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Zhejiang Wynca Chemical Group Co., Ltd. intended to invest USD2.2 million to acquire shares of Hubei NJF Agricultural Means of Production Co., Ltd. (NJF) from its shareholders. After this transfer, it planned to take 4.50 million shares newly increased in the company at USD0.3/share by contributing USD1.3 million. Then Zhejiang Wynca will in total invest USD3.5 million and hold 12.50 million shares in NJF, making up a 51% stake.
“NJF, involved in the businesses of pesticides, fertilizers, seeds and UAV (= unmanned aerial vehicle), is now shifting from the distribution of agricultural means of production (= AMP) to the agricultural services. This is consistent with our pattern and idea of development;” said Zhejiang Wynca in its announcement, “The share transfer and capital increase are in line with our development strategy. We will build NJF into a company to achieve co-development of AMP, seed and UAV businesses. It will play an active role in our future development of all-round agricultural service business.”
NJF is a top 3 AMP distributor in Hubei Province and is the largest AMP distributor in Xiangyang City. It makes up 15-20% of the shares in Xiangyang market. It is now well recognized locally.
As of 31 December 2017, NJF had total assets of USD6.0 million and net assets of USD3.2 million. Its revenue was USD10.2 million and net profit USD0.1 million.
According to Zhejiang Wynca’s pre-announcement about its 2017 full-year financial figures, its net profit would reach USD81.3-87.4 million, up by 560-610% year on year. Its gross profit margin was up by around 4.3%, thanks to the market recovery (which contributed to the rises in the prices of its key products such as glyphosate series and organosilicone series) and its active optimization of its sales strategy.