Text | Liu Zhentao
In 2004, Liu Xiang, who won the 110-meter hurdles championship at the Athens Olympic Games, came to Chongqing, posed in front of a motorcycle, and received the "Gold Breakthrough Award" from Loncin, the endorsement fee and a "Xiang series" motorcycle.
As the founder of Loncin Holdings, Tu Jianhuale, one of the "Three Giants of Mobang", blossomed, and he spent a little money to obtain good publicity results.
According to media reports at the time, Liu Xiang's endorsement fee was 600,000 yuan, while the motorcycle of the "Xiang series" was priced at 3,000-5,000 yuan, and more than 10,000 units were sold in 2005 alone, which was more than 10 million in return.
However, 18 years later, Tu Jianhua can't laugh.
On February 7, 2022, the Chongqing Bankruptcy Court announced that 13 enterprises under the "Loncin Family" controlled by Tu Jianhua were bankrupt and reorganized. Tu Jianhua personally was also full of lawsuits, restricted from consumption, and became a "dishonest executor".
Once, Tu Jianhua, Yin Mingshan and Zuo Zongshen were known as the "Three Giants of Chongqing Motorcycle Gang", creating the three major motorcycle brands of "Lifan, Zongshen and Loncin". In the glory days, Loncin Group's assets reached 40 billion yuan, and Tu Jianhua once became the richest man in Chongqing. In 2019, Tu Jianhua also made it to the Hurun Rich List that year with a wealth of 12 billion.
But now, Lifan and Loncin are bankrupt and reorganized, and only Zongshen is still struggling, and it has to be said that the era that belongs to the Mo gang has ended.
Loncin rises
Chinese motorcycle to see Chongqing.
In 1967, Jialing Group, formerly known as the Longhua Branch of Jiangnan Manufacturing Bureau, built the first civilian motorcycle in China, the Jialing CJ50.
Since then, the motorcycle market has begun to open, countless capital has poured into the upstream and downstream industries of motorcycles, motorcycle enterprises in Chongqing have blossomed everywhere, and Chongqing has also had the title of "City of Motorcycle Gangs".
In 1993, Tu Jianhua, who resigned from the coal mine, went to the sea to start a business, and seeing the opportunity of motorcycle, he founded Loncin Transportation Machinery Factory in Panlongshan, a barren ditch in Shipingqiao.
The next year, Loncin's own motor engine went off the production line, and it became a hit, with annual sales reaching 160 million yuan and profits of more than 50 million yuan that year.
The spring breeze is proud of the horseshoe disease. In 1999, Tu Jianhua Loncin's engine reached an annual output of 1 million units, ranking second in the country. Loncin has become an important motorcycle enterprise in Chongqing.
Five years later, Loncin's annual engine production reached 1 million units, ranking second in the country, and Tu Jianhua was also known as the "Three Giants of Mobang" along with Yin Mingshan of Lifan and Zuo Zongshen of Zongshen.
In 1999, the "ban on motorcycles" was introduced, which caused the domestic market of "motorcycle gangs" to suffer a decline. In order to continue to develop, Chongqing's "Mobang" has set its sights on the Vietnamese market in Southeast Asia.
Tu Jianhua's Loncin has also focused its market on Vietnam. At that time, Loncin was the title sponsor of the Chongqing football team, and the Chongqing football team was invited to participate in the "Ho Chi Minh Cup" competition.
As a result, the Chongqing football team defeated Vietnam and won the championship, making Loncin famous in Vietnam. The success of football events and the promotion of the later stage have allowed Loncin's motorcycles to gain a firm foothold in Vietnam, once occupying 50% of the Vietnamese market.
Although the Southeast Asian market has been opened, the market for two-wheeled motorcycles has become more and more narrow as four-wheeled cars have become more and more popular.
Tu Jianhua felt that Loncin should do something else to develop.
Tu Jianhua chose the path chosen by most entrepreneurs - diversified development.
In 2003, Loncin Group established Loncin Holdings, with Loncin Holdings, Loncin Group began to enter the real estate industry and financial industry.
According to the official website of Loncin Holdings, in 2012, Loncin's pillar industries and industrial sectors and finance both led, and Loncin Real Estate was rated as "China's Top 50 Real Estate Development Enterprises" for five consecutive years.
That is, in 2012, Loncin GM, the core industry of Loncin Holdings, was listed on the Shanghai Stock Exchange. Since then, Tu Jianhua and his Loncin have begun to dance in the capital market.
After Tu Jianhua owned a listed company, he set his sights on companies in other industries. Through the equity acquisition, Loncin Holdings became the controlling shareholder of Fenghua Shares (*ST Fenghua); in 2014, Tu Jianhua sent Hanhua Financial Holdings, a financial business under Loncin, to the Hong Kong Stock Exchange for listing, and in the same year became the majority shareholder of Yushang Investment Group, and obtained control of Qihe Environmental Protection, a Hong Kong-listed company.
After diversified operations, Loncin Holdings has 4 listed companies, one shareholding listed company, and a "Loncin System" spanning industry, real estate, finance and other industries was born.
At the time of glory, the assets of the "Loncin system" reached 40 billion yuan, and Tu Jianhua once became the richest man in Chongqing. In 2019, on the Hurun China Rich List, Tu Jianhua ranked 320th with a wealth of 12 billion.
Loncin crisis
Diversification has always been a double-edged sword, allowing enterprises to quickly expand into other areas, but also bring a variety of hidden dangers. Many domestic enterprises have planted their heads on the road of diversification. The same is true of Tu Jianhua and his Loncin.
Loncin's diversified expansion and development requires a lot of funds, and it is impossible to meet the demand by relying on business operation alone. Most of the money for Loncin's expansion came from issuing bonds and pledging shares.
According to relevant media reports at the time, in 2017, Loncin Holdings' "short-term borrowings + non-current liabilities due within one year" was 11.907 billion yuan, long-term borrowings were 10.033 billion yuan, and bonds payable were 1.422 billion yuan, while the monetary funds on the account were only 4.077 billion yuan, and the debt repayment pressure was relatively large.
In 2018, the debt default of Loncin Holdings became the beginning of the "Loncin system" towards a big slide.
In June of that year, the bonds issued by Loncin Holdings as the main body defaulted. By September 2018, Loncin Holdings' debt defaults totaled RMB1 billion.
Under the pressure of debt, Loncin Holdings sold 16.74% of the equity of Hanhua Financial Holdings in that year, and after the completion of the transfer, Loncin Holdings only held 9.40%, and superimposed Loncin Holdings terminated the relevant concerted actor agreement, and Loncin Holdings was no longer the controlling shareholder.
In his speech for the 2019 New Year, Tu Jianhua once mentioned, "My 2018 was very painful, very tangled, one night and one night can not sleep, sleepless night, the most I think of the problem, is that Loncin must live, only alive, there is hope." ”
However, contrary to expectations, after 2018, Loncin Holdings defaulted on more and more debts. In January 2021, overdue liabilities rose to $6,037 million. As of July 30, 2021, Loncin Holdings had a total of 40 outstanding cases involving litigation and enforcement, with a total principal amount of 9.871 billion yuan and nearly 10 billion yuan of mature debts.
Due to the inability to repay debts, in September 2021, 13 Loncin-affiliated enterprises, including Loncin Holdings and Yushang Investment Group, applied to the Chongqing Bankruptcy Court for bankruptcy reorganization.
As for why a large number of debts defaulted, Loncin Holdings said in January 2021 that it was unable to obtain new loans due to factors such as the long-term arrears of a huge amount of money by a company. For the name of the enterprise, Loncin Holdings did not mention it.
Whatever the reason, Loncin Holdings' debt default is substantial. Under the debt crisis, the shares of listed companies held by Tu Jianhua and Loncin Holdings were frozen.
According to the data, 50% of the equity of Loncin GM held by Tu Jianhua and Loncin Holdings has been frozen by the court; the 33.45% equity of *ST Fenghua held by *ST Fenghua has been frozen; and the 570 million shares held by Yu Rural Commercial Bank have been frozen.
Today, the Chongqing Bankruptcy Court has ruled that 13 enterprises of the Loncin department are bankrupt and reorganized, which also means that the once brilliant "Loncin system" has substantially dimmed.
According to the announcement issued by Loncin GM, Jiuyang Group had signed an agreement with the bankruptcy auxiliary institution to act as a reorganization party. At present, the reorganization is still in progress, and whether the once brilliant "Loncin System" can be successfully reorganized has yet to be verified.
However, Tu Jianhua, once the richest man in Chongqing and one of the mogang giants, has gone from a rich man of 12 billion yuan to a dishonest executor today, which sounds sad.
In the face of the loneliness of the former richest man in Chongqing, perhaps the people will say that it is a trick played by the jianghu guys - changeable!