GQY Video plans to acquire 80% equity interest in Anyuan Technology, with a value-added rate of 1158%

on the evening of January 15, GQY Video announced the "Major Asset purchase Plan", which plans to buy 80% of the shares in Nanjing Anyuan Technology Co., Ltd. (hereinafter referred to as Anyuan Technology) in cash, with a transaction consideration of 540 million yuan.

GQY Video said that the acquisition of 80 per cent of Anyuan Technology is to improve the profitability of listed companies by merging high-quality assets; the second is to dynamically visualize the layout of production safety supervision combined with AR content development; the third is to use "Industrial Manufacturing 2025" to cut into production safety supervision and reshape the industry model; at the same time, it is also to provide support for building a "smart city" integrated service providers in the future.

according to disclosure, Anyuan Technology was founded in 2003 and specializes in R & D, sales and services of new-generation information technology and industry application products such as cloud computing, Internet of things and big data. Its main business is software engineering projects and software products in the field of domestic production safety.

mergers and acquisitions in the security industry have occurred frequently in the past two years. Some investors said that mergers and acquisitions between security enterprises in 2015 were more inclined to increase revenue, hoping to share the market through acquisitions, while mergers and acquisitions among enterprises in 2016 tended to be more rational, paying more attention to whether the two sides can achieve good synergy.

strong > the subject of reorganization changes quickly / strong >

it is worth mentioning that the trading of GQY Video has been suspended since the opening of the market on October 17, 2016. however, the industry type of the subject asset of the reorganization is not in the field of safety regulation, but in the Internet game industry.

according to the announcement released by GQY Video on December 16, 2016, due to the failure of the two parties to agree on the relevant terms of the transaction, and the timing is difficult to determine, finally terminated the major asset restructuring cooperation in the Internet game industry, and immediately announced that the new restructuring target is Anyuan Technology.

according to the disclosure of the "Major Asset purchase Plan", according to the pre-evaluation results of the evaluation institutions, the pre-evaluation result of the total equity value of the shareholders of Anyuan Technology is 675 million yuan, the evaluation increment is 621 million yuan, and the value-added rate is 1158.37%.

the reason why such a high estimate is given, the staff of the GQY Video Securities Department told reporters that Anyuan Technology is one of the leading enterprises in the subdivision industry, and it is difficult to find a company with public data to compare with Anyuan Technology in the same industry, while the current valuation is still an estimated value, and the specific valuation remains to be seen in the future evaluation report.

it is understood that the downstream customers of Anyuan Technology are mainly law enforcement departments such as production safety supervision and administration of governments at all levels. Judging from the performance of Anyuan Technology, in 2014,2015 and January-November 2016, Anyuan Technology achieved operating income of 35.6169 million yuan, 56.6486 million yuan and 73.2735 million yuan respectively, with net profits of 1.3763 million yuan, 2.574 million yuan and 23,123 million yuan, respectively.

for this acquisition, Anyuan Technology has made a performance compensation commitment that the net profit attributable to the owner of the parent company after deducting non-recurring gains and losses in 2017, 2018 and 2019 is not less than 50 million yuan, 65 million yuan and 84.5 million yuan, respectively.

strong > the main revenue has slowed down in recent years / strong >

Public data show that the main business of GQY video is divided into two modules: large screen splicing display system and intelligent service robot. At present, the main source of income is large screen splicing display system.

but from the perspective of operating income in recent years, GQY video revenue has slowed down. From 2013 to 2015, GQY video business income was 332 million yuan, 264 million yuan and 204 million yuan respectively, and the net profit attributed to the owner of the parent company was 7.4466 million yuan, 19.5646 million yuan and 4,899,600 yuan respectively.

the operating income from January to September 2016 was 147 million yuan, and the net profit attributed to shareholders of listed companies was-1.8677 million yuan, down 124.25% from the same period last year.

GQY Video said that the decline in revenue is mainly affected by the macroeconomic environment, competition in the video industry has become increasingly fierce, product sales and sales prices have declined, and the configuration and performance requirements of related products have generally increased, resulting in higher manufacturing costs, lower gross margins and lower profits of video products.

in order to improve the company's profitability, GQY Video previously said that it hopes to make full use of the capital market investment and financing platform to merge and acquire enterprises in the upper and lower reaches of the industrial chain, so as to enhance the company's core competitiveness.

Gao Jianfeng, founding partner of China Strategic Capital, told reporters that there is a certain degree of growth in the field of safety regulation. Compared with the enterprises in the Internet game industry that were reorganized across the border by GQY video, there is a certain correlation between enterprises in the field of security regulation and the main business of listed companies, and the government relatively supports it, and the rate of passing meetings is relatively high.

Edit: yvette