Continuous M & A brings physical deficiency worries
According to the financial report data, the total assets scale of Boya biology increased significantly from 777 million yuan at the beginning of listing to 5.177 billion yuan at the end of September 2019. In seven years, the assets scale increased by 4.4 billion yuan. In the process of asset scale growth, the debt financing scale of Boya biology during the period was 520 million yuan, the equity financing scale was 2.02 billion yuan, and the refinancing scale of 2.5 billion yuan accounted for 57% of the newly increased asset scale of 4.4 billion yuan since the listing of Boya biology.
It is the continuous M & A of Boya biology that makes the goodwill assets of the company that are still zero at the beginning of listing grow rapidly. By the end of September 2019, its goodwill assets reached 663.842 million yuan, accounting for about 13% of the total assets of the company. At the same time of the growth of goodwill assets, we can see that the net operating income interest rate of Boya biology has declined continuously since 2013, from 33.58% in 2013 to 15.75% at the end of the third quarter of 2019. This shows that the growth rate of net profit is not only far lower than the growth rate of income, but also the profitability is weakening.
On the one hand, there is the continuous improvement of goodwill assets with impairment, on the other hand, there is the continuous decline of profitability, which shows that after large-scale refinancing and M & A in previous years, Boya biology still can not avoid the common physical deficiency in the process of A-share M & A. if it continues to carry out large-scale refinancing and M & A, it will further increase the companys management and operation costs And pressure, once the performance of a certain M & a target is not up to standard, it will inevitably lead to the possibility of substantial impairment of the growing goodwill, which will have a significant negative impact on the performance of the company.
In terms of the amount of acquisition, the cost paid for the purchase of equity of loyi bio is the largest acquisition of Boya bio in recent years. According to the audited book net assets of Luoyi bio on September 30, 2019 of RMB 110.1428 million, the appraisal value of RMB 1503.5375 million increased by RMB 1393.3947 million compared with the book net assets, with a value-added rate of 1265.08%. On the basis of the reference evaluation value, the transaction consideration of Boya biologys acquisition of 48.87% equity of Luoyi biology is finally determined as 778.15 million yuan, which is 5.90% higher than the evaluation value of 734.7788 million yuan of the corresponding part of equity. That is to say, the consideration paid by Boya biology for purchasing 48.87% equity of Luoyi biology is 724.3232 million yuan more than the corresponding book net assets of 53.8268 million yuan, with a premium rate of 1345.66%. This means that once the transaction is completed, the book goodwill of Boya biology will rise from 663.842 million yuan at the end of the third quarter to more than 1 billion yuan.
In this acquisition, the performance compensation party promises that the net profit attributable to the shareholders of the parent company after deducting non recurring profit and loss in the consolidated statements realized by Luoyi bio in 2019-2022 will not be less than 71 million yuan, 90 million yuan, 120 million yuan and 14 million yuan respectively. According to the draft transaction, during the report period, the non net profit deducted by Luoyi biological is -4182.98 yuan, 19 million 269 thousand and 900 yuan and 52 million 456 thousand and 600 yuan, showing a sustained and rapid growth. If the net profit realized in the first three quarters of 2019 is 52 million 456 thousand and 600 yuan annualized, the annualized net profit is 69 million 942 thousand and 100 yuan, close to the promised 71 million yuan. It should be noted that, as mentioned in the draft of acquisition, Luoyi biology launched the technical transformation of bacterial workshop in May 2019, increasing the production capacity of AC meningococcal polysaccharide combined vaccine, a major contributor to the current revenue, from 6 million to 20 million, and is expected to resume production in May 2020. This statement means that the workshop technical transformation project is likely to lead to capacity decline in the second half of the year, and production is likely to decrease, which is likely to be detrimental to the achievement of the 2019 performance commitment. More importantly, even if it can resume production on schedule in May 2020, there is doubt whether the greatly increased capacity can be well digested in the market.
According to the draft of the transaction, the sales proportion of Luoyi bios top five customers in the reporting period is relatively small, and the customer situation shows a very scattered feature. Among them, in the first three quarters of 2019, the sales of the first largest customer only accounted for 3.52% of the current operating revenue, while the sales of the fifth largest customer only accounted for 1.31%; similarly, in 2018, the sales of the first largest customer accounted for 12.12%, while the sales of the fifth largest customer only accounted for 1.19%. In addition, the top five customers have obvious frequent changes during the reporting period, and the sales of the second to fifth largest customers are only millions of yuan. Obviously, the composition of Luoyi bios customers is not conducive to the sales of Luoyi bios products. There is a great suspense whether the new capacity of AC cerebrospinal polysaccharide combined vaccine in 2020 can be fully digested, which makes people worry about whether its performance commitment can be successfully completed.
Production and marketing data is questionable
In fact, there is a worry about the impairment of Luoyi biological goodwill, not only because of its capacity digestion, but also because of the abnormal production and sales data in the reporting period.
However, at the end of September 2019, the inventory amount of Luoyi biological products was RMB 1958.81 million, an increase of RMB 8.6467 million compared with the beginning amount. Can it be said that although the stock of AC epidemic cerebrospinal meningitis combined vaccine decreased, but the stock of hemorrhagic fever vaccine increased, so that the overall stock of goods increased?
From the perspective of Luoyi biological business income structure and production and marketing structure, in the first three quarters of 2019, the revenue of AC epidemic cerebrospinal fluid combined vaccine accounted for 98.04%, and the output was also much higher than that of haemorrhagic fever vaccine. In theory, under the condition that the inventory of the former was reduced, the change of the inventory of the latter was unlikely to lead to the growth of several million yuan in the overall inventory. In fact, from the data calculated by the reporter of red weekly, it is also possible to see This is confirmed.
According to the data, in the first three quarters of 2019, the output of Luoyi biological haemorrhagic fever vaccine was 784400, 254400 more than the sales volume of 53000. According to the calculation of the product revenue of 4.251 million yuan, the sales volume of 53000, and the gross margin of - 5.72%, the unit cost is about 8.39 yuan per product. Therefore, it can be reasonably inferred that even if there are 254400 new stocks, there are only more than 2 million yuan, which increases with the overall inventory of goods Plus 8.6467 million yuan, the difference is more than 6 million yuan.
There are similar problems in 2018. In this year, the output of AC epidemic cerebrospinal meningitis combined vaccine was 2.6694 million more than the sales volume. According to the cost of 4.79 yuan per vaccine, the stock of AC epidemic cerebrospinal meningitis combined vaccine should be increased by 12.7864 million yuan. However, according to the transaction draft, at the end of 2018, 10.9343 million yuan of goods in stock decreased by 4.0357 million yuan compared with the end of the previous year. Considering that the AC combined vaccine is the main product for sale and inventory, it is obvious that there is some abnormality in the reduction amount. At the same time, the output of hemorrhagic fever vaccine in 2018 is less than the sales volume by 242700 pieces. According to the income, sales volume and gross profit rate of the product, the average cost is 7 yuan per piece, so the corresponding inventory in theory is reduced by 1690800 yuan, which is not consistent with the reduced data of 4035700 yuan. Considering the increase of 12.7864 million yuan in the stock of AC epidemic cerebrospinal fluid combined vaccine and the decrease of 1.6908 million yuan in the stock of haemorrhagic fever vaccine, theoretically, the difference between the change of the amount of goods in stock and the decrease of 4.0357 million yuan in the actual stock is 15.1233 million yuan. Obviously, this data cannot be ignored.
It needs to be added that, according to relevant regulations, the batch issuance system shall be implemented before the vaccine products are listed and circulated, and the products that fail to pass the batch issuance shall not be listed for sale or imported. At present, Luoyi biological products shall be submitted to the Chinese Academy of inspection for approval and issuance after the completion of acceptance, including audit, inspection, inspection and issuance. It can be seen that, before the application for batch issuance, the relevant products are accepted and qualified, some of the inventory commodities are only different from those sold in batch issuance, and the inventory cost will not be significantly different. Therefore, even if the above problems are re analyzed according to the number of batches issued rather than the output, the reporter of red weekly still finds that there are several million yuan differences in the first three quarters of 2019 and 2018. The abnormal situation in production, sales and inventory really makes people doubt the possibility and authenticity of its performance commitment. Source: Yang Qian, editor in charge of stock market red weekly
It needs to be added that, according to relevant regulations, the batch issuance system shall be implemented before the vaccine products are listed and circulated, and the products that fail to pass the batch issuance shall not be listed for sale or imported. At present, Luoyi biological products shall be submitted to the Chinese Academy of inspection for approval and issuance after the completion of acceptance, including audit, inspection, inspection and issuance. It can be seen that, before the application for batch issuance, the relevant products are accepted and qualified, some of the inventory commodities are only different from those sold in batch issuance, and the inventory cost will not be significantly different.
Therefore, even if the above problems are re analyzed according to the number of batches issued rather than the output, the reporter of red weekly still finds that there are several million yuan differences in the first three quarters of 2019 and 2018. The abnormal situation in production, sales and inventory really makes people doubt the possibility and authenticity of its performance commitment.