- Leshi Internet Information & Technology Corp. (300104.SZ) plans to inject its financial services unit into its listed platform, according to Tencent Tech.
- The news will be confirmed as soon as next week.
Why It Matters:
- Leshi Financial Unit was established in 2015 and it has been involved in several business sectors including micro loans, online insurance sales, and mutual funds sales. The unit used to be under the control of Jia Tingyue, the Chairman of Leshi Internet Information & Technology, which has little connection with the listed platform.
- Since last year, Leshi has been having severe liquidity issues due to the rapid expansion of its cellphone and automobile businesses. The company has taken several measures including seeking a private placement and conducting a restructure, but its share price remains under huge pressure.
- The financial units are regarded as the most valuable assets of Chinese internet companies and they are usually set up as separate entities so that the founder can cash out the businesses. The injection of Leshi financial indicates the liquidity situation of Leshi has continued to deteriorate and the situation might become even worse.