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Starting from an ordinary residential building in Shiyun Village, Shekou, and now owning Neptune Tower, Galaxy Technology Tower and Neptune Star Tower, Zhang Siming, a businessman from Jilin who has been doing business in Shenzhen for more than 30 years, has tasted the sweetness of capital operation in the past, but now he has to sell off the controlling stake of listed companies.

Recently, Haiwang Bio (000078.SZ), controlled by Zhang Siming, disclosed several announcements stating that it intends to transfer part of its shares in the listed company to Guangdong Provincial State-owned Assets Management. While "giving up" the control rights, it also bears the burden of a three-year performance bet.

In recent years, Haiwang Bio's asset-liability ratio has been high and the company's cash flow has been tight. The industry believes that transferring control to state-owned enterprises can, on the one hand, exchange equity for cash, and on the other hand, it can also alleviate the financial pressure of listed companies.

In recent days, the stock price of Neptune Biological has continued to fluctuate. As of the close of August 2, it closed at 2.45 yuan, down 0.41%, with a total market value of 6.74 billion yuan.

Completely give up control

Zhang Simin, who is about to turn 61, is from Changchun, Jilin Province. As the head of Shenzhen Neptune Group Co., Ltd. (hereinafter referred to as "Neptune Group"), he once controlled a huge "Neptune" industry, which once spanned multiple fields such as medicine, education, media, finance and health. He once owned three listed companies: Neptune Bio, Neptune Interlon (08329.HK, indirect shareholding ratio of 32.51%) and Neptune Star (delisted from the US stock market, planning an A-share IPO).

Haiwang Bio is mainly engaged in pharmaceutical commercial circulation, and more than 60% of the company's revenue comes from this. A reporter from China Business News sorted out Haiwang Bio's annual report and found that around 2017, during the key stage of the country's implementation of the "two-invoice system", Haiwang Bio accelerated its industry integration efforts and acquired a number of industry companies.

However, mergers and acquisitions are a "double-edged sword". For Haiwang Biological, while the performance of the target assets is consolidated, it also brings great financial pressure to itself.In addition, the pharmaceutical distribution industry in which Haiwang Bio is located is a capital-intensive industry. The capital investment required for daily operations is relatively large. Prepayment of suppliers and maintenance of inventory scale will occupy a certain amount of funds.

As early as March 2022, Neptune Bio issued an announcement stating that it was planning mixed-ownership reform and introducing strategic investors, which may involve a change in the company's actual controller.However, no results of the “negotiation” were announced. Until recently, a state-owned enterprise in Guangdong Province took over.。

According to the announcement, the transaction is divided into three parts: equity transfer, the original actual controller's waiver of voting rights and private placement.。

First,Neptune Group transferred its 315 million shares of Neptune Bio to Guangdong Silk Textile Group Co., Ltd. (hereinafter referred to as Silk Textile Group), a state-owned enterprise in Guangdong Province, at a price of RMB 2.43 per share (accounting for approximately 12% of the total number of shares of the listed company after the completion of the repurchase and cancellation of restricted shares), with a total price of RMB 767 million, all paid in cash.

second,The two parties agreed that Haiwang Group and its persons acting in concert would give up the voting rights corresponding to approximately 901 million shares of the company (approximately 32.9112% of the company's shares) in total. This voting right waiver will be effective for a long time until the shareholding ratio of Silk Textile Group and its persons acting in concert exceeds that of Haiwang Group and its persons acting in concert by more than 5%.

third,In order to further consolidate its control, Haiwang Bio also plans to issue no more than 620 million shares to Silk Textile Group and its controlling shareholder Guangdong Guangxin Holding Group Co., Ltd. (hereinafter referred to as Guangxin Group) at a price of RMB 2.4 per share.

In addition, according to the agreement, Neptune Biotechnology must complete the repurchase and cancellation of 119 million restricted shares. After the repurchase and cancellation, the total number of Neptune Biotechnology shares will be 2.631 billion shares.

After all the above actions are completed, the shareholding ratio of Silk Textile Group and its persons acting in concert reaches 27.76%. The controlling shareholder of Haiwang Biotechnology is changed to Silk Textile Group, and the actual controller is changed to Guangdong Provincial People's Government.。

“In the past two years, due to the overall environment, there are not many strong buyers in the market.. Neptune Biotechnology's revenue exceeds 30 billion yuan. For a 'normal' enterprise to acquire such a large company may be a burden, but for a state-owned enterprise, there may be some advantages once the acquisition is completed. "A person in the Shenzhen pharmaceutical investment circle who has had contact with Neptune Group told the First Financial reporter.

The above-mentioned person also stated thatThe acquisition style of state-owned enterprises will be very stable. "From past cases, the price of state-owned assets acquiring listed companies generally cannot exceed 30% premium. Although there is no special document stipulating this, it is a red line when they acquire, and it is difficult to raise the price further."

“There was basically no premium for this acquisition, it was almost on par with the market price.The total transaction cost 2.2 billion yuan, of which more than 700 million yuan (one-third) was directly given to the major shareholder in cash, and the other 1.4 billion yuan (two-thirds) was given to the listed company as additional funds. "Shenzhen pharmaceutical investment circle insiders said.

"This is a relatively safe transaction for state-owned assets. After all, although the 700 million yuan equity transfer payment was paid directly in cash, the 1.4 billion yuan of additional capital will remain at the listed company level and will be controlled by the new actual controller, the state-owned assets, in the future." The above-mentioned person said that both Neptune Group and Neptune Biotechnology can obtain funds to alleviate their own financing pressures.

Not only will the status of the major shareholder be ceded, but the management of Neptune Biological will also undergo a major reshuffleAccording to the agreement, the Silk Textile Group will occupy 6 of the 9 board seats, and key positions such as the chairman and chief financial officer will also be replaced.

Zhang Simin also promised not to seek controlFrom the date of signing of this agreement, except with the prior written consent of Silk Textile Group, Neptune Group and Zhang Siming shall not directly or indirectly increase their holdings of the listed company's shares in any way, and shall not use their shareholding position or influence to interfere with or affect Silk Textile Group's control over the listed company.

Zhang Simin also has a performance bet with the acquirerAccording to the announcement, after the delivery date, Haiwang Group and Zhang Siming promised to Silk Textile Group that the net profit attributable to the parent company's shareholders achieved by Haiwang Bio in the three fiscal years of 2025, 2026 and 2027 (the "commitment period") will not be less than 200 million yuan, 250 million yuan and 300 million yuan respectively, and the cumulative net profit attributable to the parent company's shareholders in three years will not be less than 750 million yuan.

"At the end of the commitment period, if the cumulative amount of net profit attributable to the parent company's shareholders achieved by the listed company in 2025, 2026 and 2027 does not reach the committed cumulative net profit attributable to the parent company, Neptune Group and Zhang Siming shall compensate the Silk Textile Group," the announcement said.

Development with state-owned capital

It is worth noting that unlike the previous actual controllers who completely withdrew from the listed company after giving up their positions, Zhang Simin did not completely withdraw from Haiwang Biological this time. After the signing of the various agreements and before the transfer of the shares under the agreement, Haiwang Group and its concerted actors held 44.39% of Haiwang Biological's shares. After a series of transactions were completed, the shareholding was reduced to 26.86%.

Why did Neptune Group not withdraw completely? The announcement did not disclose the details, but it is clear that this transaction is of great significance to both parties.The main business of Neptune Group is still pharmaceutical business. It is not just Neptune Biological. Neptune Star Pharmacy chain is located in more than 70 large and medium-sized cities across the country, with more than 4,000 directly-operated stores and annual sales exceeding 10 billion, ranking first in the industry.

“State-owned assets also have a leverage effect. By using "not too much" funds to obtain control of a listed company with revenue exceeding 30 billion, it can achieve consolidated performance in the future. Haiwang Group can also take advantage of the advantages of state-owned capital to further expand financing channels for business development. "The above-mentioned Shenzhen pharmaceutical investment circle person said。

It can be seen from the announcements disclosed in the past that Neptune Bio's current asset-liability ratio is high and it faces transformation challenges.

According to the announcement, at the end of 2021, the end of 2022, and the end of 2023, the asset-liability ratio of Neptune Biotechnology in the consolidated financial statements was 80.57%, 83.14%, and 86.94%, respectively, and the asset-liability ratio has been at a high level. The asset-liability ratio of more than 86% in 2023 was even higher than the industry level. Other companies in the same industry, such as Shanghai Pharmaceuticals (601607.SH) and Jiuzhoutong (600998.SH), had asset-liability ratios of 62.11% and 68.23% in 2023, respectively.

"The business operations of the pharmaceutical distribution industry need to rely on long-term funds and strong cash flow support, so continuous financing is needed on a daily basis. It is also very important to obtain lower bank loans." Previously, a person from the securities department of a domestic pharmaceutical distribution listed company told the first financial reporter.

Haishen Bio said that the company's sales volume has declined due to financial constraints, and some upstream suppliers have changed their payment terms to prepayment or shortened their account age. Some downstream hospital customers have delayed payment or switched to using acceptance bills to settle payments due to financial constraints and other reasons, resulting in the company's operating capital constraints.

"In order to ease financial pressure, the company adopted a payment collection and sales policy for customers with poor sales collection, formulated sales strategies based on the collection situation of the previous month, and reduced the company's sales scale. In addition, due to tight funds, some of the company's existing product varieties are out of stock, and some hospitals are insufficiently supplied, resulting in business loss, so the sales scale has declined." said Neptune Biological.

According to the announcement, at the end of 2021, the end of 2022, and the end of 2023, Neptune Bio's financial expenses were 807 million yuan, 905 million yuan, and 944 million yuan, respectively, while the company's total profit in the same period was 576 million yuan, -853 million yuan, and -1.458 billion yuan, respectively. The financial expenses have a greater impact on the company's total profit.

"Neptune Biological's asset-liability ratio is particularly high. In addition, it has been difficult for private enterprises to raise funds in the past two years. Our contacts with upstream and downstream companies of Neptune Biological have indirectly confirmed that the company's cash flow is particularly tight." The above-mentioned person in the Shenzhen venture capital circle said that under the current market environment, the financing costs of companies with state-owned enterprise backgrounds such as Silk Textile Group are lower than those of private enterprises, and the interest costs are also lower, and there will be more financial institutions that can lend money.

Public information shows that Guangxin Group is a wholly-owned enterprise of the Guangdong Provincial Government. It is a state-owned capital investment company with distinctive main business characteristics and strong market competitiveness. It was listed on the Fortune Global 500 for the first time in 2023, ranking 427th, and is the first provincial state-owned enterprise in Guangdong to be listed. After a period of silence, Guangxin Group's capital operations have recently "heated up" rapidly. This time, it acquired Haiwang Biological through Silk Textile Group, which also has a certain origin.

The Silk Textile Group was established in 1982 with a registered capital of 247 million yuan. The company's main business also includes the production, sales, import and export of medicines, health products, medicinal materials, medical devices and other commodities, as well as the sales and import and export of medicines and health products. The core enterprises it controls also include Guangdong Yangcheng Healthcare Industry Group Co., Ltd., which operates pharmaceutical wholesale and retail businesses.

In the view of industry insiders, direct acquisition of listed companies by state-owned assets can not only meet the development needs of local industries, but also help them grow bigger and stronger with the help of capital. However, some people in the pharmaceutical industry believe that the injection of resources, industrial operation and management after the acquisition will still test the state-owned holding company. Whether the state-owned assets can be maintained and increased in value in the future depends on the subsequent stable operation and management improvement.

In recent years, competition in the pharmaceutical distribution industry has become increasingly fierce. Large state-owned pharmaceutical distribution companies have continuously seized market share by virtue of their scale advantages, and the industry's head effect has become increasingly significant.

"Faced with this competitive situation, in order to effectively break through the company's operating bottleneck, combined with its own unique advantages and development strategies, the company actively promotes the implementation of the further introduction of state-owned capital." Haiwang Bio said that after this issuance, it will further optimize the company's equity structure and utilize the advantages of state-owned capital in terms of policy inclinations, project support, talent resources and financing channels to achieve in-depth integration and coordinated development of the company's and shareholders' advantageous resources.