Zhu Linyao, the actual controller of Huabao, was put on file for investigation because of illegal issues. (Image source: Adobe stock)
[Watch China, January 30, 2022]A few days ago, ChinatobaccoA big event was circled.Huabao sharesthe actual controllerZhu LinyaoA case has been filed for investigation for violations of the law. To be honest, this is quite serious. Why do you say that?
Generally speaking, the owner of a private enterprise has nothing to do with the supervisory authority. Because they mainly focus on people who carry iron jobs, if the boss is involved in the case, most of them cannot do without the shady secrets such as power and money transactions.
Moreover, Huabao shares are involved in the richest tobacco industry. In the context of the continuous turmoil in the tobacco system in the past two years, this news is even more intriguing.
In August 2021, Liu Jianfu, deputy general manager of Hunan China Tobacco, was suspected of serious violations of discipline and law and voluntarily surrendered to the case; in October 2020, Lu Ping, general manager of Hunan China Tobacco, was suspected of serious violations of discipline and law, and was subject to disciplinary review and supervisory investigation.
These companies are all Warburg customers. Seeing that there were suspicions in the market, Huabao hurriedly stood up and made a clarification, to the effect that although the company’s chairman, CEO, executive director and controlling shareholder Zhu Linyao were investigated, the production and operation were all normal. plate.
As for whether such a statement is convincing, you will know by looking at the stock price.
Zhu Linyao has two listed companies, one is Hwabao International in Hong Kong stock, and the other is Hwabao shares in A shares. On the day of January 24, one of the two troubled brothers plunged 66% and the other fell 20% and was sealed on the daily limit.
Sometimes, you really can’t blame investors for being unkind.
You must know that tobacco belongs to the state monopoly industry, and Huabao, which started with tobacco flavors, belongs to the kind of vines that are attached to towering trees. Although it can “win” old smokers with its flavor, it is difficult to dominate its own destiny.
In addition, Boss Zhu has always shown a low-key image, and even Hurun himself, who specializes in ranking the rich and personally put her on the list, knows very little about her situation. Over time, it turned the low-key into a mystery.
Because it’s too mysterious, it’s hard to predict how bad this thing will go, so let’s just dump the stock first.
However, considering the process of her making a fortune, it is really necessary to keep a low profile.
According to public information, Zhu Linyao’s family background is average, but in the 1990s, Zhu Linyao, who was just in his 20s, opened a company in Beijing and started a flavor and fragrance trade. Most people in their 20s have just started working, but they go directly to the sea and become their bosses. This courage is indeed quite unusual.
But to be honest, no matter how good the flavor business is, it can’t support Boss Zhu’s worth of tens of billions.
The upper and lower limits of this thing have been nailed down. Go up, there are several major foreign flavor giants, and there is nothing to do with R&D and technology; down, it is a bunch of domestic competitors, just dig a few backbones and buy some Materials and equipment can set up a decent production line.
Flavor is mainly divided into three categories, edible, daily use and tobacco. The first two are big red seas, and the latter one is sure to make huge profits, but the threshold is not generally high. But the fledgling Zhu Linyao is eyeing the more monopolized and more profitable tobacco flavors.
However, this money is not so easy to make.
Although cigarettes are inseparable from flavors, it is obvious who said it in the market. In this turbulent place, with no connections or family support, no matter how capable Hua Mulan is, she can’t hold back her charms, until Zhu Linyao met her husband, Lin Guowen.
Speaking of which, Lin Guowen is also a powerful character.
As a native Guangdong electric white man, he has unique advantages in the fragrance chemical industry. You must know that among the more than 20 tobacco-specific flavoring manufacturers designated by the State Tobacco Monopoly Administration, as many as 16 are operated by electric white people.
As the so-called fellow villager sees fellow villager, tears well up, what’s so difficult that a phone call can’t handle it?
Interestingly, Zhu Linyao, who was married, did not retreat behind the scenes to become a rich wife, but instead took up a whole family business. It was Lin Guowen, who used to be a leader in the Guangdong Dianbai fragrance circle, and gradually disappeared from people’s attention. in view.
In hindsight, it was a wise decision. Under the strong alliance of the management brains and contacts of the two sides, Huabao gradually became entangled in the umbrella of the big tree of tobacco.
●In 2001, Yunnan Tianhong, a joint venture established by Huabao and Hongta Group, became the main supplier of Hongta’s Yuxi and other cigarette brands;
●In 2003, Qingdao Huabao, a joint venture established by Huabao and Yizhong Group, became the main supplier of cigarette brands such as Hadmen under Yizhong;
●In 2005, Huabao acquired 51% equity of Guangzhou Huafang, and the remaining 49% was held by Guangdong Provincial Company of China National Tobacco Corporation…
●In 2006, Zhu Linyao packaged his flavor and fragrance business into a listed company, and Huabao International officially landed on the Hong Kong Stock Exchange. That is, in that year, Zhu Linyao entered the Forbes China Rich List with a net worth of 8.66 billion and became the veritable richest woman in western Guangdong.
At present, the top ten cigarette companies, including China Tobacco, are the final customers of Huabao International, such as Hongmei, Baisha, Honghe, Huangguoshu, Shuangxi and other cigarette brands.
At the most exaggerated time, there was such a joke circulating on the Internet:
If Warburg is closed, the smokers of high-end cigarettes should slap the table: the smell of this cigarette is not right, fake cigarettes!
For Zhu Linyao, who went to sea for business at the age of 20 and made her wealthy husband retreat behind the scenes, listing is only a means, not an end.
In addition to being able to handle big state-owned enterprises, Zhu Linyao’s efforts in cutting leeks also made Hong Kong people suffer enough and gave her the nickname “Pumping Queen”.
Also, the stock and market value are false, only the cash in hand is the most practical.
At the beginning of the listing, Zhu Linyao actually held 74.9% of Huabao’s shares. In the following four years, Huabao International’s share price soared 10 times. Boss Zhu cashed out all the way. By 2010, the shareholding ratio dropped to less than 40%. , according to some statistics, a total of 9.5 billion Hong Kong dollars in hand.
Just cash out. After the stock market crash in 2015, Huabao’s stock price plummeted. In November 2016, Zhu Linyao issued an announcement saying that it would be privatized. At that time, the stock price was 3.02, which was very cheap. The price she gave was 3.3. This premium was too small, and investors would definitely not be willing to sell it.
But she bought very slowly, and the stock price did not rise. By the end of January 2017, the stock held by Zhu boss still did not meet the requirements of privatization, but the stock she held had reached the level of 73.8%.
Only then did Hong Kong investors understand that this privatization was just a pretense, and the privatization was finally over, but the equity was legally and compliantly returned to its original owner!
In the following four years, Huabao’s share price has risen from more than 3 yuan to more than 20 yuan, a seven or eightfold increase. The financial skills are really high.
Playing Hong Kong stocks alone is not enough, and the next step is to toss A-shares. In March 2018, Huabao shares went to the GEM with the flavor business that was spun off, and it also caused a lot of waves for a while.
Interestingly, the company’s registered address is not in Shanghai, where they made their fortune, but in Lhasa, Tibet, thousands of miles away.
As for the specific reasons, it is impossible to know. For Boss Zhu, who is worth tens of billions of dollars, it can’t be to win tax incentives and occupy a place in the college entrance examination, right?
In the past two years, Boss Zhu, who has been keeping a low profile, seems to have sensed a danger signal, and the pace of cashing out and pumping has accelerated.
At the time of listing, they raised 2.3 billion yuan, 649 million yuan was to supplement working capital, and the rest were invested in projects, but progress was slow. Just one year later, Huabao shares said that it would distribute dividends. How to distribute them? A cash dividend of 40 yuan was distributed for every 10 shares, which was calculated to be 2.463 billion yuan in cash, which was the highest dividend of A-shares at that time.
This is more than the money raised, in other words, the money raised from the shareholders is all divided…
Some people say that dividends are also to reward investors. Is there a problem?
According to public information, Zhu Linyao indirectly holds 73.60% of Huabao International, while Huabao International holds 100% of Huafeng China, and Huafeng China holds 81.1% of Huabao shares, that is to say, Zhu Linyao holds nearly 60% of the shares. Huabao shares, such a generous dividend, needless to say who is the biggest beneficiary.
Now that I think about it, I am afraid that everything has been foreshadowed, and I will wait for the results of the investigation.
Responsible editor: Xin He Source: Big Cat Finance
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