Evergrande Automobile's Liu Yongzhuo was arrested, the stock price crashed by 20%, and he just lost 3.5 billion life-saving money

I saw the high-rise building collapse

”

Author: Qin Zhangyong, Wang Lei

In 2024, Evergrande Auto failed to wait for a savior, and bad news followed.

Just now, the Evergrande Automobile Hong Kong Stock Exchange issued an announcement that Liu Yongzhuo, executive director, has been criminally detained in accordance with the law on suspicion of violating the law and committing crimes.

Liu Yongzhuo also has another identity - the president of Hengchi Automobile. He has a well-known saying in the automobile circle, and he has previously confidently said, "The pre-sale of Hengchi 5 exceeded expectations, and the big sale is a foregone conclusion." ”

However, the Hengchi 5 has been in mass production for more than a year, and there are frequent news of discontinuation, and the monthly sales data is impossible to verify.

At present, the news of Liu Yongzhuo's detention is still fermenting, affected by this incident, after the resumption of trading of Evergrande Automobile, it fell by more than 13%, and once crashed by 20%. As of press time, it was quoted at HK$0.385, with a total market capitalization of 4.175 billion.

Just a few days ago, Evergrande Automobile announced that the share subscription agreement and debt-to-equity swap subscription agreement between Evergrande and Newton Group were originally scheduled to expire on December 31, 2023, and have now expired. This also means that the previous investment plan of 500 million US dollars (3.57 billion yuan) has been lost.

Evergrande Automobile, where is the way out?

01

 Liu Yongzhuo was detained

Externally, Liu Yongzhuo is a key figure in Hengchi Automobile and a capable leader of Evergrande.

Liu Yongzhuo, who was born in 1981, joined Evergrande Group in 2003 and is very valued by Xu Jiayin. He has held many important positions in Evergrande Group, successively serving as Vice President of China Evergrande Group and Chairman of Evergrande Football Club.

This post-80s generation has also been in charge of Evergrande Cultural Industry Group, Evergrande Agriculture and Animal Husbandry Group, Evergrande Internet Finance Group, Evergrande High-tech Group and other Evergrande companies.

Liu Yongzhuo's progress is very fast, in addition to Evergrande Football Club, Xu Jiayin's focus on the development of Evergrande mineral water is also led by Liu Yongzhuo, Xu Jiayin's attention to it can be seen.

In 2013, Evergrande Taobao Football Club won the AFC Champions League, becoming the first Chinese team to reach the top of Asia since the AFC Champions League was restructured.

In November 2015, Evergrande Taobao Football Club was officially listed on the New Third Board of the stock market, becoming the first stock in Asian football. 

Liu Yongzhuo not only played Evergrande's football kingdom, but also smashed more than one billion yuan to advertise Evergrande Ice Spring, and successfully completed one billion sales.

In 2020, Liu Yongzhuo was appointed as executive director and president of Evergrande Automobile. In 2022, Liu Yongzhuo's total salary will be 43.984 million yuan, and Evergrande Automobile's 2023 interim report disclosed that Liu Yongzhuo owns 21.635 million shares of Evergrande Automobile, accounting for 0.2%.

If you want to look at academic qualifications, Liu Yongzhuo is not so outstanding, he graduated from East China Normal University with a bachelor's degree, and later obtained a master's degree in business from Wuhan University of Science and Technology. However, it is interesting that Xu Jiayin also graduated from Wuhan University of Science and Technology, and the two are alumni.

Judging from his work history, Liu Yongzhuo is more like a layman in the automotive industry. However, since he became the president of Evergrande Automobile, he has frequently appeared in the automobile circle and accepted media interviews.

In July 2022, Liu Yongzhuo revealed in an interview with the media that after the pre-sale press conference, the market response of Hengchi 5 was very good, and it has exceeded expectations, and the big sale is a foregone conclusion.

Liu Yongzhuo's last public appearance was on December 26, 2023, when Hengchi Automobile held a "major customer delivery ceremony" at its Tianjin production base. Liu Yongzhuo revealed that the delivery volume of Hengchi 5 has increased steadily in the past year.

However, the actual delivery volume of Hengchi 5, I'm afraid only they know in their own hearts.

I saw him rise a tall building, and I saw him collapse a tall building.

02 

Hengchi Automobile is difficult to save itself

In addition to the sudden changes in key figures, the "white knight" who renewed the life of Evergrande Automobile also encountered uncertainty.

This starts from August 14 last year, when Evergrande Automobile announced that the company would receive a strategic investment of up to $500 million from Newton Group.

At the same time, the two parties also signed a transitional financial support agreement, subject to the satisfaction of the conditions precedent in the agreement, Newton Group will provide Evergrande Automobile with interest-free and guaranteed transitional funds in three tranches with a total amount of RMB600 million for the research and development, production and sales of Evergrande Automobile.

Although 500 million US dollars (about 3.57 billion yuan) is a drop in the bucket, it can be described as "life-saving money" for Evergrande Automobile, which is on the verge of bankruptcy.

Evergrande Automobile's 2023 semi-annual report shows that as of June 30, 2023, the total assets were 42.852 billion yuan, the total liabilities were 75.692 billion yuan, and the net assets were -32.84 billion yuan.

It can be said that at that time, Evergrande Automobile had no money to burn, and Newton Group also became the long-awaited "white knight" of Evergrande Automobile.

However, as Xu Jiayin and other Evergrande series of actual controllers were taken compulsory measures, this "life-saving money" also began to be blocked.

Less than two months later, Evergrande Auto disclosed another announcement, saying that it had received a letter from the subscriber Newton Group.

Newton Group said that in view of the recent changes in China Evergrande Group, which will bring significant uncertainty to the share subscription agreement and the proposed transaction. In this case, Newton Group suspended the performance of the relevant obligations in the share subscription agreement, and Newton (Zhejiang) Automobile Co., Ltd. suspended the second and third payments to Evergrande New Energy Automobile (Tianjin) Co., Ltd.

Until a few days ago, Evergrande Auto admitted that the company's share subscription agreement and debt-to-equity swap subscription agreement with Newton Group, a new energy vehicle brand in the United Arab Emirates, were originally scheduled to expire on December 31, 2023, but Newton Group did not agree to extend the deadline, and the original subscription agreement became invalid.

Although strategic investment has been hindered and core figures have changed frequently, Evergrande Automobile's recent actions are not small.

According to Hengchi's WeChat official account, from December 10 to 18, 2023, Hengchi Automobile opened a total of 4 sales exhibition and experience centers in Guangzhou, Chongqing and Yunnan.

On December 23, 2023, Hengchi also launched a preferential policy for time-limited car purchases, reducing the price by 10,000 yuan in disguise. At the same time, there is also a limited time flash sale, and you can get a discount of 15,000 yuan when you buy a limited special car, which means that you can discount up to 25,000 yuan, which also reduces the minimum price of Hengchi 5 to 154,000.

But even so, sales of the Hengchi 5 are still dismal, with only 760 units delivered in the first half of 2023. A total of 937 units were delivered in the first 11 months of 2023, with an average monthly sales of less than 100 units.

Judging from the current situation, although Evergrande Auto is still trying its best to maintain sales, it is difficult for such an insolvent and dismal sales company to gain the trust of consumers.

The current dilemma is that it is difficult for Evergrande Group to give blood transfusions to Evergrande Automobile, and the latter obviously has no hematopoietic capacity.

On January 3, 2023, WM Motor said that it had formally submitted an application for pre-reorganization to reorganization to the Shanghai No. 3 Intermediate People's Court on December 13, 2023, and it was ruled to accept it.

There doesn't seem to be much choice in Evergrande Automobile, in addition to learning Xi Weimar, can Evergrande Auto still find a "white knight"?