It is worth noting that Wu Xiaobo channel APP has been renamed 890 New Business School, which is the homophonic of Ba Jiuling.
The acquisition of Quantum Education has lasted for half a year, which is not a good time for the company. In the first half of this year, the performance still lost because of the goodwill impact of mergers and acquisitions in 2018. Originally stimulated by mergers and acquisitions, Quantom Educations stock price rose in late March to 8.43 yuan on April 12. Since then, however, the stock price has turned the bow, and by the end of September 23, the companys share price had fallen to 5.81 yuan.
Wu Xiaobo is coming to share A
On the evening of March 17, Quantom Education announced that the company was planning to purchase 96% of Wu Xiaobos Hangzhou Bajiuling Cultural Creative Co., Ltd. (abbreviated as Bajiuling) by issuing shares and to raise supporting funds. On March 31, Quantom Education disclosed that 96% of Bajiulings equity trading price was tentatively set at 1.5 billion yuan.
Bajiuling was founded in July 2014 and restructured into a joint stock company in March 2018. At present, Bajiuling has 19 shareholders, including 10 corporate shareholders. Anhui New Media is the largest shareholder, with a share-holding ratio of 14.90%; Wu Xiaobo and his spouse are also listed as the second largest shareholder, with their respective share-holding ratio of 12.81%. Wu Xiaobo and Shao Bingbing are the actual controllers of Bajiuling.
Sky Eye Screening
According to public information, Bajiuling is positioned as a provider of knowledge products and services in the field of pan-finance and economics. Its products include Wu Xiaobo Channel (knowledge content release), Enterprise Investors College (training), New Craftsmen (integrated marketing), etc. Among them, Wu Xiaobo Channel launched on May 8, 2014, is a knowledge service provider focusing on the new middle class. In addition to Wu Xiaobo Channel, the self-Media public number matrix of Shanghai Bajiuling, a wholly-owned subsidiary, includes Feng Lun Fengmaniu, Qinshuo Friendship Circle, Wenxi Big Sister, Ten Point Reading, Liquor Industry, Deco Real Estate and so on, with more than ten million users.
At present, Bajiuling business sector is mainly divided into pan-financial knowledge dissemination, enterprise investment institute, new craftsman Institute and knowledge payment. In 2018, the revenue of the above four businesses was 100 million yuan, 31.93 million yuan, 31.34 million yuan and 66.32 million yuan, accounting for 43.96%, 13.79%, 13.53% and 28.63% of the total business income respectively.
It is noteworthy that the main business of all-round education at present mainly focuses on information service in basic education stage, training service for primary and secondary school teachers in continuing education stage and vocational education service in higher education stage. The synergy between it and the target of M&A has attracted much attention.
All-round Education frankly says that in recent years, due to the industry norms and related measures in the field of basic education, the business development of the main practitioners of campus information service in the field of basic education has been affected to varying degrees, and the traditional campus information service business of listed companies is facing challenges. At the same time, as the state began to advocate and implement the mixed training model in the field of teacher training, the listed companiesteacher training business, which mainly focuses on distance training, has been affected to a certain extent.
Quantom Education said that Ba Jiuling has long focused on industrial research and enterprise services, and has strong core competitiveness in the field of Vocational education, such as content production capacity, strong circle community foundation, etc. At present, it has formed pan-financial and economic knowledge dissemination, enterprise investment institutes, new craftsmen institutes and knowledge payment business sectors. These advantages of the target company can effectively make up for the shortcomings of Listed Companies in professional construction and integration of industry and education in the field of Vocational education.
If the deal is concluded, Wu Xiaobo and his wife Shao Bingbing will not only reap 400 million yuan in cash, but also become the second largest shareholder of all-inclusive education with the concerted actors.
Going to Wu Xiaobohua
Ba Jiuling has a close relationship with Wu Xiaobo from the aspects of ownership and content, which also attracts the attention of Shenzhen Stock Exchange.
On March 31, the Shenzhen Stock Exchange sent an inquiry letter. In addition to inquiring about the qualifications for information release, the Shenzhen Stock Exchange requires that the stability of Bajiulings business model and the sustainability of its business operation be explained in the light of Bajiulings dependence on Wu Xiaobos personal influence, Wu Xiaobos personal IP value change and sustainability.
Screenshot of All-Round Education Announcement
In its reply on April 8, Quantom Education said that Ba Jiuling did use Wu Xiaobo to bring traffic at the beginning of its founding, but in recent years, with the continuous expansion of business types, the formation of pan-financial knowledge dissemination, Enterprise Investment Institute and other business sectors, Wu Xiaobos personal image on the operating level of the target company has been declining, and star personal IP. Different roles, Bajiuling does not operate around Wu Xiaobo. In the future, Bajiuling will devote itself to education and training. The essence of this transaction is not Wu Xiaobos personal IP securitization.
Wu Xiaobo promised that he would not engage in the same or competing business with Bajiuling for at least five years from the date of the completion of this transaction in the target company, listed company and other subsidiary companies during his service in Bajiuling and two years after his departure from Bajiuling. In addition, during the prohibition period, Wu Xiaobo did not participate in other training, speech and other knowledge dissemination activities outside Bajiuling in his personal name. He did not register other Wechat public numbers in his personal name to gather traffic and publish shared knowledge content.
In view of Wu Xiaobos departure after five years and engagement in the same or similar business as Bajiuling after the expiration of the two-year non-competition period, Quantom Education said on April 15 that on the one hand, it will further improve Bajiulings business system and team building, on the other hand, it will consolidate and enhance the operating independence of the target company and take targeted measures. Shi weakened Wu Xiaobos personal direct impact on business.
China Securities Journal reporters note that the current target is indeed in the process of de-Wu Xiaobo. Wu Xiaobo Channel APP has been renamed 890 New Business School, which is a homonym of Ba Jiuling. In a Wechat push on September 23, Wu Xiaobo Channel said that 890 New Business App was an upgrade of Wu Xiaobo Channel. We will proceed from the media to the new middle-class knowledge education platform.
Quantom Education said that if the transaction fails to be notified by the shareholdersmeeting before September 28, 2019, the company needs to convene a board of directors to clarify whether the company will continue to promote the restructuring plan, and the final results are highly uncertain.
Merger and Acquisition Buried Pit
It is worth noting that the all-round education of acquiring Wu Xiaobos assets has its own goodwill risk.
All-round education, which was listed in January 2014, set off a upsurge of ups and downs in 2015. Following March 2015, only 14 months after the company went public, Quantom Educations stock price replaced Maotai, Guizhou Province, with 199.9 yuan/share price, becoming the highest-priced stock in Shanghai and Shenzhen stock markets at that time. The stock price was singing high in the bull market and touched the sky price of 467.57 yuan/share.
The main operation means of the early business of all-round education is to send short messages to provide communication and interaction services between primary and secondary schools (or kindergartens) and studentsparents. However, with the emergence of education fees incidents, all-round education, whose pillar business development is limited, has been forced to move into a new field. After launching the Internet education platform All-Course Network, the company intends to use the capital market to implement an extension model.
All-round Education opened the M&A model in 2015. Quantom Education Annual Report of 2015 reveals that the company further enhances its market share by acquiring channel companies such as Hubei Yinxin, Guangxi Huigu, Hangzhou Sixin, Hebei Huangdian, Shanghai Wenxi, etc., and the entrance of the card campus; by acquiring the technology of the teaching network, the entrance of the card teachers; and by acquiring Xian Xiyue, the company enhances mutual benefit. Networking, information technology research and development strength and Internet community operation capacity. In 2016, Quantong education acquired Wenxi, Shanghai, and invested in cel Internet, the operation main body of China Education online.
Screenshots of the 2015 Annual Report
But the acquisition brings the hidden danger of goodwill.
In 2018, the total operating income of all-round education reached 840 million yuan, down 18.57% from the same period last year. Net profit attributable to the shareholders of the parent company was 657 million yuan, compared with 66.2916 million yuan in the same period last year. For the loss of performance, Quantom Education said that the loss of impairment of assets based on goodwill impairment increased significantly in the current period, mainly due to the loss of goodwill of 609 million yuan.
Quantom Education Semi-annual Report shows that the book value of goodwill is 706 million yuan at the end of the reporting period, accounting for 53.27% of the net assets attributable to shareholders of listed companies at the end of the reporting period. The main reason is the goodwill brought by the acquisition of Quantom Jituo and Wenxi in Shanghai. In the future, including but not limited to the changes in macroeconomic situation and industrial policies, the related M&A subsidiaries may not achieve the expected future business performance, and will continue to have the risk of impairment of goodwill, which will have a negative impact on the companys business.
Source: Responsible Editor of Shanghai Securities News: Chen Hequn_NB12679