TD Holdings, Inc acquires Baiyu Supply Chain in China
Baiyu Supply Chain was established in 2016 and is an integrated service provider specializing in commodity supply chain.
TD Holdings has announced that it will formally acquire Shenzhen Qianhai Baiyu Supply Chain Co., Ltd. on October 26, 2020 and signed an acquisition agreement. According to the details of the acquisition agreement, the acquisition amount is $95.7 million. 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 specialising in commodity supply chain. Since its establishment, the company 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, the supply chain logistics provider 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. Utilising 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. It has a 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's operating income and net profit in 2019 were respectively $21.17 million and $5.9 million; according to the auditor review, the realised operating income and net profit from January to June in 2020 were $33.11 million and $6.97 million respectively. The revenue increase rate of 2018 to 2019 was 707.38 per cent, so the company expects to achieve revenue and profit at a growth rate of 30 per cent to 50 per cent in the next five years.
Ouyang Renmei, CEO of TD Holdings, Inc, says, “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 optimise 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.”
She added 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. It 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.