On March 29, Xiamen Yanjan New Material Co.Ltd(300658) ( Xiamen Yanjan New Material Co.Ltd(300658) . SZ) announced that its subsidiary yanjan USA LLC (hereinafter referred to as “Yanjiang in the United States”) planned to acquire 100% equity of spintech llc100 through the transfer of subscribed capital contribution and debt to equity swap. Spintech LLC mainly produces and sells masks that meet local standards in the United States. It is worth noting that the target company has not yet achieved profitability.
In 2020, with the sudden outbreak of covid-19 epidemic, Xiamen Yanjan New Material Co.Ltd(300658) expanded from perforated hot-air non-woven fabric to melt blown non-woven fabric, and began to produce important raw materials for masks. In that year, the net profit of the company also increased by more than twice. However, with the promotion of epidemic prevention and control, the mask market has cooled down. Compared with 2020, the net profit deducted by Xiamen Yanjan New Material Co.Ltd(300658) last year is expected to drop by more than 100%.
target company lost $ Shanghai Pudong Development Bank Co.Ltd(600000) last year
According to the announcement, spintech LLC was established in February 2020, mainly producing and selling masks that meet local standards in the United States, with a registered capital of US $100000 and a paid in capital of 0.
In terms of financial position, spintech LLC has not yet achieved profitability. By the end of last year, spintech LLC had total assets of US $3911700, net assets of US $991000, operating revenue of US $1032300 and net profit of US $597800.
yji Singapore holding PTE. Ltd. and yanjan international trading PTE. Ltd., the holding subsidiaries of Xiamen Yanjan New Material Co.Ltd(300658) are also shareholders of spintech LLC, with a total shareholding ratio of 35%. Xie Yingcheng, the daughter of Xie Jihua, the actual controller of the company, is also a director of spintech LLC. therefore, this acquisition constitutes a related party transaction.
In addition, due to the purchase of goods, machinery and equipment from Yanjiang in the United States, spintech LLC still has a payable amount of US $4.1 million to Yanjiang in the United States. Yanjiang will acquire 100% of the equity of spintech LLC through the transfer of capital contribution right and debt to equity, of which $4 million will become the paid in capital of Yanjiang to spintech LLC, and spintech LLC needs to repay the remaining $100000 receivables by the end of this yearp align=”center” style=”text-align:center;”> Source: screenshot of announcement
Analysis of the necessity and impact of the transaction, Xiamen Yanjan New Material Co.Ltd(300658) said in the announcement: “spintech LLC has the FDA level-3 certificate and the qualification to sell medical devices to American medical institutions. The person in charge of spintech LLC has the advantages of channels and resources in the field of medical devices, and the future business expansion is highly expected. This transaction is conducive to the expansion of business areas in Yanjiang, and is in line with the future business planning of Yanjiang, the United States.”
Xiamen Yanjan New Material Co.Ltd(300658) net profit deducted last year is expected to decline by more than 100%
As a leading enterprise in China’s non-woven industry, Xiamen Yanjan New Material Co.Ltd(300658) ‘s main products are perforated hot-air non-woven fabric and PE perforated film, which are mainly supplied to downstream women’s sanitary napkin manufacturers and baby paper diaper manufacturers. In 2020, due to the outbreak of covid-19 epidemic, Xiamen Yanjan New Material Co.Ltd(300658) began to expand its business to the production of melt blown non-woven fabrics, that is, important raw materials for masks.
In the first half of 2020, due to the hot sale of masks, the stock price of Xiamen Yanjan New Material Co.Ltd(300658) rose several times, and the melt blown non-woven fabric also contributed 425 million yuan of revenue to Xiamen Yanjan New Material Co.Ltd(300658) in that year.
However, the high-profile period of the mask industry has passed. With the covid-19 epidemic gradually stabilized, the price of melt blown non-woven fabric gradually corrected, and the price of mask gradually returned to the level before the epidemic.
Xiamen Yanjan New Material Co.Ltd(300658) previously released 2021 performance forecast shows that the net profit deducted by the company is expected to decrease by 103.05 ~ 105.34% year-on-year Xiamen Yanjan New Material Co.Ltd(300658) in the performance forecast, it was revealed that the sales volume and price of melt blown non-woven fabrics of the company decreased significantly year-on-year in 2021, making a very low contribution to the operating revenue and profit of the companyp align=”center” style=”text-align:center;”> Source: screenshot of announcement
In the first half of 2020, the subsidiary of Wujiang Textile Co., Ltd. achieved a net profit of nearly RMB 90 million in North America, and realized a net profit of nearly RMB 8 million in the first half of 2020.
In addition to the North American market, Xiamen Yanjan New Material Co.Ltd(300658) is also expanding the markets in India, the Middle East, Africa and the Mediterranean, and has set up production bases in the United States, Egypt and India. In 2020, overseas business accounted for more than 50% of the revenue of Xiamen Yanjan New Material Co.Ltd(300658) in Xiamen Yanjan New Material Co.Ltd(300658) , but this also brought some new problems, including the impact of rising international shipping costs on performance.
