Yanjing Beer Shrinkage

Yanjing Beer announced recently that the application for the public issuance of A-share stocks was approved, but the issuance plan reduced the raised amount twice from the beginning of the announcement. The adjusted total fund-raising amount dropped from 16.2 billion yuan to 16.40 yuan. Billion yuan, shrinking nearly 30%.

In September 2012, Yanjing Beer launched an issuance plan, and plans to issue no more than 520 million shares. The total amount of funds raised does not exceed RMB 2.62 billion (without deducting the issuance cost) and will be used for Sichuan, Xinjiang, and Guangdong. The company increased its capital and set up a joint venture to establish Hebei Yanjing Glass Products Co., Ltd. and acquire equity in related companies.

However, on the 28th of the same month after the issuance of the issuance plan, Yanjing Beer again issued an announcement stating that the amount of the public offering of shares raised was adjusted from 2.62 billion yuan to 2.236 billion yuan. At the same time, the shareholders’ meeting rejected the investment of 229.399 million yuan for the acquisition of Yanjing. The 100% equity of Beer (Qufu Three Holes) Co., Ltd. and the investment of RMB 156,060,000 were used to acquire 100% equity of Beijing Shuangyan Trademark Color Printing Co., Ltd. for two purposes.

It is worth noting that just before the issuance of the issuance program, Yanjing Beer's plan to buy Kingway Brewery failed. The main reason is that the price of Kingway Brewery is too high. In this regard, a brokerage analyst told reporters that the current "big" in the beer industry to eat "big" conditions are still not mature, the industry concentration has yet to be further improved.

Just when the market guessed whether Yanjing Beer's fundraising could achieve a proper return, Yanjing Beer lowered its fund raising quota once again, and adjusted it from not more than 2.236 billion yuan to not more than 1.640 billion yuan (including issuing expenses). At the same time, it rejected two projects of “unilaterally increasing the capital of Yanjing Beer (Zhangzhou) Co., Ltd. with a total of 300 million yuan” and “unilaterally increasing the capital of Yanjing Beer (Hengyang) Co., Ltd. with 296 million yuan.” Business conditions, financial conditions and capital requirements for investment projects.

For the two successive cuts in the amount of fundraising, some analysts believe that this may be taking into account the market's variables, raising less than expected funds, affecting investors' confidence in Yanjing Beer, further affecting the company's stock price.

Taking advantage of frequent financing in the capital market as a beer company with dominant positions in Beijing, Guangxi, and Inner Mongolia, Yanjing Beer has frequently financed the capital market since it was listed in the 1990s. According to media disclosure data, from 1998 to 2010, Yanjing Beer successively carried out five rounds of refinancing through share allotments, convertible bonds, and private placement, and accumulated funds were raised 4.832 billion yuan, ranking among liquor companies. Amount of money and refinancing amount first.

Relevant information shows that in 2008, the CSRC had approved that Yanjing Beer would not issue more than 11 million new shares in non-public offerings. The funds raised would be invested in 13 projects, with an estimated investment of 1,795,440,000 yuan and a new beer production capacity of 9,755,000 liters. According to the issuance plan, the issue price will not be lower than RMB 17.88 per share. The amount of the controlling shareholder Beijing Yanjing Beer Co., Ltd. subscribed shall not be less than 50% of the total number of shares issued this time.

Since then, in October 2010, Yanjing Beer officially announced that its convertible bond application with a total issuance amounted to 1.13 billion yuan was approved by the China Securities Regulatory Commission. The raised funds will be used to increase five new projects in Beijing, Guangdong, and Jiangxi. A total increase of 600,000 kiloliters of production was achieved.

Regarding Yanjing Beer’s frequent financing, some media said that according to the directional financing plan that was thrown out in September 2012, if the financing fund with a total raised capital of RMB 2.62 billion is implemented, the total amount of Yanjing Beer financing will exceed RMB 8 billion. . Compared with its high financing, Yanjing Beer's dividend distribution so far has only 2.073 billion yuan, equivalent to only 38.25% of the company's total financing amount. This is undoubtedly one of the reasons why the public “sees short” the public offering of Yanjing Beer.

Future performance or pressure Under the background of weak consumer demand and facing cost pressures, sales and profits of the beer industry suffered a decline in 2012. According to Yanjing Beer's third quarterly report in 2012, the company achieved total revenue of 11.217 billion yuan in the first three quarters, an increase of 8.13% year-on-year, and a net profit of 806 million yuan attributable to shareholders of listed companies, an increase of 2.83% over the same period of last year. The income is 0.32 yuan. In comparison, Yanjing Beer achieved operating revenue of 10.373 billion yuan in the first three quarters of 2011, an increase of 15.83% year-on-year; net profit attributable to shareholders of listed companies was 784 million yuan, a year-on-year increase of 10.21%; basic earnings per share was 0.6480 yuan. Obviously, Yanjing Beer's operating income and net profit growth have both declined in the first three quarters of 2012.

For the beer industry suffered a decline in performance, the brokerage analysts said there are three reasons, first of all, the economic slowdown in 2012, the slowdown in demand, whether it is beer, or meat, frozen food and other industries are not satisfactory. Secondly, the summer of 2012 was not particularly hot and it was cold summer, which further restricted the growth of beer consumption. In particular, sales growth in the peak season dragged down the annual results. Finally, Australia's barley prices are relatively high, the average price is around 330-350 US dollars / ton, the rising cost of barley also eroded the beer company profit margins.

For the 2013 Yanjing beer and beer industry performance, the analyst said that he is not optimistic. He believes that in the short term Australian wheat prices are close to US$400, and beer companies still face cost pressures in the first half of the year. In addition, the conditions for mergers and acquisitions in the industry are still immature, and the conditions for large-scale improvement of performance are not perfect.