JD Capital-Invested Jiahe Agricultural Stockbreeding Gets Listed on NEEQ
Lately, JD Capital-invested Jiahe Agricultural Stockbreeding Co., Ltd. (short for “Jiahe Agricultural Stockbreeding”; stock code: 871537) was successfully listed company on the National Equities Exchange and Quotations (NEEQ).
Jiahe Agricultural Stockbreeding is a modern integrated company which takes pig breeding as its core business, and specializes in industrialized operation of pig supply. Its products and services include high-quality breeder pigs, commodity pigs, trading of feeds and veterinary drugs, and organic fruits, vegetables, and forest products.
At present, Jiahe Agricultural Stockbreeding has established more than 30 branches and 20-odd breeding bases across China, boasting a leading pig-breeding system and advanced pig-breeding bases. All these make Jiahe one of the best breeding companies of new Denmark-originated pigs.
In 2012, a fund managed by JD Capital became one of Jiahe’s shareholders, holding 15.28% of its shares prior to its listing.
Consolidation-Oriented Investment Facilitates Large-Scale Operation of Industry Leaders
Currently, as China’s economic development enters the new normal, the growth rate of macro-economy slows down, so does that of individual companies. Under such circumstances, the latest topic in China’s industrial development is to improve industrial concentration through large-scale business consolidation.
Take agricultural stockbreeding, the industry Jiahe is in, for example. At present, the industrial concentration of pig-slaughtering sector in China is valued at less than 10%, way below 70% in the mature market; meanwhile, there are a relatively small number of large-scale companies. In the future, as the government strengthens its regulation of stock-slaughtering and meat-processing businesses, those lagged, small companies will soon be eliminated, and scale operation will become an inevitable trend in the development of the industry.
Under these new circumstances, the model of consolidation-oriented investment has dominated the PE sector in China. It, at the core, features the model of “1+N”: to be more specific, the investors will help the leader or quasi-leader (i.e. “1”) in a subsector to perform industry consolidation by acquiring other enterprises (i.e. “N”) and become a leader in the region, nationwide and even worldwide. In 2017, JD Capital has launched the “Bellwether Plan”, with which it will perform “1+N” consolidation-oriented investment practices in a comprehensive and systematic manner, dig deep into different industries, including agricultural stockbreeding, and fund the growth and mergers and acquisitions of leaders in various industries.
In the future, JD Capital will continue to support the development of Jiahe Agricultural Stockbreeding, and, by virtue of the “1+N” consolidation-oriented investment model, help it consolidate resources in its industry, lift scale effects, and become an industry leader enjoying competitive advantages from scale operation.