\u3000\u30 China Baoan Group Co.Ltd(000009) 11 Nanning Sugar Industry Co.Ltd(000911) )
Key investment points
Announcement on planned asset replacement and related party transactions between LvHua group and LvHua group. The company plans to replace 100% of the equity of Xiangshan sugar company, a wholly-owned subsidiary, with 100% of the equity of bosun company jointly held by agricultural investment group and its related party LvHua company. The way to make up the difference in replacement value shall be negotiated by all parties separately, but it does not involve the issuance of shares by the company.
Basic information of the two replacement entities: (1) Nanning Xiangshan Sugar Co., Ltd., also known as Xiangshan sugar factory, is a Nanning Sugar Industry Co.Ltd(000911) wholly-owned subsidiary with a registered capital of 9 million. According to the announcement of the company on September 17, 2021, the actual maximum daily pressing capacity of Xiangshan sugar factory is 6512 tons / day (the design capacity is 9000 tons / day), and the capacity utilization rate is 72%, which is the lowest among the five sugar factories under the company (the other four are 96%, 95%, 89% and 83% respectively); The standard coal consumption rate of 100 tons of sugar is 36.76%, which is higher than that of other sugar factories (30.46%, 31.42%, 34.81% and 34.88% respectively). In addition, the unit cost of red granulated sugar in the sugar factory was 578997 yuan / ton, which was significantly higher than the unit cost of the company’s overall inventory at the end of the period of 388562 yuan / ton. (2) Guangxi bosuan Food Co., Ltd. has a registered capital of 90 million yuan. In the 19 / 20 pressing season, the sugar production is 154000 tons, and the actual sugarcane pressing capacity is 10000 tons / day (the design sugarcane pressing capacity is 10000 tons / day). According to the disclosed data, as of Q3 in 2021, the total assets of the company were 630 million yuan (YoY + 20%), and the asset liability ratio was 32%; In the first three quarters of 2021, the company achieved a net profit of 98.73 million yuan, a year-on-year increase of 16%.
Actively fulfill the commitment to solve horizontal competition, and take the lead in injecting the best assets into listed companies through asset replacement. On April 23, 2019, the agricultural investment group became the controlling shareholder of Nanning Sugar Industry Co.Ltd(000911) through the transfer of state-owned equity. Since the date of equity transfer, the four companies controlled by the agricultural investment group (Guangxi bosuan Food Co., Ltd., Guangxi Boai Agricultural Technology Development Co., Ltd., Guangxi Bohua Food Co., Ltd., Guangxi BoQing Food Co., Ltd., hereinafter referred to as bosuan, Boai, Bohua and Boqing) and Nanning Sugar Industry Co.Ltd(000911) have formed a horizontal competition. Agricultural investment group promises to inject relevant assets constituting horizontal competition into listed companies from April 23, 2019 to April 22, 2024 to solve the problem of horizontal competition. Xiangshan sugar company’s designed daily sugarcane pressing capacity is 9000 tons and bosun is 10000 tons (Guangxi sugar industry annual report). The replacement of the two will not reduce the total production capacity of the listed company, but will increase the operating rate of the company – according to the maximum daily pressing capacity of Xiangshan sugar factory, the annual output is 100000 tons, while bosun’s sugar output in recent two years is 15 Shenzhen China Bicycle Company (Holdings) Limited(000017) 0000 tons.
As can be seen from the above, many indicators of Xiangshan sugar company to be replaced – operating rate, coal consumption rate and sugar production cost are individuals with poor qualifications in the group, which is a drag on the company’s performance; Bosun, which is to be replaced, is one of the excellent sugar factories in Guangxi. In recent years, it has still made good profits during the downturn of sugar price. It is expected that with the upward shift of the focus of sugar price, there is still much room for profit improvement. The replacement of the two is conducive to optimizing the balance sheet of listed companies and improving the quality of listed companies. It is the best choice for the company under the current shortage of money and cash.
Investment advice: maintain the “buy” rating. Based on the replacement behavior, we adjusted the company’s profit forecast. We expect the company’s operating revenue to be 3.59/47.2/5.65 billion yuan respectively from 2022 to 2024 (4.22 billion yuan and 5.16 billion yuan respectively in the previous 22 and 23 years), the net profit to be 173 / 438 / 640 million yuan respectively (267 million yuan and 275 million yuan respectively in the previous 22 and 23 years), and the current share price corresponding to PE to be 18.0/7.11/4.88 times respectively. Maintain buy rating.
Risk tips: industrial policy change risk, raw material price fluctuation risk, natural disaster risk, etc.
