(Yicai Global) July 13 -- The day after its share price plummeted to the daily limit on July 11, Beingmate Baby & Child Food Co. (SHE:002570) said it plans to sell major assets and impose an emergency trading suspension.
The share price of Beingmate Baby & Child Food (SHE: 002570) tanked shortly after opening of the afternoon session on July 11.
It soon plunged to the daily trading limit, inundated with sell orders to close at USD1.76 per share (CNY11.97) per share, down 10%. Beingmate Baby & Child Food declared its intention to sell major assets to its controlling shareholder and related parties. The plan must be referred to the shareholders' meeting for consideration, per relevant rules of the Shenzhen Stock Exchange. The company announced that share trading will be suspended from market opening on July 12 and said it would determine whether to keep applying for trading suspension or resume trading based on circumstances.
Beingmate Baby & Child Food is planning a significant matter that involved the sale of major assets -- dairy assets in the upstream industry -- to its controlling shareholderHangzhou Beingmate Group Co., Ltd. and other related parties.
According to the relevant regulations, the sale of assets need only be submitted to the general shareholders' meeting under five conditions, all of which impose high standards. For instance, the total assets involved in the transaction account for more than 50% of the latest audited total assets of the listed company; or the operating income of the subject of the transaction in the last fiscal year accounts for more than 50% of the audited operating income of the listed company in a recent fiscal year, and its absolute amount is above CNY50 million. As of the end of 2016, Beingmate Baby & Child Food had a total asset value of CNY6 billion (about USD880 million) and a net asset value of around CNY2.9 billion (about USD430 million).
A top Chinese-made infant milk powder brand, Beingmate Baby & Child Food debuted on the capital market in 2011. The company maintained high growth in the early years of its listing, with its operating income rising to CNY6.12 billion (USD900 million) and net profit hitting CNY721 million (USD106 million) in 2013. However, in 2016, the company suffered an ongoing decline in its performance, logging operating income of CNY2.764 billion (about USD410 million), down 39% annually, and net losses of CNY781 million (about USD115 million), down an annual 853.24% percentage points.