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2020.11.18  Reporter: Zhao Xueyi

On November 16, VV (600300), the "Best Soybean Milk Maker," announced its new board of directors. Lin Bin, the legal representative of Xinsheng Group, was elected Chairman of the Board of Directors of VV, while Zhao Huiqing was appointed General Manager. Boosted by this news, on November 17, the stock price of VV rose against the trend, once approaching the limit up. The closing price was RMB 4.23, up 4.70%.

Public data shows that on August 2, 2019, in order to implement the decision and spirit of the Xuzhou Municipal Party Committee and Government, the financially strong Xinsheng Group paid RMB 955 million to acquire 17% of the stock of VV Food & Beverage Co., Ltd. held by the VV Group, and became the largest shareholder of VV Food & Beverage Co., Ltd. On October 8 last year, Xinsheng Group nominated two directors of the board to enter the board of directors of VV.

Mr. Cai Tian, the spokesman for VV, said in an interview that after the entry of Xinsheng Group into VV Food & Beverage Co., Ltd., the two sides complemented each other and achieved good results. For one thing, VV has planned to return to its main business, establishing a development strategy of "ecological agriculture, grain and food in a broad sense”. While gradually divesting unrelated businesses, VV is consolidating its market share in soybean milk powder and actively developing new products and businesses in the field of vegetable protein beverages (liquid soybean milk). It also vigorously develops grain acquisition, warehousing, processing, trade and health food production, forming a "One Body, Two Wings" business layout.

For another thing, Xinsheng Group's ownership of VV is also conducive to accelerating its own market-oriented transformation, expanding the scale of its assets, accumulating experience in the governance of listed companies, enlarging the utility of state-owned capital, enhancing its capital operation capabilities, and making its industrial platform bigger and stronger.

On August 4 this year, VV transferred 71% of its shares in Zhijiang Liquor to Jiangsu Zongyi Co., Ltd. at a price of approximately RMB 462 million. The divestment of Zhijiang Liquor also demonstrates VV's determination to focus on its main business. Benefited from this, the company's net profit in the first three quarters of 2020 was RMB 316 million, with a year-on-year increase of 240.67%, while the net profit net of non-recurring gains and losses amounted to RMB 38.8453 million, with a year-on-year increase of 39.3%.

On November 16, Lin Bin, Chairman of Xinsheng Group, officially became Chairman of VV. On October 8 last year, two directors of Xinsheng Group joined the Board of Directors of VV. On November 16 this year, Lin Bin became Chairman of the Board. Over the past one year, as the largest shareholder, Xinsheng Group has acquired a comprehensive and detailed understanding of VV. The new team members and the original management team have had a good adjustment phase, laying a good foundation for the next phase of development of the company.

It is understood that, in the first half of this year, the last board of directors of VV submitted a five-year development plan to the Xuzhou Municipal Party Committee and Government, putting forward the goal of "two ten-billion industries drive to an industrial cluster of hundreds of billions". Specifically: the value of the grain industry will be over RMB ten billion; the value of the food and beverage industry will be over RMB ten billion. Under the leadership of the government, VV will promote to build a grain, oil and food industrial cluster worth RMB hundreds of billions in Xuzhou. VV also requested that the municipal government treat the company’s development plan as Xuzhou’s municipal development strategy. This proposal has been approved by the superior leaders.

“Based on the five-year development plan, the new board of directors will continue to focus on the main business of grain and food and rally the strength of all parties to firmly implement the work. We will make good use of the core competencies formed by Xinsheng Group through more than a decade of careful and diligent planning and operation to empower the long-term development of VV." Lin Bin said that in terms of science and technology, Xinsheng Group will rely on the scientific research and development strength of the Xuzhou Academy of Agricultural Sciences. Xinsheng Group will make full use of its regional wheat and rice research and development advantages and national sweet potato research achievements to scientifically empower VV’s research and development of new product (like soybean milk powder and vegetable protein beverages) and grain processing industrial chain; in terms of capital, Xinsheng Group, as a 3A-grade credit rating agency, has a strong financing capability, which can financially empower VV to grow bigger and stronger; in terms of resources, Xinsheng Group will accelerate the integration of state-owned grain depots in Xuzhou to further strengthen the regional advantages of the grain industry in Xuzhou and realize the resource empowerment for the development of VV's generalized grain industry; in terms of management, based on the continuation of the flexible mechanism and system of private enterprises, we give full play to the advantages of standardized management of the state-owned enterprises of Xinsheng Group to truly realize the dual advantages of management + efficiency and realize management empowerment for the healthy and stable development of VV.

According to Mr. Cai Tian, the spokesman of VV, in the future, Xinsheng Group and VV will further deepen the industrial and capital cooperation to achieve real complementary advantages. The two sides will continue to expand the sales volume of VV products, enlarge the influence of the VV brand, and strive to accomplish the objectives of the five-year strategic plan. They will try their best to realize mutual benefit and win-win situation, and strive to make Xinsheng's stake in VV into a typical model for the deep cooperation between state-owned and private enterprises.

Securities Daily.com November 20, 2020