Stock and debt double killing, broken arms to survive, where will the "ocean-wide system" giant ship helmed by Lu Zhiqiang head to?

This year was a rather uneventful year for Lu Zhiqiang, the former richest man in Shandong. In the past year, its Oceanwide Holdings has not only suffered a stock price cut, but also carried hundreds of billions of huge debts.

Under the double killing of stocks and debts, Lu Zhiqiang chose to "sell his son to survive". In recent years, not only have several properties been sold, but also a sharp sale of the holdings held in order to recover funds to repay debts.

For Lu Zhiqiang, the 100 billion yuan "oceanwide system" founded by one hand has also been in the limelight in the capital market, but in recent years, it has been riddled with debt, and the giant wheels of the past have shown fatigue. Under the helm of Lu Zhiqiang, where will this giant ship sail?

Abandoning politics and business to make a fortune in real estate

Lu Zhiqiang has been in the business world for nearly thirty years, whether it is the transformation of the planned economy, housing reform, or the golden decade of the property market, the reform of the securities market, without exception, he has bet on it, and it can be said that he has stepped on every market hot spot.

According to the data, Lu Zhiqiang was born in 1951. In 1984, Lu Zhiqiang, who was already the deputy director of the office of weifang technology development center, chose to resign and join the entrepreneurial wave.

In 1985, Lu Zhiqiang founded Shandong Tongda Technology Group and started education and training. In 1988, Lu Zhiqiang resolutely went north and established China Oceanwide Holding Group in Beijing with a registered capital of 4 billion yuan.

From abandoning politics and going into business to earning 4 billion yuan, Lu Zhiqiang only took three years. The reason behind the "sudden wealth" is mostly believed to be from real estate in the industry.

In the year of the establishment of Oceanwide Group, the prelude to housing reform kicked off, and Lu Zhiqiang plunged into the real estate industry. In 8 first-tier cities such as Beijing, Shanghai and Shenzhen, 12 real estate construction companies under Oceanwide Holdings are involved, among which Oceanwide's ability to obtain land is even more impressive to peers.

In the 2002 Shanghai Dong Jia Du project, Hong Kong's Sun Hung Kai did everything in its power, but it failed. However, the last 120,000 square meters of land was taken off by Oceanwide Holdings, with almost zero transfer money.

The "Oceanwide International Residential Area" in Beijing's Chaoyang District covers an area of 2.8 million square meters, two-thirds of which are greenery, with 24-hour housekeepers + security guards, plus the stay of many celebrities, and it has earned a lot of applause in the industry. Last year, a 194-square-meter house in Jia Yueting was auctioned at a price of 24.2 million yuan, which shows the high price.

Left Hand Real Estate Right Hand Finance

After making a lot of money in real estate, Lu Zhiqiang set his sights on the financial industry.

As early as 1996, with the help of TaishanHui, Oceanwide Holdings initiated the construction of China's first private joint-stock commercial bank, China Minsheng Bank. By 2000, China's financial industry was open to private capital, and Oceanwide became the second largest shareholder of Minsheng Bank with a shareholding of 9.42%.

After that, the Oceanwide Department began to "attack everywhere". According to incomplete statistics, there are as many as 7 listed companies controlled by the "Oceanwide System" and as many as 48 listed companies participating in the shares. A-share, Hong Kong stocks, US stocks, Australia and other capital markets, you can see the figure of the Oceanwide system everywhere.

In the "2007 China Capital Market Control List", Lu Zhiqiang ranked first with a total controlled market value of 260.9 billion yuan. The Lu family is therefore known as one of the "eight private financial families", and Lu Zhiqiang is also known as "Mainland Li Ka-shing".

In 2014, Oceanwide Holdings proposed a strategic transformation, shifting its focus to the financial sector, and planning to build the company into a comprehensive holding listed company covering "real estate + finance + strategic investment". Since then, Oceanwide Holdings has spent tens of billions of yuan to acquire relevant financial licenses, and has successively involved in various formats such as banking, securities, insurance, funds, trusts, futures, and Internet finance.

In 2013, the year before Oceanwide Holdings announced its transformation plan, its real estate revenue accounted for 78.25%. By 2019, the proportion of real estate revenue of Oceanwide Holdings has dropped to 22.39%, and in 2020, it has dropped to 15.19%.

On January 13, 2020, with the approval of the China Securities Regulatory Commission, the industry classification of Oceanwide Holdings was officially changed from real estate to financial industry.

As a result, Lu Zhiqiang's Oceanwide Department has become a huge capital empire covering finance, energy, real estate, culture and media and other industries.

Debt-ridden, broken arm to survive

Whether it is real estate or finance, it is a typical heavy asset industry, and once the cash flow problem occurs, it will immediately face disintegration, which can be seen from the real estate enterprises that have exploded in recent years. And Lu Zhiqiang's ocean-pan system, at the time of exalted expansion, failed to avoid this problem.

In recent years, under the background of financial deleveraging and tightening supervision of the property market, the radical ocean-going system has quickly tasted bitter results. As a number of banks began to investigate the credit granting and risk analysis of enterprises, various problems of the Oceanwide system also surfaced. On the other hand, oceanwide holdings' real estate projects have been worse off by the lack of growth in recent years.

At the end of 2020, Oceanwide Holdings' current inventory was 57.543 billion yuan, and the inventory turnover rate was only 0.02, lower than the average level of the real estate industry.

As of December 31, 2020, Oceanwide Holdings had total liabilities of RMB146.01 billion, of which short-term borrowings amounted to RMB18.265 billion, non-current liabilities due within one year were RMB29.257 billion, while monetary funds were only RMB19.388 billion.

At the same time, The share price of Oceanwide Holdings has been declining since the high of 4.80 yuan last year, and as of July 2, it closed at 2.25 yuan, with a market value of only more than 10 billion yuan.

In order to solve the debt crisis, Lu Zhiqiang opened the road to asset selling.

According to incomplete statistics, in recent years, Oceanwide has withdrawn more than 30 billion yuan of funds through the sale of assets such as Beijing Oceanwide International Project, Shanghai Dongjiadu Project, and Minsheng Securities Equity. But for hundreds of billions of debts, it is still a drop in the bucket. At the same time, the Minsheng Trust, which lent money to the Oceanwide Department, also thundered.

In the second half of 2020, Minsheng Trust thundered in a large area, and a number of trust projects were postponed. According to relevant data, the amount of litigation disputes or initiated by him as a plaintiff is as high as 15.6328 billion yuan.

In 2021, Oceanwide Holdings has 47.887 billion yuan of short-term bonds due, and there is still a funding gap of about 28.5 billion yuan in terms of the 19.388 billion yuan of monetary funds it holds in hand.

"This year's debt pressure is relatively large, and the company will go all out." All assets can be negotiated as long as the buyer is right and the price is right. Oceanwide Holdings has said.

On June 29, Oceanwide Holdings issued an announcement revealing that 176.4 million shares of the company held by its controlling shareholder, Oceanwide International, had been auctioned off. Four days ago, on June 25, Oceanwide Holdings also reached a transaction to sell 100% of the equity of Zhejiang Oceanwide Construction Investment Co., Ltd. after divesting some of its assets to Sunac for a price of 2.2 billion yuan, which had an impact on the net profit attributable to shareholders of the listed company of about -470 million yuan.

Recently, public information shows that Oceanwide Holdings will auction its shares again at the end of July, with a total starting price of 819 million yuan for 330 million shares.

Lu Zhiqiang's ocean-wide department made its fortune in the real estate industry, but it has obviously taken too big a step in the step of de-real estate, and while accelerating the development of financial business, it has not controlled the risk of cash flow disruption, so that the current embarrassing situation of debt and credit rating downgrade. Although it also hopes to solve the problem of funds by selling assets, it still seems that it is still difficult.