Release date: 2014-07-17
Why do Internet companies frequently enter the medical industry?
Whether it is the foreign Internet giants Google, Microsoft, or the domestic e-commerce big data giant Alibaba, in recent years, it has been intensively entering the medical industry. Behind it, the huge investment opportunities in the medical field have become the key factors for Internet companies to compete. .
According to the statistics of 21 Greenboot reporters, in the case of 38 pharmaceutical companies in the first half of this year, in addition to the mainstream pharmaceutical listed companies themselves, or the upstream and downstream integration based on the industrial chain, there are also “foreign†industries. Listed companies participate in the cross-border integration of pharmaceutical companies.
Recently, a computer application product company, Langma Information, which has just been listed for only 2 years, has dropped 650 million M&A plans. It plans to acquire the 39 health nets of Qisheng Information under the 22-fold premium, and plans to raise non-public offerings of no more than 216.6 million yuan. As soon as the plan came out, the company's share price quickly encountered capital speculation, and went out of five daily limit. As of July 10, the stock price rose by as much as 52.92%.
The Law of Attraction tells us that there must be deep-seated reasons behind every “capital marriageâ€. Different from the strong big data resources and integration prospects of the Internet giants, from the perspective of operational methods and historical experience, in recent years, Langma information related to “M&A hotspots†such as mobile games and mobile resale has been involved. More like a market value hype. Company executives also said in public on many occasions that the company will strive to enter the first camp of the Chinese Internet industry within five years, with a market capitalization of more than 10 billion US dollars.
The 21 Greenboot reporter further found that behind the vigorous cross-border mergers and acquisitions, or Langma Information to reverse the profit decline, a new round of mergers and acquisitions.
Under the inherent Matthew effect of the Internet, the strong are strong and the weak are weak. The Langma information, which relied on the explosive growth of a single product, quickly ushered in the bottleneck of the main business ceiling after the peak, and had to rely on the large-scale cash merger and acquisition transformation raised by the listing. However, since the beginning of 2012, many explorations and acquisitions based on the upstream and downstream of the industrial chain have not been successful.
As a result, cross-border M&A has become a new round of Langma information, and in the selection of M&A targets, the high gross profit margin of the medical and pharmaceutical industry will undoubtedly bring considerable cash flow, and the medical big data resources behind 39 Health Network are also Ma Information's own big data business has reached a complementary level. The follow-up broad development space is expected to continue its continued growth in performance.
Is Internet medicine mergers and acquisitions represented by Langma information a capital speculation or a deep involvement? Everything still needs time to prove.
M & A background
Langma Information, a company that has successfully landed on the GEM listed company with its computer application product, “Telephone-to-Touch†business, encountered the “ceiling†situation in the market the following year. In the year of listing in 2012, the company disclosed 2.48 million phone pairs to the number of members, but the number of members increased by 20,000 in 2013, resulting in a growth of only 0.75% in 2013 and a 33.06% drop in net profit.
In the same period, the company's expansion in the upstream and downstream areas was also unsuccessful. Its subsidiary, which was established in the expansion of the three networks (including calling products, mobile games, TV cloud, etc.), had only one profit of 520,000 in 2013, and all the remaining losses.
Detailed explanation of mergers and acquisitions
How do silk products meet the white beauty of medicine?
In the face of successive business bottlenecks and upstream and downstream expansion and setbacks, Langma Information was forced to start thinking about cross-border development. As an Internet company, Langma Information was originally intended to visit foreign counterparts. Wang Wei, chairman of the company, said, “We I’ve been pondering for nearly a year. When we visited Google, Apple, and Hobkins last year, we felt that many of them were data companies. We saw that Google’s Google contact lenses can measure blood sugar and blood pressure.â€
The case of foreign top Internet companies entering the health industry has undoubtedly brought inspiration to Langma information, and the support of Guizhou government has given the company a more subdivided direction. “Medical resources are in the hands of the government. It is impossible for the government to call for it. It is impossible to call for your right confrontation or other games, but the provincial capital of Guizhou is in the forefront of health." Wang Wei further said.
After encountering Gu Jing, president of 39 Health Network, Langma Information finally finalized the medical big data industry. Wang Wei said with emotion, "When we decided the direction, we were fortunate enough to meet Gu Jing. Langma did not have a big entrance to start from scratch. Difficult. And the first time I saw Gu Jing, I said that we will definitely be able to walk together in the future."
In fact, when Langma Information decided to enter the medical and health big data industry in early 2014, it has been selecting the target. Through screening and coincidence, in February 2014, we met 39 President of Health Network Gu Jing. "The first time I saw Gu Jing, I was very happy. I chatted at Shangri-La Hotel for an afternoon. I talked to seven o'clock from two o'clock in the afternoon." Wang Wei said bluntly.
From the perspective of mergers and acquisitions itself, data resources and user advantages are the core of 39 health nets selected for Langma information acquisition. "The biggest advantage of 39 health nets is that there is 14 years of precipitation, which no one company can accumulate. The accumulation in the field of mobile health is very important, not the technology of the Internet, but the understanding of the entire medical and health industry. In addition, 39 Health Network is separated from the 39 Group, which is purely born in medical care." Wang Wei pointed out.
In addition, 39 Health Network's strong profit model, as well as ample cash flow, is also very attractive to the Langma information that encounters the main "ceiling". "Year Health Network's revenue last year exceeded 100 million, and its profit exceeded 30 million. This is an announcement. The lowest conservative profit this year is 40 million, which is due to Gu Jing's ability to integrate into the health industry. Now we are talking about all the health products, portals or APPs. I think that this industry is really good. 39 health network counts one, truly formed a benign business model. From users to content, to advertisers, to revenue, profit, other companies are only exploring, how to guide user traffic, and 39 health network has formed a A relatively healthy model because it achieves a large-scale profit."
On the other hand, 39 Health Net, which has already obtained IDG investment, has also needed capital to make profits in recent years. At present, the congestion of the IPO channel is overwhelming, the cost of backdoor listing is high, and the integration of mergers and acquisitions into listed companies has become a profit-making option. .
According to public information, in 2006, IDG acquired 39 Health Net for 30 million yuan. In March 2007, 39 Health Net and IDG successfully raised $10 million in the second round. Since then, 39 Health Net has also planned overseas listings. At the same time, 39 Health Network also ushered in a number of companies mergers and acquisitions intentions, previously reported that Focus Media, Internet giant Baidu, the United States and Japan's health websites, investment bank funds, etc. have been in frequent contact, but ultimately did not have the following.
Merger
Keywords: cash flow, medical, big data
The 39 Health Net of Kaisheng Information, which is the target of this acquisition, is a domestic vertical health portal. Its main business is to integrate health information, and provide appointment registration, triage, online consultation, etc., and thus generate income through advertising.
In terms of the number of independent visitors, 39 Health Net has about 4,290 visitors per million, which is 40.75% higher than the second 3,048 people who are seeking medical advice. Their income for 2012-2013 is 55.15 million, 76.4 million yuan.
In addition, 39 Health Network's own strong profitability brings considerable cash flow. The counterparty promises that Qisheng Information (39 Health Net Holdings) will not be less than RMB 45 million and RMB 55 million respectively after deducting non-recurring gains and losses in 2014, 2015 and 2016. 65 million yuan.
Among them, 39 Health Network mainly provides three major services, consulting, data information tools and interactive consultation.
Integration outlook
From 2003 to 2012, the growth rate of the health service industry reached 17% every year. It is estimated that the scale of China's health service industry will reach 8 trillion in 2020.
In the follow-up, Langma Information will help 39 Health Network to further develop telecom value-added services by leveraging its own mobile operator resources. In addition, with the help of government resources, it is expected to integrate local physical hospitals. Finally, Langma Information and Electronic Science and Technology University will jointly develop big data. Further establish a medical ecological data system.
Green boots
risk warning
1. The Internet health care industry is still in the incubation period, with certain uncertainties, and the medical business development is not up to expectations. It is worth noting that during the acquisition process, Qisheng Information was valued at 650 million yuan, and the estimated value-added rate was as high as 22.5 times. Behind the high premium, Qisheng Information made a performance commitment, but due to the Internet medical industry. It is still in the incubation period, and once the relevant policies and other factors change in the future, it will have a negative impact on the company.
In addition, the risk of medical mergers and acquisitions is further expanded by the market law of high M/E ratios for medical M&A. “Medical devices and medical platforms have a large market space in China. However, excessive valuations will also put investment companies at high risk, because these industries cannot give high return on investment at present, and still need a lot of investment in the later stage. Guo Fanli, research director of China Investment Consulting, pointed out to reporters.
2.39 Health Network currently has higher advertising revenues depending on pharmaceutical companies, and advertisers are more specific.
At present, there are two main types of income models for 39 Health Network, among which online advertising dominates. According to the 2013 financial data, online advertising revenue accounts for 72% of the total revenue. In addition, telecom value-added services accounted for 28% of the 2013 business.
3. Risks in the process of integration with the company's original business.
As an Internet data-based company, Langma Information has previously focused on social products and has no experience in the pharmaceutical industry. In addition, Langma Information is conceived to establish an Internet hospital with the support of local government resources to integrate physical hospitals. Resources do not rule out the acquisition of some hospitals. However, in the actual implementation process, there are also certain cross-industry integration and capital investment risks.
Source: 21st Century Business Herald
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