TD Holdings, Inc announced the acquisition of Shenzhen Qianhai Baiyu Supply Chain Co., Ltd.

Rhea-AI Summary

TD Holdings, Inc (NASDAQ: GLG) announced its formal acquisition of Shenzhen Qianhai Baiyu Supply Chain Co., Ltd. on October 26, 2020, for 95.7 million USD. The payment will be completed over two years based on performance benchmarks for 2020 and 2021. Baiyu, established in 2016, specializes in a full range of commodities and achieved a revenue of 33.11 million USD in the first half of 2020. The acquisition aims to strengthen TD Holdings' entry into the commodity supply chain market and enhance its digital supply chain platform, targeting growth of 30% to 50% in the next five years.

Positive

• Acquisition of Baiyu enhances TD Holdings' entry into the commodity supply chain market.
• Baiyu has a strong revenue growth trajectory, with a revenue increase of 707.38% from 2018 to 2019.
• Projected revenue growth rates of 30% to 50% in the next five years.
• Baiyu's established relationships with major companies like Vale and Glencore.

Negative

• None.

SHENZHEN, China, Oct. 29, 2020 /PRNewswire/ -- TD Holdings, Inc (NASDAQ: GLG) announced that it will formally acquire Shenzhen Qianhai Baiyu Supply Chain Co., Ltd. (hereinafter referred to as "Baiyu") on October 26, 2020 and signed an acquisition agreement. According to the details of the acquisition agreement, the acquisition amount is 95.7 million USD. According to performance benchmarks and valuation adjustment mechanism that is agreed by both parties on the financial performance of 2020 and 2021, the payment of the acquisition will be completed in two years.

The target company Baiyu Supply Chain was established in 2016 and is an integrated service provider specializing in commodity supply chain. Since its establishment, Baiyu has been adhering to the concept of "100-year foundation starts with building reputation" and the principle of "customers first". With a perfect reputation of zero default rate and tens of billions in scale, Baiyu has become the fastest growing innovative enterprise in China's commodity supply chain industry. Baiyu's supply chain service covers full range of commodities: non-ferrous metals, ferrous metals, coal, metallurgical raw materials, soybean oils, oils, rubber, wood and many other varieties. At the same time, it has significant supply chain infrastructure including processing, logistics, warehousing, and terminals. Utilizing the company's customer base, industry experience, and expertise in the commodity field, Baiyu is one-stop commodity supply chain service and digital intelligence supply chain platform integrating upstream and downstream enterprises, warehouses, logistics, information, and futures trading. Baiyu has high-quality customer base and has established solid business relationships serving various well-known domestic and international companies including Vale, BHP, Glencore, Jiangxi Copper, Zijin Mining, Aluminum Corporation of China, Jinchuan Copper, Yunnan Tin, CNOOC, Hainan Rubber, .

Baiyu is audited by Audit Alliance LLP, a Singapore based accounting firm, and its operating income and net profit in 2019 were respectively 21.17 million USD and 5.9 million USD; according to the auditor review, the realized operating income and net profit from January to June in 2020 were 33.11 million USD and 6.97 million USD respectively. The revenue increase rate of 2018 to 2019 was 707.38%, so the company expects to achieve revenue and profit at a growth rate of 30% to 50% in the next five years.

Ms. Ouyang Renmei, CEO of TD Holdings, Inc, says that the acquisition of Baiyu has laid a solid foundation for TD Holdings, Inc to enter the commodity supply chain field. Our company will strengthen the upgrade of supply chain platform by introducing systematic quantitative risk control system, which will be based on Baiyu's massive historical market data and complex data analysis models. The platform will establish a quantitative risk management system with ETL as the core, and then optimize trading portfolios by incorporating a combination of various factors and strategies in order to effectively control risks and sustain business development. As a part of the company's growth plan, we will consider opening branches and business offices in Shanghai, Tianjin, Wuhan, Chengdu, Ningbo, Kunming, Xi'an, Foshan, Guangzhou, Hong Kong China and other oversea countries like Singapore, Malaysia, Dubai, UK, Russia to cover international ground.

Ms. Ouyang Renmei says that the completion of the acquisition of Baiyu supply chain has greatly improved the outlook of TD Holdings, Inc. and is excited to enter a new industry space. TD Holdings, Inc. will continue to acquire and incorporate companies and teams specialized in e-commerce platforms, block-chain technology, smart device manufacturing, commodity exchanges, third-party computing power payment systems, to create an ecosystem that integrates trading, payment and settlement, warehousing and logistics, supply chain financing, and market intelligence of commodities, and become an innovation leader for digital supply chain service provider for commodities.

View original content:http://www.prnewswire.com/news-releases/td-holdings-inc-announced-the-acquisition-of-shenzhen-qianhai-baiyu-supply-chain-co-ltd-301163579.html

SOURCE TD Holdings, Inc.

FAQ

What is the acquisition amount for Baiyu by TD Holdings?

The acquisition amount for Baiyu by TD Holdings is 95.7 million USD.

When was the acquisition of Baiyu finalized?

The acquisition of Baiyu was finalized on October 26, 2020.

What were Baiyu's revenues in the first half of 2020?

Baiyu reported revenues of 33.11 million USD in the first half of 2020.

What growth is TD Holdings expecting from Baiyu in the next five years?

TD Holdings expects a revenue growth rate of 30% to 50% from Baiyu in the next five years.

How will TD Holdings utilize Baiyu's data for risk management?

TD Holdings plans to introduce a systematic quantitative risk control system utilizing Baiyu's historical market data for effective risk management.