Rongsheng Petrochemical: False Performance?

Statistics show that Rongsheng Petrochemical is mainly engaged in the production and sale of PTA and polyester fiber related products.

Yisheng of the company subsidiary and Zhejiang Yisheng share holding company have the design and production capacity of 1 million 200 thousand tons per year and 1 million 60 thousand tons PTA respectively.

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According to the prospectus (draft report), Rongsheng petrochemical and Hengyi Petrochemical Company, two petrochemical companies in Xiaoshan, Zhejiang, control the two subsidiaries of yishanda and Zhejiang Yisheng respectively, and push the core assets to the capital market respectively.

Zhejiang Yisheng and Yisheng are 600 million yuan net for Rongsheng petrochemical.

Statistics show that Rongsheng Petrochemical purchased raw materials from Yisheng, Zhejiang's own holding company. The amount of Yisheng Petrochemical Company's purchase of Yisheng PTA products in 2009 accounted for 30.42% of Zhejiang Yisheng's operating income in 2009.

Therefore, doing a good job in Zhejiang Yisheng's performance is equivalent to thickening its own investment income and thickening its own performance.

Rongsheng petrochemical and Hengyi petrochemical processing "conjoined subsidiary" listing

Rongsheng Petrochemical Hengyi petrochemical, two petrochemical enterprises in Xiaoshan, Zhejiang, in recent years, the development can be described as "liver to heart".

The core products of both companies are terephthalic acid (hereinafter referred to as PTA). In February this year, Hengyi Petrochemical first moved towards the capital market, and the success of shell *ST Guanghua, while Rongsheng, which has shell resources, chose independent IPO.

Relevant information shows that the core assets of the two companies listed are their joint venture, two subsidiaries, yishanda and Zhejiang Yisheng, each of which has formed a "one control one ginseng" pattern, and the cross shareholding ratio is the same.

Rongsheng Petrochemical said in its prospectus that Hengyi Petrochemical is a non related party of the company and a competitor located in the same area. This joint venture with the competitors and the establishment of a raw material production base is conducive to the strategic cooperation of the leading enterprises in the same industry.

In the first half of 2010, 2009, 2008 and 2007, Rongsheng Petrochemical realized net profit of 575 million, 782 million, 91 million 150 thousand and 271 million respectively.

Its core earning assets are Zhejiang Yisheng and Dalian Yisheng two companies, and Rongsheng share 30% and 70% respectively.

Statistics show that Dalian Yisheng owns 80% of Yanda Shanda, while Yisheng is the core asset of Rongsheng Petrochemical Company, which is in the production and sale of purified terephthalic acid, import and export of goods and import and export of technology.

Statistics show that Zhejiang Yisheng was established in 2003 and Dalian Yisheng was established in 2005. The former has 1 million 60 thousand tons of PTA design capacity, the latter is an investment company, and its holding 80% of Yanda is 1 million 200 thousand tons of PTA design capacity.

In 2009, the two subsidiaries provided 87.89% net profit for two listed companies.

Among them, the Rongsheng Petrochemical Company provided 600 million yuan net profit, accounting for 76.62% of its current net profit, and 627 million yuan for Hengyi Petrochemical Company, accounting for 102.28% of its current net profit.

This shows that yishanda and Zhejiang Yisheng two "conjoined" subsidiaries play a decisive role in the performance of two listed companies, Rongsheng petrochemical and Hengyi petrochemical.

Related pactions accounted for a large proportion of suspected self production and self marketing performance.

As Zhejiang Yisheng and Yisheng petrochemical of Dalian contributed to the main profits of Rongsheng petrochemical, the performance of Rongsheng Petrochemical Company is closely related to Yisheng Zhejiang and Yisheng of Dalian.

The related paction data in the prospectus (Declaration) shows that the amount of PTA purchased from Rongsheng Petrochemical to Yisheng Zhejiang accounted for 99.50%, 100%, 99.03%, 97.97% of the total PTA purchase amount (excluding the subsidiary company's grand purchase) in the first half of 2007 to the first half of 2010, respectively.

Among them, the amount of PTA purchased from Yisheng in Zhejiang in 2009 was 2 billion 209 million 834 thousand and 700 yuan, while the income of Zhejiang Yisheng in the same period was 7 billion 263 million 347 thousand and 400 yuan.

From this calculation, the amount of PTA sold to Rongsheng petrochemical company accounted for 30.42% of Zhejiang Yisheng's operating income.

Zhejiang Yisheng is a subsidiary of Rongsheng Petrochemical holding company 30%. Therefore, purchasing raw materials from Yisheng, Zhejiang, which owns its own stock, has made Zhejiang Yisheng's performance equal to thickening its own investment income and thickening its own performance.

According to the prospectus of the first five customers of the company's product sales according to the prospectus (Declaration), the top five sales customers in 2008 were Hangzhou Xiangsheng textile, Hangzhou Ai Meisheng trade, Zhejiang Jinyang textile, Zhejiang Zheng Kai Group and Zhejiang Daheng textile.

Among them, Hangzhou Ai Meisheng trade and Zhejiang Kai Kai Group are also the top five sales customers of the company in 2007. However, by 2010, these old customers had disappeared from the previous five sales customers list, replaced by Jiangsu San Fang Lane Group, Shanghai Hengyi polyester fiber, Tong Kun group Zhejiang Hengtong chemical fiber, Jiangsu Huaxi Village, Jiangyin Huahong chemical fiber company five.

The prospectus (Declaration) does not disclose the relationship between Rongsheng petrochemical and these customers, but according to related reports of "financial week", business and industry data show that the legal representative of Shanghai Hengyi polyester fiber is Qiu Jianlin, the actual controller of Hengyi petrochemical company.

Hengyi polyester fiber company was founded in December 21, 2007, located in Shanghai chemical industry zone Fengxian District, 333 North Road.

Although Rongsheng Petrochemical said that it is not associated with Hengyi petrochemical, because Hengyi petrochemical and Rongsheng Petrochemical are the joint venture relations of competitors, Rongsheng Petrochemical will sell its products to Hengyi Petrochemical subsidiary, which is unavoidable to invest a kind of self produced and sold suspect.

An insider from the guhao lawyer group office told the Zhejiang business network reporter that although Hengyi petrochemical and Rongsheng Petrochemical had joint ventures with competitors, the two companies were not under the unified controller. According to the information provided at present, Hengyi Petrochemical Company Shanghai Hengyi polyester fiber has no direct relationship with Rongsheng petrochemical. Therefore, it is difficult for Rongsheng Petrochemical to sell products to Shanghai Hengyi polyester fiber as related pactions.

But what puzzles the investment is that the Hengyi petrochemical company controlled by Qiu Jianlin is similar to Rongsheng petrochemical products. Why does Hengyi polyester fiber company not buy its own Hengyi petrochemical products, but instead of buying Rongsheng Petrochemical?