Perseverance
Source: Bowang Finance
With the release of the annual report, the "thunder" behind this private trust can no longer be covered.
According to the recent annual report released by Huaao Trust, the operating income in 2023 will be 60.35 million yuan, a year-on-year decrease of 53.95%; The total profit was -403 million yuan, and the net profit was -431 million yuan. It is worth mentioning that this is the second consecutive year of large losses after the loss of 967 million yuan in 2022.
The decline in revenue is closely related to the "stagnation" of Huaao Trust business. According to the financial report, in 2023, 13 trust projects of Huaao Trust will be liquidated, but no new trust projects will be added.
But the most shocking thing to the market is the amazing bad debts of Huaao Trust. In 2022, the self-operated non-performing assets of Huaao Trust will reach 5.227 billion yuan, which will further increase to 5.23 billion yuan by the end of 2023, and the non-performing asset ratio of Huaao Trust will also be as high as 55.34%, which has exceeded 50% for two consecutive years. This data is also high in the entire financial industry.
The reason for the sudden increase in the non-performing rate of Huaao Trust is that its trust assets are mainly concentrated in the real estate industry. In recent years, in the context of the overall difficult operation of the real estate industry and the deterioration of the financing environment, Huaao Trust is naturally not much better.
Although Huaao Trust is well aware of the risks it is in, it has made it clear in its 2022 annual report that "in the face of the industry difficulties caused by the real estate thunderstorm, the company actively responds and adopts targeted risk mitigation methods according to the specific characteristics of different risk entities, including cash collection, litigation preservation, collateral disposal, supplementary credit enhancement, asset transfer, non-standard transfer, etc.", but after a year of testing, the effect is not obvious.
In addition, the extremely high non-performing rate of Huaao Trust is also involved in many litigation cases. According to Tianyancha, as of May 16, there were 714 pieces of information in judicial cases related to Huaao Trust, of which 375 were listed as defendants. Previously, some investors sued Huaao Trust products for thunderstorms.
Under heavy pressure, Zhan Weihong, the new chairman of Huaao Trust, took over the burden. In November 2023, the fifth interim meeting of the fourth board of directors of Huaao Trust in 2023 agreed to elect Zhan Weihong as the new chairman.
01
The principal and interest of self-operated loans have all been overdue, and the non-performing rate has been as high as more than 50% for two consecutive years
According to public information, Huaao Trust is a non-bank financial institution jointly funded by Beijing Rongda Investment and Chongqing Caixin Group, founded in 1992, formerly known as Kunming International Trust and Investment Company, and changed its current name in 2009, and its current business covers infrastructure, real estate, supply chain finance, consumer finance, environmental protection, energy, cultural industry and other fields, spanning the three major markets of money market, capital market and industrial market, covering more than 160 provinces and cities such as Shanghai, Beijing, Chongqing and Shenzhen.
It is said that "don't put all your eggs in one basket", but Huaao Trust has gone against the grain.
At the end of 2023, the asset management scale of the trust decreased by 23.26% year-on-year to 23.078 billion yuan, of which loans and advances and bond investment were the mainstay, accounting for 53.75% and 43.89% respectively.
From the perspective of industry concentration, Huaao Trust mainly invests in real estate and industrial and commercial enterprises and other real economic fields. Among them, the trust management scale invested in real estate was 9.880 billion yuan, accounting for the first place in the distribution of its trust business, accounting for 42.81% of the total scale; The scale of trust management invested in industrial and commercial enterprises was 6.354 billion yuan, accounting for 27.53%.
In terms of self-operation, at the end of 2023, the scale of Huaao Trust's self-operated assets will be 4.035 billion yuan, and the use of assets will be dominated by other receivables and debt investment, accounting for 62.59% and 17.57% respectively. However, it is worth noting that Huaao Trust's self-operated loans only have two loan objects, namely Zhejiang Yuhui Trading Co., Ltd. and Ningbo Haocheng Petrochemical Co., Ltd., and the principal and interest of the loans have all been overdue.
Because of this, in 2023, Huaao Trust's self-operated non-performing assets will be as high as 5.227 billion yuan, and the self-operated non-performing rate will be as high as 55.34%, resulting in a significant increase in bad debt provisions, and the impairment provisions for other assets at the end of 2023 will increase by 21.15% year-on-year to 1.945 billion yuan.
The staggering bad debts have also brought a regression to the performance of Huaao Trust.
In 2023, Huaao Trust will achieve a year-on-year decrease of 53.95% in operating income to 60.35 million yuan, of which the net interest income will be -40.8512 million yuan, the net income from fees and commissions will be 101 million yuan, and the net profit will be -431 million yuan, which has been a large loss for two consecutive years.
Looking forward to 2024, Huaao Trust will still not be able to solve the problem of performance pressure in the short term, after all, the trust business is close to stagnation. According to the financial report, in 2023, 13 trust projects of Huaao Trust will be liquidated, and no new trust projects will be added.
02
A large lawsuit was exposed, and the actual controller was not having a good time
In addition to the distress of performance, Huaao Trust has also been involved in a number of lawsuits, involving many thunderstorm real estate companies such as Shimao, Baoneng, and Kaisa.
Huaao Trust disclosed in its annual report that in major pending litigation matters, Huaao Trust, as a defendant, was successively sued by Industrial Asset Management, natural person Xu Yi and Shanghai Maidong Architectural Design for disputes over creditor's rights transfer contracts, with a total of more than 300 million yuan.
In addition, Huaao Trust also disclosed the litigation matters that ended during the year, as the defendant, it was also sued by natural persons Lu Ying and Song Jing due to a dispute over the transfer of creditor's rights, and the main judgments were: Huaao Trust paid the creditor's rights transfer money to the plaintiff; The plaintiff may be compensated in priority with the proceeds from the discount, auction, or sale of the pledged property involved in the case.
It is worth noting that Chongqing Caixin Group, the actual controller of Huaao Trust, is jointly and severally liable for the above two cases. I originally thought that Chongqing Caixin Group could lend a helping hand to help Huaao Trust, but I didn't expect that the former's life was not very good.
According to Tianyancha, as of May 16, the equity of Huaao Trust held by Chongqing Caixin Group has been judicially frozen, and Chongqing Caixin Group has a total of 19 pieces of information on the person subject to execution, with a total amount of 6.274 billion yuan. In addition, because Chongqing Caixin Group "failed to perform the payment obligations determined by the effective legal documents within the period specified in the enforcement notice", the group and its legal representative, Lu Shengju, were restricted from high-consumption behavior in accordance with the law.
In fact, Chongqing Caixin Group has long been short of liquidity. Previously, the Chongqing branch of Hengfeng Bank filed an application for compulsory enforcement with the Chongqing No. 1 Intermediate People's Court, freezing the 399 million shares of Caixin Development held by Chongqing Caixin Group, in which Hengfeng Bank Chongqing Branch believed that "Chongqing Caixin Group had liquidity difficulties, other business defaults and lawsuits, so it was announced that Caixin Group and its subsidiaries and Hengfeng Bank Chongqing Branch had 6 financing loans with a balance of 4.44 billion yuan due ahead of schedule".
Despite the many unfavorable status quo, Zhan Weihong resolutely chose to take the lead. In November 2023, the fifth interim meeting of the fourth board of directors of Huaao Trust in 2023 agreed to elect Zhan Weihong as the chairman of the company. It is reported that Zhan Weihong used to work in the non-banking department of the former China Banking Regulatory Commission, and then went to Zhongrong Trust and Zhejin Trust to work. At the end of 2019, he went to Daye Trust as the general manager, and then went to Huaao Trust.
Focusing on "small and beautiful, refined and specialized" Huaao Trust is now facing many challenges, and how the new chairman Zhan Weihong "saves himself" still needs the market to give an answer, we will wait and see.