Summary:
1. FLJ
FLJ
is an idol empty BVI shell company worth less than $5 million but can potentially help raise more than $50 million, which is over 10 times.
2. Recent suspicious transaction indicates this is already happening!
3. A lot of Chinese technology companies are trying to get list via a SPAC! It might be a growing technology company in China.
1. An Idol Empty BVI Shell Company – QK365.com
China-based Q&K was founded in 2007 and operates a long-term apartment rental platform in China and is focused on providing young, emerging urban residents with ready-to-move-in and affordable branded apartments.
According to their original 20-F SEC filling report: “we lease apartments from landlords and transform these apartments, mostly from bare-bones condition, into standardized furnished rooms to lease to people seeking affordable residence in cities, following an efficient, technology-driven business process.” “We cooperate with third parties, including professional home service providers, e commerce companies and other service providers to facilitate a wide array of value-added services for our tenants.” And “also cooperate with financial institutions to facilitate rental installment loans for our tenants in need”.
Therefore, based on their description, their core business model back to 2019 was “middleman landlord + Microloan lenders + mobile applications” it’s like a company that highly dependent on the funds but use its mobile applications as a “technology company” coat.
The financial condition about this company was also extremely horrible. As of June 30, 2019, the company had $49.8 million in cash and $393.8 million in total liabilities. Free cash flow during the twelve months ended June 30, 2019, was a negative ($80 million). In 2019, Q&K filed to raise $100 million in gross proceeds from an IPO of ADSs representing underlying Class A shares. In the end it only raised $46 million according to USCC.gov records.
In Sep 2022, Company filled a FORM 6-K, hold press released the Company has changed its corporate name from “Q&K International Group Limited” to “FLJ Group Limited”, effective on September 13, 2022, and Company also filled its FORM F-3. Under the Form F-3, it clear state: they transferred all of their equity interest and liability to WFOE, and in their business model description, there’s no more descript about “microloan lenders”.
As we might all be aware, as a middleman landlord, they typically do not own any of those properties, but they owe the liability to the landlord. While they transferred all their liabilities to WFOE, in the meantime, they also transferred their right to use the land as a “middleman landlord” to WFOE as well.
Based on finance information they subjected to SEC, the land use rights are gone. And the long-term deferred rent is gone as well.
Something more interesting about this company is the official website of this Q&K company QK365.com is already off sites. All the left on internet is only an IR site called FenglinJu ir.qk365.com/ (which only can be visit from outside of China.) Their QK applications are already can not be found both on Google play and Apple store.
All of these matters indicate this company is not operating anymore, and it is an empty shell company but still listed on Nasdaq.
From its recent corporate structure map, Q&K already removed Q&K finance outside of its structure. The actual company controlled through its BVI structure is a tiny company named Chengdu Liwu Apartment management. And according to our research, this small management company have no properties under management and registration capital of this company is only 1 million RMB.
As sources published in March 2022, USCC.gov. QK’s market cap was less than $5 million already. However, based on research and all facts the posted, it might less than $1 million.
As they keep transferring all debts to WFOE, FLJ will become a perfect Empty BVI SHELL company with not liability at all but still listed on US stock exchange market.
2. Recent suspicious transaction indicates this is already happening!
Right before FLJ filled in name change on FORM 6-K and F-3, there’s two big turnover transactions caught up on the secondary market occurred on July 29th and Oct 12th worth over 18 million. The company stock has raised over 87% in past Dec, which is abnormal for a company like this.
Therefore, I believe the transaction is already happening and it’s about to done.
3. A lot of Chinese technology companies are trying to get list via a SPAC! It might be a technology company in China.
A SPAC goes public as a shell company using an IPO for the purpose of merging with or acquiring a yet-to-be-identified private operating company. Generally, within two years, the SPAC combines with the private company via a de-SPAC merger, with the resulting company becoming public and receiving a combination of the SPAC’s IPO proceeds and additional capital from a private financing.
By going public via a SPAC, companies can have more certainty as to the amount raised, potentially a shorter timeframe than the traditional IPO process, access to liquidity that might not otherwise be available to them, and a strategic partnership with an experienced management team that the SPAC’s sponsors put together.
As Reuters report: “Capital-hungry smaller Chinese startups are vying for speedy offshore listings by merging with blank-check firms at a time when Beijing's tighter scrutiny has slowed capital raising via overseas IPOs” “As a string of special purpose acquisition companies (SPACs) hunt for targets to merge with, the startups see an opportunity to raise funds and get listed by cutting the time and regulatory rigour needed for traditional market debuts”.
Between 2019 and 2021, 10 Chinese firms raised $2 billion via mergers with U.S.-listed SPACs, according to SPAC specialist investment bank Chardan.
As what discussed about what have been left for FLJ, the FLJ is just an empty BVI SHELL company with no business at all. Therefore, the price for this SHELL might be less than $1 million, however, if a technology company uses this shell to go public, it can potentially help this company raise more than $46 million from the secondary market.
If we put all these back to stock price effects, this stock could potentially go up to $60/share, which is over 30 times compared to the stock price right now. Needless to say, I believe that FLJ is a must-own investment and 1st ten bagger in 2023.
From tech side of analysis,
FLJ
is already start to break up, and It will go up quick!
Please feel free to express your ideas and thoughts in the comment section.
Source:
https://last10k.com/secfilings/QK#ITEM_4A_UNRESOLVED_STAFF_COMMENTS
https://www.uscc.gov/sites/default/files/202203/Chinese_Companies_on_US_Stock_Exchanges.pdf
https://www.reuters.com/markets/deals/chinese-startups-spac-listings-gather-pace-tougher-offshore-ipo-rules-loom-2022-03-10/
1. FLJ
FLJ
is an idol empty BVI shell company worth less than $5 million but can potentially help raise more than $50 million, which is over 10 times. 2. Recent suspicious transaction indicates this is already happening!
3. A lot of Chinese technology companies are trying to get list via a SPAC! It might be a growing technology company in China.
1. An Idol Empty BVI Shell Company – QK365.com
China-based Q&K was founded in 2007 and operates a long-term apartment rental platform in China and is focused on providing young, emerging urban residents with ready-to-move-in and affordable branded apartments.
According to their original 20-F SEC filling report: “we lease apartments from landlords and transform these apartments, mostly from bare-bones condition, into standardized furnished rooms to lease to people seeking affordable residence in cities, following an efficient, technology-driven business process.” “We cooperate with third parties, including professional home service providers, e commerce companies and other service providers to facilitate a wide array of value-added services for our tenants.” And “also cooperate with financial institutions to facilitate rental installment loans for our tenants in need”.
Therefore, based on their description, their core business model back to 2019 was “middleman landlord + Microloan lenders + mobile applications” it’s like a company that highly dependent on the funds but use its mobile applications as a “technology company” coat.
The financial condition about this company was also extremely horrible. As of June 30, 2019, the company had $49.8 million in cash and $393.8 million in total liabilities. Free cash flow during the twelve months ended June 30, 2019, was a negative ($80 million). In 2019, Q&K filed to raise $100 million in gross proceeds from an IPO of ADSs representing underlying Class A shares. In the end it only raised $46 million according to USCC.gov records.
In Sep 2022, Company filled a FORM 6-K, hold press released the Company has changed its corporate name from “Q&K International Group Limited” to “FLJ Group Limited”, effective on September 13, 2022, and Company also filled its FORM F-3. Under the Form F-3, it clear state: they transferred all of their equity interest and liability to WFOE, and in their business model description, there’s no more descript about “microloan lenders”.
As we might all be aware, as a middleman landlord, they typically do not own any of those properties, but they owe the liability to the landlord. While they transferred all their liabilities to WFOE, in the meantime, they also transferred their right to use the land as a “middleman landlord” to WFOE as well.
Based on finance information they subjected to SEC, the land use rights are gone. And the long-term deferred rent is gone as well.
Something more interesting about this company is the official website of this Q&K company QK365.com is already off sites. All the left on internet is only an IR site called FenglinJu ir.qk365.com/ (which only can be visit from outside of China.) Their QK applications are already can not be found both on Google play and Apple store.
All of these matters indicate this company is not operating anymore, and it is an empty shell company but still listed on Nasdaq.
From its recent corporate structure map, Q&K already removed Q&K finance outside of its structure. The actual company controlled through its BVI structure is a tiny company named Chengdu Liwu Apartment management. And according to our research, this small management company have no properties under management and registration capital of this company is only 1 million RMB.
As sources published in March 2022, USCC.gov. QK’s market cap was less than $5 million already. However, based on research and all facts the posted, it might less than $1 million.
As they keep transferring all debts to WFOE, FLJ will become a perfect Empty BVI SHELL company with not liability at all but still listed on US stock exchange market.
2. Recent suspicious transaction indicates this is already happening!
Right before FLJ filled in name change on FORM 6-K and F-3, there’s two big turnover transactions caught up on the secondary market occurred on July 29th and Oct 12th worth over 18 million. The company stock has raised over 87% in past Dec, which is abnormal for a company like this.
Therefore, I believe the transaction is already happening and it’s about to done.
3. A lot of Chinese technology companies are trying to get list via a SPAC! It might be a technology company in China.
A SPAC goes public as a shell company using an IPO for the purpose of merging with or acquiring a yet-to-be-identified private operating company. Generally, within two years, the SPAC combines with the private company via a de-SPAC merger, with the resulting company becoming public and receiving a combination of the SPAC’s IPO proceeds and additional capital from a private financing.
By going public via a SPAC, companies can have more certainty as to the amount raised, potentially a shorter timeframe than the traditional IPO process, access to liquidity that might not otherwise be available to them, and a strategic partnership with an experienced management team that the SPAC’s sponsors put together.
As Reuters report: “Capital-hungry smaller Chinese startups are vying for speedy offshore listings by merging with blank-check firms at a time when Beijing's tighter scrutiny has slowed capital raising via overseas IPOs” “As a string of special purpose acquisition companies (SPACs) hunt for targets to merge with, the startups see an opportunity to raise funds and get listed by cutting the time and regulatory rigour needed for traditional market debuts”.
Between 2019 and 2021, 10 Chinese firms raised $2 billion via mergers with U.S.-listed SPACs, according to SPAC specialist investment bank Chardan.
As what discussed about what have been left for FLJ, the FLJ is just an empty BVI SHELL company with no business at all. Therefore, the price for this SHELL might be less than $1 million, however, if a technology company uses this shell to go public, it can potentially help this company raise more than $46 million from the secondary market.
If we put all these back to stock price effects, this stock could potentially go up to $60/share, which is over 30 times compared to the stock price right now. Needless to say, I believe that FLJ is a must-own investment and 1st ten bagger in 2023.
FLJ
is already start to break up, and It will go up quick! Please feel free to express your ideas and thoughts in the comment section.
Source:
https://last10k.com/secfilings/QK#ITEM_4A_UNRESOLVED_STAFF_COMMENTS
https://www.uscc.gov/sites/default/files/202203/Chinese_Companies_on_US_Stock_Exchanges.pdf
https://www.reuters.com/markets/deals/chinese-startups-spac-listings-gather-pace-tougher-offshore-ipo-rules-loom-2022-03-10/