Xinyangfeng Fertilizer intends to acquire Jiangsu Greenport

Under the national policy requirements for the reduction of production capacity in the fertilizer industry and the "zero growth in fertilizer use by 2020", the current fertilizer industry is at an industry downturn
.
However, while the traditional fertilizer industry market is shrinking, the modern agricultural market is relatively a blue ocean
.
??? Hubei Xinyangfeng Fertilizer Industry Co.
, Ltd.
(hereinafter referred to as "Xinyangfeng", 000902.
SZ)'s modern agricultural transformation strategy has been implemented again
.
A few days ago, Xinyangfeng specially held a briefing to explain the plan to acquire 51% of Jiangsu Greenport Modern Agricultural Development Co.
, Ltd.
(hereinafter referred to as "Jiangsu Greenport")
.
??? On July 25, Xinyangfeng’s new CEO Huang Bin told the 21st Century Business Herald that the company’s new strategy is to continue to expand and strengthen the main business of chemical compound fertilizer, while taking advantage of the capital market and adopting strategies.
The way of investment and resource integration is to develop modern agricultural industry, and this strategy of Jiangsu Greenport and the company is characterized by business synergy and complementarity
.
However, the current challenges facing the company include the lack of internal management and talents.
At present, the company has established a professional team to solve the above problems
.
??? Entering a new field??? According to the announcement of Xinyangfeng, the company plans to acquire 51% of Jiangsu Lugang's equity for 399 million yuan in cash.
After the above equity transfer is completed, Xinyangfeng will consolidate management of Jiangsu Lugang.

.
It is worth noting that in addition to agreeing on the cash acquisition, the two parties in this transaction also stipulated that Jiangsu Greenport should purchase the shares of Xinyangfeng in the secondary market within 6 months of receiving the second equity transfer payment.
The cumulative purchase amount must be Reached 50% (approximately 200 million yuan) of the 51% equity transfer
.
??? According to the data, Jiangsu Lvgang is a company engaged in the entire industrial chain of modern vegetable production.
It can provide services ranging from park planning, design, construction, to modern agricultural automation, information production, technical support, and park management training.
The whole industry chain service
.
Its core advantage comes from the scientific research investment in the whole process of agricultural product planting.
It promotes the promotion of advanced cultivation technology through scientific research and development, especially the technology of replacing soil with coconut chaff, and combines advanced water and fertilizer integration facilities and big data control system to realize vegetable planting.
Intelligent
.
Huang Bin explained that Jiangsu Lvgang has advantages in the layout of the entire industrial chain in the fields of fruit and vegetable products from breeding to planting, especially in water-soluble fertilizers.
Jiangsu Lvgang has strong technical force and abundant product lines.
In addition, it has advantages in water and fertilizer products.
In one aspect, precise fertilization can also be achieved, and the technology of its water and fertilizer integrated machine is also very mature, and it has the advantage of spreading from greenhouse cultivation to more cash and food crops
.
??? For Xinyangfeng, the company’s new development goal is to expand into the direction of special new fertilizers for fruits and vegetables.
Therefore, the acquisition of Jiangsu Greenport is in line with the company’s development strategy and can also form business with Xinyangfeng.
Synergy and complementarity
.
"At present, there is a huge demand for fertilizers and planting of fruit and vegetable products in the market," Huang said.
After Xinyangfeng acquires Jiangsu Greenport, the latter will receive sufficient financial support
.
After the completion of the equity transfer between the two parties, Xinyangfeng also plans to promote the technology and products of Jiangsu Greenport to the market in a wider range through other large funds such as industrial funds
.
Xinyangfeng also stated in the announcement that after the acquisition of Jiangsu Lugang, the company will combine the existing industrial chain layout, integrate the income from the science and technology park project of Jiangsu Lugang Modern Agricultural Park, and promote vegetable breeding, water and fertilizer integration, and soilless cultivation of coconut chaff.
And balcony vegetable cultivation and other technologies, and carry out the industrialized production and sales of facility vegetables in the form of facility park trusteeship.
On this basis, relying on multiple channels such as smart agriculture (Internet of Things, agricultural e-commerce, agricultural big data, agricultural finance), and finally Realize the new business development model of "Fertilizer Main Business + Smart Agriculture" set up by Xinyangfeng
.
Modern agriculture strategy advancement??? The acquisition of Jiangsu Greenport is regarded as the landing of a specific project of Xinyangfeng to transform modern agriculture
.
As early as 2015, Xinyangfeng has determined the idea of ​​transforming into a modern agricultural comprehensive enterprise with diversified development of "Internet + chemical industry + agriculture + finance"
.
In this regard, Huang Bin explained that Xinyangfeng revolves around the strategic plan of the two industries to advance together.
While maintaining the main business of chemical fertilizers, it extends the industrial chain in the modern agricultural industry, and the extension involves facility agriculture, modern agricultural equipment, Provide high-quality agricultural products breeding and seedling solutions, etc.

.
??? Before the acquisition of Jiangsu Lugang, on March 21 this year, Xinyangfeng has established Hubei Xinyangfeng Modern Agriculture Development Co.
, Ltd.
, Luochuan Xinyangfeng Fruit Industry Development Co.
, Ltd.
, etc.
, and began to deploy in the field of modern agriculture
.
In addition, Xinyangfeng also established a modern agricultural M&A investment company, planning to carry out equity investment in modern agriculture such as smart agriculture, high-end modern agricultural machinery equipment manufacturing and agrochemical services including big data, Internet of Things, e-commerce and finance
.
A research report by Changjiang Securities pointed out that in the future, Xinyangfeng's business structure will be transformed into three major business segments: agrochemicals, modern agricultural technology promotion, and agricultural services, in order to expand new growth space
.
??? The transformation of Xinyangfeng is not an isolated case
.
??? Under the national policy requirements for the reduction of production capacity in the chemical fertilizer industry and the "Zero Growth of Fertilizer Use by 2020", the current chemical fertilizer industry is at an industry downturn
.
"This period is also a good time for companies to expand significantly
.
" A researcher in the chemical fertilizer industry said that before this, Jinzhengda, Stanley, Batian, etc.
, all of which belong to chemical fertilizer companies, have successively started transformations to get rid of the current trapped in chemical fertilizers.
The performance of the main business is not high growth is embarrassing
.
??? While the traditional fertilizer industry market is shrinking, the modern agricultural market is relatively a blue ocean
.
According to a report issued by Guosen Securities, at present, the vegetable planting area in China has reached more than 300 million mu.
Assuming that only 1% of the modern agricultural greenhouses are constructed and transformed, and assuming an investment of 10,000 to 50,000 per acre, the market space is about There are 30 billion to 150 billion
.
The supporting industries derived from modern agriculture, such as new seed research and development, irrigation systems, water and fertilizer systems, and intelligent management systems, will also bring business expansion and new profitable development space to enterprises
.
??? "Unlike foreign countries, China’s current agricultural development is relatively backward, but relatively leading in terms of agricultural materials
.
" Huang Bin also believes that after various agricultural materials enterprises have obtained sufficient development funds, the next step for expansion is Extend downstream
.
At present, China’s agricultural modernization is still in its infancy.
By 2035, there are good development opportunities in the industrialization of this field.

.
??? However, peers such as Stanley and Kingenta have transformed earlier.
Compared with Xinyangfeng, they have greater advantages in resource accumulation, industrial layout, and marketing.
"But each company has a different direction of expansion
.
" A senior executive of an agricultural enterprise said that, for example, Jinzhengda's transformation direction mainly revolves around the fertilizer industry, and its main purpose is still to promote the company's fertilizer industry sales
.
Stanley's transformation direction is geared towards the purchase and storage of bulk agricultural products.
There are too many influencing factors in this area, and it is difficult for a single enterprise to control risks
.
The current direction of Xinyangfeng's transformation is in line with the modern agricultural policy, and its products can also take the lead in agricultural production
.
??? However, in the process of advancing the strategy of Xinyangfeng, it is necessary to quickly supplement the allocation of corporate management and talents
.
"Currently we are facing certain challenges mainly due to the business management and the lack of outstanding talents
.
" Huang Bin believes that after the acquisition of Jiangsu Greenport, the company needs to build a good business model based on the characteristics of Jiangsu Greenport.
In addition, in the current market, There are many business opportunities in modern agriculture, and the company needs to organize these good projects through the internal management mechanism and the allocation of talents
.
At present, the company has established a professional team to solve this difficulty
.