Friday, July 26, 2013

Noposion to plan an asset reorganization in July 2013

According to Herbicides China News 1307 issued by CCM, On July 8, 2013, Shenzhen Noposion Agrochemicals Co. Ltd. (Noposion) announced that its stocks (stock No. 002215) would be suspended from trading from that date onwards due to a significant asset reorganization planned by the company. According to the announcement, Noposion is committed to lay out the proposal of the asset reorganization before August 6, 2013. After the proposal is approved by the company's board of directors and announced to the public, its stock will resume trading.

After the announcement came out, many market participants suspect that the significant asset reorganization refers to the acquisition of Jiangsu Changlong Chemicals Co, Ltd. (Jiangsu Changlong), which is a pesticide technical supplier for Noposion. Jiangsu Changlong is one of the large-scale manufacturers of pesticide technical, ranking in the top ten of technical manufacturers in China. Market participants speculate that the sudden suspension of Noposion's stocks is probably due to Noposion's acquisition of Jiangsu Changlong.

Insiders from Noposion's Securities Department said that the company has been negotiating with Jiangsu Changlong about a possible acquisition. However, they were not at liberty to disclose the real reason for the suspension.

On March 26, 2013, Noposion announced that the company intended to acquire Jiangsu Changlong's shares. At that time, the company stated that the acquisition was still in the early stages, and that it had not yet signed any letter of intent. However, the company has not released any announcement regarding the details of the acquisition.

Some experts believe that Noposion will ensure stability in the source of raw materials especially for pesticides technical, diversify its product categories and enhance its marketing ability if it is successful in acquiring Jiangsu Changlong. It is no doubt that at present, Noposion's pesticide formulation varieties and marketing channels are far more advanced than its competitors. However, Noposion's competitive disadvantage is that it has no production bases for pesticide technical, which is the main upstream source. Acquiring Jiangsu Changlong could address this disadvantage.

Noposion, a listed company of producing pesticide formulation in China, engages in production, R&D and marketing of pesticide formulation. Its headquarters is located in Shenzhen City, Guangdong Province and its manufacturing base is in Dongguan City, Guangdong Province. Its products are mainly sold in the domestic market, especially East China, South China and Central China.

Currently, Noposion is one of the biggest agrochemical enterprises in China, with a pesticide formulation capacity of over 100,000t/a. In Q1 2013, Noposion's revenue was USD80.27 million (RMB505.71 million) with a net profit of USD7.61 million (RMB47.93 million). Its revenue and net profit increased by 11.43% and 13.26% year-on-year respectively. The company's net profit was predicted to increase by 10%-40% in H1 2013, reaching USD20.34 million-USD25.89 million (RMB128.15 million-RMB163.10 million).

Table of Contents of Herbicides China News 1307:
Editor's notes
Company Dynamics
Good Harvest-Weien continues to strengthen its sugarbeet herbicide business
Noposion to plan an asset reorganization in July 2013
Supply and demand
Jiangsu Institute of Ecomones obtains six herbicide registrations in H1 2013
Market Analysis
Overview of amide herbicides' market situation in China in May 2013
Diuron market remains weak in the first half of 2013
Corn herbicides to enjoy a bright prospect in the near future
Ex-works price of tribenuron-methyl 95% TC soared in early July 2013
Output and sales volume of paraquat TK declined in May 2013
MOA to strengthen risk monitoring of 2,4-D butylate
Hunan Province issued eight prohibitions on pesticide production in June 2013
Overview of China’s herbicide registration in H1 2013
Price Monitoring
Price Review in July 2013
News in Brief
Paraquat remains short supply in late June 2013
CCPIA set up Pesticide Additives Commission formally in June
Organic phosphorus herbicides maintain high sales ratio in May 2013
Hubei Sanonda’s net profit to increase by 420%-470% YoY in H1 2013
China to prohibit three long residual herbicides
China exports 32,264 tonnes of herbicides for retail in May 2013
Lier Chemical's net profit soared with YOY growth of 54.82% in H1 2013
Lanfeng Bio-chemical to set up a subsidiary

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