Nanfang Shares (600250): Quasi Premium 456% Holding Qinhuai Scenery Spanformation Cultural Brigade

Nanfang shares, which rely on investment income and "hard to sustain" performance, intend to spanform the cross border tourism industry.

A few days ago, Nanfang shares disclosed plans for related spanactions. The company intends to purchase the 51% stake in Nanjing Qinhuai scenery and tourism Limited by Share Ltd (hereinafter referred to as "Qinhuai scenery") to Nanjing Confucius Temple Cultural Tourism Group Co., Ltd. (hereinafter referred to as "Confucius Temple Wen brigade") by issuing shares.

In this spanaction, the estimated value of all shareholders' rights and interests of the target company's shareholders is 534 million yuan, which is 456.94% higher than that of the company's net assets at the end of 4 this year. The two sides confirm that the price of the underlying assets is tentatively fixed at 272 million yuan.

Changjiang Daily News reporter noted that in recent years, the main business of Nanfang textile company, which is mainly trading, has gradually shrunk, and its profit margins are small. From 2016 to 2018, the company's investment income totaled 533 million yuan, 1.8 times the net profit of three years. Among them, 2017 and 2018, the joint venture company's poetry group contributed 189 million yuan in investment income and 235 million yuan respectively, which greatly increased the company's profits.

Nanfang shares, as the only listed company under the Nanjing tourism Refco Group Ltd (hereinafter referred to as "Tourism Group"), has been used as a platform and platform for the operation of tourism assets. This spanaction is also the first step that the listed companies take to the scenic water tourism business and even the cultural tourism industry spanformation and upgrading.

Proposed 272 million acquisition of 51% stake in Qinhuai scenery

A few days ago, Nanfang shares disclosed plans for related party spanactions. The listed company intends to buy Confucius temple's 51% stake in the Qinhuai scenery by issuing shares. At the same time, in order to further improve the financial situation of the listed companies after the reorganization, the listed company intends to raise supporting funds to the non-public development shares of the tourism group, and raise the total amount of supporting funds to no more than 80 million yuan. After deducting the agency fees and other related expenses, the listed company intends to supplement the liquidity of the listed companies.

As of the signing date of this plan, the audit and evaluation of the underlying assets of the spanaction has not yet been completed. The benchmark date of assets evaluation of the spanaction is April 30, 2019, and the pre trial value of the underlying company's net assets is 95 million 785 thousand yuan. The estimated value of all the shareholders' equity value of the target company is 534 million yuan, the estimated increment is 438 million yuan, and the estimated increment rate is 456.94%. The two sides tentatively set a 51% stake in Qinhuai scenery, the spanaction price is 272 million yuan.

The spanaction constitutes a related spanaction but does not constitute a major asset reorganization. According to the financial data in 2018, Qinhuai's scenery business income, final assets and net assets are 10.56%, 15.39% and 42.02% of the listed companies respectively.

After this spanaction, the proportion of Listed Companies in Confucius Temple Wen brigade is expected to exceed 5%. The issue of shares to purchase assets constitutes a related spanaction; the subscribers to raise matching funds are the controlling group of the company's tourism group, and the associated funds for the listed companies constitute related spanactions. Therefore, this spanaction constitutes a connected spanaction.

It is understood that the Qinhuai scenery was established in November 2005, in September 2017, it was changed into a joint-stock company as a whole, and in the following year, it was listed on the new third board in March. Qinhuai scenery is located in the core position of Qinhuai's scenery belt. Its main business is to provide tourists with sightseeing tours on the Qinhuai River's waters. Nanjing Confucius temple - Qinhuai scenic area is a famous 5A grade tourist spot in the country. It has strong influence and attraction, and the number of tourists is increasing year by year.

Before the spanaction, Confucius Temple Wen brigade owns 85% stake in Qinhuai scenery, and is a shareholder of Qinhuai scenery holding company. The actual control of Qinhuai scenery is Nanjing Qinhuai District People's government.

Financial data show that in 2017, 2018 and 2019 1-4, the business income of Qinhuai was 90 million yuan, 107 million yuan and 39 million yuan respectively. The net profit attributable to the owners of the parent company was 38 million 905 thousand and 300 yuan, 44 million 235 thousand and 300 yuan and 15 million 484 thousand and 400 yuan respectively, and the assets liabilities ratio was 6.87%, 6.5% and 9.47% respectively.

Behind the acquisition of the higher premium, the counterparty also made a brilliant performance promise. According to the estimated situation, the counterparty undertakes that the net profit of Qinhuai scenery from 2019 to 2021 is no less than 48 million 252 thousand and 200 yuan, 51 million 71 thousand and 300 yuan and 60 million 97 thousand and 300 yuan respectively. Considering the impact of non business factors such as weather on the performance, during the performance commitment period, the net profit of each year is less than 90% of the corresponding annual net profit. The Confucius Temple brigade should compensate for the difference in proportion to the proportion of the shares sold.

First cross-border cultural tourism industry

Changjiang reporter noted that this spanaction is also the first time Nanfang shares crossed the cultural tourism industry.

It is understood that in December 2017, the holding shareholders of Nanjing municipal municipal Party committee and municipal government have set up the Nanjing tourism Refco Group Ltd as the main body, and take the tourism group as the integration platform of Nanjing tourism asset resources, while Nanjian shares as the only company in the tourism group, the tourism group will take Nanjian shares as the platform and operation platform of the operational tourism asset resources, gradually inject the South spinning stock into the full operating tourist assets or operation rights, and support the South textile stock to integrate the related tourism assets with better profitability and higher standard in Nanjing.

Before the spanaction, the main business of Nanfang stock was import and export trade and domestic trade. Influenced by the current market environment and competition situation, the business development of listed companies is facing challenges, reflecting the weak profitability of the main business, and the enterprises facing certain operational risks.

Back track of the past performance of Nanfang Textile Co., Ltd. After two consecutive years of net profit loss in 2014 and 2015, Nanfang shares began to take the initiative to "slim down" in 2016 to seek spanformation.

From 2016 to 2018, Nanfang shares achieved 848 million yuan, 799 million yuan and 1 billion 12 million yuan respectively, an increase of -37.5%, -5.73% and 26.63% compared with the same period last year. Net profit was 17 million yuan, 94 million yuan and 185 million yuan respectively, up 139.44%, 445.08% and 97.89% over the same period. And investment income has basically become the main source of company performance.

The Yangtze daily news reporter noted that from 2016 to 2018, the investment income of Nanfang shares was 102 million yuan, 194 million yuan and 237 million yuan respectively, totaling 533 million yuan, 1.8 times the net profit of three years. Among them, 2017 and 2018, the joint venture company's poetry group contributed 189 million yuan in investment income and 235 million yuan respectively, which greatly increased the company's profits.

In the first quarter of this year, Nanfang shares realized 147 million yuan in business income, a decrease of 27.54% compared to the same period last year, a net profit loss of 46 million 613 thousand and 900 yuan, a decrease of 4.34% compared with the same period last year, a net loss of 58 million 739 thousand and 300 yuan after deducting non profits, a decrease of 32.37% compared with the same period last year, a net cash flow of operating activities of -1170.54 million yuan, and a 67.02% capital assets liability ratio at the end of the year.

The spanaction plan shows that based on the current spanformation needs and the strategic positioning of controlling shareholders, the listed companies have clearly defined the management and development strategy for the spanformation of the cultural tourism industry. In the future, the listed company's parent company will be used as a controlling platform to integrate the high-quality tourism assets resources of Nanjing, and gradually build a business block and system covering scenic tour services, tourism business, hotels and other cultural tourism businesses.

Nanfang shares also said that after the completion of the spanaction, with the operation experience of the scenic sightseeing business in Qinhuai, the listed companies and controlling shareholders will gradually integrate the sightseeing tour business in Nanjing, and build a business tour covering the main scenic spots in Nanjing.