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against the backdrop of declining performance, haili biotech (603718) has proposed a restructuring plan, intending to carry out major asset purchases and sales, on the one hand to enter the oral repair business, and on the other hand to divest related assets that are difficult to control operating decisions. this restructuring matter has attracted the attention of the shanghai stock exchange, and the company recently received an inquiry letter from the shanghai stock exchange. in the inquiry letter, the shanghai stock exchange questioned whether the target valuation is reasonable and whether it is conducive to the company's continued operation.

can a synergistic effect be formed?

it is understood that the reorganization is divided into two parts. haili bio intends to purchase 55% of the shares of shaanxi ruisheng biotechnology co., ltd. (hereinafter referred to as "ruisheng bio") held by meilun management co., ltd. in cash. at the same time, the company intends to sell its 30% stake in wuxi vaccines (cayman) inc. (hereinafter referred to as "wuxi haide") to wuxi biologics.

the draft disclosed that the purchase and sale transactions were independent of each other and were not prerequisites or implementation conditions for each other. the cash consideration for the acquisition of 55% of resheng bio was rmb 935 million, and the funds mainly came from self-owned funds and equity transfer proceeds from the sale of wuxi haidtech shares.

according to the information, haili bio is a company that mainly deals in human in vitro diagnostic reagents and animal biological products, while ruisheng bio is mainly engaged in oral tissue repair and regeneration materials. haili bio said that the company plans to add oral tissue repair and regeneration materials business through this transaction, which is to deepen the "people's insurance" business map and establish a new business growth point.

in response to this situation, the shanghai stock exchange requires haili bio to explain the specific reasons and considerations for the company's proposed new oral tissue repair and regenerative materials business, the early connection preparations and subsequent business plans based on the company's personnel and technical reserves in the field of oral tissue repair and regenerative materials; at the same time, based on the current operating conditions of each business segment, the correlation between the existing business and ruisheng bio's business in sales, supply, technology and other aspects, explain whether the new business and the existing business can form a synergistic effect.

according to the evaluation report, from 2024 to 2028, ruisheng bio's forecast period operating income is rmb 270.04 million, rmb 320 million, rmb 369 million, rmb 416.58 million, and rmb 463.15 million respectively. from 2022 to 2023 and from january to april 2024, ruisheng bio's comprehensive gross profit margin is 92.9%, 91.93%, and 91.94% respectively, and the forecast period gross profit margin from 2024 to 2028 is 90.07%, 87.63%, 83.48%, 81.17%, and 79.52% respectively.

in this regard, the shanghai stock exchange requires the company to explain the rationality of the high gross profit margin during the reporting period based on ruisheng bio's main revenue, cost structure, and gross profit margin of comparable companies in the same industry; and to analyze and explain the rationality of maintaining the gross profit margin at around 80% until 2028 based on changes in the centralized procurement policy for dental implants and their ancillary products, market competition, etc.

is the target valuation reasonable?

the restructuring draft shows that ruisheng bio uses the income method as the basis for transaction pricing. the valuation of all shareholders' equity is 1.711 billion yuan, with an increase of 1.548 billion yuan and an appreciation rate of 952.12%.

in response to this situation, the shanghai stock exchange requires haili bio to explain the reasons and rationality for the valuation difference between this transaction and the previous transaction based on the valuation of ruisheng bio's equity transfer during the reporting period; and to supplement the disclosure of the amount of goodwill expected to be generated by this transaction and the specific basis for confirmation. at the same time, based on the existing conditions, it should judge the future goodwill impairment risk and the impact on the operating performance of the target assets, and fully alert to the risks.

investment and financing expert xu xiaoheng said that high-premium mergers and acquisitions by listed companies will push up goodwill on their accounts. goodwill has always been considered a "killer" that strangles a company's performance and will, to a certain extent, pose hidden dangers to the company. therefore, it has always been a focus of regulatory attention.

compared with the high appreciation rate of the assets to be acquired, the appreciation rate of the assets to be sold is relatively low. the valuation base date of the sale of 30% of wuxi vaccine is april 30, 2024. the market-based p/b valuation is finally used as the basis for transaction pricing. the valuation of all shareholders' equity on the base date is 2.53 billion yuan, with an appreciation rate of 22.98%, an increase of 473 million yuan compared with the audited book owners' equity.

it is worth mentioning that from the perspective of financial indicators, wuxi vaccine is quite important to haili bio. wuxi vaccine's total assets, net assets, operating income, and net profit in 2023 are 4.976 billion yuan, 2.087 billion yuan, 983 million yuan, and 38 million yuan, respectively, accounting for 90.04%, 51.45%, 122.46%, and 22.97% of the company's corresponding items after conversion based on the shareholding ratio.

in this regard, the shanghai stock exchange requires haili bio to list the valuation indicators such as p/b, p/e, ev/ebit, ev/s corresponding to the transaction price, as well as the evaluation methods and value-added rates of recent comparable transaction cases in the market; combined with the above content and the valuation of comparable listed companies in the same industry, analyze and explain the reasons and rationality for adopting the market method and choosing p/b instead of other indicators for this valuation, and whether the p/b valuation can fully reflect the value of the human vaccine crdmo business; combined with the above content, further explain the fairness of the transaction price of the sale of wuxi vaccines and whether the transaction fully protects the interests of the listed company.

regarding company-related issues, a beijing business daily reporter called the secretary of the board of directors of haili biopharma for an interview, but no one answered the call.

beijing business daily reporter ding ning