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 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: August 23, 2017
EXHIBIT INDEX
| Exhibit 99.1 | Press release dated August 22, 2017 |
Exhibit 99.1
China New Borun Announces Second Quarter 2017 Unaudited
Financial Results
Beijing, China, August 22, 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 second quarter ended June 30, 2017.
Mr. Jinmiao Wang, Chairman and Chief Executive Officer of Borun, commented on the results, “We are pleased with our solid results for second quarter of 2017, as revenue expanded by 4.7% year-over-year, gross profit by 19.3% year-over-year, and net income by 14.5% year-over-year. We also generated outstanding cash flows from operations totaling RMB333.4 million ($49.2 million), driven by the deployment of our pre-purchased corn inventory.
Driven by the strong sale volumes across major product categories, our facilities were practically running at maximum output, with effective utilization rate of 97%. Sales volume of edible alcohol and DDGS Feed reached a new five-year high to 95,196 tons and 83,586 tons, respectively.
We continue to witness solid demand from a healthy baijiu industry, with prices rising for the top baijiu brands. Corn prices are also rising in the current non-harvest season, which favors our corn sourcing advantage, and we are confident that despite the rising corn prices at the spot market, our corn cost during the third quarter will remain stable. With adequate corn reserves, healthy cash flows, and a strong cash balance of more than RMB1.2 billion to support our corn sourcing arrangement in the next harvest season, we are reassured with our competitive position for the second half of 2017,” Mr. Wang concluded.
Second Quarter 2017 Quick View
| · | Total revenue increased 4.7% to RMB555.1 million ($81.9 million1) from RMB530.4 million in the second quarter of 2016. |
| · | Gross profit increased 19.3% to RMB52.5 million ($7.8 million) from RMB44.0 million in the second quarter of 2016. |
| · | Net income increased 14.5% to RMB17.0 million ($2.5 million) from RMB14.9 million in the second quarter of 2016. |
| · | Basic and diluted earnings per American Depositary Share ("ADS") were RMB0.66 ($0.10) for the quarter ended June 30, 2017. 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 period ended June 30, 2017 were made at a rate of RMB6.7744 to USD1.00, the rate published by the People’s Bank of China on June 30, 2017. 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.
Second Quarter 2017 Financial Performance
For the second quarter of 2017, revenue increased by 4.7% year-over-year to RMB555.1 million ($81.9 million) from RMB530.4 million in the same period of 2016. The increase in revenue was mainly attributable to higher sales volume of edible alcohol and its by-products.
Revenue breakdown by product lines is as follows:
| · | Revenue from edible alcohol increased by 1.6% to RMB366.9 million ($54.2 million) in the second quarter of 2017, compared to RMB360.9 million in the second quarter of 2016. The sales volume of edible alcohol in the second quarter of 2017 increased by 13.2% year-over-year to 95,196 tons, while the average selling price of edible alcohol decreased by 10.2% year-over-year to RMB3,854 per ton. |
| · | Revenue from DDGS Feed increased by 12.2% to RMB135.1 million ($19.9 million) in the second quarter of 2017, compared to RMB120.4 million in the second quarter of 2016. The sales volume of DDGS Feed in the second quarter of 2017 increased by 3.7% year-over-year to 83,586 tons, and the average selling price increased by 8.2% year-over-year to RMB1,616 per ton. |
| · | Revenue from liquid carbon dioxide decreased by 10.8% to RMB4.9 million ($0.7 million) in the second quarter of 2017, compared to RMB5.5 million in the second quarter of 2016. The sales volume of liquid carbon dioxide in the second quarter of 2017 decreased by 4.9% year-over-year to 30,657 tons, and the average selling price decreased by 6.2% year-over-year to RMB160 per ton. |
| · | Revenue from crude corn oil decreased by 6.0% to RMB17.0 million ($2.5 million) in the second quarter of 2017, compared to RMB18.1 million in the second quarter of 2016. The sales volume of crude corn oil in the second quarter of 2017 increased by 1.8% year-over-year to 2,860 tons, and the average selling price decreased by 7.7% year-over-year to RMB5,950 per ton. |
| · | Revenue from CPE increased by 22.8% to RMB31.2 million ($4.6 million) in the second quarter of 2017, compared to RMB25.4 million in the second quarter of 2016. The sales volume of CPE in the second quarter of 2017 increased by 26.9% year over year to 3,935 tons, and the average selling price decreased by 3.3% to RMB7,938 per ton. |
During the second quarter of 2017, gross profit increased by 19.3% to RMB52.5 million ($7.8 million) from RMB44.0 million in the same period of 2016. Gross margin for the second quarter of 2017 increased to 9.5%, from 8.3% in the same period of 2016, which was primarily attributable to the steeper decrease in average corn cost, compare with selling price of edible alcohol.
Operating income increased by 23.2% to RMB39.3 million ($5.8 million) in the second quarter of 2017, from RMB31.9 million in the same period of 2016, primarily attributable to higher gross profit earned.
Selling expenses decreased by RMB0.3 million, or 22.2% to RMB0.9 million ($0.1 million) in the second quarter of 2017, from RMB1.2 million in the same period of 2016.
General and administrative expenses increased by RMB1.4 million, or 12.7% to RMB12.3 million ($1.8 million) in the second quarter of 2017, from RMB10.9 million in the same period of 2016.
Income tax expenses in the second quarter of 2017 were RMB5.7 million ($0.8 million), representing an effective tax rate of 25.0%.
Net income increased by 14.5% to RMB17.0 million ($2.5 million) in the second quarter of 2017, compared to RMB14.9 million in the same quarter of 2016. In the second quarter of 2017, basic and diluted earnings per share and per ADS were RMB0.66 ($0.10), and the Company had 25.7 million weighted average basic and diluted shares outstanding.
As of June 30, 2017, cash and bank deposits of RMB1,219.8 million ($180.1 million) increased by RMB424.5 million, compared with RMB795.3 million as of December 31, 2016. Cash flows generated from operating activities for the second quarter of 2017 amounted to RMB333.4 million ($49.2 million) which was mainly generated form the decrease in inventory during the second quarter of 2017.
Financial Outlook
For the third quarter of 2017, the Company’s Shandong facility will halt production for approximately two weeks, and the Daqing facility will halt production for up to four weeks for annual maintenance. Comparatively, in the third quarter of 2016, the Company’s Shandong and Daqing facilities did not halt production, as the Company had already completed annual maintenance in the second quarter of 2016. Reflecting the comparatively shorter year-over-year production period, the Company estimates that its revenue for the third quarter of 2017 will be in the range of RMB380 million ($56.1 million) to RMB420 million ($62.0 million), a decrease of approximately 36.9% to approximately 30.3%, respectively, 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 Wednesday, August 23, 2017 (8:00 p.m. Beijing time on Wednesday, August 23, 2017) to discuss the results and highlights from the second quarter 2017 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: | 800-819-0121 |
| China Toll (Mobile): | 400-620-8038 |
| Conference ID: | 66753231 |
A replay of the webcast will be accessible through August 31, 2017 on http://ir.chinanewborun.com or by dialing:
| United States toll free: | 1-855-452-5696 |
| International: | 61-2-8199-0299 |
| Passcode: | 66753231 |
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
CHINA NEW BORUN CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEETS
| December 31, 2016 | June 30, 2017 | |||||||||||
| RMB | RMB | US$ | ||||||||||
| Assets | ||||||||||||
| Cash | 795,329,065 | 1,219,761,937 | 180,054,608 | |||||||||
| Trade accounts receivable, net of allowance for doubtful accounts of RMB nil and RMB nil (US$ nil), as of December 31, 2016 and June 30, 2017, respectively | 415,621,572 | 390,926,580 | 57,706,451 | |||||||||
| Inventories | 602,628,839 | 648,631,535 | 95,747,451 | |||||||||
| Advance to suppliers | 245,977,475 | 243,582 | 35,956 | |||||||||
| Other receivables | 81,055,814 | 93,578,212 | 13,813,506 | |||||||||
| Prepaid expenses | 3,325,225 | 1,513,382 | 223,397 | |||||||||
| Total current assets | 2,143,937,990 | 2,354,655,228 | 347,581,369 | |||||||||
| Property, plant and equipment, net | 876,240,529 | 820,243,097 | 121,079,815 | |||||||||
| Land use right, net | 130,460,205 | 129,043,917 | 19,048,760 | |||||||||
| Total assets | 3,150,638,724 | 3,303,942,242 | 487,709,944 | |||||||||
| Liabilities and shareholders’ equity | ||||||||||||
| Trade accounts payable | 23,643,261 | 19,434,182 | 2,868,768 | |||||||||
| Accrued expenses and other payables | 47,614,155 | 52,863,857 | 7,803,474 | |||||||||
| Income taxes payable | 12,242,364 | 28,457,093 | 4,200,681 | |||||||||
| Short-term borrowings | 905,170,000 | 978,380,000 | 144,423,122 | |||||||||
| Total current liabilities | 988,669,780 | 1,079,135,132 | 159,296,045 | |||||||||
| Bonds payable in connection with 2016 Bonds: | ||||||||||||
| Outstanding principal amount of RMB300,000,000, bearing fixed annual interest rate of 6.5%, with maturity on November 2, 2021 (less unamortized debt issuance costs based on imputed interest rate of 6.75% of RMB6,830,549 and RMB5,975,840 ($882,121) as of December 31, 2016 and June 30, 2017, respectively) | 293,169,451 | 294,024,160 | 43,402,244 | |||||||||
| Total liabilities | 1,281,839,231 | 1,373,159,292 | 202,698,289 | |||||||||
| Shareholders’ equity | ||||||||||||
| Ordinary share – par value of RMB0.0068259, 25,725,000 shares authorized, issued and outstanding as of December 31, 2016 and June 30, 2017, respectively | 175,596 | 175,596 | 25,725 | |||||||||
| Additional paid-in capital | 468,132,187 | 468,132,187 | 69,103,122 | |||||||||
| Retained earnings – appropriated | 153,533,656 | 153,533,656 | 22,663,801 | |||||||||
| Retained earnings – unappropriated | 1,247,519,969 | 1,309,475,581 | 193,297,647 | |||||||||
| Accumulated other comprehensive loss | (561,915 | ) | (534,070 | ) | (78,640 | ) | ||||||
| Total shareholders’ equity | 1,868,799,493 | 1,930,782,950 | 285,011,655 | |||||||||
| Total liabilities and shareholders’ equity | 3,150,638,724 | 3,303,942,242 | 487,709,944 | |||||||||
CHINA NEW BORUN CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
| For the three-month period ended, | ||||||||||||||||
June
30, | December
31, | June 30, 2017 | ||||||||||||||
| RMB | RMB | RMB | US$ | |||||||||||||
| Revenues | 530,379,367 | 513,471,966 | 555,093,952 | 81,939,943 | ||||||||||||
| Cost of goods sold | 486,353,803 | 467,502,403 | 502,561,489 | 74,185,387 | ||||||||||||
| Gross profit | 44,025,564 | 45,969,563 | 52,532,463 | 7,754,556 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling | 1,206,445 | 907,214 | 938,979 | 138,607 | ||||||||||||
| General and administrative | 10,910,620 | 14,996,132 | 12,294,818 | 1,814,894 | ||||||||||||
| Total operating expenses | 12,117,065 | 15,903,346 | 13,233,797 | 1,953,501 | ||||||||||||
| Operating income | 31,908,499 | 30,066,217 | 39,298,666 | 5,801,055 | ||||||||||||
| Other (income) expenses: | ||||||||||||||||
| Interest income | (467,853 | ) | (919,059 | ) | (942,288 | ) | (139,096 | ) | ||||||||
| Interest expense | 12,563,890 | 14,256,960 | 17,558,275 | 2,591,857 | ||||||||||||
| Others, net | (25,047 | ) | (4,009,834 | ) | (25,263 | ) | (3,729 | ) | ||||||||
| Total other expense, net | 12,070,990 | 9,328,067 | 16,590,724 | 2,449,032 | ||||||||||||
| Income before income taxes | 19,837,509 | 20,738,150 | 22,707,942 | 3,352,023 | ||||||||||||
| Income tax expense | 4,959,378 | 5,184,537 | 5,676,985 | 838,006 | ||||||||||||
| Net income | 14,878,131 | 15,553,613 | 17,030,957 | 2,514,017 | ||||||||||||
| Earnings per share: | ||||||||||||||||
| Basic and diluted | 0.58 | 0.60 | 0.66 | 0.10 | ||||||||||||
| Weighted average ordinary shares outstanding: | ||||||||||||||||
| Basic and diluted | 25,725,000 | 25,725,000 | 25,725,000 | 25,725,000 | ||||||||||||
CHINA NEW BORUN CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
| For the six-month period ended, | ||||||||||||
| June 30, 2016 | June 30, 2017 | |||||||||||
| RMB | RMB | US$ | ||||||||||
| Revenues | 1,016,961,602 | 1,071,003,283 | 158,095,666 | |||||||||
| Cost of goods sold | 913,424,014 | 927,765,691 | 136,951,714 | |||||||||
| Gross profit | 103,537,588 | 143,237,592 | 21,143,952 | |||||||||
| Operating expenses: | ||||||||||||
| Selling | 2,291,413 | 1,857,320 | 274,167 | |||||||||
| General and administrative | 22,944,278 | 25,926,437 | 3,827,119 | |||||||||
| Total operating expenses | 25,235,691 | 27,783,757 | 4,101,286 | |||||||||
| Operating income | 78,301,897 | 115,453,835 | 17,042,666 | |||||||||
| Other (income) expenses: | ||||||||||||
| Interest income | (2,461,915 | ) | (1,697,415 | ) | (250,563 | ) | ||||||
| Interest expense | 26,874,240 | 34,603,020 | 5,107,909 | |||||||||
| Others, net | 383,588 | (59,252 | ) | (8,746 | ) | |||||||
| Total other expense, net | 24,795,913 | 32,846,353 | 4,848,600 | |||||||||
| Income before income taxes | 53,505,984 | 82,607,482 | 12,194,066 | |||||||||
| Income tax expense | 13,376,496 | 20,651,870 | 3,048,516 | |||||||||
| Net income | 40,129,488 | 61,955,612 | 9,145,550 | |||||||||
| Earnings per share: | ||||||||||||
| Basic and diluted | 1.56 | 2.41 | 0.36 | |||||||||
| Weighted average ordinary shares outstanding: | ||||||||||||
| Basic and diluted | 25,725,000 | 25,725,000 | 25,725,000 | |||||||||