The potential “surround mark” risk of Guofa’s plan to acquire Goldman Sachs biomarker

On September 15, Beihai Guofa Marine Biological Industry Co., Ltd. (hereinafter referred to as “Guofa shares”, 600538. SH) issued a purchase report, intending to acquire 99.9779% equity of Guangzhou Goldman Sachs Biotechnology Co., Ltd. (hereinafter referred to as “Goldman Sachs biology”), with a transaction price of about 356 million yuan. The value-added rate of the target company reached 329.68%. < / P > < p > according to the plan, the main clients of Goldman Sachs biology are public security units, which cooperate in the form of bidding. The main cooperation modes include DNA testing related products and DNA testing technology services. However, a reporter from China Business Daily found that Goldman Sachs bio has a close relationship with other bidders of government procurement bidding projects. < / P > < p > what kind of company is Goldman Sachs bio? Why is its value added rate so high? Will the bidding matters involve “bidding around”? On September 28, the reporter came to the Guangdong South China new drug development center in Guangzhou Science City, where Goldman Sachs biology is located. For the above-mentioned matters, Goldman Sachs biological related responsible personnel believe that the company is not convenient to be interviewed at this stage. According to the bidding documents, Guangzhou Lederer Biotechnology Co., Ltd. (hereinafter referred to as “Lederer bio”) and Goldman Sachs Bio Technology Co., Ltd. frequently bid for a number of government procurement bidding projects. < / P > < p > strangely, the reporter noticed at the scene that according to the floor indicator of the accelerator service base, the office address of Guangdong Laide Liankang Biotechnology Co., Ltd. (hereinafter referred to as “Laide Liankang”) is adjacent to Goldman Sachs Bio Technology Co., Ltd., which are 902-903 and 904-905, respectively. Laide Liankang is a foreign investment enterprise of Lederer biology, with a shareholding ratio of 30%. < p > < p > Goldman Sachs biological was founded in 2007 and was listed in the stock transfer system in 2018. Its main business is DNA detection products business, DNA detection technology service business and judicial identification business. Its main customers are public security units, and its main sales mode is bidding mode. Its business model is stable. < / P > < p > according to public information, from 2017 to 2019, Goldman Sachs biological realized operating revenue of 75 million yuan, 109 million yuan and 148 million yuan respectively, and the net profit attributable to the parent was 7.94 million yuan, 16.6489 million yuan and 23.0656 million yuan respectively. Among them, the operating income and net profit attributable to the parent company increased by 35.44% and 38.54% respectively in 2019. And its performance mainly depends on the company’s bidding business. From the perspective of the top five customers from 2017 to January to June 2019, they are mainly the public security organs of various provinces and cities. But this kind of organization unit mainly carries on the purchase through the local government budget in the form of bidding. < / P > < p > the cooperation mode is that Goldman Sachs biological participates in the bidding of public security organs and signs the contract after winning the bid, and supplies goods or provides services according to the contract requirements. In addition to the consumables such as sequencing kits and consumables, customers generally do not need to update the DNA testing workstation in a short period of time. At the same time, the public security organs carry out bidding according to their annual demand for products and services procurement. < p > < p > the reporter sorted out the bidding projects that Goldman Sachs biology participated in over the years, and found that other units bidding together were mainly Goldman Sachs biology, Lederer biology, Guangzhou Baidi Biotechnology Co., Ltd. (hereinafter referred to as “Baidi bio”) and Guangzhou Chunshu Pharmaceutical Technology Co., Ltd. (hereinafter referred to as “Chunshu medicine”). And these companies have a closer relationship. < p > < p > take the 2020-2021 qualification project of Jiangmen Public Security Bureau as an example, the procurement project of DNA laboratory reagent consumables of Liwan District branch of Guangzhou Public Security Bureau in 2020, and the bid winning announcement of Shaoguan Public Security Bureau purchasing biological evidence testing consumables in 2020. The three bidding units of the above-mentioned institutions are Goldman Sachs biology, Lederer biology, and Birdie biology. < / P > < p > in the procurement project of DNA laboratory equipment and consumables of Heshan Public Security Bureau in 2018, the bidding units were Goldman Sachs biology, Lederer biology and Chunshu medicine. On September 28, the reporter came to the 9th floor of building F, Guangdong South China new drug innovation center, where Goldman Sachs biological Co., Ltd. is located. It is mainly divided into two sections: one is the administrative office area of Guangdong South China new drug creation center; the other is Guangdong Kangjian forensic clinical forensic identification Institute, with the house number of 902-910. Beside the door, there are also plaques for technological innovation small giant enterprises and high-tech enterprises. According to the floor signs, 902-903 is Laide Liankang, 904-905 is Goldman Sachs biology, 906 is Guangdong Botong Medical Technology Co., Ltd., and 907 is Guangdong Huabo biopharmaceutical research institute. According to Tianyan survey, the majority shareholder of Guangdong Botong Medical Technology Co., Ltd. is kangxiantong, with a shareholding ratio of 60%. The former name was Guangzhou Laide Medical Technology Co., Ltd. And a staff member on the scene told the reporter, “in Guangdong Kangjian forensic clinical judicial expertise Institute, in addition to Guangdong Huabo biopharmaceutical research institute has moved out, the rest are the offices of Goldman Sachs biology.” < / P > < p > in addition, the reporter also noted that other bidding units have a long-term business connection with Goldman Sachs biology, and they have the identities of the top five suppliers and the top five customers of Goldman Sachs biology. The reporter further inquired and found that Chunshu pharmaceutical was established on June 16, 2016. Soon after its establishment, Chunshu medicine became the second largest supplier of Goldman Sachs biology in 2017, the fifth largest supplier in 2018 and the third largest supplier from January to June 2019. On May 20, 2020, the company said that due to the impact of the epidemic, Chunshu medicine had difficulties in capital turnover, so it invested 600000 yuan to increase capital and share. According to Tianyan, Goldman Sachs bio invested in Chunshu pharmaceutical, with a shareholding ratio of 6.67%. < / P > < p > however, Baidi bio was founded on November 30, 2017. Shortly after its establishment, it became the second largest client of Goldman Sachs biology in 2018, with a transaction volume of 5.3992 million yuan. < / P > < p > according to the bidding documents, if there are less than 3 bidders or less than 3 qualified or qualified bidders on the day of bid opening, the project will be abandoned except for special circumstances. The bidding qualification examination information shows that the person in charge of the unit is the same person or different suppliers with direct holding and management relationship may not participate in government procurement activities under the same contract. For the doubts about the bidding, Guofa shares and Goldman Sachs biology did not respond to this. According to the official website, Goldman Sachs biological entered the field of DNA identification in 2012, with more than 10 independent patents. It was recognized by high-tech enterprises in September 2016, and is committed to improving the overall level of criminal technology in China. According to the official website, there are three subsidiaries of Goldman Sachs biology, namely, Guangzhou Goldman Sachs Intelligent Manufacturing Technology Co., Ltd., Guangzhou Goldman Sachs Zhiyun Technology Co., Ltd., and Guangdong zhenghang judicial authentication Institute. However, the official website did not disclose the content of the innovation team and the company’s development plan. < / P > < p > the reporter noted that most of the top 10 core members of Goldman Sachs biology worked in Lederer biology and its companies from 2007 to 2017. < / P > < p > according to the public data, Mr. Kang Xiantong, chairman of Goldman Sachs biology, served as the executive director and general manager of rydlin from October 2007 to September 2014, and served as the chairman from September 2014 to June 2017. From November 2011 to January 2014, director Liu Hongfu worked in Lederer biology as sales director. Kang Xianjiao, the director of finance, Chen Yongli, and Huang Yazhen, the employee supervisor, all worked in Laide Liankang. According to Tianyan survey, Lederer bio was established on December 21, 2005, and holds 30% of the equity of rydliankang. On September 18, 2016, Connexion withdrew from the list of shareholders of Lederer biology. According to the transaction draft, the valuation and transaction price of the underlying assets of this transaction show that the valuation value of 99.9779% equity of Goldman Sachs biology is 360 million yuan, and the transaction price is 356 million yuan. In this transaction, the appraisal value of all shareholders’ equity of the target company is 360 million yuan, and the book value attributable to the parent company is 83.8549 million yuan, with a value-added rate of 329.68%. < / P > < p > in the view of Guofa, the valuation of this transaction is reasonable, and the valuation of the target company is more cautious. According to the draft, the subject company has a stable operation, a large market space in the industry, and has formed a stable cooperative relationship with major customers such as public security units. Based on its core technical advantages such as customized service and product matching, the subject company has become a leading enterprise in the field of forensic DNA testing in Guangdong Province, with a high market share and sustainable profitability. At the same time, the growth rate of operating revenue and net profit of the target company in the forecast period is lower than the historical annual growth rate, the P / E ratio of the subject company on the benchmark date is lower than the average level of comparable companies in the industry, and the P / E ratio in this transaction is also lower than that of comparable trading cases in the same industry. < / P > < p > according to public data, Goldman Sachs bio was founded in 2007, after several capital increases and equity changes, it was listed and transferred in the stock transfer system in February 2018. Among them, the issue price of the target company in March 2018 was 7.5 yuan / share, which was converted into about 3.33 yuan / share after conversion, while the share transfer price of the target company this time was about 11.76 yuan / share, with a big difference. < p > < p > in this regard, the Shanghai Stock Exchange put forward the corresponding inquiry, and asked to explain the reason and rationality of the large premium rate of the target company’s estimated value and the large difference between the estimated value and the valuation value in the short-term of the previous capital increase in combination with the pricing situation of the target company during the listing and transfer period of the new third board. < / 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. 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