PLBIO's ownership change confirmed by China National Biological Group, further concentration of blood products achieves another milestone

For PLBIO (000403.SZ), which is planning a change in control, the acquirer has finally emerged.

On the evening of June 9, PLBIO announced that its controlling shareholder, Qiongqing City Shengbang Yinghao Investment Partnership (Limited Partnership) (hereinafter referred to as "Shengbang Yinghao"), plans to transfer all of its shares (21.03%) to China National Biotechnology Co., Ltd. (hereinafter referred to as "China Biotechnology").

The acquisition of PLBIO by China Biotechnology also means that the actual controller of the latter will change from Shaanxi State-owned Assets to China National Pharmaceutical Group.

China Biotechnology intends to make a full cash payment for this transaction, which amounts to 3.844 billion yuan.

Based on this, the pricing for this control transaction is roughly calculated at 24.96 yuan per share, a premium of 47% compared to PLBIO's closing price of 16.96 yuan per share on June 6; with an estimated net profit attributable to the parent company of 745 million yuan for 2024, the corresponding price-to-earnings ratio for this transaction is close to 32 times.

Such a valuation level is significantly higher than that of several A-share blood product companies.

As of the close on June 9, the PE (TTM) ratios of Tiantan Biological (600161.SH), Shanghai RAAS (002252.SZ), and Hualan Biological (002007.SZ) were generally around 25 times, with only Boya Biological (300294.SZ) reaching 36 times.

The scarcity of blood products is the backdrop for China Biotechnology's hefty cash expenditure of over 3.8 billion yuan.

Since 2001, China has not approved any new blood product production enterprises, but the "Blood Product Management Regulations" stipulate that a single plasma collection station can only supply raw plasma to one blood product production unit with which it has signed a quality responsibility agreement.

Due to the high difficulty and low efficiency of establishing new plasma stations, industry players generally expand their market share through acquisitions; for example, Haier Group spent 12.5 billion yuan to acquire Shanghai RAAS.

After the acquisition of PLBIO by the controlling shareholder, Tiantan Biological, which is also engaged in the blood product business, will face competition from the same industry.

Therefore, one of the key points of this transaction is how Tiantan and PLBIO will integrate under the same roof in the future.

An industry insider in blood products anticipates that China Biotechnology may subsequently integrate PLBIO into Tiantan Biological to complete the merger of the two.

"The market actually also expects Tiantan Biological to directly acquire, but the efficiency of a listed company like Tiantan participating in the acquisition may be relatively low," pointed out an investment banker in Beijing. "However, China Biotechnology is not a listed company and is not bound by disclosure rules, making operations more efficient."

As of the end of 2024, Tiantan Biological and PLBIO have 85 and 38 plasma collection stations, respectively, with collection volumes of 2,781 tons and 1,400 tons, ranking first and fourth in the industry, respectively.

If the two complete the integration, it means that China Biotechnology will have no less than 123 plasma collection stations, with a total collection volume exceeding 4,000 tons, further widening the gap with other players.

Shanghai RAAS, Hualan Biological, and Boya Biological have 44, 34, and 21 plasma collection stations, with collection volumes of 1,600 tons, 1,586 tons, and 631 tons, respectively.

If the two complete the integration, Tiantan Biological's position as the industry leader in China will be further solidified.