Anhui Guangxin Agrochemical Co.Ltd(603599) 3 on the afternoon of March 17, it was announced that it planned to acquire 70% equity of Liaoning Shixing Pharmaceutical Chemical Co., Ltd. (hereinafter referred to as Shixing pharmaceutical chemical) for 210 million yuan. Shixing pharmaceutical chemical is mainly engaged in the large-scale production of vanillin, Anhui Guangxin Agrochemical Co.Ltd(603599) said that the acquisition is conducive to the company to obtain a stable new profit growth point. The reporter of the daily economic news noted that the net profit of Shixing pharmaceutical in 2021 was as high as 274 million yuan.
For listed companies, it is undoubtedly very cost-effective to win the controlling stake of Shixing pharmaceutical with 210 million yuan. However, some people don’t understand is that the three-year cumulative amount of performance commitment given by the performance commitment party is only 90 million yuan. Does the seller predict that the performance of Shixing pharmaceutical will change in the next few years?
involved in vanillin industry
According to Anhui Guangxin Agrochemical Co.Ltd(603599) announcement, the company has signed a formal equity acquisition agreement with Ms. Wang Baoqin after deliberation and approval of the board of directors and the board of supervisors. The company plans to acquire 70% equity of Shixing pharmaceutical held by Wang Baoqin in cash.
On the benchmark date of December 31, 2021, the book value of the owner’s equity of Shixing pharmaceutical is 157 million yuan. The appraisal value of all shareholders’ equity of Shixing pharmaceutical is 289 million yuan by using the asset-based method, and the appraisal appreciation rate is 84.78%. The listed company said that it planned to acquire 70% equity of Shixing pharmaceutical chemical for 210 million yuan based on the above evaluation value and taking into account performance commitments, future market conditions, asset evaluation methods and the above dividend distribution.
Qixinbao shows that Shixing Pharma was established in 2000 with a registered capital of 66 million yuan. The shareholding ratios of Wang Baoqin and Dong Guanglin are 80% and 20% respectively. According to the company’s official website, its predecessor is Huludao pharmaceutical chemical plant, which is a professional manufacturer engaged in medicine, pesticides, dye intermediates and spices. “It covers an area of about 220000 square meters and has more than 1100 employees. The whole plant has seven production workshops and five auxiliary workshops, and the main products are methyl, ethyl vanillin, p-aminophenol, p-nitrochlorobenzene, o-nitrochlorobenzene, etc.”.
The announcement of the listed company revealed that Shixing pharmaceutical is the only manufacturer of p-aminophenol in Northeast and North China, and one of the few manufacturers with large-scale vanillin production capacity in China. In the view of listed companies, the acquisition of Shixing pharmaceutical can help the company quickly extend the industrial chain to the downstream, grasp the market profit opportunities in time and enter the pharmaceutical intermediate industry; Quickly enter the vanillin industry, enrich the product structure and obtain a stable new profit growth point.
According to the data, Anhui Guangxin Agrochemical Co.Ltd(603599) is mainly engaged in the R & D, production and sales of pesticide technical drugs, preparations and fine chemical intermediates with phosgene as raw material. Its main products include fungicides such as Carbendazim and thiophanate methyl, herbicides such as diuron and glyphosate, and fine chemical intermediates such as methyl carbamate, isocyanate and o-phenylenediamine.
performance commitment questioned
According to the transaction agreement, Wang Baoqin and others promised that the net profit attributable to the shareholders of the parent company (the lower before and after deducting non recurring profits and losses) in the consolidated statements of Shixing Pharma in each year during the performance commitment period shall not be less than 30 million yuan per year or 90 million yuan in three years. The performance commitment period is three consecutive fiscal years from the year when the transaction is completed. If the transaction is completed in 2022, the performance commitment period is 2022 ~ 2024.
The reporter of the daily economic news noted that the operating revenue of Shixing pharmaceutical in 2021 was 1.033 billion yuan, the net profit was 274 million yuan, and the net profit after deducting non recurring profits and losses was 275 million yuan. According to the Anhui Guangxin Agrochemical Co.Ltd(603599) announcement, Rongcheng Certified Public Accountants (special general partnership) has audited the above financial data of Shixing pharmaceutical and issued an audit report.
In other words, Shixing Pharma made more than 270 million yuan last year, but the seller promised that the company would only need to earn 30 million yuan a year in the next few years. This contrast is somewhat puzzling.
In this regard, the reporter called the Anhui Guangxin Agrochemical Co.Ltd(603599) Securities Department on March 17, and the other party said that his department was not clear about the specific details, and the transaction agreement was negotiated by the accounting firm and the company’s executives.
The reporter noted that the two sides of the transaction agreed on the payment of equity transfer funds. The equity transfer funds of 210 million yuan will be paid to Wang Baoqin by Anhui Guangxin Agrochemical Co.Ltd(603599) in three phases. Among them, 70 million yuan will be paid in the first phase, and the transfer funds in the second and third phases will not be paid until Shixing Pharma has completed its performance commitments in 2023 and 2024 respectively. Interestingly, both parties agreed that after Wang Baoqin received the first phase of equity transfer payment, if Shixing Pharma completed all performance commitments of RMB 90 million in the performance commitment period in 2022, Anhui Guangxin Agrochemical Co.Ltd(603599) need to accelerate the payment of the second and third phase of transfer payment.
