List of Hong Kong embezzler shares

On June 27, 2017, the market did not have any special news, Hong Kong those old shares, why the collective plunge?

It turned out that at around 10:30 a.m. on the same day, Ten cent Securities cited market rumors that the Hong Kong Stock Exchange, in order to activate the innovation of small and medium-sized enterprises in Hong Kong, will force the delisting of stocks that are less than 1 Yuan and usually not actively traded, and also restrict backdoor listings and encourage new listings as the mainland does.

It can be imagined that those who have a loud name and no real business of fraud companies, heard this news, cannot shit? And, not surprisingly, all of those penny stocks, they all went down from 10:30.

However, Hex has responded to Ten cent Finance saying it doesn’t have any proposal to delist shell companies.

It seems that the Hong Kong Stock Exchange and the Securities and Futures Commission are much more tolerant of scammers than the mainland.

Hong Kong’s financial regulators have a lot of reasons for not doing anything about it, saying that if there were a regulation to limit the number of fraudulent shares, it would restrict financing for good companies that really need it. In the hands of a good man, a kitchen knife is used to cut vegetables, but only bad people use it to cut others. Investors should be responsible for their own investment behavior, do not invest in companies they do not understand…

The issue of fraudulent shares has been debated for more than 20 years, and the Hong Kong Stock Exchange and the Securities and Futures Commission have never put any real controls on it, allowing them to continue to cheat.

Someone further asked, the old stock has been falling, the company’s major shareholders how to make money?

Well, we big A share people know that the stock price rises, the major shareholders make a lot of money, never thought that the stock price falls, the major shareholders can also make a lot of money!

Well, using yesterday’s article, I’ll show you how the big owners of the fraudulent stock market have made a lot of money at the expense of retail investors:

The share price of a Chinese XX is 1 Yuan, the total capital stock is 100 million shares, the total market value is 100 million Yuan, and the majority shareholder holds 80%.

Major shareholders desperately sell the stock, the stock plummeted, down to 0.1 Yuan, and the major shareholders shareholding into 50%;

Let’s say the major shareholder trades 30 per cent of the equity for $20m in cash on hand;

At this time, the company suddenly announced rights issue, one share for four shares, rights issue price 0.06 Yuan, 40% discount compared to the current share price, because 5 times rights issue, need to pay a lot of money at a time, retail investors without more money cannot participate;

Assuming that all retail investors do not participate, only the major shareholders of the company participate in the rights offering in full at the price of 0.06 Yuan, which requires funds: 5000*4*0.06=12 million Yuan;

After the completion of rights offering, the total share capital of the company changes into: 50 million (original share capital of major shareholders) + 200 million (rights share capital of major shareholders) + 50 million (total share capital of retail investors) = 300 million shares, and the shareholding ratio of major shareholders becomes 83.3%, while the original 50% shareholding ratio of retail investors becomes less than 17%.

In this way, through a round of slump and rights issues, the company’s major shareholders not only increased their shareholding, but also netted 8 million Yuan in cash.

Of course, if the major shareholders think the stock price is too low for fun, they can buy 10 shares for one share, so the company’s share price will return to 0.6 Yuan per share, and then they can play another round of “make money by plunging” tricks.

Using the lines in the movie “Big Shot”, someone summed up the method of cheating:

You have to pick the most auspicious stock number,

The nicest company name,

Hire an MBA from Harvard, a JD from Yale,

In what sounds like the hippest, most lucrative business,

Bloomberg goes straight to the home,

Office space, 4,000 square feet minimum,

Finance, real estate, coal mining, solar power,

Anything you can put in the annual report put it in!

The company is registered in Bermuda,

We have offices in major cities in the United States, Japan and China.

There’s a bunch of gist onstage at the annual meeting,

Oh, ho, ho, ho, ho, ho, ho,

When a shareholder walks in the door, whatever’s going on, he has to tell them,

Boost shareholder value,

A real American Wall Street accent, more than a face!

The CEO buys a helicopter and a luxury yacht,

Maintenance alone costs millions of dollars a year,

And a group of Indian security guards, 24 hours of close protection

I mean, lunch costs $8,000,

Just one word — expensive!

The companies around them either lost money or filed for bankruptcy protection,

If you have a profit at the end of the year, you are embarrassed to say hello to people!

How much do you think a share of a company like that would cost?

I guess its two bucks or something?

Two dollars That’s an all-time high!

Starting at eight cents!

Don’t be too flat, you can be even flatter,

You have to study the psychology of retail investors,

Retail investors who are willing to pay real money for their shares,

I had no idea that there would be 100 shares for 1, 50 shares for 1, 20 shares for 1 and then 10 shares for 1!

What is retail you know?

Retail investors are,

Buy the cheapest stock, not the best value,

So, we do the slogan is:

Not the best, but the cheapest!

Not only black, but also know how to follow the trend and concept.

Absolutely what fire, what can attract retail investors to follow suit to buy, they call it.

In 2000, the Internet was hot, it was more called What technology, what sky; In 2007, the resource boom ah, then rename this mining, that resource, this coal, that oil; In 2015, Internet finance, renewable energy and consumer industries became popular, so they changed their names…

Let’s A share market, once a company renamed “PIP convex PI”, is to follow the tricks of the thousand shares.

The bad of the major shareholders of the company is absolutely beyond your imagination. There is no bottom line, the worst to the extreme, our big A-share listed companies, A considerable part of the bad water, are following the cheating stock, for example:

The business has been losing money while the chairman has been paid a staggering amount;

The company’s profit is not much, but when the majority shareholders hold the highest proportion of cash dividends, the company pays out the principal into the pockets of the majority shareholders;

For example, the company inexplicably spends hundreds of millions of Yuan to buy an inexplicable company, and this company is often the major shareholder’s family or relatives and friends, suddenly hollowed out the company;

You want to be a so-called “value investor”, to view these old shares of the company’s annual report, financial results, wow, that call a beautiful ah!

For example, there is a company called Ruin International (02010.HK), which is similar to Mr. Shi Kyushu’s stupid business. In 2015, the price-to-book ratio was 0.7, the P/E ratio was 6, and the cash flow was continuously positive. The amino acid health care products industry was the first.

But in fact, if you buy it, you’re going to die!

From June 2015 to date, two years down nearly 90%!

Worse still, A lot of cheater shares or group, a lump a lump, is generally several cheater shares are affiliated companies, and then, the assets of A company sold to their holding company B, earn huge profits; Then, Company B provides “management consulting” services to Company A, often charging tens of millions of dollars…

In the end, the money goes to the major shareholders themselves. But if you go to analyze the report, you can definitely see a blank!

A lot of people should be asking, which stocks might be fraudulent?

Here are a few criteria:

1) In the environment where bad money drives out good money, unclear new stocks are likely to be fraudulent. Unlike the A-share market, Hong Kong stocks do not want to buy new stocks within 3 years. They would rather kill by mistake than abuse the trust.

2) Companies that change their names every few years, no matter whether they are fraudulent or not, are certainly not legitimate companies and will be shot to death directly;

3) Be highly alert to stocks with a large record of rights offering/rights offering/joint share offering, and directly pull them into the blacklist;

4) If you do not want to buy stocks, then the average daily trading volume of less than HK $1 million, do not touch;

5) With China, Global, World, Asia, etc., if it is not a well-known, particularly creditworthy company, shoot dead;

6) Small and medium-sized stocks that have experienced big avalanches are worth being wary of;

7) Avoid all capital operation frequent company, a legitimate operation of the company, not easy to use capital operation;

8) Avoid stocks of companies whose financial statements are too good to be true.

 

 

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