Here’s the real way to play the Chinese stock market, Goldman-style.
A Chinese meatpacking company, Henan Shuanghui (000895 CH) is about to turn its army of Chinese managers into very wealthy individuals, after undergoing what appears to have been a savvy restructuring process.
A Goldman joint venture named ‘Rotary Vertex’ was part of the deal, and we’ll guess the brains behind it as well.
Shares of Henan Shuanghui were suspended from trading since March due to an assets restructuring exercise planned by its parent company, Henan Shuanghui Group which will inject all its assets related to the meat business into Henan Shuanghui Investment and Development.
According to the report, 300 senior managers of Henan Shuanghui Group currently hold an estimated four billion yuan worth of the company’s stock. Upon the lifting of the restrictions, each of the senior managers would become a multimillionaire.
Basically, they’re pumping assets from the listed company’s unlisted parent into the listed entity, and then letting the stock market rejoice. This is how a lot of Chinese managers have become very rich; by tapping the government-promoted stock market and its love of potential parent company asset injections such as the above.