Event: Vcanbio announced that the non-public offering of shares is to acquire Shanghai Collison, and the non-public offering is aimed at no more than 10 specific investors (major shareholders do not participate in the subscription). The offering price will be inquired (not less than 90% of the average price in the 20 trading days before the first day after the meeting), the total amount raised shall not exceed 1.5 billion yuan, and the number of shares issued shall not exceed 50 million shares, with a lock-up period of one year. Capital investment: 1.1 billion yuan for the acquisition of 100% equity in Collison, 400 million yuan for replenishing Collison's working capital and repaying bank loans.

Comments:

Collison is one of the largest immune cell therapy companies in the country. Immunocyte therapy has been carried out in more than 30 hospitals in more than 20 provinces and cities across the country. The annual income in 2015 is 296 million yuan and the net profit is 40 million yuan. Although the net profit in 2015 is lower than the 50 million yuan expected in our previous report, we still maintain our forecast of 80 million net profit this year.

Collison injection met expectations. We judge in the Vcanbio Research brief: extension expansion is still being promoted and the genetic cell strategy is gradually taking shape. Since Vcanbio announced in December 2015 that his M & A fund had transferred 100% equity to Collison for 820 million yuan, it is only a matter of time before it is injected into a listed company. The purchase price is 1.1 billion yuan, but we can't simply assume that Collison has gained 34% in two months. we estimate that the price negotiation between the company and Collison's original shareholders was around June last year, so it has been 8-9 months so far. Follow-up also need to disclose Collison audit report, hold a board of directors, shareholders' meeting, it is expected that the fixed increase plan is expected to be submitted to the CSRC for review by the end of April, and is expected to be approved by the end of June. The price is not locked mainly because the CSRC will examine and approve it relatively quickly.

We have stated in our previous report that the significance of acquiring Collison lies in: first, increased profits. Second, access to the hospital market. Immune cell therapy must be more advantageous for leading enterprises to develop hospitals. Third, technological integration, Collison market is strong but technology is weak, while Vcanbio and his subsidiary Beike Biology have more technological innovations in immune cell therapy.

Collison + Beike will make the company a leading enterprise in immune cell therapy in China, with not only the highest market share, but also the leading technology in China. Origene will be the company's international platform for further involvement in the field of cell genetics and maintain recommendations.

Risk hint: there is uncertainty in asset restructuring. The performance was lower than expected.