1. CommercialDue diligence consultationThe definition and meaning

Commercial due diligence consulting, also known as commercial due diligence or commercial due diligence, refers to a comprehensive, in-depth and systematic investigation and analysis of the financial, legal, tax, market and operational aspects of the target enterprise before making an investment decision to assess its value, risk and potential. The purpose of business due diligence consulting is to provide investors with an objective, true and accurate picture of the target enterprise, and to help investors judge whether to invest and how to invest.

The significance of commercial due diligence consulting mainly has the following points:

-Identify and avoid risks. Business due diligence consulting can reveal the potential risks of the target company's financial situation, legal disputes, tax issues, market competition, operational efficiency, management team, strategic planning, etc., and help investors avoid investment traps and reduce investment costs and losses.

-Identify and seize opportunities. Business due diligence consulting can discover the core competitiveness, market potential, growth space, innovation ability, partners, customer resources and other advantages and opportunities of the target enterprise, help investors determine the investment value and income, optimize investment strategies and programs.

-Increased return on investment. Commercial due diligence consulting can provide investors with strong data support and analysis basis, help investors to carry out reasonable valuation and pricing, strive for more favorable trading conditions and terms, and improve investment efficiency and effectiveness.

2. CommercialDue diligence consultationProcesses, methods and tools

The process of commercial due diligence consultation generally includes the following steps:

-Determine the scope, objectives and requirements of the commercial due diligence consultation. According to the investor's investment objectives, strategies and expectations, as well as the industry, scale and characteristics of the target enterprise, determine the focus and depth of business due diligence consulting, and formulate plans and programs for business due diligence consulting.

-Collect and organize information about the target company. Collect and sort out the financial, legal, tax, market and operational information of the target enterprise by consulting the public information, internal documents, financial statements, legal documents and tax documents of the target enterprise, as well as communicating and interviewing with the management, employees, customers, suppliers and competitors of the target enterprise.

-Analyze and evaluate the value, risk and potential of the target enterprise. Using financial analysis, legal analysis, tax analysis, market analysis, operational analysis, strategic analysis and other methods, the information of the target enterprise is analyzed and evaluated in depth, the advantages and disadvantages of the target enterprise are identified, the opportunities and threats of the target enterprise are found, and the value, risk and potential of the target enterprise are evaluated.

-Advice on commercial due diligenceConclusionand recommendations. Based on the results of the analysis and evaluation, a commercial due diligence advisory is proposed.Conclusionand recommendations, including whether to invest, how to invest, the value and return of the investment, the terms and conditions of the investment, the risks of the investment and countermeasures.

There are several main methods and tools for business due diligence consulting:

-Financial analysis. Financial analysis refers to the analysis of the financial situation, financial performance and financial risk of the target enterprise, mainly using financial ratio analysis, financial forecast analysis, financial valuation analysis and other methods, mainly using financial statements, financial models, financial indicators and other tools.

-Legal analysis. Legal analysis refers to the analysis of the legal status, legal liability and legal disputes of the target enterprise, mainly using legal review analysis, legal compliance analysis, legal risk analysis and other methods, mainly using legal documents, legal opinions, legal provisions and other tools.

-Tax analysis. Tax analysis refers to the analysis of the tax situation, tax burden and tax risk of the target enterprise, mainly using tax audit analysis, tax planning analysis, tax optimization analysis and other methods, mainly using tax documents, tax models, tax indicators and other tools.

-Market analysis. Market analysis refers to the analysis of the market environment, market demand and market competition of the target enterprise, mainly using market research analysis, market positioning analysis, market strategy analysis and other methods, mainly using market data, market reports, market models and other tools.

-Operational analysis. Operational analysis refers to information and data on the operational efficiency, operational quality, and operational risk of the target company.

-Independent due diligence position: Champ Consulting maintains an independent due diligence position, is not affected or interfered by the target enterprise or project party, investors or any other third party, and provides investors with true, reliable and useful due diligence reports and recommendations in an objective, impartial and professional manner.

4. cases of business due diligence consulting by Champ Consulting

Shangpu Consulting has rich experience and cases in the field of business due diligence consulting. The clients it has served cover many industries such as finance, manufacturing, energy, medical care, education, Internet, etc. The following are some of Shangpu Consulting's business due diligence consulting cases:

-Commercial due diligence consulting for a U.S. private equity fund on a Chinese new energy vehicle company: The private equity fund plans to make a strategic investment in the new energy vehicle company and entrusts Shangpu Consulting to conduct commercial due diligence consulting. The Shangpu consulting team conducted a comprehensive, in-depth and systematic due diligence on the financial, legal, tax, market, technology and human resources of the enterprise, assessed the value, risk and potential of the enterprise, and provided detailed due diligence reports and recommendations for investors. The Champ Consulting team identified the following strengths and weaknesses of the business:

Advantages: The company has independent research and development of core technologies, including batteries, motors, electronic control, etc., with high technical advantages and market competitiveness; the company has a team composed of senior automotive industry experts and management personnel, with Strong execution and innovation; the company has a group of loyal customers and partners, with good market reputation and brand influence; the enterprise has a series of policy support and tax incentives, with greater development space and potential.

Disadvantages: the enterprise's financial situation is unstable, there are greater financial risks, the need to strengthen financial management and control; the enterprise's legal compliance is not high, there are some legal disputes and responsibilities, the need to strengthen legal risk prevention and response; the enterprise's market competition pressure is greater, facing challenges from multiple competitors at home and abroad, the need to strengthen marketing and differentiation strategy; the enterprise's human resources are not sufficient, there are some problems of brain drain and recruitment difficulties, the need to strengthen the training and motivation of human resources.

Based on the results of the due diligence, the Champ Consulting team provides investors with the following recommendations:

It is recommended that investors make strategic investments in the enterprise, but they need to sign a reasonable investment agreement with the enterprise, specifying the purpose, amount, term, return, exit and other terms of the investment, so as to protect the rights and interests of investors;

It is recommended that investors establish an effective communication and coordination mechanism with the enterprise after investment, participate in the strategic planning and decision-making of the enterprise, and provide support and assistance in terms of capital, technology and management, so as to promote the development and growth of the enterprise;

It is recommended that investors continue to monitor and evaluate the financial, legal, market and human resources of the enterprise after investment, so as to find and solve possible problems and risks in a timely manner and improve the efficiency and return of investment.

-Commercial due diligence consulting for a Chinese Internet education company on an American online education platform: The Internet education company plans to acquire the online education platform and entrust Champ Consulting to conduct commercial due diligence consulting. The Shangpu consulting team conducted a comprehensive, in-depth and systematic due diligence on the financial, legal, tax, market, technology and human resources of the platform, evaluated the value, risk and potential of the platform, and provided detailed due diligence reports and recommendations for the acquirer. The Champ Consulting team identified the following strengths and weaknesses of the platform:

Advantages: The platform has rich online education content, including video, audio, text, pictures, etc., covering multiple disciplines and fields, with high content quality and user satisfaction; the platform has advanced online education technology, including Cloud computing, big data, artificial intelligence, etc., has strong technological innovation capabilities and user experience advantages; the platform has a large number of online education users, including students, teachers, parents, etc., with high user activity and user loyalty; the platform has a good online education business model, including advertising, subscription, payment, etc., with strong profitability and growth potential.

Disadvantages: The financial status of the platform is not transparent, and there are some suspects of financial fraud and financial fraud, which requires strict financial audit and verification; the legal compliance of the platform is not high, and there are some legal risks in copyright, privacy, taxation, etc. It needs careful legal review and handling; the platform has great market competition pressure and faces competition and challenges from other online education platforms, effective market strategy and layout are needed; the human resources of the platform are unstable, there are some problems of brain drain and recruitment difficulties, and reasonable human resources planning and management are needed.

Based on the results of the due diligence, the Champ Consulting team provided the following recommendations to the acquirer:

It is recommended that the acquirer acquire the platform, but it needs to sign a reasonable acquisition agreement with the platform, clarify the purpose, price, method, conditions, period and other terms of the acquisition, and protect the rights and interests of the acquirer;

It is recommended that the acquirer establish an effective integration and coordination mechanism with the platform after the acquisition to optimize and upgrade the content, technology, users, and business model of the platform, and enhance the competitiveness and value of the platform;

It is recommended that the acquirer conduct continuous supervision and evaluation of the financial, legal, market, and human resources of the platform after the acquisition, and timely discover and resolve possible problems and risks to improve the efficiency and profitability of the acquisition.

Conclusion

Business due diligence consulting is an important part of the investment field, which can help investors identify and avoid risks, discover and grasp opportunities, and improve investment efficiency and returns. As a professional business due diligence consulting company, Shangpu Consulting has a professional due diligence team, flexible due diligence program, rigorous due diligence method, rich due diligence resources and independent due diligence position, providing high-quality business due diligence consulting services for investors in all walks of life. The case of business due diligence consulting by Champ Consulting shows the advantages and characteristics of Champ Consulting in the field of business due diligence consulting, as well as the actual effect and value of business due diligence consulting. Champ Consulting looks forward to working with more investors to jointly explore and create more investment opportunities and value.