On the evening of January 2, Meier Ya (600107. SH) announced that the company intends to transfer 100% of the equity of its subsidiary Qinghai Zhongyou Health Huijia Pharmaceutical Chain Co., Ltd. (hereinafter referred to as "Qinghai Zhongyou") to Jilin Zhiyu Technology Co., Ltd. at a transaction price of 100 million yuan.
It should be noted that as of now, Qinghai Zhongyou still owes the company a balance of 14.6 million yuan in loan principal. According to the agreement between the company and Qinghai Zhongyou, Qinghai Zhongyou will repay the loan to the company on a monthly basis starting in February 2024, and complete the payment of all principal and interest no later than December 31, 2024.
Titanium Media APP noticed that in December 2020, Meier Ya acquired 100% of the equity of Qinghai Zhongyou for 230 million yuan, and as the company's pharmaceutical assets, but now it is sold at a price of 100 million yuan, and there is a situation of buying at a high price and selling at a low price. In addition, the company's acquisition of Qinghai Zhongyou was for the rapid transformation from the traditional garment industry to the pharmaceutical field, and now this asset disposal seems to have announced the company's cross-border "dream shattered", which also means that the company will withdraw from the pharmaceutical industry.
For the same asset, buy high and sell low
According to the data, Qinghai Zhongyou was established in April 2002 and is a pharmaceutical chain enterprise. As of June 30, 2020, Qinghai Zhongyou had a total of 48 chain stores, of which 40 were located in four districts and three counties in Xining City, and 8 were located in Ping'an, Ledu, Huzhu and other districts and counties in Haidong City.
On December 2, 2020, the company disclosed that it planned to spend 230 million yuan to acquire 100% of the shares of Qinghai Zhongyou held by Gansu Zhongyou Health Pharmaceutical Co., Ltd. (hereinafter referred to as "Zhongyou Shares"). It is understood that as of June 30, 2020, Qinghai Zhongyou's net assets were 42.6121 million yuan, and the pricing of the above transactions was several times higher than its net assets. In this regard, the company said that on the one hand, Qinghai Zhongyou is a well-known enterprise in the pharmaceutical retail industry in Qinghai Province, with a good local operating foundation and strong ability to continue to operate;
Only about three years after the acquisition, the company now sells Qinghai Zhongyou for 100 million yuan. According to the announcement, the pricing of this transaction is based on the net book value of the underlying assets as of October 31, 2023 and the analysis of the appraised increase or decrease in value, and the evaluation result obtained by the income method is 98.6538 million yuan. In the end, the transaction price was determined to be 100 million yuan after negotiation between the two parties.
The company told the company that when the company acquired Qinghai Zhongyou, it was valued compared with its peers, and the income method was used when selling the asset.
What is puzzling is that the transaction Qinghai Zhongyou in the sale of the audit base date of the book net assets of 46.1373 million yuan, and the original acquisition of its net assets of 42.6121 million yuan, why in the case of Qinghai Zhongyou's net assets increased, its sale price is much lower than the purchase price?
In addition, judging from the price-to-sales ratio of Qinghai Zhongyou, it seems to reveal signs of undervaluation. According to the announcement, the annual revenue is estimated according to the operating income of Qinghai Zhongyou on the base date, and the price-to-sales ratio of this transaction is 0.96, which is in line with the market industry level. A person familiar with the transfer of the pharmacy industry told Titanium Media APP that in recent years, the conversion of pharmacy transfer consideration is generally judged by the price-to-sales ratio (PS), and in recent years, the transfer price of medical insurance designated pharmacies has generally been more than double the price-to-sales rate, and the core points in some major cities can be as high as more than twice the price-to-sales rate.
Cross-border medicine "dream shattered"
According to the data, the company was founded in 1993 and listed in 1997, mainly engaged in the manufacturing, processing and sales of fine wool textile products, clothing and accessories, and its products are mainly sold to Japan and other foreign markets.
In recent years, due to the rising cost of garment manufacturing and fierce market competition, the company's performance has been poor. From 2020 to 2022, the company's operating income will be 339 million yuan, 486 million yuan and 432 million yuan respectively, with a growth rate of about -24.22%, 43.26% and -11.1% respectively, and the non-net profit will be -27 million yuan, 16 million yuan and -123 million yuan respectively.
In order to improve the business predicament and find new growth points, the company embarked on the road of cross-border transformation. In 2020, the company began to lay out the medical retail industry and acquired 100% of the shares of Qinghai Zhongyou, a subsidiary of Zhongyou, for 230 million yuan.
According to previous announcements, in 2019, Qinghai Zhongyou's total operating income was 177 million yuan, operating profit was 20.52 million yuan, and net profit was 15.54 million yuan, and due to the impact of domestic public health events, Qinghai Zhongyou's total operating income reached 101 million yuan, operating profit of 11.0798 million yuan, and net profit of 8.2141 million yuan from January to June 2020.
In terms of future performance, the company signed performance commitments and compensation terms with Zhongyou shares. It is reported that the net profit attributable to the parent company of Qinghai Zhongyou in 2020, 2021 and 2022 after deducting non-recurring profits and losses will not be less than 15 million yuan, 16.5 million yuan and 18 million yuan respectively.
After the completion of the company's acquisition, Qinghai Zhongyou only completed the performance commitment in 2020, and failed to meet the target in 2021 and 2022, and the cumulative after-tax net profit contributed to the company during the three-year performance commitment period was only 5.8667 million yuan. In this regard, the company explained that the main influencing factors for the decline in the revenue of chain pharmacies are the large number of local road closures and store closures after the outbreak of the domestic public health incident, coupled with the implementation of the policy of stopping the sale of pharmacies, resulting in a significant decline in the number of pharmacies and a decline in performance.
Because Qinghai Zhongyou's performance did not meet the standard, the compensation clause of Zhongyou shares to the company was triggered. However, due to the difficulties in the operation of Zhongyou shares at the beginning of 2022 and then entered the bankruptcy reorganization stage, the company did not receive relevant performance compensation. Therefore, in 2022, the company will carry out goodwill impairment for the first time on Qinghai Zhongyou, with an amount of 99.47 million yuan. (This article was first published on the Titanium Media App, by Zhai Zhichao)