Xinjiang Tianshan Animal Husbandry Bioengineering Co., Ltd. (hereinafter referred to as "Tianshan Bioengineering" or "the Company") is a company listed on the Shenzhen Stock Exchange. To meet the capital needs of the Company's business development, enhance its capital strength and profitability, and in accordance with the "Company Law of the People's Republic of China" (hereinafter referred to as the "Company Law"), the "Securities Law of the People's Republic of China" (hereinafter referred to as the "Securities Law"), and the "Administrative Measures for the Issuance and Registration of Securities by Listed Companies" (hereinafter referred to as the "Issuance Registration Measures") and other relevant laws, administrative regulations, departmental rules, or normative documents and the "Articles of Association," the Company has compiled the Argumentation and Analysis Report on the Proposal for Issuance of A Shares to Specific Objects in 2026. Unless otherwise specified herein, the terms used in this report have the same meaning as in the "Xinjiang Tianshan Animal Husbandry Bioengineering Co., Ltd. 2026 Proposal for Issuance of A Shares to Specific Objects."
I. Background and Objectives of the Current Issuance
(I) Background of the Current Issuance
- The industry is showing a trend of gradual concentration and integration across the entire industry chain.
Currently, the domestic beef cattle farming industry has low concentration. Comparing the development paths of industry leaders at home and abroad, such as Shuanghui Development, Wens Foodstuff, and Muyuan Foods, these companies have complete industry chains from farming to meat processing. Therefore, the industry is currently showing a trend of gradual concentration and integration across the entire industry chain. Due to the relatively long breeding and fattening cycle of cattle, using the most common Simmental cattle in China as an example, it takes at least 18 months from calf to market. When the industry experiences significant cyclical fluctuations, beef cattle farming carries relatively high risks within the entire industry chain. The main reasons include: (1) The operating cycle for live cattle circulation, slaughter, and beef sales is relatively short, and is less affected by price fluctuations; while the farming cycle typically exceeds one year, and sales prices are greatly affected by market conditions; (2) Live cattle farming requires continuous cost investment, and it takes time to realize cash from cattle sales; (3) There is a time lag in the transmission of live cattle prices to beef prices, and the decline in beef prices is usually much lower than that of live cattle prices. Therefore, during periods of significant industry cyclical fluctuations, developing the entire industry chain is conducive to smoothing out the volatility risks of a single link and enhancing market competitiveness.
The current issuance is conducive to alleviating the Company's capital pressure, improving liquidity, and facilitating the Company's full industry chain layout, expanding into downstream slaughtering and processing, and meat sales, thereby increasing revenue streams and enhancing market competitiveness.