The Joint Global implosion
A collapse in a hub of the "Chung Nam Network" has wiped about HK$2bn off the balance sheets of at least 11 listed companies, many of which never announced that they had invested in it. We piece together an ugly jigsaw and call on the SFC to investigate and HKEX to wake up and require announcements. (30-Sep-2016)
China Innovative Finance (0412) bubble
Hao Tian Development (0474) has confirmed our view by dumping 9.06% of CIFG at a 61.9% discount, still well above the net tangible asset value of $0.099. CIFG should trade below NTAV due to its appalling governance and membership of what we call the "Chung Nam Network". The purported profits of its leasing division are largely illusory and depend heavily on 1 customer in which CIFG has invested. HTD has also been allowed by HKEX to skirt the Listing Rules on corporate transactions. (26-Sep-2016)
China Opto (1332) discloses the junk held by Win Wind Capital Ltd
Company announcement, 28-Jun-2016
This follows a complaint filed by Webb-site on 23-Jun-2016 that the Major Transaction circular, which was presumably vetted by the Stock Exchange, failed to include any information on the underlying investments held by Win Wind Capital Ltd, with which China Opto is engaged in a share swap. Several of the stocks are in what we call the "Chung Nam Network".
China Opto (1332) coughs up details of financial assets
Company announcement, 31-May-2016
Following a complaint by Webb-site to SEHK, China Opto reveals that at 31-Dec-2015, it held 4.88% of Freeman Financial (0279) and other holdings in what we call the "Chung Nam Network".
China Optoelectronics (1332) swaps 28.56% of itself for 11.78% of Win Wind Capital LtdEnerchina announcement
Company announcement, 30-Mar-2016
Prior to this, Win Wind is 100% owned by Enerchina (0622). Both companies are in what we call the "Chung Nam Network".
China Optoelectronics (1332) does money-lending JV with Freeman (0279)
Company announcement, 30-Dec-2015
As the HK$300m joint venture will be 50:50, it will not be a subsidiary of either company, and therefore any loans it makes will be beyond the scope of the connected transaction rules. Another deal in what we call the "Chung Nam Network".
China Optoelectronics (1332) subscribes CB in Win Wind Capital Ltd
Company announcement, 23-Dec-2015
Another deal in what we call the "Chung Nam Network". We believe that Win Wind Capital Ltd was formerly known as Enerchine Capital Ltd. It is owned by Enerchina Holdings Ltd (0622).
China Optoelectronics (1332) subscribes HK$90m for 3.98% of Co-Lead Holdings Ltd
Company announcement, 5-Nov-2015
Co-Lead is a hub in what we call the "Chung Nam Network". Before this deal it is 55.27% owned by Mason Financial (0273), 16.58% by Rentian Technology (0885), 10.13% by Dragonite (0329), 5.58% by China Soft Power Technology (0139), 3.87% by National Investment Fund (1227), 2.86% by Celebrate (8212) and 5.71% by unknown others.
China Optoelectronics (1332) subscribes HK$80.03m for 3.45% of Freewill Holdings Ltd
Company announcement, 17-Jul-2015
Note: although the deal was stated to be subject to a due diligence investigation "to be carried out", this investigation was apparently completed within 1 hour and 12 minutes after the 22:48 announcement, because the subsequent interim report states that the transaction completed the same day. Freewill is a hub invested by 4 other listed companies in what we call the "Chung Nam Network".
Qualipak (1332) sells 544m shares (6.92%) of Mission Capital (1141)
Disclosure of interest, 3-Jun-2015
The sale price of $0.225 was a 52.6% discount the closing price of $0.475 on 29-May-2015. On the same day, China Jinhai (0139) bought the same number of shares at $0.485 per share. So was someone in the middle, and why? All 3 companies are in what we call the "Chung Nam Network".
Qualipak (1332) sells 7/F, China United Centre, to Mission Capital (1141)MC announcement
Company announcement, 16-Feb-2015
Another transaction in the "Chung Nam Network". Of the HK$90m price, $79.9m is satisfied with 850m new shares in Mission Capital, or 11.70% as enlarged. MC at last disclosure is 9.19% owned by HEC Capital, 9.25% owned by Freeman Corp (both being network hubs) and 29.68% by Paul Suen Cho Hung. The transfer of the BVI property owner avoids $7.65m of double stamp duty.
ICube (0139) buys 15/F China United Centre in shell from Qualipak (1332)Qualipak announcement
Company announcement, 28-Nov-2014
Both companies are in what we call the "Chung Nam Network". By transferring the BVI shell they avoid HK$7.82m of Double Stamp Duty at 8.5%.

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