On April 7, Beijing Oriental Jicheng Co.Ltd(002819) ( Beijing Oriental Jicheng Co.Ltd(002819) . SZ) announced that, therefore, Wan Lihong, which had been acquired at a cost of 2.98 billion yuan, failed to fulfill its performance commitment. Huatai United Securities issued verification opinions and apology statements. Huatai United Securities said that the audited net profit of wanlihong in 2021 was 112 million yuan, which was 983575 million yuan lower than the performance commitment, triggering the compensation procedure. The amount of compensation payable by the performance commitment party in the current period is about 292 million yuan, equivalent to 128314 million shares.
On February 24, 2021, Beijing Oriental Jicheng Co.Ltd(002819) announced that it planned to acquire 78.33% shares of wanlihong held by 20 counterparties, including Wanli Jincheng, Liu Da, Jin Taifu, Hangzhou Mingjie, precision smart core and Gree venture capital, with a transaction amount of 2.98 billion yuan. The company believes that through the M & A of wanlihong, it can quickly enter the market fields of information security and confidentiality, government integration and iris recognition under the wave of independent control and safety, which is conducive to listed companies to seize the dominant position of the wave of independent control, and is an important opportunity and measure for the business expansion of listed companies.
According to the acquisition plan, both parties to the transaction signed a performance commitment and compensation agreement at that time, and the seller promised that the net profit of wanlihong in 2020, 2021, 2022 and 2023 would not be less than 71 million yuan, 210 million yuan, 310 million yuan and 391 million yuan respectively. If the performance compensation procedure is triggered, the performance commitment party shall give priority to compensate the listed company in the form of compensation shares, and the number of compensation shares shall not exceed the number of performance commitment shares obtained by the performance commitment party in this transaction; If the shares are insufficient for full compensation, the insufficient part shall be compensated to the listed company in cash.
According to the announcement on April 7, 2022, wanlihong failed to fulfill its performance commitment. According to the unqualified audit report issued by Zhitong Certified Public Accountants (special general partnership), the net profit attributable to the shareholders of the parent company after deducting non recurring profits and losses in 2021 was 112 million yuan, which was 983575 million yuan lower than the performance commitment.
The announcement said that there are two main factors for the difference. First, due to the impact of China’s epidemic prevention and control situation, the bidding of some projects is delayed, and the delivery and implementation progress of some signed projects is also affected by the customer’s on-site prevention and control requirements. Second, due to the prolonged supply cycle of government integration products and equipment, the supply of some products in the implementation project is delayed, and the conditions for project delivery and acceptance are not met; Due to the rising price of raw materials for core components of self owned information security products, the product cost increased and the gross profit margin decreased, affecting the growth of business gross profit. Based on the above factors, the annual revenue growth and gross profit growth of wanlihong did not meet the performance commitment expectations.
Huatai United Securities, as the independent financial adviser of the transaction at that time, said in the announcement that the audited net profit attributable to the shareholders of the parent company after deducting non recurring profits and losses in 2021 was 112 million yuan, and the net profit attributable to the shareholders of the parent company after deducting non recurring profits and losses in 2020 was 731135 million yuan. The net profit attributable to the shareholders of the parent company after deducting non recurring profits and losses accumulated in two years was 185 million yuan, 65.75% of the net profit attributable to the shareholders of the parent company after deducting non recurring profits and losses.
Because the accumulated actual net profit of wanlihong in 2020 and 2021 did not reach 80% of the accumulated committed net profit of the two years, the performance commitment was not completed, and the compensation procedure was triggered. The performance commitment party shall give priority to compensation with Beijing Oriental Jicheng Co.Ltd(002819) shares, and Beijing Oriental Jicheng Co.Ltd(002819) shall be repurchased and cancelled with a total price of 1 yuan. After calculation, the amount of compensation payable in the current period is 292 million yuan, and the number of shares to be compensated in the current period is 128314 million shares.
Huatai United Securities said that the independent financial adviser and sponsor deeply regretted that wanlihong failed to fulfill its performance commitment, and sincerely apologized to the majority of investors. It will supervise listed companies and relevant parties to fulfill relevant commitments on performance compensation in major asset restructuring in strict accordance with relevant regulations and procedures, and effectively protect the interests of small and medium-sized investors.
