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Pearl River Holdings announced on the evening of the 13th: the company intends to issue 210 million shares at a price of 8.09 yuan per share to buy the 67% equity held by Beijing Food Group and the difference after the replacement of Zhujiang holding assets. and to buy a total of 33% of the shares held by Beijing Grain from the State Administration Center, Guokai Finance and Xinniu Runying. After the completion of this transaction. Pearl River Holdings will transform into vegetable oil processing and food manufacturing industries. In addition, it is proposed to raise an additional 432 million yuan from Beijing Grain Group at a price of 8.82 yuan per share.
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Beijing Food Group: a large state-owned grain group under Beijing SASAC.
Founded in 1999, Beijing Grain Group is a large wholly state-owned enterprise funded by the Beijing Municipal Government. Its business involves five major industrial sectors: grain and oil reserves, grain, oil and food processing, grain, oil and food trade, trade services, and real estate. At present, the group takes Beijing Cereals as the core brand, and the mother-son brand system is composed of many product brands such as "Ancient ship", "Green Bao", "Firebird", "Huateng", "Zhengda" and other service brands such as "Beijing Food Logistics" and "Beijing Cereal Home ownership".
In 2016, the revenue of Beijing Cereal Group was 28.6 billion yuan, up 17.6 percent from the same period last year, and its profit was 1.005 billion yuan, up 97.4 percent from the same period last year. It was among the top 500 Chinese enterprises for the first time, and its comprehensive strength ranked among the top two domestic grain enterprises. According to the relevant documents such as the opinions on comprehensively deepening the Reform of Municipal State-owned State-owned Enterprises by the Beijing Municipal Party Committee and Municipal Government, Beijing Grain Group will seize the opportunity of the new round of reform of state-owned enterprises and take capital operation as the link. In order to improve the asset securitization of Beijing Food Group, it will actively develop the economy of mixed ownership and strive to promote equity diversification in the future. Focusing on standardizing operation and improving efficiency, we will accelerate the modernization of the governance system and capabilities of state-owned enterprises.
The company has become the most important asset integration platform of Beijing Food Group, and we can look forward to the injection of M & An and extension expansion in the future.
Compared with Cofco Group, which has a number of listed companies in An and H cities, Beijing Food Group currently has only one Pearl River Holdings, and we expect Pearl River Holdings to undertake more asset securitization tasks of Beijing Food Group. Although the grain, oil and food processing business of the listed companies belongs to the traditional industry, the advantage lies in stable performance, which can provide stable cash flow, operating income and profits for listed companies. In the future, Beijing Grain Group will timely put mature industries into listed companies, promote listed companies to expand into the Internet, bioengineering, real estate and other forms of business, and achieve a great increase in the market value and profits of listed companies. At the same time, extension expansion will be an important measure in the 13th five-year Plan of Beijing Grain Group and Beijing Food Co., Ltd. Jingfeng acquired Zhejiang Little Prince Leisure Food Company in 2015, mainly engaged in the production of snack foods such as pastries, rice cakes and potato chips, which is a vertical extension of the company's grain and oil industry. Zhejiang Little Prince achieved an income of 730 million yuan in 2016, an increase of 26.3% over the same period last year. Net profit was 91.897 million yuan, up 29.7%. It is the most profitable high-quality asset among the company's first-class subsidiaries, and the company's extension expansion has achieved remarkable results.
Four years to create a new Beijing Food, the company will achieve rapid development with the help of the platform
Beijing Grain Group is not only a grain and oil enterprise. according to the latest complete development plan of Beijing Food Group, the Group will strive to double its operating income and profits by the end of 2020 through the path of great health, agriculture and grain merchants. To achieve the goal of creating a "new Beijing grain", to achieve the transformation from traditional grain enterprises to modern grain merchants, and to become the most competitive modern grain industry group. During this period, the listed companies will also make use of the three major advantages of the group's policy, industrial chain and brand to adjust the industrial structure and product structure, focus on expanding the high value-added oil business and food business, and gradually peel off the low-margin raw grain business. in order to achieve rapid performance growth.
Risk hint
Crude oil and oil prices rose too fast, epitaxial mergers and acquisitions and group asset injection failed to meet expectations.
Increase the rating
After the completion of the major asset restructuring, Beijing Grain shares will officially enter the capital market. According to the dilution of the total shares after the IPO, we expect to maintain the company's EPS of 0.30, 0.43, 0.53 yuan respectively from 2017 to 2019, income of 81.92,87.17 and 9.306 billion yuan in 1719, and net profit of 2.03,2.94 and 363 million yuan as the listing platform of Beijing Food Group. In the future, it is expected to fully integrate the high-quality resources within the group and carry out extension expansion. We give the company a valuation of 27 times PE in 2018, with a target market value of 7.9 billion yuan, which is about 14% higher than the market value of the company after the IPO.