Jia Linjie: It is proposed to terminate the acquisition of Deqingyuan Holdings shareholders to increase 100 million to 400 million yuan

On the evening of October 26, Jia Linjie (002486) announced that it intends to terminate the acquisition of Beijing Deqingyuan Agricultural Technology Co., Ltd. At the same time, Jia Linjie said that it received the notice from the controlling shareholder Dongxu Group Co., Ltd. based on the confidence in the company's future development prospects and the recognition of the company's long-term investment value. It is planned to be within 12 months from November 1, 2017. With funds or self-raised funds to increase the company's shares, the cumulative increase in holdings is not less than 100 million yuan, not more than 400 million yuan. The company's stock will resume trading on the 27th.

According to the announcement, Dongxu Group directly holds 8.45 million shares of the company and indirectly holds 163 million shares of the company through Shanghai Guojun Investment Co., Ltd., with a total shareholding ratio of 20.63%. The purpose of this increase is based on confidence in the company's future development prospects and recognition of the company's long-term investment value.

Jialinjie is a research and development, design, production and sales company of high-end outdoor sports functional fabrics in Shanghai. In order to resist the risks of rising raw materials and labor costs and increasing market competition, the company needs to seek other industry development opportunities and create new profit growth points.

In April this year, Jia Linjie announced the announcement of major asset progress, announcing that it is planning a major asset restructuring with Deqingyuan, and said that the two parties have reached a preliminary intention; in August, Jia Linjie released the "Major Asset Restructuring Plan", which is intended to be in cash. In the end of September, Jia Linjie officially resumed trading and issued the “Significant Asset Purchase Report (Draft)”, announcing the agreement to pay in cash and increase the capital to acquire the total amount of 1.235 billion yuan. 50.47% of Qingyuan's equity will be incorporated into the planned eco-health industry chain, and will serve as an industrial platform for further upstream and downstream expansion.

Specifically, the company intends to acquire the 8.91% (42.28 million shares) of Deqingyuan held by CAPITAL TODAY INVESTMENT II (HK) LIMITED in cash, and the share transfer consideration is 134 million yuan; the company intends to fund the currency. The way to increase the capital and share of 3.4 million shares to Deqingyuan, the increase of funds is 1.1 billion yuan.

After the resumption of trading, Jia Linjie's share price closed at 8.54 yuan / share on September 27, and has continued to show a downward trend since then. On October 25, the company's share price was closed at 6.82 yuan / share.

Industry observers believe that although Deqingyuan has achieved a certain market position with multiple rounds of financing and heavy investment in the heavy asset model, the Chinese egg market, which is still in its infancy, still faces chaos, disorder and low return on investment. The reality of the dilemma. From the product attributes, eggs are special fast-moving products, which have both food safety risks and large risks of control. According to the data, about 60% of the eggs in China are currently distributed through retail farming and wholesale markets. Most of the eggs have no brand. Subject to the consumption habits of the domestic population, the growth of the brand egg market still has a long way to go.

Therefore, the above-mentioned industry observers analyzed that the termination of the reorganization of Jialinjie and Deqingyuan may be a good thing for both parties. On the one hand, Jialinjie can re-enter high-growth assets, and the imagination space is still huge in the future; while the latter continues to seek strategic investors to help them integrate industry resources and seek survival and development.