Jiaoda Onlly to Acquire Renxing Health for RMB 600 Million, Gaining Over 3,700 Elderly Care Beds

VCBeat has learned that Shanghai Jiaoda Only Co., Ltd. (hereinafter referred to as “Jiaoda Only”) plans to acquire 100% of the equity in Shanghai Renxing Health Management Co., Ltd. (hereinafter referred to as “Renxing Health”), held by Shanghai Bairen Health Industry Co., Ltd. (hereinafter referred to as “Bairen Health”), for RMB 600 million in cash.

Shanghai Jiaoda Onlly (Stock Code: 600530) is a joint-stock company established by nine initiating shareholders, including Shanghai Jiao Tong University, Shanghai Dazhong Taxi Co., Ltd., Shanghai Rongbei Industry and Trade Industrial General Company, Shanghai Xinluda Commercial (Group) Co., Ltd., and Shanghai International Co., Ltd., on the basis of the former Shanghai Jiaoda Onlly Biological Products Co., Ltd. through promotion-based incorporation.

In July 2001, Jiaoda Only successfully listed on the Shanghai Stock Exchange, becoming the first publicly traded company in China’s health food industry. As of the end of 2016, the company had a registered capital of RMB 780 million, a total share capital of 780 million shares, and total assets of RMB 2.465 billion.

The announcement stated that this move by Jiaoda Onlly aims to improve the asset quality of the listed company, optimize its existing business structure, accelerate its strategic layout in the field of elderly medical and nursing care services, enhance its competitiveness and profitability, and promote its strategic transformation toward the integrated healthcare and eldercare industry.

On March 13, 2019, Jiaoda Onlly and Bairen Health signed the “Equity Acquisition Agreement” subject to conditions precedent, thereby setting forth the terms of this transaction.

Shanghai Renxing operates in the elderly medical and nursing care services industry. Its core business involves the operation and management of elderly medical and nursing care institutions, including providing management consulting services to hospitals, nursing homes, and eldercare facilities, as well as directly operating its own hospitals and nursing homes with a focus on medical treatment, rehabilitation, and nursing care for the elderly. Currently, it operates and manages 14 medical and eldercare institutions across Shanghai, Jiangsu, and Zhejiang provinces, with approximately 3,700 open beds.

The audited results of Renxing's key financial indicators are as follows:

Data Source: Corporate Announcements

As the sole shareholder of Renxing Health, Bairen Health is primarily engaged in chain-based institutional elderly care, community-based home care, derivative services for the elderly care industry, medical and elderly care management consulting services, and the construction of smart elderly care information platforms. According to the announcement, as of December 31, 2018, its key financial data for the most recent year were as follows: total assets of RMB 435.9787 million, net assets of RMB 120.4028 million, operating revenue of RMB 150.8408 million for the year 2018, and net profit attributable to the parent company of RMB 25.3745 million.

Prior to the acquisition of Renxing Health, Jiaoda Onlly’s core business involved the research and development, production, and sales of raw materials and finished products for food and health supplements. According to its performance announcement released before January 30, the company recorded an impairment of approximately RMB 543 million on its long-term equity investment in Tai Ling Pharmaceutical (01011.HK), in which it holds a 22.28% stake, due to changes in operating performance and stock price fluctuations. In line with its development strategy, Jiaoda Onlly will gradually transition into the broader health sector, aiming to become a platform-based company focused on investment and integration within the pharmaceutical and health industry.

Reference Information:
http://www.cninfo.com.cn/new/disclosure/detail?plate=&orgId=gssh0600530&stockCode=600530&announcementId=1205897573&announcementTime=2019-03-14
http://www.nbd.com.cn/articles/2019-01-31/1297022.html