The company plans to buy 100% of Shenzhou Shihan's shares at a price of 280 million yuan and raise supporting capital of 162.9 million yuan
The company plans to pay 280 million yuan in consideration by issuing shares and paying cash to purchase Qin Yi, Zhong Xiaochun, Wang Zheng, and Chulu Investments to hold 100% of Shenzhou Shihan's shares. Among them: Listed companies paid $168.0 million by issuing shares and $120.00 million in cash.
The issue price was 9.80 yuan, and the total number of shares issued was 17.142,900 shares. Shares were also issued to no more than 5 specific targets to raise supporting capital of 162.99 million yuan to pay for the transaction's cash consideration, the construction of a remote video service platform project based on hierarchical diagnosis and treatment, and the expenses of related intermediaries.
Shenzhou Shihan is a leader in the field of triage guidance in China
Founded in 2010, Shenzhou Shihan is a leading enterprise in the field of triage and guidance in hospitals in China. Its main products include four categories of products: smart clinics, digital wards, medical video collaboration, and medical IoT. The company has set up separate engineering service and production bases in Wuhan and Dongguan, and has established direct sales networks and agent networks in more than 30 provinces across the country. After years of accumulation, the company has successfully implemented typical projects such as the outpatient and ward system of Beijing Fuwai Hospital, the ward system of Shanghai Deda Cardiovascular Hospital, and the outpatient and information release system for the First Affiliated Hospital of Zhejiang University. The company has covered more than 700 hospitals, with a compound growth rate of no less than 30% in the last 5 years. Shenzhou Shihan promised net profit of 17 million yuan, 25 million yuan, 33 million yuan, and 37 million yuan in 2017-2020.
Digital wards and telemedicine will become new growth points for Shenzhou Shihan in the future
The company's triage guidance products have entered a stage of steady growth. In the future, the company's new growth points will mainly be digital wards and telemedicine. The company reached a strategic cooperation with US PDI in 2014 to promote digital wards in China. The company's digital ward products include many services such as ward television, nursing calls, bedside entry of signs, nursing publicity, nursing evaluation, and execution of doctor orders. They represent the highest level of domestic ward informatization. Currently, no other manufacturers are involved, and it is expected that they will bring great revenue growth to the company in the future.
In terms of telemedicine, the company's advantage is that it pioneered the world's first unattended system design to improve doctors' work efficiency; the system design is simple and completely free of training.
Acquisition of Shenzhou Shihan extends product line to make up for Rongke's sales shortfall
Hospital information systems can be divided into three layers: data collection layer - data mining layer (HIS/CIS, etc.) - data interaction display layer. The field that Shenzhou Shihan is engaged in is the hospital's data interaction display layer, which can achieve a high degree of complementarity with Rongke's clinical medical informatization products and extend Rongke's product line. Furthermore, Rongke's biggest shortcoming is that it lacks a sales network and sales capacity, while Shenzhou Shihan's marketing network covers the whole country and has strong sales capacity. After Rongke's acquisition of Shenzhou Shihan, it can make up for the company's shortcomings in sales capacity to a large extent.
Performance is expected to reach an inflection point, giving a buying rating
Excluding this merger and acquisition, net profit for 2017-2019 is expected to be 47.18 million yuan, 60.6 million yuan, and 89.3 million yuan. The corresponding EPS is 0.15 yuan, 0.20 yuan, and 0.28 yuan respectively, and the corresponding PE is 70 times, 51 times, and 37 times, respectively. Considering that the company is expected to reach an inflection point in its performance this year, this merger and acquisition will greatly improve the company's products and sales capacity. Currently, the TTM valuation of Shenwan Tier 1 Computer is 64 times, giving the company a certain valuation premium, giving the company a target PE of 70-85 times for 2017, corresponding target price of 10.5-12.75 yuan. Currently, the company's market value is only 3.3 billion yuan. There are transactional opportunities, and a purchase rating is given.
Risk warning: The promotion of clinical medical informatization products fell short of expectations; traditional business performance declined sharply.