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Listed 13 trading days share price soared 215 times, this Chinese stock what background?

By: Beatrice Aug. 03,2022
  On Aug. 2, EST, shares of Sunplus Digital Technology (HKD) continued to soar during the day, once rising more than 240% during the day. By the end of the day, the company's share price had risen back to 126.28% to $1,679 per share, up 215 times from its debut price of $7.8 per share.

  Notably, Sunseeker's latest market capitalization of $310.7 billion (about 209.8 billion yuan) surpassed those of companies including Chinese stock leaders Ali ($9.62, 2.28, 2.52%) ($245.3 billion), Jingdong ($59.73, 0.97, 1.65%) ($93.3 billion), Jindo ($4.98, 1.29, 2.70%) ( 61.9 billion USD), NetEase (90.6, -0.94, -1.03%) (59.5 billion USD), Baidu (134.16, -0.85, -0.63%) (46.4 billion USD) and a host of other leading Chinese stocks.

  The company was listed on the U.S. stock market on July 15, with an offering price of $7.8, raising about $125 million (about RMB 845 million).


  Is the concept of Li Ka-shing behind the surge?

  On July 15, 2010, Sunseeker launched its IPO on the U.S. stock market with an offering price of $7.8, raising about $125 million (RMB 845 million) and becoming the largest Chinese IPO on the NYSE in 2022.

  In the 10-odd trading days after the IPO, SunTrust's share price started a "wild ride". By the end of the last trading day in July, Sunseeker's share price soared to $400.25.

  Surprisingly, this may just be the beginning.

  As of the close of trading on August 2, Eastern time, Sunseeker's share price had soared to $1,679 per share. In just 13 trading days, Sunseeker's market capitalization has reached $310.7 billion, surpassing Chinese stock leader Alibaba's $245.3 billion. It is equivalent to 5 Poundland (PDD, share price $48.98, market cap $61.9 billion).

  AMTD Digital Inc is the Asian digital finance subsidiary of the Sunseeker Group, a spin-off of Sunseeker International, a financial services company also listed on the NYSE. Founded in 2003, Somerset Group is involved in financial services, digital technology, arts and culture, and entertainment, and one of its founding shareholders is Li Ka-shing's Cheung Kong Holdings and Hutchison Whampoa.

  According to public information, Sunseeker Group now holds 86.7% of Sunseeker International, but its shareholding structure has not been disclosed, so it is impossible to know exactly the value of Li Ka-shing's wealth gained in this "Chinese stock myth". If its shareholding ratio exceeds 25%, the present value will reach 100 billion yuan.

  The shareholding structure of Sunseeker before its IPO shows that Sunseeker Group was the controlling shareholder of Sunseeker at that time, with a 72.2% shareholding; Sunseeker Education and Sunseeker Real Estate both had a 16.2% shareholding; and Sunseeker International had a 14.4% shareholding. In addition, the company also introduced Wireless Power Investment Company and Value Partners Greater China High Yield Fund. The Daily Economic News also noted that Sunseeker's shareholders also include the Greater Bay Area Common Home Fund, Value Partners, one of Asia's largest independent asset management firms, and Jiayou Fund, founded by former Ali CEO Weizhe.

  I think (the surge of Sunseeker) may have something to do with some of Li Ka-shing's concepts, after all, Li Ka-shing's name is quite famous in Asia," said Sham Chi-yung, a strategist at Baihui Securities in Hong Kong, China, to the Daily Economic News via WeChat. Now that the company is listed in the U.S., investors in the U.S. may also have a certain vision. The valuation of Shangye Digital Technology has been high in the same industry, so if investors are interested in this company, they must pay attention to the risk."

  It is worth noting that with the help of many well-known shareholders, the company has completed several investments previously.

  According to the prospectus, in fiscal years 2019, 2020 and 2021 (as of April 30), Sunseeker's revenue will be generated primarily from fees and commissions from its digital financial services business and its "spider web" ecosystem solutions business. The "spider web" ecosystem serves to connect and re-enable multiple resources. According to the company, partners from various sectors, including digital and traditional finance, technology, and academic institutions, can be connected in the Spider Web ecosystem, which provides customers with capital, technology, guidance and other resources to accelerate and enhance the digital transformation of their businesses.


 

  In terms of performance, the prospectus disclosed that for the fiscal years 2019, 2020 and 2021 ending April 30, Somerset Digital's customer contract revenue is HK$14.554 million, HK$168 million and HK$196 million, respectively; and its profit for the same period is HK$21.544 million, HK$158 million and HK$172 million, respectively.


  In the face of the wild share price fluctuations, Sunseeker recently issued a press release, which mainly reads: firstly, it thanked the investors for their love to the company; secondly, since the IPO, there have been drastic fluctuations in the share price, but there are no significant changes in the company's fundamentals; finally, Sunseeker said it will also closely monitor the market in case of any unusual trading activities or abnormalities.
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