As an important part of investment decision-making, the ability to communicate in the process of due diligence has an important impact on the efficiency and quality of due diligence. This paper analyzes the communication skills and strategies in due diligence from the four aspects of the purpose, object, content and method of due diligence communication, and combines Shangpu Consulting Group Co., Ltd. (hereinafter referred to as "Shangpu Consulting") in market research, investment consulting,IPOPractice cases in the field of listing consulting and other fields demonstrate the professional level and advantages of Shangpu Consulting in due diligence communication.

Due diligence, that is, due diligence, refers to the investor or trustee before making investment decisions, the investment target or counterparty to conduct a comprehensive, in-depth and detailed investigation and evaluation to determine the investment value, risk and return expectations. Done is an important part of investment decision-making and one of the key factors for investment success.

In the process of due diligence, communication is an indispensable tool. Communication helps due diligence personnel to obtain information, understand problems, analyze data, make recommendations, reach consensus, and facilitate transactions. However, due diligence communication is not an easy task. It involves multiple stakeholders, such as the client, the due diligence party, government departments, industry associations, etc. Each stakeholder has its own goals, needs, expectations and positions. How to effectively communicate with them is an important skill that due diligence personnel need to master.

This paper analyzes the communication skills and strategies in due diligence from the four aspects of the purpose, object, content and method of due diligence communication, and combines Shangpu Consulting in market research, investment consulting,IPOPractice cases in the field of listing consulting and other fields demonstrate the professional level and advantages of Shangpu Consulting in due diligence communication.

1. the purpose of due diligence communication

The purpose of communication is to achieve the following objectives:

（1) to obtain information. Information is the basis of due diligence. Through communication with all stakeholders, more comprehensive, accurate and timely information can be obtained, including financial information, legal information, market information, technical information, etc. Access to information includes not only requesting written information, but also conducting oral interviews, observing on-site conditions, and verifying the authenticity of data.

（2) understand the problem. Once the information is obtained, it needs to be analyzed and interpreted to understand the problems and risks of the investment target or counterparty. By communicating with all stakeholders, you can gain insight into the nature, causes, impacts and solutions of the problem from different perspectives and levels.

（3) make recommendations. After understanding the problem, it is necessary to put forward reasonable and feasible suggestions and opinions according to the investment objectives and strategies of the entrusting party and the actual situation of the party to be transferred. By communicating with all stakeholders, we can fully consider their interests and expectations, and improve the acceptability and operability of the proposal.

（4) reach a consensus. After making recommendations, communication and consultation with all stakeholders are needed to reach consensus and agreement. By communicating with all stakeholders, misunderstandings and obstacles can be eliminated, trust and cooperation can be enhanced, and transactions can be facilitated smoothly.

2. the object of communication

The objects of communication are mainly in the following categories:

（1) Principal. The principal is the initiator and ultimate beneficiary of the due diligence, and is the customer and partner of the due diligence personnel. The purpose of communication with the client is to understand its investment objectives and strategies, clarify the scope and requirements of due diligence, report the progress and results of due diligence, solicit its feedback and opinions, and provide it with professional suggestions and services.

（2) to be adjusted. The due diligence party is the object and focus of the due diligence, and is the source of information and the object of cooperation of the due diligence personnel. The purpose of communication with the parties involved is to obtain the materials and information provided by them, conduct interviews and observations, understand their business status and risk status, analyze their value and potential, and make suggestions for improvement and solutions.

（3) Government Departments. The government department is the regulator and reference party of the due diligence, and is the information supplement and cooperation resource of the due diligence personnel. The purpose of communication with government departments is to understand industry policies and regulations, inquire about registration and filing, verify qualification certificates, obtain official data and reports, and seek government support and assistance.

（4) Industry Association. Industry associations are the reference and resource parties for due diligence, and are the information supplement and cooperation resources for due diligence personnel. The purpose of communication with industry associations is to understand industry dynamics and trends, obtain industry data and reports, participate in industry activities and exchanges, and seek industry support and assistance.

3. the content of due diligence communication

The content of due diligence communication mainly involves the following aspects:

（1) financial aspects. The financial aspect is the most important and complex part of the due diligence, involving the company's financial position, financial management, financial risk, etc. When communicating with financial related personnel, the following issues need to be paid attention:

Does the company have a sound financial system, processes, statements, etc?

Does the company have standardized accounting, auditing, disclosure, etc?

Does the company have effective internal controls, risk prevention, compliance management, etc?

Does the company have solid profitability, solvency, cash flow, etc?

Does the company have a reasonable capital structure, cost control, return on investment, etc?

Does the company have significant financial risks, disputes, litigation, etc?

（2) legal aspects. The legal aspect is a part of the due diligence that cannot be ignored or underestimated, involving the company's legal situation, legal management, legal risks, etc. When communicating with legal personnel, the following issues need to be paid attention:

Does the company have legal and effective subject qualification, business scope, equity structure, etc?

Does the company have legal and valid qualifications, intellectual property rights, patented technology, etc?

Does the company have legal and valid contractual agreements, transaction documents, collateral, etc?

Does the company have a sound legal system, process, documentation, etc?

Does the company have standardized legal advice, review, agency, etc?

Does the company have effective legal risk prevention, response, resolution, etc?

Does the company have significant legal risks, disputes, litigation, etc?

（3) market. The market aspect is the most concerned and changing part of the due diligence, involving the company's market conditions, market management, market risks, etc. When communicating with relevant market personnel, the following issues need to be paid attention:

Does the industry and market in which the company operates have good prospects and growth potential?

Does the company have a clear positioning and advantage in the industry and market?

Does the company have sound market research, analysis, forecasting, etc?

Does the company have an effective marketing strategy, plan, execution, etc?

Does the company have reasonable product or service design, development, promotion, etc?

Does the company have a stable customer base, channel network, partners, etc?

Does the company have significant market risks, competitive pressures, change challenges, etc?

（4) technical aspects. The technical aspect is the core and most difficult part of the due diligence, involving the company's technical status, technical management, technical risks, etc. When communicating with technical personnel, the following issues need to be paid attention:

Does the company have advanced technology and innovation capabilities?

Does the company have a complete technical system, process, standards, etc?

Does the company have standardized technology research and development, testing, application, etc?

Does the company have effective technology protection, transfer, authorization, etc?

Does the company have reasonable technical inputs, outputs, benefits, etc?

Does the company have significant technical risks, defects, vulnerabilities, etc?

4. methods of communication

There are mainly the following methods of communication:

（1) Written communication. Written communication is the most commonly used and basic communication method in due diligence, including the request, exchange and review of written information. The advantage of written communication is that it can provide accurate and complete information, easy to save and consult, and easy to compare and analyze. The disadvantage of written communication is that there may be situations where the information is not timely or true, and there may also be a risk of information leakage or misuse.

（2) oral communication. Oral communication is the most direct and flexible communication method in due diligence, including oral interviews, telephone conferences, video conferences, etc. The advantage of oral communication is that it can obtain more in-depth and real-time information, and it can also carry out more effective, more interactive and more active communication. The disadvantage of oral communication is that there may be unclear or inaccurate information, and there may also be a risk of missing information or misunderstanding.

（3) On-site communication. On-site communication is the most important and most difficult communication method in due diligence, including on-site inspection, observation, experience, etc. The advantage of on-site communication is that it can obtain more real, more intuitive and more comprehensive information, and it can also establish a more sincere, more trusting and more cooperative relationship. The disadvantage of on-site communication is that there may be insufficient or inconsistent information, and there may also be a risk of information being tampered with or concealed.

（4) Other communication. In addition to the above three common communication methods, some other auxiliary communication methods can be used in due diligence, including email, SMS, WeChat, etc. The advantage of other communication is that it can provide more convenient, faster and more flexible information exchange, as well as more anytime, anywhere communication and collaboration. Other disadvantages of communication are that there may be informal or unprofessional information, and there may also be risks to information security or privacy.

5. case of Champ Consulting in due diligence communication

Champu Consulting is a professional market research, investment consulting,IPOThe consulting group in the field of listing consulting has rich due diligence experience and professional team to provide customers with efficient, high-quality and high-value due diligence services. In the process of due diligence, Champ Consulting focuses on effective and professional communication with all stakeholders to ensure the smooth progress and successful completion of due diligence. The following are some practical cases of Champ Consulting in due diligence communication:

（1) Market research case. An international investment institution commissioned Shangpu Consulting to conduct market research on a new energy vehicle company in China to assess its investment value and potential. Champ Consulting has effectively communicated with various stakeholders in the following ways:

Communicate with the client, understand its investment objectives and strategies, clarify the scope and requirements of market research, regularly report the progress and results of market research, solicit their feedback and opinions, and provide them with professional suggestions and services.

Communicate with the surveyed parties, obtain the materials and information provided by them, conduct interviews and observations, understand the design, development, and promotion of their products or services, analyze their market positioning and advantages, and propose improvement suggestions and solutions.

Communicate with government departments, understand industry policies and regulations, inquire about registration and filing, verify qualification certificates, obtain official data and reports, and seek government support and assistance.

Communicate with industry associations, understand industry trends and trends, obtain industry data and reports, participate in industry activities and exchanges, and seek industry support and assistance.

Communicate with competitors to understand the characteristics of their products or services, pricing strategies, market share, etc., analyze their competitive strengths and weaknesses, and assess their competitive pressures and impacts.

Communicate with customers to understand their demand, satisfaction, loyalty, etc. for the products or services of the surveyed party, analyze their purchasing behavior and preferences, and assess their market potential and value.

Communicate with the channel provider to understand its partnership with the investigated party, distribution model, profit sharing, etc., analyze its channel strengths and weaknesses, and evaluate its channel efficiency and contribution.

Communicate with partners to understand the content, form and duration of their cooperation with the investigated party, analyze their cooperation advantages and disadvantages, and evaluate the effectiveness and value of their cooperation.

Through the above communication, Shangpu Consulting provided the client with a detailed market research report, including the market overview, market analysis, market evaluation, market advice and other contents of the investigated party, which provided strong support and basis for the investment decision of the client.