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子弹财经
wrote a column · Jul 29 05:44

Cashing out of BlueFocus for a massive profit of RMB 1.5 billion—where is Lakala’s next 'cash cow'?

Produced by | Bullet Finance Author | Qiong Ma Editor | Egg Chief Art Direction by | Qianqian Reviewed | Songwen Recently, Lakala, a veteran in the payments industry, released its earnings guidance for the first half of 2026, revealing a clear divergence in profitability. According to the earnings guidance, Lakala’s attributable net profit for the first half of 2026 is expected to be between RMB 610 million and RMB 700 million, representing a year-over-year increase of up to over 200%. However, its net profit excluding non-recurring gains and losses is only projected at RMB 190 million to RMB 240 million. The roughly RMB 5 billion gap between the two figures primarily stems from gains on the disposal of its stake in BlueFocus. (Image / Lakala announcement) Combined with proceeds from its stake reduction in 2025, Lakala has reaped total investment gains of RMB 15.26 billion over two years from this equity investment, making it the cornerstone of its reported profits. This substantial one-off gain originates from founder Sun Taoran’s three-decade-long capital strategy: from co-founding BlueFocus, to Lakala’s acquisition of the stake, and finally cashing out at peak prices—a complete playbook of equity maneuvering. However, while investment gains have temporarily boosted profits, they cannot mask the underlying weakness in its core business over the long term. Since the 'transaction code-switching' controversy in 2022, Lakala’s gross margin has failed to show meaningful improvement. Its traditional bank card acquiring business has been shrinking, while new ventures such as cross-border payments, SaaS, and AI remain in early development stages. With its Hong Kong IPO filing imminent, major shareholders have successively reduced stakes, collectively cashing out over RMB 1 billion. How long can this profit story, propped up by investment gains, last? Can its three key transformation initiatives fill the profitability gap left by its core business? 1. A Three-Decade Equity Maneuver Lakala becomes...
Produced by | Bullet Finance
Author | Qiong Ma
Editor | Egg Chief
Art Direction by | Qianqian
Reviewed | Songwen
Recently, Lakala, a veteran in the payments industry, released its earnings guidance for the first half of 2026, revealing a clear divergence in profitability.
According to the earnings guidance, Lakala’s attributable net profit for the first half of 2026 is projected at RMB 610 million to RMB 700 million, representing a year-on-year increase of up to over 200%. However, its net profit excluding non-recurring gains and losses is only expected to be between RMB 190 million and RMB 240 million. The roughly RMB 5 billion gap primarily stems from gains realized through the full divestment of its stake in BlueFocus.
Produced by | Bullet Finance Author | Qiong Ma Editor | Egg Chief Art Direction by | Qianqian Reviewed | Songwen Recently, Lakala, a veteran in the payments industry, released its earnings guidance for the first half of 2026, revealing a clear divergence in profitability. According to the earnings guidance, Lakala’s attributable net profit for the first half of 2026 is expected to be between RMB 610 million and RMB 700 million, representing a year-over-year increase of up to over 200%. However, its net profit excluding non-recurring gains and losses is only projected at RMB 190 million to RMB 240 million. The roughly RMB 5 billion gap between the two figures primarily stems from gains on the disposal of its stake in BlueFocus. (Image / Lakala announcement) Combined with proceeds from its stake reduction in 2025, Lakala has reaped total investment gains of RMB 15.26 billion over two years from this equity investment, making it the cornerstone of its reported profits. This substantial one-off gain originates from founder Sun Taoran’s three-decade-long capital strategy: from co-founding BlueFocus, to Lakala’s acquisition of the stake, and finally cashing out at peak prices—a complete playbook of equity maneuvering. However, while investment gains have temporarily boosted profits, they cannot mask the underlying weakness in its core business over the long term. Since the 'transaction code-switching' controversy in 2022, Lakala’s gross margin has failed to show meaningful improvement. Its traditional bank card acquiring business has been shrinking, while new ventures such as cross-border payments, SaaS, and AI remain in early development stages. With its Hong Kong IPO filing imminent, major shareholders have successively reduced stakes, collectively cashing out over RMB 1 billion. How long can this profit story, propped up by investment gains, last? Can its three key transformation initiatives fill the profitability gap left by its core business? 1. A Three-Decade Equity Maneuver Lakala becomes...
(Image / Lakala announcement)
Combined with proceeds from divestments in 2025, Lakala has cumulatively generated RMB 15.26 billion in investment income from this equity position over two years, which has become the core driver of its reported profits.
This substantial one-time gain originates from founder Sun Taoran’s capital strategy spanning three decades: from co-founding BlueFocus, to Lakala acquiring the stake, and finally cashing out at peak valuations—a complete sequence of equity maneuvering. However, while such investment gains temporarily boost profits, they cannot mask the underlying weakness in Lakala’s core business over the long term.
Since the 'transaction code switching' controversy in 2022, Lakala’s gross margin has failed to show significant improvement. Its traditional bank card acquiring business has continued to shrink, while newer ventures—including cross-border payments, SaaS, and AI—are still in early development stages.
With a Hong Kong IPO filing looming and major shareholders having conducted successive share sales totaling over RMB 10 billion in proceeds, how long can this profit narrative—propped up by investment gains—last? Can Lakala’s three key transformation initiatives fill the profitability gap left by its core business?
1. A Three-Decade Equity Maneuver
Founded in 2005, Lakala was among the first batch of companies to receive a Payment Business License from the People’s Bank of China in 2011. It listed on the Shenzhen Stock Exchange on April 25, 2019, becoming China’s first publicly traded company in the digital payments sector. Lakala’s founder, Sun Taoran, is also a co-founder of BlueFocus.
Public records show that in 1996, Sun Taoran co-founded BlueFocus with Zhao Wenquan and three others. The company later became China's first publicly listed PR firm and Asia's largest marketing communications group. Reports indicate that BlueFocus was primarily managed by Zhao Wenquan, while Sun Taoran focused more on subsequent entrepreneurial ventures.
In March 2016, the five founders of BlueFocus terminated their concert party agreement, making Zhao Wenquan the sole actual controller.Sun Taoran entrusted Zhao Wenquan with the voting rights of his 3.75% stake in the company. This move was seen as Sun formally relinquishing control over BlueFocus, transitioning his role from co-founder to strategic investor.
In January 2018, three other founding shareholders of BlueFocus—Xu Zhiping, Chen Lianghua, and Wu Tie—collectively transferred 5.98% of their shares to Tibet Yaowang Network Technology Co., Ltd. (hereinafter 'Tibet Yaowang') for a total of RMB 9.26 billion. Tibet Yaowang thereby became BlueFocus's largest shareholder.
The key to this transaction lay in Tibet Yaowang's background: it is a wholly owned subsidiary of Tibet Koala Technology Development Co., Ltd., of which Sun Taoran is the legal representative and holds a 33% stake; Legend Holdings Corporation is the controlling shareholder of Tibet Koala, holding 51%.
This meant that although Sun Taoran had personally stepped back from BlueFocus's management, he indirectly increased his stake in BlueFocus through the Koala Technology platform while simultaneously bringing in Legend Holdings.
By 2021, Sun Taoran-controlled Lakala entered the scene directly. In May 2021, Lakala acquired 144 million shares of BlueFocus (representing 5.78% of BlueFocus’s total share capital) from Tibet Yaowang for RMB 9.144 billion in cash, becoming BlueFocus’s second-largest shareholder. At the time, both parties aimed to collaborate in cross-border services, industrial internet technology platforms, and digital marketing to empower small and medium-sized enterprises.
Starting in 2025, Lakala changed its holding intention for its investment in BlueFocus from long-term to short-term.
That year, Lakala disposed of its BlueFocus shares, changing the accounting method from the equity method for long-term equity investments to fair value measurement, recognizing an investment gain of RMB 6.25 billion and a fair value change gain of RMB 3.50 billion, totaling RMB 9.75 billion.
In the first quarter of 2026, Lakala fully exited its position in BlueFocus, recognizing an investment gain of RMB 5.51 billion and adding RMB 4.63 billion to its after-tax profit.
Produced by | Bullet Finance Author | Qiong Ma Editor | Egg Chief Art Direction by | Qianqian Reviewed | Songwen Recently, Lakala, a veteran in the payments industry, released its earnings guidance for the first half of 2026, revealing a clear divergence in profitability. According to the earnings guidance, Lakala’s attributable net profit for the first half of 2026 is expected to be between RMB 610 million and RMB 700 million, representing a year-over-year increase of up to over 200%. However, its net profit excluding non-recurring gains and losses is only projected at RMB 190 million to RMB 240 million. The roughly RMB 5 billion gap between the two figures primarily stems from gains on the disposal of its stake in BlueFocus. (Image / Lakala announcement) Combined with proceeds from its stake reduction in 2025, Lakala has reaped total investment gains of RMB 15.26 billion over two years from this equity investment, making it the cornerstone of its reported profits. This substantial one-off gain originates from founder Sun Taoran’s three-decade-long capital strategy: from co-founding BlueFocus, to Lakala’s acquisition of the stake, and finally cashing out at peak prices—a complete playbook of equity maneuvering. However, while investment gains have temporarily boosted profits, they cannot mask the underlying weakness in its core business over the long term. Since the 'transaction code-switching' controversy in 2022, Lakala’s gross margin has failed to show meaningful improvement. Its traditional bank card acquiring business has been shrinking, while new ventures such as cross-border payments, SaaS, and AI remain in early development stages. With its Hong Kong IPO filing imminent, major shareholders have successively reduced stakes, collectively cashing out over RMB 1 billion. How long can this profit story, propped up by investment gains, last? Can its three key transformation initiatives fill the profitability gap left by its core business? 1. A Three-Decade Equity Maneuver Lakala becomes...
(Image / LAKALA Announcement)
Through the aforementioned stake reduction, LAKALA has recognized approximately RMB 1.526 billion in investment gains, accounting for the majority of the company’s reported profits over the past two years. Although this gain is non-recurring, it has provided ample financial resources to support its subsequent transformation.
In June this year, LAKALA announced its intention to participate in establishing the Shanghai Koala Pioneer Artificial Intelligence Venture Investment Fund, committing RMB 150 million of its own funds, representing 68.18% of the confirmed total committed capital. The fund focuses on investing in next-generation information technology sectors centered on artificial intelligence.
For LAKALA, which is vigorously promoting an 'AI First' strategy, this investment could represent a significant strategic bet on its AI narrative.
2. Core business struggles to sustain growth after the 'rate-jumping' incident
LAKALA’s financial statements show that nearly 90% of its revenue comes from payment services. In the three years following its 2019 IPO, LAKALA delivered solid performance: from 2019 to 2021, the company’s revenue grew from RMB 4.899 billion to RMB 6.596 billion, and net profit attributable to shareholders rose from RMB 806 million to RMB 1.083 billion.
Produced by | Bullet Finance Author | Qiong Ma Editor | Egg Chief Art Direction by | Qianqian Reviewed | Songwen Recently, Lakala, a veteran in the payments industry, released its earnings guidance for the first half of 2026, revealing a clear divergence in profitability. According to the earnings guidance, Lakala’s attributable net profit for the first half of 2026 is expected to be between RMB 610 million and RMB 700 million, representing a year-over-year increase of up to over 200%. However, its net profit excluding non-recurring gains and losses is only projected at RMB 190 million to RMB 240 million. The roughly RMB 5 billion gap between the two figures primarily stems from gains on the disposal of its stake in BlueFocus. (Image / Lakala announcement) Combined with proceeds from its stake reduction in 2025, Lakala has reaped total investment gains of RMB 15.26 billion over two years from this equity investment, making it the cornerstone of its reported profits. This substantial one-off gain originates from founder Sun Taoran’s three-decade-long capital strategy: from co-founding BlueFocus, to Lakala’s acquisition of the stake, and finally cashing out at peak prices—a complete playbook of equity maneuvering. However, while investment gains have temporarily boosted profits, they cannot mask the underlying weakness in its core business over the long term. Since the 'transaction code-switching' controversy in 2022, Lakala’s gross margin has failed to show meaningful improvement. Its traditional bank card acquiring business has been shrinking, while new ventures such as cross-border payments, SaaS, and AI remain in early development stages. With its Hong Kong IPO filing imminent, major shareholders have successively reduced stakes, collectively cashing out over RMB 1 billion. How long can this profit story, propped up by investment gains, last? Can its three key transformation initiatives fill the profitability gap left by its core business? 1. A Three-Decade Equity Maneuver Lakala becomes...
(Chart / East Money)
LAKALA’s peak performance came to an end in 2021.Since then, the company’s revenue and net profit growth have stalled, its net profit excluding non-recurring items has declined year after year, and its gross margin has plummeted from 72.23% in 2016 to 25.33% in 2025.
Produced by | Bullet Finance Author | Qiong Ma Editor | Egg Chief Art Direction by | Qianqian Reviewed | Songwen Recently, Lakala, a veteran in the payments industry, released its earnings guidance for the first half of 2026, revealing a clear divergence in profitability. According to the earnings guidance, Lakala’s attributable net profit for the first half of 2026 is expected to be between RMB 610 million and RMB 700 million, representing a year-over-year increase of up to over 200%. However, its net profit excluding non-recurring gains and losses is only projected at RMB 190 million to RMB 240 million. The roughly RMB 5 billion gap between the two figures primarily stems from gains on the disposal of its stake in BlueFocus. (Image / Lakala announcement) Combined with proceeds from its stake reduction in 2025, Lakala has reaped total investment gains of RMB 15.26 billion over two years from this equity investment, making it the cornerstone of its reported profits. This substantial one-off gain originates from founder Sun Taoran’s three-decade-long capital strategy: from co-founding BlueFocus, to Lakala’s acquisition of the stake, and finally cashing out at peak prices—a complete playbook of equity maneuvering. However, while investment gains have temporarily boosted profits, they cannot mask the underlying weakness in its core business over the long term. Since the 'transaction code-switching' controversy in 2022, Lakala’s gross margin has failed to show meaningful improvement. Its traditional bank card acquiring business has been shrinking, while new ventures such as cross-border payments, SaaS, and AI remain in early development stages. With its Hong Kong IPO filing imminent, major shareholders have successively reduced stakes, collectively cashing out over RMB 1 billion. How long can this profit story, propped up by investment gains, last? Can its three key transformation initiatives fill the profitability gap left by its core business? 1. A Three-Decade Equity Maneuver Lakala becomes...
(Chart / East Money)
This turning point traces back to the 'rate-jumping' incident in 2022. 'Rate jumping' refers to payment processors applying preferential transaction rates to merchants who are not eligible for such discounts, thereby profiting from the rate differential—a practice that essentially constitutes a gray-market arbitrage scheme.
In April 2023, LAKALA disclosed in an announcement that its acquiring business had engaged in 'rate-jumping' practices and that it was required to refund the relevant amounts in accordance with applicable agreements. This directly led the company to recognize substantial losses in 2022, resulting in a sharp net loss of RMB 14.37 billion for the year and a steep decline in its share price.
In the same year, Document No. 259—dubbed by industry insiders as the 'end of merchant category hopping'—was fully implemented. Issued by the People’s Bank of China in October 2021, this notice mandated 'one terminal, one code; one code, one device,' effectively closing regulatory loopholes that payment institutions had exploited by falsifying merchant categories to arbitrage interchange fee differentials.
With gray-market arbitrage now over, can LAKALA identify new growth drivers for its core business?
Currently, the ceiling for bank card payment services is clearly visible. According to the People’s Bank of China’s 'Overall Operation of the Payment System,' nationwide bank card transaction value reached RMB 130.91 trillion in 2025, down 2.11% year-over-year.
Meanwhile, LAKALA’s core revenue stream—bank card acquiring—is being steadily eroded by QR code payments. In 2025, LAKALA’s domestic integrated acquiring transaction volume totaled RMB 3.94 trillion, a 6.75% year-over-year decline. Within this, bank card transactions amounted to RMB 2.47 trillion, plunging 13.73% year-over-year, while QR code transactions reached RMB 1.47 trillion, up 7.90% year-over-year.
QR code payments typically carry lower fees in most scenarios due to their disintermediated revenue-sharing model and lower operational costs. The rising share of low-fee business could further compress LAKALA’s overall gross margin.
The competitive landscape is equally challenging. Alipay and WeChat Pay dominate the consumer (C-end) market, UnionPay’s Cloud QuickPass is leveraging policy tailwinds to capture government-related payment scenarios, and emerging players like TikTok Pay and Meituan Pay are also carving out their slices of the pie.
Amid this squeeze, channel revenue-sharing costs continue to rise. CICC noted in a recent research report that intensified competition and higher channel revenue-sharing expenses were key reasons behind LAKALA’s gross margin contraction in 2025. The company’s gross margin showed slight year-over-year improvement in Q1 2026, likely driven by a higher contribution from technology services—but the sustainability of this trend remains uncertain.
Facing these challenges, LAKALA has turned its focus to new areas such as cross-border payments and SaaS services. Although its cross-border payment transaction volume reached RMB 88.9 billion in 2025—a surge of 80.69% year-over-year—it still accounted for only about 2% of the company’s total payment transaction volume.
In fact, the cross-border payments market is already relatively mature, with established players like LianLian Global, Airwallex, and Xunhui holding dominant market shares. Moreover, with stringent regulatory oversight now常态化 (the norm) in the payments industry, building and maintaining compliance infrastructure entails significant ongoing investment, presenting continuous challenges for LAKALA in its cross-border payment operations.
Additionally, in 2025, LAKALA invested RMB 250 million to acquire a strategic stake in Tiancai Shanglong, becoming its largest institutional shareholder with a 35.71% ownership interest. By June 2026, its stake had increased to 45%. Tiancai Shanglong primarily provides digital solutions to restaurant businesses.
By consolidating Tiancai Shanglong into its financial statements, Lakala swiftly entered the restaurant SaaS segment, providing technology services to foodservice businesses. According to its financial report, Lakala's technology services revenue grew by 44.05% year-over-year in 2025, although the gross margin of this segment declined by 14.66 percentage points.
Produced by | Bullet Finance Author | Qiong Ma Editor | Egg Chief Art Direction by | Qianqian Reviewed | Songwen Recently, Lakala, a veteran in the payments industry, released its earnings guidance for the first half of 2026, revealing a clear divergence in profitability. According to the earnings guidance, Lakala’s attributable net profit for the first half of 2026 is expected to be between RMB 610 million and RMB 700 million, representing a year-over-year increase of up to over 200%. However, its net profit excluding non-recurring gains and losses is only projected at RMB 190 million to RMB 240 million. The roughly RMB 5 billion gap between the two figures primarily stems from gains on the disposal of its stake in BlueFocus. (Image / Lakala announcement) Combined with proceeds from its stake reduction in 2025, Lakala has reaped total investment gains of RMB 15.26 billion over two years from this equity investment, making it the cornerstone of its reported profits. This substantial one-off gain originates from founder Sun Taoran’s three-decade-long capital strategy: from co-founding BlueFocus, to Lakala’s acquisition of the stake, and finally cashing out at peak prices—a complete playbook of equity maneuvering. However, while investment gains have temporarily boosted profits, they cannot mask the underlying weakness in its core business over the long term. Since the 'transaction code-switching' controversy in 2022, Lakala’s gross margin has failed to show meaningful improvement. Its traditional bank card acquiring business has been shrinking, while new ventures such as cross-border payments, SaaS, and AI remain in early development stages. With its Hong Kong IPO filing imminent, major shareholders have successively reduced stakes, collectively cashing out over RMB 1 billion. How long can this profit story, propped up by investment gains, last? Can its three key transformation initiatives fill the profitability gap left by its core business? 1. A Three-Decade Equity Maneuver Lakala becomes...
(Image / Lakala Announcement)
In its latest earnings guidance, Lakala stated that its bank card payment business stabilized and resumed growth in the first half of 2026, while both QR code payments and cross-border payments continued to grow rapidly.
However, beneath this surface-level growth, several critical questions remain unresolved: Is the stabilization of bank card transaction volumes a structural reversal or merely a seasonal rebound? When will the still relatively small cross-border payment business become a meaningful contributor to profitability? And has the declining gross margin in the technology services segment been dragged down by Tiancai Shanglong?
Bullet Finance sent a letter to Lakala regarding the above questions, but as of publication, had not received a response.
3. Two major shareholders collectively cashed out RMB 1 billion before filing for Hong Kong listing
On October 17, 2025, Lakala officially submitted an application to list its H-shares on the Hong Kong Stock Exchange. According to the prospectus, the proceeds from the offering will primarily be used to accelerate licensing expansion and overseas market development, enhance technological capabilities to build a global end-to-end product ecosystem, fund strategic investments and acquisitions over the next five years, and support working capital needs.
Lakala previously stated in relevant announcements that its plan to list in Hong Kong aims to advance its internationalization strategy, establish a dual-circulation model integrating domestic and international markets, create an international capital operation platform, accelerate the application of digital currency in cross-border scenarios, and further enhance its global influence.
Recently, an investor asked on an interactive platform, 'Lakala’s initial Hong Kong listing submission has expired—when do you plan to refile?' In response, the company’s secretary stated, 'We will proceed with relevant work based on market conditions and the review process.'
Notably, prior to its push for a Hong Kong listing, Lakala’s major shareholders initiated an intensive share reduction plan.
Produced by | Bullet Finance Author | Qiong Ma Editor | Egg Chief Art Direction by | Qianqian Reviewed | Songwen Recently, Lakala, a veteran in the payments industry, released its earnings guidance for the first half of 2026, revealing a clear divergence in profitability. According to the earnings guidance, Lakala’s attributable net profit for the first half of 2026 is expected to be between RMB 610 million and RMB 700 million, representing a year-over-year increase of up to over 200%. However, its net profit excluding non-recurring gains and losses is only projected at RMB 190 million to RMB 240 million. The roughly RMB 5 billion gap between the two figures primarily stems from gains on the disposal of its stake in BlueFocus. (Image / Lakala announcement) Combined with proceeds from its stake reduction in 2025, Lakala has reaped total investment gains of RMB 15.26 billion over two years from this equity investment, making it the cornerstone of its reported profits. This substantial one-off gain originates from founder Sun Taoran’s three-decade-long capital strategy: from co-founding BlueFocus, to Lakala’s acquisition of the stake, and finally cashing out at peak prices—a complete playbook of equity maneuvering. However, while investment gains have temporarily boosted profits, they cannot mask the underlying weakness in its core business over the long term. Since the 'transaction code-switching' controversy in 2022, Lakala’s gross margin has failed to show meaningful improvement. Its traditional bank card acquiring business has been shrinking, while new ventures such as cross-border payments, SaaS, and AI remain in early development stages. With its Hong Kong IPO filing imminent, major shareholders have successively reduced stakes, collectively cashing out over RMB 1 billion. How long can this profit story, propped up by investment gains, last? Can its three key transformation initiatives fill the profitability gap left by its core business? 1. A Three-Decade Equity Maneuver Lakala becomes...
(Image / LAKALA Announcement)
According to relevant announcements, from June to August 2025, shareholder Sun Haoran cumulatively sold 19,270,852 shares via centralized bidding and block trading, with average selling prices of RMB 28.70 per share and RMB 23.40 per share, respectively.
Based on these figures, Sun Haoran’s total cash-out amounted to approximately RMB 493 million. Sun Haoran is the younger brother and concerted actor of Sun Taoran. Following this divestment, Sun Haoran no longer holds any LAKALA shares.
Additionally, Lenovo Holdings, LAKALA’s largest shareholder, also executed a divestment plan prior to filing its Hong Kong IPO application. Per disclosed announcements, Lenovo Holdings cumulatively sold 23,642,154 shares between July and September 2025 through centralized bidding and block trading, with average selling prices of RMB 27.88 per share and RMB 20.63 per share, respectively.Lenovo Holdings’ cash-out from this divestment totaled approximately RMB 545 million.
Following this divestment, Lenovo Holdings remains LAKALA’s largest shareholder. As of the first quarter of this year, Lenovo Holdings held a 23.88% stake in LAKALA.
Produced by | Bullet Finance Author | Qiong Ma Editor | Egg Chief Art Direction by | Qianqian Reviewed | Songwen Recently, Lakala, a veteran in the payments industry, released its earnings guidance for the first half of 2026, revealing a clear divergence in profitability. According to the earnings guidance, Lakala’s attributable net profit for the first half of 2026 is expected to be between RMB 610 million and RMB 700 million, representing a year-over-year increase of up to over 200%. However, its net profit excluding non-recurring gains and losses is only projected at RMB 190 million to RMB 240 million. The roughly RMB 5 billion gap between the two figures primarily stems from gains on the disposal of its stake in BlueFocus. (Image / Lakala announcement) Combined with proceeds from its stake reduction in 2025, Lakala has reaped total investment gains of RMB 15.26 billion over two years from this equity investment, making it the cornerstone of its reported profits. This substantial one-off gain originates from founder Sun Taoran’s three-decade-long capital strategy: from co-founding BlueFocus, to Lakala’s acquisition of the stake, and finally cashing out at peak prices—a complete playbook of equity maneuvering. However, while investment gains have temporarily boosted profits, they cannot mask the underlying weakness in its core business over the long term. Since the 'transaction code-switching' controversy in 2022, Lakala’s gross margin has failed to show meaningful improvement. Its traditional bank card acquiring business has been shrinking, while new ventures such as cross-border payments, SaaS, and AI remain in early development stages. With its Hong Kong IPO filing imminent, major shareholders have successively reduced stakes, collectively cashing out over RMB 1 billion. How long can this profit story, propped up by investment gains, last? Can its three key transformation initiatives fill the profitability gap left by its core business? 1. A Three-Decade Equity Maneuver Lakala becomes...
(Image / LAKALA Announcement)
In fact, over the past few years, multiple shareholders have reduced their stakes in LAKALA.
From May to July 2022, Lenovo Holdings sold a total of 16,822,900 shares, representing a 2.16% reduction in its stake. Zhou Gang, LAKALA’s former CFO, announced a plan in 2022 to sell no more than 395,600 shares; on May 30 of that year, he sold shares via centralized bidding at an average price of RMB 18.165 per share, cashing out approximately RMB 7.1852 million.
Sun Haoran had previously reduced his LAKALA holdings multiple times. Between September 19 and November 28, 2024, he cumulatively sold 4,030,000 shares via centralized bidding, representing 0.50% of the company’s total shares outstanding (excluding repurchased shares). The sale prices ranged from RMB 11.73 to RMB 23.87 per share, with an average price of RMB 18.23 per share.
Major shareholders intensively reduced their stakes during the planning period for the H-share listing, cashing out over RMB 1 billion, inevitably raising market concerns about whether their long-term valuation of the company has diverged from that of the enterprise itself.
The RMB 1.5 billion equity gain is ultimately a one-time cash inflow; once this reserve is depleted, whether cross-border payments, SaaS, and AI—the three strategic transformation tracks—can sustain Lakala’s core profitability will remain the central question for the market.
*Featured image in the article courtesy of Lakala’s official website.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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