Cao Jiafu is the chairman of Huaying Agriculture
Overhead the aura of the Sino-British cooperation project, known as the world duck king, raised 2 billion funds from the stock market, but now it is facing the situation of restructuring and delisting, the only duck breeding company in the two cities - Huaying Agriculture, the management led by Cao Jiafu, how to account to the shareholders?
In 1991, then British Prime Minister Margaret Thatcher visited China and brought a number of cooperative projects, including three cherry valley duck breeding projects, which were won by Huangchuan County in Xinyang City, Henan Province. Subsequently, the local finance bureau set up a state-owned enterprise Huaying Agricultural Development Co., Ltd., using loans from the British government to specifically implement the Cherry Valley Duck project.
18 years later, that is, in 2009, Huaying Agriculture was listed on the small and medium-sized board, raising more than 600 million yuan and the issue price was 16.98 yuan. Up to now, Huaying Agriculture has only paid dividends of 86 million yuan in the capital market, but the total amount of funds raised before and after several times has reached 2.098 billion yuan, so the support of investors for Huaying Agriculture is very large.
Huaying Agriculture itself also claimed that the company from the earliest introduction of Cherry Valley duck, the initial annual output of only a few hundred thousand, to the current total assets of 7 billion yuan, the annual output of 300 million duck seedlings, cooked food 60,000 tons, slaughtering and processing of Cherry Valley duck 220 million, and down 50,000 tons (known as the first in China), completed the take-off from the Chinese duck king, to the Asian duck king to the world duck king, creating a miracle in the history of the development of China's livestock enterprises.
But it is such a good deck of cards, but it is beaten poorly. As of 2020, Huaying Agriculture has suffered losses for two consecutive years, with litigation, high debts, unclear restructuring, or the possibility of delisting. The market value of nearly 10 billion yuan is now only more than 1 billion yuan, and investors want to cry without tears.
On May 27, 2021, the small and medium-sized board of the Shenzhen Stock Exchange issued a regulatory inquiry letter to Huaying Agriculture, raising 23 questions and asking the company to reply, until now, it has not been replied, and several delayed reply announcements have been issued.
Here, On behalf of some investors, Zhisheng Finance also put forward three questions, asking Huaying Agriculture to answer them together.
Question 1: Who is Huaying Agriculture?
The current shareholding structure of Huaying Agriculture is: the local finance bureau → 100% of Henan Huangchuan Huaying Poultry Industry Corporation→ 11.11% of Huaying Agriculture. In terms of equity structure, the local finance bureau is the largest shareholder, and Huaying Agriculture belongs to a state-controlled mixed ownership listed company.
However, it can be found that in terms of corporate governance, Huaying Agriculture is a chairman who has been working to the end, a team that has been in charge for more than ten years, and it is very rare among thousands of listed companies in A-shares.
For example, mr. Cao Jiafu, the current chairman, was the main person in charge when the Cherry Valley project was implemented in 1991, and began to serve as the chairman of Huaying Agriculture in 2002, continued to serve as the chairman after the listing in 2009, and still holds the position of chairman of the company until now.
Other senior managers, including many deputy general managers, have most of their tenures begun in 2008 or before, and have not been changed for more than a decade now.
If Huaying Agriculture is good enough, in the middle of this mountain to open up the road and meet the water, and make the enterprise into a real world duck king, investors are naturally happy to see it.
But now that Huaying has fallen into such a situation and is facing an existential crisis, should the current management and chairman of the board of directors step aside to reflect on it?
Chairman Mr. Cao Jiafu, formerly a local township chief, was commissioned to set up Huaying Agricultural Company, the project was completed to a certain extent later, until the listing, cultivated the local brand, stimulated the local economic development, is also a contribution.
But the cherry valley duck project, originally introduced, not Cao Jiafu invented, and there is no Cao Jiafu exclusive patent or technology, since it is not born because of Cao, Cao has to accompany to the end?
In a local county, there are hundreds of cadres at or above the deputy section level, and for decades it has not been possible to select one who will manage the enterprise. How about looking at Henan? How about nationwide? If you can't find a person who can turn a loss into a profit, even if you find a loss of 800 million, it will be 200 million less than last year's 1 billion loss.
Therefore, the crux of the matter is who this enterprise is.
Question two, the two shareholders of the agricultural investment financial control, in addition to voting against, what else can they do?
In July 2014, the management and some employees of Huaying Agriculture established Zhengzhou Huaheying Agricultural Science and Technology Center (Limited Partnership), and then through the Shandong Trust-Hengxin Capital Trust product initiated by Shandong International Trust, the company increased its holdings in the secondary market by 29.6 million shares of Huaying Agriculture' outstanding shares, with an increase price of about 5.3 yuan.
But in 2018, the company's operating problems began to gradually appear. For example, in 2017, although the operating income was 4.1 billion yuan, an increase of 63%, the net profit attributable to the listed company fell by 33%, and the increase in revenue did not increase profits. There are two more events in 2018, one is that the major asset restructuring of tianyi agriculture has failed, and the other is that the industrial fund cooperating with Northern Trust has been terminated.
Therefore, by the end of 2018, the fundamentals coupled with market factors, huaying agriculture's stock price fell from the highest 14 yuan at the end of 17 to less than 5 yuan.
At this time, Huaying Agriculture suddenly issued an announcement that Shandong International Trust would transfer all its shares to Henan Agricultural Investment Financial Holdings Co., Ltd.
Behind the agricultural investment financial control is the provincial agricultural development company affiliated to the Department of Finance, which has a lot of imagination, so once the transfer of shares is completed, the stock price of the secondary market rises to more than 10 yuan in the following months, doubling.
Henan Agricultural Investment Financial Holdings lost about 3 yuan per share
However, at the end of 2019, the historical problems in Huaying's agricultural operation began to appear, resulting in a loss of about 80 million yuan that year. Subsequently, in 2020, it was even more quagmire and could not extricate itself, with a loss of about 1 billion yuan that year.
At this time, the agricultural investment financial control found that it spent more than 150 million yuan in 18 years to take over, and now the market value is only 80 million yuan. Does it feel like being pitted?
On June 30, 2021, Huaying Agriculture held a board meeting to consider the loan guarantee for contract farmers and supply chain customers. Chairman Cao Jiafu presided over the meeting, 8 of the 9 directors were in favor, and Zhang Wei, a director of Agricultural Investment Financial Holdings, voted against it alone.
The announcement wrote that Zhang Wei's reason for opposition was not very clear.
You see, some of the directors were not very clear about the matters studied by the board of directors, and they were representatives of the provincial state-owned agricultural development companies invited at that time. In the case that he did not know, he actually studied it at the meeting and voted on it, and the contradiction between the two sides seemed to be not shallow.
But as a provincial agricultural platform company, can it do anything other than vote against it?
Question three, Huaying Poultry Industry Corporation, the controlling shareholder of Huaying Agriculture, who is getting it?
In the 2019 annual report, Huaying Agriculture disclosed for the first time that the controlling shareholder, Huaying Poultry Industry Corporation, had occupied 470 million yuan of the listed company's funds in a non-operational manner, and under the questioning of the exchange, it could only use physical assets and other means to repay part of the debt.
Huaying Poultry Company itself is an investment holding platform, but in the name of listed companies, financing is carried out, the essence is to take the funds of listed companies to play by themselves.
According to the materials, the local finance bureau holds 100% of the equity of Huaying Poultry Industry and controls Huaying Agriculture through Huaying Poultry Industry. However, according to the information, the management of Huaying Poultry Industry does not have anyone from the Finance Bureau.
The company's legal representative and general manager is called Yang Zhiming, who also holds various positions in Huaying Poultry Industry. But Yang Zhiming's other identity is that he is the chairman of the supervisory board of the listed company and receives remuneration in the listed company.
Over the years, the industrial and commercial information of Huaying Poultry Industry has hardly been changed. That is to say, the local treasury bureau has little control over the 100% subsidiary, or has not sought control.
Recently, Huaying Poultry Industry and Commerce Information also shows that the company has 156 risks above its head, why these risks arise, and what kind of hidden dangers will be brought to listed companies, which needs to be carefully observed by investors.