HSGC(SH:600774) Xin Lang Zheng Quan·2025-07-03 05:21Core Viewpoint - Han Commercial Group's acquisition plan for a loss-making office building from its controlling shareholder raises concerns due to the asset's poor financial performance and the challenging market conditions in Wuhan [1][2][3]. Group 1: Acquisition Details - The acquisition involves purchasing the Wuhan Living Room Project's Art Building B from Wuhan Zhuoer City Investment Development Co., controlled by the actual controller Yan Zhi, through a combination of issuing shares and cash payments [2]. - The core audit and valuation for the transaction remain incomplete, leaving the transaction price undecided [2]. - The asset has reported zero revenue and increasing net losses over the past three years, with losses of -403,500 yuan, -3,395,700 yuan, and -7,993,900 yuan from 2022 to September 2024 [2]. Group 2: Market Conditions - The office market in Wuhan is experiencing a downturn, with a vacancy rate approaching 40% and rental prices for Grade A and B office buildings declining significantly [3]. - Effective rental prices have dropped to 72.8 yuan per square meter per month for Grade A and 61.3 yuan for Grade B, reflecting a notable decrease from the previous year [3]. Group 3: Company Performance - Han Commercial Group is facing its first loss in 20 years, with a net loss of 15 million yuan in 2024, alongside a 20.54% decline in pharmaceutical revenue and a 12.94% drop in commercial operations revenue [3]. - The company's net profit fell by 78.21% year-on-year in the first quarter of this year, primarily due to the impact of centralized procurement on its subsidiary, Dikan Pharmaceutical, and rising costs [3]. Group 4: Strategic Challenges - Since Yan Zhi's takeover in 2020, Han Commercial Group has attempted a transformation towards a "big health + big commerce" dual business model, initially showing promising results [4]. - However, growth has stagnated in recent years, with 2022 and 2023 revenues nearly flat and a projected loss in 2024 [4]. - The decision to pursue the acquisition of a consistently loss-making asset raises questions about the company's strategic focus and governance, especially when core business operations are under pressure [4].