Chinese Pig Breeder Rallies Despite Bourse Querying USD6 Billion State Energy Deal
Source: Liao Shumin, Yicai (China)
Editor: Emmi Laine, Xiao Yi
Date: June 20, 2022
(Yicai Global) June 20 -- Zhengbang Technology's stock price surged despite the Shenzhen Stock Exchange's inquiry about the troubled pig breeder's foray into the energy sector with one of China's five biggest state-owned power generators.
Zhengbang [SHE: 002157] rallied by the exchange-set limit of 10 percent to CNY6.95 (USD1) intraday. However, the shares are almost a third down this year amid the company's mounting financial obligations.
The SZSE requires the livestock feed producer and pig farmer to explain how its cooperation with State Power Investment fits together with its main business and development plans, the Nanchang-based firm announced today, citing a letter from the bourse. Moreover, it should detail the obligations of the partnership.
On June 17, Zhengbang said that it has penned an agreement with a Zhejiang province-based unit of the electricity giant to spend CNY40 billion (USD6 billion) to enter the new energy industry within three years. The plan includes building photovoltaic, wind power, and smart energy projects with a total capacity of 10 million kilowatts.
The agricultural company has been having financial problems this year as it defaulted on CNY500 million (USD74.5 million) of commercial acceptance bills on June 10, causing the firm's stock price to slump to the lowest in more than three and a half years.
Because of rising costs and lower pork prices, Zhengbang lost CNY2.4 billion (USD359.3 million) in the first quarter, after reporting a CNY18.8 billion (USD2.8 billion) net loss for last year. Cash on hand plunged to...