As a leading enterprise in the domestic physical examination industry, the physical examination report of meinian health (002044. SZ) in 2019 is not very optimistic.
According to the 2019 annual report of meinian health, due to the impairment of goodwill of 1.035 billion yuan, the company lost 866 million yuan of net profit attributable to the parent in the whole year, the worst performance since the backdoor listing. According to the exclusive investigation of Qingliu studio, Yu Rong, the actual controller of listed companies, bought shares at a low price and then transferred them to listed companies at a high price in at least two acquisitions. In other acquisitions, meinian health mostly purchased shares of related or non related parties at a high premium, laying a goodwill mine of more than 5 billion yuan for listed companies.
In order to occupy the physical examination market rapidly, the radical expansion of meinian health since its listing requires a steady stream of funds. For this reason, listed companies not only use multi-channel financing, but also encourage employees to purchase physical examination cards at the end of each year to realize cash flow back. Qingliu studio learned that a branch in a major city of meinian health could brush out more than 50 million yuan of sales in one day.
This health examination institution with strong capital operation flavor quickly takes the leading position through merger and acquisition, but it seems to be a little overwhelmed in the face of high goodwill and tight cash flow. In 2019, meinian Health introduced Alibaba network, Hangzhou xintou and Shanghai Qijun as strategic shareholders, attracting attention from all walks of life. Whether Ali can turn the tide and help meinian out of the dilemma of goodwill impairment remains to be seen.
Behind the huge Goodwill: the actual controller buys low and sells high
According to the 2019 annual report, Yu Rong is the actual controller of meinian health. He controls 21.17% of the equity of meinian health through individuals, persons acting in concert and four investment companies. Yu Rong, a master of finance, has done real estate development and is considered a master of capital. After the healthy backdoor listing of meinian, Yu Rong continued to expand rapidly by means of merger and acquisition.
It is worth noting that many assets acquired by meinian health are taken over from investment companies controlled by Yu Rong. According to the company, it is to reduce the capital pressure of listed companies and transfer the early-stage investment risks when Yu Rongs investment companies incubate high-quality assets and then inject them into listed companies.
However, Qingliu studio found that Yu Rongs investment company incubates high-quality assets at an amazing speed and makes a lot of profits by reselling them to listed companies.
For example, Qingliu studio found that before meinian health acquired Ciming Health Examination Management Group Co., Ltd. (hereinafter referred to as Ciming health examination), Yu Rong had a surprise stake in Ciming health examination, and then sold it to the listed company for profit.
According to the valuation report of Ciming physical examination, on November 30, 2015, 14 original shareholders transferred 68.4% of their shares in Ciming physical examination to Shanghai Tianyi Asset Management Co., Ltd. (hereinafter referred to as Tianyi asset management), controlled by Yu Rong, for a price of 2.462 billion yuan. Three months later, meinian Health announced that it would pay 2.697 billion yuan to acquire 72.22% of the shares of Ciming physical examination, and the consideration of 68.4% held by Tianyi asset management was 2.555 billion yuan. This means that in just three months, Yu Rongs share price has increased by 93 million yuan.
However, compared with the profits from the acquisition of Meiyin Health Technology (Beijing) Co., Ltd. (hereinafter referred to as Meiyin technology), Yu Rongs difference in medical examination in Ciming is not high.
In April 2018, meinian health released a notice that it plans to transfer 33.42% equity of Meiyin technology held by Tianyi assets controlled by Yu Rong with 388 million yuan. According to the appraisal report of Meiyin technology assets, 33.42% of Tianyis assets are shares acquired when Meiyin technology was established in January 2016, with a cost of only 3.9 million yuan. Meiyin technology has been established for 8 months. After a capital increase of 1.67 million yuan in October 2016, its valuation rose to 1.167 billion yuan. Then in 2018, Tianyi asset, an investment of 3.9 million yuan, was sold to the listed company at a price of 388 million yuan, with a rough calculation of its income of 384 million yuan.
To this end, meinian Health said to Qingliu studio that the valuation of the above two transaction targets is the valuation given by a third-party professional appraiser. The evaluation process complies with the provisions of laws, administrative regulations and asset evaluation standards, adheres to the principle of independence, objectivity and fairness, performs appropriate asset evaluation procedures, and does not harm the interests of listed companies.
After being sold to the listed company at a high price by the controlling shareholders, these two assets did not show their due value.
After completing the two-year performance commitment, Cimings 2019 net profit is less than RMB 248 million. Tianyi assets and other compensation obligors need to compensate 5.6671 million shares of the listed company, and return the two-year dividend of RMB 447800.
After Meiyin technology was acquired, in 2018, it completed the performance commitment of deducting non net profit of 42.6273 million yuan. In 2019, it was difficult to improve the profit, and the performance commitment completion rate fell back to 46.38%. Therefore, Tianyi assets need to withdraw 71.9885 million yuan as performance compensation. However, compared with the proceeds of 384 million yuan from Yu Rongs resale, the compensation fee is only a small amount.
In fact, such high premium acquisitions are everywhere in the announcement of meinian health. These acquired subsidiaries constantly stack up the revenues and profits of listed companies to help listed companies fulfill their performance commitments from 2015 to 2018. But at the same time, it also brings up to 5 billion yuan of goodwill.
In 2019, the sequelae of the aggressive merger and acquisition of health in the US has begun to take place. Due to the unexpected performance of 39 companies, the company made a provision for goodwill impairment of 1.035 billion yuan in the annual report, which directly consumed the net profit of the whole year. In 2019, the net profit loss of 866 million yuan attributable to the shareholders of the listed company was attributable to the health of meinian.
Meinian Health said to Qingliu studio that with the effective control of the epidemic, people are paying more and more attention to health, and the demand for screening and diagnosis in prevention will increase significantly, and the companys business is gradually recovering and maintaining high-quality operation. At the same time, based on the information obtained by the management, the company judges that there is no risk of further impairment at present.
Performance of card hoarding at the end of the year
In recent years, meinian health has exhausted all kinds of financing methods. By the end of 2019, the balance of healthy short-term borrowings, long-term borrowings, non current liabilities due within one year and bonds payable were RMB 2.309 billion, RMB 1.183 billion and RMB 1.368 billion respectively. The total balance of interest bearing liabilities formed by the above four liabilities was RMB 7.176 billion, accounting for 37.93% of total assets. Its financial expenses in 2019 amounted to 438 million yuan, a year-on-year increase of 78.12%.
In terms of cash flow, the net cash flow from operating activities in the first three quarters of 2019 of meinian health was negative, and the cash flow in the first quarter reached 556 million yuan. In the fourth quarter, the companys cash flow back was positive, reaching 1.919 billion yuan. In the reply to the inquiry letter from the exchange, meinian health explained that due to the impact of credit term, the business receipts in the first three quarters were less, and those in the fourth quarter increased.
In this regard, meinian health employees have different views. A former employee of meinian health in Hefei, Anhui Province, told Qingliu studio that at the end of December every year, the financial department would arrange to sell cards to employees for half a day, with a large volume of transactions.
At the end of 2018, a branch of meinian health organized card hoarding activities
In order to hoard cards and get bonuses, there are a lot of people who swipe credit cards and ask friends to borrow money. There are twenty or thirty thousand or hundreds of thousands of them. She said.
Another sales manager who works in several branches of meinian told Qingliu studio that in addition to the dream bonus, meinians sales rating also promotes the employees card hoarding behavior invisibly. According to a salary system table of health salesmen of meinian obtained by Qingliu studio, meinians sales are divided into more than ten grades, with the basic salary and performance of each grade gradually superimposed, and the monthly salary span ranges from 2000 yuan to tens of thousands.
At the end of the year, you can raise the sales performance by one gear through hoarding cards, so that the year-end settlement salary will be one gear higher. He said. According to the above respondents, at the end of the year, dun cards are required to pay off on the same day, taking into account the performance of the current year. The Commission of Dun cards will be paid in January of the next year, and the difference between the salary level increased due to the performance improvement will be reissued in the middle of the next year.
According to the old employees, 2018 is the craziest time to hoard cards. By the end of 2018, many branches in the US year had been on record on the official account.
Shandong Province, the United States issued a large health public number article said that in December 1, 2018, Shandong District brushed a 41 million 981 thousand and 100 yuan performance, the first salesperson in the province official account for the performance of 548 thousand and 900 yuan. Subsequently, the Wuhan health in the United States also announced in the official account, Hubei regional companies to receive staff purchase card amount of 20 million 460 thousand yuan. The next day, Heyuan company subscribed for 3.3104 million yuan. According to the old employees in Hefei, 48 million cards were prepared in Hefei at the end of 2018, and the colleague who bought the most cards alone hoarded 1 million cards.
In 2019, Shandong continued to create a record of 53 million 50 thousand and 100 yuan for single day sales, while the rest of the branches did not announce the sale of official account numbers. But some public numbers still released articles on the official account. By the end of 2019, meinian health has set up 703 physical examination centers in 294 core cities and 632 in operation.
According to the card hoarding system, meinian Health said to Qingliu studio that in order to maintain the stable operation of the company, before the off-season, the company will launch the new year promotion card at the end of the year to increase the sales of individual inspection, and the sales personnel can purchase the physical examination card from the company for sales. The sales personnel will recognize the advance collection when selling the physical examination card, and the revenue will be recognized when the customer arrives at the inspection, so there is no case of the revenue accounting in advance and overdraft of the next years business.
A certified public accountant told Qingliu studio that according to accounting principles, when a listed company receives money, it should recognize the advance receipts. Therefore, the money received from selling cards at the end of the year should be recognized as the advance receipts at the end of the year. In this case, the amount of advances received in the annual report of the current year may fluctuate greatly compared with the amount reported in the three quarters of the current year.
According to the annual report of meinian health, from 2017 to 2019, the companys advance receipts were 1.093 billion yuan, 1.416 billion yuan and 1.447 billion yuan respectively, of which more than 80% were medical examination fees. During this period, the balance of advances received in the three quarterly reports and annual reports of American health was 446 million yuan, 261 million yuan and 568 million yuan respectively. In 2015 and 2016, the difference between the third quarter report and the annual report is 87 million yuan and 222 million yuan.
In response to the inquiry letter from the exchange, meinian Health said that the health examination customers can be divided into group customers and individual customers. Group customers have obvious off-season and peak season, while individual customers are not obvious. The companys accounts receivable mainly come from group customers, and will be settled after the end of the medical service period, so the companys accounts receivable amount is relatively high. The above-mentioned sales manager also told Qingliu studio that in addition to some public institutions, group customers usually sign contracts, most of them do physical examination before paying. According to this calculation, most of the physical examination expenses in the companys advance receipts should be generated by personal physical examination, and the main product of personal physical examination in meinian is physical examination card.
The above-mentioned old employees told Qingliu studio that it may take half a year or more to sell the cards hoarded at the end of the year. Many of the cards hoarded at the end of 2018 cannot be sold until the end of 2019, and a new round of harvest has arrived. In the multiple chat screenshots she sent to Qingliu studio, the salesperson asked her to help sell last years cards and said she didnt want to hoard them. The sold cards will not be recycled by the company. When the cards in the hands of the employees are approaching the deadline or when the employees leave the company, they will often sell the physical examination cards at a reduced price to the customers or colleagues on the job. If they cant sell them, the employees or their families will finally do physical examination and digest them
At the end of 2019, health employees of meinian asked their colleagues to help sell the cards they had hoarded last year
Card hoarding has overdrawn the purchasing power of employees in advance. In 2019, the card hoarding system in many places has changed. In order to reduce the economic pressure of employees, the staff of a county-level organization in Zhejiang Province of meinian Health said that in 2019, the sales staff were allowed to buy cards by months. According to a successful subscription document in Hainan in 2020 obtained by Qingliu studio, the form of card hoarding has changed to paying subscription money first, and then returning it according to the number of people arriving for inspection. The above-mentioned senior employees also said that in 2019, meinian health no longer emphasizes the dream bonus. Employees believe that it may be the fake doctor event in 2018 that makes meinian converge, or that the company no longer has pressure to fulfill its performance commitment in 2019.
In this context, the healthy performance decline of 2019 is emerging.
The urgency of funds is first on the employees. Many healthy employees of meinian complain to Qingliu studio. Meinian health has been in arrears for a long time. A nurse who once worked in Qingdao meinian said that meinian health had not paid wages from December 2019 to May this year, because a large number of accounts receivable could not be recovered, and after consultation, the salary was paid back at the end of May. A number of resigned or in-service employees said that meinian health was in arrears with wages ranging from 30000 to 350000 yuan, which had not been settled by the time of publication. In the context of the epidemic, the health of the United States began to show weakness. In the first quarter report, it is estimated that the net profit of the half year 2020 will be a loss of 650 million yuan to 850 million yuan. In 2019, a major event in the US year was to introduce Ali network, Hangzhou letter and Shanghai Qi Jun as strategic shareholders. We expect to rely on Ali to take the Internet plus medical route, and Ali will transform the company from the organizational form and internal construction to the company. From solving the problems of performance and goodwill to transformation and development, meinian health may have to go through another period of pain. Wang Xiaoyue is a senior author of Qingliu studio and is based in Guangzhou. It is produced by Netease Qingliu studio (wechat: wangyingliu), and is not allowed to be reproduced without authorization. Qing Liu studio is the original financial investigation team of NetEase finance. More content is welcome to pay attention to WeChat official account. NF4368
The urgency of funds is first on the employees. Many healthy employees of meinian complain to Qingliu studio. Meinian health has been in arrears for a long time. A nurse who once worked in Qingdao meinian said that meinian health had not paid wages from December 2019 to May this year, because a large number of accounts receivable could not be recovered, and after consultation, the salary was paid back at the end of May. A number of resigned or in-service employees said that meinian health was in arrears with wages ranging from 30000 to 350000 yuan, which had not been settled by the time of publication. In the context of the epidemic, the health of the United States began to show weakness. In the first quarter report, it is estimated that the net profit of the half year 2020 will be a loss of 650 million yuan to 850 million yuan.
Wang Xiaoyue is a senior author of Qingliu studio and is based in Guangzhou.
It is produced by Netease Qingliu studio (wechat: wangyingliu), and is not allowed to be reproduced without authorization. Qing Liu studio is the original financial investigation team of NetEase finance, and more content is welcome to pay attention to WeChat official account.