Xinri Hengli plans to invest 2.3 billion to expand the company or will change hands

Latest News: On September 12, the Shanghai Stock Exchange issued an inquiry letter to Xinri Hengli on the change of company control, requiring the listed company to disclose the number of shares transferred in this agreement and the proportion of the total share capital And other issues.

Earlier on the evening of September 9, Xinri Hengli announced that the company’s controlling shareholder Shanghai Zhongneng and Jintou Xincai signed the “Share Transfer Intention Agreement”. After the transaction is completed, Jintou New Materials will gain control of the listed company.

At present, Shanghai Zhongneng holds 200 million shares of Xinri Hengli, accounting for 29.2% of the total share capital, but the pledge rate is 100%.

It should be noted that in mid-August, Xinri Hengli released two major production expansion announcements in one day, with a total investment of 2.3 billion yuan. However, as of the end of June 2022, the company’s monetary funds were only 167 million yuan, and short-term loans reached 430 million yuan, with a huge funding gap.

Only 167 million in cash in hand, but aggressively expanding production

The main business of Xinri Hengli is the production and sales of activated carbon products, the preparation and storage of stem cells, and trade, as well as the production and sales of lauric acid. The company’s main products include activated carbon, etc.

In recent years, the performance of Xinri Hengli has fluctuated greatly. From 2018 to 2021, the company’s operating income was 552 million yuan, 266 million yuan, 119 million yuan and 192 million yuan, a year-on-year increase of -55.76%, -51.86%, -55.18% and 61.51%; net profit was 9.4006 million yuan,

-44.9521 million yuan, 20.9060 million yuan and -22.9649 million yuan, an increase of -75.41%, -578.18%, 146.51% and -209.85% year-on-year respectively.

In the first half of 2022, Xinri Hengli’s operating income reached 475 million yuan, a year-on-year increase of 462.75%; net profit reached 8.9086 million yuan, a year-on-year increase of 133.40%.

It should be noted that in the first half of 2022, the investment income of Xinri Hengli’s shareholding financial institutions was 12.2951 million yuan, and the investment income increased by 2.5589 million yuan year-on-year.

According to Xinri Hengli, the company’s long-chain dibasic acid project has been officially put into production. In the first half of the year, the production efficiency of the biological fermentation process of the core production unit has been greatly improved, and the production cost has continued to decline. During the reporting period, it realized an operating income of 354 million yuan and a net profit of 25.8401 million yuan.

Moreover, in the first half of 2022, due to the high prices of raw materials such as washed coal and tar, the sales price of activated carbon decreased slightly, and the gross profit margin decreased, achieving an operating income of 121 million yuan and a net profit of -6.7554 million yuan.

Xinri Hengli completed the technical acceptance of the 50,000-ton/year long-chain dibasic acid project in March this year, reaching the intended state of use.

On August 16, Xinri Hengli announced that it will expand the 50,000-ton/year long-chain dibasic acid and 50,000-ton/year bio-based new material integration project, focusing on microbial long-chain dibasic acid and long carbon chain Technology development, production and management of polyamide (including high temperature resistance). The investment in this project amounted to 2.253 billion yuan.

Xinri Hengli said that after the completion of the project, the company will become one of the world’s important production bases of long-chain dibasic acids and bio-based long-carbon chain polyamides, which can further enhance the company’s comprehensive competitiveness, improve the company’s industrial chain layout, and improve the profitability.

On the same day, Xinri Hengli also announced that the company’s holding subsidiary Zhongke New Materials plans to use self-raised funds to implement a technical transformation project for the existing long-chain dibasic acid production line, with a planned total investment of 50 million yuan.

Xinri Hengli said that after the implementation of this technical transformation project, the company’s long-chain dibasic acid production capacity will increase from 50,000 tons/year to 65,000 tons/year, and its cost control, production capacity, product structure and other aspects will be improved. There is a substantial improvement, which will help the company to reduce costs and increase efficiency, and enhance the market competitiveness of the company’s long-chain dibasic acid products.

Xinri Hengli’s above two investments amounted to 2.3 billion yuan, but as of the end of June 2022, the company’s monetary funds were only 167 million yuan, and short-term loans reached 430 million yuan, with a huge funding gap.

Company may change hands

Just when Xinri Hengli is short of money, the company may change hands.

On the evening of September 9, Xinri Hengli announced that the company’s controlling shareholder, Shanghai Zhongneng, recently signed the “Share Transfer Intention Agreement” with Jintou Xincai, intending to transfer the underlying equity to the latter by agreement. After the transaction is completed, Jintou New Materials will gain control of the listed company.

Jintou Xincai was established on September 2, 2022, only a dozen days ago, but it has a lot to do.

According to the data, Jintou New Materials is a wholly-owned subsidiary of Shouguang Jintou Agricultural Science and Technology Development Group Co., Ltd. (hereinafter referred to as “Jintou Agricultural Science”).

Jintou Agricultural Science is an important state-owned enterprise within the jurisdiction of Shouguang Municipal Finance Bureau. On the basis of the original agricultural industry, the company is committed to technology research and development and technology export, infrastructure construction, foreign investment, and relies on Shouguang’s existing high-end chemical industry. Advantages and gradually deploy the emerging new material industry.

Some analysts said that in recent years, Xinriheng has been seeking to transform into the field of new materials, and has achieved certain results. Jintou New Materials, which has a background of local state-owned assets, is obviously optimistic about the company’s advantages in bio-based materials.

The announcement shows that Xinri Hengli did not disclose the number and price of the transferred shares. The company stated that the specific terms such as consideration, payment method, and delivery arrangements still need further negotiation between the two parties.

At the same time, both parties agreed that the validity period of the above-mentioned “Share Transfer Intention Agreement” is 6 months, and the validity period can be extended after both parties agree.

Xinri Hengli said that after the completion of the transaction, Jintou New Materials will gain control of the company, and it intends to give full play to its own advantages, strengthen the complementarity of resources with the company, and further increase investment in production capacity, promote product upgrades, improve management levels, and build enterprises for the company. Brands create more conveniences.