Definition of 1. investment due diligence advice

Investment due diligence consulting (Investment ue Diligence Consulting), also known as investment prudential investigation and consulting, refers to the comprehensive, in-depth and objective evaluation and analysis services provided by professional consulting institutions for investors or investors on target enterprises or projects, aiming to help investors or investors make reasonable, effective and efficient investment decisions. The objects of investment due diligence consultation can be various forms of investment such as equity investment, debt investment, merger and acquisition investment, project investment, etc. The content of investment due diligence consultation can cover various aspects such as finance, law, business, market, technology, environment, society, etc. The results of investment due diligence consultation are usually presented in the form of written reports, provide investors or investors with investment value assessment, investment risk identification, investment advice and strategies.

Purpose of 2. Investment due diligence advice

The purpose of investment due diligence advice is mainly in the following three areas:

Value discovery: Through a comprehensive analysis of the historical performance, current situation and future prospects of the target enterprise or project, it evaluates its intrinsic value and potential value, and provides investors or investors with reasonable investment valuation and return expectations.

Risk discovery: Through in-depth investigation of the financial status, legal compliance, business stability, market competitiveness, technological innovation, environmental and social impact of the target company or project, various risks that exist or may exist are discovered, Provide effective risk prevention and control measures for investors or investors.

Investment feasibility analysis: through the comprehensive evaluation of the investment environment, investment strategy, investment model, investment structure, investment agreement, etc. of the target enterprise or project, analyze the feasibility and operability of its investment, and provide investors or investors with optimized investment plans and suggestions.

Scope of 3. investment due diligence advice

The scope of investment due diligence advice can be divided into the following areas:

Financial due diligence: Focus on the financial position of the target enterprise or project, including financial statements, financial policies, financial risks, financial forecasts, etc., assess its financial performance, financial position, financial capacity, financial quality, etc., and provide financial value assessment and financial risk identification for investors or investors.

Legal due diligence: focus on the legal compliance of the target enterprise or project, including company establishment, equity structure, major contracts, major litigation, intellectual property rights, taxation, etc., assess its legal status, legal liability, legal risks, etc., and provide legal protection and legal advice for investors or investors.

Business due diligence: Focus on the business status of the target company or project, including products or services, customers or markets, suppliers or channels, competitors or industries, management teams or human resources, etc., and evaluate its business model, business capabilities, and business stability, Business competitiveness, business development potential, etc., to provide investors or investors with business value evaluation and business strategy recommendations.

Market due diligence: focus on the market environment of the target enterprise or project, including market size, market structure, market demand, market trend, market opportunity, market risk, etc., evaluate its market position, market share, market potential, market prospect, etc., and provide market analysis and market forecast for investors or investors.

Technical due diligence: focus on the technical status of the target enterprise or project, including technical level, technical innovation, technical transformation, technical protection, technical risk, etc., evaluate its technical advantages, technical barriers, technical value, technical frontier, etc., and provide technical evaluation and technical advice for investors or investors.

Environmental due diligence: focus on the environmental impact of the target enterprise or project, including environmental compliance, environmental risk, environmental responsibility, environmental management, environmental improvement, etc., assess its environmental status, environmental impact, environmental cost, environmental benefit, etc., and provide environmental protection and environmental optimization for investors or investors.

Social due diligence: focus on the social impact of the target enterprise or project, including social responsibility, social relations, social reputation, social effect, social risk, etc., evaluate its social influence, social contribution, social value, social prospect, etc., and provide social responsibility and social benefits for investors or investors.

4. Investment due diligence consultation process

The process of investment due diligence consulting generally includes the following stages:

Develop survey plan: According to the needs and objectives of investors or investors, determine the scope, content, methods, standards, time, cost, etc. of investment due diligence consulting, and formulate detailed survey plans and programs.

Collect survey data: according to the survey plan and scheme, obtain the required survey data from the target enterprise or project, relevant institutions, third-party data sources, etc., including public, internal, qualitative, quantitative and other types of data, to ensure the integrity, authenticity and validity of the data.

Analysis of survey data: according to the survey standards and methods, the collected survey data are systematically collated, summarized, analyzed and evaluated, and various analysis tools such as financial analysis, legal analysis, market analysis, technical analysis, environmental analysis and social analysis are used to reveal the value, risk, feasibility and other aspects of the target enterprise or project.

Preparation of investigation report: according to the investigation results and analysis, preparation of detailed investigation report, including investigation background, investigation purpose, investigation scope, investigation method, investigation process, investigationConclusion, survey recommendations and other parts, as well as related appendices, charts, data, etc., to provide investors or investors with a comprehensive, in-depth and objective investment reference.

Provide investigation and consultation: according to the investigation report and the needs of investors or investors, provide further investigation and consultation services, including explaining the contents of the investigation report, answering the questions of the investigation report, discussing the opinions of the investigation report, assisting in the implementation of the investigation report, etc., so as to provide continuous, professional and effective investment support for investors or investors.

5. approach to investment due diligence advice

The main methods of investment due diligence advice can be divided into the following:

Document review: by consulting the relevant documents of the target enterprise or project, such as articles of association, shareholder register, financial statements, contract agreements, legal documents, market reports, technical literature, environmental assessment, social survey, etc., to obtain the basic information and important matters of the target enterprise or project, verify its authenticity and legitimacy, find its advantages and disadvantages, and evaluate its value and risk.

Field investigation: by visiting the actual operation location of the target enterprise or project, such as factory, office, warehouse, store, project site, etc., observe the actual situation and operation status of the target enterprise or project, understand the process, efficiency, quality and problems of its production, management, sales and service, etc., test its ability and stability, and evaluate its potential and prospect.

Interviews and communication: through interviews and communication with relevant personnel of the target enterprise or project, such as shareholders, management, employees, customers, suppliers, competitors, industry experts, government officials, community representatives, etc., face-to-face or telephone or network, ask the relevant situation and opinions of the target enterprise or project, obtain its internal and external perspectives and feedback, and analyze its relationship and influence, assess its credibility and effectiveness.

Data analysis: collect, sort, process and analyze the relevant data of the target enterprise or project, such as financial data, market data, technical data, environmental data, social data, etc., and use various analysis methods such as statistical analysis, comparative analysis, trend analysis, sensitivity analysis, simulation analysis, etc. to reveal the data characteristics and data rules of the target enterprise or project, and evaluate its data quality and data value.

Model establishment: through the relevant factors of the target enterprise or project, such as income, cost, profit, cash flow, market share, technical level, environmental impact, social benefits, etc., to make assumptions, forecasts, calculations and optimizations, and use financial models, market models, technical models, environmental models, social models and other model methods to simulate the future situation and possible changes of the target enterprise or project, assess its future value and future risks.

Report 6. investment due diligence advice

The report of investment due diligence consulting is the final result of investment due diligence consulting and is an important basis for investors or investors to make investment decisions. The report of the investment due diligence consultation generally includes the following parts:

Summary of the report: An overview of the background, purpose, scope, methodology, process, conclusions, recommendations, etc. of the report, highlighting the focus and highlights of the report, and providing a concise investment reference for investors or investors.

The main body of the report: elaborates on all aspects of the report, such as financial, legal, business, market, technical, environmental, social, etc., and analyzes the value, risk and feasibility of the target enterprise or project to provide comprehensive and in-depth investment analysis for investors or investors.

Appendix to the report: The relevant contents of the supplementary report, such as survey data, analytical data, analytical models, analytical tools, analytical methods, analytical basis, etc., provide investors or investors with complete and effective investment evidence.

Report chart: Present the relevant contents of the report, such as financial indicators, market indicators, technical indicators, environmental indicators, social indicators, etc., as well as related trends, comparisons, forecasts, etc., to provide investors or investors with an intuitive and clear investment display.

The role of 7. investment due diligence advice

The role of investment due diligence consulting in improving business decision-making is mainly reflected in the following aspects:

Help investors or investors to fully understand all aspects of the target enterprise or project, eliminate information asymmetry, enhance investment confidence and improve investment efficiency.

Help investors or investors accurately assess the value and risk of the target enterprise or project, avoid investment blindness, reduce investment costs, and improve investment returns.

Help investors or investors to optimize investment plans and strategies, choose the most suitable investment model and structure, coordinate investment relations, and improve investment success rate.

Help investors or investors find investment opportunities and potential, grasp investment trends and prospects, create investment value, and improve investment competitiveness.

Development of 8. Investment Due diligence Advice

As a professional consulting service, investment due diligence consulting is constantly innovating and progressing with the development and changes of the investment market. The development of investment due diligence consulting mainly includes the following aspects:

The scope of investment due diligence consulting continues to expand, from traditional equity investment, debt investment, M & A investment, etc., to emerging project investment, venture capital, social investment, etc., involving more industries.

The method of investment due diligence consultation is constantly innovating, from traditional document review, field investigation, interview exchange, etc., to emerging data analysis, model building, artificial intelligence, blockchain, etc., using more technologies and tools to improve the efficiency and accuracy of investigation.

The report of investment due diligence consultation has been continuously improved, from the traditional written report, oral report, etc., to the emerging video report, interactive report, visual report, etc., using more forms and means to improve the expression and communication of the report.

The role of investment due diligence consulting continues to increase, from traditional value discovery, risk discovery, investment feasibility analysis, etc., to emerging value creation, risk management, investment execution, etc., using more strategies and solutions to improve the effectiveness of investment And value.

The challenge of 9. investment due diligence advice

As a professional consulting service, investment due diligence consulting also faces some challenges and difficulties. The challenges of investment due diligence consulting mainly include the following aspects:

Difficulty in obtaining survey data: Because the information of the target company or project is often sensitive, confidential, and complex, it is difficult to obtain survey data. It is necessary to fully communicate and coordinate with the target company or project, as well as with relevant institutions and Effective cooperation and communication with third-party data sources ensure the integrity, authenticity, and effectiveness of survey data.

Quality control of investigation and analysis: As the situation of target enterprises or projects is often changeable, complex and uncertain, the quality control of investigation and analysis is difficult. It is necessary to use professional knowledge and experience, as well as appropriate methods and tools to carry out systematic sorting, induction, analysis and evaluation to ensure the accuracy, objectivity and rationality of investigation and analysis.

The expression and communication of the investigation report: because the value and risk of the target enterprise or project are often implicit, relative and dynamic, the expression and communication of the investigation report is difficult. It is necessary to use clear language and logic, as well as vivid forms and means to carry out detailed elaboration, explanation, discussion and suggestion, so as to ensure the understandability, usefulness and strength of the investigation report.

Continuous support of investigation and consultation: as the needs and objectives of investors or investors are often changing, diverse and high-standard, the continuous support of investigation and consultation is difficult, which requires close follow-up and feedback with investors or investors, as well as continuous monitoring and evaluation with target enterprises or projects, so as to ensure the timeliness, professionalism and effectiveness of investigation and consultation.

Conclusion

Investment due diligence consulting is a professional consulting service that provides investors or investors with comprehensive, in-depth and objective evaluation and analysis of target enterprises or projects, helps investors or investors make reasonable, effective and efficient investment decisions, and improves the role and value of business decisions. Investment due diligence consulting involves many aspects, including definition, purpose, scope, process, method, report, role, development, challenge, etc. It needs to use professional knowledge, experience, technology, tools, etc. to carry out systematic investigation, analysis, evaluation, suggestions, etc., to provide all-round investment support for investors or investors. With the development and change of the investment market, investment due diligence consulting is also constantly innovating and improving, facing some challenges and difficulties, and needs to constantly improve its own ability and level to meet the needs and objectives of investors or investors. to create more investment value for investors or investors.