There is no unexplained decline. The market is always forewarned, especially the various institutional bigwigs, has always had a great insight into any wind and movement.
Recently, the leading medical checkups, Meridian Health (11.98-1.88%, shares) pulled back sharply, changing its upward pace from the beginning of the year. Two consecutive drops, down more than 25% in just four days, the market value evaporated tens of billions of dollars, deep stock pass become the stock’s big short. In fact, last November, the majority shareholder Alibaba took the lead in reducing its holdings, followed by a continuous decline in the health of the United States. What is the killing mechanism of today’s drop?
Although, the company recently issued a special announcement, saying that the company’s recent operations are normal and there have been no significant changes in the internal or external business environment. But as of yesterday, the stock continues to fall. The company also said it noticed that some media released a report about “the company’s 2021 quarter and 2021 annual performance guidance”, the company is now solemnly clarify and explain: the company has never given 2021 performance guidance on any occasion.
However, it is quite surprising that the company has revised its performance for the first quarter. On January 30 this year, Meridian Health revised its first quarter results, amending the net profit attributable to shareholders of the listed company for the year 2020 from “RMB 10 million to RMB 30 million” to “RMB 550 million to RMB 650 million”, but the net profit after deduction of non-recurring gains and losses was not included. However, the net profit loss after deducting non-recurring gains and losses was revised upward from “-14.82 million – 518 million yuan” to “-609 million – 475 million yuan”. For this adjustment, the company said that it was a comprehensive consideration of external environmental factors, and that it would increase the estimated impairment provision in the fourth quarter of last year by about 450 million yuan compared to the original expectation, including a goodwill impairment of no more than 350 million yuan and other impairments of 100 million yuan compared to the expectation.
The issue of the company’s goodwill began to be noticed, after the company had a crazy M&A expansion and accumulated a large amount of goodwill. It is understood that in 2016, the company acquired 72.22% of rival Ciming Health Check for RMB 2.697 billion, 100% of Xinxin Health for RMB 182 million, 36% of Xichang Meinian and 37% of Anhui Tzuji for RMB 153 million. In addition, there are plans to acquire fourteen companies including Main Genetics and Bozhou Company, 32% equity interest in Xining Meinian, 41% equity interest in Anyang Meinian, 20 companies including Langfang Meinian, 80% equity interest in Ningbo Meizhao and 90% equity interest in Gusu Meizhao, some of which have been acquired and some are still in progress. at the end of 2018, the company had goodwill of 4.739 billion yuan on its books, and as of the end of 2020, the company’s goodwill was 5.367 billion yuan.
Institutions may already be worried about the sudden goodwill impairment accrual by Meinian Health this time by way of amendment. No one wants to be a receiver. But looking at the essence through the phenomenon, we can open up the stock steak and re-compose the main risks of the stock again.
In addition to the goodwill mine, we can see that Meridian Health has these aspects that we need to pay attention to.
The company’s total pledged disk to total equity ratio is 15.28%, which is not too high. Among them, the company’s important shareholders pledge the highest proportion of Shanghai Tianyi Asset Management Co., Ltd, whose equity pledge ratio is as high as 99.60%, which is close to the limit, if the stock price plunge exists pledge closeout risk. Overall, the company’s equity pledge problem has been very serious.
The company’s gearing ratio reached 54.18% in the third quarter of 2020, which is a bit high. Among them, the interest-bearing debt ratio is as high as 67.98%, and the interest-bearing debt of 6.186 billion yuan brings considerable pressure on the interest expense of the company.
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