Financial Services Association, January 2 (Reporter Feng Qijuan) Following the launch of Dongrui Stock's fixed increase, this is the second pork stock to complete a fixed increase since December last year.

On the eve of New Year's Day, the results of a new round of fixed increases in pork stock Tianbang Foods were announced. A total of 383,000 shares were issued at a price of 3.13 yuan in this round. The total amount raised was 1,198 billion yuan, and 17 investors were eventually allotted shares. According to the fixed increase plan (revised draft) released earlier, the total amount of capital raised by the company was initially planned to be 2.72 billion yuan, a reduction of 55.96% in fund-raising.

The 17 investors mentioned above involved 12 institutional investors, 3 well-known Niushan, and the veterinary drug company Huisheng Biotech. Specifically, these 12 institutions include 4 private equity institutions, 3 public funds, 3 brokerage firms, Guojun Financial Holdings, a wholly-owned subsidiary of Cathay Pacific Junan Hong Kong, and UBS AG.

According to the announcement, Tianbang Co., Ltd. issued fixed increase plans and revised fixed increase plans in June and November 2022. The total amount of capital raised was also reduced from 2.8 billion yuan to 2.72 billion yuan. The fund-raising investment remained unchanged, mainly for digital intelligent pig farm upgrade projects and supplementary working capital.

Furthermore, after the first round of subscription for Tianbang Foods was completed, investors did not reach the proposed target for subscription capital and number of shares, and the number of active subscribers was less than 35, so it was decided to launch an additional subscription process. However, after the first round of additional subscriptions, the three major subscription targets still did not meet the standards, and the additional subscription process was initiated again.

After the fixed increase was completed, the top ten shareholders of Tianbang Foods had a “big blood exchange”, and the eight institutional investors that were allotted shares were added to the top ten shareholders of the stock. The only remaining top ten shareholders were Chairman Zhang Banghui and former chairman Wu Tianxing. NORD Fund, the single subscriber with the largest fixed increase in this round, also became the third largest shareholder of Tianbang Foods in one fell swoop.

Eight institutional investors have joined the top ten shareholders

According to statistics, the three public offering companies received a total allocation of 74.2684 million shares, with a total investment of 232 million yuan. Among them, NORD Fund, CaiTong Fund, and Huitianfu were allocated 47.0499 million shares, 22.392 million shares, and 4.7923 million shares respectively, with investment amounts of 147 million yuan, 70.1 million yuan, and 15 million yuan respectively.

NORD Fund is the largest single subscriber for this fixed increase. The private equity agency Taicang Yingyuan Consulting (Limited Partnership) ranked second, receiving 383.387 million shares, involving an amount of 120 million yuan.

The four private equity institutions were allocated a total of 12,800 shares, with a total investment of 400 million yuan. In addition to Taicang Yingyuan Consulting (limited partnership), Guangdong Dehui Investment (2 of its products were distributed), Shanghai Tuopai Fund, and Zhongyue Capital were allocated 37.607 million shares, 36.262 million shares, and 15.974,400 shares with investment amounts of 116 million yuan, 113 million yuan, and 50 million yuan respectively.

Looking through equity, Taicang Yingyuan Consulting (Limited Partnership) is a subsidiary of Dongyuan Investment. According to the China Foundation Association, Dongyuan Investment was established in June 2022, with registered and paid up capital of 150 million yuan. The registered and office address are all located in Tianjin. The actual controller is Taicang Asset Management Group. This is a private equity investment fund. The management scale range is 2 to 5 billion yuan. The last time the institutional information was updated in September 2023.

The other 3 private equity companies that have been allotted shares mentioned above are also private equity investment funds. Zhongyue Capital was founded in 2017 with registered and paid-up capital of 100 million yuan, and the management scale range is between 5 and 10 billion yuan. The legal representative and chairman Sun Jianbo has worked for Guangfa Fund and Galaxy Securities; Liu Antian, vice president and fund manager, has worked as an investment researcher at ICBC Credit Suisse and Dacheng Fund.

The three brokerage firms and Guojun Financial Holdings invested 368 million yuan to receive a total of 114 million shares. Among them, Great Wall Securities, Guotai Junan, and Guojun Financial Holdings were all allocated 31.948,900 shares, each investing 100 million yuan; at the same time, GF Securities was allocated 18.6422 million shares, with an investment amount of 58.35 million yuan.

In addition, UBS AG invested 26 million yuan and was allotted 8.3067 million shares; the veterinary drug stock Huisheng Biotech Investment invested 100 million yuan to receive 31.948,900 shares.

In addition to institutional investors, three individual investors were also allotted shares in this round of fixed increases. Yu Fangqin, Wu Tianxing, and Huo Weichao were allocated 14.910,500 shares and 6.3898 million shares, respectively, involving amounts of 4667 yuan, 20 million yuan, and 15 million yuan.

According to the third quarterly report of Tianbang Foods, Wu Tianxing is the chairman of the company's 5th board of directors; in addition, Niusan Yu Fangqin participated in the fixed increase of too many individual A-shares.

By the end of the third quarter, the top ten shareholders of Tianbang Foods were: Zhang Banghui, Wu Tianxing, Galaxy Derui Capital, Cathay Pacific China Securities Animal Husbandry ETF, Wang Mengde, Hong Kong Central Clearing Co., Ltd., Zhang Yanxiang, Pan Liying, Yu Chunchao, and Zhang Yichi.

After completing share registration for the new shares issued, NORD Fund, Taicang Yingyuan Consulting (limited partnership), Huisheng Biotech, Shanghai Tuopai Fund, Guotai Junan, Guojun Financial Holdings, Great Wall Securities, and Caitong Fund joined the top ten shareholders of the stock. Compared to the end of the third quarter, there were only 2 natural person shareholders, Zhang Banghui and Wu Tianxing, among the top ten shareholders.

Why are loss-making pork stocks once again attracting institutional investors?

This is the second loss-making pork stock to complete a fixed increase since December last year. In mid-December, Dongrui Co., Ltd. raised a total of 925 million yuan in the first round of fixed increases after listing. A number of public and private equity funds, brokerage firms, and 2 well-known Niu San Guo Weisong and Yang Yuezhi all had allotted shares.

Dongrui Co., Ltd. had revenue of 807 million yuan in the first three quarters; a net loss of 416 million yuan to mother; and a net loss of 855.274 million yuan in the third quarter, a year-on-year decrease of 233.54%.

In the first three quarters, Tianbang Food's cumulative revenue was 7.269 billion yuan, up 6.36% year on year; net loss to mother was 1,566 billion yuan. In a single quarter of the third quarter, the company achieved revenue of 2,532 billion yuan and a net loss of 310 million yuan to the mother. The loss amount narrowed by 47.89% month-on-month.

By the end of the third quarter, Liang Xing's Cathay Pacific China Securities Animal Husbandry ETFs were among the top ten tradable shareholders of Tianbang Foods and Dongrui Co., Ltd. According to its three-quarter report, small-scale African swine fever broke out again in 2023. Currently, non-plague prevention and control methods are still mainly physical prevention and control. Biotechnology has not yet ushered in a breakthrough, further reducing the willingness of individual farmers to fill the gap, exacerbating the conflict between supply and demand. There is a high probability that pig prices will rise beyond expectations in the future. Due to the continuation of current elimination, the judgment that pig prices are likely to rise or even reach new highs at the end of 2023 or the beginning of 2024 will continue to be maintained.

Liang Xing also pointed out that the farming industry still has two long logics: one is the long-term rise in meat prices; the second is that swine fever prevention and control requirements and trends such as intelligent farming have concentrated market share towards leading companies.

The December research report of Shanxi Securities predicts that 2024 or the fourth “loss bottom” of the current cycle will occur. This is the first time since 2006 that there will be 4 “loss bottoms”, and the cycle bottoming out is expected to gradually come to an end. It is recommended to lay out pig breeding stocks during the current 3rd “loss bottom” period. Under pessimistic assumptions, if next year's 4th “loss bottom” is not the last bottom, it is still possible to seize phased opportunities for farming stocks with a “loss period+low PB” strategy during the 3rd “loss bottom” period.