After the resumption of trading, Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) ( Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) . SH) has recorded three trading boards in a row.
Due to the major event of planning to acquire 99.22% shares of Ningxia Yipin Biotechnology Co., Ltd. (hereinafter referred to as “Yipin biotechnology”) and raise supporting funds, Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) was suspended from the opening of the market on March 8. On the night of March 21, Xinghu Co., Ltd. issued relevant announcements such as the plan for issuing shares and paying cash to buy assets and raising supporting funds and related party transactions and its abstract, and resumed trading from the opening of the market on March 22.
As of the closing on March 24, Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) closed at 8.49 yuan / share, up 9.97%. It was the third consecutive day after the resumption of trading to close at the limit price. 504400 hands were traded throughout the day, with a total market value of 428 million yuan. At present, the total market value is 6.274 billion yuan.
Source: Midea and New Hope Liuhe Co.Ltd(000876) are listed in the list of counterparties of China stock market news
Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) disclosed the plan for issuing shares and paying cash to purchase assets and raise matching funds and related party transactions (hereinafter referred to as the “transaction plan”), which shows that the listed company plans to purchase 99.22% equity of Yipin biology by issuing shares and paying cash. After the completion of this transaction, Yipin biology will become the holding subsidiary of the listed company.
The main products of Yipin biology are feed and food additives such as lysine, threonine and monosodium glutamate, fresh flavoring, compound fertilizer and other products.
In this transaction, one of the counterparties, Guangxin group (full name “Guangdong Guangxin Holding Group Co., Ltd.”), is the controlling shareholder of Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) and holds 149 million shares (20.22%) as a related party of the listed company Guangxin group holds 43.78% of the equity of Yipin biology and is also the controlling shareholder of Yipin biology . In this transaction, Guangxin group transferred all its equity of Yipin biology to the listed company Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) .
Picture source: Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) announcement
According to the transaction plan, in addition to Guangxin group, Midea investment and New Hope Liuhe Co.Ltd(000876) respectively hold 6.61% equity of Yipin biological , which have also become the counterparties of the listed company. He Xiangjian is the actual controller of Midea investment, while Liu Yonghao is the actual controller of New Hope Liuhe Co.Ltd(000876) . In addition, Yipin group controlled by Yan Xiaoping and tie Xiaorong is the second largest shareholder of Yipin biology. The eighth largest shareholder Hexing assets (holding 0.78% equity of the target company) was not included in this transaction because it did not send the intention to participate in this transaction to Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) and Yipin biology.
According to the transaction plan, Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) issue shares to purchase assets. The benchmark date of share issue pricing is the announcement date of the resolution of the 14th meeting of the 10th board of directors, and the issue price will not be less than 4.97 yuan / share. The issuing objects are 10 Yipin biological shareholders, including Guangxin group, Yipin group, tie Xiaorong, Midea investment, New Hope Liuhe Co.Ltd(000876) , Yangzhou Huasheng, Beijing Chieftain Control Engineering Technology Co.Ltd(300430) , Ma Weidong, Shen Wanbin and Bao Jianxiong.
Meanwhile, the matching funds raised in this transaction shall not exceed 1.5 billion yuan , which is intended to be used to pay cash consideration, intermediary fees and supplement the working capital of Listed Companies in this transaction. Among them, the proportion used to supplement working capital shall not exceed 25% of the transaction price and 50% of the total supporting funds raised.
As of the signing date of this plan, the audit and evaluation of the subject assets have not been completed, and the specific transaction price has not been determined. The final transaction price of the underlying assets will be determined by the parties to the transaction through consultation based on the evaluation results of the asset evaluation report. The audited historical financial data and asset evaluation results of the underlying assets will be disclosed in the transaction restructuring report.
It is worth noting that the issue price of the issue price for the purchase of assets in this transaction is no less than 4.97 yuan / share, while the closing price of Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) shares on March 24 was 8.49 yuan / share, which has been 70.82% higher than the minimum issue price. If the subsequent share price continues to rise, this gap will be further widened. The issue of how to balance the interests of all parties to the transaction is worthy of attention.
“fat in one bite”? Transaction plan prompt risk
The main business of the listed company Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) is divided into two parts: Food and feed additives, biochemical APIs and pharmaceutical intermediates. From January to September in 2019, 2020 and 2021, its operating revenue was 1.05 billion yuan, 1.116 billion yuan and 825 million yuan respectively, and its net profit was 150 million yuan, 149 million yuan and 80 million yuan respectively. Among them, the sales revenue of food and feed additives accounted for more than half of the total revenue, which were 663 million yuan, 696 million yuan and 509 million yuan respectively.
Main data of consolidated income statement of listed companies. Picture source: Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) announcement
The transaction plan shows that after the completion of this transaction, Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) ‘s business scale and profitability will be greatly improved. In fact, the asset scale and revenue scale of Yipin biology are much larger than that of Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) .
At the end of 2021, the total assets of Yipin biological reached 12.006 billion yuan, and the total equity attributable to the shareholders of the parent company was 4.377 billion yuan. According to Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) ‘s third quarterly report of 2021 (the latest financial report at present), its total assets on September 30 were 2.47 billion yuan, and the total owner’s equity attributable to the parent was 1.749 billion yuan. Therefore, the asset scale of Yipin biological is 4.86 times that of Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) and the owner’s equity attributable to the parent is 2.50 times
In addition, in 2020 and 2021, Yipin biological’s operating revenue was 11.081 billion yuan and 14.665 billion yuan respectively, and its net profit was 83 million yuan and 366 million yuan respectively. Compared with the above operating revenue and net profit of Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) in the same period, the operating revenue of Yipin biology in 2020 is 9.93 times that of Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) but the net profit in this year is equivalent to 55.70% of Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866)
Financial data of the subject company. Picture source: Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) announcement
The transaction plan shows that this transaction will help to fundamentally improve the business scale and profitability of Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) the listed company, and build a leading enterprise in the field of biological fermentation.
Obviously, Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) the controlling shareholder intends to inject another affiliated company with a scale several times that of the listed company into the listed company. If the issuing price of the shares issued to purchase assets is close to or even the lowest price of 4.97 yuan / share, then compared with the current share price, all counterparties, including the affiliated shareholder Guangxin group, will gain considerable “income” from the rise in share price
It is worth mentioning that the industry of Yipin biology, the target company of is a typical heavy asset industry, with large asset investment scale and high operating leverage at the end of 2020 and 2021, the asset liability ratio was 67.12% and 63.52% respectively, and the overall debt ratio was relatively high. The transaction forecast suggests: “the higher asset liability ratio makes the target company face higher debt repayment risk, and also limits the ability of the target company to further expand the production scale through debt financing. If the target company cannot continuously and effectively optimize the capital structure and debt structure, the target company may face greater capital pressure in its normal operation, resulting in a certain debt repayment risk.”
After closing on March 24, Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) issued an announcement that the shareholders’ asset management plan of the company will reduce its holdings of no more than 147804 million shares by means of centralized bidding within 6 months after 15 trading days from the date of disclosure of the announcement, that is, no more than 2% of the total share capital of the company. According to the announcement on the same day, from September 24, 2021 to March 22, 2022, Huili assets reduced 1249600 shares of the company’s shares through centralized bidding trading, accounting for 0.1691% of the company’s current total share capital, and reduced 14780000 shares of the company’s shares through block trading, accounting for 1.9999% of the company’s current total share capital.
