Nanfang Shares (600250):3 Planning Major Events Have Failed Transformation Can Be Seen?

On the evening of July 4th, 600250.SH announced that it had received the inquiry letter of the Shanghai Stock Exchange regarding its merger and acquisition matters, mainly concerning the valuation changes of M & A targets.

For Nanfang shares, after planning many important events all the time, the acquisition of tourism assets seems to be more reliable. Its controlling shareholders have been positioned as a platform for the integration of tourism resources in Nanjing.

For the question of whether the original main business will be set up after the transformation, in July 5th, the staff of the Ministry of finance of Nanfang Securities replied to the associated press, "we have received the enquiry letter yesterday, please wait for the reply to the inquiry letter."

Enquiries about the acquisition of Qinhuai scenery

According to the trading plan, Nanfang shares intends to buy shares of Nanjing Confucius Temple Cultural Tourism Group Limited (hereinafter referred to as Confucius Temple Wen brigade) to buy 51% stake in Nanjing Qinhuai scenery and tourism Limited by Share Ltd (hereinafter referred to as Qinhuai scenery, 872618.OC), and raise the supporting assets to the controlling shareholder Nanjing tourism Refco Group Ltd (hereinafter referred to as tourism group) non-public offering shares. Gold does not exceed 80 million yuan.

Statistics show that the Qinhuai scenery was established in November 2005, and its business scope is water tour, pre packaged food retail, souvenir sales, ticketing agency. It has exclusive right to operate the waterway cruise tour in the inland waterway of the Qinhuai River, which is about 10 Li, while the Qinhuai River is the core part of the 5A grade scenic spot Nanjing the Qinhuai River Qinhuai scenic spot.

Qinhuai scenery is the main force of Confucius temple's cultural tourism.

Financial data show that in 2016 -2018, the operating income of Qinhuai scenery was 60 million 885 thousand and 500 yuan, 91 million 162 thousand and 800 yuan and 107 million yuan respectively, with net profit of 26 million 459 thousand yuan, 38 million 905 thousand and 300 yuan and 44 million 235 thousand and 300 yuan respectively. In the same period, the operating income of Confucius Temple Wen brigade was 151 million yuan, 234 million yuan and 261 million yuan respectively, with net profit of 32 million 40 thousand and 800 yuan, 30 million 105 thousand and 200 yuan and 14 million 258 thousand and 200 yuan respectively.

It is reported that the transaction price is tentatively set at 272 million yuan. As at the date of assets valuation base date, in April 30, 2019, the estimated value of all the equity value of Qinhuai scenic shareholders was 533 million yuan.

Associated Press reporter noted that the stock market of Qinhuai has already been transferred two times: in April 2017, the Confucius Temple Cultural brigade was granted 25% of the Qinhuai scenery, the cost method was used as an assessment method, and the assessed value was 62 million 79 thousand and 600 yuan. In November 2018, Chen Qiyuan passed the stock transfer trading system to grant 1000 shares of Qinhuai scenery.

In response, the Shanghai Stock Exchange asked Nanfang stock to disclose the price of the equity transfer mentioned above and the market value of the corresponding underlying assets. Combined with the valuation methods of the three equity transfer transactions and the operating performance of the target company, the reasons and reasonableness of the difference between the three transactions before and after the transaction were explained.

Will the original business be set up?

According to the transaction plan, the two sides of the transaction will sign the agreement on performance compensation separately. But according to the estimated situation, the net profit of Qinhuai scenery from 2019 to 2021 is not less than 48 million 252 thousand and 200 yuan, 51 million 71 thousand and 300 yuan and 60 million 97 thousand and 300 yuan.

This is undoubtedly "timely rain" for the main Nanbu textile company.

Statistics show that Nanfang stock was established in 1978 and listed on the Shanghai Stock Exchange in 2001. Its main business is import and export trade, and trade revenue accounts for more than 85% of the company's revenue.

Nanfang shares said that due to the current market environment and competition situation, the trading situation of listed companies is rather grim and the profitability is weak. Enterprises are faced with certain operational risks.

The financial union reporter noted that the performance of Nanfang shares went from bad to worse, and its net profit mainly came from net investment income. In 2016 -2018, the investment income of Nanfang stock from joint ventures and joint ventures was 102 million yuan, 201 million yuan and 251 million yuan. Its operating cash flow also maintained a continuous net outflow. In 2017 and 2018, the net cash flow generated by business activities was -1.51 billion yuan and -0.72 billion yuan respectively, and -1170.54 yuan in the first quarter of 2019.

In fact, Nanfang shares have been "self saving" and the restructuring has been ongoing.

Nanfang shares planned a major asset restructuring in 2015, and Nanjing securities (601990.SH) plans to backdoor listing, but eventually the restructuring was aborted in 2016. Nanjing securities also went public through the IPO channel in 2018. August 2016, Nanfang shares suspended major planning matters, which could involve major asset reorganization, but only 10 days later; 2017, Nanfang shares announcement control stock. The East intends to transfer the company's 29.96% stake in the company by way of an open collection of the transferee, which may involve changes in the company's control rights, but the transfer is terminated in January 2018.

Nanfang shares are also constantly disposing of assets, such as its two transfer of 99.69% stake in Jingwei electric company in 2018, but none of them has been recruited to the intention transferee. This year, 40% of its shares were transferred to the construction industry, and the transferee was finally determined.

In July 5th, the staff said, "there is no plan to transfer warp and weft machines for the time being." It also did not disclose whether the future of the main business will be listed in the future.

It is noteworthy that Nanfang shares have been newly positioned today: in December 2017, the Nanjing municipal Party committee and the municipal government took tourism group as an integrated platform for Nanjing's tourism assets, while Nanfang shares were the only listed companies under the tourism group.

Nanfang shares said that the tourism group will take Nanfang shares as the operating platform and operation platform of the operating tourism assets resources. Under the premise of compliance with the regulations, the tourism group will gradually inject all the operating tourism assets resources or operation rights to Nanfang share, while supporting Nanfang shares to integrate the relevant tourism assets with better profitability and high standard in Nanjing.