Wang Zhenhua, a wealthy man who molested girls in Xincheng, has taken a big dive
Produced by Radar Finance and Economics, edited by Mo Enmeng, Deep Sea
Since 2024, Seazen Holdings' share price has fluctuated lower, falling by more than 26% year-to-date.
According to Flush iFinD data, as of the end of last year, Wang Zhenhua, who is the actual controller of Xincheng Holdings, held 45.71% of the shares.
The share price of Xincheng Holdings fell, triggering a sharp decline in Wang Zhenhua's wealth. According to the recently released "2024 Hurun Global Rich List", Wang Zhenhua's family was included in the list of Chinese entrepreneurs with the largest decline in wealth. The list shows that the Wang Zhenhua family, which is worth 7.2 billion yuan this year, has shrunk by more than 60%, and its ranking has fallen by nearly 1,900.
As a well-known local entrepreneur in Changzhou, Jiangsu Province, Wang Zhenhua's wealth accumulated over the years is mainly due to the new city company he has built. However, Wang Zhenhua's personal fate took a turn in 2019. At that time, due to the indecent assault on a 9-year-old girl, Wang Zhenhua had to withdraw from the management of Seazen Holdings, but he is still the actual controller of Seazen Holdings.
After Wang Zhenhua retired, his son Wang Xiaosong took over his father's chairmanship, but the burden on Wang Xiaosong's shoulders was not light. According to the financial report, in 2023, Seazen Holdings' revenue will only increase slightly by 3.22%, and its net profit attributable to shareholders of listed companies will decline by 47.12%.
Due to the comprehensive impact of multiple factors such as the macroeconomic situation, the overall environment of the industry, the company's strategic planning and future capital needs, Seazen Holdings also made a decision not to distribute cash dividends, not to give bonus shares, and not to use provident fund to increase share capital in 2023. As of the end of 2023, Seazen's distributable profit at the end of the period was RMB7.61 billion, which was the third consecutive year that Seazen Holdings had not paid dividends since 2021.
For 2024, Seazen Holdings will take "ensuring delivery, reducing risks, and seeking transformation" as its goal. However, judging from the business briefing in the first quarter of this year, when the cumulative contracted sales amount and cumulative contracted sales area both declined, as well as the overall environment of the real estate industry that has not yet fully recovered, Seazen Holdings is still facing difficult challenges in the future.
Wealth shrank by more than sixty percent, and Wang Zhenhua's ranking on the rich list plummeted
In the "2024 Hurun Global Rich List" released last month, the wealth of Wang Zhenhua's family is 7.2 billion yuan, which has shrunk by more than 60% compared with the wealth of 19 billion yuan in the previous year, and the ranking of Wang Zhenhua's family on the list has also dropped from 1181 in the previous year to 3058, a cliff-like decline of 1877.
Radar Finance found that in fact, since 2020, Wang Zhenhua's family's ranking on the "Hurun Global Rich List" has been declining. In 2020, Wang Zhenhua's family ranked 357th on the list with a wealth of 43 billion yuan. From 2021 to 2023, Wang Zhenhua's family's wealth has continued to shrink, and its ranking has also dropped by 225, 174, and 425 respectively. By 2023, the wealth of Wang Zhenhua's family has fallen to 19 billion yuan.
Born in March 1962 in Changzhou, Jiangsu Province, Wang Zhenhua is a well-known local entrepreneur. The ups and downs of Wang Zhenhua on the rich list are also inseparable from the real estate business empire he has built single-handedly. However, Wang Zhenhua was not originally engaged in the real estate industry. When Wang Zhenhua was only 22 years old, he became the deputy director of the workshop of the state-owned cotton mill, and later Wang Zhenhua founded the home textile factory from scratch.
In 1993, Wang Zhenhua, who was in his early 30s, plunged into the real estate industry. In July of that year, Wang Zhenhua raised funds to establish Wujin Xincheng Investment, Construction and Development Co., Ltd. Under the leadership of Wang Zhenhua, Xincheng quickly became a leader in Changzhou's real estate industry.
After entering the millennium, Seazen expanded its business territory from the early residential development business to the commercial real estate field, and its footprint also moved from Changzhou to the Yangtze River Delta region, and moved its strategic focus to Shanghai in 2009.
Radar Finance learned from the official website of Seazen Holdings that as of January 25 this year, Seazen Holding Group has entered 142 large and medium-sized cities in China, including Shanghai, Beijing, Tianjin, Chongqing, Hangzhou, Nanjing, Suzhou, Jinan, Xi'an, Chengdu, Changchun, Changzhou, etc., with more than 700 projects under development or completed.
In the process of enterprise development, Xincheng company has made frequent moves in the capital market. In 2001, Seazen Real Estate was listed on the B-share market, becoming one of the earliest listed real estate companies in Jiangsu Province. In 2012, Seazen Development was listed on the Hong Kong Stock Exchange. In 2015, Seazen Holding Group landed on the Shanghai Stock Exchange, thus becoming the first private real estate enterprise in China to achieve B-to-A. In 2018, Seazen's property platform, Xinchengyue Service, also landed on the Hong Kong stock market.
After decades of rapid development, Seazen has gradually grown into a comprehensive real estate group integrating residential and commercial real estate. In 2018, Xincheng's sales exceeded 200 billion yuan, and it once ranked among the top 10 real estate companies. However, a police report in 2019 made Wang Zhenhua's good reputation accumulated over the years take a sharp turn.
According to the police report issued by the Putuo Branch of the Shanghai Municipal Public Security Bureau, at about 22 o'clock on June 30, 2019, the Shanghai Putuo police received a report from Ms. Wang, saying that her daughter was taken to Shanghai from her hometown in Jiangsu by her friend Zhou Moumou (female, 49 years old, from Jiangsu) and stayed in a hotel in the city, after which her daughter was molested by a man in the room.
In June 2020, the media learned from the Shanghai Putuo District People's Court that the defendant Wang Zhenhua was sentenced to 5 years in prison for child molestation. Although Wang Zhenhua subsequently appealed and requested a second-instance verdict of not guilty, in May 2021, the Shanghai No. 2 Intermediate People's Court held a closed hearing of the case in accordance with the law and pronounced the verdict in court, ruling to reject the appeal and uphold the original verdict.
Affected by this incident, Seazen Holdings made the decision to change the coach as early as July 3, 2019. At that time, Seazen Holdings issued an announcement stating that the company received a notice from the Putuo Branch of the Shanghai Public Security Bureau on the same day that Wang Zhenhua, the actual controller and chairman of the company, was criminally detained for personal reasons. Wang Xiaosong, director and president of the company, will take over as chairman of the board of directors of the company, and Wang Xiaosong will exercise the power of legal representative, and Wang Xiaosong is Wang Zhenhua's son.
So far, Seazen Holdings has ushered in the era of the second generation of Wang Xiaosong in power. It is reported that Wang Xiaosong, who was born in 1987, graduated from Nanjing University with a bachelor's degree in environmental science. Before taking over the position of chairman, Wang Xiaosong had many working experiences in the Xincheng company system, including civil engineer of the engineering department of Changzhou company of Jiangsu Xincheng Real Estate Co., Ltd., assistant manager and project general manager of the engineering department of Shanghai company, and assistant to the president, director and president of Jiangsu Xincheng Real Estate Co., Ltd. Later, he served as a director and president of the Company and a non-executive director of Seazen Development Holdings Limited.
The company's profits were cut in half, and investors voted with their feet
In fact, the reason for the shrinkage of Wang Zhenhua's family wealth is, to a certain extent, inseparable from the current predicament faced by Xincheng Holdings, which is at the helm of the company.
According to the annual report released by Seazen Holdings not long ago, Wang Zhenhua is the actual controller of the company. As of the end of last year, among the top ten shareholders of the company, Fuyu Development Group Co., Ltd. and Changzhou Derun Consulting Management Co., Ltd. held 61.09% and 6.11% of the company's shares respectively, and these two companies are the enterprises actually controlled by Wang Zhenhua, holding a total of 67.20% of the company's shares.
Specifically, Wang Zhenhua holds 63.33% of the equity of Seazen Development, while Seazen Development holds 100% of the equity of Fuyu Development and Changzhou Derun through Hong Kong Chuangtuo, Fuyu Development holds 61.09% of the equity of Seazen Holdings, and Changzhou Derun holds 6.11% of the company's equity. In addition, Wang Zhenhua's wife, Chen Jing, holds a 1.43% stake in Seazen Development, and Wang Zhenhua's son, Wang Xiaosong, holds a 0.02% stake in the company.
In the past year, Seazen Holdings' financial results were not satisfactory. According to the financial report, in 2023, Seazen Holdings will record a total revenue of 119.2 billion yuan, a slight increase of 3.22% compared with the revenue of 115.5 billion yuan in the previous year, but it is still less than the revenue scale of 168.2 billion yuan in 2021.
Unlike the slight increase in revenue, Seazen Holdings' profit indicators last year declined significantly. According to the financial report, in 2023, the net profit attributable to shareholders of listed companies will be 737 million yuan, and the net profit attributable to shareholders of listed companies in 2022 will be as high as 1.394 billion yuan. In contrast, the net profit attributable to shareholders of listed companies shrank by nearly half, down 47.12%.
Regarding the decline in net profit, Seazen Holdings explained that due to the overall market environment and the structural changes of carry-over projects, the gross profit of the company's real estate projects during the reporting period decreased compared with the same period last year;
During the reporting period, the net cash flow generated by the operating activities of Seazen Holdings was 10.16 billion yuan, a decrease of 30.11% from 14.53 billion yuan in the same period of last year, which was mainly due to the decrease in the cash received from the sale of goods and the provision of labor services due to the decline in the company's contract amount during the reporting period.
As a member of the real estate track, Seazen Holdings' current main business is real estate development and sales, of which the real estate development business mainly includes residential real estate development business and commercial real estate development business, the main products of residential real estate development business are various types of commercial residences, and the main products of commercial real estate development business are commercial complexes.
Specifically, real estate development and sales contributed 107.336 billion yuan of revenue to the company last year, a year-on-year increase of 2.34%, and the company's property leasing and management contributed 10.631 billion yuan of revenue to the company, a year-on-year increase of 15.26%, mainly due to the increase in the number of Wuyue Plazas opened by the company.
Although the revenue of the above two major segments has achieved varying degrees of growth, the gross profit margin of both has shown a downward trend. Among them, the gross profit margin of the real estate development and sales segment decreased by 1.51 percentage points year-on-year to 13.91%, and the gross profit margin of the property leasing and management segment decreased by 2.7 percentage points year-on-year to 69.9%.
In the past year, the sales amount and sales area of commercial housing across the country continued to decline, but the decline narrowed. During this period, Seazen Holdings has not been able to get rid of the overall downward trend of the industry. In 2023, Seazen Holdings will achieve a contracted sales area of 9,687,800 square meters, a year-on-year decrease of 18.69%, and a contracted sales amount of 75.983 billion yuan, a year-on-year decrease of 34.52%.
In the financial report released this time, Seazen Holdings bluntly said that in 2023, in the face of many projects under construction and large volumes, especially in the context of the industry with slowing project sales, the company's liquidity will be under pressure and the pressure on delivery will increase. During the reporting period, the company completed the delivery of more than 140,000 sets of properties and an area of 22.1 million square meters, and completed the delivery task.
When it comes to the commercial real estate development business of Seazen Holdings, we have to mention the company's commercial complex project brand "Wuyue". As of the end of the reporting period, there were 198 Wuyue Plaza urban complexes opened or under construction nationwide, and the number of Wuyue Plaza urban complexes that have been opened or entrusted to manage has reached 161, with an operating area of 14,991,100 square meters and an occupancy rate of 96.48%.
Due to the unsatisfactory performance, the company was voted with their feet by investors, and the company's stock price has fallen by 26.82% year-to-date.
There has been no dividend for three consecutive years, and challenges will still exist in 2024
Just as the company's annual report was released, Seazen Holdings also issued an announcement on the profit distribution plan for 2023. Seazen Holdings said in this announcement that the company plans not to distribute cash dividends, give bonus shares, and not use provident fund to increase share capital in 2023, and this is the third consecutive year that Seazen Holdings has not paid dividends since 2021.
The reason for making such a decision is that based on the current macroeconomic situation, the overall environment of the industry, the company's strategic planning and future capital needs, in order to protect the company's operating ability and solvency, and reduce financial risks.
The company's retained undistributed profits will be used for the company's daily operation, debt repayment, replenishment of working capital and other purposes in accordance with the company's development strategy and annual work plan, and actively respond to the policy of "ensuring the delivery of buildings and ensuring people's livelihood".
According to Seazen Holdings, in 2024, the company will adhere to the goal of "ensuring delivery, reducing risks, and seeking transformation", focus on the core business policy, anchor the future, and promote the completion of various business objectives.
Specifically, the company plans to achieve a total revenue of 12.5 billion yuan from commercial operations in 2024, with the opening of 12 new Wuyue Plaza and entrusted management projects in operation, and the company plans to start 51 new sub-projects with a new construction area of 4,081,900 square meters, including 1,696,600 square meters of residential projects and 2,385,300 square meters of commercial complex projects.
According to the plan of Seazen Holdings, in 2024, the company plans to complete 177 sub-projects, with an estimated total construction area of 13,588,500 square meters, including 6,593,600 square meters of residential projects and 6,994,900 square meters of commercial complex projects.
At the same time, Seazen Holdings will continue to optimize the asset-liability structure and thicken the company's safety barrier to ensure the company's sustainable and steady development while ensuring that the company's cash flow is reasonable and abundant. Seazen Holdings said that the company will improve the efficiency of capital use under the premise of strictly controlling the risk of capital use, and strive to achieve better operating performance to return investors.
However, entering 2024, Seazen Holdings is still facing a lot of pressure. According to the business briefing released by Seazen Holdings, in the first quarter of this year, the cumulative contracted sales amount of Seazen Holdings was about 11.947 billion yuan, a decrease of 44.44% compared with the same period of the previous year, and the cumulative contracted sales area was about 1.6517 million square meters, a decrease of 34.4% compared with the same period of the previous year.
Xincheng Holdings believes that the real estate industry is still in the risk clearance period, although the favorable policies continue to release a certain positive effect, but the transmission of the policy still takes time, the repair of buyers' confidence and industry expectations will take time, it is expected that the sales downturn will be difficult to reverse in the short term, and the sales of real estate enterprises will continue to be under pressure. In the face of this situation, real estate companies need to promote the decentralization of sales, actively grasp financing opportunities, expand financing channels, maintain stable cash flow, send positive signals to the market, and enhance brand confidence.
Will the Wang Zhenhua family, which has fallen very badly in the world's richest list this year, sweep away the decline in recent years and achieve a jump in wealth in the future? Radar Finance will continue to pay attention.