occurrences
The company plans to acquire 100% of the shares of Jiangsu Alpha Pharmaceutical Co., Ltd. The target company of this transaction caught fire in March 2016. According to the operating conditions of the target company up to the third quarter obtained by the company and relevant intermediaries, it will take time for the target company's production and operation to resume. In order to protect the interests of the company and the vast number of small to medium investors, all parties agreed to terminate this major asset restructuring.
To protect the interests of the company and small and medium shareholders, the major asset restructuring plan was announced on July 2, 2016, and then partially revised on July 16. The company plans to pay the specific targets Shi Zhenxiang, Dingliang Jiayi, Chen Benshun, Shi Liping, Shi Lijun, Suqian Puhui, Yin Xiaolong, Wan Xinqiang, and Suqian Puhui to purchase 100% of its total shares held by issuing shares and paying cash. Of consideration 55.64%, totaling 624 million yuan; 44.36% of transaction consideration was paid in cash, totaling 498 million yuan.
At the same time, supporting capital was raised from no more than 10 targeted non-public shares to be issued to no more than 10 specified targets, including Nantong Industrial Control. The total amount of supporting capital raised did not exceed 555 million yuan, and the subscription amount of Nantong Industrial Control did not exceed 100 million yuan. Alpha Pharmaceutical promised net profit for 2016, 2017, and 2018 not less than 70.5 million yuan, 97 million yuan, and 131 million yuan respectively. Due to the severe fire situation, performance promises are difficult to achieve, so it has terminated this major asset restructuring.
Profit forecasts and investment advice
The company's “one master, two wings” industrial strategy remains unchanged, and when the time is ripe, it will also launch extended acquisitions. We forecast earnings per share of 0.41 yuan, 0.54 yuan, and 0.67 yuan respectively in 2016-2018. The corresponding PE will be 57 times, 43 times, and 35 times, respectively, and continue to give “recommended” ratings.
Risk warning
1. Risk of extended mergers and acquisitions; 2. Risk of rising raw material costs; 3. Drug safety incidents, etc.