Friday, June 10 2022

Ashare price dds in paragraph 3; company statement in paragraph 9 and details

BEIJING, February 28 (Reuters)Jiangxi Zhengbang Technology, struggling Chinese pig farmer 002157.SZ agreed to sell eight of its animal feed units to Beijing Dabeinong Technology 002385.SZ between 2 billion yuan ($317.13 million) and 2.5 billion yuan.

Under the deal, announced Monday evening, Dabeinong will take full ownership of three of the companies and a 51% stake in five others.

Shares of Zhengbang jumped 3% while Dabeinong rose 1.8% on Tuesday following news of the deal.

Zhengbang, China’s second-largest pork producer, is cash-strapped after a major expansion in 2020 left it vulnerable to the dramatic fall in pork prices last year.

In January, the company said it expected to report annual losses of nearly 20 billion yuan for 2021, the worst performance among all its listed peers.

Last month, he announced a deal with a local government-backed infrastructure group to fund some of his feed purchases.

The planned sale includes full ownership of Deyang Zhengbang, Danling Zhengbang and Chongqing Guanglian, as well as majority stakes in five Zhengbang subsidiaries based in the southwestern provinces of Yunnan and Guizhou.

The eight companies made combined net profits of more than 200 million yuan in the first three quarters of 2021, according to Reuters calculations based on Zhengbang’s stock market statement.

The deal was reached to enhance the company’s competitiveness in the animal feed industry and improve the layout of its animal feed business in the southwest region, Dabeinong said in a filing on Monday. .

Dabeinong is one of China’s leading animal feed producers and also raises pigs and sells seed.

The company told investors this month that it wants to own 10% of the pet food market in the short term and 20% in the medium and long term.

It predicts a loss of between 230 million yuan and 450 million yuan for 2021.

($1 = 6.3066 Chinese Yuan)

(Reporting by Dominique Patton, editing by Louise Heavens and Sherry Jacob-Phillips)

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