24x Premium Acquisition of Related Assets: Shanghai Stock Exchange Questions the Reasonableness of the Shapuaisi Transaction

延期，再延期，the market is still waiting for Sapure AiSi (603168.SH) to respond to the inquiry letter from the Shanghai Stock Exchange.

Recently, a related-party acquisition by this leading company in ophthalmic drug treatments at a premium has drawn intense market attention. According to the company’s announcement, it plans to use RMB 528 million in cash to acquire 100% of the equity interest in Shanghai Qinli Industrial Co., Ltd. (hereinafter referred to as “Shanghai Qinli”), which is held by the controlling shareholder and its persons acting in concert. The book net assets of the underlying assets are only approximately RMB 20.97 million, while the appraisal appreciation rate is as high as 2,417.87%. On the day the announcement was released, the Shanghai Stock Exchange promptly issued an inquiry letter, directly pointing to key questions including the fairness of the valuation, the reasonableness of the related-party transaction, and the logic supporting performance.

Soon after, the China Securities Investor Service Center (hereinafter referred to as the “CISC”) sent a recommendation letter as a shareholder. In accordance with the law, it exercised the shareholder’s recommendation right and recommended that Sapure AiSi prudently evaluate the reasonableness of the target company’s future revenue forecasts, reconsider the valuation and consideration for this transaction, and protect the interests of the listed company and the legitimate rights and interests of minority shareholders.

The latest announcement shows that, as of April 1, Sapure AiSi and the intermediary agencies still need to further verify and improve the response content. After applying to the Shanghai Stock Exchange, the company will again postpone its response to the inquiry letter, with the postponement not exceeding five trading days.

Public information indicates that the underlying company Shanghai Qinli acquired in this transaction by Sapure AiSi was established in 2022, and its core asset is 100% equity interest in Shanghai Tianlun Hospital Co., Ltd. (hereinafter referred to as “Tianlun Hospital”). If this transaction is completed, Sapure AiSi will indirectly hold 100% equity interest in Tianlun Hospital.

Whether the underlying assets can support a highly valued, high-growth expectation is the focus of both the market and regulators. The announcement shows that this transaction uses the income approach for valuation. The appraisal value of the 100% equity interest in the underlying company is RMB 528 million, representing an appreciation of 2,417.87% compared with its consolidated basis book value of all shareholders’ equity of RMB 20.9701 million. The underlying company is expected to realize revenue of RMB 157 million and net profit of RMB 27 million in 2025. The static P/E ratio corresponding to this transaction is approximately 19.45 times.

The inquiry letter from the Shanghai Stock Exchange penetrates the valuation issue layer by layer. It requires Sapure AiSi to fully explain the rationality of the 24x premium valuation by combining the underlying assets’ core competitiveness, sustainable profitability, and future growth potential, and whether there is any situation of transferring benefits to related parties. It also requires, based on historical operating data of the underlying company, industry policy, regional competitive landscape, bed utilization rates, and other factors, a detailed explanation of the determination basis for key parameters in the income approach valuation, such as revenue, net profit, and discount rates.

The CISC, on the other hand, focuses on the profit forecast for the rehabilitation ward revenue of the underlying company, directly pointing to multiple data contradictions: the number of beds in the profit forecast is inconsistent with the number of approved beds disclosed on Tianlun Hospital’s official website; the forecast change trend in this transaction’s operating costs does not match the bed expansion data reflected in the appraisal results; and the bed utilization rate in the profit forecast is far higher than the average bed utilization rate of private hospitals in both the national market and Shanghai region.

This transaction includes performance commitments. The transaction counterpart commits that the net profits of the underlying company for 2026, 2027, and 2028 will be no less than RMB 32.40 million, RMB 37.30 million, and RMB 42.65 million, respectively, and the cumulative net profit commitment for the three years will be no less than RMB 112.35 million. Past performance shows that there is a clear gap between the level of net profit of Shanghai Qinli in recent years and the committed amounts. Its net profits for 2024 and 2025 were RMB 18.98 million and RMB 27.13 million, respectively. Whether it can achieve the commitment of sustained three-year high growth is what the market expects Sapure AiSi to further explain.

The Shanghai Stock Exchange requires Sapure AiSi to provide a detailed explanation of the feasibility of the performance commitments. It also requires disclosures on the target hospital’s department structure, charging standards, proportion of payments covered by medical insurance, and stability of the core doctor team, among others, to demonstrate the conditions supporting future growth in revenue and profit, and to sufficiently disclose the potential impact on the listed company if the performance commitments cannot be met.

According to the transaction agreement, the consideration for this transaction is RMB 528 million, paid via self-owned funds and bank loans. The transaction payments will be made in five installments, with the combined proportion of the first two installments totaling approximately RMB 370 million. In contrast, Sapure AiSi’s financial fundamentals face funding pressure. As of the end of the third quarter of 2025, the company’s cash and cash equivalents balance is approximately RMB 101 million, and its financial assets at fair value through profit or loss are approximately RMB 122 million, for a total of about RMB 223 million, which is insufficient to cover the consideration for this transaction. In 2024, the company’s net profit attributable to shareholders was negative RMB 123 million. In 2025, it is expected to incur losses ranging from RMB 228 million to RMB 342 million, with the loss scale continuing to grow.

If the controlling shareholder’s assets are acquired at a premium by taking on debt, whether it would adversely affect the company’s liquidity, debt-servicing capacity, and subsequent operations is a concern commonly raised by investors. The Shanghai Stock Exchange’s inquiry letter also revolves around this real risk, requiring Sapure AiSi to disclose in detail the specific funding plan for the acquisition of RMB 528 million and the progress of related financing arrangements, and to assess the potential impact of large cash outlays on the company’s day-to-day operations, its ability to repay debts, and its financial stability.

In addition, the Shanghai Stock Exchange also requires Sapure AiSi to explain whether the relevant medical qualifications of Shanghai Tianlun Hospital, practice licenses, and medical insurance designated-entity qualification are complete and valid, and whether there are administrative penalties or compliance risks, etc.