WEB NEWS Comments & Business Outlook
BEIJING, Dec. 27, 2019 (GLOBE NEWSWIRE) -- Shineco, Inc. ("Shineco" or the "Company"; Nasdaq: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, hemp products, and various health and well-being focused plant-based products in China, announced today that the Company received a letter from Nasdaq Listing Qualifications Staff (“Nasdaq”) that the Company has been granted an additional 180-day grace period or until June 20, 2020 (“Expiration Date”) to regain compliance with the minimum $1.00 bid price per share Listing Rule (the “Rule”).
On June 26, 2019, the Company received a written notification from the Nasdaq indicating that the Company did not comply with the minimum $1.00 bid price per share requirement for continued listing on The Nasdaq Capital Market set forth in Listing Rule 5810.
December 24, 2019, the Company received another written notification from Nasdaq indicating that the Company is eligible for an additional 180 calendar day period, or until June 22, 2020, to regain compliance. Nasdaq’s determination is based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Capital Market with the exception of the bid price requirement, and the Company’s written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. If at any time during this additional time period the closing bid price of the Company’s security is at least $1 per share for a minimum of 10 consecutive business days, Nasdaq will provide written confirmation of compliance and this matter will be closed. The Company will monitor the closing bid price of its common shares and will consider various options to regain compliance by the Expiration Date.
Joint Venture
BEIJING, Dec. 23, 2019 (GLOBE NEWSWIR
As previously disclosed in a release on December 16, 2019, Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, has reached a consensus on cooperation with Vice Mayor Zhang Jianchun of the Government regarding Shineco’s industrial hemp development plan in Heilongjiang Province (the “Plan”).
Pursuant to the Agreement, the Government agrees to actively promote the execution of the Plan, coordinate relevant departments to communicate on bilateral cooperation, and provide related services and convenience. The Government also agrees to create a good policy environment for Shineco’s development in Wuchang City through providing tailored high-quality services, all-around support in terms of publicity and promotion, and national and local preferential policies. As part of the Agreement, the Company agrees to target Wuchang City as a key development area and formulate a cooperative development plan based on relevant local industrial advantages, industrial development needs and the Company's own strategic development plan.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, “We highly value the strategic cooperation with the Government to establish Wuchang Industry Hemp Park (the “Park”). This is another important part of Shineco’s development plan after our industrial hemp project in Shanxi landed. The Park focuses on the research and development of a CBD biotechnology product series based on comprehensive utilization and realizing the comprehensive utilization extraction of industrial hemp and the development plan for CBD biological manufacturing. As early as March of this year, the Company began to develop the Park in Heilongjiang Province. First, we entered into a strategic cooperation with the Institute of Hemp Research of the Chinese Academy of Agricultural Sciences and completed the regional planting trial of "Xinma No. 1" in Heilongjiang Province. "Xinma No. 1" is the first high quality industrial hemp seed in China which has obtained a seed license with a CBD content of more than 2%. Second, the company co-developed with Harbin Institute of Technology and Jiangsu Hagong Pharmaceutical Machinery Technology Co., Ltd. China's first artificial intelligence industrial hemp CBD extraction production line in April this year, which is expected to be put into production in the first quarter of next year. According to the Plan, 50,000 acres of "Xinma No. 1" will be planted within three years, and facilities for products such as CBD extraction, hemp oil, hemp protein powder, hemp oligopeptide, hemp fiber, and environmentally friendly building materials will be established correspondingly. After the completion of the construction of the Park, the output value is expected to reach RMB5.5 billion.”
Comments & Business Outlook
BEIJING, Dec. 16, 2019 (GLOBE NEWSWIR E) -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, hemp products, and various health and well-being focused plant-based products in China, announced today that Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, has reached a consensus on cooperation with Vice Mayor Zhang Jianchun of Wuchang municipal government of Heilongjiang Province (the Government) regarding Shineco’s industry hemp development plan in Heilongjiang Province (the “Plan”).
Wuchang City of Heilongjiang Province has a superior geographical location and convenient transportation. It is located 24 kilometers north of Harbin, the provincial capital, and close to Changchun, the capital of Jilin Province. The transportation network of Wuchang includes a Labin Railway that runs through the north and south, and the main highways such as Heida and Hawu. Now Wuchang City has been included in the core development plan of the Harbin-Daqi Industrial Corridor.
Wuchang City has fertile soil with a total arable land area of approximately 3.8 million mu (among which 1.75 million mu are wet land and 2.05 million mu are dry land). It is an important commodity grain base in China and ranked Top 10 advanced counties (cities) by production in China and named Top 5 rice county in China. "Wuchang Rice" has received multiple awards: "Geographical Landmark Protected Products in China", "Certificate of Origin", "Chinese Famous Brand Products", "Chinese Famous Brand Agricultural Products" and "China Well-Known Trademarks". Dry land mainly refers to high-quality black soil which is the most precious soil resource on the earth and only located in four places in the world (the Great Plains of Ukraine, the Mississippi Basin in North America, the Pampas Grasslands in South America and the Northeast Plain in China). Black soil has moderate pH and good permeability for fiber accumulation and formation, which is an excellent place for industry hemp cultivation.
The Government attaches great importance to the Plan and agrees to cooperate with the Company. The Plan is highly consistent with Heilongjiang's industry development plan. The Company has been invited to Wuchang to conduct field inspections to complete the project of Industry hemp comprehensive utilization industrial park as soon as possible, and build an industry hemp industrial chain system. The Government believes that this move will increase the income of local farmers and promote the adjustment of the agricultural industrial structure. At the same time, it is also of long-term significance to the development and expansion of the Plan, and both parties are excited for the forthcoming cooperation.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, “Shineco has always adhered to serving local economic development, maintaining long-term and close cooperative relationships with local governments and enterprises, working to promote the optimization of local agricultural structures, strengthening rural economic strength, and achieving industry hemp industry integration. We believe that this cooperation between Shineco and the Government will focus on industrial hemp cultivation to establish a series of industry hemp related industry chain development. The cooperation is to make "Wuchang Industry Hemp" a new city landmark besides "Wuchang Rice" and also to lay a solid foundation for Shineco’s future development plan of industry hemp in Harbin. It will greatly promote the comprehensive utilization value of industry hemp and further stimulate local economic growth. Shineco will also fully grasp the development opportunities of the industry hemp, actively integrate high-quality resources, and accelerate the implementation of our projects.”
Comments & Business Outlook
BEIJING, Dec. 11, 2019 (GLOBE NEWSWIRE ) -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, hemp products, and various health and well-being focused plant-based products in China, announced today that it signed a RMB70 million (approximately USD10 million) industry hemp fiber preliminary processing sales contract (the “Contract”) with Chengongliao (Beijing) Science & Trade Co., Ltd. (“CSTC”), an enterprise focusing on hemp processing in China.
CSTC focus on the construction of the entire industrial hemp industry chain and it conducts business globally, covering various industries such as food, health products, and cosmetics. In addition, CSTC is constantly analyzing industry trend and industrial structure, proactively upgrade technology and product, and continuously improving the branding awareness.
Pursuant to the Contract, CSTC agrees to purchase 4000 tons industry Hemp Fiber by a certain market price from the Company. The purchase amount of the Contract is up to RMB70 million (approximately USD 10 million).
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, “The signing of the Contract is very important for Shineco’s expansion of sales channels and rapid business development. The establishment of this cooperative relationship indicates that Shineco has further expanded its market in the field of industry hemp and has a wider customer base. Looking forward, we expect to achieve mutual benefit and win-win results and build more connections with good partners like CSTC.”
Comments & Business Outlook
BEIJING, Dec. 09, 2019 (GLOBE NEWSWIR E) -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, hemp products, and various health and well-being focused plant-based products in China, announced today that its wholly owned subsidiary Tenjove NewHemp Biotech Co., Ltd. ("TNB") has achieved progress in its industrial product system which focuses on cannabidiol development (“CBD”). The Company has achieved good progress with hemp planting, product research and development, and technical supports.
In April 2019, TNB entered into a strategic cooperation agreement with the Hemp Research Institute of the Chinese Academy of Agricultural Sciences ("HRI"). Both parties spent 3 years jointly cultivating Xinma No.1 (M11), a high-quality industrial hemp seed. M11 has been tested by Daqing branch of Heilongjiang Academy of Science numerous times and has proved that the CBD composition of M11 is much higher than that of similar products.
With regard to product research and development, TNB cooperated with Heilongjiang Harbin Beima Technology Development Co., Ltd.(“HBTD”). The Company and HBTD has developed a series of CBD mask beauty products and improved the industrial chain of food products of CBD black gold powder including the product research and development, production and sale.
The total investment of Shineco in CBD product system project (the “Project”) is about RMB 150 million (approximately USD 22 million). The direct income of the Project exceeds RMB 3000 per mu, which is of great significance to the local economic restructuring and industrial transform.
In the area of technical support, TNB and Jiangsu Hagong Pharmaceutical Machinery Technology Co., Ltd.(“JHPMT”), which focuses on the research and development of intelligent equipment, jointly developed the first industrial hemp intelligent processing equipment (the “Equipment”) in China. At present, the technical development is almost finished. After the official launch of the Equipment, the Company will become the national pioneer in both the processing throughput and extraction rate of the industrial hemp.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, “Shineco CBD product has great market prospects and the CBD product system has great industrial value. It is an important part of Shineco’s strategic development plan in the industrial hemp industry. In the future, Shineco will continue to innovate in the field of industrial hemp, utilize seeds with 100% independent property rights and leading planting technology, build the whole industrial chain system of industrial hemp. This will maximize industrial hemp’s value, constantly improve the current backward situation of industrial hemp cultivation and processing in China, and promote local development, increase agricultural efficiency, increase farmers' income and create more and better social benefits for local economic development.”
Comments & Business Outlook
BEIJING, Dec. 05, 2019 (GLOBE NEWSWIRE ) -- Shineco, Inc. ("Shineco" or the "Company"; Nasdaq: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, specialized textiles, and various health and well-being focused plant-based products in China, announced today that it has regained compliance with Nasdaq’s continued listing requirement and rules with respect to annual meeting of shareholders.
On July 1, 2019, the Company received a written notification from the Nasdaq Listing Qualifications Staff indicating that the Company did not comply with the annual meeting requirement for continued listing on The Nasdaq Capital Market set forth in Listing Rule 5620 (the “Rule”).
On December 4, 2019, the Company received another written notification from Nasdaq Listing Qualifications Staff indicating that the Company has regained compliance with the annual meeting requirement for continued listing on The Nasdaq Capital Market set forth in the Rule.
Contract Awards
BEIJING, Dec. 04, 2019 (GLOBE NEWSWIRE ) -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, specialized textiles, and various health and well-being focused plant-based products in China, announced today that the Company, through its subsidiary Shineco China Hemp Technology Co., Ltd.(“SCHT”), has entered into a 500,000 mu (approximately 82,348 acres) hemp fiber preliminary processing sales framework contract (the “Contract”) with Shanxi Oasis Textile Co., Ltd.(“Oasis”), one of the largest enterprises in China that produces textiles of hemp [and is the National Textile Industry Hemp Product Development Base.
SCHT is a biotechnology enterprise focusing on industrial hemp comprehensive utilization with RMB200 million registered capital. The Company holds 60% of the shares of SCHT and is the controlling shareholder of SCHT. SCHT is located in the Jinzhong Development Zone of Shanxi's Transition and Comprehensive Reform Demonstration Zone, which has a history of over 2800 years’ of agricultural cultivation, development and utilization of industrial hemp. The Company plans to build a comprehensive industrial chain of industrial hemp by applying the traditional local craftmanship. The total scale of the project is estimated to reach 500,000 mu (approximately 82,348 acres). The harvest of industrial hemp has been completed this year and the construction of the project is expected to be gradually completed in the next three years.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, “Shineco officially entered into the industrial hemp industry this year and first established a CBD-based product system in Heilongjiang Province, China. Now we have integrated the industrial hemp resources in Shanxi Province and established SCHT to gradually achieve comprehensive use of industrial hemp. We applied advanced technology to the traditional industry hemp industry, which extends the application of industrial hemp to hemp fiber textiles, antibacterial and environmentally friendly building materials, hemp seed oil and protein powder, oligopeptide as well as industrial hemp essential oil.”
Mr. Zhang continued, “Our innovation technologies greatly add to the value of industrial hemp. We will increase the economic benefits of extracting and processing industrial hemp from less than RMB3,000 to more than RMB40,000 per mu, which increases the output value by more than 10 times. We expect to achieve RMB20 billion output value after the completion of the entire project.”
Comments & Business Outlook
BEIJING, Sept. 27, 2019 (GLOBE NEWSWIRE ) -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, specialized textiles, and other health and well-being focused plant-based products in China, announced today its financial results for the fiscal year ended June 30, 2019.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, “I am clearly disappointed with our 2019 fiscal year financial results but remain confident in our strategy and the fundamentals of our business model. We plan to develop new products and expand our distribution network as well as to grow our business through possible mergers and acquisitions of similar or synergetic businesses, all aimed at increasing awareness of our brand, developing customer loyalty, meeting customer demands in various markets and providing solid foundations for our continuous growth. To meet the increasing demand for our products, we plan to make capital improvements in our existing production facilities which would improve both their efficiency and capacity. In the short-run, we intend to increase our investment in our reliable supply network, personnel training, information technology applications and logistic system upgrades. As 2020 unfolds, we expect to continue to strengthen our competitive positions in industrial hemp industry to lay a firm foundation for long-term sustainable growth.”
Fiscal Year 2019 Financial Highlights
Revenue: $31.22 million (at 28.7% gross margin), down 28.9% from $43.90 million (at 33.7% gross margin) in fiscal year 2018, reflecting the decrease in sales across all products.
Gross Profit: $8.97 million, down 39.3% from $14.79 million in fiscal year 2018.
Operating Income: $0.12 million, down 98.8% from $9.27 million in fiscal year 2018.
Net income attributable to Shineco: $0.80 million, compared to $7.59 million in fiscal year 2018.
EPS: Net income per share of 0.04, compared to a net income per share of $0.36 in fiscal year 2018.
Fiscal Year 2019 Financial Results
Revenue
Revenue for the year ended June 30, 2019 decreased by $12.68 million, or 28.9%, to $31.22 million from $43.90 million for the same period of last year, mainly due to the decrease in sales across all products.
Revenue from Luobuma products decreased by $10.22 million, or 93.9%, to $0.66 million for the year ended June 30, 2019 from $10.88 million for the same period of last year, mainly due to the decrease in revenue from Xinjiang Taihe of $8.21 million. As the nature environment in Xinjiang province is very vulnerable, the harvesting of wild Apocynum Venetum is strictly controlled by the local government, and the Company is required to obtain a permit from local authority before harvesting. In fiscal year 2019, the Company only managed to obtain the permit in the end of December 2018. The management estimated that it is unlikely to obtain new permit in the future, hence, the management decided to cease the wild Apocynum Venetum in Xinjiang province, and changed the Company’s strategy to develop industrial Apocynum Venetum business in Shanxi province instead. As a result, no revenue was generated by Xinjiang Taihe during the year ended June 30, 2019. The decrease was also due to the decrease in revenue from Tenet-Jove Xuzhou branch of $1.34 million as the business operation of this branch ceased in November 2017.
Revenue from Chinese medicinal herbal products decreased by $0.47 million, or 3.3%, to $13.71 million for the year ended June 30, 2019 from $14.18 million for the same period of last year. The sales of Chinese medicinal herbal products were comparatively stable during the year ended June 30, 2019 as compared to the same period in 2018. The decrease was due to the depreciation of RMB against US$. The average translation rate for the year ended June 30, 2019 and 2018 were at 1 RMB to 0.1466 USD and at 1 RMB to 0.1537 USD, respectively, which represented a decrease of 4.65%.
Revenue from other agricultural products decreased by $1.98 million, or 10.5%, to $16.85 million for the year ended June 30, 2019 from $18.83 million for the same period of last year. The decrease was mainly due to the decrease in sales volume of yew trees for the year ended June 30, 2019 as compared to the same period in 2018. The main reason of the decrease was that the Company sold $2.24 million in November 2017 to fulfill a one-time large order from one of the Company’s customers, Qingdao Ship Owners Association.
Gross profit and Gross Margin
Total cost of revenue decreased by $6.86 million, or 23.6%, to $22.25 million for the year ended June 30, 2019 from $29.11 million for the same period of last year. Gross profit decreased by $5.82 million, or 39.3%, to $8.97 million for the year ended June 30, 2019 from $14.79 million for the same period of last year. Overall gross margin decreased by 5.0 percentage points to 28.7% for the year ended June 30, 2019, compared to 33.7% for the same period of last year.
Gross margins for Luobuma products, Chinese medicinal herbal products, and other agricultural products were 54.6%, 25.0%, and 31.2%, respectively, for the year ended June 30, 2019. This compared to gross margins for Luobuma products, Chinese medicinal herbal products, and other agricultural products of 55.2%, 24.5%, and 28.7%, respectively, for the same period of last year.
Operating income
General and administrative expenses increased by $4.17 million, or 104.6%, to $8.15 million for the year ended June 30, 2019 from $3.99 million for the same period of last year. The increase in general and administrative expenses was mainly due to an increase in bad debt expense of $4.12 million as well as an offering cost write-off of $0.43 million. The $0.43 million was the valuation of the Commitment Shares retained by IFG Fund upon termination of the Purchase Agreement and Registration Rights Agreement. The increase was partially offset by the decreased general and administrative expenses of $0.34 million for Tajite and Tiankunrunze as a result of reduced business activities during the year ended June 30, 2019.
Selling expenses decreased by $0.83 million, or 54.1%, to $0.70 million for the year ended June 30, 2019 from $1.53 million for the same period of last year. The decrease was primarily due to the decrease in selling expenses from Tenet-Jove Xuzhou branch of $0.26 million as the business operation of this branch ceased in November 2017. The decrease was also due to the decrease in advertising expenses, salary expenses and commissions from Tenet-Jove of $0.28 million, $0.14 million and $0.05 million for year ended June 30, 2019.
Operating income decreased by $9.16 million, or 98.8%, to $0.12 million for the year ended June 30, 2019 from $9.27 million for the same period of last year.
Net income
Net income decreased by $6.65 million, or 88.3%, to $0.88 million for the year ended June 30, 2019 from $7.53 million for the same period of last year. After the deduction of non-controlling interests, net income attributable to common shareholders for the year ended June 30, 2019 was $0.80 million, or $0.04 per basic and diluted share. This compared to net income attributable to common shareholders of $7.59 million, $0.36 per basic and diluted share, for the same period of last year.
Financial Condition
As of June 30, 2019, the Company had cash and cash equivalents of $35.33 million, compared to $31.49 million as of June 30, 2018. Net cash provided by operating activities was $3.50 million for the year ended June 30, 2019, compared to $9.85 million for the same period of last year. Net cash used in investing activities was $0.25 million for the year ended June 30, 2019, compared to $0.75 million for the same period of last year. Net cash provided by financing activities was $1.81 million for the year ended June 30, 2019, compared to net cash used in financing activities of $0.49 million for the same period of last year.
Acquisition Activity
BEIJING, Aug. 02, 2019 (GLOBE NEWSWIRE ) -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, specialized textiles, and various health and well-being focused plant-based products in China, announced today that the Company entered into a strategic cooperation agreement (the “Agreement”) with Shanxi Yushe County Xunmengyuan Construction Management Co., Ltd. (“SYCX”) on July 29, 2019 to jointly construct China’s first Industrial Hemp Technology Living Museum (the “Museum”).
Pursuant to the Agreement, the Company plans to acquire 51% of SYCX to establish an industrial hemp museum in Shanxi province of China. The consideration is in stock and cash with amounts yet to be determined. As part of the Preliminary Agreement, the Company expects to construct 9 sections for the Museum including an international industrial hemp botanical garden, a China industrial hemp historical and cultural center, an anti-drug education publicity center, an industrial hemp experimental base, an industrial hemp industry research institute, an industrial hemp food production center, an CBD drug and cosmetic products experience hall, an oxygen bar and a hemp themed music hall.
SYCX is located in Yushe County, Jinzhong City, on the bank of the Turquoise River in the hinterland of Taihang Mountain with beautiful scenery and green mountains. SYCX began development in 2017, investing RMB210 million. At the start of 2019, SYCX began business operations, drawing on the nearby Jinzhong City, Shanxi Province. SYCX attracts visitors for cultural tourism, leisure and holidays, and entertainment performances.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, “The world industrial hemp industry is in the early stage of its comprehensive utilization of the material. China's hemp planting area accounts for 50% of the world, and it is basically in the original state of development and utilization, and its output value only accounts for about 5% of the global. Our goal to construct the Museum is to apply modern science and technology to develop the industrial hemp industry, focus on the R&D and production of CBD products in the development of the industrial hemp industry, improve the quality of long-standing hemp products as well as popularize the scientific use of beneficial substances in industrial hemp industry and away from drugs. I believe that Industrial Hemp Technology Living Museum will play an active role in the development of the industrial hemp industry and provide a forum to present these issues.”
Acquisitions
BEIJING, Aug. 01, 2019 (GLOBE NEWSWIRE ) -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, specialized textiles, and various health and well-being focused plant-based products in China, announced today that it entered into a strategic cooperation (the “Agreement”) with Shanxi Hongtian Jiali Agricultural Technology Co., Ltd. (“Hongtian Jiali”) on July 29, 2019. Hongtian Jiali is a leading industrial hemp agriculture technology company in Shanxi province of China.
Hongtian Jiali, located in Jinzhong City of Shanxi province, processes and sells industrial hemp oil, industrial hemp protein powder, industrial hemp oligopeptides and other products. Hongtian Jiali has been granted 4 patents for industrial hemp processing by the State Intellectual Property Office.
Pursuant to the Agreement, the Company plans to acquire 51% of Hongtian Jiali to establish an industrial hemp park in Shanxi province of China. The consideration is in stock and cash with amounts yet to be determined. As part of the Preliminary Agreement, the Company expects to, by 2020, complete planting a target of 100,000 mu (approximately 16,474 acres) of industrial hemp, build a comprehensive industrial hemp product system, and implement the industrial upgrade of hemp food products.
Approval for the industrial park was obtained from the provincial government of Shanxi in April 2019.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, “The acquisition is an important part of Shineco's industrial hemp industry strategy. Hongtian Jiali is committed to inheriting the 2,700-year history of industrial hemp and expanding the development and utilization of hemp to traditional health food. The Company and Hongtian Jiali will respectively leverage their resource advantages with the intention of integrating resources and optimizing their competitiveness and overall profitability in the industrial hemp business ecosystem. The hemp food industry will keep pace with the times, meet the needs of the people for the new era for healthy food, and enhance peoples’ quality of life.”
Comments & Business Outlook
BEIJING, July 05, 2019 (GLOBE NEWSWIRE ) -- Shineco, Inc. ("Shineco" or the "Company"; Nasdaq: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, specialized textiles, and various health and well-being focused plant-based products in China, announced today the Company received a notification letter dated July 1, 2019 from the Nasdaq Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, since the Company has not yet held an annual meeting of stockholders within twelve months of the end of the Company's fiscal year ended June 30, 2018, the Company no longer complies with Nasdaq Listing Rules 5620(a) and 5810(c)(2)(G).
The Company filed its Annual Report on Form 10-K for the fiscal year ended June 30, 2018 on October 15, 2018 and plans to announce its annual meeting date shortly.
The notification received has no immediate effect on the listing of the Company's common stock on Nasdaq. Under the Nasdaq Listing Rules, the Company has until August 15, 2019 to submit a plan to regain compliance. If the Company's plan is accepted, Nasdaq can grant an extension of up to 180 calendar days from June 30, 2019, or December 27, 2019, to regain compliance.
Comments & Business Outlook
BEIJING, May 14, 2019 (GLOBE NEWSWIRE ) -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, specialized textiles, and various health and well-being focused plant-based products in China, announced today that the Company, through its wholly owned subsidiary Tenjove NewHemp Biotech Co., Ltd. ("TNB"), entered into a strategic cooperation agreement (the “Agreement”) with Heilongjiang Provincial Science Research Institute of Healthy Food ("SRIHF") on May 8, 2019 to establish a NewHemp food processing laboratory (the “Lab”) to explore opportunities in the food industry.
Approved by the provincial government, SRIHF was established in April 2013 by The Northeast Agricultural University by integrating resources from Heilongjiang Dairy Industry Technology Development Center, Heilongjiang Soybean Technology Development Research Center, and Heilongjiang Textile Industry Research Institute. SRIHF is mainly engaged in green food research and technological innovation, the development of new products, new equipment research and development and technical services.
Pursuant to the Agreement, both parties agree to jointly establish the Lab to conduct R&D, talent training, research project application, as well as national-level related projects or projects applications. The Lab is mainly engaged in the scientific research of seeds of industrial hemp and other edible foods derived from biotin extracts such as hemp seed beverage, cold pressed oil, candy, bread and nutritional powder, which includes the corresponding industrial hemp food formulas, processing research and development of technology and processing equipment.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, "As we carry out our industrial hemp industry chain strategy, we place the leading technology as our first priority. We hope to use the advantages of scientific research to promote the upgrading of China's traditional industrial hemp industry, so that industrial hemp related products can truly benefit people. The same is true for the downstream applications of industrial hemp. The development and utilization of industrial hemp seeds and other derivative foods not only promotes the development of the industrial hemp industry, but also provides a rich and nutritious food source.”
Comments & Business Outlook
BEIJING, April 30, 2019 (GLOBE NEWSWIRE) -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, specialized textiles, and various health and well-being focused plant-based products in China, announced today that the Company, through its wholly owned subsidiary Tenjove NewHemp Biotech Co., Ltd. ("TNB"), entered into a strategic cooperation framework agreement (the “Agreement”) with Life Spectacular, Inc. ("Proven Skincare" or "Proven"), an enterprise specializing in personal custom-made skin care products, on April 27, 2019 to establish a NewHemp North American Cosmeceutical Laboratory (the "Lab") to explore opportunities in the beauty market.
Pursuant to the Framework Agreement, Proven Skincare agrees to organize relevant scientific research personnel, is responsible for product development, testing and promotion and delivering four different types of skin care products qualified formulas in 2019 and 2020 including masks, creams, essences and body lotions. The Company agrees to invest capital to support Proven Skincare, supply CBD materials as well as produce and distribute products in U.S. and China.
CBD is an extract from industrial hemp. Experimental evidence suggests that the ingredients of CBD can effectively relieve irritated skin, establish a protective barrier for the skin surface, improve the skin's healing properties and treat eczema. The cooperation between the Company and Proven will maximize the use of each parties’ respective strengths and jointly contribute to the utilization, development and promotion of CBD products in skin care products. As an emerging trend in the beauty industry, CBD has huge market potential. Investment research firm Cowen has estimated that CBD consumer goods will reach 16 billion US dollars in sales in 2025.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, "This cooperation is an important step for us to expand to overseas markets and develop the value chain of industrial hemp. The policy environment of the North American market, the relatively mature CBD industry and advanced research level, and consumers with higher acceptance will help us to consolidate develop advantages, expand market share, and seize opportunities.”
Joint Venture
BEIJING, April 22, 2019 (GLOBE NEWSWIRE ) -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, specialized textiles, and various health and well-being focused plant-based products in China, announced today that the Company, through its wholly owned subsidiary Tenjove NewHemp Biotech Co., Ltd. ("TNB"), entered into a strategic cooperation framework agreement (the “Agreement”) with Shenzhen Datong Industrial Co., Ltd. (also referred to as Shenzhen Capstone Industrial Co., Ltd. or “Datong”) on April 18, 2019 to establish a new joint venture Datong NewHemp LLP.
Datong is a Chinese public company listed on the Shenzhen Stock Exchange (000038.SZ). Datong has extensive technology and experience in the research, development and application of blockchain technology. Among other accomplishments, Datong jointly established a blockchain technology application innovation and information security laboratory with the Beijing University of Posts and Telecommunications. Currently, Datong’s blockchain technology, “Datong Chain,” has been implemented for use with positive results. Datong has submitted several patents for blockchain technology to the National Patent Office.
Pursuant to the Framework Agreement, both parties agree to invest up to RMB 1 billion for Datong NewHemp LLP. The two parties plan to establish separate subsidiaries or designate existing subsidiaries as general partners of the partnership. The core strategy of Datong NewHemp LLP includes the integration and expansion of the industrial hemp industry chain, the development of CBD products and domestic and overseas sales, and the exploration of combinations of blockchain and industrial hemp business scenarios to achieve synergy and value maximization.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, "This advantageous plan for cooperation marks another important milestone for NewHemp in the industrial hemp field, laying a solid foundation for further deepening the industrial hemp industry and accelerating the integration of the entire industry chain. We hope that our long-term experience applying advanced scientific techniques to agricultural production can be combine with Datong’s leading blockchain technology to shape the future of the industrial hemp, CBD, and related industries.”
Comments & Business Outlook
BEIJING, March 28, 2019 /PRNewswire / -- Shineco, Inc. ("Shineco" or the "Company")(NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, specialized textiles, and other health and well-being focused plant-based products in China, announced today that the Company plans to cooperate with Heilongjiang Zhenye Agricultural Technology Development Co., Ltd. ("Zhenye Agriculture") , a professional industrial hemp planting enterprise, to establish China's largest planting and processing base for industrial hemp.
The Company, through its wholly owned subsidiary, Tenjove NewHemp Biotech Co., Ltd. ("TNB"), has entered into a strategic cooperation agreement (the "Agreement") on March 22, 2019 and a letter of intent for a share purchase agreement (the "Letter") on March 25, 2019 with Zhenye Agriculture.
Zhenye Agriculture, located in Heilongjiang Province, is a professional industrial hemp planting enterprise. Zhenye Agriculture holds an industrial hemp planting record license and has years of mechanized crop planting experience. Through this cooperation, with the advantages of hemp floral leaf processing and integrated CBD product development, the TNB will provide Zhenye Agriculture with quality strains for medicinal use jointly developed by the Chinese Academy of Agricultural Sciences and the guidance of advanced industrial hemp cultivation techniques. Zhenye Agriculture will become its professional production base.
The hemp, fully licensed and legally planted, has tetrahydrocannabinol (THC) content less than 0.3%. Such products are not used as a drug, but is mainly used in medicine, food, health products and other fields. One of its main ingredients is CBD, also known as cannabidiol, has been touted for its health benefits for treating spasms, anxiety, inflammations and so on. Developed countries in Europe and the United States already have brought related products on the market. According to the Data, medical grade CBD with 99.99% purity CBD sells for $100/g in the current international market, fetching a higher price than gold.
Pursuant to the Agreement, TNB is expected to provide Zhenye with planting techniques, training and guidence for industrial cannabis in designated area. Zhenye is expected to provide land, equipment, labor, fertilizer, herbicides, insecticides, daily management and all procedures before delivery including, but not limited to, soil replacement, planting, watering, pest control, weeding, branch reduction, fertilization, harvesting, drying, clearing and others. Pursuant to the terms of the Agreement, all the hemp products that Zhenye has planted belong to TNB, and Zhenye is expected to deliver the processed industrial cannabis leaves and other parts to the designated warehouse.
Pursuant to the Letter, TNB is expected to acquire 100% shareholder equity, all tangible assets, and relevant information in Zhenye Agriculture with a combination of shareholder equity and cash as consideration.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, "New Hemp Biotechnology is based on serving local economic development, maintaining long-term and close cooperation with local governments and enterprises, devoting itself to optimizing agricultural structure, strengthening rural economic strength, improving residents' income level, and realizing the integration and growth of "tertiary industries". We believe that, with the expansion of industrial hemp planting area and the active engagement of both sides, the civil and medical value of industrial hemp will be better appreciated in the future. New hemp biotechnology will also improve the development opportunities of industrial hemp industry, actively integrate relevant resources, and accelerate the implementation of the project."
Comments & Business Outlook
BEIJING, March 26, 2019 /PRNewswire / -- Shineco, Inc. ("Shineco" or the "Company") (NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, specialized textiles, and other health and well-being focused plant-based products in China, announced today that the Company received a merchant's invitation (the "Invitation") for its industrial hemp business line from Xingshan District People's Government of Hegang City of Heilongjiang province (the "Government") on March 20, 2019.
As previously disclosed in a press release dated March 20, 2019, the Company has established a wholly owned subsidiary, Beijing Tenjove Newhemp Biotechnology Co., Ltd. ("TNB") on March 13, 2019, to capture growth in the industrial hemp market.
According to the Invitation, the Government has invited TNB to cooperate with Heilongjiang Zhenye Agricultural Technology Development Co., Ltd. for industrial hemp business in the Xingshan District of Hegang City of Heilongjiang province. Local land resources are abundant in Hegang city which has an economic development zone planning area of 54.22 square kilometers. In addition, the geographical conditions are particularly suitable for the growth of medicinal industry cannabis. The Government is willing to discuss proposals in detail with TNB.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, "Heilongjiang and Yunnan provinces are currently the only provinces in China where industrial hemp is allowed to grow. We are excited for this opportunity to leverage our technical expertise in advanced agricultural production techniques to develop operations in Heilongjiang. We plan to develop industrial hemp processing and CBD related products capacity in Heilongjiang. We believe we have identified an area with the appropriate soil and water conditions for industrial production."
Comments & Business Outlook
BEIJING, March 20, 2019 /PRNewswire / -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, specialized textiles, and other health and well-being focused plant-based products in China, announced today that the Company has entered into three separate agreements with the Hemp Research Institute of the Chinese Academy of Agricultural Sciences ("HRI").
The three agreements the Company has entered into include an industrial cannabis technology transfer agreement, an industrial cannabis apocynum planting technical service agreement and a hemp industry technical service and product R&D cooperation framework agreement.
Pursuant to the industrial cannabis technology transfer agreement (the "Transfer Agreement"), HRI agrees to transfer use rights and intellectual property rights of its newly bred high CBD industrial cannabis strains, the M11 line, to the Company. The Company believes certain traits of M11 are suitable for the Company's production of industrial cannabis.
Pursuant to the industrial cannabis apocynum planting technical service agreement (the "Technical Service Agreement"), HRI agrees to provide the Company with proposals for farmland infrastructure maintenance, agricultural product procurement and industrial cannabis, apocynum strain selection and planting. As part of the agreement, HRI also agrees to guide the Company in its planting, field management and harvest during the growing period for industrial cannabis and apocynum.
Pursuant to the hemp industry technical service and product R&D cooperation framework agreement, both parties agree to strengthen technical cooperation in planting and seed production including but not limited to apocynum and industrial cannabis planting regional planning, strain screening, high-yield planting technical guidance, improved seed breeding, pest control, mechanized harvesting and stripping, biological degumming and functional active ingredient extraction. As part of the cooperation framework agreement, both parties agree to conduct joint technical research and product development including but not limited to apocynum and industrial cannabis related forward-looking technical research, and comprehensive utilization related technology research and development.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, "We view these three agreements with the Hemp Research Institute of the Chinese Academy of Agricultural Sciences as important milestones for Shineco. We believe our new business line of industrial cannabis will benefit from the industrial cannabis strains produced by the HRI, which are suitable for industrial production, as well as the technical knowledge and other resources that HRI possesses. We are happy to innovate in the industrial cannabis market as we leverage our long-time expertise in augmenting hemp production with technology and our extensive knowledge in other agricultural products."
Comments & Business Outlook
BEIJING, March. 18, 2019 /PRNewswire / -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, specialized textiles, and other health and well-being focused plant-based products in China, announced today that the Company has established a wholly owned subsidiary, Beijing Tenjove Newhemp Biotechnology Co., Ltd. ("TNB") on March 13, 2019, to capture growth in the industrial cannabis market.
The Company has formulated a strategic development plan (the "Plan") based on 20 years' successful experience in the Apocynum (a type of hemp) industry. The Company expects to implement this Plan to expand in the industrial cannabis market including planting, CBD processing, CBD derivatives development and the comprehensive utilization of industrial hemp.
CBD, a naturally occurring compound within the cannabis plant, has been used to study the treatment of epilepsy, depression and other psychiatric diseases, and the inhibition of cancer cell growth and the prevention and treatment of AIDS. Presently, its medicinal value is gaining recognition, and its scope of application is very broad, indicative of the Company's future development prospects.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, "We believe that the new business line of industrial cannabis will likely enrich and draw on the Company's longtime experience in the comprehensive utilization of hemp plants and position the Company to become one of the world's leading experts in the industrialization of hemp-based plants. We expect our plan to create greater value and return to our shareholders and investors."
Comments & Business Outlook
BEIJING, Oct. 15, 2018 /PRNewswire / -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, specialized textiles, and other health and well-being focused plant-based products in China, announced today its financial results for the fiscal year ended June 30, 2018.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, "We are proud of our achievements for fiscal year 2018 with total revenue increased by 30.7% to $43.90 million. Our revenue from Luobuma products increased 200.3% to $10.88 million as our investment in our Apocynum Industrial Park in Xinjiang began to realize its potential. We expect to see more revenue momentum as we continue to invest in key projects to position ourselves for long term growth and success. We are pleased with the reception our Luobuma product line has received over the past fiscal year and we are excited to continue to optimize our operations and improve our gross margins as we enter the new fiscal year."
Revenue: $43.90 million (at 33.7% gross margin), up 30.7% from $33.59 million (at 32.0% gross margin) in fiscal year 2017, reflecting the increase in sales across all products.
Comments & Business Outlook
BEIJING, Aug. 9, 2018 /PRNewswire / -- Shineco, Inc. ("Shineco" or the "Company") (NASDAQ: TYHT), a manufacturer and distributor of Chinese herbal medicines, organic agricultural products, specialized textiles, and other health and well-being focused plant-based products in China, announced today its Apocynum Fiber and Comprehensive Utilization Industry Park Project (the "Project") has been included in the official 13th Five-Year Plan of Bayingolin Mongol ("Bazhou") Autonomous Prefecture. The Project is operated by the Company's joint venture company, Xinjiang Shineco Taihe Agriculture Technology Ltd. ("Xinjiang Taihe").
The 13th Five Year Plan describes the strategy for Bazhou's development for 2016-2020 in the Korla National Economic and Technological Development Zone in Xinjiang and includes concrete targets regarding the environment and efficiency. As a key project of the 13th Five-Year Plan for Bazhou, the Company is expected to invest in the industrialization of Apocynum through its wholly owned subsidiary Shineco Beijing Technology Development Co., Ltd. The initial investment in the Project was approximately RMB1.1 billion and the second phase of investment is expected to be more than RMB4 billion. The Project includes the following, an Apocynum fiber comprehensive extraction plant, a hemp blended fiber plant, an apparel manufacturing plant, a biopharmaceutical plant, a health food factory, a research and innovation center as well as an e-commerce center. The Project is designed to optimize the agricultural industrial structure and industrial development in Bazhou and is expected to make great impact on the local society and the local economy.
Xinjiang is located in the heart of Eurasia and is a core region of the "One Belt and One Road" infrastructure plan. Within Xinjiang, Bazhou has a good industrial foundation in cotton spinning, weaving and dyeing, and pharmaceuticals. Bazhou's infrastructure is conducive to the expansion of Apocynum blending, biotechnology and other industries. The Project combines the strengths of Apocynum products with the geographic advantages of Xinjiang, to stabilize the supply chain, and establish more effective distribution and marketing channels to promote the development of Xinjiang's regional economy and drive the rapid development of the local economy.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, stated, "After the signing of the cooperation agreement with the Development Zone Management Committee on November 15, 2017, our 'Apocynum Fiber and Comprehensive Utilization Industrial Park' project has progressed rapidly. In March 2018, it was approved by the Economic Development Bureau of the Development Zone. In April, the project was listed by the State of Bazhou as a '13th Five-Year Plan' development project. We are excited that our project was included in the local '13th Five Year Plan' project by the State of Bazhou and was referred to the provincial government for the Xinjiang Autonomous Region's '13th Five-Year Plan' project. This is very rare in non-state-owned investment projects and demonstrates the importance of the Apocynum industry for local economic development."
Mr. Zhang continued, "With the strong support and cooperation of local governments in Bazhou, we believe that the development of the Project will be swift. Shineco plans to take on the mission and responsibility of societal development and contribute to the 'One Belt and One Road' infrastructure plan. Upon the completion of the Project, we estimate the revenue to reach RMB51.4 billion with a projected investment return at as high as 183.6%."
Acquisition Activity
BEIJING, July 9, 2018 /PRNewswire / -- Shineco, Inc. ("Shineco" or the "Company") (TYHT), a manufacturer and distributor of Chinese herbal medicines, organic agricultural products, specialized textiles, and other health and well-being focused plant-based products in China, announced today its plan for a strategic investment in Hash Bank, an integrated cryptocurrency financial services platform aiming at becoming the first cryptocurrency bank in the world.
The Company has entered into an Equity Investment Letter of Intent ("LOI") with Hash Bank pursuant to which, Shineco, as an investor in the latest round of investment of RMB 40 million, plans to acquire a 5% ownership stake in Hash Bank for a purchase price of RMB 10 million (approximately US$1.5 million).
Mr. Yuying Zhang, the Chairman and CEO of Shineco, stated that, "The Company has focused on entering the blockchain field since the beginning of this year. This strategic investment in Hash Bank has launched a new journey for the Company's application of blockchain technology. We hope Shineco will enter the global apocynum industry chain with this cooperation with Hash Bank, integrating resources in its apocynum growing and processing regions, and increasing the intensity of R&D and innovation, gradually introducing blockchain technology into the apocynum industry chain. We expect that Shineco would benefit from reduced costs, improved efficiency, a more optimized collaborative environment, and the creation of a new industry ecosystem."
Mr. Zhaicai Su, the co-founder of Hash Bank commented, "Hash Bank is an integrated financial services platform offers depositary services to multiple and various cryptocurrency tokens, tokenized bonds, fund wealth management, investment banking services, and other financial services. Hash Bank's multi-national team is composed of experts with international perspectives and deep financial expertise. We believe that with the development of the cryptocurrency market, digital financial opportunities will increasingly emerge. Through the POS (Proof of Stake) consensus mechanism, we expect to provide financial services for digital assets to promote the establishment and evolution of the global digital financial ecosystem, making the global financial system balanced and safe through blockchain technology. Meanwhile, building a platform for the top global investors, provides Shineco with the perfect services of investment and financing, entrepreneurship and innovation, assisting Shineco with entering the express lane of the blockchain revolution."
Comments & Business Outlook
BEIJING, July 2, 2018 /PRNewswire / -- Shineco, Inc. ("Shineco" or the "Company") (NASDAQ: TYHT), a manufacturer and distributor of Chinese herbal medicines, organic agricultural products, specialized textiles, and other health and well-being focused plant-based products in China, announced today the official establishment of its Apocynum Industrial Integration Construction Project (the "Project") in Bayingolin Mongol ("Bazhou") Autonomous Prefecture. The Project is operated by the Company's joint venture company, Xinjiang Shineco Taihe Agriculture Technology Ltd. ("Xinjiang Taihe") and has secured local government approval.
Apocynum is unique among Chinese herbal medicine as it can be used in textiles. The scientific and technological innovations in apocynum planting are expected to improve the ecological impact of cultivation and facilitate the effective protection and sustainable development of apocynum raw materials. These advances are of great significance for improving the vegetation coverage rate of the Tarim River and conserving soil and water. The government of Bazhou stated that the implementation of this project is conducive to improving the ecological environment in parts of Bazhou, increasing employment, and increasing farmers' income and wealth, with major ecological, economic and social benefits.
The Company plans to build 280 greenhouse nursery bases, five modern farms, five mechanical peeling hemp factories, five environmental protection building materials factories, and five theme villages over 3 years. The Company will carry out overall regional planning, and will advance the Project in stages on the basis of scientific agricultural management.
The Project aims to implement the goals of the "National Strategic Plan for Rural Vitalization" in the "19th National Congress" to boost rural incomes and living standards in an effort to combat unbalanced economic development in China. The Project was created to align with the development trends of agriculture in Xinjiang and the demands of the PRC market. Through the establishment of a standardized production demonstration base for apocynum, the improvement of product market competitiveness and comprehensive benefits, and the adjustment and optimization of regional agricultural structure, the Project aims to strengthen the local rural economy and promote the industrialization and commericalization of apocynum projects.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, stated, "We utilize the unique local resources in Bazhou to expand and strengthen the globally unique apocynum industrial chain, which we expect to play an important role in promoting the development of the regional economy, alleviate poverty, and improve standards of living for local farmers and herdsmen. In addition, the construction of the apocynum planting area may positively impact the Bazhou local climate and protect the natural ecological environment for the benefit of future generations."
Mr. Zhang continued, "When the project is completed, we expect to achieve annual output goals for apocynum fabric, apocynum tea, building materials and apocynum honey of 300,000 tons, 20,000 tons, 300,000 cubic meters and 100,000 kilograms respectively. We also expect to attract 100,000 tourists per annum. We estimate that total revenue may reach RMB 12.5 billion with an investment return rate projected at as high as 135.6%."
Comments & Business Outlook
Second Quarter 2018 Financial Results
Revenues increased by 25.9% to $14.13 million for the three months ended December 31, 2017 from $11.22 million for the same period of last year, mainly due to increases in sales from Luobuma products and Chinese medicinal herbal products and partially offset by decreased sales from other agricultural products.
Net income attributable to Shineco increased by 26.3% to $3.60 million, or $0.17 per basic and diluted share, for the three months ended December 31, 2017 from $2.85 million, or $0.14 per basic and diluted share, for the same period of last year. The increases in net income earnings per share were primarily a result of the increase in gross profit, partially offset by the increase in general and administrative expenses.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, "We are proud of all that we have accomplished in the first two quarters of our fiscal year and are pleased to report the second quarter of 2018 financial results with a 26.3% increase in net income as compared to the second quarter of 2017. We believe that our investment in our Apocynum Industrial Park and Institute of Chinese Apocynum Industrial Technology Research continues to strengthen the long-term outlook of Shineco as a positive long-term investment. In the short term we have seen tremendous growth in our Luobuma product line and are pleased that we have grown to become a high margin business, with revenues grown 327% compared to the second quarter ended December 31, 2016, and have achieved impressive results following our expansion over this past year. The past six months have been immensely positive for Shineco and we are excited to tackle the challenges and opportunities that the next six months will bring, as we anticipate continued future growth in our revenues and net income."
Comments & Business Outlook
BEIJING, Dec. 28, 2017 /PRNewswire / -- Shineco, Inc. ("Shineco" or the "Company") (NASDAQ: TYHT), a manufacturer and distributor of Chinese herbal medicines, organic agricultural products, specialized textiles, and other health and well-being focused plant-based products in China, today announced that the Company has established an expert task force to serve the Apocynum Industrial Park. The move by Shineco to send the expert task force to the Apocynum Industrial Park garnered positive attention from the local government and local community and was regarded by Xinjiang Korla government as a Belt and Road industry benchmark.
On the morning of December 27, 2017, the expert task force led by Shineco arrived at Apocynum Industrial Park in Xinjiang. The team, in addition to a number of executives sent by the Shineco headquarter, also included Dr. Lan Wang, a senior expert in "Steam Explosion Degumming" biological technology from the Chinese Academy of Sciences. Dr. Wang is expected to offer professional knowledge Questions & Answers on call for the Apocynum Industrial Park. The expert task force is expected to operate from the Apocynum Industrial Park in Xinjiang for several months and will make every effort to lay a solid foundation for the rapid development of Apocynum Industrial Park.
Mr. Fang Lv, the deputy general manager of the Company, said, "As we announced dated September this year, Shineco and its joint venture, Xinjiang Shineco Taihe Agriculture Technology Ltd. started to establish the Apocynum Industrial Park. At present, the Company regards the Apocynum Industrial Park establishment as the top priority for the strategic development of Shineco. Therefore, the headquarters also gives its most powerful support. As we can see, all the personnel in the expert task force are all top talents in related fields."
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, stated, "We and the local government have reached a consensus on the construction and the development of Apocynum Industrial Park. We will maintain close cooperation and communication in the future with the local government. China's Apocynum industrialization development is the goal and mission of Shineco and we will spare no effort to carry it out through the Apocynum Industrial Park project."
Mr. Yuying Zhang continued, "From the government approval to the frequent interaction between the local government and Shineco, it is not hard to understand that the highly-advanced industrialization project of Apocynum is in perfect harmony with the present "Belt and Road" policy and the development strategy of the local government, which will play a key role in the development of Shineco in the future."
Contract Awards
BEIJING, Dec. 18, 2017 /PRNewswire / -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a manufacturer and distributor of Chinese herbal medicines, organic agricultural products, specialized textiles, and other health and well-being focused plant-based products in China, today announced that the Company, through its joint venture company, Xinjiang Shineco Taihe Agriculture Technology Ltd. ("Xinjiang Taihe"), has signed a supply contract on December 15, 2017 (the "Contract") with Horgos Huajing Tencel Technology Development Co., Ltd. ("Huajing") worth approximately $51 million USD (340 million RMB).
Through Shineco's proven track record and reputation for quality among peers, Shineco has been contracted by Huajing to supply up to 20,000 tons of apocynum leather fabric at a price of 17,000 RMB per ton. Pursuant to the Contract, Huajing is expected to purchase up to approximately $51 million USD (340 million RMB) worth of apocynum leather fabric from Shineco from December 15, 2017 to December 31, 2018. Pursuant to the Contract, Shineco is expected to guarantee that both the impurity and dampness of the apocynum leather fabric to be less than 6%.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, stated, "We are proud to partner with Huajing. The Supply Contract will help Shineco to expand our business rapidly. This partnership will provide Huajing with better access to the desired apocynum leather fabric and, at the same time, leverage Shineco's brand reputation in a bigger platform. We look forward to nurturing a thriving business relationship. Looking forward, we are very excited to continue building our relationship with well-respected partners like Huajing."
Contract Awards
BEIJING, Dec. 13, 2017 /PRNewswire / -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a manufacturer and distributor of Chinese herbal medicines, organic agricultural products, specialized textiles, and other health and well-being focused plant-based products in China, today announced that the Company, through its subsidiary Tianjin Tajit E-Commerce Ltd, has signed a RMB 8 million supply contract dated December 11, 2017 (the "Contract") with Huangpu International Limited ("Huangpu"), a community e-commerce company in China.
Huangpu International Limited operates its own community e-commerce platform, Xiaohongshu, at www.xiaohongshu.com and designed to enable younger generations to purchase desirable products all around the world through the Internet.
Pursuant to the Contract, Huangpu is expected to purchase RMB 8 million (approximately 1.2 Million USD) worth of products from Shineco and is expected to distribute Shineco's products through its e-commence platform at www.xiaohongshu.com. Shineco will provide Huangpu with necessary assistance during the distributing process.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, stated, "We are proud to have a close working relationship with Huangpu International Limited, one of the most popular community e-commerce platforms in China. This contract is an additional piece of good news for Shineco as it expands our products' sales channels. In addition, the platform, Xiaohuangshu, allows users to share their own buying experiences, which will encourage more and more people to appreciate the uniqueness of our products."
Acquisitions
BEIJING, Dec. 11, 2017 /PRNewswire / -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a manufacturer and distributor of Chinese herbal medicines, organic agricultural products, specialized textiles, and other health and well-being focused plant-based products in China, today announced that the Company, through its joint venture company, Xinjiang Shineco Taihe Agriculture Technology Ltd. ("Xinjiang Taihe"), has entered into a definitive Share Exchange and Acquisition Agreement (the "Agreement") with Western Xinjiang Tiansheng Agricultural Development Co., Ltd ("Xinjiang Tiansheng"), a leading nursery and agricultural company with extensive industry experience in Xinjiang, China.
As previously disclosed on November 16, 2017, Xinjiang Taihe and Xinjiang Tiansheng both agreed to engage in strategic cooperation on the following activities and objectives, such as upgrading nursery greenhouses, establishing a large-scale, mechanized, intelligent modern apocynum base as well as deepening related follow-up cooperation, including building a National Apocynum Park along the 300-kilometer-long Tarim River.
Pursuant to the Agreement, Xinjiang Taihe will receive 51% equity ownership in Xinjiang Tiansheng for further investment in apocynum business expansion in Xinjiang, China, in exchange for a combination of 14% equity ownership in Xinjiang Taihe and cash payments in three separate installments (the "Acquisition Consideration"). The Acquisition Consideration in the aggregate is valued at RMB 23.8 million contingent upon certain milestones in the next years.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, stated, "This transaction is very exciting for Shineco and its shareholders as it will enable the Company to focus on several attractive development objectives such as improving our apocynum seedling base. With our proven business development strategy and Xinjiang Tiansheng's expertise addressing very large business opportunities, we intend to build a world-class and highly focused development effort in apocynum industry. We will leverage the expertise of our team and out financial resources by continuing to seek non-dilutive grant funding and partnerships with leading academic and commercial entities."
Joint Venture
BEIJING, October 27, 2017 /PRNewswire / -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural products, specialized textiles, and other health and well-being focused plant-based products in China, today announced that the Company, through its subsidiary Tianjin Tajit E-Commerce Ltd., has obtained contractual rights to distribute branded products of Daiso Industries Co., Ltd.("Daiso"), a large franchise of 100-yen shops founded in Japan, via JD.com ("JD"), the largest e-commerce company and largest retailer in China.
Pursuant to the contractual arrangement, Shineco is authorized to distribute Daiso's branded products and utilize its brand names in connection therewith in China through Tianjin Tajit E-Commerce Ltd. The cooperation between Shineco and JD includes many business initiatives, covering a broad spectrum of online retail. It allows the Company to access JD's significant online customer base to advance Shineco's business pursuit in China. JD will leverage Shineco's business expertise, and Shineco will serve as JD's authorized vendor for providing its customers with access to a wide range of products of Daiso.
JD and Shineco is expected to join forces on promoting innovation of online retail business model, which is expected to improve Shineco's brand awareness and might result in enhanced marketing and continued growth.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, stated, "We are excited about teaming up with China's e-commerce giant JD and Japan's retail giant Daiso, and the potential market that new relationship can bring to our business. JD's vast online retail channel will enable us to distribute Daiso's products in a more efficient and economical manner to meet the growing consumer demand in China, which further drives the Company's fast expansion in e-commerce, enhances the influence of the Company and builds up the brand awareness of Shineco."
Mr. Zhang continued, "As the market globalization and digital transformation continues to challenge traditional business concept, we need to develop the business faster and in a more flexible way. Distributing Daiso branded products via JD would be an exciting leap in this transformation and allows us to move forward with an even greater focus on innovation and development to meet changing customer needs in China. Given the fact that Daiso can now benefit over 20 million Chinese families, this part of our business is expected to achieve an annual growth rate of 20% subject to contract renewal. We look forward to offering customers a tremendous number of Daiso's quality products not previously widely available across China through JD."
Comments & Business Outlook
Fourth Quarter 2017 Financial Results
Net income increased by 68.2% to $2.35 million, or $0.114 per basic and diluted share, for the three months ended June 30, 2017 from $1.40 million, or $0.072 per basic and diluted share, for the same period of last year. The increases in net income and earnings per share were primarily due to lower operating expenses in 2017 versus the same period of 2016.
Net income increased by $0.33 million, or 4.1%, to $8.47 million for the twelve months ended June 30, 2017 from $8.29 million for the same period of last year. After the deduction of non-controlling interests, net income attributable to common shareholders for the twelve months ended June 30, 2017 was $8.47 million, or $0.41 per basic and diluted share. This compared to net income attributable to common shareholders of $8.14 million, $0.42 per basic and diluted share, for the same period of last year.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, commented, "We are proud of all that we have accomplished in our first full year as an independent publicly traded company and pleased to report the fourth quarter of 2017 financial results with a 68.2% increase in net income and a 57.6% increase in EPS. As we reflect back on the year, we are pleased with the significant progress we have made as we begin to unlock the potential of our businesses by investing to establish the Institute of Chinese Apocynum Industrial Technology Research and Apocynum Industrial Park in Xinjiang. These investments presented headwinds to our sales and profit performance in the short term, we are confident that our strategy will best-position Shineco for continued success for the long term. We expect to sustain good momentum in our financial performance and we anticipate another year of good growth with stable margins and further progress in revenue and net income."
Joint Venture
BEIJING, June 9, 2017 /PRNewswire / -- Shineco, Inc. ("Shineco" or the "Company"; NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural produce, specialized textiles, and other health and well-being focused plant-based products in China, today announced that the Company and its subsidiary Xinjiang Tiankunrunze Biological Engineering Co., Ltd. ("Tiankunrunze") have entered into a Strategic Cooperation Agreement with Beijing Zhongke Biorefinery Engineering Technology Co., Ltd. ("Biorefinery"), a leading high-tech biomass refining company financially backed by the Chinese Academy of Sciences Institute of Process Engineering, to establish the Institute of Chinese Apocynum Industrial Technology Research("ICAITR").
Pursuant to the Strategic Cooperation Agreement entered into on May 2, 2017 among the three parties, Tiankunrunze, Shineco and Biorefinery agreed to establish the ICAITR and each will own 45%, 35% and 20% of the equity interest of ICAITR, respectively. Shineco and Tiankunrunze will invest five million RMB as the registered capital, and Biorefinery will contribute technical investment such as the patent for "Steam Explosion Degumming" as well as other resources.
As a leader in China's Apocynum industry, Shineco will join hands with Biorefinery and Tiankunrunze, to establish the ICAITR in order to launch a public service platform for the domestic Apocynum industry. ICAITR will work as a technology incubation base to transform technology into end-products, such as Apocynum tea, cosmetics and eco-friendly building boards, etc. Shineco expects it will make efforts to increase Shineco's technology innovation, to achieve sustainable development of the Apocynum industry and help more enterprises utilize and industrialize advanced Apocynum processing technologies. Once the technology incubation is successful, Shineco believes that ICAITR will play a significant role in economic development and technology diffusion, and bring significant economic benefit to Shineco.
Mr. Yuying Zhang, Chairman and Chief Executive Officer of Shineco, stated "the Institute of Chinese Apocynum Industrial Technology Research offers a unique and important opportunity for us to develop new refining technology for the Apocynum industry. Together with our strategic partners, we are looking forward to accelerating our product development and manufacturing technology innovation with the core technology of Steam Explosion Degumming. Through the collaborative efforts of the Biorefinery, we expect the utilization of advanced scientific research, human resources and collective data will transform research results into successful products."
Notable Share Transactions
BEIJING, China, Sept. 28, 2016 /PRNewswire / -- Shineco, Inc. ("Shineco" or the "Company"), a producer and distributor of Chinese herbal medicines, organic agricultural produce, specialized textiles, and other health and well-being focused plant-based products in China, today announced that it completed the initial public offering ("IPO") of its common shares on September 27, 2016. The Company raised approximately $7.7 million in gross proceeds through the issuance of 1,713,190 common shares at a price of $4.50 per share. Shineco's common shares will begin trading today at approximately 10:35 AM EST on the NASDAQ Capital Market under the symbol "TYHT".
Network 1 Financial Securities, Inc. acted as Underwriter for the offering. Monarch Bay Securities, LLC participated as a Selected Dealer.
Shineco's registration statement relating to the IPO has been filed with, and declared effective by, the United States Securities and Exchange Commission ("SEC"). This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
