"Yunnan'S Largest Pig Enterprise" Shennong Shares Rushed To The IPO Family Holding 97% Chairman Was Exposed To Bribery.

When the price of pork is at a high level, "the biggest pig enterprise in Yunnan" once again rings the door of A share IPO.

Yunnan Shennong agricultural industry group Limited by Share Ltd (hereinafter referred to as Shennong shares) issued a prospectus (Draft) in advance on the official website of the SFC in April 10th. It intends to raise 1 billion 906 million yuan to 1 feed processing projects, 3 high-quality piglets breeding base construction projects, 5 high-quality pig fattening base construction projects and 1 pig slaughtering projects.

Prior to November 2017, Shennong shares went to the trial conference, but eventually IPO crashed.

It is worth noting that on the eve of the pre disclosure of prospectus, a referee document exposed the past 30 thousand years ago that He Zuxun, chairman of the board, had bribed 30 thousand yuan.

When the harvest comes to IPO, will Shennong share this wish?

When the price of pork is at a high level, "Yunnan's largest pig enterprise" again rings the door of IPO A shares. Visual China

Two sprint IPO on the occasion of harvest

Pigs are in good harvest.

The first quarter results announcement of "pig raising large family" Wen's shares revealed that the first quarter profit was expected to be 1 billion 892 million -18.97 billion yuan, an increase of 510.90%-511.98% compared to the same period last year, and a loss of 460 million yuan in the same period last year. "510.90%-511.98%" Among them, the average price of the pig increased nearly 2 times from the same period last year, from about 12.39 yuan per kilogram in the first quarter of 2019 to about 36.62 yuan / kg, an increase of more than 190% over the same period last year.

Influenced by factors such as African swine fever and epidemic situation, the price of pork is still at a high level, and Shennong's two degree IPO tour is also at that time.

Shennong is the largest pig breeding enterprise in Yunnan province. It was founded in 1999 by the current chairman, Mr. He Zuxun.

According to the prospectus, Shennong was founded in 1999 as the main business of feed processing. In order to strengthen the competitiveness of the company, the company established a strategy of focusing on the whole industry chain of pig industry. In 2002, it began to enter pig breeding industry, and began to enter pig slaughtering industry in 2005.

According to the official website, Shennong shares "to help farmers raise good pigs and let consumers eat good meat" as their business purpose, and focus on creating pig industry chain. After more than 20 years of pioneering and innovation, Shennong has grown into a national leading enterprise of agricultural industrialization, which integrates feed production and marketing, breeding pig breeding, commodity pig breeding, pig slaughtering, and processing and sales of pork products. It is one of the first enterprises in China to realize the whole pig industry chain from farm to table.

In November 7, 2017, Shennong shares came to the trial conference, but it was not passed.

At that time, the Commission issued four types of questions, mainly dealing with financial authenticity and the ability of enterprises to deal with extreme situations.

For example, cash transactions. The Commission issued a report that the proportion of cash sales in Shennong shares accounted for operating income increased year by year, accounting for 25.43% of sales in 2016, and 1-6 in 2017. There were more tax exemption links in the issuer's trading process. At the same time, issuers accounted for nearly 99% of the distribution revenue. Customers were more dispersed and changed more. Most of them were individual businesses. The ERP system was not perfect, and the sponsors did not get the data of the dealers' purchase and sale.

In this regard, the SFC requires Shennong shares to explain the truthfulness and necessity of cash transactions and the reasons for the increase year by year, the cash flow process and related internal control measures, and the relevant measures to reduce cash transactions in the future. The issuer's actual controller and its related parties are between the issuer Dong Jiangao and the other enterprises or other stakeholders, major customers and suppliers. Whether there is capital flow, whether there is a case of capital extracorporeal circulation and third direction issuers to transport interests; the authenticity of distribution mode terminal sales.

In twenty-first Century, the economic report reporters searched the latest prospectus and found that Shennong shares had rectify the problem after the first IPO crashed, and the proportion of cash settlement declined significantly.

The latest prospectus shows that in 2017-2019 years, the amount of sales realized by cash settlement was 219 million 787 thousand and 200 yuan, 80 million 997 thousand and 400 yuan and 60 million 442 thousand and 400 yuan respectively, accounting for 21.06%, 7.42% and 3.49% of the company's operating income respectively.

Since the end of 2017, the company has begun to standardize receivables and settlement by upgrading POS machines and promoting WeChat's collection, so as to reduce the proportion of cash receipts. In 2018 and 2019, the cash receipts and the proportion of business receipts decreased significantly. With the further popularization of convenient payment represented by WeChat and Alipay, it is estimated that the proportion of cash receipts will be further reduced in the future.

Shennong shares suffered problems in March 2016. Yue pig farm, Puer pig farm and Xuanwei pig farm had piglets epidemic diarrhea in March 2016, resulting in 19298 piglets, which accounted for 14.54% of Shennong's share of pig production in 2016 and 10.84% of pig production in 2016.

At the time of the first IPO, the Commission was also concerned about the epidemic and pig mortality, and asked Shennong shares to explain the impact of the epidemic on the production and operation of issuers.

Luckily, Shennong shares had been robbed of the "African swine fever" epidemic since August 2018. "The company has carried out effective prevention and control of African swine plague based on the advanced biosafety management system and integrated industrial chain advantages, and there has been no case of non swine plague in its farms," he said.

In September 2019, the Guangdong Provincial Department of agriculture and rural areas and the Yunnan provincial agriculture and rural department jointly issued the circular on the "pig to butt" transportation of Yunnan pig, and Shennong shares and Wen's shares became the only two pig breeding enterprises in Yunnan province and Guangdong province.

Thanks to the high price of pigs and the successful escape of the African swine plague, Shennong shares grew substantially in 2019.

Prospectus shows that in 2017 -2019, Shennong shares respectively achieved operating income of 1 billion 44 million yuan, 1 billion 92 million yuan and 1 billion 733 million yuan, up 2.91%, 4.62% and 58.75% compared to the same period last year, and net profit of 157 million yuan, 71 million yuan, 469 million yuan, an increase of -6.79%, -55.05% and 563.22% over the same period last year.

From the perspective of the main business income structure in 2019, the income of Shennong's feed processing business, pig breeding business and slaughtering processing business was relatively balanced, which were 796 million yuan, 938 million yuan and 711 million yuan respectively. However, Shennong's 2019 pig breeding business income increased significantly compared to the previous two years, the first two years were 291 million yuan, 322 million yuan, which also stems from the 2019 high pork prices led to pig farming business gross profit margin rose sharply. Shennong share is two degrees IPO at that time.

Ho family holdings 97%

From the perspective of ownership structure, Shennong shares before the listing are a distinct "family business".

The prospectus shows that Chairman He Zuxun directly owns 55.74% of Shennong's shares and is the controlling shareholder of the issuer. He Zuxun, He Qiaoguan, He Yuebin and He Baojian are brothers and sisters of the compatriots. They share 85.76% of Shennong's shares. He Zuxun and He Qiao Guan invest 87% of the investment share in the right way, and control the investment in the right way. 97% of the shares. During the He Zuxun reporting period and at present, both the chairman and general manager of the issuer have a significant impact on the company's business decisions.

However, on the occasion of the two degree impact on IPO, an old affair about chairman He Zuxun's bribery was exposed.

The SFC's official website showed that Shennong share prospectus was submitted in April 3rd, and in April 1st, the Chinese judgment paper net disclosed "Shi Zengrong's bribery and bribing first instance criminal judgment" revealed that He Zuxun had bribed 30 thousand yuan.

The verdict shows that Shi Zengrong was sentenced to 6 years, 3 months, and sentenced to imprisonment for bribery and bribery by former Party committee member and deputy director of Yunnan Rural Credit Cooperatives Union. The chairman of dozens of local enterprises in Yunnan personally bribed Shi Zengrong. During the period from 2007 to 2009, Shi Zengrong helped the Limited by Share Ltd of Shennong agricultural industry group, Yunnan, to receive loans from many other companies. He received many times that the company's chairman, Mr. Ho, paid a total of 30 thousand yuan in cash in the name of the festival fee. At that time, Shen Nong's chairman was He Zuxun.

In twenty-first Century, the economic news reporters found that the Shennong shares were not disclosed for the purpose of consulting the latest pre disclosure prospectus.

The 389th provision of the criminal law of the People's Republic of China stipulates that in order to gain illegitimate interests, the act of giving property to the state personnel constitutes a crime of offering bribes. According to the relevant judicial interpretation, in order to gain illegitimate interests and bribe the state workers, the amount above thirty thousand yuan should be investigated for criminal responsibility for bribery.

"This bribery item has already passed the limitation of action, will not affect Dong Jiangao's qualification, but what effect will it have on Shennong's IPO? We need to see how the CSRC pays attention to it." A lawyer engaged in capital market business analyzed the twenty-first Century economic report reporter. (Editor: rono)

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