The rating and scale are not high, and the parity provides a strong safety pad.
Fengshan Group announced on June 23 that it will publicly issue convertible corporate bonds on June 27, 2022, and this issue will only be issued online. Fengshan Group issued 500 million yuan, and the debt rating AA-, calculated according to the maturity yield of 6.4282% of Chinese bonds of the same grade on June 23, the debt bottom is about 83.37 yuan, and the parity of Fengshan convertible bonds on June 23 is 99.49. the parity provides a strong safety cushion. In terms of terms, the three major provisions are in order.
Integrated layout of pesticide industry chain to actively promote the project to be put into production
Low-toxic pesticide industry chain integrated development, the company's profits under short-term pressure. Fengshan Group is mainly engaged in the research, production and marketing of high-efficiency, low-toxicity, low-residue and environmentally friendly pesticide raw drugs, preparations and fine chemical intermediates. In many years of production and operation, the company has formed a business system with herbicides as the core and pesticides and fungicides as supplements.
The company has a complete pesticide research and development, production and sales industry chain, realizing the all-round development of "fine chemical intermediate → raw drug → preparation" business. Due to the rising prices of raw materials and weak demand for pesticide products, the company's profits are under short-term pressure. 2022Q1 achieved revenue of 441 million yuan, year-on-year-2.84%, net profit of 31 million yuan, and gross profit margin of 17.85% for 2022Q1 compared with the end of 2021. 2.19pct.
In 2022, the company will speed up the landing of the intermediate project in Sichuan Guang'an Base centering on "Pesticide crude drugs and preparations". Speed up the construction of the technical renovation project of the annual production line of 1700 tons of quizalofop and 1083 tons of by-product potassium chloride and 1083 tons of quinoline bran ester production line. In the field of extension, the company's annual report said it would focus on investment and M & An opportunities in new chemical materials, new energy and other areas.
The total amount of funds raised in this issue will not exceed 500 million yuan (including 500 million yuan). After deducting the issuing expenses, it will be invested in the construction projects of fine chemical products such as 3-dinitro-4-chlorotrifluorotoluene with an annual output of 10000 tons. The smooth implementation of this fund-raising project will enrich the company's product range, optimize the product structure, reduce production costs, and enhance profitability and market position.
The success rate of purchase is expected to be about 0.00181%, and it is expected that the actual control of the company with low purchase risk in the primary market is Yin Fengshan and Yin Ping father and daughter. As of March 31, 2022, Yin Fengshan and Yin Ping father and daughter held a total of 75.9653 million shares, with a combined shareholding ratio of 46.79%. With reference to the recently issued Tongyu convertible bonds (original shareholder placement ratio 67.58%, online valid purchase amount 11.39 trillion) and Shangneng convertible bond (original shareholder placing proportion 61.10%, online effective purchase amount 11.32 trillion), assuming that the original shareholder placement ratio of Fengshan convertible bonds and the online effective purchase amount are 11 trillion respectively, the online success rate is expected to be about 0.00181%.
With reference to Suli convertible bonds with the same industry and similar parity (conversion premium rate of 23.51%, closing price of 124.07 yuan) and limin convertible bonds (conversion premium rate of 32.03%, closing price of 117.41 yuan), Fengshan convertible bonds are expected to have a conversion premium of 20% on the first day of listing. For June 23 parity, the listing price of Fengshan convertible bonds is expected to be between 119.39 yuan and 124.37 yuan. The scale of Fengshan convertible bond issue is small, and the company is mainly engaged in the integrated business of pesticide intermediate-crude drug-preparation industry chain. It is one of the world's largest suppliers of trifluralin and nicosulfuron, and has the world's largest production plant of quizalofop. Affected by the price of raw materials and capacity utilization, the company's short-term profitability is under pressure, but the company has more projects under construction, and production is expected to bring profits to pick up. It is expected that the risk of applying for purchase in the primary market is not high, and active attention can be paid to it after listing.
Risk Tips:
Production capacity falls short of expectations, product prices and raw material prices fluctuate, etc.