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 March 2017
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: March 10, 2017
EXHIBIT INDEX
| Exhibit 99.1 | Press release dated March 8, 2017 |
Exhibit 99.1
| Confidential | March 8, 2017 |
China New Borun Announces Fourth Quarter and Full-Year 2016 Unaudited
Financial Results
Beijing, China, March 8, 2017 – 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 fourth quarter and full-year ended December 31, 2016.
Mr. Jinmiao Wang, Chairman and Chief Executive Officer of Borun, commented on the results, “Reflecting the robust baijiu industry fundamentals, our production facilities were running at 89% capacity in the fourth quarter of 2016, and as such, despite fewer production days due to a short maintenance shut down, we delivered healthy sales volume of 87,400 tons. Driven by our solid volume shipment and production utility, our fourth quarter revenue of RMB513.5 million was in line with our previous total revenue guidance, despite a lower average selling price of edible alcohol and its byproducts. More importantly, our average cost of corn decreased in the fourth quarter of 2016, fueling our gross margin expansion of 360 basis points sequentially to 9.0%.
For 2017, we believe that the demand of edible alcohol remains quite healthy, as baijiu producers are not only selling at higher volumes but also at higher prices. This growth in both consumption volume and selling price of baijiu clearly demonstrates that the industry has fully recovered, forming a solid market foundation for edible alcohol producers in the foreseeable future. And given the completed maintenance and upgrade in the fourth quarter, we are confident that we will continue to operate at high production utilization in the first quarter of 2017.”
Fourth Quarter 2016 Quick View
| · | Total revenue decreased 26.5% to RMB513.5 million ($74.0 million1) from RMB699.1 million in the fourth quarter of 2015. |
| · | Gross profit decreased 32.0% to RMB46.0 million ($6.6 million) from RMB67.6 million in the fourth quarter of 2015. |
| · | Net income decreased 79.7% to RMB10.8 million ($1.6 million) from RMB53.2 million in the fourth quarter of 2015. |
| · | Basic and diluted earnings per American Depositary Share ("ADS") were RMB0.42 ($0.06) for the quarter ended December 31, 2016. Each ADS represents one of the Company's ordinary shares. |
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 year ended December 31, 2016 were made at a rate of RMB6.937 to USD1.00, the rate published by the People’s Bank of China on December 31, 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 | March 8, 2017 |
Fourth Quarter 2016 Financial Performance
For the fourth quarter of 2016, revenue decreased by 26.5% year-over-year to RMB513.5 million ($74.0 million) from RMB699.1 million in the same period of 2015. The decrease in revenue was mainly attributable to lower sales volume and average selling price in edible alcohol and its by-products, as well as lower sales from chlorinated polyethylene (“CPE”) due to a temporary factory shut down for maintenance and upgrades.
Revenue breakdown by product lines is as follows:
| · | Revenue from edible alcohol decreased by 22.3% to RMB353.1 million ($50.9 million) in the fourth quarter of 2016, compared to RMB454.6 million in the fourth quarter of 2015. The sales volume of edible alcohol in the fourth quarter of 2016 decreased by 2.8% year-over-year to 87,441 tons, while the average selling price of edible alcohol decreased by 20.1% year-over-year to RMB4,038 per ton. |
| Ÿ | Revenue from DDGS Feed decreased by 17.4% to RMB123.0 million ($17.7 million) in the fourth quarter of 2016, compared to RMB148.9 million in the fourth quarter of 2015. The sales volume of DDGS Feed in the fourth quarter of 2015 decreased by 8.0% year-over-year to 75,321 tons, while the average selling price decreased by 10.2% year-over-year to RMB1,633 per ton. |
| · | Revenue from liquid carbon dioxide decreased by 3.8% to RMB6.0 million ($0.9 million) in the fourth quarter of 2016, compared to RMB6.2 million in the fourth quarter of 2015. The sales volume of liquid carbon dioxide in the fourth quarter of 2016 decreased by 13.7% year-over-year to 30,345 tons, while the average selling price increased by 11.4% year-over-year to RMB197 per ton. |
| · | Revenue from crude corn oil decreased by 65.1% to RMB16.9 million ($2.4 million) in the fourth quarter of 2016, compared to RMB48.3 million in the fourth quarter of 2015. The sharp decrease in revenue was mainly due to the suspension of production of the crude corn oil at the Daqing facility during the fourth quarter, as the Company is currently in the process of renewing the facility’s production authorization. Revenue from crude corn oil in the fourth quarter of 2016 only represented the sales made by the Shandong facility. The sales volume of crude corn oil in the fourth quarter of 2016 decreased by 64.2% year-over-year to 2,728 tons, while the average selling price decreased by 2.4% year-over-year to RMB6,181 per ton. |
| · | Revenue from CPE decreased by 66.5% to RMB13.6 million ($2.0 million) in the fourth quarter of 2016, compared to RMB40.5 million in the fourth quarter of 2015. The sales volume of CPE in the fourth quarter of 2016 decreased by 64.5% year over year to 1,680 tons, while the average selling price decreased by 5.5% to RMB8,077 per ton. The sharp decrease in sales volume of CPE was mainly due to the temporary shutdown for maintenance and upgrades during the quarter. |
During the fourth quarter of 2016, gross profit decreased by 32.0% to RMB46.0 million ($6.6 million) from RMB67.6 million in the same period of 2015. Gross margin for the fourth quarter of 2016 decreased to 9.0%, from 9.7% in the same period of 2015, which was primarily due to the steeper decrease in average selling price of edible alcohol and its by-products, compare with the decrease in average corn cost.
| Confidential | March 8, 2017 |
Operating income decreased by 37.4% to RMB30.1 million ($4.3 million) in the fourth quarter of 2016, from RMB48.0 million in the same period of 2015, primarily due to lower gross profit earned.
Selling expenses decreased by RMB0.3 million, or 25.2% to RMB0.9 million ($0.1 million) in the fourth quarter of 2016, from RMB1.2 million in the same period of 2015, which is in line with the decrease in sales volume.
General and administrative expenses increased by RMB3.7 million, or 32.5% to RMB15.0 million ($2.2 million) in the fourth quarter of 2016, from RMB11.3 million in the same period of 2015.
Income tax expenses in the fourth quarter of 2016 were RMB3.6 million ($0.5 million), representing an effective tax rate of 25.0%.
Net income decreased by 79.7% to RMB10.8 million ($1.6 million) in the fourth quarter of 2016, compared to RMB53.2 million in the same quarter of 2015. The year-over-year decrease in net income was primarily attributable to the Company not receiving any government grants in the fourth quarter of 2016, compared to receiving a government grant of approximately RMB32.0 million (after-tax) in the fourth quarter of 2015.
In the fourth quarter of 2016, basic and diluted earnings per share and per ADS were RMB0.42 ($0.06), and the Company had 25.7 million weighted average basic and diluted shares outstanding.
As of December 31, 2016, cash and bank deposits of RMB795.3 million ($114.7 million) increased by RMB299.7 million, compared with RMB495.6 million as of December 31, 2015. Cash flows used in operating activities for the fourth quarter of 2016 increased to RMB564.6 million ($81.4 million), compared with RMB443.0 million in the fourth quarter of 2015, which was primarily used in corn pre-purchase in the harvest season.
Full Year 2016 Financial Performance
For the year ended December 31, 2016, total revenue decreased 19.6% year-over-year to RMB2.1 billion ($307.4 million), from RMB2.7 billion for the year ended December 31, 2015. Gross profit decreased 34.9% year-over-year to RMB182.1 million ($26.2 million), from RMB279.8 million for the year ended December 31, 2015. Operating income decreased 40.4% year-over-year to RMB129.5 million ($18.7million), from RMB217.3 million for the year ended December 31, 2015. Net income decreased 54.2% year-over-year to RMB59.0 million ($8.5 million), from RMB128.9 million for the year ended December 31, 2015. Basic and diluted earnings per ordinary share and per ADS decreased to RMB2.29 ($0.33), from RMB5.01 in the prior year. Weighted average number of basic and diluted shares outstanding was approximately 25.7 million in 2016.
Financial Outlook
Reflecting the sustained solid demand for edible alcohol and its by-products, the Company continues to operate at a high level of capacity utilization. However, as the price of edible alcohol and its by-products will likely decrease to reflect lower corn cost, the Company estimates that its revenue for the first quarter of 2017 will be in the range of RMB470 million ($67.8 million) to RMB500 million ($72.1 million), a decrease of approximately 3.4% to an increase of 2.7% over the same quarter of 2016.
| Confidential | March 8, 2017 |
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, March 9, 2017 (9:00 p.m. Beijing time on Thursday, March 9, 2017) to discuss the results and highlights from the fourth quarter and full year 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: | 80258317 |
A replay of the webcast will be accessible through March 17, 2017 on http://ir.chinanewborun.com or by dialing:
| United States toll free: | 1-855-452-5696 |
| International: | 61-2-8199-0299 |
| Passcode | 80258317 |
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.
| Confidential | March 8, 2017 |
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 | March 8, 2017 |
CHINA NEW BORUN CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEETS
| December 31, 2015 | December 31, 2016 | |||||||||||
| RMB | RMB | US$ | ||||||||||
| Assets | ||||||||||||
| Cash | 495,630,607 | 795,329,065 | 114,650,290 | |||||||||
| Trade accounts receivable, net of allowance for doubtful accounts of RMB nil and RMB nil, at December 31, 2015 and 2016, respectively | 515,520,269 | 415,621,572 | 59,913,734 | |||||||||
| Held-to-maturity debt securities | 98,720,762 | — | — | |||||||||
| Inventories | 438,841,092 | 602,628,839 | 86,871,679 | |||||||||
| Advance to suppliers | 344,998,183 | 245,977,475 | 35,458,768 | |||||||||
| Other receivables | 68,223,787 | 81,055,814 | 11,684,563 | |||||||||
| Prepaid expenses | 3,645,396 | 4,738,441 | 683,068 | |||||||||
| Deferred tax assets | 1,755,197 | — | — | |||||||||
| Total current assets | 1,967,335,293 | 2,145,351,206 | 309,262,102 | |||||||||
| Property, plant and equipment, net | 988,392,988 | 869,904,276 | 125,400,645 | |||||||||
| Land use right, net | 133,292,782 | 130,460,205 | 18,806,430 | |||||||||
| Intangible assets, net | 1,996,285 | — | — | |||||||||
| Long-term deferred expenses | — | 5,417,332 | 780,933 | |||||||||
| Total assets | 3,091,017,348 | 3,151,133,019 | 454,250,110 | |||||||||
| Liabilities and shareholders’ equity | ||||||||||||
| Trade accounts payable | 22,292,132 | 23,643,261 | 3,408,283 | |||||||||
| Accrued expenses and other payables | 80,201,926 | 47,614,155 | 6,863,796 | |||||||||
| Income taxes payable | 26,175,329 | 10,658,301 | 1,536,442 | |||||||||
| Short-term borrowings | 753,200,000 | 905,170,000 | 130,484,359 | |||||||||
| Current portion of long-term borrowings | 84,000,000 | — | — | |||||||||
| Bonds payable | 320,000,000 | — | — | |||||||||
| Total current liabilities | 1,285,869,387 | 987,085,717 | 142,292,880 | |||||||||
| Bonds payable | — | 300,000,000 | 43,246,361 | |||||||||
| Total liabilities | 1,285,869,387 | 1,287,085,717 | 185,539,241 | |||||||||
| Shareholders’ equity | ||||||||||||
| Ordinary share – (December 31, 2015 and December 31, 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 | 67,483,377 | |||||||||
| Retained earnings – appropriated | 147,162,560 | 153,058,436 | 22,064,067 | |||||||||
| Retained earnings – unappropriated | 1,190,180,107 | 1,243,242,998 | 179,219,115 | |||||||||
| Accumulated other comprehensive loss | (502,489 | ) | (561,915 | ) | (81,415 | ) | ||||||
| Total shareholders’ equity | 1,805,147,961 | 1,864,047,302 | 268,710,869 | |||||||||
| Total liabilities and shareholders’ equity | 3,091,017,348 | 3,151,133,019 | 454,250,110 | |||||||||
| Confidential | March 8, 2017 |
CHINA NEW BORUN CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
| For the three-month period ended, | ||||||||||||||||
December 31, 2015 | September 30, 2016 | December 31, 2016
| ||||||||||||||
| RMB | RMB | RMB | US$ | |||||||||||||
| Revenues | 699,055,308 | 602,246,617 | 513,471,966 | 74,019,312 | ||||||||||||
| Cost of goods sold | 631,477,965 | 569,687,921 | 467,502,403 | 67,392,591 | ||||||||||||
| Gross profit | 67,577,343 | 32,558,696 | 45,969,563 | 6,626,721 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling | 1,212,615 | 966,076 | 907,214 | 130,779 | ||||||||||||
| General and administrative | 11,319,024 | 10,473,339 | 14,996,132 | 2,161,760 | ||||||||||||
| Impairment loss of fixed assets | 7,020,788 | — | — | — | ||||||||||||
| Total operating expenses | 19,552,427 | 11,439,415 | 15,903,346 | 2,292,539 | ||||||||||||
| Operating income | 48,024,916 | 21,119,281 | 30,066,217 | 4,334,182 | ||||||||||||
| Other (income) expenses: | ||||||||||||||||
| Government subsidy | (42,630,000 | ) | — | — | — | |||||||||||
| Interest income | (3,292,495 | ) | (662,929 | ) | (919,059 | ) | (132,487 | ) | ||||||||
| Interest expense | 21,798,132 | 11,110,400 | 13,767,114 | 1,984,592 | ||||||||||||
| Amortized issuance cost of bonds | — | — | 244,923 | 35,307 | ||||||||||||
| Others, net | 1,268,630 | (32,000 | ) | 2,571,342 | 370,671 | |||||||||||
| Total other (income) expense, net | (22,855,733 | ) | 10,415,471 | 15,664,320 | 2,258,083 | |||||||||||
| Income before income taxes | 70,880,649 | 10,703,810 | 14,401,897 | 2,076,099 | ||||||||||||
| Income tax expense | 17,720,161 | 2,675,953 | 3,600,474 | 519,025 | ||||||||||||
| Net income | 53,160,488 | 8,027,857 | 10,801,423 | 1,557,074 | ||||||||||||
| Earnings per share: | ||||||||||||||||
| Basic and diluted | 2.07 | 0.31 | 0.42 | 0.06 | ||||||||||||
| Weighted average ordinary shares outstanding: | ||||||||||||||||
| Basic and diluted | 25,725,000 | 25,725,000 | 25,725,000 | 25,725,000 | ||||||||||||
| Confidential | March 8, 2017 |
CHINA NEW BORUN CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
| For the year ended, | ||||||||||||
| December 31, 2015 | December 31, 2016 | |||||||||||
| RMB | RMB | US$ | ||||||||||
| Revenues | 2,652,043,999 | 2,132,680,185 | 307,435,518 | |||||||||
| Cost of goods sold | 2,372,269,654 | 1,950,614,338 | 281,189,900 | |||||||||
| Gross profit | 279,774,345 | 182,065,847 | 26,245,618 | |||||||||
| Operating expenses: | ||||||||||||
| Selling | 5,210,530 | 4,164,703 | 600,361 | |||||||||
| General and administrative | 50,254,277 | 48,413,749 | 6,979,061 | |||||||||
| Impairment loss of fixed assets | 7,020,788 | — | — | |||||||||
| Total operating expenses | 62,485,595 | 52,578,452 | 7,579,422 | |||||||||
| Operating income | 217,288,750 | 129,487,395 | 18,666,196 | |||||||||
| Other (income) expenses: | ||||||||||||
| Government subsidy | (42,630,000 | ) | — | — | ||||||||
| Interest income | (12,694,278 | ) | (4,043,903 | ) | (582,947 | ) | ||||||
| Interest expense | 95,460,460 | 51,751,754 | 7,460,250 | |||||||||
| Amortized issuance cost of bonds | — | 244,923 | 35,307 | |||||||||
| Others, net | 5,346,370 | 2,922,930 | 421,354 | |||||||||
| Total other expense, net | 45,482,552 | 50,875,704 | 7,333,964 | |||||||||
| Income before income taxes | 171,806,198 | 78,611,691 | 11,332,232 | |||||||||
| Income tax expense | 42,951,549 | 19,652,923 | 2,833,058 | |||||||||
| Net income | 128,854,649 | 58,958,768 | 8,499,174 | |||||||||
| Earnings per share: | ||||||||||||
| Basic and diluted | 5.01 | 2.29 | 0.33 | |||||||||
| Weighted average ordinary shares outstanding: | ||||||||||||
| Basic and diluted | 25,725,000 | 25,725,000 | 25,725,000 | |||||||||