Shapuai Si's acquisition of related-party assets prompts Shanghai Stock Exchange inquiry; concerns focus on high premiums and performance commitments

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On March 17, 2026, the Shanghai Stock Exchange issued an inquiry letter (Shanghai Stock Exchange Public Letter [2026] No. 0514) to Zhejiang Shapuaisi Pharmaceutical Co., Ltd. (hereinafter referred to as “Shapuaisi”), raising multiple questions regarding the company’s plan to acquire 100% equity of Shanghai Qinli Industrial Co., Ltd. (hereinafter referred to as “Shanghai Qinli”) from related parties for a cash consideration of 528 million yuan, as part of a related party transaction. The core asset of the target company involved in this transaction is Shanghai Tianlun Hospital Co., Ltd. (hereinafter referred to as “Tianlun Hospital”), with an assessment appreciation rate reaching 2417.87%. Given the company’s issues such as insufficient funds, the Shanghai Stock Exchange requires the company to respond in writing within five trading days and fulfill its information disclosure obligations.

The inquiry letter focuses on four major aspects: the reasonableness and fairness of the transaction valuation, the feasibility of performance commitments, the sources and payment capabilities of funds, and the ownership and operational qualifications of the target assets.

Regarding the transaction valuation, the announcement shows that the 100% equity of Shanghai Qinli is assessed at 528 million yuan based on the income method, while its net assets are only 20.97 million yuan, resulting in an appreciation of 507 million yuan, with an appreciation rate of 2417.87%. Based on Shanghai Qinli’s net profit of 27 million yuan for the year 2025, the static price-earnings ratio for this transaction is approximately 19.45 times. The Shanghai Stock Exchange requires Shapuaisi to supplement the disclosure of specific basis and feasibility for future revenue growth forecasts in the income method assessment, including the rationality of projected revenue growth rates of 9.50%, 8.34%, 7.52%, 6.37%, 5.79%, and 5.39% for the years 2026 to 2031, and to explain in conjunction with factors such as the competitive landscape of the local market where Tianlun Hospital is located, medical insurance policies, bed occupancy rates, and average daily costs per bed. Additionally, it is necessary to explain the basis for selecting seven comparable companies, such as Yinkang Life and Samsung Medical, for valuation comparison, and whether selective criteria have led to an inflated valuation, along with an analysis of the fairness of the transaction price based on comparable transaction cases, and whether there is a situation of transferring benefits to related parties.

Concerning the feasibility of performance commitments, the counterparty has committed that the net profit of the target company will not be less than 32.4 million yuan, 37.3 million yuan, and 42.65 million yuan for the years 2026 to 2028, which represents a significant increase compared to its net profits of 18.98 million yuan and 27.13 million yuan for 2024 and 2025, respectively. The Shanghai Stock Exchange notes that the previously acquired Taizhou Maternal and Child Hospital and Qingdao Shikang Eye Hospital by Shapuaisi experienced a decline in performance after the performance commitment period, and the goodwill generated is currently at risk of impairment. Therefore, it requires the company to supplement the disclosure of Tianlun Hospital’s revenue, profit, bed numbers, and occupancy rates over the past three years, to clarify the feasibility of the performance commitments, and in conjunction with the performance of previously acquired hospitals, to explain whether this transaction’s performance commitment arrangements are favorable to protecting the interests of the listed company, as well as the integration plan post-transaction and measures to prevent “performance face-changing.”

The sources of funding and payment capabilities are another key concern. The transaction consideration of 528 million yuan will be paid through self-owned funds and bank loans, but Shapuaisi’s Q3 2025 report shows that the company’s cash balance at the end of the period is approximately 101 million yuan, and trading financial assets are about 122 million yuan, totaling approximately 223 million yuan, which is insufficient to cover the transaction consideration. Additionally, the transaction amount is to be paid in five installments, with the sum of the first two installments amounting to approximately 370 million yuan. The Shanghai Stock Exchange requires the company to explain its funding arrangements and performance capabilities, including whether there is a risk of transaction failure due to insufficient funds; if acquisition loans are used, it must explain the amount, term, interest rate, and other impacts on the company’s finances; and in conjunction with the current debt level and cash flow situation, to clarify the impact of this large cash acquisition on the company’s liquidity, debt repayment ability, and subsequent operations.

Furthermore, the inquiry letter also raises requirements regarding the ownership, operational qualifications, and transitional arrangements of the target assets. Shanghai Qinli, as a holding platform, has its core asset as 100% equity of Tianlun Hospital. The Shanghai Stock Exchange requires the company to clarify whether the equity structure of Tianlun Hospital is clear, whether there are any nominee holdings or rights restrictions; whether its “Medical Institution Practice License” and other core operational qualifications are complete and valid; the situation of self-owned and leased assets required for operation, including whether there are any defects in the lease of the main operating site; and the compensation mechanism and guarantee measures in the event of major medical accidents, administrative penalties, or loss of key doctor teams during the transitional period that may lead to a decrease in the value of the target company.

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Editor: Xiaolang Kuaibao