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China New Borun Announces Fourth Quarter and Full-Year 2015 Unaudited Financial Results
03/14/16

BEIJING, March 14, 2016 /PRNewswire/ -- 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, 2015. 

Mr. Jinmiao Wang, Chairman and Chief Executive Officer of Borun, commented on the results, "We are thrilled with our strong fourth quarter of 2015 financial results, as revenue grew by nearly 15% year-over-year, gross margin expanded by 40 basis points, and net income rose by nearly 300% year-over-year, benefiting from our leadership position and positive government support."

"Demand for edible alcohol remained strong, while corn cost continued to noticeably trend downward, which should support further gross margin expansion opportunities.  We also expect that our capacity expansion for chlorinated polyethylene ("CPE") in the second quarter of 2015 will drive additional revenue growth in 2016. We feel confident about our business and profitability outlook for 2016."

Fourth Quarter 2015 Quick View

  • Total revenue increased 14.6% to RMB699.1 million ($107.7 million[1]) from RMB610.0 million in the fourth quarter of 2014.
  • Gross profit increased 18.7% to RMB67.6 million ($10.4 million) from RMB56.9 million in the fourth quarter of 2014.
  • Net income increased 306.6% to RMB53.2million ($8.2 million) from RMB13.1 million in the fourth quarter of 2014.
  • Basic and diluted earnings per American Depositary Share ("ADS") were RMB2.07 ($0.32) for the quarter ended December 31, 2015. Each ADS represents one of the Company's ordinary shares.  

Fourth Quarter 2015 Financial Performance

For the fourth quarter of 2015, revenue increased by 14.6% year-over-year to RMB699.1 million ($107.7 million) from RMB610.0 million in the same period of 2014. The increase in revenue was mainly attributable to higher sales volume in edible alcohol and its by-products.

Revenue breakdown by product lines is as follows:  

  • Revenue from edible alcohol increased by 11.1% to RMB454.6 million ($70.0 million) in the fourth quarter of 2015, compared to RMB409.3 million in the fourth quarter of 2014. The sales volume of edible alcohol in the fourth quarter of 2015 increased by 14.4% year-over-year to 89,991 tons, while the average selling price of edible alcohol decreased by 2.9% year-over-year to RMB5,052 per ton.
  • Revenue from DDGS Feed increased by 13.9% to RMB148.9 million ($22.9 million) in the fourth quarter of 2015, compared to RMB130.7 million in the fourth quarter of 2014. The sales volume of DDGS Feed in the fourth quarter of 2015 increased by 30.6% year-over-year to 81,836 tons, while the average selling price decreased by 12.7% year-over-year to RMB1,819 per ton.
  • Revenue from liquid carbon dioxide decreased by 25.4% to RMB6.2 million ($1.0 million) in the fourth quarter of 2015, compared to RMB8.3 million in the fourth quarter of 2014. The sales volume of liquid carbon dioxide in the fourth quarter of 2015 increased by 12.0% year-over-year to 35,170 tons, while the average selling price decreased by 33.4% year-over-year to RMB177 per ton.
  • Revenue from crude corn oil increased by 11.1% to RMB48.3 million ($7.5 million) in the fourth quarter of 2015, compared to RMB43.5 million in the fourth quarter of 2014. The sales volume of crude corn oil in the fourth quarter of 2015 increased by 16.2% year-over-year to 7,623 tons, while the average selling price decreased by 4.5% year-over-year to RMB6,331 per ton.
  • Revenue from CPE increased by 144.6% to RMB40.5 million ($6.2 million) in the fourth quarter of 2015, compared to RMB16.5 million in the fourth quarter of 2014. The sales volume of CPE in the fourth quarter of 2015 increased by 149.5% year over year to 4,736 tons, while the average selling price decreased by 2.0% to RMB8,547 per ton. Revenue from foam insulation was RMB0.6 million ($0.1 million) in the fourth quarter of 2015, compared to RMB1.7 million in the fourth quarter of 2014.

During the fourth quarter of 2015, gross profit increased by 18.7% to RMB67.6 million ($10.4 million) from RMB56.9 million in the same period of 2014. Gross margin for the fourth quarter of 2015 increased to 9.7%, from 9.3% in the same period of 2014, which was primarily attributable to the decrease in average corn cost, partly offset by the decrease in average selling price of edible alcohol and its by-products.

Operating income increased by 8.3% to RMB48.0 million ($7.4 million) in the fourth quarter of 2015, from RMB44.3 million in the same period of 2014, primarily attributable to higher gross profit earned and partly offset by the impairment for foam insulation equipment.

Selling expenses increased by RMB0.2 million, or 16.0% to RMB1.2 million ($0.1 million) in the fourth quarter of 2015, from RMB1.0 million in the same period of 2014, which is in line with the sales volume.

General and administrative expenses decreased by RMB0.2 million, or 1.8% to RMB11.3 million ($1.7 million) in the fourth quarter of 2015, from RMB11.5 million in the same period of 2014.

In the fourth quarter of 2015, as the manufacturing of foam insulation products was halted in 2015, and the Company elected to make a one-time non-cash impairment of RMB7.0 million ($1.1 million) for all the equipment related to the production of foam insulation. 

Income tax expenses in the fourth quarter of 2015 were RMB17.7 million ($2.7 million), representing an effective tax rate of 25.0%.

Net income increased by 306.6% to RMB53.2 million ($8.2 million) in the fourth quarter of 2015, compared to RMB13.1 million in the same quarter of 2014. The increase in net income was primarily attributable to a government subsidy netting of income tax of approximately RMB32.0 million the Company received during the fourth quarter of 2015, as the local government grants for corn processing.  In the fourth quarter of 2015, basic and diluted earnings per share and per ADS were RMB2.07 ($0.32), and the Company had 25.7 million weighted average basic and diluted shares outstanding. 

As of December 31, 2015, cash and bank deposits of RMB495.6 million ($76.3 million) decreased by RMB397.2 million, compared with RMB892.8 million as of December 31, 2014. Cash flows used in operating activities for the fourth quarter of 2015 increased to RMB443.0 million ($68.2 million), which was primarily used in corn pre-purchase in the harvest season.

Full Year 2015 Financial Performance

For the year ended December 31, 2015, total revenue increased 9.0% year-over-year to RMB2.7 billion ($408.4 million), from RMB2.4 billion for the year ended December 31, 2014. Gross profit increased 7.4% year-over-year to RMB279.8 million ($43.1 million), from RMB260.4 million for the year ended December 31, 2014. Income from operations increased 2.4% year-over-year to RMB217.3 million ($33.5 million), from RMB212.1 million for the year ended December 31, 2014. Net income increased 62.7% year-over-year to RMB128.9 million ($19.8 million), from RMB79.2 million for the year ended December 31, 2014. Basic and diluted earnings per ordinary share and per ADS increased to RMB5.01 ($0.77), from RMB3.08 in the prior year. Weighted average number of basic and diluted shares outstanding was approximately 25.7 million in 2015.

Financial Outlook

Reflecting the sustained solid demand for edible alcohol and its by-products, the Company continues to operate at a high level capacity utilization.  However, this February the Shouguang government conducted a safety check for all the chemical manufacturing facilities in Shouguang, which mandated the Company's Shouguang facility to shut down for an additional two weeks (approximately 15% of quarterly production schedule) after the Chinese New Year. 

As such, despite sustained solid industry fundamentals, the Company estimates that its revenue for the first quarter of 2016 will be in the range of RMB510 million ($78.5 million) to RMB540 million ($83.2 million), a decrease of approximately 5.4% to 10.7% over the same quarter of 2015.

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 Tuesday, March 15, 2016 (8:00 p.m. Beijing time on Tuesday, March 15, 2016) to discuss the results and highlights from the fourth quarter and full year of 2015 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:

62178138

A replay of the webcast will be accessible through March 22, 2016 on http://ir.chinanewborun.com or by dialing:

United States toll free:

1-855-452-5696

International:   

61-2-8199-0299

Passcode

62178138

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

[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, 2015 were made at a rate of RMB6.4936 to USD1.00, the rate published by the People's Bank of China on December 31, 2015. 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.

 

 CHINA NEW BORUN CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEETS


December 31, 2014


 

December 31,
2015


RMB


RMB


US$

Assets






Cash

830,430,168


495,630,607


76,326,014

Restricted cash

62,370,000



Trade accounts receivable, net of allowance for doubtful accounts of nil and nil, respectively

531,480,981


515,520,269


79,388,978

Held-to-maturity debt securities


98,720,762


15,202,778

Inventories

496,754,625


438,841,092


67,580,555

Advance to suppliers

52,577,513


344,998,183


53,128,955

Other receivables

73,593,217


68,223,787


10,506,312

Prepaid expenses

4,562,333


3,645,396


561,383

Deferred tax assets


1,755,197


270,296

Total current assets

2,051,768,837


1,967,335,293


302,965,271

Property, plant and equipment, net

1,096,055,659


988,392,988


152,210,328

Land use right, net

136,125,360


133,292,782


20,526,793

Intangible assets, net

5,822,528


1,996,285


307,423

Other non-current assets

5,562,810



Total assets

3,295,335,194


3,091,017,348


476,009,815







Liabilities and shareholders' equity






Trade accounts payable

17,055,679


22,292,132


3,432,939

Accrued expenses and other payables

86,729,443


80,201,926


12,350,919

Income taxes payable

6,205,515


26,175,329


4,030,943

Short-term borrowings

901,000,000


753,200,000


115,991,129

Current portion of long-term borrowings

24,000,000


84,000,000


12,935,814

Bonds payable

500,000,000


320,000,000


49,279,290

Total current liabilities

1,534,990,637


1,285,869,387


198,021,034

Long-term borrowings

84,000,000



Total liabilities

1,618,990,637


1,285,869,387


198,021,034







Shareholders' equity






Ordinary share – (December 31, 2014 and December 31, 2015: 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


72,091,319

Retained earnings – appropriated

134,277,095


147,162,560


22,662,708

Retained earnings – unappropriated

1,074,210,923


1,190,180,107


183,285,097

Accumulated other comprehensive loss

(451,244)


(502,489)


(76,068)

Total shareholders' equity

1,676,344,557


1,805,147,961


277,988,781

Total liabilities and shareholders' equity

3,295,335,194


3,091,017,348


476,009,815


 

CHINA NEW BORUN CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME


For the three-month period ended,


December 31,

 2014


September 30,

2015


December 31,
2015


RMB


RMB


    RMB


US$









Revenues

610,013,951


661,425,029


699,055,308


107,652,967

Cost of goods sold

553,101,972

553

596,147,823


631,477,965


97,246,206

Gross profit

56,911,979


65,277,206


67,577,343


10,406,761

Operating expenses:








Selling

1,045,480


928,963


1,212,615


186,740

General and administrative

11,521,209


13,615,056


11,319,024


1,743,105

Impairment loss of fixed assets



7,020,788


1,081,186

Total operating expenses

12,566,689


14,544,019


19,552,427


3,011,031

Operating income

44,345,290


50,733,187


48,024,916


7,395,730









Other (income) expenses:








    Government subsidy



(42,630,000)


(6,564,925)

Interest income

(1,074,378)


(3,120,573)


(3,292,495)


(507,037)

Interest expense

24,757,422


23,234,892


21,798,132


3,356,864

Others, net

3,231,807


1,561,751


1,268,630


195,366

Total other expense, net

26,914,851


21,676,070


(22,855,733)


(3,519,732)

Income before income taxes

17,430,439


29,057,117


70,880,649


10,915,462

Income tax expense

4,357,609


7,264,280


17,720,161


2,728,865

Net income

13,072,830


21,792,837


53,160,488


8,186,597









Earnings per share:








      Basic and diluted

0.51


0.85


2.07


0.32

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 year ended,


December 31,
2014


December 31,
2015


RMB


RMB


US$







Revenues

2,433,820,369


2,652,043,999


408,408,895

Cost of goods sold

2,173,381,791


2,372,269,654


365,324,266

Gross profit

260,438,578


279,774,345


43,084,629

Operating expenses:






Selling

4,880,386


5,210,530


802,410

General and administrative

43,421,610


50,254,277


7,739,047

Impairment loss of fixed assets


7,020,788


1,081,186

Total operating expenses

48,301,996


62,485,595


9,622,643

Operating income

212,136,582


217,288,750


33,461,986







Other (income) expenses:






Government subsidy


(42,630,000)


(6,564,925)

Interest income

(2,707,003)


(12,694,278)


(1,954,891)

Interest expense

102,884,972


95,460,460


14,700,699

Others, net

6,344,415


5,346,370


823,329

Total other expense, net

106,522,384


45,482,552


7,004,212

Income before income taxes

105,614,198


171,806,198


26,457,774

Income tax expense

26,403,549


42,951,549


6,614,443

Net income

79,210,649


128,854,649


19,843,331







Earnings per share:






Basic and diluted

3.08


5.01


0.77

Weighted average ordinary shares outstanding:






Basic and diluted

25,725,000


25,725,000


25,725,000







 

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SOURCE China New Borun Corporation

 
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