In late January, Xinjiang Chenguang Biotech Group Co.Ltd(300138) Technology Co., Ltd. (hereinafter referred to as Chenguang Technology) submitted documents such as public transfer instructions (application draft) to the national share transfer system, planned to be listed on the basic layer of the new third board, and planned to raise about 42.85 million yuan through directional issuance to supplement working capital. At present, the company has replied to the first feedback from the listing review department and received the second feedback.
The listed company Chenguang Biotech Group Co.Ltd(300138) ( Chenguang Biotech Group Co.Ltd(300138) , SZ; yesterday’s closing price of 15.95 yuan) owns 100% equity of Chenguang technology through direct and indirect shareholding. In 2020, Chenguang Biotech Group Co.Ltd(300138) integrated the business of its subordinate cottonseed sector through asset transfer and equity acquisition. After the reorganization, Chenguang technology became the parent company of all entities in its cottonseed sector. From January to August in 2019, 2020 and 2021 (hereinafter referred to as the reporting period), Chenguang technology achieved operating revenue of 1.512 billion yuan, 1.661 billion yuan and 1.419 billion yuan respectively, showing an overall upward trend, but the gross profit margin during the reporting period was 13.09%, 5.72% and 5.19% respectively, which continued to decline.
For matters related to the listing of the new third board, on March 29, the reporter of the daily economic news called Chenguang technology and sent an interview email, but as of press time, no reply was received.
contributed more than 40% of the parent company’s income
Chenguang Biotech Group Co.Ltd(300138) plans to spin off the business of cottonseed. The main business of the non spin off part is the R & D, production and sales of natural pigments, spices, nutrition and medicinal products, and the main business of the spin off part is the R & D, production and sales of refined cottonseed products and the trade of cottonseed products.
When Chenguang Biotech Group Co.Ltd(300138) was listed on the Shenzhen Stock Exchange in 2010, the net fund raised through IPO was 649 million yuan, of which 303 million yuan (accounting for 46.74%) was invested in the cottonseed sector project, that is, the main business component of Chenguang technology, which had a great impact on the company’s financial situation and operating results. Relevant projects were completed in April 2012.
During the reporting period, the proportion of operating revenue of Chenguang technology in Chenguang Biotech Group Co.Ltd(300138) operating revenue was 46.31%, 42.46% and 49.37% respectively, with a revenue contribution of more than 40%. This is mainly due to the high turnover of Chenguang technology’s Cottonseed products trade business. During the reporting period, the trade revenue of cottonseed products was 490 million yuan, 646 million yuan and 506 million yuan respectively, accounting for 32.42%, 38.86% and 35.64% respectively.
However, since the gross profit margin of cottonseed products trading business is significantly lower than that of Chenguang Biotech Group Co.Ltd(300138) overall gross profit margin, the proportion of total profit and net profit of Chenguang technology in Chenguang Biotech Group Co.Ltd(300138) performance is not as high as that of revenue, and the contribution proportion of net profit during the reporting period is 28.68%, 13.02% and 18.71% respectively. “The company’s contribution to the performance of Chenguang Biotech Group Co.Ltd(300138) is not high as a whole.” Chenguang technology said that the company’s listing on the new third board will not affect the scope of consolidated statements of Chenguang Biotech Group Co.Ltd(300138) and the company’s listing will not have an adverse impact on the performance of Chenguang Biotech Group Co.Ltd(300138) .
The reporter of the daily economic news noted that there is mutual guarantee between Chenguang technology and Chenguang Biotech Group Co.Ltd(300138) . As of the end of the reporting period, the guarantee amount of Chenguang technology for Chenguang Biotech Group Co.Ltd(300138) has not been released is 581827 million yuan. The company indicated that if Chenguang Biotech Group Co.Ltd(300138) cannot be repaid after the relevant loan corresponding to the guarantee expires, the company’s collateral will be subject to the risk of enforcement, which may have an adverse impact on the company’s operation.
At the same time, as of the end of the reporting period, Chenguang Biotech Group Co.Ltd(300138) and other related parties controlled by Chenguang Biotech Group Co.Ltd(300138) and its secured loans to Chenguang technology amounted to 158 million yuan; By the end of 2021, Chenguang Biotech Group Co.Ltd(300138) and other related parties controlled by Chenguang Biotech Group Co.Ltd(300138) and other related parties had provided guarantee loans of RMB 1.064 billion to Chenguang technology.
Chenguang technology said that since the main raw material of the company is cottonseed, and the procurement is mainly concentrated from October of each year to January of the next year, the company needs a lot of working capital support during the centralized procurement period. At present, the company mainly obtains working capital through bank loans, and the relevant loans need Chenguang Biotech Group Co.Ltd(300138) and other related parties to provide guarantee for the company. Therefore, the company has a certain dependence on the guarantee of Chenguang Biotech Group Co.Ltd(300138) and other related parties.
the company will increase revenue but not profit in 2020
During the reporting period, Chenguang technology achieved operating revenue of 1.512 billion yuan, 1.661 billion yuan and 1.419 billion yuan respectively, net profits of 555217 million yuan, 34.849 million yuan and 449362 million yuan respectively, and net profits deducted were 352515 million yuan, 7.8657 million yuan and 321541 million yuan respectively. In 2020, there was an increase in revenue but a decline in net profit.
In 2020, the company achieved an increase in operating revenue, mainly due to the increase in the price of cottonseed and related products while the trade volume of cottonseed increased. The decline in net profit in 2020 is mainly due to the fact that the price of cottonseed products is greatly affected by the market and the company changes its business model. Since 2020, Chenguang technology has basically adopted the operation mode of lock. The specific operation is that while purchasing cotton seeds, the company calculates the output of various products according to the processing data over the years, carries out sales simultaneously, and locks the processing profit.
“Through the lock-in business mode of purchasing and selling at the same time, we can realize the fast in and fast out of orders, avoid the greater business risks caused by market fluctuations, and ensure the stability of the company’s operating profits.” Chenguang technology said that however, during the period when the price of cottonseed products was in an upward trend, the gross profit margin of the company decreased compared with that without the lock-in business model.
According to the public transfer statement (declaration draft), the comprehensive gross profit margin of Chenguang technology during the reporting period was 13.09%, 5.72% and 5.19% respectively. In the reply to the feedback, Chenguang technology disclosed the changes in the gross profit margin of the company’s products after excluding the influencing factors of the new income standard. During the reporting period, the comprehensive gross profit margin was 13.09%, 11.14% and 9.57%, still showing a continuous downward trend. Among them, the gross profit margin of cottonseed processing business is 10.82%, 8.12% and 8.24% respectively. After the lock-in business model is basically adopted in 2020 and January August 2021, the gross profit margin is basically stable; The gross profit margin of cottonseed products trading business was 18%, 15.31% and 12.74% respectively, showing a downward trend. Chenguang technology said that it was mainly due to the fierce market competition of cottonseed trading business during the reporting period. With the increase of bulk properties of cottonseed products, the price transparency became higher and higher, and the profit space of trading business decreased. In this regard, Chenguang technology added that “the company’s business risks related to carrying out large trade business under the lock business model”.
