Zhongzhi Group has a showdown! Debt of 420 billion, 15 listed companies "stepped on thunder"
Author | Fu Ying
Source | Unicorn Finance
Zhongzhi Enterprise Group Co., Ltd. (hereinafter referred to as "Zhongzhi Group"), a once turbulent private giant and a "trillion-dollar business empire" spanning real industry, asset management, finance and other fields, no one expected that it is now seriously insolvent.
On November 22, Zhongzhi Group issued an open letter stating that the comprehensive liquidation of assets and capital verification found that the total assets of the group were about 200 billion yuan, and at the same time, due to the huge scale of debts, the principal and interest scale of related liabilities after excluding margin was about 420 billion yuan to 460 billion yuan. Preliminary due diligence showed that the group was seriously insolvent, and the company's related products had materially defaulted, and apologized to investors.
According to the incomplete combing of "Unicorn Finance", the number of financial institutions controlled by Zhongzhi Group and its subsidiaries is at least 33, and the number of listed companies held by it has reached 56. When the "head" Xie Zhikun died of a heart attack while exercising, he was left with no one to take over, and the wind and rain were shaky.
Since the second half of this year, Zhongzhi Group has experienced the postponement of payment of its four major wealth management companies, which is considered to be the most important licensed financial institution of Zhongzhi Group, Zhongrong International Trust Co., Ltd. (hereinafter referred to as "Zhongrong Trust") Some products have been suspended, and its controlling shareholder Jingwei Textile Machinery was officially delisted from the Shenzhen Stock Exchange on October 26 due to concerns about the company's significant impact.
Standing in the present and looking back at the past, the "middle planting system" that has been in the capital market and stirred up the wind and clouds is only a footnote to a specific stage.
1
Debt of at least 420 billion,
Claims of "significant going concern risk"
According to the content of the letter of apology issued by Zhongzhi Group, Zhongzhi Group hired an intermediary agency to carry out a comprehensive liquidation of assets and capital, and the total assets of the group are about 200 billion yuan. At the same time, the scale of debt is huge, and after excluding margin, the scale of principal and interest of related liabilities is about 420 billion to 460 billion yuan.
According to the preliminary due diligence of Zhongzhi Group, the group has become seriously insolvent, has significant continuing operation risks, and the resources available for debt repayment in the short term are far lower than the overall debt scale. Due to the huge size of the Group's assets, complex industrial distribution, and a large number of business entities and project entities, a large number of corporate assets, related party financing and external guarantee matters must be further extended for verification and confirmation, and the final asset and liability status may be adjusted according to the verification situation.
Based on this calculation, the funding gap of Zhongzhi Group is about 220 billion yuan to 260 billion yuan.
Zhongzhi Group also said that it will sort out the historical context, have zero tolerance for possible acts of encroachment on the interests of the group and investors, and once found and confirmed, both enterprises and individuals will be held accountable and relevant assets will be recovered in accordance with the law. At the same time, Zhongzhi Group deeply apologizes for the losses incurred by investors, and will actively cooperate with intermediaries to clear assets and verify funds, and accurately find out the specific situation of assets and debts for the protection of investors' rights and interests.
According to public information, Zhongzhi Group was founded in the 90s of the last century by Xie Zhikun, a native of Heilongjiang, and began to expand in the field of financial capital in the early 20th century, becoming a well-known private capital group in China, and was once known as a trillion assets at its peak.
In the financial business sector, Zhongzhi Group holds or participates in Zhongrong Trust, Zhongrong Fund, Hengqin Life Insurance, Hengbang Property Insurance, Zhongrong Huixin Futures and Tianke Jiahao Pawnshop, holds or participates in five asset management companies, including Zhonghai Shengrong, Zhongzhi International, Zhongxin Rongchuang, Zhongzhi Capital and Shoutuo Rongsheng, and holds or participates in four wealth management companies, namely Hengtian Wealth, Xinhu Wealth, Datang Wealth and Gaosheng Wealth.
In December 2021, Xie Zhikun passed away due to a sudden heart attack, and Zhongzhi Group fell into turmoil for a while. Starting from the second half of 2023, the fixed financing products distributed by Hengtian Wealth, Datang Wealth, Xinhu Wealth and Gaosheng Wealth have been overdue one after another, and will be completely suspended after July, involving 150,000 high-net-worth investors (investors of more than 3 million) and nearly 5,000 corporate customers.
Due to the inextricable connection between Zhongrong Trust and Zhongzhi Department, the delisting of warp and weft textile machinery has also attracted market attention.
After a two-day suspension of trading on August 28 to 29, Jingwei Textile Machinery decided late at night on August 29 to voluntarily withdraw the listing and trading of A-share shares on the Shenzhen Stock Exchange, and instead applied for transfer in the national small and medium-sized enterprise share transfer system.
Source: Announcement
The warp and weft textile machinery is mainly engaged in textile machinery, which was restructured and established by the warp and weft textile machinery factory that was put into construction in 1951 and listed in December 1996. At the end of 2015, its market value was close to 20 billion yuan. China Textile Machinery Group, the direct controlling shareholder of Jingwei Textile Machinery, is also a subsidiary of Hengtian Group, which was merged into China National Machinery Industry Group Co., Ltd. (hereinafter referred to as "SINOMACH Group") on June 29, 2017.
Source: Tianyancha
For the reason for the delisting, Jingwei Textile Machinery disclosed that the company's operation is facing significant uncertainties, which may have a significant impact on the company. In order to protect the interests of small and medium-sized shareholders, this plan was thrown.
According to its 2022 annual report, the revenue of textile machinery and equipment is 6.6 billion, and the income of trust business is 4.862 billion.
In 2021, the net profit of Zhongrong Trust reached 1.487 billion yuan, but it fell to 1.056 billion yuan in 2022. In the first half of the year, the net profit attributable to the parent company of Zhongrong Trust was about 332 million yuan, a year-on-year decrease of 51.63%. Behind the poor performance, it also reflects the deterioration of the profitability of Zhongrong Trust.
As the controlling shareholder of Zhongrong Trust, can Jingwei Textile Machinery isolate the risk from Zhongrong Trust after it is voluntarily delisted?
Yang Mengchen, a lawyer at Beijing Zhoutai Law Firm, said that the voluntary delisting of warp and weft textile machinery does not rule out that financial risks can be effectively isolated from the capital market from the legal level. However, if the problem of overdue payment of Zhongrong Trust continues, Jingwei Textile Machinery may still be affected by it, because the reduction of information disclosure requirements after delisting can only isolate part of the risk.
2
At least 15 listed companies "stepped on the thunder" Zhongrong Trust
The turmoil over the overdue payment of Zhongrong Trust has also affected a number of A-share listed companies.
Since August, Yongxin Optics, Shuangcheng Pharmaceutical, PharmaBlock Technology, Anji Food, Sande Technology, Microlight Shares, Pioneer Electronics, Zhongruitai, Anbang Electric, Jinfang Energy, Jinbo Shares, Nandu Property, and Xianheng International have disclosed that they have encountered overdue payments from Zhongrong Trust. According to incomplete combing, up to now, there have been 15 A-share listed companies that have officially announced that they have stepped on Lei Zhongrong Trust, with a total overdue principal of more than 500 million yuan.
Source: Yiweishi
Yongxin Optics announced on November 13 that on June 30, the company signed the "Trust Contract of Zhongrong-Tangsheng No. 1 Accumulative Capital Trust Plan" with Zhongrong Trust, and purchased Tangsheng No. 1 product with its own funds of 50 million yuan, with a period from June 30, 2023 to October 30, 2023. As of the disclosure date of the announcement, the above-mentioned trust products have matured, but the principal and investment income have not yet been received.
On October 26, Shuangcheng Pharmaceutical issued a risk warning announcement showing that the company used 30 million yuan of idle own funds to purchase Zhongrong International Trust wealth management products overdue payment. This is not the first time that Shuangcheng Pharmaceutical has purchased wealth management products to "step on thunder". In September this year, Shuangcheng Pharmaceutical announced that some of the wealth management products purchased by the company with idle own funds of 20 million yuan were overdue, and the investment object was the same wealth management product of Zhongrong International Trust.
On September 6, PharmaBlock announced that the company spent 10 million yuan to purchase the "Yuanrong No. 1" product issued by Zhongrong Trust. It is worth noting that PharmaBlock's purchase time was after the thunderstorm of Zhongrong Trust. On June 7 this year, PharmaBlock purchased 10 million Yuanrong No. 1 with a maturity date of September 5 this year and an estimated annualized yield of 5.6%. However, as of September 6, PharmaBlock has not received the principal and investment income.
In addition, PharmaBlock also disclosed in the announcement that as of June 30, the company's total assets were 5.147 billion yuan, and the asset-liability ratio was 46.23%. The overdue investment amount of "Yuanrong No. 1" only accounts for about 0.19% of total assets and about 0.36% of net assets, which does not affect the company's normal cash flow.
There are also listed companies that take precautions and prepare for overdue problems in advance. On August 22, Leike Defense disclosed in its 2023 semi-annual report that out of prudence, the company included a fair value change loss of 15 million yuan in advance for the unexpired wealth management products of Zhongrong Trust of 30 million yuan.
In fact, the suspension of exchange has been in place as early as April. At the beginning of April, Jihua Group announced that the Zhongrong-Jida No. 11 Collective Capital Trust Plan and Zhongrong-Fengteng No. 83 purchased by the company had the risk of delayed payment. As of April 30, Jihua Group had 30 million overdue.
On April 7, Tower Group announced that on April 27, 2021, the company subscribed to the "Zhongrong-Fengteng No. 83 Accumulative Capital Trust Plan" issued by Zhongrong Trust with its own funds of 10 million yuan, with a performance benchmark of 7.2% per year and a term of 12 months, and most of the amount of the product was automatically extended.
According to the statistics of Debang Securities Research Report, at present, the listed companies that purchase Zhongrong Trust products in A-shares are mainly in the biomedicine, machinery and equipment and automobile industries. Among the listed companies that have disclosed the purchase of Zhongrong Trust products, there are 8 biomedical companies, 5 machinery and equipment companies, and 5 automobile companies under the first-level industry classification. In addition, according to Flush data, the unexpired amount of Zhongrong Trust-related products purchased by A-share listed companies reached 1.034 billion yuan.
Zhongrong Trust was formerly known as Harbin International Trust and Investment Company in 1987. In 2002, Zhongzhi Group invested 120 million yuan to pocket Zhongrong Trust by participating in the restructuring, and became its largest shareholder in one fell swoop. In 2010, Jingwei Textile Machinery completed the actual holding of Zhongrong Trust through the transfer of 117 million shares held by Zhongzhi Group, with a shareholding ratio of 37.47%, and Zhongzhi Group became the second largest shareholder with a shareholding ratio of 32.99%.
Although Zhongzhi Group is the second shareholder, Liu Yang, the chairman of Zhongrong Trust and the legal person of the company, is the nephew of Xie Zhikun, the late actual controller of Zhongzhi Group, who once served as the vice president of Zhongzhi Group. In addition, Jin Qinghao, chairman of the board of supervisors of Zhongrong Trust, was also recommended by Zhongzhi Group.
As of the end of 2022, Zhongrong Trust has 1,633 surviving trust plans with assets under management of 629.3 billion yuan.
In the face of the failure to redeem the products purchased by the listed company and the "early warning", the relevant person of Zhongrong Trust responded to investors that the company was operating normally, and the news of the complete external suspension was untrue.
Chen Zhenhui, a senior partner at Beijing Jingshi Law Firm, once told Beijing Business Daily that the overdue payment of trust products may have a negative impact on listed companies, including affecting the company's cash flow and financial status, and the overdue payment may make the company's balance sheet abnormal, affect the company's financial status assessment, and may lead to a decline in the company's credit rating, which in turn affects the company's borrowing cost and financing ability.
For a long time, real estate trusts have become more defaulting entities. According to the data on the official website of the usufruct trust, in 2022, the number and scale of defaults of real estate trusts will account for about 58% and 76% respectively. As of the end of the fourth quarter of 2022, Zhongrong Trust's real estate exposure accounted for 10.69% of trust assets, higher than the industry average.
Liao Hekai, an analyst at Jinle Function, said that in recent years, Zhongrong Trust has continued to have business problems, overdue business has continued, and the special real estate business has been mired and its credit has been damaged. There are two problems involved, one is that the real estate and part of the equity business problems in the early stage of its own layout have affected the reputation, and the other is that the related business of Zhongzhi has led to the collapse of credit, and the correlation with other companies is not high, which will affect the credit of the industry, but it is expected that there is no correlation effect.
Unicorn Finance found that Zhongrong Trust "stepped on the thunder" of a number of financing parties, including Evergrande Group, Kaisa, Sunac, Blu-ray Group, Tahoe Group, Shimao Group, China Fortune, Helenbergh, Mingmen Real Estate, East Asia Real Estate, Zheng Development, Huangting International and other at least 15 real estate developers, in the context of deleveraging in the real estate industry, these superficially brilliant real estate companies have revealed the true face of financing development. Once you can't borrow the new to repay the old, you will be in danger. And Zhongrong Trust, which does business with many real estate developers, is also in trouble.
3
Hengqin Life Insurance emphasized that it will be "separated" from Zhongzhi Group,
能否自善其身?
At a time when the subsidiaries of Zhongzhi Group are in the whirlpool of cashing, Hengqin Life Insurance Co., Ltd. (hereinafter referred to as "Hengqin Life"), an insurance company in which it has a stake, issued a document in August emphasizing that the two will be "separated".
According to the Beijing Business Daily, a document titled "Explanation on the Situation of Hengqin Life Insurance and Zhongzhi Group" shows that Zhongzhi Group, a shareholder of Hengqin Life, intends to transfer equity.
As early as May 23, 2022, Zhongzhi Group planned to transfer all the equity of Hengqin Life Insurance held by it based on its own business considerations, and the insurance company is promoting the work of capital increase and war, looking for investors to promote equity transfer, so as to complete the company's equity optimization work as soon as possible.
According to past experience, looking for a powerful "take-over man" through the transfer of equity can partially resolve the risks brought by the shareholders of insurance companies, so as to ensure their own stable development.
Before the equity transfer, investors were most worried about whether Zhongzhi Group and Hengqin Life Insurance had existing related party transactions. In this regard, Hengqin Life Insurance said that the two parties and their related parties did not have any stock related party transactions. At the same time, the five shareholders, including Zhongzhi Group, do not nominate senior executives to the company, nor do they interfere in the appointment, dismissal and evaluation of personnel in key positions, nor do they interfere with the company's decisions in violation of regulations and any improper transfer of interests.
Founded at the end of 2016, Hengqin Life Insurance is the first national legal life insurance company in the Guangdong-Hong Kong-Macao In-Depth Cooperation Zone in Hengqin, and before 2022, it was jointly founded by five shareholders, including Zhuhai Huachuang Investment Management Co., Ltd., Hengtong Group Co., Ltd., Guangdong Pearl Group Shenzhen Investment Co., Ltd., Suzhou Huanya Industrial Co., Ltd., and Zhongzhi Enterprise Group Co., Ltd., with a shareholding ratio of 20%.
In 2022, Zhuhai Huachuang's shareholding in Hengqin Life Insurance increased to 32.9%, and the shareholding ratio of the other four shareholders decreased to 16.775%. Under this equity governance structure, shareholders check and balance each other, and also avoid the illegal outflow of large amounts of funds.
Since its establishment, the premium scale of Hengqin Life Insurance has continued to grow, especially in 2019, its premium scale rose from 2.46 billion yuan to 5.955 billion yuan. In addition, the income of insurance business reached 7.971 billion yuan in 2022, a year-on-year increase of 17.47%. In the first half of this year, its insurance business income was 5.81 billion yuan, which has exceeded 7% of the whole year of 2022.
The income of the insurance business increased, but the performance still turned from a profit to a loss. In 2022, Hengqin Life Insurance will lose 179 million yuan and make a net profit of 135 million yuan in the first half of the year, and in the process of finding investors, the most direct pressure is the pressure of poor performance.
In addition to Hengqin Life Insurance, Zhongzhi Group's layout in the insurance industry also includes Hengbang Property Insurance. According to the solvency report of Hengbang Property Insurance in the second quarter of this year, Zhongzhi Group holds 16.81% of the equity of Hengbang Property Insurance. Among them, all the shares held by Zhongzhi Group were pledged or frozen.
Time has changed, and the rise and fall of private capital family enterprises is sighing. In the past 30 years, the private capital clan boss has appeared on the stage, and staged a breathtaking and embarrassing capital drama.
However, with the development of China's capital market for more than 30 years, the market has become more and more standardized, which has gradually lost the living space of the capital families that emerged in the 90s of the last century. Instead, the new economy and new industrial capital represented by the Internet are more transparent and standardized.
What do you think of Zhongzhi rising from the ground and finally collapsing again? What inspiration does this give you? Let's talk about it in the comment area!