Economic Observer reporter Huang Yifan Guangzheng Ophthalmology (002524. SZ) is still not out of the red.
On April 25, Guangzheng Ophthalmology released its 2023 performance report. According to the annual report, Guangzheng Ophthalmology's operating income in 2023 will be 1.075 billion yuan, and the net profit attributable to the parent company after deducting non-profits will be -5.7619 million yuan. So far, Guangzheng Ophthalmology's net profit deducted from non-attributable to the parent has been negative for 11 consecutive years. In the first quarter of this year, Guangzheng Ophthalmology's non-net loss has exceeded that of the whole year of 2023.
On April 29, at the performance briefing, a number of investors asked Guangzheng Ophthalmology to explain the reasons for the decline in performance and specific business adjustment measures. When investors asked whether the company would continue to merge and acquire or open new hospitals in 2024, Li Wei, secretary of the board of directors, replied that the company adheres to the idea of simultaneous endogenous growth and epitaxial expansion, and will promote the injection of shareholding hospitals into listed companies in a timely manner.
However, the reporter noticed that the actual situation of the above-mentioned shareholding hospitals is not optimistic. Guangzheng Ophthalmology's M&A capabilities and asset operation level will be tested again. Regarding the ability of mergers and acquisitions and the quality of the target, the reporter called the secretary of the board of directors of Guangzheng Ophthalmology many times, but as of press time, the call was not answered.
After 11 consecutive years of losses, cross-border mergers and acquisitions have been blocked
In May 2023, Guangzheng Ophthalmology publicly predicted its performance in 2024 during the institutional roadshow. At that time, Shizheng Ophthalmology predicted that the revenue in 2023 would reach 1.139 billion yuan and the net profit would be more than 38 million yuan.
However, the actual answer sheet of Guangzheng Ophthalmology is far from the original prediction.
The reporter noticed that the net profit attributable to the parent company after deducting non-profits was negative, and Guangzheng Ophthalmology has lasted for 11 years.
From 2013 to 2023, the net profit attributable to the parent company of Guangzheng Ophthalmology after deducting non-profits will be -18.4226 million yuan, -99.1259 million yuan, -18.9953 million yuan, -45.84 million yuan, -43.2999 million yuan, -79.494 million yuan, -23.4281 million yuan, -13.8378 million yuan, -70.5911 million yuan, -291 million yuan, and -5.7619 million yuan.
Among them, in 2022, it will experience the largest non-net loss since the listing of Guangzheng Ophthalmology. According to the disclosure, the factor that has the greatest impact on the performance in 2022 is the impairment of goodwill in the current year.
In 2022, due to the acquisition of Shanghai New Vision Ophthalmology Hospital Investment Co., Ltd. (hereinafter referred to as "New Vision Ophthalmology"), Guangzheng Ophthalmology will provide for goodwill impairment of 130 million yuan.
At the beginning, Guangzheng Ophthalmology had high hopes for this acquisition. In 2018, due to the company's performance not improving after the previous acquisition of natural gas assets, Guangzheng Group (formerly known as Guangzheng Ophthalmology), which was mainly engaged in steel structure business and natural gas business at that time, planned to transform again.
In February 2018, Guangzheng Investment Co., Ltd., the controlling shareholder of Guangzheng Group, signed the Share Transfer Agreement with Lin Chunguang, the founder of New Vision Ophthalmology, stipulating that Guangzheng Investment would transfer its 25,166,600 shares (accounting for 5% of the company's total shares) held by Guangzheng Group to Lin Chunguang by way of agreement transfer. Subsequently, Lin Chunguang served as the vice chairman of Guangzheng Group.
In April 2018, Guangzheng Group announced that it planned to purchase 51% of the equity of New Vision Ophthalmology from the original shareholders of New Vision Industrial Co., Ltd. and founder Lin Chunguang by paying 600 million yuan in cash.
It is worth mentioning that at that time, in order to acquire New Vision Ophthalmology, Guangzheng Group pledged the above-mentioned equity, land and the shares of Huaxia Airlines held by the actual controller Zhou Yonglin, thus applying for a five-year M&A loan of 360 million yuan. In addition, the company also applied for comprehensive credit from banks and other relevant financial institutions with a total amount of no more than 1.2 billion yuan.
The transaction quickly increased the asset-liability ratio of Shizheng Group from 48.93% in 2017 to 63.12% after the completion of the transaction, and the debt scale increased by 121.19%.
After a lapse of more than a year, in January 2020, Guangzheng Group once again acquired the remaining 49% equity of New Vision Ophthalmology, with a transaction amount of 741 million yuan.
After two successful transactions, Guangzheng Group changed its name to Guangzheng Ophthalmology, but the results of this merger and acquisition are still not good.
Except for 2018, New Vision Ophthalmology failed to complete the performance commitments in 2019 and 2020, of which the completion rate in 2019 was 98.9%, and the performance of 152 million yuan promised in 2020 was only 52.6591 million yuan, with a completion rate of less than 40%. In August 2020, Guangzheng Ophthalmology announced the resignation of Lin Chunguang.
In the end, the conflict between the two sides broke out and they went to court. Guangzheng Ophthalmology demanded performance compensation from Lin Chunguang and other original shareholders, while Lin Chunguang and other original shareholders filed a claim for recovery of 313 million yuan of equity money, interest losses and litigation costs. Finally, in September 2022, the Shanghai No. 2 Intermediate People's Court made a first-instance judgment, and all the claims of Guangzheng Ophthalmology were rejected, and the court supported the claims of the original shareholders of New Vision Ophthalmology with 100 million yuan, and other claims were dismissed.
Partially affected by the above events, the performance of Guangzheng Ophthalmology declined across the board. According to the 2022 annual report of Guangzheng Ophthalmology, the company's net loss attributable to the parent company after deducting non-profits was 291 million yuan, a year-on-year decrease of 312.33%.
Expansion is difficult to sustain Reserve M&A projects contain risks
In March this year, Guo Ruiming, director of the Department of Supervision of Listed Companies of the China Securities Regulatory Commission, publicly stated that it would strictly supervise backdoor listings and blind cross-border mergers and acquisitions, and resolutely crack down on "shell speculation", because in this way we can strengthen the survival of the fittest mechanism and create a better market ecology.
The person in charge of the investment banking business of a small and medium-sized brokerage firm in Shanghai told reporters that the original intention of the actual controller of the listed company is the key to the ultimate success or failure of the company's merger and acquisition. "In China, listed companies carry out cross-border acquisitions, and many major shareholders of companies are trying to speculate on stock prices in the secondary market. As long as the shareholders like him, they will buy, and these major shareholders will not seriously do due diligence to check whether the performance commitment of the target can be completed, as long as the stock price can rise. ”
"Lao Zhou is a capital veteran. A senior executive of a listed ophthalmology company commented on Zhou Yonglin. At the same time, the executive remained skeptical about Zhou's ability to operate assets. "At the time of the acquisition of New Vision Ophthalmology, Guangzheng and New Vision Ophthalmology did not have upstream and downstream synergy, nor did they have relevant experience, and their funds were insufficient. ”
However, from the current point of view, Guangzheng Ophthalmology, which has undergone two transformations, will focus on the ophthalmology business.
Li Wei said at the performance briefing that in the future, the company will adhere to the main business of ophthalmic medical services and continue to achieve strategic focus. At the same time, the company continued to improve the breadth, depth and density of the medical network in the key layout areas, and during the reporting period, Shanghai Guangzheng New Vision Tongliang Eye Hospital, Shanghai New Vision Mingyue Eye Clinic, and Shanghai New Vision Mingche Eye Clinic opened one after another.
However, judging from the debt situation, the pressure on the follow-up expansion of Guangzheng Ophthalmology is intensifying.
According to the 2023 annual report, as of December 31, 2023, the balance of cash and cash equivalents at the end of the period was 67.6069 million yuan, and the monetary funds were 91.0624 million yuan. At the same time, its short-term borrowings were $264 million, and non-current liabilities due within one year were $120 million. The company's debt-to-asset ratio increased from 55.98% in 2018 to 81.55% in 2023.
In addition, the reporter noted that the assets of the hospital that are said to be injected into the company at the right time contain risks.
According to the 2023 annual report, Beijing Guangzheng Eye Hospital Co., Ltd. (hereinafter referred to as "Beijing Guangzheng"), which is 15.54% owned by Guangzheng Ophthalmology, has invested in three companies. According to the 2023 Guangzheng Ophthalmology Annual Report, Beijing Guangzheng's operating income is 221 million yuan and its net loss is 108 million yuan.
These three companies are Ziyang Sichuan West Ear, Nose and Throat Hospital (Limited Partnership), Beijing Meiermu Hospital Management Co., Ltd. (hereinafter referred to as "Meiermu"), and Ziyang Zhengxin Vision Eye Hospital Co., Ltd.
According to Tianyan, Ziyang Sichuan West Ear, Nose and Throat Hospital (Limited Partnership) and Meiermu are both dishonest judgment debtors. At the same time, Beijing Guangzheng is also in the whirlpool of litigation. Tianyan check shows that Beijing Guangzheng is involved in 42 legal proceedings.
It is worth mentioning that Beijing Guangzheng had contract disputes with Ye Qing, the other two shareholders of Meiermu, and Meiermu Investment Management Partnership (Limited Partnership) in Ningbo Meishan Free Trade Port Zone.