Business investment due diligence report is a professional service provided by consulting companies to help investors fully understand the business prospects, market competitiveness, operational efficiency, financial situation, legal risks and other aspects of the target enterprise, so as to support investment decisions. This article will introduce the characteristics of the consulting firm's business investment due diligence report, including: (1) Customized design survey plan based on customer needs; (2) Use a variety of methods to collect and analyze data to ensure the authenticity and validity of the data; (3) Use professional knowledge and industry experience to conduct in-depth evaluation and analysis of the target enterprise; (4) Provide clear conclusions and recommendations, pointing out the advantages and disadvantages of the target enterprise, as well as potential opportunities and risks; (5) Follow strict quality control procedures to ensure the accuracy and completeness of the report; (61) Pay attention to the readability and operability of the report, adopt appropriate format and language, and highlight the key points and details. This article will also show the content and structure of the consulting firm's business investment due diligence report, using the case of Champ Consulting's business investment due diligence for a medical device company.

Business investment due diligence refers to a comprehensive, in-depth and systematic investigation and evaluation of the target enterprise or project before making major business decisions such as equity investment, merger and acquisition transactions, strategic cooperation, etc., in order to understand its real situation, value potential, risk factors, etc., so as to provide investors with an effective basis for decision-making. Business investment due diligence usually involves many aspects, such as finance, law, tax, technology, market, operation, etc.

Consultants are one of the leading providers of business investment due diligence services. Consulting companies have professional knowledge, rich experience, extensive resources and efficient methods to provide investors with comprehensive, objective and professional business investment due diligence reports. The business investment due diligence report of the consulting firm has the following characteristics:

Customer demand-oriented, customized design survey program. After accepting the client's entrustment, the consulting company will communicate with the client to determine the scope, depth, focus and duration of the investigation according to the client's specific needs and objectives, and formulate an appropriate investigation plan according to the characteristics of the target enterprise or project. The consulting company will select the appropriate evaluation model and method according to different industries, different stages, and different types of target enterprises or projects to ensure that the survey results meet customer expectations.

A variety of methods are used to collect and analyze data to ensure the authenticity and validity of the data. Consulting firms use various channels and tools provided by themselves or third-party organizations to collect internal and external data related to the target enterprise or project. These data include: financial statements, contract documents, management systems, etc. provided by the target company or project; publicly available macroeconomic data, industry data, market data, etc.; target companies or projects obtained through interviews, questionnaires, observations, etc. Information about related parties such as managers, employees, customers, suppliers, and competitors. The consulting company will verify, clean, organize and analyze the collected data to ensure the authenticity and validity of the data.

Use professional knowledge and industry experience to conduct in-depth evaluation and analysis of target enterprises. According to the survey plan, the consulting company will conduct in-depth evaluation and analysis of all aspects of the target enterprise or project, including: the historical development of the target enterprise or project, strategic planning, organizational structure, management team, products or services, market positioning, competitive advantage, operational efficiency, financial status, legal risks, etc. Consulting firms will use their expertise and industry experience, combined with industry standards and best practices, to evaluate the strengths and weaknesses of the target business or project, as well as potential opportunities and risks.

Provide clear conclusions and recommendations, pointing out the strengths and weaknesses of the target business, as well as potential opportunities and risks. Based on the results of the assessment and analysis, the consulting firm will provide clear conclusions and recommendations, indicating key indicators such as value assessment, investment feasibility, and return on investment of the target enterprise or project, as well as the strengths and weaknesses of the target enterprise or project, as well as potential opportunities and risks. The consulting company will provide corresponding investment advice according to the customer's needs, including: whether to invest, investment amount, investment method, investment terms, post-investment management, etc.

Follow strict quality control procedures to ensure the accuracy and completeness of reports. The Consultant follows a rigorous quality control process and performs multiple audits and verifications of the contents of the report to ensure its accuracy and completeness. The consulting company will conduct source tracing, logic inspection, consistency inspection, etc. on the data, information, conclusions and recommendations involved in the report, and invite internal or external experts to review and review. The consulting company will communicate feedback with customers in a timely manner and revise and improve them according to their opinions.

Pay attention to the readability and operability of the report, adopt appropriate format and language, and highlight the key points and details. Consultants will focus on the readability and operability of the report, using appropriate format and language, highlighting the focus and details. The consulting company will select the appropriate report form according to the customer's needs, such as text report,PPTReports, video reports, etc., with clear headings, catalogues, abstracts, text, appendices, etc. Consultants will use concise and clear language, avoid using too professional or vague terms, and provide explanations or comments when necessary. Consultants will use charts, tables, pictures, etc. to present data and information, and highlight or summarize where important.

The following is a case of business investment due diligence conducted by Champ Consulting for a medical device company, which shows the content and structure of the consulting company's business investment due diligence report:

Champu Consulting conducted a business investment due diligence report for a medical device company.

1. background introduction

A medical device company (hereinafter referred to as the "target company") is a company specializing in the development, production and sales of high-end medical devices in the cardiovascular field.2010Headquartered in Beijing, it has approximately200employees. The main products of the target company are heart stents, which occupy a leading position in the domestic market, and are also exported to Europe, the United States and other countries and regions. Target company in2019The year achieved about10Operating income of $100 million, approximately2Net profit of 100 million yuan, with high profitability and growth potential.

An investment fund (hereinafter referred to as the "Client") is a private equity investment fund focusing on the healthcare sector, established in2015Year, the size of funds under management is approximately50Billions of dollars. In recent years, customers have successfully invested in many excellent enterprises in the fields of medical equipment, medicine and medical services, and achieved good return on investment. The client is interested in the target company and plans to make an equity investment in it to capture dividends for its future development.

The client entrusts Shangpu Consulting to provide business investment due diligence services to help the client fully understand the target company's business prospects, market competitiveness, operational efficiency, financial status, legal risks, etc., so as to support the client's investment decisions.

2. survey method

Champ Consulting has developed the following survey methodology based on the client's needs and objectives:

Document Review: Champ Consulting obtained the financial statements, contract documents, management systems, product certificates and other related documents provided by the target company, and conducted a detailed review and analysis.

Interviews: Champ Consulting conducted in-depth interviews with senior management, core technical personnel, major customers, major suppliers, major competitors and other relevant parties of the target company to obtain first-hand information and opinions.

Market research: Shangpu Consulting collected macroeconomic data, industry data, market data, etc. in the cardiovascular field through web search, database query, industry report, etc., and carried out analysis and forecast.

On-site inspection: Shangpu Consulting conducted an on-site inspection of the target company's production base, R & D center, sales outlets, etc., to observe its production equipment, R & D capabilities, sales channels, etc.

3. Findings

Based on the survey methodology, Champ Consulting conducted a comprehensive, in-depth and systematic assessment and analysis of the target company and reached the following findings:

3.1 business prospects

The cardiovascular field in which the target company is located is a high-growth, high-profit, high-tech barrier market with huge development potential. According to the International Medical Devices Association (IMDA), the global cardiovascular medical device market size is in.2019The year reached about3000Billions of dollars, expected2025The year will grow to about5000billion dollars, with a compound annual growth rate10.6%. As one of the world's largest cardiovascular medical device markets, China is also showing a rapid growth trend. According to the China Pharmaceutical Industry Information Center (CPMIEC), the size of China's cardiovascular medical device market in2019The year reached about600Billions of dollars, expected2025The year will grow to about1200billion yuan, with a compound annual growth rate14.8%. Key drivers of market growth include: (1) The increase in cardiovascular disease morbidity and mortality due to population aging and lifestyle changes; (2) The improvement of the medical security system and the improvement of medical standards have promoted the demand for the diagnosis and treatment of cardiovascular diseases; (3) Technological innovation and product upgrades provide more choices and solutions for cardiovascular medical devices.

The main product of the target company is the heart stent, which is a medical device used to treat coronary heart disease. By implanting the stent into the coronary artery, it can expand the narrowed or blocked blood vessels, restore blood flow, and relieve symptoms such as angina or myocardial infarction. Cardiac stents are one of the most important segments in the cardiovascular medical device market, accounting for approximately20%China's cardiovascular medical device market30%. AccordingIMDAThe global heart stent market size is in.2019The year reached about600Billions of dollars, expected2025The year will grow to about900billion dollars, with a compound annual growth rate8.7%. China heart stent market size in2019The year reached about180Billions of dollars, expected2025The year will grow to about360billion yuan, with a compound annual growth rate14.6%. Key drivers of market growth include: (1) The number of patients with coronary heart disease is increasing, according to the World Health Organization (WHO), the global annual data of about1700Ten thousand people die of coronary heart disease, about every year in China.400Ten thousand people died of coronary heart disease; (2) Continuous progress and innovation in cardiac stent technology, from the initial bare metal stent (BMS), development to drug-eluting stents (DES), to bioabsorbable scaffolds (BRS), improved safety and effectiveness; (3) policy and regulatory support and encouragement, such as those implemented by the Chinese government“4+7”The volume procurement policy reduces the price and threshold of heart stents and expands market demand.

The target company has strong competitiveness and advantages in the field of heart stents. The target company has independent intellectual property rights and core technologies, and its products have passed the European Union.CECertification, U. S.FDACertification, ChinaCFDACertification and other domestic and foreign authorities for approval, and won a number of international and domestic patents and awards. Target company in the domestic market share reached15%, ranked first; in the international market share reached5%, in fourth place. The target company has established a stable cooperative relationship with many well-known hospitals, and has a wide range of sales channels and networks. The target company has reached the international first-class level in terms of product quality, performance and safety, and the price is relatively low, with strong market competitiveness and advantages.

The target company has broad development space and opportunities in the future. The target company has made remarkable achievements in the field of heart stents, but there is still potential for further improvement and expansion. The target company plans to continue to increase R & D investment in the next few years and launch more innovative products, such as bioabsorbable stents and smart stents, to meet different types and needs of patients. The target company also plans to further expand its production scale and sales network to increase market share and brand awareness. The target company also plans to expand other cardiovascular medical device fields, such as artificial heart valves and pacemakers, in order to achieve diversified development.

3.2 market competitiveness

The target company faces fierce competition in the heart stent market, with key competitors including: (1) Internationally renowned medical device giants such as Medtronic (Medtronic), Boston Scientific (Boston Scientific), Albert (Abbott) and so on, these companies have strong technical strength, brand influence, market channels and financial support, occupying about the global heart stent market.70%, China Heart Stent Market40%；（2) domestic excellent medical device enterprises, such as Lepu Medical (Lepu Medical), Minimally Invasive Medical (MicroPort), Kyushu Tong Medicine (Shinva Medical) and so on, these companies have a high level of technology, product quality, price advantages and localization advantages, occupying about the Chinese heart stent market.50%, and gradually expand to the international market; (3) Other emerging medical device companies, such as Huaxin Medical (Huaxin Medical), Tianao Medical (Tianao Medical), Hualan Biology (Biolan), etc., although these companies are smaller in scale, weaker in technology, and weaker in brand, they have higher innovation capabilities and flexibility, and compete for market share by continuously introducing new products and lowering prices.

The target company has strong competitiveness and advantages in the heart stent market. The target company has independent intellectual property rights and core technologies in terms of technology. Its products have passed the approval of many domestic and foreign authoritative institutions, and have won a number of international and domestic patents and awards. The target company has the characteristics of high quality, high performance and high safety in terms of products, and the price is relatively low, with a strong cost performance. The target company has a high market share and popularity, ranking first in the domestic market and fourth in the international market. The target company has established a stable cooperative relationship with many well-known hospitals, and has a wide range of sales channels and networks.

3.3 operational efficiency

The target company's operational efficiency is high in the following ways: (1) The target company is highly productive and its production base is located on the outskirts of Beijing, covering an area of approximately20000Square meters, with advanced production equipment and technology, as well as a strict quality control system, can guarantee the quality and quantity of products. The annual production capacity of the target company is10010,000 heart stents, with actual production8010,000 units, with a production utilization rate80%；（2) The target company has a high R & D efficiency, and its R & D center is located in Beijing, with approximately50High-quality research and development personnel, accounting for the total number of employees.25%It has established cooperative relations with many well-known universities and scientific research institutions, and can continuously introduce innovative products and technologies. The target company's annual R & D investment is approximately1Billions of dollars, accounting for operating income10%, the rate of return on R & D investment is20%；（3) The target company's sales efficiency is high, with sales outlets all over the country, with approximately100Sales staff, accounting for the total number of employees.50%, and with a number of dealers and agents to establish a cooperative relationship, can cover a wide range of customer groups. The target company's annual sales expenses are approximately.2Billions of dollars, accounting for operating income20%, the return on selling expenses is50%。

3.4 Financial Status

The financial position of the target company is good in the following aspects: (1) The target company's operating income shows a steady growth trend, from.2017of the year6Billions of dollars grew2019of the year10billion yuan, with a compound annual growth rate28.9%；（2) The target company's net profit shows a rapid growth trend from2017of the year1Billions of dollars grew2019of the year2billion yuan, with a compound annual growth rate41.4%；（3) The target company's gross and net profit margins are higher, respectively.60%and20%, well above the industry average; (4) the target company has a low gearing ratio30%, indicating that the target company has strong solvency and financial soundness; (5) The target company's cash flow is relatively abundant, and its cash flow from operating activities, investment activities and financing activities are respectively.2.5Billions of dollars,-1.5Billions of dollars and0.5billion yuan, with net cash flow1.5Billions of dollars.

3.5 legal risk

The target company has no significant legal problems and risks, as shown in the following aspects: (1) The target company is legally incorporated and has obtained relevant business license, tax registration certificate, social insurance registration certificate and other certificates; (2) The target company complies with relevant laws, regulations and industry norms, and pays all taxes and social insurance premiums on time; (3) The target company has signed legal and effective contracts with employees, customers, suppliers, competitors and other relevant parties, and has fulfilled its contractual obligations; (4) The target company is not involved in any legal disputes or events such as litigation, arbitration, administrative penalties, etc; (5) The target company respects and protects intellectual property rights, and has not infringed or been infringed upon any intellectual property rights such as patents, trademarks, copyrights, etc.

4. conclusions and recommendations

Based on the above findings, Champ Consulting draws the following conclusions and recommendations:

The target company is a high-end medical device company focusing on the cardiovascular field. It has independent intellectual property rights and core technology. Its main product is heart stents, which occupies a leading position in the domestic market and is also exported to Europe, the United States and other countries and regions. The target company performs well in terms of business prospects, market competitiveness, operational efficiency, financial status, legal risks, etc., and has high profitability and growth potential.

The cardiovascular medical device market in which the target company is located is a high-growth, high-profit, high-tech barrier market, with huge development space and opportunities. The target company has made remarkable achievements in the field of heart stents, but there is still potential for further improvement and expansion. The target company plans to continue to increase R & D investment in the next few years, launch more innovative products, such as bioabsorbable stents, smart stents, etc.; further expand the production scale and sales network, increase market share and brand awareness; expand other cardiovascular The field of medical devices, such as artificial heart valves, pacemakers, etc.

To sum up, Shangpu Consulting believes that the target company is an investment object with high value and potential, and it is recommended that customers make equity investment in it. Based on the target company's financial data and market forecasts, Champ Consulting estimates that the target company's current valuation is approximately50Billions of dollars, expected2025The year will grow to about100billion yuan, with a compound annual growth rate14.9%. Champ Consulting recommends that customers be at least30%The proportion of equity invested, and not more.20The price-to-earnings ratio is priced. Shangpu Consulting also recommends that the client sign a reasonable investment agreement with the target company, clarifying the investment terms, exit mechanism, management rights and so on.