Event

The company issued a fixed increase plan on November 25, 2014. the company intends to issue 160 million shares at a price of 5 yuan per share to three institutions, namely, Shenzhen Jinsu Asset Management Center (Limited Partnership), Shenzhen Jinwu Equity Investment Center (Limited Partnership) and Shenzhen Jinhui Equity Investment Center (Limited Partnership). It will be used to repay bank loans and replenish liquidity after deducting issuance expenses.

Conclusion:

After the issue, the company's net assets per share rose from 1.51 to 1.81 yuan, and the PB corresponding to the IPO price was 3.3 times, and the IPO price was reasonable. The focus of the future lies in the expectation of industrial mergers and acquisitions under the strategic background of "big food".

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1. Additional issuance to alleviate the financial pressure of the company. Statistics show that the asset-liability ratio of 2010-2014 (Q3) companies is 57.9%, 58%, 53.9% and 55.4% respectively, which remains relatively high. At the same time, as of September 30, 2014, the company's short-term loans, non-current liabilities due within a year and other interest-bearing debt balance totaled 2.515 billion yuan, the debt repayment pressure is greater. The completion of the additional issuance will ease the financial pressure of the company and reduce the financial expenses of the company.

2. The additional offering lays the foundation for the extension of the company. In 2013, the company put forward the "big food" strategy, successively acquired Zhijiang wine industry and Guizhou Chun wine industry, and constructed a business pattern with wine industry, soybean milk powder and dairy industry as the main industry. In view of the fact that after the completion of the acquisition of liquor assets, the liquor industry has entered a decline stage and the fastest growth period of the liquor industry has passed, it is difficult for the industry to achieve high growth in the future.

In terms of soy milk business, the plant protein beverage industry (including solid and liquid) has good prospects in the future. however, the company's soybean milk powder products (with soybeans as the main raw materials and nutrients for soybean plant protein) lack new selling points to win the market under the background of consumption upgrading trend, and there is a growth bottleneck. If there is no new product launch, it is difficult to improve the market space and profitability of the business. The prospect of the dairy industry is good, but the competition is fierce, the market pattern has taken shape, the company's dairy industry is a local brand, the market competitiveness is not strong.

3. The brand foundation is expected to promote the successful expansion of the company in the "big food" industry chain. We believe that the core value of food enterprises is the brand of the enterprise. In recent years, the growth of Weiwei stock business is weak, the profitability continues to decline, and the attempt of diversification is thwarted, but the "Weiwei" brand still has brand influence in the food industry, and the brand foundation still exists. We believe that the company's future focus on "big food" strategy will help the company to achieve "Weiwei" brand synergy, lay the foundation for the company to successfully open up the market, and be optimistic about the company's extensive expansion prospects in the "big food" industry chain. In particular, the implementation of additional issuance will ease the financial pressure of the company and help the company to expand its business.