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Form 6-K CHINA NEW BORUN Corp For: Nov 23

November 23, 2016 8:11 AM EST

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 6-K

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

 

For the month of November 2016

 

Commission File Number: 001-34754

 

China New Borun Corporation

(Translation of Registrant’s name into English)

 

Bohai Industrial Park

Yangkou Town

Shouguang, Shandong 262715

People’s Republic of China

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

 

x Form 20-F   o Form 40-F

 

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

 

 

 

 

  

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

  China New Borun Corporation
 

 

 

  By: /s/  Terence Chen
  Name:   Terence Chen
  Title: Chief Financial Officer

 

 

 

Date: November 23, 2016

 

 

 

 

 

EXHIBIT INDEX

 

 

Exhibit 99.1

  Press release dated November 22, 2016

 

 

 

 

Exhibit 99.1

 

 

  Confidential November 22, 2016

 

 

China New Borun Announces Third Quarter 2016 Unaudited Financial Results

 

Beijing, China, November 22, 2016 – China New Borun Corporation (NYSE: BORN; “Borun” or the “Company”), a leading producer and distributor of corn-based edible alcohol in China, today announced its unaudited financial results for the third quarter ended September 30, 2016.

 

Mr. Jinmiao Wang, Chairman and Chief Executive Officer of Borun, commented on the results, “Driven by solid demand from the baijiu industry, we were able to deliver record sales volume of edible alcohol and exceeded our previous revenue guidance for the third quarter of 2016. However, during the quarter, record-low corn prices caused a sharp over-supply of edible alcohol, which pressured pricing and profitability. As we enter a new harvest season this November, corn prices have stabilized, and we anticipate our profitability will gradually rebound.”

 

“Benefiting from consistently positive quarterly net incomes, our cash flow and balance sheet remain solid, as our cash position increased to almost RMB1 billion at the end of third quarter. This November, we further strengthened our cash position with the issuance of a five-year RMB300 million Corporate Bonds. Reflecting our strong financials, our Corporate Bonds received an investment-grade rating of AA- by one of China’s notable rating agencies, and as a result, this year’s Corporate Bonds fixed-rate of 6.5% is a noticeable improvement from the 2013 Corporate Bonds fixed-rate of 9.3%. With the proceeds from our Corporate Bonds, we now have cash on hand of almost RMB1.3 billion, or nearly USD200 million, and as such, we are confident about our abilities to execute on our objectives for the remainder of 2016 and our strategic initiatives for 2017,” Mr. Wang concluded.

 

Third Quarter 2016 Quick View

 

·Total revenue decreased 8.9% to RMB602.2 million ($90.2 million1) from RMB661.4 million in the third quarter of 2015.

 

·Gross profit decreased 50.9% to RMB32.6 million ($4.9 million) from RMB66.3 million in the third quarter of 2015.

 

·Net income decreased 63.2% to RMB8.0 million ($1.2 million) from RMB21.8 million in the third quarter of 2015.

 

·Basic and diluted earnings per American Depositary Share ("ADS") were RMB0.31 ($0.05) for the quarter ended September 30, 2016. Each ADS represents one of the Company's ordinary shares.

 

Third Quarter 2016 Financial Performance

 

For the third quarter of 2016, revenue decreased by 8.9% year-over-year to RMB602.2 million ($90.2 million) from RMB661.4 million in the same period of 2015. The decrease in revenue was mainly due to a sharp decrease in ASP for edible alcohol and its by-products, and a decline in sales from crude corn oil at the Company’s Daqing facility.

 

 

1 This press release contains translations of certain Renminbi amounts into US dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to US dollars for the quarter ended September 30, 2016 were made at a rate of RMB6.6778 to USD1.00, the rate published by the People?s Bank of China on September 30, 2016. China New Borun Corporation makes no representation that the Renminbi or US dollar amounts referred to in this press release could have been or could be converted into US dollars or Renminbi, at any particular rate or at all. 

 

 ConfidentialNovember 22, 2016

 

Revenue breakdown by product lines is as follows:

 

·Revenue from edible alcohol decreased by 5.9% to RMB403.9 million ($60.5 million) in the third quarter of 2016, compared to RMB429.3 million in the third quarter of 2015. The sales volume of edible alcohol in the third quarter of 2016 increased by 13.5% year-over-year to 94,347 tons, and the average selling price of edible alcohol decreased by 17.1% year-over-year to RMB4,281 per ton.

 

ŸRevenue from DDGS Feed decreased by 3.3% to RMB135.7 million ($20.3 million) in the third quarter of 2016, compared to RMB140.4 million in the third quarter of 2015. The sales volume of DDGS Feed in the third quarter of 2016 increased by 11.7% year-over-year to 80,750 tons, and the average selling price decreased by 13.4% year-over-year to RMB1,681 per ton.

 

·Revenue from liquid carbon dioxide decreased by 17.1% to RMB6.0 million ($0.9 million) in the third quarter of 2016, compared to RMB7.3 million in the third quarter of 2015. The sales volume of liquid carbon dioxide in the third quarter of 2016 increased by 11.0% year-over-year to 35,233 tons, and the average selling price decreased by 25.3% year-over-year to RMB171 per ton.

 

·Revenue from crude corn oil decreased by 51.4% to RMB19.5 million ($2.9 million) in the third quarter of 2016, compared to RMB40.1 million in the third quarter of 2015. The sharp decrease in revenue was mainly due to the shut down for the crude corn oil facility in Daqing facility during the third quarter. The sales volume of crude corn oil in the third quarter of 2016 decreased by 51.0% year-over-year to 3,083 tons, and the average selling price decreased by 0.9% year-over-year to RMB6,315 per ton.

 

·Revenue from chlorinated polyethylene (“CPE”) decreased by 16.4% to RMB37.2 million ($5.6 million) in the third quarter of 2016, compared to RMB44.4 million in the third quarter of 2015. The sales volume of CPE in the third quarter of 2016 decreased by 12.9% year-over-year to 4,530 tons, while the average selling price decreased by 4.0% year-over-year to RMB8,205 per ton.

 

During the third quarter of 2016, gross profit decreased by 50.9% to RMB32.6 million ($4.9 million) from RMB66.3 million in the same period of 2015. Gross margin for the third quarter of 2016 decreased to 5.4%, from 10.0% in the same period of 2015, which was primarily due to steeper decrease in ASP of edible alcohol and its by-products than the cost of corn.

 

Operating income decreased by 58.4% to RMB21.1 million ($3.2 million) in the third quarter of 2016, from RMB50.7 million in the same period of 2015, primarily due to lower gross profit earned.

 

Selling expenses decreased by RMB0.9 million, or 49.9% to RMB1.0 million ($0.1 million) in the third quarter of 2016, from RMB1.9 million in the same period of 2015.

 

General and administrative expenses decreased by RMB3.1 million, or 23.1% to RMB10.5 million ($1.6 million) in the third quarter of 2016, from RMB13.6 million in the same period of 2015.

 

 ConfidentialNovember 22, 2016

 

Income tax expenses in the third quarter of 2016 were RMB2.7 million ($0.4 million), representing an effective tax rate of 25.0%.

 

Net income decreased by 63.2% to RMB8.0 million ($1.2 million) in the third quarter of 2016, compared to RMB21.8 million in the same quarter of 2015. The decrease in net income was primarily due to the decrease in revenue and lower gross margin during the third quarter.

 

In the third quarter of 2016, basic and diluted earnings per share and per ADS were RMB0.31 ($0.05), and the Company had 25.7 million weighted average basic and diluted shares outstanding.

 

As of September 30, 2016, cash and bank deposits totaled RMB990.7 million ($148.4 million), an increase of RMB495.1 million, compared with RMB495.6 million as of December 31, 2015. Cash flows generated from operating activities for the third quarter of 2016 were RMB382.1 million ($57.2 million), mainly attributable to the cash generated by consumption of corn inventory.

 

Financial Outlook

 

Reflecting a sharp year-over-year decrease in ASP for edible alcohol and its by-products, the Company estimates that its revenue for the fourth quarter of 2016 will be in the range of RMB480 million ($71.9 million) to RMB530 million ($79.4 million), a decrease of approximately 24.2% to a decrease of 31.3% over the same quarter of 2015.

 

This guidance is based on the current market conditions and reflects the Company's current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change.

 

Conference Call

 

Borun's management will hold a corresponding earnings conference call and live webcast at 8:00 a.m. E.T. on Wednesday, November 23, 2016 (9:00 p.m. Beijing time on Wednesday, November 23, 2016) to discuss the results and highlights from the third quarter of 2016 and answer questions from investors. A webcast of the call will be available at http://ir.chinanewborun.com. Listeners may access the call by dialing:

 

United States Toll Free: 1-866-519-4004
US Toll/International: 1-845-675-0437
Hong Kong Toll Free:   800-906-601
Hong Kong Toll: 852-3018-6771
China Toll Free: 800-819-0121
China Toll Free (Mobile): 400-620-8038
Conference ID: 16726921

 

A replay of the webcast will be accessible through December 1, 2016 on http://ir.chinanewborun.com or by dialing:

 

United States toll free: 1-855-452-5696
International:     61-2-8199-0299
Passcode 16726921

 

 

 ConfidentialNovember 22, 2016

 

 

About China New Borun Corporation

 

China New Borun Corporation (NYSE: BORN) is a leading producer and distributor of corn-based edible alcohol sold as an ingredient to producers of baijiu, a popular grain-based alcoholic beverage in China. The Company also produces DDGS Feed, liquid carbon dioxide and crude corn oil as by-products of edible alcohol production, and chlorinated polyethylene (CPE) that is widely used in chemical industries. China New Borun is based in Shouguang, Shandong Province. Additional information about the company can be found at http://www.chinanewborun.com and in documents filed with the U.S. Securities and Exchange Commission, which are available on the SEC's website at http://www.sec.gov.

 

Forward-looking Statements

 

All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.

 

 

Contact Information

 

Asia Bridge Capital Limited

Wendy Sun 

Phone:   +86-10-8556-9033 (China)
+1-888-870-0798  (U.S.)
Email: [email protected]

 

 ConfidentialNovember 22, 2016

 

CHINA NEW BORUN CORPORATION

 

UNAUDITED CONSOLIDATED BALANCE SHEETS

 

   December 31, 2015   September 30, 2016 
   RMB   RMB   US$ 
Assets               
Cash   495,630,607    990,704,716    148,357,950 
Trade accounts receivable, net of allowance for doubtful accounts of nil and nil, respectively   515,520,269    395,943,082    59,292,444 
Held-to-maturity debt securities   107,912,111         
Inventories   438,841,092    354,772,350    53,127,130 
Advance to suppliers   344,998,183    589,893    88,336 
Other receivables   59,032,438    30,543,364    4,573,866 
Prepaid expenses   3,645,396    3,562,569    533,494 
Total current assets   1,965,580,096    1,776,115,974    265,973,220 
Property, plant and equipment, net   988,392,988    897,534,679    134,405,744 
Land use right, net   133,292,782    131,168,350    19,642,450 
Intangible assets, net   1,996,285         
Deferred income tax assets   1,755,197    1,755,197    262,841 
Total assets   3,091,017,348    2,806,574,200    420,284,255 
                
Liabilities and shareholders’ equity               
Trade accounts payable   22,292,132    81,066,402    12,139,687 
Accrued expenses and other payables   80,201,926    33,260,398    4,980,742 
Income taxes payable   26,175,329    10,813,024    1,619,249 
Short-term borrowings   753,200,000    762,153,389    114,132,407 
Current portion of long-term borrowings   84,000,000    66,000,000    9,883,495 
Bonds Payable   320,000,000         
Total current liabilities   1,285,869,387    953,293,213    142,755,580 
Total liabilities   1,285,869,387    953,293,213    142,755,580 
                
Shareholders’ equity               
Ordinary share – (December 31, 2015 and September 30, 2016: par value of RMB0.0068259, 25,725,000 shares issued and outstanding)   175,596    175,596    25,725 
Additional paid-in capital   468,132,187    468,132,187    70,102,756 
Retained earnings – appropriated   147,162,560    147,162,560    22,037,581 
Retained earnings – unappropriated   1,190,180,107    1,238,337,452    185,440,931 
Accumulated other comprehensive loss   (502,489)   (526,808)   (78,318)
Total shareholders’ equity   1,805,147,961    1,853,280,987    277,528,675 
Total liabilities and shareholders’ equity   3,091,017,348    2,806,574,200    420,284,255 

 

 

 ConfidentialNovember 22, 2016

 


CHINA NEW BORUN CORPORATION

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

 

 

   For the three-month period ended, 
   September 30, 2015   June 30, 2016   September 30, 2016 
   (RMB)   (RMB)   (RMB)   (US$) 
                 
Revenues   661,425,029    530,379,367    602,246,617    90,186,381 
Cost of goods sold   595,147,823    486,353,803    569,687,921    85,310,719 
Gross profit   66,277,206    44,025,564    32,558,696    4,875,662 
Operating expenses:                    
Selling   1,928,963    1,206,445    966,076    144,670 
General and administrative   13,615,056    10,910,620    10,473,339    1,568,381 
Total operating expenses   15,544,019    12,117,065    11,439,415    1,713,051 
Operating income   50,733,187    31,908,499    21,119,281    3,162,611 
                     
Other (income) expenses:                    
Interest income   (3,120,573)   (467,853)   (662,929)   (99,274)
Interest expense   23,234,892    12,563,890    11,110,400    1,663,781 
Others, net   1,561,751    (25,047)   (32,000)   (4,791)
Total other expense (income), net   21,676,070    12,070,990    10,415,471    1,559,716 
Income before income taxes   29,057,117    19,837,509    10,703,810    1,602,895 
Income tax expense   7,264,280    4,959,378    2,675,953    400,724 
Net income   21,792,837    14,878,131    8,027,857    1,202,171 
                     
Earnings per share:                    
                     
Earnings per share:                    
Basic and diluted   0.85    0.58    0.31    0.05 
Weighted average ordinary shares outstanding:                    
Basic and diluted   25,725,000    25,725,000    25,725,000    25,725,000 

 

 

 ConfidentialNovember 22, 2016

 

CHINA NEW BORUN CORPORATION

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

 

 

   For the nine-month period ended, 
   September 30, 2015   September 30, 2016 
   RMB   RMB   US$ 
             
Revenues   1,952,988,691    1,619,208,219    242,476,297 
Cost of goods sold   1,739,791,689    1,483,111,935    222,095,890 
Gross profit   213,197,002    136,096,284    20,380,407 
Operating expenses:               
Selling   4,997,915    3,257,489    487,809 
General and administrative   38,935,253    33,417,617    5,004,285 
Total operating expenses   43,933,168    36,675,106    5,492,094 
Operating income   169,263,834    99,421,178    14,888,313 
                
Other (income) expenses:               
Interest income   (9,401,783)   (3,124,844)   (467,945)
Interest expense   73,662,328    37,984,640    5,688,197 
Others, net   4,077,740    351,588    52,650 
Total other expense, net   68,338,285    35,211,384    5,272,902 
Income before income taxes   100,925,549    64,209,794    9,615,411 
Income tax expense   25,231,388    16,052,449    2,403,853 
Net income   75,694,161    48,157,345    7,211,558 
                
Earnings per share:               
Basic and diluted   2.94    1.87    0.28 
Weighted average ordinary shares outstanding:               
Basic and diluted   25,725,000    25,725,000    25,725,000 

 

 



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