UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the month of August 2016
Commission File Number: 001-34754
China New Borun Corporation
(Translation of Registrant’s name into English)
Bohai Industrial Park
Yangkou Town
Shouguang, Shandong 262715
People’s Republic of China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
| x Form 20-F | o Form 40-F |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| China New Borun Corporation | ||
|
| ||
| By: | /s/ Terence Chen | |
| Name: | Terence Chen | |
| Title: | Chief Financial Officer | |
Date: August 18, 2016
EXHIBIT INDEX
Exhibit 99.1 |
Press release dated August 17, 2016 |
Exhibit 99.1
| Confidential | August 17, 2016 |
China New Borun Announces Second Quarter 2016 Unaudited Financial Results
Beijing, China, August 17, 2016 – China New Borun Corporation (NYSE: BORN; “Borun” or the “Company”), a leading producer and distributor of corn-based edible alcohol in China, today announced its unaudited financial results for the second quarter ended June 30, 2016.
Mr. Jinmiao Wang, Chairman and Chief Executive Officer of Borun, commented on the results, “Despite a lower average selling price (“ASP”) of edible alcohol, we exceeded our previous revenue guidance for the second quarter of 2016, driven by our better-than-expected utilization of 94%. The sharp decline in ASP, while partially negated by lower corn costs, compressed our second quarter gross margin to 8.3%.”
“Demand for edible alcohol from the baijiu industry continues to gain strength for the fourth consecutive quarter, driving greater industry-wide sales volume. Also, during the second quarter, we already completed ahead of schedule our annual maintenance that historically took place in the summer, and as such, we anticipate strong utilization and solid sales volume for the third quarter of 2016,” Mr. Wang concluded.
Second Quarter 2016 Quick View
| · | Total revenue decreased 26.4% to RMB530.4 million ($80.0 million1) from RMB720.6 million in the second quarter of 2015. |
| · | Gross profit decreased 49.8% to RMB44.0 million ($6.6 million) from RMB87.7 million in the second quarter of 2015. |
| · | Net income decreased 61.0% to RMB14.9 million ($2.2 million) from RMB38.1 million in the second quarter of 2015. |
| · | Basic and diluted earnings per American Depositary Share ("ADS") were RMB0.58 ($0.09) for the quarter ended June 30, 2016. Each ADS represents one of the Company's ordinary shares. |
Second Quarter 2016 Financial Performance
For the second quarter of 2016, revenue decreased by 26.4% year-over-year to RMB530.4 million ($80.0 million) from RMB720.6 million in the same period of 2015. The decrease in revenue was mainly due to a sharp decrease in ASP for edible alcohol and its by-products, and decline in sales from crude corn oil due to a temporary shut-down for the crude corn oil facility in Daqing.
Revenue breakdown by product lines is as follows:
| · | Revenue from edible alcohol decreased by 23.8% to RMB360.9 million ($54.4 million) in the second quarter of 2016, compared to RMB473.8 million in the second quarter of 2015. The sales volume of edible alcohol in the second quarter of 2016 decreased by 9.5% year-over-year to 84,086 tons, and the average selling price of edible alcohol decreased by 15.9% year-over-year to RMB4,292 per ton. |
_________________________
1 This press release contains translations of certain Renminbi amounts into US dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to US dollars for the quarter ended June 30, 2016 were made at a rate of RMB6.6312 to USD1.00, the rate published by the People’s Bank of China on June 30, 2016. China New Borun Corporation makes no representation that the Renminbi or US dollar amounts referred to in this press release could have been or could be converted into US dollars or Renminbi, at any particular rate or at all.
| Confidential | August 17, 2016 |
| Ÿ | Revenue from DDGS Feed decreased by 24.7% to RMB120.4 million ($18.2 million) in the second quarter of 2016, compared to RMB159.9 million in the second quarter of 2015. The sales volume of DDGS Feed in the second quarter of 2016 decreased by 2.2% year-over-year to 80,631 tons, and the average selling price decreased by 23.0% year-over-year to RMB1,493 per ton. |
| · | Revenue from liquid carbon dioxide increased by 3.8% to RMB5.5 million ($0.8 million) in the second quarter of 2016, compared to RMB5.3 million in the second quarter of 2015. The sales volume of liquid carbon dioxide in the second quarter of 2016 decreased by 7.5% year-over-year to 32,226 tons, and the average selling price increased by 13.4% year-over-year to RMB171 per ton. |
| · | Revenue from crude corn oil decreased by 61.4% to RMB18.1 million ($2.7 million) in the second quarter of 2016, compared to RMB46.9 million in the second quarter of 2015. It was mainly due to the temporary shut down for the crude corn oil facility in Daqing during the second quarter. The sales volume of crude corn oil in the second quarter of 2016 decreased by 61.1% year-over-year to 2,810 tons, and the average selling price decreased by 0.6% year-over-year to RMB6,443 per ton. |
| · | Revenue from chlorinated polyethylene (“CPE”) decreased by 27.0% to RMB25.4 million ($3.8 million) in the second quarter of 2016, compared to RMB34.8 million in the second quarter of 2015. The sales volume of CPE in the second quarter of 2016 decreased by 23.9% year-over-year to 3,100 tons, while the average selling price decreased by 4.0% year-over-year to RMB8,205 per ton. |
During the second quarter of 2016, gross profit decreased by 49.8% to RMB44.0 million ($6.6 million) from RMB87.7 million in the same period of 2015. Gross margin for the second quarter of 2016 decreased to 8.3%, from 12.2% in the same period of 2015, which was primarily due to steeper decrease in ASP of edible alcohol and its by-products than the cost of corn.
Operating income decreased by 55.9% to RMB31.9 million ($4.8 million) in the second quarter of 2016, from RMB72.3 million in the same period of 2015, primarily due to lower gross profit earned.
Selling expenses decreased by RMB0.7 million, or 35.4% to RMB1.2 million ($0.2 million) in the second quarter of 2016, from RMB1.9 million in the same period of 2015.
General and administrative expenses decreased by RMB2.6 million, or 19.2% to RMB10.9 million ($1.6 million) in the second quarter of 2016, from RMB13.5 million in the same period of 2015.
Income tax expenses in the second quarter of 2016 were RMB5.0 million ($0.7 million), representing an effective tax rate of 25.0%.
Net income decreased by 61.0% to RMB14.9 million ($2.2 million) in the second quarter of 2016, compared to RMB38.1 million in the same quarter of 2015. The decrease in net income was primarily due to the decrease in revenue and lower gross margin during the second quarter.
In the second quarter of 2016, basic and diluted earnings per share and per ADS were RMB0.58 ($0.09), and the Company had 25.7 million weighted average basic and diluted shares outstanding.
| Confidential | August 17, 2016 |
As of June 30, 2016, cash and bank deposits totaled RMB613.9 million ($92.6 million), an increase of RMB118.3 million, compared with RMB495.6 million as of December 31, 2015. Cash flows generated from operating activities for the second quarter of 2016 were RMB204.6 million ($30.9 million), compared with cash outflow of RMB59.0 million in the second quarter of 2015.
Financial Outlook
Reflecting a lower ASP for edible alcohol and its by-products, the Company estimates that its revenue for the third quarter of 2016 will be in the range of RMB550 million ($82.9 million) to RMB600 million ($90.5 million), a decrease of approximately 9.3% to a decrease of 16.8% over the same quarter of 2016.
This guidance is based on the current market conditions and reflects the Company's current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change.
Conference Call
Borun's management will hold a corresponding earnings conference call and live webcast at 8:00 a.m. E.T. on Thursday, August 18, 2016 (8:00 p.m. Beijing time on Thursday, August 18, 2016) to discuss the results and highlights from the second quarter of 2016 and answer questions from investors. A webcast of the call will be available at http://ir.chinanewborun.com. Listeners may access the call by dialing:
| United States Toll Free: | 1-866-519-4004 |
| US Toll/International: | 1-845-675-0437 |
| Hong Kong Toll Free: | 800-906-601 |
| Hong Kong Toll: | 852-3018-6771 |
| China Toll Free: | 800-819-0121 |
| China Toll Free (Mobile): | 400-620-8038 |
| Conference ID: | 61565842 |
A replay of the webcast will be accessible through June 26, 2016 on http://ir.chinanewborun.com or by dialing:
| United States toll free: | 1-855-452-5696 |
| International: | 61-2-8199-0299 |
| Passcode | 61565842 |
About China New Borun Corporation
China New Borun Corporation (NYSE: BORN) is a leading producer and distributor of corn-based edible alcohol sold as an ingredient to producers of baijiu, a popular grain-based alcoholic beverage in China. The Company also produces DDGS Feed, liquid carbon dioxide and crude corn oil as by-products of edible alcohol production, and CPE that is widely used in chemical industries. China New Borun is based in Shouguang, Shandong Province. Additional information about the company can be found at http://www.chinanewborun.com and in documents filed with the U.S. Securities and Exchange Commission, which are available on the SEC's website at http://www.sec.gov.
Forward-looking Statements
All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.
Contact Information
Asia Bridge Capital Limited
Wendy Sun
Phone: +86-10-8556-9033 (China)
+1-888-870-0798 (U.S.)
Email: wendy.sun@asiabridgegroup.com
| Confidential | August 17, 2016 |
CHINA NEW BORUN CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEETS
| December 31, 2015 | June 30, 2016 | |||||||||||
| RMB | RMB | US$ | ||||||||||
| Assets | ||||||||||||
| Cash | 495,630,607 | 613,947,197 | 92,584,630 | |||||||||
| Trade accounts receivable, net of allowance for doubtful accounts of nil and nil, respectively | 515,520,269 | 332,064,828 | 50,076,129 | |||||||||
| Held-to-maturity debt securities | 107,912,111 | — | — | |||||||||
| Inventories | 438,841,092 | 692,559,243 | 104,439,505 | |||||||||
| Advance to suppliers | 344,998,183 | 538,319 | 81,180 | |||||||||
| Other receivables | 59,032,438 | 86,758,385 | 13,083,360 | |||||||||
| Prepaid expenses | 3,645,396 | 1,419,442 | 214,055 | |||||||||
| Total current assets | 1,965,580,096 | 1,727,287,414 | 260,478,859 | |||||||||
| Property, plant and equipment, net | 988,392,988 | 927,931,996 | 139,934,250 | |||||||||
| Land use right, net | 133,292,782 | 131,876,494 | 19,887,274 | |||||||||
| Intangible assets, net | 1,996,285 | 83,163 | 12,541 | |||||||||
| Deferred income tax assets | 1,755,197 | 1,755,197 | 264,688 | |||||||||
| Total assets | 3,091,017,348 | 2,788,934,264 | 420,577,612 | |||||||||
| Liabilities and shareholders’ equity | ||||||||||||
| Trade accounts payable | 22,292,132 | 48,144,929 | 7,260,364 | |||||||||
| Accrued expenses and other payables | 80,201,926 | 49,770,101 | 7,505,444 | |||||||||
| Income taxes payable | 26,175,329 | 11,537,071 | 1,739,816 | |||||||||
| Short-term borrowings | 753,200,000 | 762,200,000 | 114,941,489 | |||||||||
| Current portion of long-term borrowings | 84,000,000 | 72,000,000 | 10,857,763 | |||||||||
| Bonds Payable | 320,000,000 | — | — | |||||||||
| Total current liabilities | 1,285,869,387 | 943,652,101 | 142,304,876 | |||||||||
| Total liabilities | 1,285,869,387 | 943,652,101 | 142,304,876 | |||||||||
| Shareholders’ equity | ||||||||||||
| Ordinary share – (December 31, 2015 and June 30, 2016: par value of RMB0.0068259, 25,725,000 shares issued and outstanding) | 175,596 | 175,596 | 25,725 | |||||||||
| Additional paid-in capital | 468,132,187 | 468,132,187 | 70,595,396 | |||||||||
| Retained earnings – appropriated | 147,162,560 | 147,162,560 | 22,192,448 | |||||||||
| Retained earnings – unappropriated | 1,190,180,107 | 1,230,309,595 | 185,533,477 | |||||||||
| Accumulated other comprehensive loss | (502,489 | ) | (497,775 | ) | (74,310 | ) | ||||||
| Total shareholders’ equity | 1,805,147,961 | 1,845,282,163 | 278,272,736 | |||||||||
| Total liabilities and shareholders’ equity | 3,091,017,348 | 2,788,934,264 | 420,577,612 | |||||||||
| Confidential | August 17, 2016 |
CHINA NEW BORUN CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
| For the three-month period ended, | ||||||||||||||||
| June 30, 2015 | March 31, 2016 | June 30, 2016 | ||||||||||||||
| (RMB) | (RMB) | (RMB) | (US$) | |||||||||||||
| Revenues | 720,638,443 | 486,582,235 | 530,379,367 | 79,982,412 | ||||||||||||
| Cost of goods sold | 632,954,711 | 427,070,211 | 486,353,803 | 73,343,257 | ||||||||||||
| Gross profit | 87,683,732 | 59,512,024 | 44,025,564 | 6,639,155 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling | 1,866,280 | 1,084,968 | 1,206,445 | 181,935 | ||||||||||||
| General and administrative | 13,506,488 | 12,033,658 | 10,910,620 | 1,645,346 | ||||||||||||
| Total operating expenses | 15,372,768 | 13,118,626 | 12,117,065 | 1,827,281 | ||||||||||||
| Operating income | 72,310,964 | 46,393,398 | 31,908,499 | 4,811,874 | ||||||||||||
| Other (income) expenses: | ||||||||||||||||
| Interest income | (4,017,821 | ) | (1,994,062 | ) | (467,853 | ) | (70,553 | ) | ||||||||
| Interest expense | 24,018,082 | 14,310,350 | 12,563,890 | 1,894,663 | ||||||||||||
| Others, net | 1,490,237 | 408,635 | (25,047 | ) | (3,777 | ) | ||||||||||
| Total other expense (income), net | 21,490,498 | 12,724,923 | 12,070,990 | 1,820,333 | ||||||||||||
| Income before income taxes | 50,820,466 | 33,668,475 | 19,837,509 | 2,991,541 | ||||||||||||
| Income tax expense | 12,705,116 | 8,417,118 | 4,959,378 | 747,885 | ||||||||||||
| Net income | 38,115,350 | 25,251,357 | 14,878,131 | 2,243,656 | ||||||||||||
| Earnings per share: | ||||||||||||||||
| Earnings per share: | ||||||||||||||||
| Basic and diluted | 1.48 | 0.98 | 0.58 | 0.09 | ||||||||||||
| Weighted average ordinary shares outstanding: | ||||||||||||||||
| Basic and diluted | 25,725,000 | 25,725,000 | 25,725,000 | 25,725,000 | ||||||||||||
| Confidential | August 17, 2016 |
CHINA NEW BORUN CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
| For the six-month period ended, | ||||||||||||
| June 30, 2015 | June 30, 2016 | |||||||||||
| RMB | RMB | US$ | ||||||||||
| Revenues | 1,291,563,662 | 1,016,961,602 | 153,360,116 | |||||||||
| Cost of goods sold | 1,144,643,866 | 913,424,014 | 137,746,413 | |||||||||
| Gross profit | 146,919,796 | 103,537,588 | 15,613,703 | |||||||||
| Operating expenses: | ||||||||||||
| Selling | 3,068,952 | 2,291,413 | 345,550 | |||||||||
| General and administrative | 25,320,197 | 22,944,278 | 3,460,049 | |||||||||
| Total operating expenses | 28,389,149 | 25,235,691 | 3,805,599 | |||||||||
| Operating income | 118,530,647 | 78,301,897 | 11,808,104 | |||||||||
| Other (income) expenses: | ||||||||||||
| Interest income | (6,281,210 | ) | (2,461,915 | ) | (371,262 | ) | ||||||
| Interest expense | 50,427,436 | 26,874,240 | 4,052,696 | |||||||||
| Others, net | 2,515,989 | 383,588 | 57,846 | |||||||||
| Total other expense, net | 46,662,215 | 24,795,913 | 3,739,280 | |||||||||
| Income before income taxes | 71,868,432 | 53,505,984 | 8,068,824 | |||||||||
| Income tax expense | 17,967,108 | 13,376,496 | 2,017,206 | |||||||||
| Net income | 53,901,324 | 40,129,488 | 6,051,618 | |||||||||
| Earnings per share: | ||||||||||||
| Basic and diluted | 2.10 | 1.56 | 0.24 | |||||||||
| Weighted average ordinary shares outstanding: | ||||||||||||
| Basic and diluted | 25,725,000 | 25,725,000 | 25,725,000 | |||||||||