Backgammon Commercial Chain Co., Ltd. (hereinafter referred to as “BBK”, 002251.SZ) recently issued an announcement on the controlling shareholder’s plan to change control and suspend trading, saying that on January 8, 2023, it received the company’s controlling shareholder Backgammon Investment Group Co., Ltd. (hereinafter referred to as “BBK Group”) informed that BBK Group is planning for share transfer and voting entrustment matters, and the total share transfer and voting entrustment ratio accounted for 29.00% of the company’s total share capital (the specific ratio and transaction method are subject to further negotiation between the two parties to the transaction) ), involving a change in corporate control. BBK’s controlling shareholder plans to transfer control rights, and the retail industry is under great pressure, mainly engaged in industrial investment business. The transaction needs to be approved by relevant departments in advance.
BBK stock will be suspended from the opening of the market on January 9, 2023, and the expected suspension time will not exceed 2 trading days. During the suspension of BBK shares, the company will perform its information disclosure obligations in strict accordance with the provisions and requirements of relevant laws and regulations according to the progress of the matter. After the above matters are determined, the company will issue relevant announcements in a timely manner and apply for resumption of trading in the company’s stocks.
The first financial reporter learned from insiders that the matter of equity transfer is still under negotiation. This is the fundamental reason why BBK plans to transfer its equity this time.
Backgammon’s 2022 semi-annual report shows that its revenue during the reporting period was 5.821 billion yuan, a year-on-year decrease of 20.35%; the net profit attributable to the parent was 21.7854 million yuan, a year-on-year decrease of 89.64%. The company attributed it to the slow recovery of residents’ consumption due to the normalization of the epidemic, coupled with the fierce competition in channels, the physical retail industry is under greater pressure. Just recently, BBK agreed to its subsidiary Huaihua BBK Business Management Co., Ltd. to provide joint liability guarantee for the company’s 400 million yuan new credit line to the Xiangtan Branch Business Department of Hunan Bank Co., Ltd. It can be seen that BBK’s profit pressure and financial pressure are not small.
A reporter from China Business News learned that a few years ago, BBK transferred 11% of its shares to Tencent and JD.com, and the total consideration at that time was about 1.626 billion yuan. However, as the retail industry has been affected by the epidemic in the past few years, industry competition and pressure have increased. At present, Tencent and JD.com are gradually fading out of non-main business areas such as BBK, which makes BBK’s capital chain even tighter. “BBK, as a company started from scratch by the founder team, is different from a professional manager-type company. The founder team has emotions for the company, but the impact of the epidemic on the consumer industry and the rise in various costs have overwhelmed the retail industry. As far as Internet companies are concerned, the profit margin of physical retail and other data are not high, so they will not pay special attention to it. I believe that the transfer of equity by BBK’s founder team is also a helpless move.” A person close to the company told the first financial reporter.
The “Report on Chain Supermarket Operations (2022)” recently released by the China Chain Store Association pointed out that in 2022, the epidemic will continue, and retail companies will face the impact of the epidemic, rising food prices, and difficulty in recruiting workers.