On September 9th opening, Hithink Royalflush Information Network Co.,Ltd. (300033.SZ), which had been declining for several consecutive days, opened up over 1%. As of 10:15 AM, the gains expanded to 2.56%, trading at 352.4 yuan per share.
On the news front, in the early hours of September 9th, Hithink Royalflush issued an announcement stating that the company's controlling shareholder, actual controller, and chairman Yi Zheng decided to terminate early the share reduction plan disclosed on September 6th. During this period, no company shares were reduced, while the reduction plan of shareholder Hangzhou Kaisishun Technology Co., Ltd. (hereinafter "Kaisishun") remains unchanged.
Previously on September 6th, this hundred-billion-yuan market cap "stock trading software leader" sparked market controversy due to executive share reductions at high levels and the stated reason of "yielding market participation opportunities." According to the pre-reduction announcement disclosed that day, Yi Zheng and Kaisishun, a shareholder holding over 5% of shares, had planned to reduce a combined total of no more than 1.3831 million shares, accounting for 0.26% of the company's total share capital. Based on the closing price on September 5th, this reduction could have generated approximately 500 million yuan in proceeds, with Yi Zheng personally planning to reduce 684,000 shares for 247 million yuan in proceeds.
Kaisishun stated the reduction was due to its own capital needs. Yi Zheng explained that the reduction was firstly because "phased shareholding increase targets had been successfully completed," and secondly to "yield market participation opportunities, release liquidity, and activate market vitality."
However, this "yielding opportunities" explanation was questioned by some investors. Some investors bluntly called it "cashing out at high prices," while others sarcastically referred to it as a "high-level takeover invitation."
Following the announcement of the reduction plan, Hithink Royalflush's stock price fell accordingly. On September 8th, it dropped over 6% intraday and closed down 4.95%, with market capitalization evaporating 9.623 billion yuan in a single day.
According to records, the 55-year-old Yi Zheng currently holds 194 million shares of the company, representing 36.13% of total share capital, including 146 million restricted shares and 48.5553 million unrestricted shares. The proposed reduction of 684,000 shares originated from shares purchased through centralized bidding transactions on April 28th, 2022.
Kaisishun currently holds 48.1938 million shares of the company, representing 8.96% of total share capital, with shares originating from pre-IPO holdings. Notably, Kaisishun was formerly known as "Shanghai Kaisiao Investment Consulting Co., Ltd." and was jointly established by Hithink Royalflush executives Ye Qiongjiu, Yi Xiaomei, Wang Jin, Yu Haomiao and others, with Yi Xiaomei being Yi Zheng's sister.
Since the "924" market rally last year, Hithink Royalflush's stock price has accumulated gains of 238.38% and reached a historical high of 426.88 yuan per share on August 18th this year. Based on the closing price on September 8th, Yi Zheng's personal wealth exceeds 66.6 billion yuan.
It's worth noting that Yi Zheng has previously had unsuccessful reduction attempts. Past announcements show that on March 28th, 2023, Hithink Royalflush announced a reduction plan where multiple directors, supervisors, and senior executives, including actual controller, chairman and general manager Yi Zheng, planned to collectively reduce no more than 45.5004 million shares (8.46% of total share capital), with a planned reduction value of nearly 9 billion yuan at the time.
However, subsequent reduction result announcements showed that by the expiration of the aforementioned share reduction plan, Yi Zheng and most other executives had not implemented any reductions. Additionally, the latest announcement states that since Hithink Royalflush's listing in December 2009, nearly 16 years ago, Yi Zheng has never reduced company shares.
In terms of performance, Hithink Royalflush's semi-annual report shows the company achieved revenue of 1.779 billion yuan in the first half of the year, up 28.07% year-on-year; net profit attributable to listed company shareholders was 502 million yuan, up 38.29% year-on-year; the company plans to distribute a cash dividend of 1.00 yuan per 10 shares (including tax) to all shareholders.
Hithink Royalflush noted that mainly due to the capital market recovery, user activity on the company's website and App increased, leading to higher revenue from advertising and internet promotion services; simultaneously, investor demand for financial information services rose, resulting in increased value-added telecommunications business revenue; therefore, the company's revenue and net profit achieved certain growth during the reporting period.
(Disclaimer: Article content is for reference only and does not constitute investment advice. Investors operate at their own risk.)
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