On December 12, Guizhou Yibai Pharmaceutical Co., Ltd. (600594. Sh, Yibai Pharmaceutical (hereinafter referred to as “Yibai pharmaceutical”) issued an asset purchase announcement of RMB 880 million – “the company’s proposal on the transfer of priority property shares of jingfuhuayue (Taizhou) Asset Management Center (limited partnership) and jingfuhuacai (Taizhou) Asset Management Center (limited partnership)” (hereinafter referred to as “jingfuhuayue” and “jingfuhuacai”). < / P > < p > Yibai pharmaceutical’s goal of this transaction is to transfer the shares of Jingfu Huayue held by Huabao Trust Co., Ltd. (hereinafter referred to as “Huabao trust”) through RMB 880 million 66.54% of the limited partner’s share of property and 66.65% of the limited partner’s share of property of jingfuhua Mining Co., Ltd., thus taking control of Siyang hospital, Lankao first hospital, Lankao Oriental Hospital and Lankao Guyang hospital. < / P > < p > this transaction is relatively complex, with litigations and debt disputes among all parties, and some partners enter into the liquidation process. However, Yibai pharmaceutical does not need to submit the transaction to the general meeting of shareholders, it only needs to pass the resolution of the board of directors. On December 13, Shanghai stock exchange sent an inquiry letter to Yibai pharmaceutical, asking Yibai pharmaceutical to explain the necessity and rationality of the transaction, as well as the fairness of pricing, and its impact on the future of listed companies. < / P > < p > according to the announcement, the main assets of Jingfu Huayue are Lankao first hospital Co., Ltd., Lankao Guyang hospital Co., Ltd. and Lankao Oriental Hospital Co., Ltd., with 99.9% of the shares held by the three hospitals. < / P > < p > Jingfu Huayue was established in November 2016. Among the partners, Huabao trust is the preferred limited partner, accounting for 66.65%; Hengkang Medical Group Co., Ltd. (002219.sz, hereinafter referred to as “Hengkang medical” or “* ST Hengkang”) is the inferior limited partner, accounting for 10%; Jingfu Asset Management Co., Ltd. (hereinafter referred to as “Jingfu assets”) is the general limited partner Partner and manager, accounting for 0.02% of the shares. < / P > < p > in January 2020, Jingfu Huayue has expired its 36 month investment exit period. According to the partnership agreement, the trust company requires Hengkang medical to pay the relevant investment income and fulfill the acquisition obligation, but Hengkang medical fails to fulfill the relevant obligations. In July 2020, the trust company sued Hengkang medical to the court. < / P > < p > the situation of Jingfu Huacai is similar, which is also composed of the above four partners, and its main investment is 81.42% equity of Siyang County People’s Hospital Co., Ltd. < / P > < p > the explosion was mainly caused by Hengkang medical, which was once known as the first share of private hospitals, and que Wenbin, the richest man in Gansu, was the actual controller of Hengkang medical. < / P > < p > however, in the past two years, due to the rapid expansion of the scale, Hengkang medical has been heavily in debt, with a loss of RMB 1.4 billion and RMB 2.5 billion in 2018 and 2019 respectively. The stock price once fell below 1 yuan, and the company has been warned of risks and renamed as “* ST Hengkang”. On December 14, the reporter of Economic Observer called the office of secretary of board of directors of Yibai pharmaceutical to ask whether the company would withdraw the transaction after the inquiry letter of Shanghai Stock Exchange. The other party replied: “the inquiry letter of Shanghai Stock Exchange may be because the disclosure in our announcement is not detailed enough, and investors may not understand some matters.” < p > < p > Yibai pharmaceutical secretary’s office replied: “relevant matters are going step by step according to legal procedures. If everything is normal, we can get (four hospitals)” < / P > < p > the above equity is in essence a creditor’s right, please Yibai pharmaceutical to make supplementary disclosure: (1) after the completion of the transaction, the specific relationship between the company’s acquisition of priority limited partner’s equity and the acquisition of relevant medical service assets, and whether the specific way to obtain relevant medical service assets in the compulsory liquidation process needs to go through the judicial auction process; (2) explain whether the company’s acquisition of priority limited partner’s equity in the non assignment process If so, please compare the difference between the current priority property share and the future direct participation in the judicial auction process and the impact on the listed companies. < / P > < p > the transaction price is 88 million yuan more than the actual capital contribution of 792 million yuan. Yibai pharmaceutical said that it is mainly determined by combining with the priority of the actual right of return, and the relevant right of return is * ST Hengkang’s repurchase obligation and liquidated damages to Huabao trust. < / P > < p > at the same time, Yibai pharmaceutical pointed out the risks of this transaction: first, Huabao trust still has 2, seven hundred and ninety-one The company’s investment will be further increased after the transfer of its rights and interests; second, the company’s rights and interests to be transferred may have the risk of impairment; third, because * ST Hengkang is in the process of bankruptcy and reorganization, the company may not be able to get full repayment when it claims repurchase money and liquidated damages for * ST Hengkang in the future; fourth, the underlying fund has external liabilities and faces liquidation In addition, Jingfu Huayue has a performance compensation litigation dispute, and it is uncertain whether it needs to fulfill the payment obligation of 64.5 million yuan. < p > < p > based on this, Shanghai stock exchange requires Yibai pharmaceutical to make supplementary disclosure of the debt of the transferred fund. Knowing that the purchased assets involve litigation disputes, compulsory liquidation, performance compensation, and the partner * ST Hengkang has entered into bankruptcy reorganization, Shanghai Stock Exchange still insists on the rationality of the purchase. This transaction of Yibai pharmaceutical is six times of its net profit of 142 million yuan in 2019, accounting for a quarter of its annual revenue in 2019. Based on the closing price of 5.56 yuan per share on December 14, the total market value of 10 pharmaceutical is about 4.4 billion yuan, accounting for one fifth of its market value. < / P > < p > however, as there is no need to pass the approval of the general meeting of shareholders, Yibai pharmaceutical should insist on purchasing the above assets with RMB 880 million. In the face of the query from Shanghai Stock Exchange, Yibai pharmaceutical has not made a reply. < / P > < p > Disclaimer: the purpose of this article reprinted by CNFC is to convey more information, and it does not represent the opinions and positions of CNFC. The content of this article is for reference only, and does not constitute an investment proposal. Investors operate on this basis at their own risk. < p > < p > Chinanet is a state key news website under the leadership of the Information Office of the State Council and the management of China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website publishes information 24 hours a day. It is an important window for China to carry out international communication and information exchange.