Main points of investment:
The financial difficulties of Jinjian Rice Industry, a state-owned enterprise, and the withdrawal of Agricultural Bank Of China's acting shareholders are paid for by the shelling local government. The 92.65 million shares of Jinjian Rice held by Agricultural Bank Of China were transferred to Hunan Jinxia Grain Industry Co., Ltd., a subsidiary of Hunan Grain Group, at a total of 428 million yuan per share. 200 million of the transfer is funded by local government cash and 300 million is discounted by the government to Hunan Grain Group. Jinjia Grain Company now holds 17.02% of Jinjian Rice, making it the largest shareholder of Jinjian Rice, and the local government keeps the listing platform.
After Jinxia Grain Company came in, the first step was to issue additional and reduce 610 million bank loans to Jinjian Rice Industry to itself and three other companies. The company proposes to issue 9732 shares (RMB 4.11 per share) to Jinxia Grain, Hunan Development, Xiangyi Industry and Xingxiang Chuangfu, the additional capital of which will be used to repay Agricultural Bank Of China's loan, and the other nearly 200 million will be used to supplement the company's working capital. The additional issuance plan has yet to be submitted to the securities regulatory authority for approval. Up to now, the main business of Jinjian rice industry has not changed.
The next step is to wait for Hunan Jinxia Grain and other possible assets of Hunan Grain Group. Hunan Grain Group came prepared, so the next step is to load Jinxia Grain and possibly other possible assets of Hunan Grain Group. The important thing is how to load it. There are three options to choose from (asset swap, asset acquisition and reissue). According to our preliminary assessment, the third option is the most likely, but the worst for tradable shareholders because the company's equity is expanding too fast. earnings per share after the entry of new assets is too small. The first two schemes are relatively beneficial to the shareholders of tradable shares.
Jinxia grain fundamentals are better, but the scheme of asset loading determines the investment value of the company's stock. Jinxia Grain relies on the Hunan Grain Group with strong financial strength, which is engaged in grain purchase and storage, grain processing trade and grain feed trading market. The main leaders are pragmatic and pioneering, and we think its fundamentals are better (see below). However, how assets are loaded into Jinjian Rice determines the investment value of the company's stocks. based on the uncertainty of its asset loading plan, we temporarily give the company's stock a "neutral" rating.
Risk Tips:
It will take some time from the approval of this additional issuance plan to the next asset loading, which may be variable.
