Specifically, Dexin Jiaoyun plans to purchase 90% equity of Dongguan Zhihong precision mould Co., Ltd. (hereinafter referred to as “Zhihong precision”) by issuing shares and paying cash. < / P > < p > the reason given by the merger and reorganization committee is “the applicant fails to fully explain the core competitiveness of the underlying assets and the rationality of the valuation of this transaction, and fails to fully disclose that the transaction is conducive to improving the asset quality of the listed company, which is not in line with the provisions of Article 43 of the administrative measures for material assets reorganization of listed companies”. < / P > < p > it is reported that German new transportation was established in 2003, and its main business includes road passenger transport and passenger bus station business. Zhihong precision focuses on the R & D, design, production and sales of high-precision die-cutting tools and other products applied in the field of lithium battery electrode sheet forming and manufacturing, and provides relevant technical services. The products are widely used in the production of high-quality consumer lithium batteries, power batteries, energy storage batteries, etc. < / P > < p > at the same time, the listed companies also offered a nearly 7 times premium to the target company of the acquisition. As of December 31, 2019, the audited book net assets of the subject company are 87.8144 million yuan, the pre evaluation value is 70.01 million yuan, and the estimated value-added rate is 698.29%. According to the announcement, < / P > < p > in July 2017, Guanwei of Samoa transferred its 100% equity of Zhihong precision to Zheng Zhixian at the price of RMB 14659400, and the unpaid capital contribution obligation of RMB 1840600 was inherited and paid by the transferee Zheng Zhixian. As of June 30, 2017, the total equity value of Zhihong precision’s shareholders was 14.6509 million yuan. Based on this calculation, the underlying valuation has soared nearly 47 times in more than two years. < / P > < p > from 2018 to 2019 and from January to March 2020 (hereinafter referred to as the “reporting period”), the target company achieved operating revenue of 49.3 million yuan, 121.98 million yuan and 38.78 million yuan respectively, and the net profits were 13.02 million yuan, 50.41 million yuan and 19.9 million yuan respectively, with rapid growth in performance. < p > < p > < p > < p > the reporter of international finance news found that this was mainly affected by the annual growth of gross profit rate. During the above period, the gross profit margin of the target company was 54.9%, 69.36% and 73.88% respectively. < / P > < p > in this transaction, the counterparties made performance commitments. From 2020 to 2022, Zhihong precision’s net profit (determined by the lower principle before and after deducting non recurring profit and loss) will not be less than 59.1 million yuan, 69.16 million yuan and 81.73 million yuan respectively. < / P > < p > if this transaction becomes a reality, the listed company will add 544.6305 million yuan of goodwill. The company points out that if the target company’s future operating conditions do not meet the expectations, there is a risk of goodwill impairment. Goodwill impairment will directly affect the operating performance of listed companies and reduce the current profits of listed companies. During the reporting period, the total sales amount of Zhihong precision to the top five customers were RMB 25814700, RMB 91841300 and RMB 36026300, accounting for 49.2%, 74.45% and 92.85% of the current main business income, respectively. The proportion of the top five customers increased year by year with high concentration. < p > < p > during the reporting period, the sales revenue of the target company to Ningde new energy were 2.6569 million yuan, 58.6698 million yuan and 26.5759 million yuan respectively, accounting for 5.39%, 48.14% and 68.53% of the current main business income. Since 2019, Ningde new energy has become the largest customer of the target company. < / P > < p > in this regard, the company explained that this was mainly due to the high market concentration of the downstream lithium battery industry and the target company’s business strategy of focusing on the segmentation of major customers and high-end market applications. According to the data of GGII, the top ten domestic consumer lithium battery manufacturers and power lithium battery manufacturers had 73% and 80% market share respectively in 2018. < / P > < p > the company also pointed out the risk that if the competition pattern of downstream industries changes greatly, or the core customers have major adverse changes due to their own business or the cooperation relationship with the target company, the purchase volume of the target company will drop sharply, and the target company fails to expand other high-quality customers in time and effectively, which may lead to large fluctuations in its business performance. < / P > < p > Deutsche Xin Jiaoyun landed in Shanghai Stock Exchange in January 2017. After the listing, the performance of Dexin Jiaoyun has shown a cliff like decline. From 2017 to 2019, the operating revenue of Dezhou Xinyi transportation is 197 million yuan, 170 million yuan and 99 million yuan respectively, and the net profit is 27 million yuan, 259 million yuan and 07 million yuan respectively. < / P > < p > it can be seen that compared with 2017, the revenue and net profit of Dezhou xinjiaoyun will decline sharply in 2019, especially the net profit has been nearly “cut back”. < / P > < p > in the first half of 2020, Dezhou Xinyi transportation is still in a dilemma. Specifically, in the first half of the year, the company’s operating revenue reached 27.3457 million yuan, a year-on-year decrease of 42.67%; the net profit attributable to the parent company was 2.5271 million yuan, a year-on-year decrease of 46.86%. < / P > < p > in view of the acquisition, Dexin transportation previously said that after the completion of the transaction, the company’s main financial data such as total assets, operating income and net profit attributable to the owners of the parent company are expected to effectively improve, which will help to enhance the company’s profitability and core competitiveness, and its anti risk ability will be significantly enhanced. < / P > < p > Disclaimer: the purpose of this article reprinted by china.com finance and economics is to convey more information and does not represent the views and positions of the website. The content of this paper is for reference only and does not constitute investment advice. Investors operate accordingly and bear their own risks. < p > < p > Chinanet is a national key news website under the leadership of the Information Office of the State Council and managed by China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website releases information 24 hours a day, which is an important window for China to carry out international communication and information exchange.