Guanfu Throw 1.8 billion Enters Pharmaceutical Intermediates Target Funds Hungry for IPO

The main business has been losing money for years, and the fixed increase has been rejected by the CSRC. Guanfu shares (002102.SZ) (more named on August 21) have thus started a restructuring turnaround.

On August 17, Guanfu shares issued a reorganization draft after trading suspension for more than three months. It intends to purchase all the shares of Nengte Technology Co., Ltd. (hereinafter referred to as "Nengte Technology") for 1.8 billion yuan by issuing shares to pay cash. Enter the pharmaceutical intermediate industry.

Relying on the excellent R & D team and the formation of technical barriers through patent protection, the performance of Nengte Technology has achieved explosive growth in recent years. From 2011 to 2013, the net profit of nengte technology increased from 10.8749 million yuan to 50.9379 million yuan, which expanded 3.7 times in just two years. In 2014, its promised net profit reached three times of the net profit in 2013.

In the secondary market, the share price of Guanfu shares began to languish after three consecutive short-term madness of the daily limit, and the speculative funds began to accelerate the withdrawal, and some high-level retail investors were deeply locked up. Set to Raise 1.8 billion Yuan to Enter Pharmaceutical Intermediates

According to the draft restructuring, Guanfu intends to acquire a 100 per cent stake in Nengte Technology by issuing shares and paying cash. Among them, the consideration of 1.32 billion yuan shall be paid by the listed company at the price of 6.01 yuan/share, and the consideration of 0.48 billion yuan shall be paid in cash and solved by the listed company to implement supporting financing, with the issue price of 6.01 yuan/share, and the total amount of supporting funds raised shall not exceed 0.6 billion yuan.

Nengte Technology was founded in 2006, formerly known as US-China Nengte Pharmaceutical Chemical Technology (Jingzhou) Co., Ltd. In 2010, the company introduced strategic partners to complete the reorganization by absorbing the merger. In 2012, it was renamed Nengte Technology Co., Ltd.

At present, the company is a national high-tech enterprise and a circular economy pilot enterprise in Hubei Province. It is mainly engaged in the research and development, production and sales of pharmaceutical intermediates. The main products include montelukast sodium intermediates, 2,3, 5-trimethylhydroquinone, 2,3, 6-trimethylphenol and 2,5-dimethylphenol and other customized products.

Guanfu shares believe that through this acquisition, the company will form a diversified business pattern of pharmaceutical intermediates, ceramic products and other household goods, industrial park rental, mining investment, bulk trade and other industries, and the transaction will improve the company's capital structure and financial situation. enhance the company's profitability and anti-risk ability.

From 2011 to 2013 and from January to June 2014, Nengte Technology achieved operating income of 71.3898 million yuan, 0.184 billion yuan, 0.217 billion yuan and 0.196 billion yuan respectively, and net profit attributable to shareholders of 10.8749 million yuan, 19.9592 million yuan, 50.9379 million yuan and 59.1365 million yuan. Both operating income and net profit have achieved rapid growth.

At the same time, the transferor also promised that the net profit attributable to the parent company of Nengte Technology from 2014 to 2016 will not be less than 0.15 billion yuan, 0.182 billion yuan and 0.227 billion yuan respectively.

Nengte Technology has also gained a high valuation as a result. Taking June 30, 2014 as the valuation base date, the book value of Nengte Technology was 0.28 billion yuan, which was valued at 1.807 billion yuan according to the income method, and the value-added was 1.526 billion yuan, with a value-added rate of 544.50.

On the second day of the release of the reorganization draft, Lin Wenchang, chairman of Guanfu Co., Ltd., told the media that Nengte Technology was selected after screening more than 50 targets. There are two main reasons why he is optimistic about Nengte Technology.

First, Nengte Technology has core competitiveness in the pharmaceutical intermediate industry. Its R & D team is led by Cai Dongwei, a national "Thousand Talents Program" candidate, a postdoctoral fellow at Stanford University in the United States, and a former senior researcher at Merck Synthesis Process Research Office in the United States. Chen Liequan, chairman and general manager of the company, is an expert enjoying special allowances from the State Council and a professor-level senior engineer with decades of production management experience in the chemical industry, the research and development results can be quickly transformed into large-scale industrial production.

Second, the company's process innovation forms technical barriers through patent protection, which can bring relatively stable income and profits to listed companies for a long time in the future.

Stimulated by the good news of restructuring, the share price of Guanfu shares rose by the daily limit for three consecutive trading days after the resumption of trading, and rose another 3% on the fourth day, setting a new high in nearly three years. As of August 22, the company's share price closed at 8.42 yuan, up 34.72 from before the suspension (April 30).

Subject company abandons IPO

According to a reporter from the Financial Weekly, Nengte Technology originally planned to directly IPO. In the company's next five-year plan proposed in early 2012, it included the company's stock listing in 2014. However, the major shareholder of Nengte Technology finally gave up the IPO and reorganized with Guanfu shares, giving up the actual controlling stake in the company.

Reporters were able to give up IPO and other issues with special technology and call Huang Hualun, Dong Mi of Guanfu Stock Company. The staff who answered the phone said Huang Hualun was away on business and was not convenient for interviews. Later, the reporter called the company's witness Huang Lizhu, who said she would send the interview outline first. However, as of press time, has not yet received a reply.

A problem that cannot be ignored is that Nengte Technology is currently facing tremendous financial pressure.

According to the reorganization draft, as of June 30, 2014, the monetary funds in the account of nengte technology were only 6.2642 million yuan, while the company's short-term loans and non current liabilities due within one year were as high as 0.11 billion yuan and 11 million yuan respectively.

Compared with listed companies in the pharmaceutical intermediates industry, the solvency of Nengte Technology is also significantly insufficient.

The reorganization draft shows that in 2012 and 2013, the current ratio of Nengte Technology was 1.67 and 0.77 respectively, and the quick ratio was 1.02 and 0.47, while the current ratio of six companies such as Lianhua Technology (002250.SZ) reached 6.97 and 3.96 respectively, and the quick ratio was 6.15 and 3.49 respectively. In terms of asset-liability ratio, Nengte Technology is 48.71 and 56.97, far higher than the industry average of 30.28 and 34.79.

Moreover, the future can special technology also need a large amount of money to invest in construction. In the aforementioned plan for the next five years, the company proposes to invest a total of 1.9 billion yuan to build a production line of 100 tons of MK5 and its series of products, a production line with an annual output of 40000 tons of tricresol, and a production line of raw materials such as sitagliptin and peramivir.

Guanfu shares believe that Nengte Technology is in a period of rapid business expansion and is in urgent need of a large amount of working capital and capital investment. However, its own capital accumulation is limited, financing channels are few, and there are bottlenecks in business development. After the completion of this transaction, as a listed company, Guanfu shares can give strong support to nengte technology in terms of fund raising, assist nengte technology to achieve rapid business expansion, realize efficient coordination between capital and industry, and create greater benefits for the company and shareholders.

However, Guanfu shares are not well-off, capital pressure is not small. In 2010 and 2011, the company's net profit suffered huge losses of 93.9322 million yuan and 0.133 billion yuan respectively. In 2012 and 2013, relying on the change in fair value gains and losses of 0.198 billion yuan brought about by changing the subsequent measurement model of investment real estate and the transfer of subsidiary Shanghai Zhizao Space Household Products Co., Ltd. to the affiliated enterprises to achieve 86.61 million yuan of gains, the company barely turned a profit.

At the same time, the company's asset-liability ratio is also high. At the end of 2012, the end of 2013 and June 60, 2014, the company's consolidated asset-liability ratio reached 66.29, 66.08 and 68.24.

As early as September 2012, Guanfu shares issued a fixed increase plan, intending to raise 0.82 billion yuan from the non-public issuance of shares such as Ping An Dahua Fund and the company's major shareholder Lin Wenchang. After deducting the issuance fee, all of them will be used to repay bank loans and Replenish working capital. However, after more than a year and several adjustments to the plan, the fixed increase was rejected by the CSRC in late April 2014.

However, despite the shortage of funds, Guanfu shares are still ready to spend 1.8 billion yuan to acquire Nengte Technology.

It is worth noting that in the secondary market, all kinds of funds began to withdraw from Guanfu shares on a large scale. According to the data of dragon and tiger list, on August 21, 2014, the top five business departments (institutions) of Guanfu shares bought a total of 0.109 billion yuan, accounting for 11.96 percent of the total transaction, while the total amount of the top five business departments (institutions) sold reached 0.349 billion yuan, accounting for 38.32 percent of the total transaction.

After the crazy hype ended up in a feather, some high-level retail investors were deeply trapped.