Xiwang food’s worries: the net profit of the first half of the year declined, and the high proportion pledge of the holding stock dongxiwang group

As the benchmark of “China’s first listed village”, Xiwang Group, which has three listed companies, has been in deep debt crisis since this year. At the same time, the semi annual report of its listed company Xiwang food also exposed many problems. On October 23, the Shenzhen Stock Exchange issued the inquiry letter on the semi annual report of Xiwang Food Co., Ltd., asking for explanations on the company’s double high deposit and loan, the high proportion of pledge by the controlling shareholders and the persons acting in concert, and the accounts receivable, etc. < / P > < p > according to public data, Xiwang food’s main products are Xiwang brand corn germ oil and fresh embryo corn germ oil, and its products involve sunflower seed oil, olive oil, flaxseed oil, peanut oil and other health oils. According to the semi annual report data of 2020, the first half of the year’s revenue decreased by 4.58% to 2.647 billion yuan, and the attributable net profit decreased by 19.75% to 180 million yuan. Among them, vegetable oil products increased by 6.22% to 1.274 billion yuan, while nutritional supplements decreased by 17.06% to 1.132 billion yuan. In the future, Xiwang food plans to invest in the construction of 300000 tons of small package corn germ oil project. On the evening of August 16, Xiwang food announced that in order to better grasp the market opportunities and give full play to the scale advantages and market competition advantages of the company, Xiwang food plans to produce 600000 tons of small package corn germ oil in the existing production line. According to the company, the project will be constructed in two phases. It is expected that the whole project will be completed in 2022. The total investment of this expansion is 1.492 billion yuan, and the source of funds is self raised by the enterprise. < / P > < p > on the reasons for the expansion, Xiwang food explained: as the current production capacity of the company can no longer meet the market demand for the company’s products, the newly built 300000 tons of small package corn germ oil project is the need for the company’s continuous operation, and is also a guarantee for further improving the company’s production quality level, expanding production capacity and enhancing the competitiveness of the company Market share, industry status and competitive advantages are in line with the company’s development strategy of “expanding grain and oil”. Is it necessary to expand production? According to the annual report data, from 2018 to 2019, Xiwang food and vegetable oil industry will produce 232400 tons and 248400 tons, sales volume will be 255200 tons and 255300 tons, and the inventory will be reduced from 22800 tons to 17800 tons. Indeed, as the company says, capacity supply is close to saturation. Zhu danpeng, an analyst in China’s food industry, said: “Xiwang food is a small and medium-sized oil enterprise. Although it is positioned as a medium and high-end oil enterprise, its overall volume is not large. Moreover, with the arrival of YIHAI KERRY in China’s capital market, it will focus on the implementation of the strategy of big kitchen in China, and small and medium-sized oil enterprises will be hit. For Xiwang food, not only the expansion space is not big, the company’s market share will be further squeezed. Therefore, there is a certain risk for Xiwang food to expand production rashly when the utilization rate of the whole production capacity is not particularly full load. ” < / P > < p > it is worth mentioning that the company’s deposit and loan double high even raises doubts. According to the semi annual report, the balance of monetary funds at the end of the reporting period of Xiwang food was 2.110 billion yuan, accounting for 26.45% of the total assets of Xiwang food; the balance of interest bearing liabilities was 2.201 billion yuan (including long-term and short-term loans, bonds payable and non current liabilities due within one year), accounting for 27.59% of the total assets of Xiwang food; in addition, the interest expenditure of Xiwang food during the reporting period was 6, The total financial expenses were 72.6509 million yuan, accounting for 40.36% of the net profit of Xiwang food during the reporting period, and the interest income was 11.3833 million yuan. < p > < p > the Shenzhen stock exchange requires that Xiwang food maintain a large scale of interest bearing negative in the case of high monetary capital balance by combining the differences in financing costs and return on monetary funds in the reporting period, the use plan of monetary funds in the next three years, the obtained bank credit, cash flow generated from operating activities, asset liability ratio and comparison of comparable companies in the same industry The necessity and rationality of debt and bearing higher financial expenses; check and explain whether the monetary fund of Xiwang food has been restricted or potential restricted up to now. If so, please specify the specific conditions of restriction, including but not limited to the limited amount, reasons and background of restriction, restricted use, restricted time, relevant temporary information disclosure (if applicable), etc. In addition, according to the semi annual report, the balance of monetary funds deposited in Xiwang Group Finance Co., Ltd. (hereinafter referred to as “financial company”) at the end of the reporting period was 1.499 billion yuan, accounting for 71.07% of the ending balance of Xiwang food’s monetary capital, including 1.460 billion yuan of fixed deposit and 39.4351 million yuan of current deposit. < p > < p > Shenzhen Stock Exchange also requires to state whether the financial company has carried out loan business for Xiwang food in combination with the relevant agreement signed with the financial company. If so, please explain the amount and balance of the loan during the reporting period; if not, please explain the reason and rationality of Xiwang food only carrying out deposit business with the financial company but not loan business; and specify the majority of monetary assets The reason, necessity and rationality of gold deposit in related financial companies, and whether the deposit interest rate is reasonable. In addition, the security of such deposits is analyzed and explained in combination with the financial status and operating results of the financial company, the capital flow between Xiwang food and the financial company, the relevant internal control and risk prevention system, the implementation situation and the regular risk assessment. In addition, the high proportion of pledge of Xiwang food’s controlling shareholders and their acting in concert has also attracted the attention of the regulatory authorities. According to the semi annual report, Xiwang Group Co., Ltd. and Shandong Yonghua Investment Co., Ltd. pledged 316505300 shares and 244154025 shares of Xiwang food shares held by them respectively, with the pledge rate of 98.74% and 100% respectively. < p > < p > the Shenzhen stock exchange requires to explain the reasons why the controlling shareholders and their persons acting in concert pledge Xiwang food shares in high proportion for financing, the destination and specific purpose of the pledge financing funds; in combination with the performance ability and additional guarantee ability of the controlling shareholders and their acting in concert, as well as the recent stock price trend of the company, it is required to explain whether there is the risk of closing positions, and analyze and explain the impact of such share pledge matters on Xiwang food Food production and management, the stability of control power and other aspects. < / P > < p > it is worth mentioning that since the second half of 2019, the capital chain of Xiwang Group has been tense. By the end of 2019, Xiwang Group had 15.5 billion yuan of assets, 16.69 billion yuan of liabilities, and – 1.15 billion yuan of owner’s equity, with an asset liability ratio of 107%. This shows that Xiwang Group has become insolvent! < / P > < p > on October 24, 2019, the maturity and payment date of the first phase of short-term financing bonds of Xiwang Group in 2018 (hereinafter referred to as “18 Xiwang cp001”), the Shanghai Clearing House announced that as of the end of the day, no cashing funds of the bonds had been received. The issuance scale of “18 Xiwang cp001”, which constituted a material breach of contract, was 1 billion yuan, with a coupon rate of 7.7%. At the end of last year, the information disclosed by the Shanghai clearing house said that as of the interest payment and cashing date (December 30, 2019), the Shanghai clearing house had not received the interest payment cashing funds paid by Xiwang Group Co., Ltd. for the first phase of ultra short term financing bonds (Code: 01190800, referred to as: 19 Xiwang scp001) by the interest payment and redemption date (December 30, 2019). According to the announcement issued by the Shanghai Stock Exchange in February this year, as of February 10, the third phase of ultra short term financing bonds of Xiwang Group in 2019 (Code: 011901154, referred to as: 19 Xiwang scp003) has had a material breach of contract, and the SSE is unable to pay the interest of the bonds. The issuance scale of the bonds is 500 million yuan, and the coupon rate of the bonds is 7.75%. At the first creditors’ meeting of Xiwang Group at the end of March, the settlement agreement of Xiwang Group was approved by a high proportion of creditors who accounted for 86.41% of the total amount of creditor’s rights. So far, the bond default risk of Xiwang Group since the end of October 2019 has been effectively resolved with the efforts of local governments, creditors, enterprises and other parties. < / P > < p > although Xiwang Group’s debt crisis has been effectively resolved, for Xiwang food, the high proportion of pledge of controlling shareholders and their concerted actions is still worthy of vigilance. < / 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. 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