I. Overview of events
On June 22, the company announced that it intends to sell its 100% stake in Jinghan Real Estate Group Co., Ltd., Beijing Yangjia Health Management Co., Ltd., and Penglai Hualu Jinghan Old-age Service Co., Ltd. (hereinafter collectively referred to as the "target company") by means of public listing and transfer in Beijing property Exchange, and purchased by the other party in cash. The final transaction price will be determined based on the results of the public listing.
II. Analysis and judgment
The proposed divestiture of the real estate business is light, and the strategic transformation further clarifies the situation of the target company to be sold: as of December 31, 2020, the total asset value of the target company assessed by the asset-based method is 2.006 billion yuan. at the same time, on April 9, 2021, the shareholders of Jinghan Real Estate passed a resolution to pay dividends of 1 billion yuan to shareholders. The company refers to the above evaluation results and deducts the dividend amount as the listing reserve price of the subject matter of this transaction. As the proportion of the total assets of the target company at the end of 2020 (7.514 billion yuan), net assets (1.478 billion yuan) and operating income (1.592 billion yuan) to the corresponding audited financial indicators of the company in the same period are 80.09%, 86.22% and 80.11%, respectively, reaching more than 50%, this transaction constitutes a major asset restructuring. Creditor's rights and debts: as of May 31, 2021, the total borrowing amount of the target company is 309 million yuan. The announcement points out that the transferee shall provide loans to the target company within 90 working days from the date of signing the asset sale agreement, it is used for the target company to repay the existing debts to the listed company and its subsidiaries. The impact of real estate business: 1) further consolidate the financial strength, the company will use the recovered cash for investment in the medical and beauty industry, combined with previously released industrial funds, M & A loans and other financing methods. Concentrate resources to promote the upstream layout and mid-stream M & A, speed up the strategic landing of the ecological integrators; 2) help to optimize the asset structure and reduce the asset-liability ratio. 3) it also helps to solve the problem of inter-industry competition between the company and the controlling shareholders and safeguard the interests of the shareholders.
The foundation of medical beauty ecological business is already in place, and it will soon enter the accelerated cash-out period, which will be more in line with the strategic positioning of technology, materials and service providers in the beauty and health industry. Before the transaction, the company mainly focused on healthy residential development of real estate business, new materials research and development and manufacturing-based chemical fiber new materials business and medical and beauty-related business. After the transaction, the company's real estate business will shrink significantly, focusing more on the business layout based on medical and cosmetology, and the sustainable operating ability, profitability and the value of listed companies are expected to increase at the same time. Medical beauty ecological business foundation already has: committed to become the domestic beauty health industry head brand and medical beauty ecological integrator, the middle reaches cut into + upstream foothold + downstream card position step by step. Upstream technology side: it has signed an investment agreement with Jiyuan Biology to acquire 51% of the 70% equity of related companies; exclusive agent of medical and beauty instruments, and joint special channels to develop the specialist market; the strategic cooperation with Jiyuan Bio (human collagen) and KDM (lipolysis needle, kinetic energy, hyaluronic acid) is actively promoted in the early stage. In the middle reaches: Liantianmei, a high-quality medical and beauty service institution in East China, has been included in the bag, and is speeding up the enclosure of head service institutions nationwide; downstream: sign a contract for head anchorman, and cooperate with head network celebrities and MCN in the form of equity, and link upstream technology end and downstream flow end resources to empower existing medical and beauty service institutions. We believe that the essence of this business model is to enjoy the competitive advantage of sharing a certain value activity in the tangible connection, invisible connection and the connection between competitors, which is expected to shorten the growth curve of the company.
III. Investment suggestions
At present, the company's internal governance structure has been straightened out, external M & A cooperation is progressing smoothly, and the company's comprehensive strength will be enhanced after the completion of the real estate business divestiture transaction. We believe that based on the richness and multi-level demand of the domestic medical and beauty market, as well as the barriers gradually formed by the company in the process of business development, business model and brand building, superimposing its strong execution and cash power, it will greatly benefit from the rapid development dividend of the medical and beauty industry, and its value will be more reflected in the platform value under the continuous improvement of capacity in the future. It is estimated that the return net profit of the company from 2021 to 2023 is 1.69,4.14 and 672 million yuan respectively, and the corresponding EPS is 0.22,0.53 and 0.86 yuan respectively, and the corresponding PE in 2022 is only 39.9 times, which is far lower than the 100X valuation level of the medical and beauty industry in 2022, and is the most cost-effective investment target in the medical and beauty sector, maintaining the "recommended" rating.
Risk Tips:
With the intensification of competition in the industry, the landing of medical and beauty projects is not as expected.