In The Supply And Marketing System, The First Case Of Huatong Medicine "Big Reorganization" Encountered "Small Challenges".

Perhaps few people expected that a year ago, 002758.SZ, which was still pushing the "cross border development strategy of Chinese herbal medicine", would transform itself into a "urban and rural integration business platform" in a year.

The small and medium-sized board listed companies, which are rarely seen by institutional investors, have gained widespread attention in the market after launching the restructuring of Zhejiang Agricultural shares.

The reason is that the transaction is generally regarded as an internal "friendship" between the supply and marketing cooperative system, and is also gradually securing the assets of Zhejiang's supply and marketing cooperatives.

"The total number of Listed Companies in the national supply and marketing cooperatives system is more representative than that of 603970.SH," 002556.SZ ", which is controlled by Anhui's supply and marketing cooperatives, and 603029.SH, which is controlled by Shandong's supply and marketing cooperatives. If we say that the national supply and marketing system's backdoor system is listed and controlled, we are the first one.

In October 10th, the twenty-first Century economic report took part in the media briefing of Huatong Pharmaceutical (002758.SZ) major asset restructuring. Wang Luping, chairman of Zhejiang agricultural group, seemed to show the confidence and ambition of the target side.

This restructuring will bring some changes to Huatong medicine, and it will obviously be a long way for Zhejiang Agricultural shares.

Internal friendship of supply and marketing cooperatives

As a listed company Huatong medicine and Zhejiang Agricultural shares are both supply and marketing cooperatives, as a reorganization of assets within the supply and marketing system, the transaction is highly anticipated by the competent authorities.

According to the September 17th evening's reorganization draft, Huatong pharmaceutical intends to issue shares to buy Zhejiang Agricultural holding company, Tai'an Tai, Xinghe group, Xinghe venture capital and Wang Lu equal 16 natural persons held by Zhejiang Agricultural Group Limited by Share Ltd (hereinafter referred to as "Zhejiang agricultural share") 100% stake, the price is 2 billion 667 million yuan.

The transaction is expected to constitute a backdoor listing.

In the afternoon, the restructuring meeting will be held. Wang Luping, chairman of Zhejiang agricultural group, said: "this transaction is the continuation and deepening of the market integration reform in Zhejiang's supply and marketing cooperative system. It is conducive to relying on the platform of listed companies to create a leading enterprise in the national supply and marketing cooperative system.

In addition, participants also revealed that "this restructuring is the decision-making and arrangement of Zhejiang supply and marketing cooperatives".

Huatong medicine, a listed company, was founded in August 1999, formerly known as Shaoxing Huatong Pharmaceutical Co., Ltd., and is a subsidiary enterprise of Zhejiang Keqiao Shaoxing District Supply and marketing cooperative. It is mainly engaged in pharmaceutical wholesale, retail chain, pharmaceutical production, drug exhibition and third party logistics. The target market is mainly in Shaoxing and surrounding areas.

In May 27, 2015, Huatong medicine was listed on the SME Board of Shenzhen Stock Exchange.

Zhejiang Agricultural shares, which are intended to be injected, can be traced back to the agricultural production information company of Zhejiang Province, which was founded in 1952, and the largest shareholder, Zhejiang Agricultural holdings, is the platform of the Zhejiang Federation of supply and marketing cooperatives.

The core business of znong shares is circulation of agricultural materials and circulation service of automobile trade.

Among them, in the aspect of agricultural circulation service, znong's main chemical fertilizer and pesticide have established distribution networks including 9 regional distribution centers, 39 county-level distribution centers and nearly 2000 grass-roots agricultural chain outlets in Zhejiang Province, and regional companies in Beijing, Shanghai, Jiangsu, Anhui, Sichuan, Hainan, Shandong, Shaanxi, Hunan, Hunan, Hunan, and so on.

In terms of vehicle circulation services, its business includes vehicle sales, maintenance and other integrated services.

Lin Changbin, general manager of Zhejiang agricultural group, introduced the company's auto sales in 1994, and set up a department in 1994. In 2000, the Department was restructured to set up auto sales group. It is one of the earliest and most exemplary Car dealership companies in Zhejiang province and even in the whole country.

The draft shows that Zhejiang Agricultural shares have established brand 4S stores in Hangzhou, Ningbo, Shaoxing, Jinhua, Jiaxing, Taizhou, Lishui and Jiangsu provinces in Jiangsu, Suzhou and other places in Zhejiang Province, and have obtained regional distribution rights of BMW, Audi, MINI, Cadillac, modern, general Buick, Qingling and other automobile brands, and built 29 standardized 4S shops (2 are under construction).

Zhejiang Agricultural shares have long been in charge of Huatong medicine.

In September 1st, Zhejiang Agricultural holding company and the controlling shareholder of Huatong Group, a listed company, signed a share transfer agreement. The 57% stake in Huatong Group will be transferred to znong holdings by 719 million yuan agreement. As a result, Zhejiang Agricultural Holdings Limited indirectly controls the 26.23% stake in Huatong medicine through Huatong Group, and Zhejiang supply and marketing agency has become a new controller of the listed company.

If the backdoor listing is added, Zhejiang Agricultural holding company and its associated Xingxing group and Xinghe venture capital will jointly control 44.97% of the listed companies.

Perhaps it is precisely because this reorganization involves a lot, it also leads to an "uncontrollable" episode.

Small deals stir big strategy

Some trading parties and their spouses and children buying and selling stocks seem to be a minor episode, which has cast a shadow over this asset restructuring.

From the time line, in April 8th this year, Huatong medicine announced that it was planning to acquire 100% stake in Zhejiang Agricultural shares through issuing shares to buy assets.

Prior to April 4th, Huatong signed a "intent agreement" on equity transfer with Zhejiang Agricultural holdings and znong shares.

By April 19th, Huatong medicine disclosed the plan for issuing shares to buy assets and related party transactions, and disclosed the draft transaction at the end of September 17th.

The draft transaction showed that during the 6 months' self check period (from October 8, 2018 to September 16, 2019), the spouse Qiu Huiliang and Qiu Mengyuan of the other side of the transaction, Zhao Jianping, Shi Zufa and their spouses Shi Qiong, director Zhang Ruhe, supervisor Zhang Ruhe Feng and their children Shi Yu Le were in possession of Huatong medical shares.

Twenty-first Century economic news reporter found that the above natural person purchase time basically concentrated in February 2019, early March to buy, and Huatong medicine disclosure planning and reorganization time is very close.

At present, Qiu Huiliang has 54 thousand and 300 remaining shares, Qiu Mengyuan remaining 59 thousand and 500 shares, horses remaining 20 thousand shares, Shi Jianfeng remaining 1600 shares, Shi Zhu law and his wife Shi Qiong remaining 0 shares, Zhang Ru and 0 remaining shares, Shi Yu Le 0 shares.

From the trend, Huatong medicine rose from the end of February to the middle of April, and the stock price rose to a limit in April 22nd. It reached a two day limit in September 17th and September 18th.

In fact, this kind of insider trading is not just the natural person.

According to public information, as an independent financial adviser, Haitong Securities wholly owned subsidiary of Shanghai Haitong Securities Asset Management Co., Ltd., "Haitong half year rise", "Haitong long surplus 3", "Haitong sea blue treasure silver", "Haitong sea blue consumption selection" and other fund products, there are frequent buying and selling Huatong medical stocks.

After the relevant data were found and found, several natural persons who participated in the stock exchange said: "during the period of self-examination, the proceeds from Huatong medical shares will be all owned by Huatong medicine." Haitong Securities also explained that the above fund products mainly used quantitative hedging strategies and quantitative models for stock trading.

Huatong pharmaceutical secretaries Ni hung hang replied to the twenty-first Century economic news reporter, "there are individual trading parties and their relatives and executives who buy and sell shares in the company during their self-examination. Before verification, they did not know that the company had a major asset reorganization, and there was no correlation between their stock trading activities and the company's major asset restructuring."

In twenty-first Century, the business reporter reported to the public offering fund in 2019 and the 2018 public fund annual report. The two time nodes hold only a few active investment funds such as the pioneer of avant-garde and the core of Finance and communication. This also makes the Huatong medicine suddenly caught by Haitong Securities and some associated natural persons, and it is thought-provoking.

Whether it involves insider trading is subject to regulatory verification. Whether the present situation can make this reorganization picture come to a successful conclusion remains to be seen. " A large investment bank in Beijing said in an interview with our reporter.

The original assets are not set aside.

It is worth mentioning that the reorganization of Huatong medicine's original assets and business is not out.

This also means that after many rounds of competition, the "asset securitization advantage" of the listed companies' original industries will not be "abandoned".

According to the twenty-first Century economic report reporter, this is not the same as the choice of internal asset restructuring in many previous regions. Many places are willing to build a new platform for listed companies through asset allocation.

The most difficult problem is how to integrate the original pharmaceutical business of Huatong medicine and the agricultural and automobile circulation business of znong shares. What is the strategic positioning of the listed company after reorganization?

"After the completion of this transaction, the listed company will become the main service provider of Zhejiang province's supply and marketing cooperatives, which covers agricultural products and automobiles, and also serves as an integrated service platform for the integration of urban and rural commerce and medicine." In October 10th, Qian Mushui, chairman and general manager of Huatong medicine, said at the restructuring meeting.

Wang Luping, chairman of Zhejiang agricultural group, further explained that after the reorganization, the existing businesses of the listed companies and the related businesses of znong share will explore the combination of the circulation commodity varieties, the combination of the circulation channel network and the mining and sharing of the customer data, strengthen the headquarters construction of the listed companies, and at the same time build the business management and control system with division and cooperation based on the main body of the operation of the agricultural, automobile and pharmaceutical circulation service.

The draft transaction shows that the core members of Zhejiang Agricultural shares have entered the board of directors of listed companies.

According to the "share transfer agreement", the nominated and recommended personnel of Zhejiang Agricultural holding company will occupy the majority of seats of the board of directors of the listed company. The general manager, deputy general manager, chief financial officer and Dong secret are all approved by the board of directors after the recommendation of Zhejiang Agricultural holding company. At the board meeting held in September 24, 2019, Wang Luping was nominated by Huatong Group, Bao Zhonghai, Lin Changbin, Qian Mu Shui, Liu Wenqi and Jin Ding as the fourth independent directors of the board of directors.

For an enterprise, the integration of assets that are not related to the same industry or not is obviously not easy.

Some respondents also worry that the failure of assets will lead to too much burden.

In twenty-first Century, the economic report reporters examined publicly available data. From 2016 to 2018, Huatong medicine achieved 1 billion 258 million yuan, 1 billion 369 million yuan and 1 billion 523 million yuan respectively, and the net profit attributable to the owners of the parent company was 40 million 155 thousand and 200 yuan, 42 million 63 thousand and 800 yuan and 34 million 563 thousand and 300 yuan respectively.

Zhejiang Agricultural shares are much brightier than Huatong medicine.

In 2016, 2017, 2018 and the first quarter of 2019, znong shares achieved 14 billion 596 million yuan, 18 billion 740 million yuan, 22 billion 714 million yuan and 5 billion 468 million yuan respectively, and the net profits attributable to the owners of the parent company were 218 million yuan, 230 million yuan, 255 million yuan and 47 million 531 thousand and 200 yuan respectively.

However, financial data also showed that the amount of non recurring gains and losses in Zhejiang Agricultural shares was relatively large. In 2016, 2017, 2018 and 2019 1-3, the non recurring gains and losses after deducting minority shareholders' profit and loss were 41 million 609 thousand yuan, 36 million 627 thousand and 200 yuan, 55 million 748 thousand and 600 yuan and 36 million 989 thousand yuan respectively.

Wang Luping said, "after the acquisition and control of the listed companies, the Zhejiang supply and marketing cooperatives will take the listed companies as the platform to further integrate the advantageous resources. This major asset reorganization is one of the important steps of the integration plan, and the follow-up plan is based on the announcement."