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 2014

 

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 22, 2014

 

 

 
 

 

 

EXHIBIT INDEX

 

 

Exhibit 99.1   Press release dated August 21, 2014

 

 

 

 

Exhibit 99.1

 

Final Confidential August 21, 2014

 

 

 

China New Borun Announces Second Quarter 2014 Unaudited Financial Results

 

 

Beijing, China, August 21, 2014 – 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 of 2014.

 

Mr. Jinmiao Wang, Chairman and Chief Executive Officer of Borun, commented on the results, “Although demand and average selling price for edible alcohol were solid in the first half of the second quarter, the market encountered an unexpected sharp drop nation-wide in demand and average selling price this June. As a result, even though we recorded revenue growth at the high end of our second quarter guidance on better-than-expected volume shipment, our gross profits contracted year-over-year.”

 

“Despite the challenging month of June, we continued to make progress in ramping up our chlorinated polyethylene (“CPE”) and foam insulation businesses. During the quarter, we successfully scaled our CPE plant to full production capacity and grew total revenue from CPE and foam insulation by 47% sequentially to RMB23.4 million. It is worth noting that the new business has surpassed its gross breakeven point during the second quarter, and therefore we anticipate incremental positive contributions to profitability from the new business in the months ahead,” Mr. Wang concluded.

 

Second Quarter 2014 Quick View

 

·Total revenue increased 6.4% to RMB668.9 million ($108.7 million[1]) from RMB628.5 million in the second quarter of 2013.

 

·Gross profit decreased 5.4% to RMB67.5 million ($11.0 million) from RMB71.4 million in the second quarter of 2013.

 

·Net income decreased 17.8% to RMB21.0 million ($3.4 million) from RMB25.5 million in the second quarter of 2013.

 

·Basic and diluted earnings per American Depositary Share ("ADS") were RMB0.82 ($0.13) for the quarter ended June 30, 2014. Each ADS represents one of the Company's ordinary shares.

 

 

Second Quarter 2014 Financial Performance

 

For the second quarter of 2014, revenue increased by 6.4% year-over-year to RMB668.9 million ($108.7 million) from RMB628.5 million in the same period of 2013. The increase in revenue was mainly attributable to higher sales volume of edible alcohol, partially offset by lower average selling prices, as well as incremental revenue contribution from the Company’s CPE and foam insulation businesses that were introduced in the fourth quarter of 2013.

 

 

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, 2014 were made at a rate of RMB6.1528 to USD1.00, the rate published by the People’s Bank of China on June 30, 2014. 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.  

 

 

 
FinalConfidentialAugust 21, 2014

 

Revenue breakdown by product lines is as follows:

 

·Revenue from edible alcohol increased by 4.1% to RMB425.9 million ($69.2 million) in the second quarter of 2014, compared to RMB409.0 million in the second quarter of 2013. Driven by higher production, the sales volume of edible alcohol in the second quarter of 2014 increased by 6.1% year-over-year to 83,505 tons, while the average selling price of edible alcohol decreased by 1.9% year-over-year to RMB5,100 per ton.

 

·Revenue from DDGS Feed increased by 2.1% to RMB159.8 million ($26.0 million) in the second quarter of 2014, compared to RMB156.5 million in the second quarter of 2013. The sales volume of DDGS Feed in the second quarter of 2014 decreased by 1.2% year-over-year to 74,155 tons, while the average selling price increased by 3.3% year-over-year to RMB2,155 per ton.

 

·Revenue from liquid carbon dioxide decreased by 17.0% to RMB11.4 million ($1.8 million) in the second quarter of 2014 compared to RMB13.7 million in the second quarter of 2013. The sales volume of liquid carbon dioxide in the second quarter of 2014 decreased by 2.6% year-over-year to 32,751 tons, and the average selling price decreased by 14.8% year-over-year to RMB347 per ton.

 

·Revenue from crude corn oil decreased by 1.4% to RMB48.5 million ($7.9 million) in the second quarter of 2014 compared to RMB49.2 million in the second quarter of 2013. The sales volume of crude corn oil in the second quarter of 2014 increased by 4.0% year-over-year to 6,746 tons, while the average selling price decreased by 5.3% year-over-year to RMB7,185 per ton.

 

·Revenue from CPE was RMB21.3 million ($3.5 million) in the second quarter of 2014, and the sales volume was 2,448 tons at an average selling price of RMB8,718 per ton. Revenue from foam insulation was RMB2.0 million ($0.3 million) in the second quarter of 2014, and the sales volume was 1,868 cubic meters at an average selling price of RMB1,094 per cubic meter.

 

During the second quarter of 2014, gross profit decreased by 5.4% to RMB67.5 million ($11.0 million) from RMB71.4 million in the same period of 2013. Gross margin for the second quarter of 2014 decreased to 10.1%, from 11.4% in the same period of 2013, which was primarily attributable to a decrease in average selling price of edible alcohol, as well as lower gross margin from the new CPE and foam insulation businesses during its initial production ramp up.

 

Operating income decreased by 7.8% to RMB55.3 million ($9.0 million) in the second quarter of 2014, from RMB60.0 million in the same period of 2013, primarily due to lower gross profit earned.

 

Selling expenses were RMB1.5 million ($0.2 million) in the second quarter of 2014, which remained stable with that in the same period of 2013.

 

General and administrative expenses increased by RMB0.8 million, or 8.0% to RMB 10.7 million ($1.7 million) in the second quarter of 2014, from RMB9.9 million in the same period of 2013, mainly due to the increasing management cost for our new CPE and foam insulation businesses.

 

 
FinalConfidentialAugust 21, 2014

 

Income tax expenses in the second quarter of 2014 were RMB7.0 million ($1.1 million), representing an effective tax rate of 25.0%.

 

Net income decreased by 17.8% to RMB21.0 million ($3.4 million) in the second quarter of 2014, compared to RMB25.5 million in the same quarter of 2013. In the second quarter of 2014, basic and diluted earnings per share and per ADS were RMB0.82 ($0.13), and the Company had 25.7 million weighted average basic and diluted shares outstanding.

 

As of June 30, 2014, cash and bank deposits of RMB361.8 million ($58.8 million) decreased by RMB159.5 million, compared with RMB521.3 million as of December 31, 2013. Cash flows provided by operating activities for the second quarter of 2014 were RMB77.3 million ($12.6 million), compared with operating cash outflow of $148.1 million in the second quarter of 2013.

 

Financial Outlook

 

During the third quarters, the Company historically conducts an annual maintenance of its production facilities, which requires a temporary shut down of all production lines for edible alcohol for approximately one month.

 

Reflecting the annual maintenance period this summer, and lower average selling prices, the Company estimates that its revenue for the third quarter of 2014 will be in the range of RMB520 million ($84.5 million) to RMB540 million ($87.8 million), an increase of approximately 0.4% to 4.2% over the same quarter of 2013.

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. EDT on Friday, August 22, 2014 (8:00 p.m. Beijing time on Friday, August 22, 2014) to discuss the results and highlights from the second quarter 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:   800-930-346
Hong Kong Toll: 852-2475-0994
China Toll Free: 800-819-0121
China Toll Free (Mobile): 400-620-8038
Conference ID: 85386554

 

A replay of the webcast will be accessible through August 30, 2014 on http://ir.chinanewborun.com or by dialing:

 

United States toll free: 1-855-452-5696
International:     61-2-8199-0299
Passcode 85386554

 

 
FinalConfidentialAugust 21, 2014

 

 

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 and foam insulation that are 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

 

 
FinalConfidentialAugust 21, 2014

 

CHINA NEW BORUN CORPORATION

 

UNAUDITED CONSOLIDATED BALANCE SHEETS

 

 

   December 31, 2013   June 30, 2014 
   RMB   RMB   US$ 
Assets               
Cash   521,270,799    361,770,279    58,797,666 
Restricted cash   42,040,667    32,000,000    5,200,884 
Trade accounts receivable, net of allowance for doubtful accounts of nil and nil, respectively   358,463,468    353,450,451    57,445,464 
Available-for-sale  securities   16,783,869    —    — 
Inventories   353,206,120    915,014,772    148,715,182 
Advance to suppliers   276,245,034    191,099    31,059 
Other receivables   58,510,165    114,562,500    18,619,572 
Prepaid expenses   3,773,980    2,299,637    373,755 
Deferred income tax assets   248,712    —    — 
Total current assets   1,630,542,814    1,779,288,738    289,183,582 
Property, plant and equipment, net   1,143,722,628    1,106,121,274    179,775,269 
Land use right, net   138,944,251    137,541,648    22,354,318 
Intangible assets, net   9,648,771    7,735,649    1,257,257 
Other non-current assets   10,697,712    8,130,261    1,321,392 
Total assets   2,933,556,176    3,038,817,570    493,891,818 
                
Liabilities and shareholders’ equity               
Trade accounts payable   29,272,232    15,877,284    2,580,497 
Accrued expenses and other payables   106,574,084    66,479,333    10,804,728 
Income taxes payable   9,119,258    7,038,216    1,143,905 
Short-term borrowings   620,200,000    732,000,000    118,970,225 
Current portion of long-term borrowings   24,000,000    24,000,000    3,900,663 
Total current liabilities   789,165,574    845,394,833    137,400,018 
Long-term borrowings   48,000,000    36,000,000    5,850,995 
Bonds Payable
   500,000,000    500,000,000    81,263,815 
Total liabilities   1,337,165,574    1,381,394,833    224,514,828 
                
Shareholders’ equity               

Ordinary share – (December 31, 2013 and June 30, 2014: 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    76,084,415 
Retained earnings – appropriated   126,356,029    126,356,029    20,536,346 
Retained earnings – unappropriated   1,002,921,340    1,063,215,301    172,801,863 
Accumulated other comprehensive loss   (1,194,550)   (456,376)   (71,359)
Total shareholders’ equity   1,596,390,602    1,657,422,737    269,376,990 
Total liabilities and shareholders’ equity   2,933,556,176    3,038,817,570    493,891,818 

 

 
FinalConfidentialAugust 21, 2014


CHINA NEW BORUN CORPORATION

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

 

 

   For the three-month period ended, 
   June 30,
2013		   March 31,
2014		   June 30, 2014 
   (RMB)   (RMB)   (RMB)   (US$) 
                 
Revenues   628,493,979    625,731,081    668,887,775    108,712,745 
Cost of goods sold   557,088,612    535,247,941    601,348,437    97,735,736 
Gross profit   71,405,367    90,483,140    67,539,338    10,977,009 
Operating expenses:                    
Selling   1,509,414    1,214,951    1,534,527    249,403 
General and administrative   9,912,973    10,490,866    10,703,722    1,739,651 
Total operating expenses   11,422,387    11,705,817    12,238,249    1,989,054 
Operating income   59,982,980    78,777,323    55,301,089    8,987,955 
Other (income) expenses:                    
Interest income   (990,007)   (525,335)   (637,612)   (103,630)
Interest expense   26,418,467    26,024,958    26,695,034    4,338,681 
Others, net   (105,210)   855,570    1,273,848    207,035 
Total other expense, net   25,323,250    26,355,193    27,331,270    4,442,086 
Income before income taxes   34,659,730    52,422,130    27,969,819    4,545,869 
Income tax expense   9,142,375    13,105,533    6,992,455    1,136,467 
Net income   25,517,355    39,316,597    20,977,364    3,409,402 
                     
Earnings per share:                    
Basic and diluted   0.99    1.53    0.82    0.13 
Weighted average ordinary shares outstanding:                    
Basic and diluted   25,725,000    25,725,000    25,725,000    25,725,000 
                     

 

 

 
FinalConfidentialAugust 21, 2014

 

CHINA NEW BORUN CORPORATION

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

 

   For the six-month period ended, 
   June 30, 2013   June 30, 2014 
   (RMB)   (RMB)   (US$) 
             
Revenues   1,079,186,038    1,294,618,856    210,411,334 
Cost of goods sold   960,690,062    1,136,596,378    184,728,315 
Gross profit   118,495,976    158,022,478    25,683,019 
Operating expenses:               
Selling   2,558,750    2,749,478    446,866 
General and administrative   19,721,770    21,194,588    3,444,706 
Total operating expenses   22,280,520    23,944,066    3,891,572 
Operating income   96,215,456    134,078,412    21,791,447 
Other (income) expenses:               
Interest income   (1,616,097)   (1,162,947)   (189,011)
Interest expense   46,298,133    52,719,992    8,568,455 
Others, net   (131,154)   2,129,418    346,089 
Total other expense, net   44,550,882    53,686,463    8,725,533 
Income before income taxes   51,664,574    80,391,949    13,065,914 
Income tax expense   13,393,586    20,097,988    3,266,478 
Net income   38,270,988    60,293,961    9,799,436 
                
Earnings per share:               
Basic and diluted   1.49    2.34    0.38 
Weighted average ordinary shares outstanding:               
Basic and diluted   25,725,000    25,725,000    25,725,000