Changshan North Ming (000158): Cotton Five Branch, The Starting Price Of Land Is 1 Billion 297 Million Yuan.

Changshan North Ming (000158) issued a notice on November 22nd, the original Fifth Branch Factory (cotton five branch) land use right will be sold openly, the land area of 76 thousand and 500 square meters, for residential and educational land, land transfer years residence for 70 years, education for 50 years.

The starting price of the auction is 1 billion 297 million yuan, and the price increase is 1 million yuan / time. The bid margin is 390 million yuan. The deadline for paying the bid margin is 17 hours in December 20, 2019, and the time limit for auction begins at 14:35 on December 24th.

Changshan North Ming said that the auction price of the land and the time to relocate the support funds had not yet been determined, and the impact of the public sale on the profits of the company was also uncertain.

Cotton three and cotton four branch

The total price of land auction is 6 billion 441 million yuan.

It is worth noting that Toshiyama Kitaaki's transfer of land is not the first time. Prior to that, Changshan North Ming cotton three branch and cotton four branch were sold separately in December 2015 and January 2016, and were awarded by Hebei Rongsheng Real Estate Development Co., Ltd. the total price was 6 billion 441 million yuan.

The origin of Changshan North Ming branch should start from the 50s of last century. In April of 1953, the first cotton mill in Shijiazhuang was broken down and put into operation in May 1954. After that, cotton two, cotton three and cotton four were put into operation in 1955, 1956 and 1957 respectively.

In December 1998, the Shijiazhuang textile Limited by Share Ltd was established on the basis of the four cotton and cotton branch of Shijiazhuang cotton company. In 2000 July, Changshan shares were listed on the Shenzhen stock exchange, and later renamed as Changshan North Ming because of the acquisition of software.

The traditional business of North Ming in Changshan is cotton textile, which is mainly responsible for the cotton one to cotton five branch in Shijiazhuang. In July 2006, the Shijiazhuang municipal government issued the notice on speeding up the construction of the "five major bases" and included the textile and garment base as one of the five bases. According to the government plan, Changshan North Ming began planning to vacate the land occupied by the plant and move the cotton to cotton five as a whole to the textile and garment base of Zhengding County.

According to statistics, in 2008 -2010, the Land Bureau bought and sold the site of Changshan North Ming Mian to cotton five branch company. The total area of the factory covers 819 thousand and 500 square meters, and the total purchase price is 1 billion 491 million yuan.

There is no government relocation subsidy.

Thickening profits for the company

Although the relocation of North Ming in Changshan will cause certain losses to the company's performance, the local government said it could return some of the net proceeds from the land to the company.

According to the sixty-fifth minutes of the executive meeting of the Shijiazhuang Municipal People's Government in 2007, the auction of the original land and ground attachments of Changshan shares (Changshan's North Ming Dynasty predecessor) reduced the remaining taxes and the remaining part of the 20% part of the compensation portion and the benchmark land price as the net income of the land, and the 90% returned enterprises were used for the enterprise project construction.

According to public information disclosure, Changshan North Ming in 2016 -2018 received the relocation support funds allocated by the Shijiazhuang Municipal People's Government in 686 million yuan, 500 million yuan and 300 million yuan respectively. When it was received, it was included in the deferred income, and the amount from deferred income to current profits and losses was 404 million yuan, 602 million yuan, and 279 million yuan respectively.

At the same time, the net profit of Changshan North Ming in 2016 -2018 was 350 million yuan, 355 million yuan and 186 million yuan respectively. According to the three quarterly report, in the first three quarters of 2019, Changshan North Ming received a 171 million yuan subsidy related to the government's income, while the net profit for the current period was 41 million 320 thousand yuan.

That is to say, in 2016 -2018 and the first three quarters of 2019, Changshan North Ming's net profit was less than the relocation subsidy, and the net loss of non net profit became the norm. Some investors believe that the government relocation subsidy for Changshan North Ming continued thickening profits.

In response, Toshiyama Kitaakikejunra, in an interview with the Securities Daily, said that the company strictly deducted the net profit of the company in accordance with the non recurring items of profit and loss stipulated in the QQ No. first - non recurring gains and losses issued by the China Securities Regulatory Commission. However, the government subsidies can only be deducted from the company's recognized government subsidies according to the relocation losses, and the loss of the relocation can not be deducted, resulting in the net profit loss of the company after deduction.

"The relocation loss of the company is due to the relocation. The government's relocation compensation policy funds are used to support the company's project construction and make up for the loss of the relocation process. The net profit after the relocation loss is the company's operating net profit, and there is no case of the government relocation subsidy for the company's thickening profit." Chi Junping said.

In addition, about the company's relocation support fund payment scheduling problem, Toshiyama Kitaaki said, at present, the company's policy basis for relocation support funds is the meeting minutes of the municipal government. At that time, there was no contract for the specific amount and return time of the relocation support fund, there was uncertainty in the total amount and payment schedule of the relocation support fund. Therefore, the municipal government also allocated funds for relocation support in accordance with the financial situation of the city's finances.