enterprise focusing on biotechnology breeding innovation and industrialization. At present, the company’s main products are divided into two categories: one is technical products, which are herbicide resistant functional genes and can cover rice, wheat, corn, soybean, rape and other major crops; One is a new plant variety, which is xinghezhuang crop glyphosate resistant crop, xingheqiang crop glyphosate resistant crop and xinghexin crop trianone resistant crop. The profit model is mainly to provide technical (cooperation) services such as herbicide resistance introduction and molecular detection for varieties provided by seed enterprises, and participate in the sales revenue sharing and premium after the promotion of cooperative varieties by seed enterprises.
However, from the financial aspect of Tianyu Xinghe, as of the end of 2020 and the end of September 2021, the net assets of Tianyu Xinghe were 2758200 yuan and 893600 yuan respectively. From January to September in 2020 and 2021, the operating revenue of Tianyu Xinghe was 192200 yuan and 304300 yuan respectively, and the net profit was – 2.72 million yuan and – 2.4404 million yuan respectivelyp align=”center” style=”text-align:center;”> Source: screenshot of announcement
evaluation value-added rate up to 831535%
According to the appraisal of the appraisal institution, taking September 30, 2021 as the benchmark date, the value of all shareholders’ equity of Tianyu Xinghe assessed by the income method is 751977 million yuan, with an estimated appreciation of 743042 million yuan and an appreciation rate of 831535%. After negotiation, Hefei Fengle Seed Co.Ltd(000713) determined that the price of capital increase and transfer of 6 million shares of Tianyu Xinghe was 6 yuan per share, totaling 36 million yuan.
Hefei Fengle Seed Co.Ltd(000713) the board of Directors believes that the R & D expenses of the target company are not capitalized and the patents and other intangible assets obtained are off the balance sheet, resulting in low book net assets. The transaction price is based on the evaluation value of the third-party asset evaluation institution and determined by both parties through negotiation. The pricing is fair and reasonable, and there is no situation that damages the interests of the company and other shareholdersp align=”center” style=”text-align:center;”> Source: screenshot of announcement
In terms of risk, listed companies suggest that the transaction may not bring benefits into play in a short time. Seed industry is a special industry. Whether it is improved varieties or new varieties, it takes a period of 3-4 years to promote the quantity and produce benefits. It is difficult to see benefits in the short term after cooperation.
In addition, scientific research management is a new topic. The scientific research work of Tianyu Xinghe is mainly the frontier scientific research of breeding, and the scientific research work of listed companies is mainly applied scientific research. How to integrate scientific research resources and how to manage them to maximize benefits are new topics. Poor management will affect the transformation process of scientific research achievements.
Therefore, after holding the shares, the listed companies will carry out multi industry and multi variety improvement, at the same time, carry out breeding and promotion by multiple subjects, shorten the promotion cycle, accelerate the cooperation between Tianyu Xinghe and seed enterprises, and generate benefits through technical cooperation. It will also strengthen the team construction of Tianyu Xinghe, appoint scientific researchers of listed companies to communicate and integrate with them, increase production and operation personnel, form a team with reasonable division of labor and perform their duties, and improve operation efficiency.
