Lakala Halts 3-Year Acquisition of Zhongbeilian

Lakara's three-year-long acquisition of Beijing Zhongbei United Credit Evaluation Co., Ltd. (hereinafter referred to as "Zhongbei United") has ended in failure.

On the evening of October 28th, Lakara announced that due to changes in the external market environment during the transaction process, all parties involved agreed to terminate the equity transfer after friendly negotiations.

The "Announcement" stated that the termination of the acquisition of Zhongbei United's equity does not involve any breach of contract liability for all parties involved, will not affect the company's normal production and operation, will not have an adverse impact on the company's financial situation, and there is no situation that harms the interests of the company and its shareholders.

Looking back to August 2021, in order to obtain the qualifications for enterprise credit rating and securities market credit rating, Lakara announced the use of its own funds of 50 million yuan to purchase 100% of Zhongbei United's equity held by Tibet Koala Technology Development Co., Ltd. and Beijing Koala Kunlun Investment Management Co., Ltd.

Zhongbei United is a credit rating agency, established in November 2015, with a registered capital of 50 million yuan, and completed the filing of securities rating business with the China Securities Regulatory Commission in November 2020. At the end of 2020, Zhongbei United's net assets were 17.45 million yuan, and the unaudited net assets for the first half of 2021 were 20.19 million yuan, which means that the acquisition premium for this transaction is close to 30 million yuan.

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In fact, Zhongbei United was once a subsidiary of Lakara and was sold to Tibet Koala Technology Development Co., Ltd. on the eve of its listing in 2016, which was also established by Sun Taoran, an important shareholder of Lakara. Therefore, this transaction was also questioned at the time for "transferring assets from one hand to another."

Regarding the termination of this acquisition, Wang Pengbo, a senior analyst in the financial industry at Broadcom Consulting, said in an interview with the Economic Observer Network that this may be related to the regulatory requirements of the securities market by the China Securities Regulatory Commission. After all, Zhongbei United was a subsidiary that Lakara divested before going public, and this acquisition is an act of acquiring major shareholder assets at a high premium, which has also been questioned by the market. The termination of this acquisition is also a manifestation of protecting the interests of the company and its shareholders.

On the same day, Lakara also released the performance report for the third quarter of 2024.

In the first three quarters, the company achieved a main business income of 4.39 billion yuan, a year-on-year decrease of 0.78%, among which the digital payment business income was 3.91 billion yuan, a year-on-year increase of 1.89%; the company achieved a net profit attributable to the shareholders of the parent company of 513 million yuan, a year-on-year decrease of 17.49%; the net profit attributable to the parent company after deducting non-recurring gains and losses was 516 million yuan, a year-on-year increase of 7.26%; the basic earnings per share were 0.66 yuan.

Lakara stated that in the third quarter, the net profit attributable to the parent company after deducting non-recurring gains and losses decreased by 95 million yuan year-on-year, mainly due to factors such as the inclusion of investment income of 50 million yuan in the same period last year, which was included in the recurring gains and losses, and the seasonal differences in payment service income.In the third quarter alone, Lakala achieved a total operating revenue of 1.408 billion yuan, a year-on-year decrease of 3.28%, and a sequential decrease of 5.44%; the net profit attributable to the parent company was 93.343 million yuan, a year-on-year decrease of 15.20%, and a sequential decrease of 55.78%; the net profit excluding non-recurring gains and losses was 104 million yuan, a year-on-year decrease of 47.63%, and a sequential decrease of 43.21%.

In response, Wang Pengbo analyzed that the increase in QR code transactions continues, but the reduction in bank card transactions is significantly affected by the overall industry environment. Affected by this, Lakala's revenue growth rate in the third quarter was relatively slow, and due to the lower interest rate of QR code transactions, the company's net profit attributable to the parent company decreased significantly year-on-year. Although the net profit attributable to the parent company increased by 7.26% year-on-year to 516 million yuan after deducting non-recurring gains and losses, the decline in net profit still reflects that the company faces certain pressures in terms of profitability.

The financial report shows that Lakala is continuously advancing its digital operation strategy, further optimizing payment services, enriching "payment + SaaS" solutions, and enhancing the digital operation service capabilities of merchants.

"Lakala has recently been actively innovating products, launching a new generation of micro-smart POS, and loading digital operation management modules on the app, which is also a manifestation of actively expanding the business scope. However, there are still certain doubts about when these measures can truly be transformed into profitable benefits based on the current market feedback," said Wang Pengbo.