\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 861 Beijing Urban-Rural Commercial (Group) Co.Ltd(600861) )
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Major asset restructuring transaction plan released: Beijing Urban-Rural Commercial (Group) Co.Ltd(600861) or will acquire 100% equity of Beijing foreign enterprise FESCO: 1) major asset replacement: Beijing Urban-Rural Commercial (Group) Co.Ltd(600861) intends to replace all assets and liabilities except reserved assets with the equivalent part of 86% equity of Beijing foreign enterprise held by Beijing state management, and the purchased assets will be undertaken by Beijing state management. 2) Issuing shares to purchase assets: Beijing Urban-Rural Commercial (Group) Co.Ltd(600861) plans to purchase the difference between the 86% equity of Beijing foreign enterprises held by Beijing Guoguan and the transaction price of assets from Beijing Guoguan by issuing shares, and plans to purchase the 8.8%, 4.0% and 1.2% equity of Beijing foreign enterprises held by Tianjin Rongheng, Beijing venture capital and jingguofa respectively by issuing shares. Through this restructuring, Beijing Urban-Rural Commercial (Group) Co.Ltd(600861) may acquire 100% equity of Beijing foreign enterprises. 2) The newly determined transaction price of disposed assets is 6.502 billion yuan (appreciation rate of 225.02%), and the transaction price of disposed assets is 8.946 billion yuan (appreciation rate of 280.92%, PE calculated according to 20-year net profit is 15.56 times). The price difference between the two is 2.444 billion yuan. According to the previously determined issuance price of 15.84 yuan / share, the number of shares to be issued is 154 million shares. 3) Raising supporting funds: the listed company plans to raise supporting funds from Beijing Guoguan by means of non-public offering of shares. The number of shares issued with supporting funds shall not exceed 95 million shares, that is, 30% of the total share capital of the listed company before this transaction. According to the previously determined issuance price of 16.80 yuan / share, the total amount of funds raised shall not exceed 1.597 billion yuan, which is mainly used for FESCO digital integration construction project and supplementary working capital.
FESCO was founded in 1979, formerly known as Beijing Friendship Business Service Corporation. The company’s four main businesses are personnel management / salary and welfare / business outsourcing services / recruitment and flexible employment. In 21 years, the proportion of revenue is 5.2% / 3.9% / 85.5% / 4.5% respectively, and the proportion of gross profit is 50.4% / 15.0% / 26.1% / 4.9% respectively. In 19, 20 and 21 years, the company’s revenue was 16.18 billion yuan, 18.09 billion yuan and 25.41 billion yuan respectively; The net profit is 590 / 750 / 790 million yuan, and the net interest rate is 3.6% / 4.1% / 3.1%; The net cash flow from operating activities is RMB 760 / 13.6 / 590 million.
The advantages of FESCO are: 1) first mover advantage, customer resource advantage and scale effect. At present, FESCO has established stable cooperative relations in human resources services with a large number of high-quality industry leading enterprises, including Huawei, Didi travel, SF express, Alibaba, State Grid, COFCO, Samsung, IBM, Microsoft, Pfizer pharmaceutical and Schneider Electric Appliance; 2) Comprehensive service advantages, rich product modules have been accumulated, which can meet the diverse needs of different customer groups and effectively give play to the synergy advantages; 3) Technology application advantages, including fescoapp (employee self-service platform), yibeijing app (one-stop intelligent service platform for international talents), gonghuitong app and other terminal applications and platform systems, have been launched to accelerate the transformation of Internet and digitization.
Investment suggestion: we are optimistic about the accelerated development of FESCO after its backdoor listing. If the acquisition is completed, the pro forma revenue of FESCO 2021 / 2022e / 2023e will be 25.41/23.78/27.94 billion yuan, yoy + 40.5% / – 6.9% / + 17.5%, and the pro forma net profit attributable to the parent company will be 615 / 7.5/920 million yuan, yoy + 6.0% / 22.7% / 21.7% respectively. Referring to foreign service holding and Beijing Career International Co.Ltd(300662) dynamic PE, and considering that the net cash of foreign enterprises in Beijing is more than 6 billion, which is a high level, 2022e is given a reasonable 28-30 times PE, which is expected to support the market value of about 21 billion. It is recommended to pay active attention. Note: the financial data, valuation and financial model at the end of the text are the data of companies before Beijing foreign enterprises.
Risk warning: risk of unsuccessful reorganization; Key customer deposit risk; Macroeconomic fluctuation risk; Risk of fierce market competition; The risk that the company’s strategy does not meet expectations; Risks of unfinished audit and assessment; The company has recently seen stock price changes
