"Jiangxi Pig King" Zhengbang Technology, Nirvana is "reborn".
html On June 12, Zhengbang Technology canceled the delisting risk warning after resumption of trading, and the stock abbreviation was changed from "*st Zhengbang" to "Zhengbang Technology" again.In the past few years, affected by the continued downturn in pork prices, Zhengbang Technology's "life" has been very difficult. Huge liabilities and huge losses once brought it to the edge of bankruptcy.
In 2022, as Zhengbang Technology's asset-liability ratio climbed to 148.31% and its net assets turned negative, the company was "st".
After wearing the hat, Zhengbang Technology became even more difficult. Facing a severe debt crisis, Zhengbang Technology had to carry out debt restructuring and introduced twin groups that were also large pig companies in Jiangxi. After the reorganization of
, Twins Group will obtain control of Zhengbang Technology and place its own pig breeding, feed and other business assets into Zhengbang Technology. For Zhengbang Technology, it is a top priority to be able to overcome its debt burden and get out of trouble.
However, competition in the current pig breeding industry is still fierce. Moreover, pig companies such as Muyuan, Wens, and New Hope have completed expansion against the trend. For Zhengbang Technology, which has just taken off its hat, the future challenges are not small.
Rebirth after "tribulation"
Everything is a cycle.
In 2020, affected by African swine fever, pork prices "skyrocketed" across the board, and the pig farming industry began the strongest pig cycle. At that time, many other industry giants began to cross-border pig farming, in addition to NetEase, Alibaba and JD.com, even Vanke " A "horizontal thrust".
As Zhengbang Technology, the "King of Pigs in Jiangxi", naturally it has not missed the dividends of the industry. According to the financial report, Zhengbang Technology achieved revenue of 49.17 billion and net profit of 5.744 billion in 2020. The growth rates of revenue and net profit reached an astonishing 100.53% and 248.75% respectively. The skyrocketing performance of
has brought about a skyrocketing stock price.
According to statistics, Zhengbang Technology's stock price climbed from the lowest of less than 3 yuan in 2019 to the highest of 25.98 yuan in 2020 in just one year, an increase of more than 850%, and the market value exceeded 240 billion yuan.
But looking back, with the soaring performance and stock price, Zhengbang Technology began to expand its debt, which was also the fundamental reason for its troubles. In order to seize cyclical dividends, Zhengbang Technology joined the expansion army and internally set a "four grabs" strategy - grab sows, grab piglets, grab breeding quotas, and grab talents. To this end, Zhengbang Technology even borrowed huge amounts of debt to pay for the initial employment and land use. , the cost of raising pigs.
According to the financial report, before the strongest pig cycle began in 2017, Zhengbang Technology’s asset-liability ratio was 59.67%; and after Zhengbang Technology’s massive debt expansion in 2021, the asset-liability ratio soared to 92.6%. Against the background of the expansion of pig companies, the entire pig industry is oversupplied. In 2021, pork prices will begin a "diving" downward trend, and the strongest pig cycle will come to an end.
Zhengbang Technology has also suffered a "backlash" as a result. First, it suffered a huge loss in net profit, with losses of 18.82 billion and 13.39 billion in 2021 and 2022 respectively; then the debt ratio surged, and Zhengbang Technology's asset-liability ratio climbed to 148.38% in 2022.
Under the dual pressure of debt and losses, Zhengbang Technology once reached the edge of bankruptcy. In 2022, Zhengbang Technology’s net assets have turned negative. In addition, by the third quarter of 2023, Zhengbang Technology's monetary funds will only be 488.2 million, while Zhengbang Technology's short-term borrowings during the same period were as high as 12.85 billion.
As a last resort, Zhengbang Technology could only introduce twin groups that were also Jiangxi Pig Enterprises in order to achieve debt restructuring.
Fortunately, Zhengbang Technology's reorganization went relatively smoothly.
On December 12, 2023, Zhengbang Technology and Twins Group signed a framework agreement for related transactions. In the next three years, all procurement and sales work of Zhengbang Technology will gradually be handled by Twins Group, and the company will be managed by Twins Group. In addition, within two years after the completion of this reorganization, Twins Group will gradually start the reorganization process of placing its own pig breeding, feed and other business assets into Zhengbang Technology.
From the current point of view, Zhengbang Technology, which was taken over by the Twin Group, can be said to be reborn after the "catastrophe". From the perspective of debt, in the first quarter of this year, Zhengbang Technology’s asset-liability ratio has plummeted to 50.43%.
NoJitailai
Recently, pork prices have begun to recover, and the pig breeding industry has gradually recovered.
According to media sources, the pig breeding industry is currently undergoing a transition from the traditional pig cycle to the new pig cycle. The increase in industry concentration may bring about economies of scale and reduce the irrational "chasing the rise and killing the fall" behavior.
Looking at specific pig prices, as of June 11, the average wholesale price of pork was 24.6 yuan/kg, and the price of pigs has increased by approximately 23% in the past month.
Although the price of pigs has rebounded significantly recently, it is not difficult to find out by comparing the price trends in the past that the price of pigs has only returned to the normal price level, while the pig companies are in the stage of slight profit. Will they be able to return to the normal price level in the future? At the brightest moment, pig prices still need to rise further.
As the trend of pig prices becomes more stable, the better the breeding costs are controlled, the stronger the competitiveness of pig companies will be.
But controlling costs is not a strong point for Zhengbang Technology. According to relevant media calculations, Zhengbang Technology's average breeding cost for the whole year of 2023 will still be more than 20 yuan/kg. Based on this calculation, compared with the industry's "big brother" Muyuan Shares, its average complete cost of pig breeding for the whole year of 2023 is about 15 yuan. /kg. The average complete cost of pig breeding for Wen's shares in 2023 is about 16.5 yuan/kg. Zhengbang Technology does have some shortcomings in cost control.
It is worth noting that the pig breeding cost of Twin Group is relatively low, about 15 yuan to 16 yuan/kg, which is basically at the same level as Muyuan Co., Ltd. After the debt restructuring, there is a high probability that it will be able to reduce the cost of pig breeding of Zhengbang Technology. From this perspective, the competitiveness of Zhengbang Technology will be significantly improved in the future, but whether it can ultimately achieve the expected results remains uncertain. .
Of course, in addition to cost control, the adverse expansion of top pig companies in recent years has also led to further intensification of industry competition. This is another problem that Zhengbang Technology faces. The
financial report shows that in the first quarter of this year, Zhengbang Technology’s revenue was 1.442 billion. In the same period, the revenue of Muyuan Shares, Wen's Shares and New Hope was 26.272 billion, 21.848 billion and 23.908 billion. It can be seen that in terms of scale, the gap between Zhengbang Technology and other companies is quite obvious. At present, the size of Zhengbang Technology is less than one-tenth of Muyuan Shares, Wen's Shares and New Hope. Although Twins Group has placed related businesses in Zhengbang Technology, it is not easy for it to catch up.
Generally speaking, although Zhengbang Technology still faces challenges in the future, it has come out of the trough. In the future, with the increase in pig prices and the support of the Twin Group, Zhengbang Technology will most likely be able to prosper and return to the top.
