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 November 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 | ¨ 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: November 21, 2017
EXHIBIT INDEX
| Exhibit 99.1 | Press release dated November 21, 2017 |
Exhibit 99.1
China New Borun Announces Third Quarter 2017 Unaudited
Financial Results
Beijing, China, November 21, 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 third quarter ended September 30, 2017.
Mr. Jinmiao Wang, Chairman and Chief Executive Officer of Borun, commented on the results, “Despite a longer annual maintenance, our third quarter revenue of RMB457 million beat our previous guidance. We again generated outstanding cash flows from operations totaling RMB342 million, boosting our corn sourcing capabilities in the new corn harvest season.
Demand remains strong from a very healthy baijiu industry, and we are encouraged by an increase in the average selling price of edible alcohol, which expanded 7% sequentially from that of the second quarter, and continued to further increase in October. With our facilities back up to full speed and corn prices stabilizing this harvest season, we anticipate higher revenue and sequential margin expansion in the fourth quarter of 2017,” Mr. Wang concluded.
Third Quarter 2017 Quick View
| · | Total revenue decreased 24.1% to RMB457.0 million ($68.9 million1) from RMB602.2 million in the third quarter of 2016. |
| · | Gross profit decreased 7.7% to RMB30.1 million ($4.5 million) from RMB32.6 million in the third quarter of 2016. |
| · | Net income decreased 84.2% to RMB1.3 million ($0.2 million) from RMB8.0 million in the third quarter of 2016. |
| · | Basic and diluted earnings per American Depositary Share ("ADS") were RMB0.05 ($0.01) for the quarter ended September 30, 2017. Each ADS represents one of the Company's ordinary shares. |
Third Quarter 2017 Financial Performance
For the third quarter of 2017, revenue decreased by 24.1% year-over-year to RMB457.0 million ($68.9 million) from RMB602.2 million in the same period of 2016. The decrease in revenue was mainly due to lower sales volume of edible alcohol and its by-products.
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 September 30, 2017 were made at a rate of RMB6.6369 to USD1.00, the rate published by the People’s Bank of China on September 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.
Revenue breakdown by product lines is as follows:
| · | Revenue from edible alcohol decreased by 20.9% to RMB319.5 million ($48.1 million) in the third quarter of 2017, compared to RMB403.9 million in the third quarter of 2016. The sales volume of edible alcohol in the third quarter of 2017 decreased by 17.9% year-over-year to 77,476 tons, while the average selling price of edible alcohol decreased by 3.7% year-over-year to RMB4,123 per ton. |
| · | Revenue from DDGS Feed decreased by 15.5% to RMB114.7 million ($17.3 million) in the third quarter of 2017, compared to RMB135.7 million in the third quarter of 2016. The sales volume of DDGS Feed in the third quarter of 2017 decreased by 13.0% year-over-year to 70,280 tons, and the average selling price decreased by 2.9% year-over-year to RMB1,632 per ton. |
| · | Revenue from liquid carbon dioxide increased by 12.7% to RMB6.8 million ($1.0 million) in the third quarter of 2017, compared to RMB6.0 million in the third quarter of 2016. The sales volume of liquid carbon dioxide in the third quarter of 2017 decreased by 14.7% year-over-year to 30,042 tons, and the average selling price increased by 32.2% year-over-year to RMB226 per ton. |
| · | Revenue from crude corn oil decreased by 17.6% to RMB16.0 million ($2.4 million) in the third quarter of 2017, compared to RMB19.5 million in the third quarter of 2016. The sales volume of crude corn oil in the third quarter of 2017 decreased by 18.0% year-over-year to 2,529 tons, and the average selling price increased slightly by 0.4% year-over-year to RMB6,342 per ton. |
During the third quarter of 2017, gross profit decreased by 7.7% to RMB30.1 million ($4.5 million) from RMB32.6 million in the same period of 2016. Gross margin for the third quarter of 2017 increased to 6.6%, from 5.4% 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 decreased by 17.7% to RMB17.4 million ($2.6 million) in the third quarter of 2017, from RMB21.1 million in the same period of 2016, primarily due to lower gross profit earned.
Selling expenses decreased by RMB0.1 million, or 11.8% to RMB0.9 million ($0.1 million) in the third quarter of 2017, from RMB1.0 million in the same period of 2016.
General and administrative expenses increased by RMB1.3 million, or 12.9% to RMB11.8 million ($1.8 million) in the third quarter of 2017, from RMB10.5 million in the same period of 2016.
Income tax expenses in the third quarter of 2017 were RMB0.4 million ($0.1 million), representing an effective tax rate of 25.0%.
Net income decreased by 84.2% to RMB1.3 million ($0.2 million) in the third quarter of 2017, compared to RMB8.0 million in the same quarter of 2016. In the third quarter of 2017, basic and diluted earnings per share and per ADS were RMB0.05 ($0.01), and the Company had 25.7 million weighted average basic and diluted shares outstanding.
As of September 30, 2017, cash and bank deposits of RMB1.4 billion ($216.4 million) increased by RMB640.8 million, compared with RMB795.3 million as of December 31, 2016. Cash flows generated from operating activities for the third quarter of 2017 amounted to RMB341.6 million ($51.5 million) which was mainly generated form the decrease in inventory during the third quarter of 2017.
Financial Outlook
The Company estimates that its revenue for the fourth quarter of 2017 will be in the range of RMB520 million ($78.3 million) to RMB560 million ($84.4 million), an increase of approximately 1.3% to an increase of 9.1% 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, November 22, 2017 (9:00 p.m. Beijing time on Wednesday, November 22, 2017) to discuss the results and highlights from the third 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: | 8986459 |
A replay of the webcast will be accessible through November 30, 2017 on http://ir.chinanewborun.com or by dialing:
| United States toll free: | 1-855-452-5696 | |
| International: | 61-2-8199-0299 | |
| Passcode: | 8986459 |
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
Michael Tieu
| Phone: | +86-10-8556-9033 (China) |
+1-888-870-0798 (U.S.)
Email: Michael.tieu@asiabridgegroup.com
CHINA NEW BORUN CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEETS
| December 31, 2016 | September 30, 2017 | |||||||||||
| RMB | RMB | US$ | ||||||||||
| Assets | ||||||||||||
| Cash | 795,329,065 | 1,436,113,139 | 216,383,121 | |||||||||
| Trade accounts receivable, net of allowance for doubtful accounts | 415,621,572 | 370,800,566 | 55,869,542 | |||||||||
| Inventories | 602,628,839 | 392,803,569 | 59,184,795 | |||||||||
| Advance to suppliers | 245,977,475 | 1,039,827 | 156,674 | |||||||||
| Other receivables | 81,055,814 | 60,823,803 | 9,164,490 | |||||||||
| Prepaid expenses | 3,325,225 | 3,158,583 | 475,912 | |||||||||
| Total current assets | 2,143,937,990 | 2,264,739,487 | 341,234,534 | |||||||||
| Property, plant and equipment, net | 876,240,529 | 792,244,381 | 119,369,643 | |||||||||
| Land use right, net | 130,460,205 | 128,335,773 | 19,336,704 | |||||||||
| Total assets | 3,150,638,724 | 3,185,319,641 | 479,940,881 | |||||||||
| Liabilities and shareholders’ equity | ||||||||||||
| Trade accounts payable | 23,643,261 | 18,290,213 | 2,755,837 | |||||||||
| Accrued expenses and other payables | 47,614,155 | 58,785,978 | 8,857,445 | |||||||||
| Income taxes payable | 12,242,364 | 28,879,533 | 4,351,359 | |||||||||
| Short-term borrowings | 905,170,000 | 853,067,011 | 128,533,956 | |||||||||
| Total current liabilities | 988,669,780 | 959,022,735 | 144,498,597 | |||||||||
| Bonds payable: 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 RMB5,772,426 ($869,747) as of December 31, 2016 and September 30, 2017, respectively) | 293,169,451 | 294,227,574 | 43,332,079 | |||||||||
| Total liabilities | 1,281,839,231 | 1,253,250,309 | 188,830,676 | |||||||||
| Shareholders’ equity | ||||||||||||
| Ordinary share – par value of RMB0.0068259, 25,725,000 shares authorized, issued and outstanding as of December 31, 2016 and September 30, 2017, respectively | 175,596 | 175,596 | 25,725 | |||||||||
| Additional paid-in capital | 468,132,187 | 468,132,187 | 70,534,766 | |||||||||
| Retained earnings – appropriated | 153,533,656 | 153,533,656 | 23,133,339 | |||||||||
| Retained earnings – unappropriated | 1,247,519,969 | 1,310,742,892 | 197,493,241 | |||||||||
| Accumulated other comprehensive loss | (561,915 | ) | (514,999 | ) | (76,866 | ) | ||||||
| Total shareholders’ equity | 1,868,799,493 | 1,932,069,332 | 291,110,205 | |||||||||
| Total liabilities and shareholders’ equity | 3,150,638,724 | 3,185,319,641 | 479,940,881 | |||||||||
CHINA NEW BORUN CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
| For the three-month period ended, | ||||||||||||||||
September
30, | June
30, | September 30, 2017 | ||||||||||||||
| RMB | RMB | RMB | US$ | |||||||||||||
| Revenues | 602,246,617 | 555,093,952 | 457,012,922 | 68,859,396 | ||||||||||||
| Cost of goods sold | 569,687,921 | 502,561,489 | 426,956,487 | 64,330,710 | ||||||||||||
| Gross profit | 32,558,696 | 52,532,463 | 30,056,435 | 4,528,686 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling | 966,076 | 938,979 | 852,375 | 128,430 | ||||||||||||
| General and administrative | 10,473,339 | 12,294,818 | 11,823,704 | 1,781,510 | ||||||||||||
| Total operating expenses | 11,439,415 | 13,233,797 | 12,676,079 | 1,909,940 | ||||||||||||
| Operating income | 21,119,281 | 39,298,666 | 17,380,356 | 2,618,746 | ||||||||||||
| Other (income) expenses: | ||||||||||||||||
| Interest income | (662,929 | ) | (942,288 | ) | (1,239,283 | ) | (186,726 | ) | ||||||||
| Interest expense | 11,110,400 | 17,558,275 | 16,953,914 | 2,554,493 | ||||||||||||
| Others, net | (32,000 | ) | (25,263 | ) | (24,023 | ) | (3,620 | ) | ||||||||
| Total other expense, net | 10,415,471 | 16,590,724 | 15,690,608 | 2,364,147 | ||||||||||||
| Income before income taxes | 10,703,810 | 22,707,942 | 1,689,748 | 254,599 | ||||||||||||
| Income tax expense | 2,675,953 | 5,676,985 | 422,437 | 63,650 | ||||||||||||
| Net income | 8,027,857 | 17,030,957 | 1,267,311 | 190,949 | ||||||||||||
| Earnings per share: | ||||||||||||||||
| Basic and diluted | 0.31 | 0.66 | 0.05 | 0.01 | ||||||||||||
| 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 nine-month period ended, | ||||||||||||
| September 30, 2016 | September 30, 2017 | |||||||||||
| RMB | RMB | US$ | ||||||||||
| Revenues | 1,619,208,219 | 1,528,016,205 | 230,230,410 | |||||||||
| Cost of goods sold | 1,483,111,935 | 1,354,722,178 | 204,119,721 | |||||||||
| Gross profit | 136,096,284 | 173,294,027 | 26,110,689 | |||||||||
| Operating expenses: | ||||||||||||
| Selling | 3,257,489 | 2,709,695 | 408,277 | |||||||||
| General and administrative | 33,417,617 | 37,750,141 | 5,687,918 | |||||||||
| Total operating expenses | 36,675,106 | 40,459,836 | 6,096,195 | |||||||||
| Operating income | 99,421,178 | 132,834,191 | 20,014,494 | |||||||||
| Other (income) expenses: | ||||||||||||
| Interest income | (3,124,844 | ) | (2,936,698 | ) | (442,480 | ) | ||||||
| Interest expense | 37,984,640 | 51,556,934 | 7,768,225 | |||||||||
| Others, net | 351,588 | (83,275 | ) | (12,547 | ) | |||||||
| Total other expense, net | 35,211,384 | 48,536,961 | 7,313,198 | |||||||||
| Income before income taxes | 64,209,794 | 84,297,230 | 12,701,296 | |||||||||
| Income tax expense | 16,052,449 | 21,074,307 | 3,175,324 | |||||||||
| Net income | 48,157,345 | 63,222,923 | 9,525,972 | |||||||||
| Earnings per share: | ||||||||||||
| Basic and diluted | 1.87 | 2.46 | 0.37 | |||||||||
| Weighted average ordinary shares outstanding: | ||||||||||||
| Basic and diluted | 25,725,000 | 25,725,000 | 25,725,000 | |||||||||