Why do Chinese companies have so many subsidiaries

[rukawa]

Its basically a dis-qualifier for me if a small company has more than 5 subsidiaries. I have found that its frequently the case that there are small Chinese companies with tonnes of subsidiaries such as this one:

 

emperor watch subsidiaries

 

or this one:

 

 

easy repay

 

 

The subsidiaries have weird names like super luck investments or happy good ltd. I just wonder if there was anyone who has insight into the game that is being played. I have no intention of investing in these companies. I just want to know why they do all this.

[ccplz]

What's wrong with having subsidiaries

[rukawa]

What's wrong with having subsidiaries

 

There is nothing wrong with it if it makes sense. With most of these companies it doesn't make sense. A 30 million company that has subsidiaries which invest money, run golf courses, operate in social media etc...doesn't make sense.

[thowed]

This might be of interest:

 

https://webb-site.com/articles/enigma.asp

 

If you don't know him, he's a legend in HK corporate governance.  Not long after he put this out, a load of the companies' share prices bombed.

 

Again, not to say all Chinese companies with lots of subsidiaries are bad, but murky patterns of cross-holdings need to be checked.

[Morgan]

This might be of interest:

 

https://webb-site.com/articles/enigma.asp

 

If you don't know him, he's a legend in HK corporate governance.  Not long after he put this out, a load of the companies' share prices bombed.

 

 

This site is incredible. Thanks!

[rukawa]

Just thought I would post this since we are talking about scam chinese companies. This one doesn't have many subsidiaries but their investment page is hilarious. Probably the funniest investor relations page I have ever read;

http://www.sippinternational.com/