Investment due diligence is a comprehensive and in-depth review of all aspects of the enterprise after the investor has reached an initial cooperation intention with the target enterprise to assess the value, risk and investment feasibility of the enterprise. As a professional third-party organization, consulting companies can provide investors with objective, professional and efficient due diligence services to help investors make wise investment decisions. This paper introduces the main role and advantages of consulting companies in the due diligence process, and shows how consulting companies create value for customers through due diligence services, combined with the actual case of Shangpu Consulting Group.

What is investment due diligence?

Investment due diligence (Due Diligence, shortDD) refers to the investor after reaching an initial cooperation intention with the target enterprise, after consensus, the historical data and documents of the enterprise, the background of the management personnel, market risk, management risk, technical risk and capital risk and other aspects of a comprehensive and in-depth review to assess the value, risk and investment feasibility of the enterprise. The purpose of investment due diligence is threefold: value discovery, risk discovery and investment feasibility analysis.

Value discovery refers to the analysis of an enterprise's financial situation, business model, market competitiveness, growth potential, etc., to determine the true value of the enterprise and future earnings expectations, and to provide a basis for investment pricing.

Risk discovery refers to the inspection of the legal compliance, financial soundness, operational efficiency and technological innovation ability of an enterprise to identify the potential risks and hidden dangers of the enterprise and provide protection for investment risk control.

Investment feasibility analysis refers to the evaluation of the enterprise's strategic planning, development goals, resource allocation, etc., to determine whether the enterprise meets the expectations and requirements of investors, and to provide support for investment decisions.

What is the role of consulting firms in due diligence?

As a professional third-party organization, consulting companies can provide investors with objective, professional and efficient due diligence services. Consultants play the following main roles in the due diligence process:

Data collector: the consulting company obtains the required data and documents through communication and coordination with the target enterprise, and verifies its authenticity and integrity.

Analyst: The consulting company uses professional methods and tools to conduct in-depth analysis of the collected data, reveal the value and risks of the enterprise, and give suggestions and opinions.

Report writer: The consulting firm writes a detailed due diligence report based on the results of the analysis, and reports and explains the contents of the report to the investor.

Communication coordinator: The consulting company maintains close communication with investors during the due diligence process, feedback progress and problems in a timely manner, and coordinate the cooperation and support of relevant parties.

What are the advantages of consulting firms?

Consultants have the following advantages in providing due diligence services:

Objective and fair: as an independent third party, the consulting company is not affected by any stakeholders, and can objectively and fairly evaluate the value and risk of the target enterprise, so as to avoid the subjective bias and blind optimism of investors.

Professional ability: the consulting company has a professional due diligence team with rich industry knowledge, market experience and analytical skills, which can conduct comprehensive and in-depth due diligence on the target enterprise, discover the advantages and disadvantages of the enterprise, and put forward valuable opinions and suggestions.

Efficient savings: Through standardized processes and methods, as well as advanced tools and systems, consulting companies can complete high-quality due diligence in a limited time, saving investors' time and costs, and speeding up the investment process.

Risk aversion: The consulting company can timely discover and remind investors of the risks and hidden dangers by conducting all-round due diligence on the target enterprise, and help investors avoid potential legal disputes, financial losses, reputation damage and other risks.

How does Champ Consulting Group provide due diligence services to its clients?

Champ Consulting Group (S&P Consulting) is one of the most leading and authoritative independent third-party research and investment and financing consulting institutions in China. Champ Consulting Group adheres to the following four principles in providing due diligence services:

Customer-oriented: Shangpu Consulting Group is customer-oriented, according to the customer's investment objectives, strategies and requirements, customized appropriate due diligence programs and plans, to provide customers with tailor-made due diligence services.

Comprehensive and systematic: from a comprehensive and systematic perspective, Shangpu Consulting Group conducts multi-dimensional, multi-level and multi-angle due diligence on the target enterprises, covering financial, legal, business, market, technology and other aspects, providing customers with comprehensive and systematic due diligence reports.

In-depth and accurate: Shangpu Consulting Group conducts detailed and in-depth analysis of the target enterprise with an in-depth and accurate attitude, uses professional methods and tools to excavate the value and risk points of the enterprise, and gives accurate and effective suggestions and opinions.

High-efficiency and high-quality: Shangpu Consulting Group uses advanced tools and systems to ensure the authenticity and integrity of data, and ensure the quality and timeliness of reports.

The following are some specific examples of due diligence services provided by Champ Consulting Group to clients:

Case 1: A leading multinational pharmaceutical company

The company is one of the largest biopharmaceutical companies in the world and has several production sites in China. The company plans to acquire a local Chinese biopharmaceutical company to expand its market share in China. The company commissioned the Champ Consulting Group to provide commercial due diligence services.

Through communication and coordination with the target enterprise, the Shangpu Consulting Group obtained its relevant data and documents, and conducted on-site visits. At the same time, through the network, industry magazines, expert interviews and other channels, the target enterprise industry and market information is collected. Based on the information collected, Champ Consulting Group conducted an analysis of the target companies in the following areas:

Products/Service analysis: the characteristics, advantages, disadvantages, market share, sales, profit margin, cost structure, research and development investment, etc. of the main products and services of the target enterprise are analyzed, and the products of the target enterprise are evaluated./service competitiveness and profitability.

Market analysis: the scale, growth rate, trends, drivers, constraints, opportunities and challenges of the target enterprise's industry and market are analyzed, and the market potential and development prospects of the target enterprise are evaluated.

Customer analysis: the characteristics, needs, preferences, purchasing behavior of the main customer groups of the target enterprise are analyzed, and the customer loyalty and satisfaction of the target enterprise are evaluated.

Channel analysis: The type, coverage, efficiency and cost of the main sales channels of the target enterprise are analyzed, and the channel optimization and expansion space of the target enterprise are evaluated.

Competitor analysis: analyzes the background, strategy, advantages, disadvantages, market share, etc. of the main competitors of the target enterprise, and evaluates the competitive position and strategy of the target enterprise.

Based on the above analysis, Champ Consulting Group gives the following suggestions and opinions:

The target enterprise has a strong product/Service competitiveness, with a number of core patents and leading technology, to provide high-quality and efficient biopharmaceutical solutions.

The industry and market in which the target enterprise is located has a large scale and room for growth. Driven by policy support and social demand, it is expected to maintain stable growth in the next few years.

The target enterprise has a stable and loyal customer base, mainly hospitals and pharmacies, which can form a stable income stream and profit stream.

The target enterprise has a wide and effective sales channel, covering all regions of the country, and is able to quickly distribute its products./Service to market and collect customer feedback in a timely manner.

Target companies face a certain degree of competitive pressure, mainly from other biopharmaceutical companies at home and abroad, and need to continuously strengthen R & D innovation and brand building to maintain a leading edge.

In summary, Shangpu Consulting Group believes that the target company is an investment target with higher value and lower risk, and recommends that the company continue to advance the acquisition process and conduct friendly cooperation with the target company.

Champ Consulting Group has provided the company with a detailed commercial due diligence report, in which more details and data are given. The company was very satisfied with the due diligence services of the Champ Consulting Group and ultimately successfully completed the acquisition.

Case 2: A well-known domestic Internet company

The company is one of the largest online education platforms in China and has more2Billions of users. The company plans to invest in a U. S.-based online education startup to enter the U.S. market. The company commissioned the Shangpu Consulting Group to provide technical due diligence services.

Through communication and coordination with the target enterprise, Shangpu Consulting Group obtained its relevant technical documents and codes, and conducted technical tests. At the same time, through the network, patent database, technology forum and other channels, collected the target enterprises involved in the technology and field of information. Based on the information collected, Champ Consulting Group conducted an analysis of the target companies in the following areas:

Technical architecture analysis: the design, implementation, optimization and expansion of the technical architecture of the target enterprise are analyzed, and the stability, reliability, security and flexibility of the technical architecture of the target enterprise are evaluated.

技术创新分析：分析了目标企业的技术创新的方向、内容、成果、影响等，评估了目标企业的技术创新能力和水平。

技术团队分析：分析了目标企业的技术团队的规模、结构、背景、能力、协作等，评估了目标企业的技术团队的素质和效率。

技术风险分析：分析了目标企业的技术风险的类型、来源、程度、应对等，评估了目标企业的技术风险的可能性和影响。

Based on the above analysis, Champ Consulting Group gives the following suggestions and opinions:

目标企业具有较先进的技术架构，能够支撑其在线教育平台的高效运行和快速发展，同时具有较高的安全性和灵活性，能够适应不同场景和需求。

目标企业具有较强的技术创新能力，拥有多项核心专利和领先技术，能够提供高质量和高效率的在线教育服务，并在人工智能、大数据、云计算等领域有着较大的发展潜力。

目标企业拥有一支优秀的技术团队，由来自世界一流大学和公司的技术专家组成，具备丰富的经验和能力，并能够良好地协作和沟通。

目标企业面临一些技术风险，主要包括技术泄露、技术侵权、技术过时等，需要加强技术保护、监测和更新，以防止损失和竞争劣势。

综上所述，尚普咨询集团认为目标企业是一个具有较高价值和较低风险的投资对象，建议该公司继续推进投资进程，并与目标企业进行深度合作。

尚普咨询集团为该公司提供了一份详尽的技术尽调报告，并在报告中给出了更多细节和数据。该公司对尚普咨询集团的尽调服务表示非常满意，并最终成功完成了投资交易。