Jixiang’s acquisition of Zhongtian Yinchuan failed

In order to increase profits, Jixiang (603399) plans to purchase 100% equity of Zhongtian yinkong Technology Co., Ltd. (hereinafter referred to as “Zhongtian yinkong”). A few months after planning, on October 20, Jixiang company announced that the major asset restructuring was terminated, announcing that the business was dead. This also means that Jixiang shares plans to expand its business system failed. Jixiang shares need to think hard about how to save the company’s performance in the future. < / P > < p > the restructuring draft disclosed by Jixiang shares shows that the company intends to purchase 100% equity of Zhongtian yinkong from 105 counterparties such as Zhongjian Hongshun by issuing shares and paying cash. After friendly negotiation between the trading parties, the transaction price of Zhongtian yinkong 100% equity was determined as 2.4 billion yuan; Jixiang shares also offered Zheng Yonggang, Chen Guobao, Dazi Zhengdao and Ning BOCOG and Ningbo biaoch issued shares to raise supporting funds of no more than 1.07 billion yuan. The raised matching funds are intended to be used for the project construction of the target company, payment of cash consideration for this transaction, supplement of the working capital of the target company and payment of intermediary agency fees. < / P > < p > after the completion of the transaction, Zhongtian yinkong will become a wholly-owned subsidiary of Jixiang. Jixiang shares believes that the company’s main business will extend to the field of national defense industry through this transaction, enrich the industrial layout of listed companies and expand the business system of listed companies by virtue of the extension development to the field of national defense. Unfortunately, the restructuring of Jixiang shares ended with termination. Jixiang said: “due to the long-term restructuring, certain changes in the external market environment, and the impact of the new crown epidemic, the macroeconomic situation and market environment pressure have increased, both sides of the transaction have been unable to reach an agreement on the adjustment of the restructuring plan. The company believes that there is great uncertainty and risk in continuing to promote this transaction at this stage, so it decided to terminate the restructuring 。” < p > < p > behind the acquisition of assets, Jixiang shares is in a performance dilemma. Jixiang Co., Ltd. is mainly engaged in molybdenum product business and film and television business. The company’s film and television business mainly includes the R & D, investment, production, marketing and distribution of films and TV dramas. Looking at the performance of Jixiang shares in recent years, it is not satisfactory. In 2018, the attributable net profit of Jixiang shares decreased by 13.2% year-on-year. By 2019, the net profit loss of Jixiang shares is about 226 million yuan, a decrease of 218.33% year on year. This also reflects the loss of Jixiang’s M & A. As for whether there will be any new merger and acquisition plan in the future after the termination of the restructuring of Jixiang shares, Wang Weichao, the securities affairs representative of Jixiang shares, said in an interview with the reporter of Beijing commercial news, “for the time being, we promise not to plan major asset restructuring within one month. It will take a month to see the follow-up plan. Wang Weichao also disclosed that “in the afternoon of October 21, there will be an interactive reception meeting between investors on the Shanghai Stock Exchange (SSE) online to exchange views on the termination of the restructuring and the company’s future plans.”. < / P > < p > Disclaimer: the purpose of this article reprinted by china.com finance and economics is to convey more information and does not represent the views and positions of the website. The content of this paper is for reference only and does not constitute investment advice. Investors operate accordingly and bear their own risks. < p > < p > Chinanet is a national key news website under the leadership of the Information Office of the State Council and managed by China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website releases information 24 hours a day, which is an important window for China to carry out international communication and information exchange.