The concept and significance of 1. investment due diligence consulting.

Investment due diligence consulting (Due Diligence Consulting, shortDDC) refers to the comprehensive and in-depth review and evaluation of the business model, market environment, competitive advantages, risk challenges and other aspects of the target enterprise before the acquisition, merger and acquisition, listing and other transactions, so as to help investors make more rational and scientific investment decisions. The process of investment due diligence consulting usually includes the following aspects:

-Commercial due diligence: Analyze the target company's products or services, market positioning, competitive strategies, marketing channels, customer relationships, brand image, innovation capabilities, etc., and evaluate its commercial viability and profitability.

-Financial due diligence: Review the financial statements, accounting policies, assets and liabilities, cash flow, cost structure, tax status, internal controls, etc. of the target enterprise to assess its financial position and risks.

-Legal due diligence: inspect the legal documents, contracts, licenses, intellectual property rights, litigation, compliance, etc. of the target enterprise, and assess its legal risks and liabilities.

-Technical due diligence: evaluate the technical level, R & D investment, patent protection, technology transfer, technical cooperation, etc. of the target enterprise, and evaluate its technological advantages and potential.

-Environmental due diligence: assess the environmental impact, pollutant discharge, environmental management, environmental responsibility, etc. of the target enterprise, and assess its environmental risks and costs.

-Human resources due diligence: evaluate the organizational structure, personnel size, talent structure, salary and benefits, labor relations, human resources policies, etc. of the target enterprise, and evaluate its human resources advantages and problems.

The significance of investment due diligence consulting is that it can effectively reduce investment risk, improve investment returns, and protect the interests of investors. Through investment due diligence advice, investors can:

-Fully understand the real situation of the target company, avoid information asymmetry and fraud, and improve the accuracy and effectiveness of investment decisions.

-Reasonably assess the value and potential of the target enterprise, determine reasonable transaction prices and terms, optimize the investment structure and strategy, and improve the return on investment and payback period.

-Discover the risks and problems of the target enterprise, formulate corresponding risk prevention and remedial measures, reduce investment losses and disputes, and ensure the safety and legitimacy of investment.

-Identify the advantages and opportunities of the target enterprise, formulate corresponding post-investment management and value-added plans, enhance the competitiveness and market share of the target enterprise, and realize investment value-added and exit.

Market status and development trend of 2. investment due diligence consulting

With the transformation and upgrading of China's economy, the demand for investment due diligence consulting and the scale of the market continue to grow. At the same time, it is also facing challenges and opportunities in many aspects such as industry competition, technological innovation, and legal supervision.

1. Market demand and scale

The market demand for investment due diligence consulting mainly comes from the following aspects:

-Acquisitions and mergers and acquisitions: Acquisitions and mergers and acquisitions are important means for companies to achieve rapid expansion and strategic transformation, and are also the main source of demand for investment due diligence consulting. According to PricewaterhouseCoopers,2020In, the total amount of M & A transactions in Mainland China and Hong Kong reached7799Billion US dollars, year-on-year growth18%, a record high, with cross-border M & A transactions reaching2925Billion US dollars, accounting37%. With the further opening and internationalization of China's economy, the activity and scale of acquisitions and mergers and acquisitions are expected to remain high, driving the growth of demand for investment due diligence consulting.

-Listing and refinancing: Listing and refinancing are important ways for companies to obtain capital and enhance their brands, as well as an important source of demand for investment due diligence advice.2020Year, ChinaAstock market total397The initial public offering of enterprises (IPO), the total amount of funds raised reached4726Billion yuan, year-on-year growth46%; Refinancing market common1089The company completed the refinancing, raising a total of up1.8Trillion yuan, year-on-year growth144%. With the continuous improvement and innovation of China's capital market, the opportunities and difficulties of listing and refinancing will increase, which will promote the growth of demand for investment due diligence consulting.

-Private equity and venture capital: Private equity and venture capital are important forces to support innovation and entrepreneurship and industrial upgrading, and are also important sources of demand for investment due diligence consulting.2020China's private equity and venture capital markets have completed a total9829Investment transactions, the amount of investment reached.1.2Trillion yuan, year-on-year growth4%. With the high-quality development of China's economy and the rise of emerging industries, the vitality and potential of private equity and venture capital will be further released, driving the demand for investment due diligence consulting.

According to the China Consulting Federation,2020The size of the Chinese investment due diligence advisory market reached approximately150Billion yuan, up about10%. expected2025The size of the Chinese investment due diligence advisory market will reach approximately300billion, with a compound annual growth rate of approximately15%。

2. Industry competition and pattern

Investment due diligence consulting industry competition mainly comes from the following aspects:

-The four major international accounting firms: The four major international accounting firms (Deloitte, PricewaterhouseCoopers, Ernst & Young and KPMG) are leaders and major competitors in investment due diligence consulting. They have a global network and rich experience, The professional team, a wide range of customers and a good reputation can provide comprehensive and high-quality investment due diligence consulting services, occupying the majority of the investment due diligence consulting market.

-Local professional consulting companies: Local professional consulting companies are the rising stars and important competitors of investment due diligence consulting. They have a deep understanding of the local market, flexible customization capabilities, fast response speed, reasonable price advantages, etc., and can provide targeted, Differentiated investment due diligence consulting services have won a certain market share and customer recognition.

-Vertical consulting companies in the industry field: Vertical consulting companies in the industry field are experts and potential competitors in investment due diligence consulting. They focus on a certain industry or field, and have deep industry knowledge, professional technical capabilities, and unique data resources. Etc., can provide in-depth and professional investment due diligence consulting services to meet some specific market needs and customer needs.

According to the China Consulting Federation,2020The competitive landscape of China's investment due diligence consulting market is as follows:

-The market share of the Big Four international accounting firms is approximately60%, where Deloitte is about18%, PricewaterhouseCoopers is about17%, Ernst & Young is about14%, KPMG is about11%。

-The market share of local professional consulting firms is about.30%, of which Champ Consulting Group is about.8%, Huaxia Consulting Group is about.7%, Zhongcheng Consulting Group is about.6%Other consulting firms are approximately9%。

-The market share of vertical consulting firms in the industry sector is approx.10%Among them, the Internet, medical care, education, energy and other industries are the main ones, and their respective market shares are insufficient.1%。

3. Technological innovation and application

The technological innovation and application of investment due diligence consulting are mainly reflected in the following aspects:

-Big data and artificial intelligence: Big data and artificial intelligence are important technical support and innovation drivers for investment due diligence consulting. They can help investment due diligence consulting companies to collect, sort out, analyze and mine massive data information, improve the efficiency and quality of investment due diligence consulting, and enhance the value and impact of investment due diligence consulting. For example, Shangpu Consulting Group uses big data and artificial intelligence technology to build a global enterprise database, which can update and analyze the financial, operational, market, risk and other multi-dimensional data of enterprises in real time, providing strong data support and intelligent assistance for investment due diligence consulting.

-Cloud Computing and Block Chain: Cloud Computing and Block Chain are important technology platforms and innovation paths for investment due diligence consulting. They can help investment due diligence consulting companies to store, transmit, share, verify and protect data information, improve the security and credibility of investment due diligence consulting, and expand the service scope and cooperation mode of investment due diligence consulting. For example, Shangpu Consulting Group uses cloud computing and block chain technology to establish a cloud-based investment due diligence consulting platform, which can realize efficient storage and rapid transmission of data. At the same time, it uses the encryption and distributed characteristics of block chain to ensure the authenticity and immutability of data, and provides a safe and credible technology platform for investment due diligence consulting.

-Remote collaboration and virtual reality: Remote collaboration and virtual reality are important technical tools and innovative ways for investment due diligence consulting. They can help investment due diligence consulting companies to overcome geographical and time constraints, realize efficient communication and in-depth communication with customers and target enterprises, improve the convenience and experience of investment due diligence consulting, and increase the interactivity and participation of investment due diligence consulting. For example, Shangpu Consulting Group uses remote collaboration and virtual reality technology to provide an online collaboration space for investment due diligence consulting, which can realize real-time dialogue and video conference with customers and target enterprises. At the same time, it uses virtual reality technology to simulate the scene and environment of target enterprises, providing a real and vivid technical tool for investment due diligence consulting.