Will the next year be worse?
Editor’s note: This article comes from the WeChat public account “One Point Finance” (ID: yidiancaijing) .
Author / Yan Rui
Editor / Liu Yu
From a net profit of 821 million yuan to a loss of 866 million yuan, Meinian Health (002044.SZ) only used one annual reporting cycle. But what makes market investors even more worried is that it will get worse next.
The profit level has fallen steeply. The explanation given by Meinian Health (hereinafter referred to as “Meinian”) is that the overall environment of the non-public medical service market has affected the size of the income of the medical examination center.
Specifically reflected in the book is the provision of 1.035 billion yuan of goodwill impairment provisions during the reporting period of the 2019 annual report, resulting in a 206% decrease in net profit attributable to shareholders of common stock of listed companies.
In 2018, Meinian ’s goodwill test impairment was 0; in October 2019, when the Shenzhen Stock Exchange inquired about the reasons for the company ’s failure to account for the goodwill impairment provision, Meinian said “the entire second half of the year The industry environment is still good, and the company is expected to be able to complete the early 2019 budget targets and achieve the promised performance without finding obvious signs of impairment … “.
There are still no signs of impairment in the ears, and Mienian made a generous calculation of the impairment of goodwill. This face was really crackling.
However, even if the goodwill impairment of RMB 1.035 billion is taken out, the listed company Mei Nian Health still has a goodwill value of RMB 4.1 billion, accounting for 56% of its net assets. Whether or not there will continue to be impairment risks in the future can be said to be overhanging for the investors of Mei Nian.
In the latest Shenzhen Stock Exchange Inquiry Letter, Mienian stated, “After this impairment loss, the company ’s goodwill impairment risk has been released. Based on the information obtained by the company ’s management, the company judges that it is not currently There is a risk of further impairment. ”
The question is how much will market investors believe?
In mid-2018, Meinian Health once jumped to a new high of 80 billion yuan in total market value, which was sought after by the market as the first stock of Great Health. But at the end of July of that year, the “fake doctor” storm not only caused Mei Nian to fall into a storm of public opinion, but also caused its market value to evaporate by more than 30%.
It is also after the Black Swan incident that the Mei Nian stock price has been repaired in stages, but the overall trend is still declining. So far, its total market value is about 44 billion yuan, only more than 50% of its peak .
The continued slump in stock prices and market value has long signalled a major crisis that is hidden in Mienian, and it seems that this crisis is only beginning to show its ugliness.
01 Has the crisis of goodwill been cleared?
Proactively accrue more than 1 billion goodwill impairment losses. Has Mienian concentrated on releasing goodwill risks? This statement is obviously too optimistic.
In fact, for most medical examination institutions, although their business volume is affected by the seasonality of the off-peak season, the overall growth and change are relatively stable and regular. Under normal circumstances, it is unlikely that business volume, The situation of a sudden drop in business income in a short period of time.
Not to mention, from the first quarter to the third quarter of 2019, Meinian has been releasing optimistic signals to the market. Its profit in the first three quarters was 391 million yuan, which was only a decrease of 5.46% compared with the same period in 2018.
The third and fourth quarters of each year are the “peak season” of the medical examination center, especially the fourth quarter has always been the most important quarter for the annual revenue contribution of the United States, but the fourth quarter of 2019 has become particularly “special”. Quarterly net profit was -12.58 billion yuan.
Of course, this is the result of accruing goodwill impairment losses, but the problem is that the mid-year report has not warned of this profit and loss at all. There are only two cases of goodwill impairment:
One is due to sudden changes in market conditions or other reasons in the most profitable fourth quarter, which led to a significant decline in the performance of some of the holding medical examination institutions in the United States and the need for goodwill to be impaired; The performance of the holding medical examination organization cannot meet the promise, but only uses “finance technology” to concentrate the goodwill risk to a specific time point and expose it.
What is the possibility?
In fact, since the publication of the 2018 annual report, market investors have doubts and concerns about the value of Goodyear ’s goodwill. However, 2018 is the last year of the performance commitment period of the major shareholders of Meinian’s healthy restructuring. The impairment of goodwill is likely to result in the failure to honor the performance commitments.
According to the backdoor reorganization of the year ’s commitment to gambling, Meinian will deduct the net profit of the non-native mother under the consolidated statement in 2015-2018. If the performance commitment is not realized, the major shareholders of Meinian will need to compensate the difference .
Obviously, accumulating goodwill losses after the performance commitment period has passed is essentially different for major shareholders. Even if significant impairment losses are accrued in 2019, it is difficult to determine that there will be no goodwill risk in the future.
96% of the total revenue and profit contribution rate is nearly 100%, and the medical examination business is the only main business of Mi Nian. Therefore, since the backdoor listing was completed in August 2015,Miannian, which capitalizes on capital, has accelerated the acquisition and integration of physical examination stores.
The continuous increase in the number of medical examination centers owned will inevitably lead to an exponential increase in passenger traffic, thereby driving continued growth in revenue scale.
Compared to the total market size of 150 billion yuan, the total number of 575 million physical examinations (2018 data), and the revenue of less than 10 billion US years, it seems that there is still huge room for market integration and growth.
Using industrial funds to participate in the holding medical examination center, and then continue to inject or sell to listed companies, this is the main routine of the controlling shareholder of Meinian. As the medical examination organization operates as a heavy asset, the general premium for the acquisition of the medical examination center by Mi Nian is 3-4 times, which is the reason for its goodwill.
In the 2018 annual report, Mi Nian had predicted that the number of its participating medical examination centers would reach about 1,000 in 2020. However, according to the 2019 annual report, as of the end of the year, the number of medical examination centers held by the United States and the United States was 703, with an annual increase of 11%. It was the lowest increase in the past few years.
There is a passage in the explanation of the provision of impairment of goodwill in the US year: due to the overall environment of the non-public market in 2019, the income of the medical examination center has not been expanded accordingly, and it is expected to affect profits of about 240 million yuan.
Another statistic is that among the 39 Midea holding subsidiaries involved in the impairment of goodwill, 20 companies suffered losses in 2019, while only 5 of the holding subsidiaries that announced profit figures in 2018. Home is loss-making.
It is more noteworthy that the first of the list of goodwill impairments of the subsidiary of Meinian Holdings was the directional additional issuance in 2017, which acquired 72.22% of the shares at a price of 2.7 billion yuan, and completed 100% of it. Holding a medical examination of Ciming.
The Ciming medical examination acquired at a premium of 4 times was the third in the industry. The brand maturity is very high, but it did not meet the profit expectations in 2019, which has brought goodwill to the United States to a large extent. Impairment loss.
It can be seen that the market environment in 2019 is not wonderful for the overall medical examination industry. In fact, we can also see the signs of a decline in profitability from the quarterly reports of the United States in 2019. The revenue increased slightly, but the net profit declined significantly year-on-year.
The question is, due to the impact of the new crown epidemic in 2020, will the health center of the American New Year’s Holdings hold a larger area and a larger loss?
According to the company ’s interim results forecast released on April 30, the net loss for the first half of 2020 will be US $ 850 million-650 million.