Main points of investment
Brewing "change of ownership + reorganization", Hengyang cattle industry plans to take over at a premium to inject new vitality. Hengyang cattle plans to accept Singapore dollar investment of 699.7 million yuan to hold all 89.4817 million shares, accounting for 10.99% of the total share capital of New Dazhou A, and plans to acquire 100% stake in Hengyang cattle and its related assets by means of non-public offering shares. The share transfer price is 7.82 yuan per share, equivalent to a 36.95% premium for Hengyang cattle. The entry of new major shareholders and their actual controllers will help to optimize the company's asset allocation and inject new vitality into the future development.
China has a high demand for beef consumption, a long-term shortage of supply, a large degree of import dependence, and a spring tide of cross-border mergers and acquisitions in breeding. The main results are as follows: (1) with the increase of income, the middle class expands rapidly, and beef consumption shows an increasing trend. The compound growth rate of beef consumption in China from 2007 to 2014 was as high as 14.64%. The per capita beef consumption in China is 4.92 kg, which is twice the gap compared with the world average. (2) the growth of beef supply in China is slow, and the degree of import dependence increases sharply. The long breeding cycle of Xiaojia in China leads to the low income of farmers and the small breeding of cows. The stock of beef cattle continues to decline, and the gap between beef supply and demand will exist for a long time in the future. (3) the beef cattle breeding industry in Australia is developed, but the demand is sluggish, the valuation of industry companies is much lower than that in China, and A-share breeding companies start a tide of cross-border mergers and acquisitions.
Domestic beef supplier leader + whole industry chain model, high profit level. Hengyang cattle is one of the largest beef suppliers in China, with total assets of more than 2 billion yuan. The company focuses on developing the beef industry and has established a modern whole industry chain covering green planting, characteristic calf breeding, slaughtering of beef cattle and pigs, deep processing of meat products, e-commerce, terminal chain and so on. In the whole industry chain, the profit of breeding is the highest, which is 21%, and the net interest rate of slaughtering and processing is only 7% and 8%. The company acquired Australia's TABRO and HYMO slaughtering plants in 2014 with an ample supply of imported beef and a significant cost advantage. Layout of Rosario and Lirtix cold chain meat processing plants in Uruguay meat processing base in South America in 2015. The northeast black soil belt has set up a number of standardized breeding bases for ten thousand beef cattle, making every effort to create a global supplier of quality beef, with great benefits from breeding and meat processing. Hengyang cattle Industry has pledged to inject assets from New Continental A, which is expected to contribute no less than 400 million yuan, 500 million yuan and 600 million yuan in net profit from 2016 to 2018, respectively.
Product structure + brand advantage, the whole network marketing "thousands of merchants ten thousand stores" + e-commerce new model, bring new profit growth. The product structure of Hengyang cattle industry is mainly composed of low-temperature meat products and high-end beef with high added value. With Australian beef fresh frozen series products, beef slicing and conditioning products and so on more than 1000 individual products. "Hengyang", "Heidi Manor", "Northern Cowboy" and other five major brand advantages, products sell well at home and abroad, high level of business income. At the same time, take advantage of Internet + to open up a new e-commerce model with the new brand "Hengyang Ecology". Comprehensively upgrade the existing channel network, open online and offline, realize the transparency of the whole process from "field" to "dining table", and create an interconnected community service network of "thousands of merchants and ten thousand stores".
Profit forecast and investment advice: after the completion of the restructuring, Hengyang Cow has become the actual shareholder of New Dazhou, and the net profit contributed by the injection of new assets from 2016 to 2018 is expected to be no less than 400 million yuan, 500 million yuan and 600 million yuan. As the final evaluation value of Hengyang beef has not yet been determined, the number of shares issued can not be determined and will not be rated for the time being.
Risk hint: there is still uncertainty in major asset restructuring.