Author: Pan Yan

Production: Global Finance

recently, Shanghai lesbians announced that Haier group, through haiyingkang (Qingdao) medical technology co., ltd., acquired 20% of Shanghai lesbians (002252. SZ) shares held by Shanghai lesbians shareholder killiford at a total price 12.5 billion, and obtained a total of 26.58 of the voting rights.

Haier's acquisition of Shanghai Rex also represents an entry into a more "special" industry, namely blood products.

01

10 billion knocking on the door of blood products

Why is this industry special? To a large extent, it stems from the fact that the raw material of blood products is human plasma, which is still destined to be strictly regulated by the state in every link of the industry.

In 2001, the state implemented total control on blood product production enterprises and no longer approved new blood product enterprises. At the same time, the industry implements GMP (Good Manufacturing Practice) certification system, that is, GMP replacement inspection is carried out every 5 years, and flight inspection is accepted at any time.

In addition, institutions that take plasma raw materials, that is, plasma collection stations, can only be set up by blood products companies, and strict requirements and conditions are set for new plasma stations.

for example, the implementation of "one-to-one supply of plasma", plasma cannot be supplied to other blood products enterprises; The implementation of "integration of stations and areas", each pulp station has an exclusive pulp collection area, and the area and area do not overlap; The implementation of "integration of people and areas", only the permanent residents of the pulp collection area can supply pulp to the corresponding pulp station, etc.

But for blood product companies, the number of plasma stations represents the upstream supply chain capacity and determines the size of the blood product company. However, under many restrictions, the number of domestic single plasma collection stations is growing slowly.

Barriers to entry plus stringent restrictions create a scarcity of licenses in the blood products industry. According to a research report on the biological products industry released by Wanlian Securities, there are currently less than 30 blood products manufacturers operating normally in China, and more than half of them do not have the qualifications to open new pulp stations.

The particularity of the industry has laid the business tone, that is, players are fixed, or will be less and less. If you want to enter, you can only use mergers and acquisitions.

in addition to Shanghai Laishi, in recent years, almost all industry leaders have changed owners, such as China Resources Group holding Boya Biology, Tiantan Biology's acquisition of Xi 'an Huitian, Sinopharm Group's entry into Weiguang Biology, and Shaanxi SASAC's acquisition of Pailin Biology's controlling stake, etc.

For Haier, 12.5 billion just bought a stepping stone. It is not easy to get on the table, it is more difficult to win cards, and the final game depends on whether there is an ace in the hand.

02

Shanghai Laishi Good Card Becomes "Dead Game"

In 2008, Shanghai Laishi, which has been established for 20 years, successfully landed on the Shenzhen Stock Exchange, becoming the fourth blood products company listed on A shares after Pailin Biology, Tiantan Biology and Hualan Biology.

In the first few years of listing, Shanghai Laishi's performance has been mediocre. From 2008 to 2013, Shanghai Laishi's revenue increased from 0.31 billion yuan to 0.496 billion yuan, with a compound annual growth rate of only 9.86. Far less than the 21.88 compound annual growth rate of Tiantan Biology in the same period, Tiantan Biology's revenue reached 1.837 billion yuan in 2013.

or this is also the case. since 2014, Shanghai rais has started a crazy "buy buy buy" mode to expand its territory, and has successively acquired shares of Banghe Pharmaceutical, Tonglu Biology, BPL of Britain, Zhejiang Haikang, GDS of Jili Fu subsidiary, Guangxi Guanfeng and other companies.

In the process, the number of pulp stations in Shanghai Rex has skyrocketed. By the end of 2023, Shanghai Laishi has formed a large network of 44 pulp stations in 11 provinces and regions. But at the same time, the goodwill of Shanghai Laishi also jumped directly from the initial million level to about 5 billion yuan, and it continues to this day.

As the so-called pulp station wins the world, Shanghai Laishi's performance growth was immediate. In 2014, it showed explosive growth. Operating income increased by 165.88 to 1.32 billion yuan year-on-year, and net profit attributable to the parent increased by 255.27 to 0.511 billion yuan year-on-year.

Along with it, the company's share price has risen sharply. In November 2015, Shanghai Laishi's share price rushed to a historical high of 24.76 yuan. In about two years, the share price increased by more than 500, and the market value was pushed up from 20 billion yuan to 100 billion yuan, becoming the first company with a market value of 100 billion yuan in the blood products industry. At that time, the market value of Tiantan Bio was less than 30 billion yuan.

At that time, Shanghai Laishi was worthy of the "Blood King of China". Zheng Yuewen, the real controller behind the scenes, also won the title of "the richest man in medicine" in 2015. According to the 2015 Hurun Pharmaceutical Rich List, Zheng Yuewen topped the list of the richest people in medicine with a fortune of 43 billion yuan.

after 2015, Shanghai Laishi began to slow down the process of mergers and acquisitions. At that time, an analysis said, "the market target, the listed are listed, the merger and acquisition are completed."

As a result, under the leadership of Zheng Yuewen, Shanghai Laishi began to join the securities market, and the early stage did taste a lot of sweetness.

From 2015 to 2016, the net profit of Shanghai Laishi was 1.442 billion yuan and 1.613 billion yuan respectively, of which the income from investing in stocks was as high as 0.875 billion yuan and 0.829 billion yuan respectively. Therefore, Zheng Yuewen was once called the "stock god" in the pharmaceutical industry ".

Unfortunately, Shanghai Laishi, which reached the peak by virtue of its capital operation, fell off the altar.

In 2018, Shanghai Laishi suffered its first loss since its listing, with a net loss of 1.523 billion yuan. The main reason for the change in performance that year was the failure in the securities market.

In addition to the losses, Shanghai Laishi's share price began to plummet. In order to maintain the company's huge market value and peak share price, Zheng Yuewen tried to use the old tricks. After a nine-month shutdown, in December 2018 Shanghai Laishi threw out a 40 billion sky-high acquisition, planning to buy Kiliford's GDS stake (valued at $34.4 billion) and Tiancheng Germany's 100 percent stake (valued at $4.7 billion).

However, on the day of the resumption of trading, Shanghai Laishi suffered a bloodbath in the secondary market, falling for 10 consecutive trading days. During this period, the market value evaporated by more than 63 billion yuan. At that time, the stock price was still less than 7 yuan, which was more than 70% lower than the historical high price in 2015.

Since then, the acquisition plan has undergone several drafts until March 2020, when Shanghai Rex announced a reduction from the original 40 billion yuan to 13.2 billion yuan. During this period, the two major shareholders of Shanghai Leishi, Corey Tiancheng, Leishi China due to stock pledge financing default passive liquidation, but also lost the dominance of Shanghai Leishi, which led to the second largest shareholder Kilifu "passive" to become the largest shareholder.

After becoming a major shareholder, Kiliford's real control of Shanghai Laishi was not positive. Kiliford promised not to seek control of Shanghai Leshi within 36 months of the completion of the acquisition of a 45% stake in GDS in 2020.

As a result, Shanghai Laishi has been in a state of no controlling shareholder and no actual controller during this period.

Shanghai Rex, which started out with mergers and acquisitions, eventually had to accept the fate of being sold off. In June 2023, Killiford said it was planning to sell its stake and plan to get about $1.5 billion.

from this time on, the market has been rumored who will take over Shanghai Laishi. According to media reports at that time, insiders revealed that Gao Tejia and China Resources Group had considered taking a stake in Shanghai RAAS, but in the end they all came to nothing.

Now that the dust has settled on the plan, Haier Group is also quite sincere, with 12.5 billion yuan buying a 20% stake. If calculated according to the closing price of Shanghai Laishi's first announcement day, the premium rate is 17.60 per cent, and Killiford can also withdraw.

03

Giants Gather for Great Health

For Haier to take over Shanghai Laishi, it is unexpected, but it is reasonable.

After Haier Group acquires Shanghai Laishi, Haier will also obtain scarce blood products management qualification, and will realize the entry into the upstream field of blood products industry, thus opening up the whole industrial chain of "blood products-blood low temperature storage-intelligent blood network scene solution.

Tan Lixia, Vice Chairman and Executive Vice President of Haier Group, said, "The conclusion of this strategic cooperation further improves the layout of Yingkang's life-long blood industry chain and is a key process for us to go deep into the core areas of medical health. We look forward to working closely with Shanghai Rex and Killiford to enhance the integration and innovation of the blood ecological industry chain and contribute to the high-quality development of the big health industry."

according to the official website of yingkang life, yingkang life is Haier's big health ecological brand of internet of things. it has deeply cultivated three major fields of life science, clinical medicine and biotechnology. currently, it has three listed companies: Haier biology (688139. SH), yingkang life (300143. SZ) and Shanghai leshi.

Among them, Yingkang Bio mainly around the tumor pre-treatment Kang industry chain to carry out business. Haier Bio focuses on the field of biological safety, engaged in the research and development, production and sales of low-temperature storage equipment, especially for blood safety to provide comprehensive solutions for low-temperature storage.

In fact, the cross-border layout of medical and health circuits by home appliance companies is no longer a rare thing. Midea, Hisense, Gree, TCL, Siemens, Sony, Philips, Panasonic, etc. are all involved.

Take Midea, which entered the market earlier than Haier, as an example. It already has five business units, namely, Wandong Medical, Kuka Medical, Midea Biomedical, Midea Building Technology and Ruishi Medical, covering many fields such as medical imaging, surgical robots, medical and educational equipment, ward renovation and upgrading, hospital automation systems and software solutions, which are relatively comprehensive.

The giants are rolling into the back of medical care, or the fierce competition in the home appliance market in recent years.

At present, the domestic white goods market is still a tripartite pattern formed by Midea Group, Haier Zhijia and Gree Electric Appliances. In 2023, the revenues of the three companies were 373.71 billion yuan, 261.514 billion yuan and 205.018 billion yuan respectively, and the net profits for the same period were 33.72 billion yuan, 16.597 billion yuan and 29.017 billion yuan respectively. In contrast, Haier's revenue in 2023 was slightly higher than Gree's second place, but it was significantly lower than the other two in terms of net profit.

At the same time, the slowdown in the home appliance industry is an indisputable fact. Take Haier Zhijia as an example. From 2016 to 2017, Haier Zhijia's revenue growth rate remained at about 30%. However, since 2018, this high growth rate has suddenly stopped, and the revenue growth rate has dropped below 10%. In 2023, Haier Zhijia's revenue growth rate has dropped to 7.33.

Similarly, from 2017 to 2023, Midea's revenue growth fell from 51.35 per cent to 8.10 per cent, while Gree's revenue growth fell from 36.24 per cent to 7.82 per cent.

The home appliance industry has entered a mature period, and the home appliance giant has opened a diversified layout and cultivated a second growth curve.

However, despite the current domestic appliance companies layout of the medical industry moves frequently,In terms of revenue contribution, it has little impact on the Group's overall performance.

judging from the three major listed entities in Haier group's big health sector, Haier's biological operating income fell 20.36 to 2.281 billion yuan and net profit fell 32.41 to 0.406 billion yuan in 2023. Yingkang's life revenue increased 27.20 to 1.471 billion yuan and net profit increased 116.85 to 0.1 billion yuan. Shanghai Laishi increased 21.27 to 7.964 billion yuan year on year, net profit fell 5.35 percent year-on-year to 1.779 billion yuan.

it can be seen that the addition of Shanghai laoshi has indeed enabled Haier to expand its large-scale health rapidly, but the total revenue of the three listed entities is also worth 10 billion yuan, which is slightly shy compared with Haier zhijia's revenue of over 260 billion yuan.

For Haier Group, in the face of today's environment, diversified layout has become a thing that has to be done. But health care as a cutting-edge, high-tech track, relative to the previous home appliance business to invest higher costs and longer time, but also through internal incubation or high-priced acquisitions to maintain their competitiveness, road resistance and long.