Overview Overview

The purpose of this series is to discuss the strategic means and development ideas of blockchain companies from all aspects, and to further explore the judgment of the future of blockchain by taking pioneers in the industry as examples.

Report report

Report report

In the game, more than two participants are often in a competitive relationship, so there are more opponents, and it is also an unbalanced, unequal, and asymmetrical distribution theory. We usually think that if there are winners, there will be losers, but this only exists when both competitors have homogeneous judgment standards for winning and losing. However, in the case of Euroco Group’s acquisition of Qianjin Holdings, we can see a “win-win” thinking, that is, both competitors under different judgment standards can simultaneously obtain the conditions of victory that both parties think.

In the case of this issue, Ouke Group obtained the control of Advance Holdings below the market price, while the seller obtained a return on investment appreciation, both of which achieved their goals.

The Gorgeous Transformation of Advance Holdings

2015 is a special year. Hong Kong stocks bottomed out in 2015 after a quarter of frenzy. It was also at this time that Advance Holdings was listed on the Hong Kong Stock Exchange. According to the prospectus, the main business of Advance Group is foundation engineering and subsidiary businesses, as well as construction waste treatment services. Including site formation works, excavation and lateral support works, piling construction, pile cap or pile foundation construction, reinforced concrete structure works, etc.

On September 19, 2017, Zhaoxing Investment Development Co., Ltd. and Advance Holdings issued a joint announcement stating that Hongcui Group Co., Ltd. (the holding company of Advance Holdings) signed a share transfer agreement with Zhaoxing on September 15, 2017. Zhaoxing sold 2.35 billion shares, accounting for 44.7% of the total issued shares of Advance Holdings. The sole director of Zhaoxing Investment Development Co., Ltd., Anthony Wong, wholly owns 2.35 billion shares.

As of November 15, 2017, Zhaoxing and its concerted actors held a total of 3.18 billion shares, accounting for about 60.49% of all issued shares of Advance Holdings.

At this time, the actual controller of Advance Holdings became Wang Yiyu. In less than a year since Wang Yiyu became the actual controller of Advance Holdings, the company's equity has been pledged for about 6 months. According to the announcement of Advance Holdings Group (01499.HK), on April 17, 2018, the company’s controlling shareholder, Zhaoxing Investment Development Co., Ltd. pledged a total of 3,182,790,001 ordinary shares of the company’s issued share capital to an independent third party as an independent The third party provided security for the loan to Anthony Wong, the beneficial owner of Megastar. As of the date of this announcement, the pledged shares represent approximately 60.49% of the company's issued share capital.

And this independent third party is Ren Yunan.

After possessing the identity of the actual controller, on April 30, 2018, Ye Yingzhou resigned as the chairman, chief executive officer and executive director of Advance Holdings. Two months later, Ren Yunan became the company's executive director, chairman and chief executive officer.

On July 23, 2018, in an interview, Ren Yunan said that in addition to the original foundation engineering business, it will also expand to the blockchain business in the future, and is now actively expanding the team. It is hoped that through the platform of the listed company, more Many people understand the application of blockchain and lay a solid foundation for the blockchain industry. In August, it signed a strategic agreement with the Hainan Provincial Department of Science and Technology to officially enter the blockchain.

On October 12, 2018, Wang Yiyu paid off the loan and interest, and the pledged shares were released.

On January 14, 2019, Xu Mingxing acquired 3.183 billion shares of Advance Holdings off-market at an agreed price of HK$0.152 per share, accounting for 60.49% of the issued voting shares, involving a capital of HK$484 million. After the share delivery is completed, Xu Mingxing and OK Group will become the actual controllers of Advance Holdings.

The buyers and sellers are OKC Holdings and Wang Yiyu's Right Star Investment Development Limited.

After the completion of the acquisition, on May 31, 2019, OKLink Fintech Limited (an indirect wholly-owned subsidiary of the Company) and Prime Trust, LLC entered into a technical service agreement and an API interface platform technology agreement to develop a platform that provides USDK services.

So far, Advance Holdings has officially set foot in the blockchain field, completing a magnificent turn from a company providing foundation engineering and construction waste treatment services to a financial technology company.

Winner Wang Yiyu

In the Ouke Group acquisition case, if the actual asset appreciation is used as a measure, the recognized winner is undoubtedly Wang Yiyu of Zhaoxing Investment Development Co., Ltd.

Wang Yiyu (fourth from right) graduated from Aalto University in Finland with an Executive Master of Business Administration degree. Since 2010, he has been conducting investment research on Internet technology and Internet operation management. Mr. Wang established a company in Singapore named Pinnacle Enterprise Pte. Ltd., which is mainly engaged in business management consulting services and other information technology and computer services. He is also a director of another company in Singapore, ECG Holdings (S) Pte. Ltd., which is mainly engaged in property development and construction business. He has been involved in the investment field for seven years and has gained a lot.

In this acquisition, Wang Yiyu bought 2.4 billion shares and 800 million shares on September 15, 2017 and November 15, 2017 respectively. After the shareholding increase, Zhaoxing and its persons acting in concert held 3,182,790,001 shares. Accounting for 60.49% of the issued shares. Its average purchase cost is HK$0.12363101 per share, and its total cost is HK$393,491,542.44. Based on the purchase price of OKC Holdings HK$0.152, within 15 months, only holding shares will make a profit of 22.9465%, with an annualized rate of return of 18.3572%, exceeding the annualized rate of return of most public offering funds.

Winner Xu Mingxing

In the acquisition of Ouke Group, if the behavior of Ouke Group is judged for the purpose of obtaining control rights at a reasonable price, then Ouke Group’s acquisition of the control of Advance Holdings at a price below the market price can also be said to be a victory, but this kind of Victory is more strategic than financial.

winning strategy

On September 4, 2017, the central bank and other seven ministries and commissions jointly issued the "Announcement on Preventing Financing Risks of Token Issuance", and domestically registered digital currency exchanges were closed one after another, including OKCoin. With the continuous tightening of policies and the country's support strategy for currency-free blockchains, Xu Mingxing is also catering to the wave and gradually stripping himself of the digital currency label.

He first separated the OK Group from the OKEx exchange through equity operations, and stepped down as OKEx CEO in February 2018. Then the OK Group was transformed into a blockchain technology development platform, and the OK Blockchain Engineering Institute was established, with Xu Mingxing as the dean.

At the same time, cooperation with the government has also been strengthened. In May 2018, with the support of the Beijing Financial Bureau, OK Blockchain Engineering Institute, as the initiator, established the Beijing Blockchain Ecological Investment Fund with a scale of 1 billion yuan, and Xu Mingxing was the main manager of the fund.

On November 28, 2019, the OK Group debuted under the new name "OKE". On December 1, the Hainan International Offshore Innovation and Entrepreneurship (Sanya) Pilot Zone was officially inaugurated. As one of the first batch of enterprises to settle in the pilot zone, Aoke Group appeared in the reports of Xinhua News Agency, China News Network and other media , It is reported that this is the first test zone listed since Hainan Province promoted the construction of the International Offshore Innovation and Entrepreneurship Demonstration Zone.

But in fact, OKC holdings still controls the digital currency exchange business of OKC Group, and Xu Mingxing still actually controls all the businesses of OKC Group with 52.32% of the shares.

After purchasing nearly 3.2 billion shares in January 2019, Ouke Group is still consolidating its absolute controlling stake, and added 700 million shares at a price of HK$0.1585 per share on April 10, 2019, making its equity The proportion reached 74.21%. Excluding the minimum public shareholding ratio of 25%, OKC's shareholding has almost reached its limit. At this time, OKC Group has absolute control within the legal framework.

failed finances

If liquidity is not considered, only the stock price is used as the basis for judgment. In terms of capital gains, Ouke Group has undoubtedly achieved positive returns on assets. Based on the cost of holding positions of HK$0.1585 per share and the floating profit on the book of holdings based on the closing price of HK$0.236 on March 2, it has reached 48.89%. But in fact, in terms of its million-level liquidity, the speed of the decline is immeasurable because there is no trading depth when selling stocks.

As a company closely related to construction, the development of Advance Holdings is limited by the unstable construction environment in Hong Kong. As the construction of public projects in Hong Kong reached its peak, the main business of Advance Holdings was increasingly severely impacted.

According to the 2017 annual report of Advance Holdings, in order to get rid of the restrictions of the main business difficulties, the group launched a securities investment business segment to achieve diversified development. The income from securities investment has improved the financial situation of Advance Holdings. Profit reached HK$25.4 million. In terms of main business, no progress has been seen in the 2018-2019 fiscal year. In the 2019 financial report, pre-tax profits began to show losses, and the final net loss was 23.3619 million Hong Kong dollars.

If we conduct a discounted cash flow valuation analysis based on its performance in the 2018 fiscal year before the completion of the acquisition, we can conclude that the unlevered cash flow is as follows.

In terms of investment value, when no new profit point is introduced, the target income of the advance holding company, which has just been renamed Okey Cloud Chain, is -69%, and the IRR is -17%.

Conclusion

Conclusion