Market value 22.7 billion annual loss of nearly 20 billion!Debt pressure share price downward Zhengbang technology when bottom?
Zhengbang Technology is expected to lose 18.2 billion yuan to 19.7 billion yuan in 2021, down 416.84% to 442.96% year on year.For the cause of the loss, the company said that it is mainly due to the decline in pig prices and the rapid expansion of production capacity. “Investment Times” researcher Dong Lin was affected by the phenomenon of “pig cycle”. In 2021, the decline in pork prices led to the collective performance of the whole industry suffered Waterloo.Among the listed pig companies that released earnings forecasts, The biggest loss was made by Zhengbang Technology Co.,Ltd.Zhengbang Technology 2021 performance forecast shows that the company is expected to return to the mother of the annual net profit loss of 18.2 billion yuan to 19.7 billion yuan, compared with the profit of 5.744 billion yuan in 2020 decreased 416.84% to 442.96%;Non-deduction net profit is expected to be a loss of 17.3 billion yuan to 18.8 billion yuan, down 388.57% to 413.59% from 5.995 billion yuan in 2020.According to the previously disclosed financial report, as of the first three quarters of 2021, Zhengbang Technology’s net profit to the mother of -7.627 billion yuan, 240.39% year-on-year reduction, that is to say, in the fourth quarter of 2021, the company’s net profit loss to the mother of more than 10 billion yuan.Researchers from Investment Times searched the company’s past financial statements and found that since its listing in 2007, Zhengbang technology has achieved a total profit of nearly 10 billion yuan, and the loss in the fourth quarter of last year alone is more than the sum of the company’s profits in 14 years.Reflected in the secondary market, zhengbang Technology fell by the daily limit for two consecutive days on February 7 and 8, the first two trading days of the year of the Tiger.Facing the market concern caused by the huge annual performance loss and the low stock price, Zhengbang Science and Technology urgently announced on February 9 that zhengbang Group, the controlling shareholder of the company, signed a cooperation agreement of no less than 10 billion yuan with Jiangxi Railway and Aviation Investment.At present, jiangxi Railway aviation Investment subsidiary has collected about 80 million yuan of feed for Zhengbang Science and Technology, and will continue to carry out specific business on the basis of the amount agreed in the overall cooperation agreement.But the transfusions of controlling shareholders have not given investors much confidence.On Feb. 9, the stock didn’t fall by its daily limit again, but it hit its lowest intraday level in more than two years.At the close, the company’s shares remained in negative territory.”Investment Times” researchers noted that under the influence of the soaring pork price, zhengbang Technology’s share price hit a record high of 25.98 yuan/share on August 7, 2020, and by the close of February 15, 2022, the company’s share price was 7.21 yuan/share, a decline of more than 70%, with a market value of 22.7 billion yuan.At the same time, the current state of the capital chain of Zhengbang Technology is not optimistic.Financial data show that by the end of the third quarter of 2021, the company’s debt ratio has reached more than 75%, book cash of 6.07 billion, limited funds of about 4 billion.Up to now, its controlling shareholder and its acting party have pledged 1.285 billion shares, accounting for 80.75% of the total shares held.In addition to the performance of huge losses, for pig enterprises, the company’s operations need to consume a lot of cash flow.As one of the leading enterprises in the pig industry, what measures will Zhengbang Take to revive its performance and reduce the risk of debt in the context of the downward cycle of the industry?In view of the above situation, “Investment Times” researcher email communication outline asked the company’s relevant departments, as of publishing has not received the company’s reply.Zhengbang Technology was founded in 1996, is a feed, breeding, pesticides, veterinary drugs in one of the comprehensive enterprise.In terms of business, the company has a single industry, with more than 95% of its revenue mainly coming from pig farming, so it is more affected by the pig cycle than other diversified businesses.The fourth round of pig cycle started in June 2018, when it was at the bottom of the previous round. Environmental protection policies were tightened and African Swine fever (ASF) broke out in a large scale. As a result, the number of viable sows in China accelerated, and the pig price rose all the way to 40 yuan/kg in October 2019, becoming the strongest pig cycle in history.Benefiting from the pig cycle, Zhengbang Technology became the fastest growing pig company, growing from 5.78 million head in 2019 to 14.93 million head in 2021, expanding by more than 9 million head in three years.At that time, the company’s actual controller Zhengbang Group chairman Lin Yinsun once shouted out the goal of 100 million pigs layout.But starting in early 2021, prices have plummeted.In the first three quarters of 2021, the market sales volume of Zhengbang Technology has exceeded 11 million pigs, which has exceeded the market volume of the whole year last year, but the selling price has dropped from 30 yuan/kg to about 11 yuan/kg.On the evening of January 28, 2022, Zhengbang Technology announced that it is expected to lose 18.2 billion yuan to 19.7 billion yuan in 2021, a year-on-year decline of 416.84% to 442.96%. In 2020, the company made a profit of 5.744 billion yuan.As for the cause of the loss, Zhengbang technology said that it was mainly due to the fall in pig prices and the rapid expansion of production capacity.The performance forecast shows that in 2021, the company’s average sales price of a single pig is 16.6 yuan/kg, down 16.1 yuan/kg year-on-year, and the sales revenue of a single pig drops 1653 yuan.During the same period, the company sold 14.926,700 hogs, up 56.14% year on year. The profit of 8.873 billion yuan was affected by the decrease of sales price and the increase of sales.At the same time, due to the continuous downturn in pig prices, the net realizable value is lower than the cost, the company’s total inventory depreciation of about 1.2 billion yuan.In addition, Zhengbang Technology expanded rapidly by outsourcing high-priced sows, and then eliminated about 2.2 million breeding sows and gilts in total, resulting in a loss of 6.2 billion yuan to 6.8 billion yuan.Analysts say that pork prices are likely to fall further in 2022 due to high cold meat stocks and rising pig production.According to the latest pig sales briefing data released by the company, In January 2022, Zhengbang Technology sold 958,700 pigs (including 69,800 piglets and 888,900 commercial pigs), with a sequential increase of 19.07% and a year-on-year increase of 21.86%;Sales revenue was 1.219 billion yuan, down 5.57% quarter-on-quarter and 60.92% year-on-year.The average selling price of commercial pigs (after deducting piglets) was 12.92 yuan/kg, 14.89% lower than last month;The average weight was 105.13kg/head, 3.83% lower than last month.The financial results of the third quarter of 2021 show that as of the end of September 2021, Zhengbang’s interest-bearing liabilities are as high as 22.319 billion yuan, which is 168.18% of its attributable net assets;The asset-liability ratio is as high as 75.23%, nearly 14 percentage points higher than the average asset-liability ratio of Wen’s, Mukihara and New Hope of 61.42% in the same period.During the same period, Zhengbang Science and Technology only has monetary capital of 6.07 billion yuan, short-term borrowings of 13.993 billion yuan, notes payable and accounts payable of 5.06 billion yuan, non-current liabilities due within one year of 1.597 billion yuan, monetary capital can not cover short-term debts.At the same time, the company’s liquidity ratio of 0.81, quick ratio of 0.32, debt paying ability indicators are weak.It should also be noted that at the end of the third quarter of 2021, the net cash flow generated by Zhengbang technology’s operating activities, investment activities and financing activities was -1.784 billion yuan, -5.599 billion yuan and -1.883 billion yuan respectively.The company’s cash and cash equivalents balance was $2.445 billion, down $9.265 billion from the beginning.In addition to huge debt pressure, Zhengbang technology has external guarantee of invisible debt.By the end of 2021, the accumulative balance of guaranteed loans actually incurred by the company and its subsidiaries was 10.422 billion yuan, accounting for 44.82% of the net assets in 2020.In addition, Wind data show that from March 2019 to now, zhengbang Technology’s controlling shareholders have appeared a number of pledges.In order to solve their own debt matters, the controlling shareholder Zhengbang Group and its unanimous action of Jiangxi Yonglian Agricultural Holding Co., LTD. (hereinafter referred to as Jiangxi Yonglian) in the frequent pledge of three years accumulated to the company “blood transfusion” 8.493 billion yuan.On February 14, Zhengbang Group, the controlling shareholder of Zhengbang Technology, and jiangxi Yonglian, the acting partner of zhengbang, completed the supplementary pledge of 28,736,663 shares held in total.Up to now, Zhengbang Group and its people acting in concert have pledged about 1,285.48 million shares of the company, accounting for 80.75% of the total shares held and 40.86% of the company’s total share capital.It is worth mentioning that on December 20, 2021, Zhengbang Science and Technology announced that in order to concentrate resources, improve professional management level and focus on pig breeding, it transferred 100% equity of Jiangxi Zhengbang Food Co., Ltd. to zhengbang Group, the controlling shareholder, with a total price of 233 million yuan.After the completion of the equity transfer, Zhengbang Technology will no longer hold the equity of Zhengbang Food.