1. market dimension

The market dimension refers to an in-depth analysis of the industry and market in which the target enterprise is located, including the overall size and structure of the industry, the market supply and demand situation, the industry development environment and trends, the current state of industry technology and the direction of change, and the analysis of industry indicators. The purpose of the market dimension is to understand the market position, potential and opportunities of the target company, as well as the risks and challenges it may face.

The main methods of the market dimension are:

Desktop research: Collecting and collating relevant market information using publicly available data and information sources, such as official statistics, industry reports, expert opinions, etc.

Expert interview: by telephone or face-to-face, invite experts, scholars, consultants, etc. in the industry to obtain their views and suggestions on the industry and the market.

Field investigation: observe and understand the actual situation of the market by personally visiting the relevant institutions, enterprises and channels of the target enterprise or industry.

Sample survey: Through questionnaires, interviews and other methods, sample surveys are conducted on customers, suppliers, and partners of the target company or industry to obtain their feedback on market demand, satisfaction, and loyalty.

The focus of the market dimension is:

Industry basic situation: including industry definition, classification, historical development process, development stage, etc.

Industry chain: including upstream raw material supply, midstream product production, downstream product sales, etc.

Industry competition analysis: including industry concentration, competitive landscape, competitive strategy, competitive advantage, etc.

Industry risk analysis: including policy risk, technology risk, market risk, environmental risk, etc.

2. competitive dimension

The competitive dimension refers to a detailed comparative analysis of the target firm and its main competitors, including basic information, technology/Product situation, production and sales inventory, financial analysis, business strategy analysis, etc. The purpose of the competitive dimension is to assess the competitiveness of the target firm, as well as its strengths and weaknesses in the market.

The main methods of the competitive dimension are:

Desktop research: Collect and organize relevant competitive information using publicly available data and information sources, such as corporate websites, annual reports, news reports, etc.

Expert interviews: Invite experts, scholars, consultants, etc. in the industry by phone or face-to-face to obtain their evaluations and suggestions on competitors.

Field visits: Observe and understand the actual situation of competitors by personally visiting competitors or their related institutions, enterprises, channels, etc.

Sample survey: Through questionnaires, interviews and other methods, sample surveys are conducted on competitors or their related customers, suppliers, partners, etc., to obtain their feedback on competitors' cognition, satisfaction, and loyalty.

The focus of the competitive dimension is:

Basic information: including enterprise background, scale, organizational structure, management team, etc.

Technology/Product information: including technical level, product type, product quality, product innovation, etc.

Production, sales and inventory: including production capacity, production efficiency, production costs, sales channels, sales, inventory, etc.

Financial analysis: including balance sheet, profit statement, cash flow statement, etc., as well as the calculation and analysis of various financial indicators.

Business strategy analysis: including market positioning, target customers, marketing strategy, price strategy, brand strategy, etc.

3. financial dimensions

The financial dimension refers to a comprehensive review and analysis of the financial position of the target enterprise, including assets and liabilities, income and expenditure, cash flow, etc. The purpose of the financial dimension is to assess the profitability, solvency, growth capacity, etc. of the target enterprise, as well as the possible financial risks.

The main methods of financial dimension are:

Desktop research: Collect and organize relevant financial information using publicly available data and information sources, such as corporate websites, annual reports, audit reports, etc.

Expert interviews: by phone or face-to-face, invite experts, scholars, consultants, etc. in the industry to obtain their interpretation and suggestions on financial information.

Field visits: by personally visiting the target enterprise or its related institutions, enterprises, channels, etc., to verify and understand the authenticity and validity of financial information.

Sample research: Through questionnaires, interviews, etc., a sample survey of the target company or its related customers, suppliers, partners, etc., to obtain their feedback and opinions on financial information.

The focus of the financial dimension is:

Assets and liabilities: including asset structure, asset quality, asset efficiency, etc.; liability structure, liability level, solvency, etc.

Income and expenditure: including income structure, income level, income stability, etc.; expenditure structure, expenditure level, expenditure control, etc.

Cash flows: including cash flows from operating activities, cash flows from investing activities, cash flows from financing activities, etc.; levels and changes in net cash flows

4. legal dimension

The legal dimension refers to a comprehensive review and analysis of the compliance and legal risks of the target enterprise, including the registration of the establishment, change and cancellation of the enterprise, the business license and qualification of the enterprise, the legal documents such as contracts, agreements, creditor's rights and debts involved in the enterprise, and the legal disputes such as litigation, arbitration and administrative punishment involved in the enterprise. The purpose of the legal dimension is to assess the legality, compliance and integrity of the target enterprise, as well as possible legal liabilities and losses.

The main methods of the legal dimension are:

Desktop research: use public data and information sources, such as industrial and commercial registration information, administrative licensing information, judicial disclosure information, etc., to collect and sort out relevant legal information.

Expert interview: by telephone or face-to-face, invite experts, scholars, consultants, etc. in the industry to obtain their interpretation and suggestions on legal information.

Field investigation: verify and understand the authenticity and validity of legal information by personally visiting the target enterprise or its related institutions, enterprises, channels, etc.

Sample research: Through questionnaires, interviews and other methods, a sample survey of the target company or its related customers, suppliers, partners, etc., to obtain their feedback and opinions on legal information.

The focus of the legal dimension is:

Registration of enterprise establishment, change, cancellation, etc.: including basic information such as enterprise name, registration number, registered capital, shareholder structure, business scope, domicile, etc.; and historical information such as the time of establishment, change record, and cancellation status of the enterprise.

Business license and qualification of the enterprise: including all kinds of administrative license certificates and industry qualification certificates required by the enterprise; as well as specific information such as the validity period of the certificates, the issuing authority, and the scope of use.

Information on contracts, agreements, creditor's rights and debts and other legal documents involved in the enterprise: including various contractual agreements signed with customers, suppliers, partners, etc.; and various creditor's rights and debt relationships with banks, financial institutions, etc.; as well as the main terms, performance and default risks of contractual agreements and creditor's rights and debts.

Legal disputes such as litigation, arbitration and administrative punishment involved in enterprises: including all kinds of civil litigation, commercial arbitration and other judicial procedures with other subjects; as well as all kinds of administrative penalties or supervision and inspection by government departments or regulatory agencies at all levels; and the causes, processes, results and effects of disputes.

Brief Introduction of 5. Shangpu Consulting Company

Shangpu Consulting Company is a consulting company specializing in commercial due diligence services. It has Class A consulting qualifications and is rated as a technology-based enterprise by the Ministry of Science and Technology of the People's Republic of China. Shangpu Consulting focuses on market research, competitor research, investment and financing consulting, market entry, business growth and other business areas, is a consulting company that provides special market consulting services. Champ Consulting owns14Years of business due diligence experience, with various industry research groups, long-term for major securities institutions to provide multi-field investment research services. Champ Consulting each year exceeds300consulting projects covering popular tracks in multiple industries. Champ Consulting owns30Ten thousand expert team, mature research consultant team, researcher team. The implementation network of Champu Consulting Company covers the whole country, which can realize rapid response. In the process of project implementation, Shangpu Consulting Company strictly keeps confidential the project implementation content, and strictly manages and supervises it.

6. case of business due diligence at Champ Consulting.

Shangpu Consulting has long served many well-known financial institutions, including industrial funds, venture capital funds, private equity funds and so on. The following are some of the business due diligence cases of Champ Consulting:

Pre-cast due diligence – Judging the investment value of the target enterprise: the target enterprise is a game company, and Shangpu Consulting helps customers comprehensively judge the investment value of the company through due diligence and analysis and evaluation. The target enterprise mainly focuses on online games, and hand-held tour products are its core business. By obtaining relevant data on the number of users and consumption in recent years, Shangpu Consulting comprehensively analyzes the key indicators such as daily activity, monthly activity, addition, retention and core user portrait characteristics of its key products, and combines internal and external expert interviews with analysis models to cross-verify the obtained information and data, and the target enterprise's own resources, talent, technology and other indicators with the same field of head enterprises for comparative analysis. Based on the comprehensive results of quantitative data analysis and qualitative interviews, Shangpu Consulting clarified the current operating status and capabilities of the target enterprise for the client, found the risks in terms of business planning direction and talent reserve, and predicted the future.3-5corporate profitability and growth capacity.

Pre-acquisition due diligence – Assessing the value and risk of the target enterprise: The target enterprise is an industrial hose manufacturer, and Champ Consulting helps clients assess the value and risk of the company through due diligence and analytical assessment. The target company mainly produces high-performance industrial hoses for automobiles, construction machinery, aerospace and other fields. It has independent research and development and production capabilities, and its product quality and technical level are in the leading position in the industry. Through the verification and analysis of the financial data, production data and sales data of the target enterprise, Shangpu Consulting calculated the net asset value, market value and income value of the target enterprise for the principal, and carried out sensitivity analysis according to different assumptions. At the same time, through the review and evaluation of the legal documents, contract agreements, administrative licenses, etc. of the target company, Shangpu Consulting identified the possible legal risks and responsibilities of the target company for the client, and gave corresponding countermeasures.

Post-pitch due diligence – Supervise the operation of the target enterprise: the target enterprise is an art park developer, and Shangpu Consulting helps customers supervise the operation of the company through due diligence and analysis and evaluation. The target enterprise is mainly engaged in the planning, construction, operation and management of the art park, aiming to build science and technology.+Cultural and tourism industry integration demonstration park, attracting all kinds of cultural and creative enterprises and institutions to settle in. Through regular tracking and analysis of the financial statements, operating data and project progress of the target enterprise, Shangpu Consulting provides the entrusting party with detailed reports on the operating status, financial status and project completion of the target enterprise, and gives suggestions on the business strategy and risk control of the target enterprise according to market changes and competition.

7. epilogue

Business due diligence is an important business activity, involving multiple dimensions such as market, competition, finance and law, and requires professional knowledge, methods and tools.