The website of Shanghai Stock Exchange recently published a letter of inquiry on the equity acquisition of Beijing Institute of Technology Navigation Control Technology Co., Ltd. (SZSKCGH [2023] No. 0297). On September 7, Beijing Institute of Technology Navigation Control Technology Co., Ltd. (hereinafter referred to as "Science and Technology Navigation", 688282. SH) issued a notice on signing the agreement of intent to acquire equity.
On September 6, 2023, Science and Engineering Navigation signed the Acquisition Intention Agreement with Chongqing New Century shareholders Hainan Yimai, Huapu Test, Century Ruida and Xuanquan. The company plans to acquire 51% of the equity of the target company in cash and obtain control of the target company. The overall valuation of the target company is currently estimated to be no more than 387.5 million yuan, The final transaction price shall be subject to the evaluation report issued by the evaluation institution and the negotiation results of relevant parties, and shall be agreed in the formal transaction agreement.
This acquisition is not expected to constitute a major asset restructuring as stipulated in the Administrative Measures for Major Asset Restructuring of Listed Companies, nor does it constitute a related party transaction.
The main financial data of the target company in recent two years are as follows:
On September 7, 2023, Science and Engineering Navigation disclosed the Announcement on Signing the Agreement of Intent to Acquire Shares, which said that it was intended to pay in cash to Hainan Yimai Technology Co., Ltd. (hereinafter referred to as Hainan Yimai), Chongqing Huapu Survey Navigation Technology Co., Ltd. (hereinafter referred to as Huapu Survey), Chongqing Century Ruida Technology Co., Ltd. (hereinafter referred to as Century Ruida) Chongqing Xuanquan Science and Technology Partnership (Limited Partnership) (hereinafter referred to as Xuanquan Partnership) acquired 51% of the equity of Chongqing Aerospace New Century Satellite Application Technology Co., Ltd. (hereinafter referred to as the Target Company) and obtained its control.
About goodwill. The announcement shows that the net assets of the target company at the end of 2022 are 57.5987 million yuan, and the overall valuation of the target company of this transaction is estimated to be no more than 387.5 million yuan. It is expected that a large amount of goodwill will be generated after the completion of this transaction. The company is requested to clarify the range of asset groups corresponding to the goodwill formed in this transaction, predict the amount of goodwill expected to be formed after the completion of this transaction and its proportion in net assets, and fully remind the risk of goodwill impairment.
The following is the original text:
Shanghai Stock Exchange
SZKCGH [2023] No. 0297
Inquiry Letter on the Equity Acquisition of Beijing Institute of Technology Navigation Control Technology Co., Ltd
Beijing Institute of Technology Navigation Control Technology Co., Ltd.:
On September 7, 2023, your company disclosed the Announcement on Signing the Equity Purchase Intention Agreement, which said that it planned to provide cash to Hainan Yimai Technology Co., Ltd. (hereinafter referred to as Hainan Yimai), Chongqing Huapice Navigation Technology Co., Ltd. (hereinafter referred to as Huapice), Chongqing Century Ruida Technology Co., Ltd. (hereinafter referred to as Century Ruida), and Chongqing Xuanquan Technology Partnership (Limited Partnership) (hereinafter referred to as Xuanquan Partnership) acquired 51% of the equity of Chongqing Aerospace New Century Satellite Application Technology Co., Ltd. (hereinafter referred to as the Target Company) and obtained its control. In accordance with the relevant provisions of the Rules of Shanghai Stock Exchange for the Listing of Science and Technology Innovation Board Shares, the Company is requested to verify and supplement the disclosure of the following matters.
1. About the historical evolution and valuation of the subject company. Public information shows that the target company was founded in 2002, and there have been several equity transfers, the most recent in July 2023. The overall valuation of the target company of this transaction is estimated to be no more than 387.5 million yuan. Please:
(1) Supplementary disclosure of the historical evolution of the subject company, including changes in the main business, previous equity transfers and whether there is an association between the counterparties, the valuation of the relevant equity transfer, the valuation method and basis, whether the paid in capital contribution is made, the reasons for the differences in previous valuations, and whether the valuation has changed significantly in the short term and is reasonable; (2) Explain the determination method, basis and rationality of the estimated value of this transaction, and whether there is any subsequent valuation adjustment arrangement; (3) Explain whether the valuation of the latest equity change is significantly different from the estimated value of this transaction, and explain the reason and rationality.
2. About the counterparty. The announcement shows that before this transaction, Hainan Yimai, Huapu Test, Century Ruida and Xuanquan Partners (hereinafter collectively referred to as the counterparty) held 45.06%, 33%, 15% and 6.94% of the equity of the target company respectively. After this transaction, the company will hold 51% of the equity of the target company. Public information shows that the controlling shareholder of Hainan Yimai will be changed to Yang Yunchun on September 5, 2023; The registered address of Huapu Survey is the same as that of the target company. The Company: (1) Supplementary disclosure of the equity structure of the underlying company after this transaction; (2) Explain the reasons for the change of the controlling shareholder of Hainan Yimai on the day before the signing of this transaction intent agreement, the relationship and rationality with this transaction, and whether there is a transaction arrangement that should be covered but not covered; (3) Explain the reason and rationality of the same registered address of Huapu Test and the target company, and whether there is any situation that affects the independence of the target company; (4) State whether the counterparty, its shareholders and actual controllers have any association or other interest arrangements with the listed company or the target company, and whether they directly or indirectly hold the shares of the listed company.
3. About the main business of the target company. The announcement shows that the target company is a private military enterprise engaged in the R&D, production and sales of mobile satellite communication systems, laser gyros, laser gyro strapdown inertial navigation systems, rapid positioning and orientation systems, aerospace telemetry and telecontrol equipment and other products. From 2021 to 2022, the unaudited operating income of the target company is 106.995 million yuan and 100.161 million yuan respectively, and the net profit is 14.6273 million yuan and 16.015 million yuan respectively. The company is requested to: (1) supplement the disclosure of the business model of the target company, the product models and terminal application fields that have been finalized by customers, the income structure, gross profit margin, the top five customers and suppliers in the past two years, and explain whether there is a risk of dependence on specific customers and products, whether there is a large amount of related transactions and rationality; (2) Explain whether the change of control of the target company has adverse effects on its customer relations, orders in hand, business qualifications, etc; (3) Distinguish different downstream application fields, and explain whether the target company's revenue, gross profit margin, net profit and other operating indicators and their change trends are significantly different from those of comparable listed companies in the past two years and whether they are reasonable; (4) Supplementary disclosure of the subject company's accounts receivable and bill book balance, bad debt reserves, aging structure and other information in the past two years, indicating whether the subject company has risks such as large accounts receivable balance, long aging and irrecoverability; (5) State whether the target company's military products sales adopt the price review method. If yes, state the amount of revenue that has not yet completed the price review, whether there is a risk of revenue reduction due to price review after the completion of this transaction, and whether the performance commitment has considered the impact of military products price review on revenue adjustment.
4. About the business synergy of the target company. The announcement shows that the target company's products include laser gyro and laser gyro strapdown inertial navigation system. The main product of the company is also inertial navigation system, but the core component of the latter is fiber optic gyroscope, and it is planned to invest 287482500 yuan in the "fiber optic gyroscope production and construction project". The company believes that this acquisition will expand the application field of the company's products, enter the field of special vehicle navigation and communication, expand the application of the company's products such as fiber optic gyroscope and inertial navigation system, and create new business growth points. The company is requested to: (1) explain the similarities and differences between the products of the listed company and the target company, whether there is a technical iteration or mutual substitution relationship between the laser gyro and the fiber optic gyro, and the rationality of the listed company operating both laser gyro and fiber optic gyro after this transaction; (2) Explain whether this transaction and the performance change of the listed company affect the construction of the "Fiber Optic Gyroscope Production and Construction Project", and quantify the rationality and prudence of the recent internal investment structure adjustment of the project; (3) Explain the specific embodiment of the synergy effect between the listed company and the target company after this transaction, the proposed integration measures for the target company's business, assets, finance, personnel, etc., and remind the potential risks.
5. Performance commitment. According to the announcement, Hainan Yimai, Huapu Test and Century Ruida (hereinafter referred to as the Performance Promisor) made a commitment to the target company's operating revenue and non net profit deduction in 2023-2025: the operating revenue was not less than 120 million yuan, 180 million yuan and 240 million yuan respectively; Non net profit deducted shall not be less than 20 million yuan, 31 million yuan and 42 million yuan respectively. If the actual non net profit deduction of the target company in each year during the performance compensation period fails to reach the commitment amount of that year, the performance commitment person shall make cash compensation to the listed company. The company is requested to: (1) supplement the disclosure of the revenue recognition policy of the target company, the main operating data from January to August 2023 and the orders in hand at the end of the period, calculate the impact of the completion of this transaction on the performance of the listed company in this year, and remind the relevant risks; (2) Explain the reason and rationality of the greater increase in committed performance compared with the previous two years; (3) Explain whether the performance commitment person's commitment to operating revenue has compensation obligations and is reasonable; (4) Supplementary disclosure of the specific arrangements for the compensation of non net profit deduction commitment, including the compensation method, the compensation period, and the determination method of the compensation amount of each performance commitment person; (5) State whether the performance promisor has the performance compensation performance capability and the proposed performance guarantee measures.
6. About goodwill. The announcement shows that the net assets of the target company at the end of 2022 are 57.5987 million yuan, and the overall valuation of the target company of this transaction is estimated to be no more than 387.5 million yuan. It is expected that a large amount of goodwill will be generated after the completion of this transaction. The company is requested to clarify the range of asset groups corresponding to the goodwill formed in this transaction, predict the amount of goodwill expected to be formed after the completion of this transaction and its proportion in net assets, and fully remind the risk of goodwill impairment.
7. About the attributes of scientific innovation. The Company is requested to explain the impact of this transaction on the scientific and creative attributes of listed companies in combination with the R&D investment, invention patents, R&D personnel and other information of the target company, with reference to the relevant requirements of the Self regulatory Guidelines of Shanghai Stock Exchange for Science and Technology Innovation Board Listed Companies No. 3 - Continuous Disclosure of Scientific and Technological Innovation Attributes and Related Matters.
8. Profit and loss in transition period. According to the intention agreement between the listed company and the counterparty, the transferor shall bear any loss of the target company during the transition period of this transaction (that is, from the audit and evaluation base date to the delivery date). The company is requested to make supplementary disclosure of the agreement arrangement for the target company to generate profits during the transition period, and explain whether there is any situation that harms the interests of the listed company.
9. About the controlled subsidiary of the target company. Public information shows that the subject company has two holding subsidiaries, Beijing Tiandi Guidance Technology Co., Ltd. and Beijing Qinghang Juhui Technology Co., Ltd. The company is requested to make supplementary disclosure on the arrangements and rationality of the company's holding subsidiaries that won the bid in this transaction.
10. Other matters. The company is requested to make supplementary disclosure on whether the target company has pending litigation, external guarantee, financial assistance, fund occupation, etc. before and after the completion of this transaction. If so, please explain the relevant arrangements and rationality, and whether there is any situation that damages the interests of the listed company.
The continuous supervision organization is requested to verify the above issues item by item and express clear opinions.
The company is requested to disclose immediately after receiving the inquiry letter, and reply to our department in writing before September 26, 2023, and disclose to the public as required, and give key tips on important matters and major risks in the prominent position of the reply.
Shanghai Stock Exchange Science and Technology Innovation Board Company Management Department
September 11, 2013
key word: Subject
Fiber optic gyroscope
Strapdown Inertial Navigation
Navigation control
Equity transfer
