3.4 billion expansion, Shenzhen Stock Exchange asked Pengdu Agriculture and Anim

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According to the 2020 annual report data, Pengdu Agriculture and Animal Husbandry achieved an operating income of 13.446 billion yuan for the whole year, a year-on-year decrease of 0.31%; the net profit attributable to shareholders of listed companies was 18.4731 million yuan, a year-on-year decrease of 70.21%



"Investment Times" researcher Dong Lin


Pengdu Agriculture and Animal Husbandry Co., Ltd. (hereinafter referred to as Pengdu Agriculture and Animal Husbandry, stock code: 002505), a “bull enterprise” in the A-share market, recently announced the "Signing a Framework Agreement on the Purchase of Imported Cattle" and plans to spend 3.392 billion yuan to purchase 205 thousand. Imported cattle.


According to the announcement, in order to promote the rapid development of the beef cattle industry and expand the source of high-quality beef cattle, the company and its wholly-owned subsidiary Ruili Penghe Agricultural Food Development Co., Ltd. (hereinafter referred to as Ruili Penghe) plan to apply to Beijing Xiongte Animal Husbandry Co., Ltd. (hereinafter referred to as Beijing Xiongte) purchased 205,000 imported beef cattle (the quantity is allowed to fluctuate by 15%). Among them, 200,000 cows can be reproduced, 545 bulls, with a total amount of 3.392 billion yuan, and the agreement is valid until December 2021.


At the same time, the announcement pointed out that the framework agreement is a daily business activity, and the company has fulfilled the corresponding approval procedures in accordance with the internal management system and relevant rules, and there is no need to submit it to the board of directors or the general meeting of shareholders for deliberation.


"Investment Times" researcher noted that since the development of Pengdu Agriculture and Animal Husbandry, it has successively saved the growth slump by raising large amounts of debt and issuing additional shares. The purchase of cattle with huge sums of money also caused widespread concern in the market. The Shenzhen Stock Exchange also issued a letter of concern to Pengdu Agriculture and Animal Husbandry.


was followed by the Shenzhen Stock Exchange


The Shenzhen Stock Exchange's letter of concern has raised questions about Pengdu Agriculture and Animal Husbandry from many aspects. The first is whether Beijing Xiongte has sufficient performance capabilities.


The content of the announcement shows that Beijing Xiongte, the transaction party, is a large-scale livestock enterprise engaged in the import, breeding, breeding, and beef processing and sales of live animals. It has a number of designated quarantine sites for imported cattle, sheep, and pigs approved by the customs. The quantity and quality of breeding cattle are among the best in the industry. The breeding cattle imported by Beijing Xiongte mainly come from Australia, New Zealand, Uruguay, Chile and other places. It has established long-term strategic partnerships with many suppliers around the world, and has sufficient cattle sources and shipping guarantees. Beijing Xiongte has a strong ability to perform contract and has a low risk of contract performance.


But according to the official website of Beijing Xiongte, the company has imported more than 300,000 heads of breeding stocks since its establishment 12 years ago, with an annual import capacity of 100,000 heads. The number of agreements signed with Pengdu Agriculture and Animal Husbandry, which is valid until December 2021, exceeds 200,000. In the remaining six months, whether Beijing Xiongte has sufficient performance capabilities to achieve the planned goals of the two parties, it is necessary to first Hit a question mark.


Secondly, the payment method of this agreement poses a great challenge to Pengdu Agriculture and Animal Husbandry's funding requirements.


According to the announcement, within 10 days of signing the contract, that is, according to the cattle supply plan, Pengdu Agriculture and Animal Husbandry will pay Beijing Xiongte a monthly advance payment of 30% of the corresponding amount according to the number of cattle supplied 4 months before the cattle arrive in Hong Kong; at the same time; , Within 3 days after Beijing Xiongte issued a cattle selection notice to the company in each batch, Pengdu Agriculture and Animal Husbandry shall pay Beijing Xiongte 50% of the amount of the batch (the time for cattle selection is within 3 days after the cattle enter the foreign quarantine); After the cattle arrive at the Chinese port, Pengdu Agriculture and Animal Husbandry has to pay another 10% of the payment to Beijing Xiongte.


In other words, before the actual delivery of the cattle, Pengdu Agriculture and Animal Husbandry had to pay most of the purchase price. Researchers of "Investment Times" consulted its 2021 quarterly report and showed that the company's net cash flow from operating activities was -554 million yuan, and there was a large gap in assets and liabilities. Among them, its monetary funds are 1.317 billion yuan, accounts receivable is 3.358 billion yuan, prepayments are 1.361 billion yuan, accounts payable are 3.963 billion yuan, and contract liabilities are 1.449 billion yuan. So, where does the capital come from for such a large-scale investment?


In this regard, the Shenzhen Stock Exchange required the company to combine the balance of monetary funds and operating cash flow to explain its source of funds for purchasing imported beef cattle and whether it has sufficient capacity to pay; whether the relevant payment arrangements comply with industry practices and whether it is similar to the company’s transactions The arrangement is consistent, whether it will lead to an abnormal situation of payment or a potential security risk of advance payment.


In response to the aforementioned issues, Pengdu Agriculture and Animal Husbandry responded to the exchange's letter of concern, stating that the annual import volume of Beijing Xiongte website is the data before 2018. In 2021, the company has the ability to import more than 250,000 heads. Beijing Xiongte will promptly Update the latest data.


At the same time, Pengdu Agriculture and Animal Husbandry stated that the amount in the "Framework Agreement on Imported Cattle" is the total purchase amount during the cooperation period, and the use of funds is arranged according to the actual order time. Up to now, the listed company has paid 765 million yuan in accordance with the order payment terms through its own funds and bank financing. After the sales payment is returned, subsequent import orders will be paid on a rolling basis. The company will also continue to actively raise funds to ensure sufficient payment capabilities.


Pengdu Agriculture and Animal Husbandry's balance sheet changes in the first quarter of 2021 and their reasons



Data source: company financial report


Performance declines, executives leave frequently


Pengdu Agriculture and Animal Husbandry was established on June 26, 2009. The company's predecessor was Dakang Animal Husbandry, and it landed on the A-share market in 2010. It is a large-scale animal husbandry enterprise engaged in the import, breeding, breeding, and beef processing and sales of live animals (high-quality dairy cows, beef cattle, breeding pigs, breeding sheep, donkeys, horses, etc.).


The 2020 financial report shows that Pengdu Agriculture and Animal Husbandry achieved an operating income of 13.446 billion yuan for the year, a year-on-year decrease of 0.31%; the net profit attributable to shareholders of listed companies was 18.4731 million yuan, a year-on-year decrease of 70.21%.


"Investment Times" researcher found that, compared with the net profit of RMB 15,318,700 in 2014, the company's net profit increased by only about 2% after six years. And, from 2010 to 2020, its net profit has accumulated a loss of 405 million yuan.


It can be seen that the livestock industry has a greater demand for funds. From 2014 to 2020, Pengdu Agriculture and Animal Husbandry conducted two additional issuances, with a total of 6.559 billion yuan in funds raised. At the same time, the debt pressure of Pengdu Agriculture and Animal Husbandry continues to increase, and the debt-to-asset ratio has risen from 30.28% in 2015 to 63.17% in the first quarter of 2021.


On April 29 this year, Pengdu Agriculture and Animal Husbandry applied for a loan of 250 million yuan from Fudian Bank with a loan period of no more than 12 months and a loan interest rate of 6.5%. The major shareholder Shanghai Pengxin intends to provide guarantees with related assets.


In fact, the Shenzhen Stock Exchange also raised questions about the necessity and rationality of this purchase.


Regarding the beef cattle business vigorously promoted this time, Pengdu Agriculture and Animal Husbandry stated that it has completed the basic layout of overseas beef cattle fattening and the trial production of domestic slaughter capacity. In 2021, it will target to slaughter and sell 300,000 beef cattle. And strive to form a beef cattle industry chain with an annual output value of 100 billion yuan in Yunnan in 3 to 5 years.


However, according to the 2020 annual report, Pengdu's agricultural and animal husbandry beef cattle business revenue is 236 million yuan, accounting for only 1.76% of its operating revenue. This seems to be a bit far from the company's "100 billion yuan" goal.


For this reason, the Shenzhen Stock Exchange required the company to explain the necessity and rationality of the purchase in terms of the current beef cattle business scale and operating conditions; at the same time, combining the situation of comparable companies in the same industry, explain the pricing basis and price fairness of the purchase, fairness and fairness. Whether the ratio of cattle meets actual business needs and industry practices, and whether the relevant procurement agreements have the necessary prudence.


In addition, the "Investment Times" researcher noted that Pengdu Agriculture and Animal Husbandry still had many directors and senior executives leaving during the year.


On June 2, the company announced that due to work changes, the company’s chairman Ge Junjie applied for resignation from the positions of director of the seventh board of directors, chairman of the board, chairman of the strategy committee of the board, member of the audit committee of the board of directors, and member of the nomination committee of the board of directors. After Ge Junjie resigned, he no longer holds any position in the company.


In fact, since March this year, Pengdu Agriculture and Animal Husbandry has successively resigned three senior executives at the vice president or director level. Last year, the company's vice president and secretary of the board and newly appointed securities affairs representatives also resigned.

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