Due to the judicial freezing of part of the company’s controlling shareholder’s equity, Boya Biopharmaceutical Group Co., Ltd. (hereinafter referred to as Boya Biotechnology, 300294.SZ) changed ownership to China Resources Pharmaceutical Holdings Co., Ltd. (hereinafter referred to as China Resources Pharmaceutical, 3320.HK) and pressed the pause button.
On February 10, 2021, the “Announcement on the Progress of the Judicial Freezing of Part of the Controlling Shareholders’ Shares” disclosed by Boya Biology shows that Shenzhen Gaotejia Investment Group Co., Ltd. (hereinafter referred to as Gaotejia Group), the controlling shareholder of the company, currently holds the company There are 126 million shares, accounting for 29.67% of the company’s total share capital. Among them, 104 million shares have been judicially frozen, and 79,601,800 shares have been pledged, accounting for 82.2% and 62.99% of the total company shares held by them, respectively. The reason for the judicial freezing was that Gaotejia Group did not order Ping An Securities Co., Ltd. as agreed. Ping An Securities (hereinafter referred to as Ping An Securities) pays the property share transfer payment, and Ping An Securities applies to the court for property preservation before arbitration.
In the same period, China Resources Pharmaceutical also issued an announcement stating that 104 million shares of the target company Boya Biotechnology held by Gaotejia Group were judicially frozen because the seller Gaotejia Group failed to pay Ping An Securities the transfer of property shares as agreed. At present, except for Boya Bio’s approval of the issuance of shares at the general meeting of shareholders and the Anti-Monopoly Bureau of the State Administration for Market Regulation passed the review of concentration of undertakings, all other prerequisite acquisition conditions have not yet been met.
Therefore, the transfer of equity from the controlling shareholder of Boya Biotechnology to China Resources Pharmaceutical is suspended.
From the perspective of the company’s business situation, as one of the four major blood products giants in China, with Hualan Biology, Shanghai RAAS (002252.SZ) and Tiantan Biology (600161.SH), Boya Biology has shown a slight decline in performance in recent years. Its return on equity has been continuously declining, and its net sales margin in the past five years has also continued to fall.
It is worth mentioning that although it is well-known as a blood product company, Boya’s blood products accounted for the proportion of revenue, which has fallen from 50.12% in 2017 to 33.96% in 2019. The net profit attributable to the mother has also declined for the first time since its current listing in 2019. .
In 2020, under the influence of the new crown pneumonia epidemic, Boya Bio will realize operating income of 1.989 billion yuan in the first three quarters, down 5.39% year-on-year; realize net profit of 224 million yuan, down 29.69% year-on-year; return on net assets is only 5.50%.
As of February 26, 2021, Boya Biotechnology closed at 26.55 yuan per share, down 54.34% from the 52-week high, and the market value was only 11.5 billion yuan.
Boya Bio’s stock price trend in the past year (yuan/share)
Data source: Wind
Shares are frozen, the Shenzhen Stock Exchange pays attention
On September 30, 2020, China Resources Pharmaceuticals and Boya Biotech simultaneously disclosed an announcement that China Resources Pharmaceuticals intends to acquire 69332 million shares of Boya Biotech held by Gaotejia Group in cash, accounting for 16% of Boya Bio’s total equity; at the same time; , Intends to subscribe in cash for the 86.665 million shares issued by Boya Bio; the transaction is expected to be approximately 5.358 billion yuan.
At the same time, as the controlling shareholder, Gaotejia Group intends to entrust the voting rights of all the remaining shares of Boya Biotechnology to China Resources Pharmaceutical Holdings. After the completion of the above transaction, China Resources Pharmaceuticals will hold 156 million shares of Boya Bio, accounting for 30% of Boya Bio’s total share capital; in total, it owns 213 million shares corresponding to Boya Bio’s voting rights, accounting for 40.97% of Boya Bio’s total share capital; accordingly, The controlling shareholder of Boya Bio will be changed to China Resources Pharmaceuticals.
While everything is proceeding in an orderly manner, on January 18, 2021, the Shenzhen Stock Exchange issued a review inquiry letter to Boya Bio-Bio’s issuance of stocks to specific targets. As some of the matters in the inquiry letter need to be further implemented, and the “Inquiry Letter” replied There was uncertainty about the time, and Boya Bio-Bio then applied to the Shenzhen Stock Exchange to suspend the review of the issuance of A shares to specific targets.
Afterwards, Boya Biology announced that 104 million shares of the company held by Gaotejia Group were judicially frozen by the People’s Court of Linchuan District, Fuzhou City, Jiangxi Province, and 7960.18 million shares have been pledged, accounting for 82.2% and 62.99 of the total number of Boya Biology shares held by it. %, accounting for 24.39% and 18.69% of Boya Bio’s total share capital.
At the same time, China Resources Pharmaceutical issued an announcement stating that the acquisition transaction must be completed after certain prerequisites are fulfilled, and so far, many prerequisites have not been fulfilled.
Immediately, the Shenzhen Stock Exchange issued a letter of concern, requesting Boya Bio to specify the details of the pledge and freezing of the company’s shares held by the Gaotejia Group as of the date of the letter of concern (including the number and proportion of each pledged or frozen share, and the pledge Starting and ending dates, pledgee, purpose of the pledge, etc.), conditions for removing the pledge and freezing of shares, and related progress, combined with the financial status and solvency of the Gaotejia Group, explain whether there are any substantial obstacles to the removal of the pledge and freezing of shares.
At the same time, the Shenzhen Stock Exchange is more concerned about the previous market. Boya Biopharmaceuticals paid a balance of 723 million yuan for plasma purchases to Boya Biopharmaceuticals (Guangdong) Co., Ltd. (hereinafter referred to as Boya Guangdong) controlled by Gaotejia Group, and promised to return it in Gaotejia Group. , But in the case of failure to return, whether there are obstacles to the implementation of the priority to use the transfer proceeds from the transfer of the target shares of China Resources Pharmaceuticals to solve the above problems.
Ping An Securities v. Gao Tejia
“Investment Times” researcher noted that the shares of Gaotejia Group have been judicially frozen, mainly because Ping An Securities applied to the court for property preservation before arbitration on the grounds that it failed to pay the transfer price as agreed and to avoid the property loss of the applicant. Gaotejia Group has bank deposits of RMB 1.889 billion or seized or seized property with corresponding value.
It is reported that on May 18, 2017, Ping An Securities, as the manager of the “Ping An Xintou No. 2 Targeted Asset Management Plan”, signed a cooperation agreement with the Gaotejia Group and other entities, stipulating that Ping An Securities as a priority limited partner to Shenzhen Gao Tejia Qianhai Youxiang Investment Partnership (referred to as Qianhai Youxiang) contributed a total of 1.575 billion yuan. The first phase of 560 million yuan was paid on April 10, 2017, and the second phase of 1.015 billion yuan was invested. It was paid on May 23, 2017.
At the same time, the two parties also agreed that Ping An Securities will transfer its property share in Qianhai Youxiang to Gaotejia Group at a cost of 1.575 billion yuan plus an annualized capital occupation cost of 6.2%. According to the agreement, Gaotejia Group shall pay Ping An Securities the first phase of the transfer of property shares (that is, Ping An Securities’ first phase of investment of 560 million yuan in Qianhai Youxiang and the corresponding interest), The second phase of property share transfer payment (that is, the second phase of Ping An Securities’ investment in Qianhai Youxiang of 1.015 billion yuan and the corresponding interest) shall be paid before May 23, 2021.
According to the latest progress announcement, at present, Gaotejia Group has paid a total of 119 million yuan in property share transfer payments to Ping An Securities, and is actively seeking debt solutions for the freezing of shares through shareholder loans and other methods.
At the same time, the announcement also stated that in accordance with the “Cooperation Agreement between China Resources Pharmaceutical Holdings Co., Ltd. and Shenzhen Gaotejia Investment Group Co., Ltd.” (hereinafter referred to as “Cooperation Agreement”), the “Ping An Xintou No. 2 Targeted Asset Management Plan” is Through the asset management plan established by Ping An Securities, China Resources Pharmaceutical Co., Ltd. promised to facilitate Gao Tejia to resolve the debt problem with China CITIC Bank Nanchang Branch.
However, the agreement has not yet come into effect because the requirements for entry into force have not been fulfilled. In view of this, the company and its main shareholders intend to actively communicate with China Resources Pharmaceuticals and China CITIC Bank Nanchang Branch to promote the simultaneous resolution of debt and transaction issues.
It is worth mentioning that during the period from March 8, 2012 to September 24, 2020, Gaotejia Group, Shenzhen Ronghua Investment Co., Ltd. (hereinafter referred to as Ronghua Investment), Shanghai Gaotejia Yikang Investment Partnership The proportion of companies (hereinafter referred to as Yikang Investment) that hold Boya Bio’s shares in total dropped from 43.88% to 29.75%, and the cumulative change ratio was 14.13%.
However, these companies failed to stop buying and selling Boya Biotech shares and fulfill their reporting and announcement obligations in a timely manner every time the total shareholding ratio decreased by 5%. They did not disclose relevant information until October 12, 2020.
In this regard, the Shenzhen Stock Exchange believes that the above behavior violates the relevant provisions of the “GEM Stock Listing Rules (Revised in November 2018)” and the “GEM Stock Listing Rules (Revised in 2020)”. Punishment for criticism of Gaotejia Group, Ronghua Investment and Yikang Investment Bulletin shall be given and recorded in the integrity file of the listed company.
ROE drops consecutively, and executives reduce their holdings
Boya Bio is a comprehensive medical industry group focusing on blood products, integrating biochemical drugs, chemical drugs, and raw materials. Its products include blood products, diabetes and anti-infective chemicals, biochemical drugs, etc.
According to Wind data, from 2017 to 2019, Boya Bio will achieve operating income of 1.461 billion yuan, 2.451 billion yuan and 2.909 billion yuan, respectively, representing a year-on-year increase of 54.29%, 67.84% and 18.66%; net profits attributable to parent companies were respectively 357 million yuan. , 469 million yuan and 426 million yuan, a year-on-year increase of 31.08%, 31.57% and -9.17%.
During the same period, the company’s net cash flow from operating activities were -24 million yuan, 35 million yuan and -115 million yuan, and the return on equity (ROE) was 14.70%, 12.66% and 10.89%, respectively.
From the above data, Boya Bio’s net operating cash flow is generally lower than its parent’s net profit, and the difference between the two amounts is large, the overall profit quality is weak, and the return on net assets is in a state of declining.
At the same time, the “Investment Times” researcher noted that in the past five years, Boya Bio’s net profit margin has also been declining. According to Wind data, from 2015 to 2019, the company’s net profit margins were 30.75%, 29.32%, 24.99%, 19.79% and 15.20%. In the same period, the corresponding sales expenses were 75 million yuan, 113 million yuan, 378 million yuan, 754 million yuan and 963 million yuan respectively, which have risen sharply year by year.
In the first three quarters of 2020, under the influence of the new crown pneumonia epidemic, Boya Biotechnology achieved operating income of 1.989 billion yuan, a year-on-year decrease of 5.39%; realized a net profit of 224 million yuan, a year-on-year decrease of 29.69%; net sales margin was 11.84%, and net assets The rate of return is 5.50%.
In this regard, Boya Biology once stated in the 2020 mid-year report that due to the increase in raw material costs, production costs, and the decline in sales prices of some products, the overall gross profit margin of the products has declined.
In addition, it is worth noting that since 2020, in addition to the company under the actual controller Cai Dajian, which has successively reduced its shares in Boya Biology, a number of executives have also successively reduced their shares in the company.
According to a researcher from the “Investment Times”, since 2020, Xu Jianxin, director of Boya Biotechnology, has reduced his holdings of 4.2177 million shares through Jiangxi Xinxing Biotechnology Development Co., Ltd., and the amount of reduction is about 135 million yuan; Boya Bio, director and general manager Liang Xiaoming has been in 6 The month reduced holdings of 186,000 shares, with a reduction of approximately 7.158 million yuan; Chairman Liao Xinxi of Boya Bio and his controlled company Nanchang Dazheng Chuyuan Investment Co., Ltd. reduced their holdings by 5,476,300 shares, and the amount of reduction was approximately 251 million yuan.
In addition, Boya Bio’s director Fan Yiqin reduced his holdings of 295,900 shares, with a reduction of approximately 11.488 million; Jiang Guoliang, the company’s supervisor (now resigned), has reduced his holdings of 99,700 shares, with a reduction of approximately RMB 3.2901 million.
Recently, according to the announcement, from November 10, 2020 to May 9, 2021, Ronghua Investment, a subsidiary of Gaotejia Group, still has 2.5283 million shares to be reduced.
It is worth mentioning that Shanghai Gaoyi Asset Management Partnership (Limited Partnership)-Gaoyi Linshan No. 1 Yuanwang Fund, has started to increase its holdings all the way since it entered the list of the ten largest shareholders of Boya Biology in the first quarter of 2020. At the end of the third quarter report, it has become Boya Bio’s third largest shareholder, holding 4.62% of the total share capital, holding 20 million shares, and the fund manager is Feng Liu.