Soaring and then plummeting, the market value once exceeded Ali Tencent, who is instructing The Shang Multiplier to "demonize"?

Reporter | Li Jingya

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On August 3, after the opening of the US stock market, the "demon stock" Shang Multiplier Branch finally stopped the crazy rise, and the intraday decline reached 41%, triggering a circuit breaker, the lowest reported at $975, and the market value erased $100 billion overnight.

As of the close of U.S. stocks on August 4, Shang Multiplier closed down 34.48% at $1100 per share, with a market capitalization of $203.55 billion. A day ago, its market value once exceeded $310 billion, not only surpassing Alibaba, but also leaving jd.com, PetroChina, Pinduoduo, NetEase and other popular stocks far behind, close to one-third of Tesla's market value.

By any measure of the table, the Shang Multiplier section, which just launched on the New York Stock Exchange on July 15, is unremarkable. According to the prospectus, for the ten months ended 28 February 2022, AMTD had revenue of HK$168 million and net profit of HK$187 million, compared with HK$162 million and net profit of HK$113 million in the same period last year.

But in half a month, the company's stock price has soared from a maximum of $7.80 per share to $2100, with a market capitalization of more than $390 billion, ranking among the world's top ten companies by market capitalization, attracting attention from all walks of life.

In half a month, it soared 250 times, creating a "Chinese stock myth" of the Shang Multiplier branch like a product of the capital game.

A widely noted fact is that the trading volume of The Shang Multiplier Is very small, with a daily trading volume of only a few hundred thousand shares after listing, and the proportion of outstanding shares is only about 10%. On August 3, the trading volume of The Shang Multiplier Division was 116,800 shares, and the turnover rate was only 0.06%.

In general, the circulating market capitalization implies the maximum benefit ceiling for shorting, while the total market capitalization implies the maximum cost of shorting. Under the current situation of the Shang Multiplier Department, it has not attracted any short-selling institutions to enter. Citron Research, a well-known short-selling institution, believes that Shang Multiplier is not a retail group stock, and the stock only traded 339,000 shares on August 2, which obviously did not get the attention of retail investors like the game station. Comments were not expressed on the company's share price movements. It is reported that The Shang Multiplier Department uses the placement listing, and has not made public subscriptions, and the general retail investors cannot indeed subscribe.

The concentration of equity capital is high, but the stock price is rocketing, indicating that the company has signs of similar A-share floating capital speculation. But the hype often needs a theme, and for Aplative Digital, which has annual revenue of less than HK$200 million, Southeast Asian fintech is the company's chosen target.

According to the prospectus, AMTD claims to have or strategically invest in a scarce financial license in Asia, connecting Southeast Asia with Greater China and providing one-stop digital financial services. Southeast Asia's fintech fundamentals are strong, and the region's booming tech industry is setting off a wealth-making movement, and AMTD clearly hopes to ride this time.

However, specific data show that this theme business accounts for a small proportion of the total revenue of AMTD.

Founded in 2019, the specific business of The Shang Multiplier Division is divided into four sectors: First, the financial license business sector, which mainly applies for financial licenses from other countries for enterprises. In the prospectus, AMTD mentioned that it has the most scarce digital financial license in Asia, but at present, Shang Multiplier has really obtained two insurance brokerage licenses in Hong Kong and Singapore, which is indeed suspected of speculation; The second is the digital media content and market promotion sector, which mainly provides customers with media platform services; The third block is a networking platform called Spider Web Ecosystem Solutions. From the perspective of revenue data, this is the company's main business, mainly to a virtual bank Tianxing Bank to provide financial service resources, the past two years of revenue accounted for more than 90%; The fourth part is a private equity fund segment that invests in high-growth technology companies and earns investment income.

Previously, AMT had produced the film Bomb Disposal Expert 2 and acquired DigFin, a digital financial media aimed at Asian readers.

As of now, the trader behind this capital game has not surfaced, but the company's main business is deeply related to Xiaomi.

As the parent company of AMTD Digital Science and Technology, AMTD Group itself has a lot of cooperation with Xiaomi Group, and the two jointly established Insight Financial Technology Co., Ltd. in 2018, with Xiaomi accounting for 90% and AMTD Group accounting for 10%.

Insight Fintech obtained a virtual banking license issued by the Hong Kong Monetary Authority in 2019 and was renamed Assing Bank in July of the same year, taking the "high-interest deposit" path adopted by most virtual banks in the early days, achieving a total revenue of HK$15.572 million in 2020.

On June 29 last year, Tianxing Bank announced that Lei Jun had retired as chairman of the board of directors of Tianxing Bank due to focusing on the Xiaomi Group business, and Lin Shiwei would take over. Some analysts pointed out that there are currently 162 licensed banks in Hong Kong, and it is not easy to break through them.

In addition, the thematic concept of Thearian Digital Science also has an important intersection with xiaomi group. The consortium led by AMTD and Xiaomi and others applied for a wholesale business license for digital banking in Singapore in 2020, but it was not approved. When Xiaomi Group was listed on the Hong Kong stock market, AMTD Group, led by Cai Zhijian, was one of the joint lead managers, which shows that the two are deeply related.

In addition to the Xiaomi Group, there are also many star shareholders who give the company a platform.

According to the prospectus, AMTD Is controlled by AMTD Group, which also introduces the Greater Bay Area Common Home Fund, one of the largest independent asset management companies in Asia, and the only asset management company listed on the Hong Kong Stock Exchange, Value Partners, Jiayu Fund, founded by former Alibaba CEO Wei Zhe, Maoyan Entertainment, venture capital and private equity company 500Startups. The board of directors of the AMTD includes Hong Kong's elites in the three circles of politics, business and science.

In early 2022, AMTD was acquired by AMTD International for US$1.2 billion, and upon completion of the acquisition, AMTD International owned a 97.1% stake in AMTD. Since then, it has landed on the New York Stock Exchange in August 2019 and was listed on the Singapore Exchange for the second time in 2020, making it the first listed company in Singapore with the same share and different rights. The soaring share price of AMTD Also triggered the stock price of the parent company AMTD International to climb all the way.

Prior to its listing in the United States, AMTD International conducted a Pre-IPO round of financing, and in addition to Xiaomi Group, the shareholder list also included Maoyan Entertainment, Tongcheng eLong, Huiliang Technology and Longling Investment created by Cai Wensheng.

The AMTD Department and Shang Cheng International were both born out of the AMTD Group. Founded in 2003 by Li Ka-shing's Cheung Kong Industrial Group and Hutchison Whampoa, AMTD Group is Asia's largest privately owned independent investment bank. However, after several rounds of equity dilution changes, the company has ostensibly little to do with Li Ka-shing.

Changjiang Hutchison Also issued a clarification statement on the afternoon of August 4, saying that Changjiang Group had sold the vast majority of its interests in AMTD Group nearly 10 years ago, and now only a very small amount of less than 4% of the interests that were not sold at that time remained, and these shares are currently under negotiation. The Company also stressed that the Board of Directors of AMTD Group does not have a representative of The Yangtze River Group, has no business dealings with AMTD, and has no knowledge of its business and plans.

Standing behind two listed companies, AMTD and Shangcheng International, is the 44-year-old high-profile and controversial Hong Kong investment banker Choi Chi-kin.

Tsai has worked in financial institutions such as PwC, Citi and UBS. According to public reports, two of its projects while working at UBS from 2014 to 2015 were investigated by the SFC due to conflicts of interest and disclosure issues.

After joining AMTD Group in 2016, Cai Zhijian led the restructuring of AMTD International, when the li ka-shing family's shareholding fell below 5%, and Cai Zhijian had become the actual controller of AMTD Group.

According to Caixin, in 2019, Cai Zhijian was once in Hong Kong by the deep financial difficulties of the mainland private financial group CMIG debt collection, but also accused of financial fraud, this year suspected of leaving Hong Kong to avoid debt, between March and April 2022, was in Singapore.

There are only 50 employees in The Current Digital Division, and the physical business and revenue data are obviously not enough to support such a high valuation, but its market value has been steeply moving forward for more than half a month, reaching a high point of $200 billion, which means that there is room for high point realization.

In this process, whether The Business Multiplier can find factors that really leverage the growth of revenue and operating data will become the key to the future trend.