Recently, Ruipu Biotech announced that it will invest 40 million yuan to jointly invest with Tianjin Ruiyi Biotechnology Partnership (Limited Partnership) to establish Tianjin Lanrui Biotechnology Co., Ltd. (hereinafter referred to as "Lanrui Biotechnology"), and stated that the pet sector The business will operate independently.
More than 20 days ago, Rip Biotech also spent more than 60 million yuan to acquire 15% of the equity of Fujian Shengwei Biotechnology Co., Ltd. (hereinafter referred to as "Shengwei Biotechnology"), and cooperated with Shengwei Biotech and Fujian Shengwei Biotechnology Co., Ltd. Agricultural Development Co., Ltd. reached a strategic cooperation.
However, the investment in Shengwei Biotech has suffered losses for two consecutive years, and the strategic cooperation company Shengnong Development has also seen a decline in profits in recent years. Why choose this target? Rip Bio did not respond to this request.
Rip Biotech is one of China’s largest veterinary pharmaceutical companies with the most comprehensive product range. It is also a national vaccine manufacturer for the prevention and control of major animal diseases. The company has 16 branches (subsidiaries) and 10 veterinary drug GMP production bases.
In recent years, Rip Biotech has not only expanded its territory in the field of veterinary drugs that it is good at, but has also successively invested in the pet hospital Ruipai and pet e-commerce Yichong Technology... With the pet sector of Rip Biotech Independent operation, a new flagship in the pet field has surfaced.
However, the pet business of Rip Biotech is growing rapidly, but the company’s overall performance has been weak. In 2022, Ruipu Biotech's net profit was 347 million yuan, a year-on-year decrease of 16.01%.
#01
The pet sector will be independent
In its foreign investment announcement on April 11, Rip Biotechnology made it clear that "the pet sector business will be independent." direction.
The announcement stated that Rip Biotechnology and Tianjin Ruiyi Biotechnology Partnership (Limited Partnership) jointly invested in the establishment of Lanrui Biotechnology and have completed registration.
Rip Bio said that the joint venture to establish Lanrui Bio will implement the company’s strategic direction of “seizing pet development opportunities, releasing product value, and building the first local brand”. The pet sector business will operate independently.
In recent years, Rip Biotechnology has generated considerable revenue in the pet sector.
The 2020 financial report pointed out that Rip Bio's pet product sales increased by 67% year-on-year; the pet business revenue in 2021 was approximately 26 million yuan, a year-on-year increase of 20.7%; in 2022 Rip Bio's pet medicine and pet bio Product revenue is approximately 50 million yuan, of which pet drug revenue increased by 175.68% year-on-year.
It is reported that the newly established joint venture company will be independently operated and accounted for, and will be included in the company's 2023 consolidated statements, which will have a positive impact on the company's current and future financial status and operating results.
The announcement disclosed that Lanrui Biotech has a registered capital of 50 million yuan. Among them, Ruipu Biotech subscribed for 40 million yuan, accounting for 80% of the registered capital; Ruiyi Biotech subscribed for 10 million yuan, accounting for 20% of the registered capital.
The business scope of Lanrui Biotech includes: technical services, pet services (excluding animal diagnosis and treatment), retail and wholesale of pet food supplies, sales of specialized veterinary equipment, veterinary drug operations, drug import and export, etc.
Rip Bio announced that Lanrui Biotech will continue to deepen the construction of channel ecology, continuously increase the breadth and depth of reaching end customers, rapidly increase market share, and strive to realize the substitution of domestically produced pet vaccines and medicines for imports.
Industrial and commercial information shows that Ruiyi Biotechnology was established on March 17, 2023, with an investment of 10 million yuan. The executive partner is Sun Jinguo, and the other investor is Wang Lei.
Ruiyi Biotechnology’s business scope includes: technical services, technology development, technology consulting, technology exchange, technology transfer, and technology promotion.
Why did Ruipu Biotech cooperate with a company that was only established for more than a month? What is its relationship with Ruiyi Biotech and its investors? "Pet Industry Lightyear" contacted Rip Biology via email, but had not received a reply as of press time.
#02
Marrying with the King of Chicken Raising
Not only that, Rip Biotech also has a relationship with a company owned by Fujian Chicken King Fu Guangming.
According to Rip Bio's announcement, the company used its own funds of 49.9552 million yuan to acquire 11.89% of the equity of Shengwei Biotech held by Guo Haiyan, and used its own funds of 13.0448 million yuan to acquire 16 other natural person shareholders. 3.11% equity stake in Shengwei Biotech.
After the acquisition is completed, Rip Biotech holds 15% of the equity of Shengwei Biotech.
Rip Biotech stated that this transaction will have a positive impact on the company’s financial status and operating results. Combined with the target company's channel advantages, the company's sales scale and brand influence will be further expanded.
Another announcement released on the same day showed that Rip Biotech also signed a "Strategic Cooperation Agreement" with Fujian Shengnong Development Co., Ltd. (referred to as "Shennong Development") and Shengwei Biotech.
Rip Biotechnology stated in the announcement that it will cooperate with ShengnongfaZhan signed a strategic cooperation agreement with Shengwei Biotech, opening a new model of comprehensive and in-depth cooperation between the company and Shengnong, and realizing the innovation of a healthy breeding cooperation model between the breeding group and the animal protection enterprise.
Rip Biotech also signed the "Asset Leasing and Operation Framework Agreement" with Shengwei Biotech. The agreement shows that Rip Bio has leased the vaccine production assets and ancillary facilities of Sunvi Bio in Jinling Industrial Park, Guangze County, Fujian Province, and will operate it independently.
It is worth mentioning that behind both Shengnong Development and Shengwei Biotech are Fujian Shengnong Group. Founded in 1983, Shengnong Group is a white-feathered broiler industry chain group integrating independent breeding, hatching, feed processing, broiler chicken breeding, broiler processing, food deep processing, residual material conversion, product sales, and cold chain logistics. Its founder Fu Guangming is known as the "Chicken King".
The official website shows that as of 2021, Shennong Group has more than 20 subsidiaries and two listed companies, 371 modern automated breeding farms, 15 modern hatcheries, 9 feed factories, and 10 automated Broiler processing plants, 10 deep food processing plants, with an annual broiler breeding capacity of over 600 million birds.
However, the performance of the two companies under the Sunnong Group that are "married" with Rip Biotech is not outstanding.
Shengwei Biotech was established in July 2016 with a registered capital of 220 million yuan. It is one of the largest animal pharmaceutical and vaccine companies in southeastern China.
The announcement shows that Shengwei Biotech has suffered losses for two consecutive years, with net profits in 2021 and 2022 being -33.6055 million yuan and -24.1752 million yuan respectively. The total assets as of the end of 2022 are 401.0548 million yuan, and the total liabilities are 274.0978 million yuan.
Shengnong Development is the largest professional manufacturer of self-raised and self-slaughtered white-feathered broiler chickens in China, and is an A-share listed company.
Rip Bio pointed out that considering the uncertainty of future market and operating conditions, and the loss of the transaction target in the most recent fiscal year, there are certain operating risks in this investment and purchase of equity, and the company will follow a proactive and cautious approach. We will improve the investment decision-making mechanism and internal control system based on the principles, further strengthen post-investment management work, pay close attention to the development and operation of Shengwei Biotech, and prevent and respond to risks.
