On March 24, Shapuaisi announced that the company received a shareholder recommendation letter from the China Securities Small and Medium Investor Service Center.
The company previously disclosed that it plans to acquire 100% of the equity of Shanghai Qinli Industrial Co., Ltd. held by the controlling shareholder and its concerted parties, Shanghai Yanghe Industrial Co., Ltd. and Shanghai Yihe Medical Management Co., Ltd., for 528 million yuan in cash, thereby indirectly holding 100% of the equity of Shanghai Tianlun Hospital Co., Ltd. China Securities Investment Services Center still has questions about the reasons for the substantial growth in operating performance of the target company in the past two years and the rationality of the valuation of this transaction.
The announcement pointed out that Qinli Industrial’s core asset is 100% equity of Tianlun Hospital, and its net profit will continue to grow from 2.02 million yuan in 2023 to 27.14 million yuan in 2025, with an average annual compound growth rate as high as 266.92%. The operating income growth rates in 2024 and 2025 will be 30% and 18% respectively, and the recovery ward income growth rate in 2025 will be as high as 55.56%.
However, the Shanghai First People's Hospital, a well-known top-three public hospital also located in Hongkou District, Shanghai, and within 6 kilometers of Tianlun Hospital, has a year-on-year growth rate of 9.97% in 2024. Listed companies among private medical institutions The medical service business revenue of Nanjing Xinbai (600682) and Honghe Renai Medical (03869) in 2024 will increase by 8.84% and 1.02% respectively year-on-year, both of which are far lower than the revenue growth rate of Tianlun Hospital in the past two years.
There are also questions over the pricing of corporate transactions. The number of beds in the profit forecast is inconsistent with the approved number of beds disclosed on Tianlun Hospital's official website, and the bed utilization rate in the profit forecast is much higher than the average bed utilization rate in private hospitals nationwide and in Shanghai. At the same time, the company's acquisition of the controlling shareholder's assets at a high premium is not conducive to safeguarding the company's interests.
The announcement mentioned that the proposal letter recommended that Shapuaisi add the reasons for the substantial increase in the target company's performance before the acquisition, and carefully consider the target company's transaction pricing. It also mentioned that the acquisition of the controlling shareholder's assets at a high premium is not conducive to safeguarding the company's interests.
(Announcement from Shapuaisi)
