21st Century Business Herald reporter Dong Peng reported from Chengdu
Assuming the integration of Dabeinong and Aonong Biology, there is hope for the birth of a head pig enterprise that reaches 10 million heads, but with the announcement of Dabeinong, the above possibility disappears.
After trading on December 26, Dabeinong announced that the investment cooperation intention agreement and strategic cooperation intention agreement signed with Zhangzhou Aonong Investment and Aonong Biotechnology in the early stage were terminated due to some major changes in the intention agreement, including equity freezing.
To this end, the company also responded through a conference call held by the seller that evening.
From the perspective of risk prevention, since the signing of the agreement of intent, Aonong Investment has had some major changes such as equity freezing, which affects the uncertainty of the transaction; from the perspective of the capital market, investors have paid more attention to the cooperation with Aonong Biotechnology and are worried about affecting the company's performance, and the company fully listens to the suggestions of investors and fully considers the impact of this transaction on the capital market. ”
Lack of money
Aonong Biotech and its controlling shareholder, Aonong Investment, currently have certain debt risks.
As of the end of September this year, Aonong Biotech ranked second among the 26 Wind pig industry sample companies with an asset-liability ratio of 89.41%.
The company's total liabilities reached 14.789 billion yuan, including short-term borrowings of 4.051 billion yuan, notes payable and accounts payable of 3.918 billion yuan, and long-term borrowings and lease liabilities of 1.542 billion yuan and 1.298 billion yuan.
In addition, the listed company has non-current liabilities due within one year of $1.751 billion, while its cash and cash equivalents balance is less than $200 million.
The listed company has a high debt ratio, and its controlling shareholder, Aonong Investment, is also not well stocked.
On November 18, Aonong Biotech announced that the controlling shareholder Aonong Investment, the actual controller and chairman Wu Youlin planned to transfer a total of no more than 152 million shares of the company through agreement transfer.
In this regard, Aonong Biotech said, "The funds obtained from the transfer are mainly used to repay the due debts, and the remaining funds are all used to support the operation and development of the listed company Aonong Biotech." ”
In addition, Aonong Investment and Wu Youlin's shareholding in listed companies has also been pledged in a high proportion. As of December 23 this year, Aonong Investment has pledged a total of 260 million shares of listed companies, accounting for 97.73% of its total shares. During the same period, Wu Youlin pledged a total of 90 million shares of listed companies, accounting for 99.95% of the total shares he held.
In the above context, in December this year, Aonong Biotech and Dabeinong reached a cooperation and signed an agreement of intent, and the cooperation between the two sides will be carried out from the two levels of Aonong Investment and Aonong Bio.
In terms of Aonong investment, Dabeinong plans to acquire no less than 51% of the equity of Aonong Investment through capital increase and share expansion, while Aonong Biotechnology and Dabeinong plan to purchase the former's assets in the form of equity transfer or asset transfer, and the planned investment amount of this part of Dabeinong will not exceed 600 million yuan.
At the same time, the agreement between the two parties stipulates that "Party A (Aonong Investment) shall notify Party B (Dabeinong) in a timely manner if there are major financial, equity, operational, and personnel changes, major external litigation, administrative penalties, solvency changes, and other matters that may affect the company." If Party B deems that there is a circumstance that is not conducive to the continuation of the transaction, it may terminate this Agreement in advance. ”
Coincidentally, on December 20, Aonong Bio announced that it was learned through the system inquiry of China Securities Depository and Clearing Co., Ltd. Shanghai Branch that part of the company's shares held by Aonong Investment and actual controller Wu Youlin have been judicially frozen/judicially marked.
As of the same day, a total of 6 million shares held by Aonong Investment have been frozen by the judiciary, 13,000 shares held by Wu Youlin's personal holdings have been frozen by the judiciary, and another 45.84 million shares have been judicially marked.
According to the relevant announcement of Aonong Biotechnology, Aonong Investment has some major changes such as equity freezing as stipulated in the agreement of intent, which further increases the uncertainty of the transaction. Based on the interests of all parties and the interests of shareholders and investors, the agreement of intent announced by the parties announced on December 13, 2023 was terminated after friendly negotiation reached an agreement by all parties. Dabeinong announced.
At this point, the asset transfer plan derived from the introduction of Dabeinong came to an end.
Active clearance
In the history of repurchase development, the situation of Aonong Biotech is similar to that of *ST Zhengbang, and the problem is in the contrarian expansion in the last round of business cycle.
According to relevant data, before 2019, the construction projects of Aonong Biotechnology remained below 300 million yuan for a long time, and in 2019 and 2020, it quickly increased to 700 million yuan and 1.47 billion yuan, and then with the transformation of construction projects into fixed assets, the company's asset scale also climbed from 1.2 billion yuan at the end of 2018 to 6.3 billion yuan at the end of 2022.
The investment direction of fixed assets is mainly focused on the construction of the company's pig production capacity.
Since the last round of the pig cycle, Aonong Bio's productive biological assets (mainly capable of breeding sows) have increased from less than 100 million yuan at the end of 2018 to 1.11 billion yuan at the end of 2022, an increase of more than 10 times.
At the same time as the production capacity is expanded, the company's slaughter volume is enlarged simultaneously. Historical data shows that between 2019 and 2022, the company's hog sales were 659,400, 1,346,300, 3,245,900 and 5,189,300, respectively.
Among them, it is understandable in 2019 and 2020, because the pig price was at a historical high at that time, but in 2021, the pig price began to return rationally and continue to run at a low level, which brought a huge test to the operation of Aonong Biotechnology.
In 2021 and 2022, the total operating cost of Aonong Biotech began to be significantly greater than the total operating income, and at the same time, with the increase in the scale of the company's debt, the interest expense of the listed company in the current period also doubled compared with the previous period, which further swallowed up the operating profit of the listed company.
Therefore, in the context of relatively good pig price performance in 2022, Aonong Biotech still has a loss of about 1 billion yuan.
"In recent years, the main body invested in pig raising, whether it is a large enterprise or a farmer, its financial strength has been greatly improved compared with the past, so it is generally at the bottom of the cycle for a longer time. For the changes that have taken place in the industry in recent years, New Hope has pointed out.
However, although Aonong Bio is a listed company and its financing ability is stronger than that of most breeding enterprises, it has begun to spontaneously reduce production capacity this year.
By the end of the third quarter of this year, the company's productive biological assets fell sharply from 1.11 billion yuan at the end of last year to 581 million yuan.
At the same time, Aonong Biotech also plans to transfer 8 subsidiaries including Quyang Aonong Agriculture to the controlling shareholder Aonong Investment at a price of 8 yuan.
In response to the shareholders' inquiry letter, the company said that among the above 8 subsidiaries, 7 have been cleared, and the remaining 1 plans to be cleared, "due to the continued downturn in the industry cycle, the future resumption plan of the target company cannot be determined." ”
It should be pointed out that the production capacity of breeding enterprises is one of the important conditions for pig prices to bottom out, and other pig breeding enterprises with high debt ratios have also reduced production capacity to varying degrees this year.
Relevant data show that as of the end of September, the top 5 companies in the industry with debt ratios were *ST Zhengbang (162.6%), Aonong Biotechnology (89.4%), Tianbang Food (87%), New Hope (72.8%), and Huatong (72.1%).
The higher the debt ratio, the more prominent the debt risk of the company, the faster the capacity reduction in the past two years.
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