Recently, the industrial cannabis concept stock Guilin Layn Natural Ingredients Corp(002166) is a little “hot”, and the stock has gained four trading limits in nearly six trading days; During this period, the company has also been investigated by many well-known institutions, including Zhou Yingbo, a public offering “top stream” – China Europe Fund.
On March 28, Guilin Layn Natural Ingredients Corp(002166) of a stock price change announcement, poured a pot of oil on the “fire”. The company said that the U.S. House of Representatives plans to hold a new round of voting on the marijuana opportunity reinvestment and Elimination Act (hereinafter referred to as “more act”) this week. If it can be finally considered, approved and signed into force through U.S. legal procedures, it will legalize marijuana at the federal level of the United States, which is expected to have a positive impact on the company’s industrial marijuana business. It is understood that Guilin Layn Natural Ingredients Corp(002166) has built the largest industrial marijuana extraction plant in the United States.
Chinese reporters from securities companies noted that recently, a number of research institutions said that the above bill has a high probability of passing the house of Representatives. The legalization of federal industrial marijuana in the United States may be accelerated, and the market is expected to expand rapidly, which is conducive to the layout enterprises related to the industrial chain, especially the OEM and brand enterprises with large-scale production capacity, or will usher in rapid development opportunities.
Guilin Layn Natural Ingredients Corp(002166) emergency announcement
Guilin Layn Natural Ingredients Corp(002166) ‘s share price has a fierce trend recently. On March 28, the stock rose by the word limit, and gained four limit boards in nearly six trading days, with a cumulative increase of nearly 46%. Other industrial marijuana concept stocks also performed well, Shanghai Shunho New Materials Technology Co.Ltd(002565) rose in 7 of the last 9 trading days, with an increase of nearly 40% during the period Guizhou Bailing Group Pharmaceutical Co.Ltd(002424) in the past nine trading days, it fell for only one day, with an increase of more than 37% during the period Guizhou Yongji Printing Co.Ltd(603058) has also closed two trading boards in a row.
On the 28th, Guilin Layn Natural Ingredients Corp(002166) issued a stock price change announcement, saying that the company has recently paid attention to relevant media reports and investor consultation, and the US House of Representatives plans to hold a new round of voting on the more bill this week. According to the company’s understanding, based on the content of the bill, if it can be finally considered, approved and signed into force through the legal procedures of the United States, it will legalize marijuana at the federal level of the United States, which is expected to have a certain positive impact on the cost reduction, legalization of the sales of by-product THC (tetrahydrocannabinol) and market expansion of the company’s industrial marijuana business.
An announcement at noon on March 21 is the source of this round of rise in the company’s share price. At that time, Guilin Layn Natural Ingredients Corp(002166) disclosed the progress of American industrial cannabis construction project and the announcement of signing the entrusted processing intention agreement Guilin Layn Natural Ingredients Corp(002166) said that the “industrial marijuana extraction and application engineering construction project” previously invested and constructed in the United States is expected to reach formal mass production before June 30, 2022.
Moreover, hemprise, a subsidiary of the company, has signed an agreement of intent on entrusted processing with an industrial marijuana product provider in the United States (hereinafter referred to as “company a”). It is preliminarily estimated that the processing fee of this agreement will exceed US $2.55 million and the maximum will not exceed us $5.7 million.
According to the data, company a is a mainstream enterprise in the global industrial cannabis market, focusing on providing cannabis derivatives and cannabis diphenol products for the health care sector. The signing of the agreement is an important progress that the company has more than 20 years of experience in the plant extraction industry and the large-scale level and production capacity of American industrial cannabis plants have been recognized by customers.
On the day of disclosure of the above announcement, that is, the afternoon of the 21st, Guilin Layn Natural Ingredients Corp(002166) share price rose sharply, and then increased in large quantities the next day.
obtained the research of “top flow” of public offering
it is understood that the total investment of Guilin Layn Natural Ingredients Corp(002166) industrial marijuana project is expected to reach about US $80 million (of which about 330 million yuan of raised funds and interest have been used up), and the annual processing capacity of raw materials is expected to be 5000 tons. The main products of the project will be medical CBD, CBG, CBN, water-soluble CBD, full spectrum oil, broad spectrum oil, thc free products, etc., which can be widely used in many fields such as medicine, food additives, cosmetics and pet products
The above project is also the largest industrial marijuana extraction plant in the United States funded by the company. Many research institutions went to Guilin Layn Natural Ingredients Corp(002166) for investigation after the important progress of the industrial marijuana project was disclosed at noon on the 21st. According to the latest research activity information disclosed on March 28, from March 22 to 25, Guilin Layn Natural Ingredients Corp(002166) accepted the research of more than 10 institutions, including Zhou Yingbo and Wang Jianli of China Europe Fund, Yi Fangda, Huang Yiqun, Duan Tao and Wang Yan of GF fund, Chen Boyang of Jingshun Great Wall, Gf Securities Co.Ltd(000776) Wang Yongfeng (the first place of new fortune food and beverage in 2020), Yuan Chenyu of ICBC Credit Suisse, etc.
among them, Zhou Yingbo is the “top stream” of public offering. As of the end of the third quarter of 2021, Zhou Yingbo’s management scale has exceeded 57.6 billion. It represents the pioneer of China Europe times, and has achieved 350% performance return in six years of management. In December 2021, Zhou Yingbo stepped down as the fund manager of four funds: China Europe era pioneer, China Europe Internet pioneer, China Europe bright new normal and China Europe vision. He only retained the position of fund manager of China Europe Innovation future, formed a management team with Zhou Weiwen, Shao Jie and Liu Jinhui to be responsible for the investment management of the product, and made preparations for the opening and redemption of the product in April this year
During the investigation, Guilin Layn Natural Ingredients Corp(002166) said that at present, the company is making every effort to overcome the impact of the epidemic and actively organize relevant technicians to the United States to assist in equipment commissioning and mass production preparation. It is expected to reach formal mass production before the first half of this year and strive to achieve profit and loss balance of industrial marijuana business in 2022.
The intentional agreement on industrial marijuana signed by the company this time is mainly to process 227 tons of industrial marijuana raw materials on behalf of customers, and the processing fee per ton of industrial marijuana raw materials is expected to be more than 10000 US dollars. Compared with the current sales price of CBD extraction products in the US market, the processing income this time is not less than that of the company’s own industrial marijuana extraction business.
Guilin Layn Natural Ingredients Corp(002166) replied to the question raised by the organization about the advantages of the company’s industrial marijuana project:
1. The company’s CBD extraction plant has the advantage of scale. Due to the lack of plant extraction industry in the United States, local industrial cannabis extraction enterprises mostly exist in the form of laboratories or small factories, and the industry lacks manufacturers for industrial production and large-scale supply. Therefore, the establishment of the company’s plant effectively makes up for the gap in the supply of stable extraction raw materials in the local industrial cannabis industry and effectively connects the upstream and downstream of the industrial cannabis industry chain.
2. The company has advanced extraction technology and process. The equipment of industrial hemp extraction plant is customized in China. After formal mass production, it will realize full-automatic extraction, which has advantages in extraction efficiency and cost control.
3. Customer expansion advantages. The company’s customers are spread in more than 60 countries and regions around the world, covering many industries such as food, beverage, medicine and health care. It highly coincides with the application fields of industrial marijuana extraction products, which is conducive to the market expansion and customer reserve of the company’s team in the United States.
Organization: the legalization of federal industrial marijuana in the United States may be accelerated
It is worth noting that this week, the Rules Committee of the US House of representatives will hold a new round of voting on the marijuana opportunity reinvestment and Elimination Act (more act).
Guoyuan Securities Company Limited(000728) pointed out that the legalization of marijuana in the United States has lasted for a century. At present, although about 40 states have legalized medical or recreational marijuana at the state level, it has not been fully legalized at the federal level. The probability of passing the bill in the Senate and house of Representatives may increase this time, mainly for the following two reasons:
1) in recent years, the public opinion support rate for the legalization of marijuana has been rising. Gallup survey data show that since the 1970s, the support rate for legalization of cannabis in the United States has increased from about 15% at that time to 68% in 2020. In recent years, it has shown an accelerated upward trend, and the end consumer demand has also continued to increase, with an obvious trend of legalization;
2) compared with 2020, there is pressure on the U.S. mid-term election in the second half of this year, and its voting against the public opinion may affect its own election results; In addition, when the house of Representatives voted on the bill for the first time in 2020, it passed with 228 votes: 164 votes, so there is a high probability of passing the same bill this time.
At the same time, the Senate is also very concerned about the marijuana legalization bill. It also proposed a similar marijuana legalization bill, the marijuana management and Opportunity Act (CAOA), in 2021. The Senate may pass the “more bill” and make some amendments this time. If the bill is passed and signed by President Biden, the United States may become the third country to fully legalize marijuana after Uruguay and Canada.
Tianfeng Securities Co.Ltd(601162) said that at present, 37 states, 4 territories and the District of Columbia in the United States have legalized medical cannabis, of which 18 states, 2 territories and the capital have also legalized non-medical cannabis. The bill has a high probability of passing the house of Representatives. At present, the house of Representatives is dominated by Democrats (the Democratic Party has always supported cannabis legalization, with a support rate of 83% in 2020). At the same time, the house of Representatives has passed the bill once in December 2020. The legalization of federal industrial marijuana in the United States may be accelerated, and the market is expected to expand rapidly, which is conducive to the layout of enterprises related to the industrial chain, In particular, OEM and brand enterprises with large-scale production capacity may usher in rapid development opportunities.
