Corporate mergers and acquisitions

Lead:

With China's macroeconomic growth rate from the past high-speed shift to medium speed, the growth of survey and design industry operating income and profits has gradually slowed down, in such an environment, survey and design enterprises between increasingly fierce competition, mergers and acquisitions between enterprises emerge endlessly, the author through listed companies released information and network public information statistics2011Year to2016Year5The total number of MA events related to the completion or completion of survey and design enterprises during the month81of which have been completed80cases, 1 1incomplete.

?MA is surging, and Northern Su Shangguang leads!

fig1：2011So far, survey and design enterprise mergers and acquisitions, mergers and acquisitions, and time distribution

From the perspective of MA time, since 2012, the MA events of survey and design enterprises have increased, which has a lot to do with the overall industry downward trend of the survey and design industry, and the overall operating income and profit growth rate of the industry in 2012 are at a low level in recent years, and the increase in MA events coincides with it.

fig2：2011Year-to-date, survey and design enterprise mergers and acquisitions, geographical distribution of acquirers

From the perspective of geographical distribution of mergers and acquisitions, except for one acquirer is an overseas enterprise, the other acquirers are domestic enterprises, mainly distributed in Beijing, Jiangsu, Shanghai, Guangdong four provinces and cities, accounting for 79% of all mergers and acquisitions, on the one hand, this is related to the fierce competition of enterprises in these places, forcing enterprises to carry out mergers and acquisitions, on the other hand, the operating mechanism of these enterprises is more flexible, which is conducive to completing mergers and acquisitions.  

fig3：2011Year-to-date, survey and design enterprise mergers and acquisitions, mergers and acquisitions

In terms of the proportion of MA shares, except for 16% of the events that did not disclose the proportion of MA shares, 74% of the MA events achieved absolute control. Therefore, the ultimate goal of most MA events is to obtain absolute control of the acquired party.

?MA is booming and strengthening strengthVSIndustrial chain extension！

Among the 81 statistical MA incidents, there were only 26 incidents in which simple survey and design enterprises were acquirers, accounting for only 35% of the total statistics, while there were 59 incidents in which simple survey and design enterprises were acquired parties, accounting for 73% of the total statistics.Overall，Survey and design enterprises are in a trend of mergers and acquisitions.

Among the 26 incidents in which survey and design enterprises were analyzed as mergers and acquisitions, 18 of them were mergers and acquisitions between survey and design enterprises, and in 8 mergers and acquisitions, the acquired parties were construction enterprises, construction integration enterprises, and more were some auxiliary industry enterprises in the construction industry, such as safety consulting, energy-saving installation, engineering testing, Technology promotion and other types of enterprises.visibleThe main purpose of MA of survey and design companies is to strengthen the strength of the design business, and at the same time, expanding some auxiliary links in the value chain of the construction industry has also become the choice of some enterprises.

Among the 59 incidents in which survey and design enterprises were acquired parties, only 18 were mergers and acquisitions between simple survey and design enterprises, and in the other 41 cases of mergers and acquisitions of survey and design enterprises, there were mainly several types of acquirers, one was construction enterprises, the main purpose of mergers and acquisitions of such enterprises is to make up for the missing part of the value chain of the enterprise, and develop in the direction of design and construction integration; The other category is design and construction integration enterprises, the main purpose of such enterprises is to strengthen the strength of enterprise design and provide support for enterprise development; The last category is other types of enterprises, the business of such enterprises and survey and design has a certain connection, the acquisition of survey and design enterprises can extend the industrial chain for them, but mainly to play an auxiliary role, so, after the completion of the merger , the importance of survey and design business in the enterprise is general, not as one of the main businesses of the enterprise.

?Where does the company go, MA or MA?

On the one hand, enterprises can develop through mergers and acquisitions of other enterprises, on the other hand, enterprises can also "sell" a good "owner", relying on more powerful enterprises. Whether to use the former or the latter, this has a lot to do with the positioning of the enterprise. Different types of enterprises have their own advantages and disadvantages in MA activities, and in the process of self-positioning, all parties need to consider:

（1）State-level survey and design enterprises

This kind of survey and design enterprises are in an advantageous position, with strong scale and brand advantages, mainly distributed in Beijing, Shanghai and other first-tier cities, most of them are oriented to the national development, occupying a considerable market space. However, most of them belong to the group company, which must be subordinated to the group's grand strategic deployment and is not flexible enough.

（2）Provincial survey and design enterprise

This kind of survey and design enterprises have certain geographical advantages, mainly targeting the local and surrounding areas, and the volume is large, but their business is significantly limited by geography, the brand is still being established, and the research strength and talent attraction are weaker than those of the national ministerial design institute. 

（3）Prefecture-level survey and design enterprises

Some prefecture-level survey and design enterprises have better qualifications, focus on relatively stable business markets within a fixed area, and have relatively stable relationships and market resources, but these enterprises are generally small in scale and lack experience in projects with higher technical requirements, and generally become the target of mergers and acquisitions.

（4）Overseas engineering consulting companies, etc

These enterprises are engaged in high-end architectural design and other family services, undertake more projects in China's economically developed areas, first-tier and super-first-tier cities are its main market areas, have international brands and popularity, and have a certain relationship with foreign customers, but their costs are still higher than domestic enterprises, do not understand domestic regulations and standards, market share in China is still relatively low, business development is more restricted by policies, such enterprises are likely to take mergers and acquisitions as the main means of their development in China in the future.

The survey and design industry is now in the era of competition of survival of the fittest, whether it is mergers and acquisitions, or mergers and acquisitions, only the continuous development of enterprises will exist, and stagnation will eventually be eliminated by the times.

Disclosure method: Internal disclosure

Main delivery: the company's management, heads of various departments                                          2020年9月23日印發