Not long ago, Jindi Shares took advantage of loopholes and shorted itself to cash out 200 million. Liu Shuwei was so angry that he cursed: Treating the stock market as a cash machine and stealing money openly! But I didn’t expect that each mountain is higher than the other. Master Lu, a Hong Kong-listed company invested by 360, openly played a "pig-killing game" in the stock market and toyed with investors.

It can only be said that Zhou Hongyi "cut leeks" again, and this trick is very powerful.

Why do you say that? You will know after reading below.


The stock market’s “Pig Killing Plan” trilogy: announcing dividends to drive up stock prices → major shareholders reducing their holdings → canceling dividends

Master Lu believes that many people have heard of or used it. In the stock market, this stock is also somewhat famous because it is so stingy.

It was listed in October 2019. It has been almost four years since its listing. However, it only paid dividends once at the beginning of its listing. In the following four years, it has not paid any dividends once. The reason is certainly not because of lack of money. In fact, Master Lu still has a lot of cash on hand.

Results in 2022 show that Master Lu achieved operating income of 359 million yuan, a year-on-year increase of 6.27%, and net profit reached 60.486 million yuan, a year-on-year increase of 9.90%. At this time, Master Lu had more than 530 million in cash and cash equivalents in his account.

The 2023 interim report shows that Master Lu has more than 470 million in cash and cash equivalents on his account, and together with 30 million in time deposits, there are also 500 million.


Shortly after the interim results were released, Master Lu finally said he would pay dividends.

On September 11, Master Lu issued an announcement stating that the board of directors will be convened on September 21 to consider the proposal of declaring special dividends to shareholders.

As soon as the news came out, many investors were shocked. Based on the closing stock price of HK$1.120 on the day of the announcement, Master Lu’s market value is only HK$300 million, which is more than 280 million yuan.

The cash in hand is nearly twice the market value. The key is that the stock price is also low, only about HK$1. Therefore, many investors believe that Master Lu has the potential to pay high dividends.

After the announcement of the proposed dividend payment, Master Lu’s stock price rose rapidly. On September 12th alone, it soared 50%, and the cumulative increase in six trading days was nearly 70%! At its peak, the stock price rose to HK$1.940 per share.

However, there was a sentence in bold at the bottom of the announcement that many people ignored:

As the Board of Directors may not approve the proposed special dividend at the Board meeting, shareholders of the Company and potential investors are advised to exercise caution when dealing in the shares of the Company.

The sudden change occurred the day before the board meeting. On September 20, Master Lu, whose trading volume had always only been in the hundreds of thousands, suddenly surged to 44.03 million shares. The stock price plummeted 47.37% that day to HK$1.00.

That night, Master Lu hurriedly issued an announcement to explain. The wording of the announcement is also quite interesting.


To translate, it’s: We don’t know what’s going on, we are very disciplined. But we checked and found that the company's major shareholder Chengsheng just informed the board of directors that they sold 34.343 million shares of the company today, reducing their holdings by 12.77%.

Based on the closing price of the day, Chengsheng cashed out HK$34.34 million this time.

However, some investors are also confused. Dividends are about to be paid. What is the purpose of selling at this time?

Immediately afterwards, they were "fried" by Master Lu's sexy moves.

On the evening of September 21, on the day of the scheduled board meeting, Master Lu issued another announcement stating that due to unusual fluctuations in stock prices and trading volume the previous day, in order to fully assess the impact of the announcement of special dividends, the board meeting was canceled.


On September 22, Master Lu’s stock price fell 16% at the opening, and then fluctuated repeatedly. The highest intraday drop reached 20.35%. It closed down 8.85% to HK$1.030. In the past three trading days, Master Lu’s share price has fallen by more than 45%.

Shareholders were even more angry. After the announcement of the cancellation of the board meeting was released, many stockholders gathered together to call investors to complain to the Hong Kong Securities and Futures Commission, believing that Master Lu "maliciously released dividend information and promoted bulk stocks."



The "red-dressed leader" behind the scenes is at the forefront again

So, what is the origin of this "dividend reduction" of Master Lu's major shareholder Chengsheng?

According to the financial report, Chengsheng is the major shareholder of Master Lu. At the end of 2022, Chengsheng held a total of 82,745,082 shares of Master Lu, accounting for 30.76% of the total issued shares.


After this reduction, Chengsheng’s shareholding was reduced to 48,402,082 shares, and its shareholding ratio was also reduced to 17.99% of the total number of issued shares.

And behind Chengsheng is 360.

According to financial report disclosures, Chengsheng is wholly-owned by 360 Technology, and 360 Technology is wholly-owned by 360. 360 was eventually owned by Zhou Hongyi and Qixin Zhicheng.

In fact, from Master Lu’s full name - 360 Master Lu Holdings Co., Ltd., we can see that it has a close relationship with 360.

It is reported that Master Lu is a project in the 360 ​​incubation plan. According to public financial reports, Master Lu generated a cumulative net profit of 478 million yuan attributable to the parent company from 2016 to June 2023. Based on the 30% equity held by 360, Master Lu has contributed a total of approximately 187 million yuan in profits to 360 since he turned around in 2015.

According to the financial report, 360 Technology, 360, Zhou Hongyi and Qixin Zhicheng are each deemed to be interested in all the shares held by Chengsheng. Chengsheng has long entrusted Master Holdings to exercise all the rights of its shareholders. Master Holdings is wholly owned by Master Lu’s chairman Tian Ye.

Therefore, after this reduction, the equity shares of Master Holdings and Ye Ye have also been reduced to 94,321,057 shares, and the proportion of shares held in the total issued shares has been reduced from 47.83% to 35.06%.

Seeing this, the context is very clear. I believe that the only person who can decide to reduce Chengsheng's holdings is Zhou Hongyi himself.

This is not the first time Zhou Hongyi has been on the forefront. Earlier this year, Zhou Hongyi also reduced his holdings due to divorce, causing market controversy.

In April this year, 360 took advantage of the ChatGPT trend, and its stock price rose by as much as 40% during the year. However, when the stock price continued to rise, 360 revealed the news that the actual controller was divorced.

On April 4, 360 issued an announcement stating that the company’s chairman, Zhou Hongyi, was dividing his property due to the dissolution of his marriage to Ms. Hu Huan, and planned to transfer the 446,585,200 shares of 360 directly held by him (accounting for approximately 6.25% of the company’s total shares) to Ms. Hu Huan’s name through non-transaction transfer.

Based on the closing price of 360 on April 4, the market value of the equity allocated to Zhou Hongyi’s wife is close to 9 billion yuan.

There was "divorce reduction" 360 before, and later there was "dividend reduction" Master Lu. Netizens couldn't help but ridicule, the red-dressed leader is so fun!


Source|Deep Blue Finance

Written by | Wu Ruixin