Event: 5.55% of shares in Yunnan Hansu were auctioned at 10:00 on July 4, and companies owned by Meirui Health International bid 14.6253 million yuan. The company's stake in Yunnan Hansu will be increased from 20% to 25.55%.
ST Galaxy's stake in Yunnan Hansu was auctioned, and Meirui Health offered 1462.53 million to buy it.
According to the 2018 annual report of ST Galaxy, the company froze its 5.55% stake in Yunnan Hansu Technology Co., Ltd. for a period of 36 months due to litigation. According to BABA's judicial auction online platform, ST Galaxy's 5.55% stake in Yunnan Hansu was auctioned from 10:00 on July 4 and ended at 10:00 on July 5. The valuation of the judicial auction is determined by the court, and the evaluation price of the 5.55% stake in Yunnan Hansu is 6.6253 million yuan. In this auction, Meirui Health and Hanma Group had the right of priority, and Wuhu Meirui Health Management Co., Ltd., a subsidiary of Meirui Health International, finally bid 14.6253 million yuan with the bidding number of "Q3006 excellent 1", becoming the winner of this auction.
Prior to this, the company already held a 20% stake in Yunnan Hansu, and the auction enhanced the company's industrial hemp processing end advantage.
Industrial marijuana extract CBD has no drug characteristics and has the efficacy of treating epilepsy and other diseases. in Canada, the United States and other regions, it has been used in cosmetics, health products, drugs and other consumer goods. Yunnan Hansu is a high-quality asset in the extraction of industrial hemp: Yunnan Hansu has China's first cannabis processing license that meets GMP standards, can produce cannabinoids with a purity of 99%, and is the largest extraction base for cannabis-based active components in China. The patent of Yunnan Hansu CBD cannabinoid extraction process is authorized by the United States, which is the first international patent for Chinese cannabinoid medicinal extraction, which reflects the international recognition of Yunnan Hansu's technical and industrial requirements in industrial cannabis medicinal (high purity) extraction. On March 16, 2018, the company acquired a 20% stake in Yunnan Hansu. In 2018, the company made a profit of HK $11.5 million through its stake in Yunnan Hansu. The auction company has benefited more clearly: the company has seized the opportunity of the judicial auction of ST Galaxy's stake in Yunnan Hansu, and after the relevant procedures are completed, Merrill's stake in Yunnan Hansu will rise to 25.55 per cent. In addition, Yuye Group, the controlling shareholder of Meirui, indirectly holds 5.2% of Yunnan Hansu through holding shares in Hanma Group, and the total proportion of direct and indirect shareholdings of Meirui Health reaches 30.75%.
Metro Health International relies on overseas advantages to promote the landing of product applications.
In this announcement, the company also mentioned that it will speed up the investment and construction of CBD healthy consumer brands and the global layout of industrial marijuana. The international layout of the product end is steadily advancing: Meirui Health Group has signed a strategic cooperation memorandum with the well-known Australian pharmaceutical group GMP Group, agreeing to set up a joint venture company in Australia in the future to engage in the research and development, production and sales of marijuana health consumer goods (CBD related products). GMP Pharmaceutical Group specializes in the research, development, production and sales of pharmaceuticals, health products, dairy products and special natural skin care products, and its Australian plants serve many customers in more than 30 countries around the world. The company already has an industrial layout in Australia, and its health real estate project is located in the Alphington area on the outskirts of Melbourne, Australia, and has innovatively developed a high-end medical floor project, which makes the company more familiar with the local situation. We believe that the company's existing business in Australia lays the foundation for the company's later new business operations, and GMP's experience in pharmaceuticals and health products will help the company to further develop cannabinoid-related health products and actively move into the industrial cannabis application market.
Profit forecast and investment suggestion
For the company's existing business, we expect its operating income from 2019 to 2021 to be HK $2.24,2.45 and HK $266 million, and its net profit to HK $1.03,1.26 and HK $147 million. The new business of industrial marijuana is expected to bring new performance increments for the company. In view of the stability of the company's traditional business, the industrial marijuana business has a solid layout and rapid expansion, maintaining a "buy" rating.
Risk hints: industrial marijuana should be strictly distinguished from intermediate marijuana, entertainment marijuana / drug marijuana; resolutely oppose the legalization of recreational marijuana; industrial marijuana-related business may contain policy change risks, R & D operational risks, and cooperation uncertainties; specific implementation progress and results are uncertain; China has never approved industrial marijuana for medical and food addition The actual cooperation between the two sides also requires a series of licenses, permits or approvals from the relevant regulatory authorities.