Yintech Investment Holdings Limited (NASDAQ:YIN)
("Yintech" or the "Company"), the largest online
provider of spot commodity trading services in China by customer
trading volume in both 2014 and 2015, today announced that it has
entered into a definitive agreement (“Definitive Agreement”) to
acquire 100% equity interest in Gold Master (HK) Company Limited
(“Gold Master”), which, through its subsidiaries,
offers online spot commodity trading services to individual
customers in China on the Shanghai Gold Exchange.
The table below sets forth the leading trading
services providers for online spot commodity trading in China,
according to an industry report compiled by Euromonitor:
Ranking 1 |
Trading ServiceProvider |
Main Exchanges OperatingOn |
EstimatedCustomerTrading Volumein 2015 (RMBbillion) |
As % of TotalTrading Volumeof IndividualInvestors in
2015 |
1 |
Yintech |
Tianjin
Exchange,Guangdong Exchange andShanghai Gold Exchange |
660 |
|
4.0 |
% |
2 |
Gold
Master 2 |
Shanghai Gold
Exchange |
600 |
|
3.7 |
% |
3 |
Company
B |
Guangdong Exchange |
350 |
|
2.1 |
% |
4 |
Company
C |
Shanghai
Gold Exchange,South Rare Precious Metals Exchange |
300 |
|
1.8 |
% |
5 |
Company D |
Tianjin Exchange |
280 |
|
1.7 |
% |
Note:1. The estimated customer trading volume
data have been determined via a fieldwork program consisting of
desk research and trade interviews. While audited data was
available for some of the companies, they do not break down to the
trading data as disclosed in the chart above. For these companies
as well as the companies that are in the market but not publicly
listed, Euromonitor has estimated their trade volume based on
various trade sources.2. Gold Master was referred to as “Company A”
in the Industry section of Yintech’s IPO Prospectus
Gold Master has grown rapidly since operations
began in 2012. For the year ended December 31, 2015 and the six
months ended June 30, 2016, Gold Master had customer trading volume
of RMB604.1 billion (accounting for approximately 14.9% of total
trading volume by individual investors on the Shanghai Gold
Exchange in 2015) and RMB753.8 billion, respectively. Gold Master’s
revenues and net profits during the same periods were RMB208.2
million and RMB257.9 million, respectively, and RMB54.0 million and
RMB41.9 million, respectively.
The acquisition is expected to significantly
enhance Yintech’s presence on the Shanghai Gold Exchange, which is
the only exchange overseen by the People’s Bank of China and
permitted to conduct spot trading of gold in China. Upon completion
of the acquisition, Yintech is expected to become the largest
trading services provider on each of the three largest exchanges
for online spot commodity trading in China, namely the Shanghai
Gold Exchange, the Tianjin Precious Metals Exchange and the
Guangdong Precious Metals Exchange.
Under the terms of the Definitive Agreement and
subject to certain closing conditions, Yintech has agreed to
acquire a 100% equity stake in Gold Master for a combination of
cash and share consideration, including US$42.2 million in cash and
US$150.7 million in newly issued Yintech ordinary shares
(“Consideration Shares”). Consideration Shares will be issued at
US$0.75 per share, equivalent to US$15.00 per American Depositary
Shares (“ADS”, one ADS represents 20 ordinary shares). The Company
will issue 200,890,940 Consideration Shares in total (equivalent to
10,044,547 ADSs), representing 14.71% of the enlarged share capital
of the Company.
“We are pleased to announce the acquisition of
Gold Master,” commented Mr. Wenbin Chen, Chairman and CEO of
Yintech. “Gold Master and its highly experienced team have done a
fantastic job in building a solid business by focusing on premier
customers, developing strong brand recognition, investing in
proprietary technology and delivering best-in-class services to
their customers. After the transaction, Gold Master will continue
to operate under its own brand. By joining forces, we believe the
two largest players in the industry will be able to create
tremendous value for our customers and shareholders.”
“This transaction is an important part of our
plan to enhance our presence on the Shanghai Gold Exchange and
extend our leadership from spot trading of silver to gold,” said
Mr. Jingbo Wang, CFO of Yintech. “Gold Master is the clear leader
on the Shanghai Gold Exchange, with the majority of customer
trading volume in gold. By acquiring Gold Master, we will be able
to gain significant market share on the Shanghai Gold Exchange and
benefit from business synergies and cost savings.”
SINA Corporation (NASDAQ:SINA), through its
wholly-owned subsidiary MeMeStar Limited, owns 15% of Gold Master
and will receive 30,133,640 ordinary shares (equivalent to
1,506,682 ADSs) in this transaction, which will increase its
holding of Yintech from 1.27% to 3.29%.
Panhou International Management Limited
(“Panhou”), through a fund under its management, holds 684,764 ADSs
as of August 23, 2016 through subscription in the Company’s initial
public offering and subsequent open market purchases. A fund under
the management of an affiliate of Panhou owns 47.33% of Gold Master
and will receive 95,081,680 ordinary shares (equivalent to
4,754,084 ADSs) in this transaction, representing 6.96% of enlarged
share capital of the Company. After the transaction, Panhou and its
affiliates will hold 7.96% of the Company. The Company entered into
a risk and return transfer arrangement in August 2015 with an
affiliate of Panhou to pass the risks and returns associated with
the Company’s principal positions resulting from customers’ trading
activities for a term of 5 years.
Pine River Holdings Limited (“Pine River”),
controlled by an independent third party individual, holds 19.82%
of Gold Master and will receive 39,816,580 ordinary shares
(equivalent to 1,990,829 ADSs) in this transaction, representing
2.92% of enlarged share capital of the Company.
Resources Fancy Limited (“Resources Fancy”),
controlled by a senior management of Gold Master, holds 17.85% of
Gold Master and will receive 35,859,040 ordinary shares (equivalent
to 1,792,952 ADSs) in this transaction, representing 2.63% of
enlarged share capital of the Company.
Each of Panhou, MeMeStar, Pine River and
Resources Fancy has agreed in the Definitive Agreement not to sell,
contract to sell, pledge or otherwise dispose of, including through
private sales, directly or indirectly, any Consideration Shares
until October 24, 2016. In addition, the Consideration Shares have
not been and will not be registered under the United States
Securities Act of 1933, as amended (the “Securities Act”), and may
not be offered or sold within the United States except pursuant to
an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act. Under SEC Rule
144, the Consideration Shares may become eligible for public sale
in the United States after six months of their issuance.
The following table shows the shareholding
structure of the Company immediately before and after the
completion of this acquisition, assuming there is no change in the
issued share capital of the Company on or before the completion of
this acquisition other than issuance of Consideration Shares.
|
Ordinary shares beneficiallyowned immediately
beforecompletion of thisacquisition |
|
Ordinary shares beneficiallyowned immediately
aftercompletion of thisacquisition |
|
Number |
|
Percentage |
|
Number |
|
Percentage |
|
|
|
|
|
|
|
|
Wenbin
Chen |
400,000,000 |
|
|
34.34 |
% |
|
400,000,000 |
|
|
29.29 |
% |
Ming
Yan |
300,000,000 |
|
|
25.76 |
% |
|
300,000,000 |
|
|
21.97 |
% |
Ningfeng
Chen |
300,000,000 |
|
|
25.76 |
% |
|
300,000,000 |
|
|
21.97 |
% |
SINA
Corporation |
14,814,815 |
|
|
1.27 |
% |
|
44,948,455 |
|
|
3.29 |
% |
Panhou |
13,695,280* |
|
|
1.18 |
% |
|
108,776,960 3 |
|
|
7.96 |
% |
Pine
River |
- |
|
|
- |
|
|
39,816,580 |
|
|
2.92 |
% |
Resources Fancy |
- |
|
|
- |
|
|
35,859,040 |
|
|
2.63 |
% |
Other
shareholders |
136,304,720* |
|
|
11.70 |
% |
|
136,304,720* |
|
|
9.98 |
% |
Total |
1,164,814,815 |
|
|
100.00 |
% |
|
1,365,705,755 |
|
|
100.00 |
% |
* representing shareholding in the form of
ADSNote: 3. Including 13,695,280 ordinary shares in the form of
ADS
Gold Master expects its 2016 net income to be in
excess of RMB140.0 million. In the case that the 2016 net profit of
Gold Master falls short of RMB140.0 million, total consideration
shall be reduced by the shortfall, which shall be remitted by
Panhou to the Company.
This acquisition is subject to customary closing
conditions. The Company expects the acquisition to be completed on
or before September 30, 2016.
Yintech was advised by Jefferies.
Operational highlights of Gold Master in comparison
with Yintech |
|
|
For the year ended |
For the six months ended |
|
December
31,2014 |
December 31,2015 |
June
30,2015 |
June
30,2016 |
|
|
|
|
|
Customer trading volume (in
RMB billion) |
Gold Master – Shanghai Gold Exchange |
253.8 |
604.1 |
155.9 |
753.8 |
Yintech – Shanghai Gold Exchange |
- |
2.7 |
- |
67.4 |
Yintech – Tianjin and Guangdong Exchanges 4 |
623.4 |
657.0 |
365.0 |
578.7 |
|
|
|
|
|
Net commissions and fees (in
RMB million) |
Gold Master –Shanghai Gold Exchange |
65.5 |
206.7 |
47.9 |
236.4 |
Yintech – Shanghai Gold Exchange |
- |
0.9 |
- |
22.0 |
Yintech – Tianjin and Guangdong Exchanges 4 |
860.8 |
989.8 |
552.9 |
783.0 |
|
|
|
|
|
Active accounts 5 |
|
|
|
|
Gold Master –Shanghai Gold Exchange |
6,629 |
17,698 |
9,647 |
22,816 |
Yintech – Shanghai Gold Exchange |
- |
369 |
- |
1,901 |
Yintech – Tianjin and Guangdong Exchanges 4 |
20,330 |
24,084 |
17,068 |
20,100 |
Note:4. Excluding Yintech’s mini account
business on the Guangdong Precious Metals Exchange5. Refer to a
customer account that executed at least one trade in a given
period
Consolidated statements
of comprehensive income of Gold Master 6 |
|
|
For the years ended |
For six months ended |
|
December 31, |
December 31, |
June 30, |
June 30, |
|
|
2014 |
|
|
2015 |
|
|
2015 |
|
|
2016 |
|
In RMB '000 |
Audited |
Audited |
Unaudited |
Unaudited |
|
|
|
|
|
Revenues |
|
66,517 |
|
|
208,194 |
|
|
49,086 |
|
|
257,872 |
|
Cost of revenues |
|
(1,000 |
) |
|
(1,543 |
) |
|
(1,217 |
) |
|
(21,522 |
) |
Sales and marketing
expenses |
|
(40,946 |
) |
|
(92,339 |
) |
|
(31,138 |
) |
|
(145,471 |
) |
General and
administrative expenses |
|
(33,291 |
) |
|
(35,704 |
) |
|
(9,455 |
) |
|
(29,948 |
) |
Other incomes and
expenses, net |
|
(3,221 |
) |
|
(12,952 |
) |
|
(3,144 |
) |
|
(4,981 |
) |
Income before income
taxes |
|
(11,941 |
) |
|
65,656 |
|
|
4,132 |
|
|
55,950 |
|
Income taxes |
|
(10 |
) |
|
(11,669 |
) |
|
14 |
|
|
(14,015 |
) |
Net income |
|
(11,951 |
) |
|
53,987 |
|
|
4,146 |
|
|
41,935 |
|
Note: 6. Prepared based on consolidated
financial statements of Gold Master’s operating subsidiaries in
accordance with PRC GAAP.
Conference Call Information
The Company will host a conference call to
discuss its unaudited financial results for the quarter ended June
30, 2016 as well as the acquisition of Gold Master at 8:00 a.m.
Eastern Time on Wednesday, August 24, 2016 (8:00 p.m. Beijing time
on the same day).
Dial-in numbers for the live conference call are as follows:
International |
+1 412 902 4272 |
U.S. Toll Free |
+1 888 346 8982 |
Mainland China Toll Free |
400 120 1203 |
Hong Kong |
+852 3018 4992 |
Hong Kong Toll Free |
800 905 945 |
Passcode |
Yintech |
A telephone replay of the call will be available
after the conclusion of the conference call through 11:59 p.m. Hong
Kong Time, August 31, 2016.
Dial-in numbers for the replay are as follows:
International Dial-in |
+1 412 317 0088 |
U.S. Toll Free |
+1 877 344 7529 |
Passcode |
10091417 |
A live and archived webcast of the conference
call will be available on the Investor Relations section of
Yintech’s website at http://ir.yintech.net/.
Safe Harbor Statement
All statements other than statements of
historical fact contained in this release, including statements
regarding future results of the operations of the Company are
forward-looking statements, which are made under the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements are subject to a number of
risks, uncertainties and assumptions that could cause actual
results to differ materially. Factors that might cause or
contribute to such differences include, but are not limited to: the
Company's ability to effectively acquire and retain its customers;
the Company’s diversification of its business among different
commodity exchanges; the adjustments in commissions and other fees
set by relevant commodity exchanges; the Company’s ability to
constantly upgrade its technology platform and software; general
market conditions of online spot commodity trading industry and
stock market; intense competition among service providers in this
industry; the Company's relatively short operating history; the
price of the Company's ADSs and changing market conditions for its
ADSs; acquisition-related risks, including unknown liabilities and
integration risks; as well as those risks detailed from time to
time under the caption "Risk Factors" and elsewhere in the
Company's Securities and Exchange Commission filings and reports,
including in the prospectus filed by the Company on April 26, 2016.
In addition, the Company operates in a very competitive and rapidly
changing environment. New risks emerge from time to time. It is not
possible for the management to predict all risks, nor can the
Company assess the impact of all factors on its business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements that the Company may make. In light of
these risks, uncertainties and assumptions, the forward-looking
events and circumstances discussed in this release are inherently
uncertain and may not occur, and actual results could differ
materially and adversely from those anticipated or implied in the
forward-looking statements. Accordingly, you should not rely upon
forward-looking statements as predictions of future events. The
Company does not undertake any obligation to update publicly or
revise any forward-looking statements for any reason after the date
of this release, nor to conform these statements to actual results,
future events, or to changes in the Company's expectations.
About Yintech
Yintech (NASDAQ:YIN) is the largest online
provider of spot commodity trading services in China by customer
trading volume in both 2014 and 2015, according to Euromonitor. The
Company facilitates the trading by individual customers of silver,
gold and other precious metals and commodities on China’s three
leading exchanges: the Shanghai Gold Exchange, the Tianjin Precious
Metals Exchange and the Guangdong Precious Metals Exchange. Yintech
provides customers with comprehensive services, including account
opening, investor education, market information, research, live
discussion boards and real-time customer support, the majority of
which, is delivered through its proprietary client software and
call center.
For investor and media inquiries, please
contact:
Yintech
Investor Relations DepartmentPhone: +86 21 2028
9009 ext 8096E-mail: ir@baidao.com
Christensen
In China Mr. Christian Arnell Phone:
+86-10-5900-1548 E-mail: carnell@christensenir.com
In US Ms. Linda Bergkamp Phone: +1-480-614-3004
Email: lbergkamp@christensenir.com
SINA com (NASDAQ:SINA)
Historical Stock Chart
From Mar 2024 to Apr 2024
SINA com (NASDAQ:SINA)
Historical Stock Chart
From Apr 2023 to Apr 2024