Acquired related hospital at a 24x premium, Shapu Aisi's "silver economy" strategy faces rapid regulatory inquiry

A related acquisition with a premium of over 24 times has once again brought Shapu Aisi (603168), currently experiencing financial losses, into the market spotlight. Recently, the company announced plans to acquire 100% equity of Shanghai Qinli, a subsidiary of its controlling shareholder, for 528 million yuan in cash, thereby indirectly holding all shares of Shanghai Tianlun Hospital. However, the high premium, performance commitments, and the company’s own financial pressure quickly drew inquiries from the Shanghai Stock Exchange, asking the company to explain the fairness of the transaction, the achievability of the performance commitments, and the sources of funding.

01 Premium exceeds 24 times, raising doubts about valuation reasonableness

The transaction was evaluated using the income approach, with Shanghai Qinli’s valuation reaching 528 million yuan, while its net assets are only 20.97 million yuan, resulting in an appreciation rate of 2,417.87%. Even based on the projected net profit of 27.13 million yuan in 2025, the static P/E ratio is nearly 19.5 times, far above the industry average.

The SSE paid close attention to this and required the company to analyze the future revenue growth forecast’s reasonableness and feasibility by considering key operational indicators such as the medical competition landscape in the area where Shanghai Tianlun Hospital is located, changes in medical insurance policies, and bed utilization rates. In other words, regulators questioned whether there were “selective parameters” or “inflated expectations” in the valuation, and even suggested the possibility of transferring benefits to related parties.

02 Performance commitments “jump,” past M&A performance concerns

The performance guarantee terms show that Shanghai Qinli’s net profit commitments for 2026-2028 are 32.4 million yuan, 37.3 million yuan, and 42.65 million yuan, respectively, representing a significant “jump” compared to the actual net profit of 18.98 million yuan in 2024 and the forecast of 27.13 million yuan in 2025.

However, Shapu Aisi’s past M&A performance has not been optimistic. The acquisitions of Taizhou Maternity Hospital and Qingdao Sight康 Eye Hospital previously experienced performance declines after the performance commitments expired, and related goodwill is currently at risk of impairment. Will this transaction follow the same path? The SSE requires the company to disclose actual operational data of Shanghai Tianlun Hospital over the past three years, analyze the historical fluctuations, and explain the feasibility of the performance commitments and how to prevent “performance face-changing” after the commitment period.

03 Financial strain, cash purchase “beyond capacity”

From a financial perspective, Shapu Aisi is not well-off. The company expects a net loss attributable to parent of 213 million to 319 million yuan in 2025, mainly due to impairment of goodwill related to previous acquisitions. As of the end of Q3 2025, the company’s cash and tradable financial assets totaled only about 223 million yuan, while the transaction price is 528 million yuan, with the first two payments already totaling 370 million yuan, far exceeding the company’s current cash reserves.

The SSE therefore asked the company to disclose the funding arrangements for this acquisition, whether acquisition loans will be used, and to assess the impact of large cash payments on liquidity, debt repayment ability, and future operations. Market analysts pointed out that relying on external financing to fund the acquisition would further increase financial costs and intensify operational pressure.

In conclusion

Shapu Aisi’s high-premium acquisition appears to aim at expanding into the “silver economy” and healthcare services, but underlying valuation bubbles, performance commitment pressures, and funding risks cannot be ignored. Under strict regulatory inquiries, whether the company can provide reasonable explanations will be key to market judgment on whether this deal is “worth the cost.” Given the history of frequent M&A pitfalls, investors should remain cautious about whether this is another case of “buy high, sell low” in the capital game.

This article was generated with AI tools.