After Chen Xi arrived, he led the team into Shennong's Finance Department and archives room.
To her surprise, Cheng Jiaxun's cooperation was much more thorough than she expected.
All financial vouchers, bank statements, purchase contracts, and sales records were all opened for her inspection.
Even the epidemic prevention records and loss list of the nearly 20,000 piglets that died in the 2016 epidemic were laid out in front of her page after page.
"Mr. Cheng, these information..." Chen Xi was a little surprised.
Cheng Jiaxun smiled bitterly, "Assistant Chen, to be honest, after the IPO was rejected, I also figured it out.
Hiding it and hiding it won't solve the problem. Whatever you want to investigate, go ahead and investigate. Yunnan Agriculture's foundation can withstand investigation."
Chen Xi glanced at him and nodded.
With the full cooperation of Cheng Jiaxun, the progress of due diligence was much faster than expected.
Most of the originally planned two-week workload was completed in less than five days.
On the last day, Chen Xi went through all the data.
Cash transactions, personal bank card collections, Gross Margin, epidemic losses, Equity Structure - she found the answer to every question that was previously questioned by regulators.
Some problems still exist, such as the high proportion of cash transactions.
But Cheng Jiaxun did not hide anything and gave a clear rectification plan.
"Assistant Chen," Cheng Jiaxun stood nearby, "Is there any problem?"
Chen Xi closed the computer. "There are some problems, but they are not fatal."
Cheng Jiaxun breathed a sigh of relief.
Chen Xi looked at him. "Mr. Cheng, your foundation is indeed good. Once the funds are in place, you should be able to recover within half a year."
Cheng Jiaxun nodded. "Then I'll leave it to you."
Chen Xi was the first to arrive at the company from the airport.
When she pushed the door open and came in, she was holding a document bag in her hand. Her face looked tired from a long journey, but her eyes had a look of determination after completing the task.
"Zhao Zong, the due diligence report is out."
She put the document bag on the Zhao Chen table and sat down opposite,
"Yunnan Agriculture's cooperation is very good, and the efficiency is much higher than expected. The work that was originally planned to take two weeks was completed in less than one week."
Zhao Chen Open the document bag, take out the thick report, and turn to the first page.
Chen Xi explained on the side:
"The report is divided into three parts. Finance Department points, Legal Department points, and operations part.
Financial problems are the most common, but they are similar to previous regulatory feedback."
Zhao Chen nodded and continued to scroll down.
"Let's talk about cash transactions first." Chen Xi pointed to a column of data on the report,
"In the first half of 2017, cash collections accounted for 28.7%. It was a little lower than the 29.4% when IPO declaration, but the magnitude was not significant.
They explained the reason very clearly - the customers are mainly rural retail investors who are accustomed to using cash.
Now we are promoting bank transfer and mobile payment, but it will take time. Cheng Jiaxun did not hide anything, and the rectification plan was also listed."
Zhao Chen Turn to the next page.
Chen Xi continued, "The problem of personal bank card collection has been completely canceled in the first half of 2017.
For the previous turnover of more than 40 million, they made Supplementary Explanation, and each transaction can correspond to a real transaction."
Zhao Chen's eyes fell on the column "Gross Margin".
Chen Xi said, "We checked the Gross Margin problem with their Finance Director several times.
Yunnan Agriculture has indeed done a good job in cost control, and its feed conversion rate and survival rate are both better than the industry average.
Gross Margin is higher than its peers, and it is supported by real data. They are not cheating on this point."
Zhao Chen Turn to the page about the epidemic.
Chen Xi said, "In the 2016 epidemic, less than 20,000 piglets died. They provided complete epidemic prevention records and a list of losses, and did not hide anything.
This matter had an impact on the profit of the year, but it has been digested. Cheng Jiaxun said that anyway, the IPO was rejected, and there is nothing to hide."
Zhao Chen closed the report and leaned back on the chair.
"Where is Equity Structure?"
Chen Xi said, "It's still the same problem. The Cheng family holds more than 98% of the shares, and one share dominates.
But this is no longer a big problem after Henglong became a shareholder.
Cheng Jiaxun is very grateful to Henglong for giving up the arrangement of Voting Rights, saying that you are the most cheerful investor he has ever seen."
Zhao Chen nodded. "What about other questions?"
Chen Xi thought for a while, "There are basically no hidden things.
Their accounts are cleaner than I thought, and the tight cash flow is mainly caused by bank loan withdrawals. As long as the funds are in place, it will be relieved within half a year."
She paused. "Cheng Jiaxun asked me to tell you something."
Zhao Chen looked at her.
Chen Xi said, "He said, thank you for trusting him."
Zhao Chen was silent for a second and put the report on the table, "Thank you for your hard work. Take a rest and have a meeting in the afternoon."
Chen Xi stood up. "Okay. Then I'll get ready first."
December 18, West Point in the afternoon.
Zhang Qingxue, Song Zhongping, Chen Qiming, Liu Mingyu arrived earliest.
Chen Xi distributed the copied report to everyone, then returned to his seat and sat down.
Zhao Chen leaned back in his chair. "I have read the report. What are your thoughts?"
Song Zhongping was the first to speak, with a hint of surprise in his tone:
"It's better than I thought. The problems with cash transactions are old problems, not new pitfalls. As long as they are willing to correct them, it's not a big deal."
Chen Qiming pushed up his glasses. "Financial Data I looked it over and there are no big differences.
The profits are real and the costs are controllable. The cash flow problem is mainly due to the withdrawal of loans from banks, not an operational problem."
Zhang Qingxue said, "Legalally, the equity is clear and there are no hidden debts.
The Cheng family has a high shareholding ratio, but after we bought shares, this problem was solved."
Liu Mingyu flipped through the report, "Then the only thing left to discuss is the price and terms?"
Zhao Chen nodded. "The price will be as agreed upon. 390 million, 20% of the shares.
The terms are the same as those agreed before - give up Voting Rights, send finance Deputy Director, one Board of Directors Seat."
He looked at Zhang Qingxue: "Aunt Zhang, you will take the lead in drafting the agreement. Together with the other party's legal affairs, we will put together the framework."
Zhang Qingxue nodded. "Understood. I will contact Yunnan Agriculture's legal affairs tomorrow."
Zhao Chen glanced around. "Any more questions?"
No one spoke.
Zhao Chen stood up. "That's it. The meeting is over."
Zhang Qingxue is very efficient, and she connected with Yunnan Agriculture Group's legal affairs that afternoon.
Early the next morning, she came to the Zhao Chen office.
"Xiao Chen, Yunnan Agriculture have contacted the legal department. They hope to finalize the framework this week and sign a Zhou Zheng-style contract."
Zhao Chen put down the report, "Is it so urgent?"
Zhang Qingxue said, "Cheng Jiaxun is more anxious than us. The bank is pressing hard, and Suppliers is also chasing for money every day. He can't wait too long."
Zhao Chen thought for a while, "Then we will set the framework this week. The details can be discussed slowly, but the core terms remain unchanged--
390 million, 20% shares, give up Voting Rights, finance Deputy Director, one Board of Directors Seat."
Zhang Qingxue nodded. "I understand. Then I will start drafting today."
She walked to the door and turned back. "Xiao Chen, there is one more thing."
Zhao Chen looked at her.
Zhang Qingxue said, "When signing the contract, Yunnan Agriculture hopes that you can go to Yunnan in person."
Zhao Chen thought for a while, "It should be. Arrange it when the time comes."
Zhang Qingxue Push the door and leave.
The office became quiet. Zhao Chen leaned on the back of his chair and looked out the window.
Yunnan Agriculture This investment, from the completion of due diligence to the drafting of the agreement, every step is progressing as planned.
In a few days, the contract will be officially signed.
The phone vibrated.
It was a message from Cheng Jiaxun: "Chairman Zhao, I heard that the due diligence report has come out? Is there no big problem?"
Zhao Chen replied, "Small problem, does not affect the transaction."
Cheng Jiaxun replied instantly, "That's good. I'll wait for you to sign the contract."
Zhao Chen looked at the line of words and raised the corners of his mouth slightly.
Soon.
Henglong's first external investment will be implemented immediately.
This is the first step for him to lead Henglong to complete the transformation of its business model.