Original Cat Finance

Reported by Wang Jianwen

Editor|Zhang Yandi

Cooperate with Haier Biotech (688139. SH) failed to merge, Shanghai RAAS (002252. SZ) also plans to borrow for expansion.

Recently, Shanghai RAAS announced that it plans to spend 4.2 billion yuan to acquire 100% of the shares of Nanyue Biopharmaceutical Co., Ltd. (hereinafter referred to as "Nanyue Biopharmaceutical"). Part of the acquisition proceeds will come from M&A loans. Shanghai RAAS said that the company plans to apply for an acquisition loan of no more than 3 billion yuan, with a total amount of no more than 80% of the consideration.

In the blood products industry, it is not uncommon to expand production capacity and pulp production capacity through mergers and acquisitions, and Shanghai RAAS has been able to achieve a leading position in the industry, which is inseparable from its many mergers and acquisitions in recent years. The acquisition of Nanyue Biotechnology by Shanghai RAAS can also further increase the pulp production and performance of the former.

For the counterparty Liu Lingan, the transaction is also a sure-fire deal. Liu Lingan is the actual controller of Nanyue Biotech and the listed company Hansen Pharmaceutical (002412. SZ). According to the proportion of shareholdings, if the transaction is successfully implemented, Liu Lingan and his wife can obtain 2.412 billion yuan of transfer money. In addition, if Nanyue Biotech recovers 305 tons of pulp in 2025, Shanghai RAAS will need to pay Liu Lingan an an additional 50 million yuan.

Why buy Shanghai RAAS?

Founded in 1988, Shanghai RAAS is mainly engaged in the production and sales of blood products, and was listed on the Shenzhen Stock Exchange in 2008. In 2023, the company will produce more than 1,500 tons of pulp, which is among the best in the industry.

In the blood products industry, the amount of pulp collected is an important indicator to measure the strength of a company. However, due to the particularity of the blood product industry, China has no longer approved new blood product production enterprises since 2001, so mergers and acquisitions have become an important means for existing blood product enterprises to expand the amount of pulp extracted.

In recent years, leading blood product companies have continued to increase pulp collection through mergers and acquisitions. For example, in July 2024, Boyaa acquired 100% of the equity of Green Cross (Hong Kong) at a consideration of 1.82 billion yuan, and expanded 4 pulp mining stations in Anhui and Hunan. In August 2024, Tiantan Biotech spent more than 1.3 billion yuan to acquire 100% of the shares of Zhongyuan Ruide, and then obtained the ownership of five pulp mining stations.

Shanghai RAAS is also increasing the number of pulp stations through mergers and acquisitions. In November 2023, the company spent 481 million yuan to acquire 95% of the equity of Guangxi Guanfeng, and then obtained two pulp mining stations under the company. The acquisition of Nanyue Biotech is also based on the same considerations. According to the announcement, Nanyue Biotech currently has 9 pulp mining stations, all of which are located in Hunan Province, with a pulp production capacity of 278 tons in 2024.

In terms of performance, Nanyue Biotech has continued to make profits in recent years, and the acquisition of the company can also increase the profit level of Shanghai RAAS. For the whole year of 2023 and the first three quarters of 2024, Nanyue Biotech will achieve operating income of 657 million yuan and 447 million yuan respectively; The net profit attributable to the parent company was 96 million yuan and 72 million yuan respectively.

However, for Shanghai RAAS, the acquisition will also increase the company's debt ratio and lead to a further increase in the company's goodwill.

Prior to this acquisition, Shanghai RAAS had abundant liquidity. As of the end of September 2024, the company's monetary fund balance was 3.712 billion yuan, at the same time, the company's short-term and long-term loan balances were 0, and the non-current liabilities due within one year were only 1.5508 million yuan.

However, the consideration for this transaction is as high as 4.2 billion yuan, and as a result, Shanghai RAAS chose to pay part of the acquisition price through loans. According to the announcement, Shanghai RAAS plans to apply for an acquisition loan of no more than 3 billion yuan, with a total amount of no more than 80% of the consideration.

In addition, Shanghai RAAS also said that the merger and acquisition will bring 3 billion to 3.4 billion yuan of goodwill to the company. Due to Shanghai RAAS's multiple large-scale mergers and acquisitions between 2014 and 2020, the company has now accumulated a high amount of goodwill. As of the end of the third quarter of 2024, the company's goodwill book value was 5.073 billion yuan, and if this transaction is finally implemented, the company's goodwill will exceed 8 billion yuan.

Shanghai RAAS also said in the announcement that if the future operating conditions of the target company do not meet expectations, there is a risk of goodwill impairment, which will adversely affect the future profitability of the listed company.

Why does Liu Lingan sell?

For Liu Lingan, the actual controller of Nanyue Biotechnology, this transaction can be described as a profitable deal.

As the target company in this transaction, Nanyue Biotech is quite famous in the capital market. The predecessor of Nanyue Biology was the Logistics Blood Supply Research Institute of Guangzhou Military Region, which was converted into Nanyue Pharmaceutical Factory in 1984. In 1999, the company was converted from military to civilian, and the Hunan listed company Tus-Pharmaceutical (000590. SZ) (then known as "Ziguang Guhan") acquired the equity of the company through a rights issue.

In the following years, Nanyue Biotech has been one of the three core subsidiaries of TusPharmaceutical. However, in 2006, after a series of capital operations, Tus-Pharmaceutical sold part of the equity of Nanyue Biotechnology to Hunan Jingda Bioengineering Co., Ltd. (hereinafter referred to as "Jingda Bio"), and the shareholding ratio of Tus-Pharmaceutical was reduced to 36%.

According to a report published by the 21st Century Economic News in 2010, in 2009, the management of Tus-Pharmaceutical was shaken, and the new management tried to take back control of Nanyue Biotech. At that time, Jingda Biotech had changed hands to Gaotejia, a well-known investment institution, and the negotiations between Gaotejia and Tus-Pharmaceutical were not smooth. In the end, Gao Tejia found Liu Lingan, a well-known Hunan businessman and the actual controller of Hansen Pharmaceutical, to mediate.

Under the mediation of Liu Ling'an, Gao Tejia and Tus-Pharmaceutical each took a step back and chose to resell the control of Nanyue Biotech to Liu Ling'an. After that, Liu Lingan first became the owner of Jingda Biotech, indirectly controlled 60% of the equity of Nanyue Pharmaceutical, and acquired 36% of the equity held by Tus-Pharmaceutical at a consideration of 182 million yuan through its subsidiary Hansen Investment.

After successfully controlling Nanyue Biologics, Liu Lingan also planned to put it into Hansen Pharmaceutical. In 2014, Liu Lingan said at the shareholders' meeting of Hansen Pharmaceutical that Nanyue Bio is carrying out a new version of GMP transformation, and when the conditions are right, Nanyue Bio can also be considered to be injected into listed companies. However, the relevant transaction has never been implemented.

With the passage of time, the shareholding structure of Nanyue Biotech has changed again. At present, Liu Lingan and his wife Wang Xiangying directly hold 50.45% of the company's equity, in addition, Nanyue Biotech's second largest shareholder, Dexin Biotech, holds 12.91% of the company's equity, and Liu Lingan holds 53.99% of Dexin Biotech's equity.

In recent years, blood product companies have become increasingly popular in the domestic market, and the valuation of related assets has also risen. In 2012, when Hansen invested in the acquisition of 36% of the shares of Nanyue Pharmaceutical, Tus-Pharmaceutical announced that the net assets of Nanyue Pharmaceutical were 170 million yuan, and the company's appraisal price was 296 million yuan.

According to the announcement issued by Shanghai RAAS, Nanyue Pharmaceutical's net assets are 839 million yuan, and the market value has reached 4.110 billion yuan to 4.519 billion yuan. Based on the transaction price of 4.2 billion yuan announced by Shanghai RAAS, Liu Lingan and his wife Wang Xiangying can receive 2.412 billion yuan from this transaction.

In addition, if Nanyue Biotech completes 305 tons of pulp production in 2025, Shanghai RAAS will also need to pay 50 million yuan to Liu Lingan. In other words, Liu Lingan and his wife can receive up to 2.462 billion yuan in cash from this transaction.

The blood product of the Haier family "ambition".

Behind Shanghai RAAS's large-scale acquisition is another layout of Haier Group in the blood products industry.

In the past 20 years, Haier Group has continued to expand its health business territory. As early as 2005, the company developed biomedical ultra-low temperature preservation related technologies, and in October of that year, Haier Medical Technology (the predecessor of Haier Biotech) was established. In 2019, Haier Group acquired control of the listed company Xingpu Medical and renamed it Yingkang Life.

In July 2024, Haier Group spent 12.5 billion yuan to gain control of Shanghai RAAS. For Haier Group, the addition of Shanghai RAAS has allowed the group to control the entire industrial chain of the blood products industry from upstream to downstream.

Among them, Haier Biotech is mainly engaged in biomedical cryogenic storage equipment related business, and its products have a wide range of application scenarios in the blood product industry, and Shanghai RAAS is the downstream company of Haier Biotech. Yingkang Life is mainly engaged in oncology-related medical services, and operates and manages 7 hospitals, which can provide application scenarios for the products of the other two companies.

Tan Lixia, vice chairman of the board of directors of Haier Group and chairman of Shanghai RAAS, once said, "In the field of blood, we have always made 'dumpling skin', which is equivalent to 'dumpling filling'. ”

After acquiring control of Shanghai RAAS, in December 2024, Haier Group had planned to let Haier Biotech exchange shares to absorb and merge with Shanghai RAAS to further exert synergies. However, in January 2025, the deal was terminated.

Since then, Haier Group has chosen to continue to promote the expansion of Shanghai RAAS in the industry. According to Shanghai RAAS's previous announcement, Haier Group supports the company to promote the strategy of "pulping" and "desizing". The so-called "slurrying" refers to continuing to expand the blood products business, while "desizing" refers to the development of non-blood-derived products.

Cat Finance focuses on the capital market and listed companies

Produced by the Blue Whale News Listed Company Reporting Group

Original title: "4.2 billion big deal landed! Shanghai RAAS won Nanyue Biological, and Liu Lingan, the actual controller of Hansen Pharmaceutical, cashed out 2.4 billion

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