CCM: Sanxia Paints acquires Ningxia Unisplendour to march into methionine business 11-01-2016

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


About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.


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Tag: Amino Acids


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