On 12 Oct., 2016, Chongqing Sanxia Paints
Co., Ltd. (Sanxia Paints) resumed its stock trading, quoting USD1.67/share
(RMB11.18/share), and the stock immediately hit limit-up the day, suggesting
industry insiders were optimistic towards the future development of Sanxia
Paints after its acquisition of Ningxia Unisplendour Tianhua Methionine Co.,
Ltd. (Ningxia Unisplendour).
Source: Baidu
In fact, Sanxia Paints began suspending its
trading on 29 March, for the acquisition of 100% of shares in Ningxia
Unisplendour. According to the company’s acquisition plan, the transaction was
priced at USD461.59 million (RMB3.09 billion) primarily, and was expected to be
made through issuing 343,718,200 shares, at USD1.34/share (RMB9.00/share). It
is notable that Sanxia Paints' controlling shareholder Chongqing Chemical &
Pharmaceutical Holding (Group) Company holds a 45.21% stake in Chongqing
Unisplendour Chemical Co., Ltd., parent company of Ningxia Unisplendour. Hence,
this is an affiliated transaction.
The day before its stock resumption, Sanxia
Paints released the reply to the Shenzhen Stock Exchange’s enquiry into details
of its asset restructuring and Ningxia Unisplendour’s business performance.
As the reply disclosed, recent years
witnessed financial growth in Ningxia Unisplendour’s business. The company’s
methionine project Phase I which was put into production in late 2014 was the
largest contributor to its great performance. In the whole of 2015, the company
produced 39,094 tonnes of methionine and sold 36,829 tonnes, respectively up
3,624% and 5,407% YoY. So far, the new plant has produced at full capacity
already: output from Jan. to July 2016 reached 30,190 tonnes, with the sales
volume hitting 25,795 tonnes. Thanks to this, the company recorded a revenue of
USD99.61 million (RMB667.45 million) and a net profit of USD22.85 million
(RMB153.09 million) during the seven months.
Ningxia Unisplendour's
financial performance, 2014-2015 & 2016 (Jan.-July)
Source: Ningxia Unisplendour Tianhua Methionine Co.,
Ltd.
Ningxia Unisplendour's output and sales
volume of methionine, 2014-2015 & 2016 (Jan.-July)
Source: Ningxia Unisplendour Tianhua
Methionine Co., Ltd.
Ningxia Unisplendour has already increased
its efforts in expanding international market. To date, around 30% of its
offerings are available to 60+ countries / regions. In the coming period, it
will further expand the coverage to 100 countries / regions, as it was
disclosed in Sanxia Paints’ reply to the Shenzhen Stock Exchange.
Moreover, Ningxia Unisplendour promised to
realise a net profit with extra ordinary items deducted of ≥USD50.74 million (RMB340.00
million), USD56.71 million (RMB380.00 million) and USD60.89 million (RMB408.00
million) in 2017-2019 respectively. Given Ningxia Unisplendour’s financial
performance in the past few years, the goal is very likely to be achieved in
the future.
Notably, “After the acquisition, we will
develop a ‘paints + feed additives (methionine)’ business pattern,” mentioned
Sanxia Paints in its reply.
This article comes
from Amino Acids China News 1610, CCM
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Tag: Amino Acids