Caixin reported on January 7 (Reporter Zhang Chenjing) that after days of planning, the answer regarding the equity transfer counterpart was revealed last night. The well-known VC Qiming Venture Capital founder Kuang Ziping is about to become the actual controller of Zhengzhou Tiamaes Technology (300807.SZ). The company's stock price hit the daily limit upon opening today. Caixin reporters found that this transaction adopts differentiated pricing. Industry insiders told Caixin reporters that differentiated pricing helps provide more negotiation space and can facilitate acquisitions and achieve fair transactions.

The "same share different price" arrangement helps facilitate the transaction.

On the evening of January 6, Zhengzhou Tiamaes Technology announced that the company's controlling shareholder Guo Jianguo and his concerted actors Guo Tiantian, Hainan Dacheng Ruixin Investment Partnership (limited partnership), signed an equity transfer agreement with Suzhou Industrial Park Qihan Venture Capital Partnership (limited partnership) (referred to as "Suzhou Qihan"). Suzhou Qihan, as the general partner and executive partner, plans to establish an M&A fund (referred to as "Qiming Fund") aiming to acquire a total of 17.7567 million shares held by the transferor, accounting for 26.1% of the company's total shares. After the completion of this equity transfer, the company's controlling shareholder will change from Guo Jianguo to Qiming Fund, and the actual controller of the company will change from the couple Guo Jianguo and Tian Shufen to Kuang Ziping.

It is worth mentioning that the transaction price shows differentiation. According to the announcement, the total transaction price is RMB 0.452 billion. Among them, Guo Jianguo's share price is 28.26 yuan per share, with a value of 0.151 billion yuan; his daughter Guo Tiantian and another partnership platform primarily held by his spouse Tian Shufen have a trading price of 24.25 yuan per share, valued at 0.056 billion yuan and 0.244 billion yuan respectively.

Differentiated pricing refers to a strategy during M&A processes to set different pricing for equity transfer among different shareholders based on the different categories of shareholder holdings, obligations assumed, investment costs, etc., also known as "same share different price". Given the trend of increasingly complex corporate valuations, differentiated pricing has become a relatively popular flexible trading tool in today's market.

Sun Yuhao, a senior partner at Shanghai Haihua Yongtai Law Firm, told Caixin reporters that, under the current market environment, the overall transaction valuation for mergers and acquisitions of listed companies is showing a downward trend, and the expected compensation from acquirers often fails to cover the costs and benefits of all shareholders. At this point, internal shareholder compromise is necessary in order to continue pushing the acquisition forward, one of which is differentiated pricing. Differentiated pricing can respond more flexibly to complex transactional environments, provide more negotiation space, facilitate acquisitions, and is more likely to reach a relatively fair deal for all parties. However, implementing a differentiated pricing strategy also requires cautious consideration of compliance and fairness, as well as more transparent communication among all parties to ensure that all shareholders understand and accept the rationale behind differentiated pricing, which inevitably increases the difficulty and time of negotiations.

Sun Yuhao further explained that on September 13, 2024, the Shanghai Stock Exchange issued a comprehensive guide on listed company mergers and acquisitions regulations, policies, and case studies, summarizing several typical cases, among which "SRP issues convertible bonds and pays cash to purchase 100% of CXW's shares" used differentiated pricing: "In terms of pricing, all parties to the transaction negotiate based on factors like initial investment costs of different counterparties. This transaction sets up a differentiated pricing mechanism, but the total compensation to be paid by the listed company does not exceed the overall valuation of the target assets..." It is clear that the legality and rationality of differentiated pricing has been recognized to a considerable extent by the Shanghai Stock Exchange.

Similar to the previous acquisition of 3peak Incorporated (688536.SH) by Zhengzhou Tiamaes Technology, the comprehensive valuation of the symbol Zhengzhou Tiamaes Technology is 1.06 billion yuan. Considering the differences in investment time and cost of various shareholders to maximize transaction facilitation, the transaction prices corresponding to the valuations of Zhengzhou Tiamaes Technology obtained by the management team, early individual investors, and other rounds of investors are 0.872 billion yuan, 1.15 billion yuan, and 1.62 billion yuan respectively.

Well-known Venture Capital's 'tasting' helps boost market confidence.

According to public information, Zhengzhou Tiamaes Technology is a high-tech enterprise specializing in the research, design, production, and sales of intelligent urban bus operation scheduling platforms and intelligent vehicle electronics products, with products mainly covering software and hardware supporting smart buses. However, in recent years, due to the general operational difficulties of urban public transport companies, the willingness to invest in information construction has declined, resulting in sluggish market demand and financial pressure on the company, which has recorded losses for three consecutive years, with losses further widening in the first three quarters of this year.

In the context of stricter IPO regulations in 2024, to invigorate mergers and acquisitions, in September 2024, the China Securities Regulatory Commission released the "Opinions on Deepening the Reform of the Market for Mergers and Acquisitions of Listed Companies" (hereinafter referred to as "Six Merger Rules"), proposing to encourage listed companies to strengthen industrial integration and encourage private equity funds to actively participate in mergers and acquisitions.

Mergers and acquisitions are the first tools listed by the Securities Regulatory Commission for managing the market cap of listed companies. Since the release of the "Six Merger Rules", there have been cases of private equity institutions acquiring controlling shares of listed companies, mostly backed by state-owned enterprises. Qiming Venture Partners acquiring Zhengzhou Tiamaes Technology and leading and participating in industrial integration has 'tasting' significance.

Sun Yuhao stated that the "Six Merger Rules" continue the spirit of the "Eight Rules of the Star Board". The acquisition of Zhengzhou Tiamaes Technology by Qiming Fund is among the earliest practical cases responding to the policy and holds unique significance. The "Six Merger Rules" aim to achieve 'promoting a healthy cycle of fundraising, investment, management, and exiting' and 'supporting private equity funds to acquire listed companies for the purpose of promoting industrial integration'; a key step is that the market is willing to actively respond to the policy. The acquisition case of Zhengzhou Tiamaes Technology is undoubtedly a strong stimulant, boosting market confidence.

According to Qiming Venture Partners' official website, Qiming Venture Partners was established in 2006 and currently manages 11 dollar funds and 7 yuan funds, with total managed assets reaching 9.5 billion dollars.

As of now, Qiming Venture Partners has invested in over 580 fast-growing innovative companies, among which more than 210 are listed on exchanges such as the NYSE, Nasdaq, HKEX, Shanghai Stock Exchange, and Shenzhen Stock Exchange, or have exited through mergers and acquisitions, with over 80 companies being recognized as industry unicorns or super unicorns. Qiming Venture Partners' investment companies include publicly listed firms such as Xiaomi Group (01810.HK), Meituan (03690.HK), Gan & Lee Pharmaceuticals (603087.SH), TIGERMED (300347.SZ), and CANSINOBIO (688185.SH).

The market reacted positively to this, and Zhengzhou Tiamaes Technology Stocks resumed trading on January 7, 2025, closing the day with a limit up at 36.37 yuan, an increase of 19.99%.