Qingliu | a super player of CITIC Guoan Capital Power with 170 billion debts

The author | Liu Pei

CITIC Guoan Group Co., Ltd. (hereinafter referred to as "Guoan Group"), which is an important member of the 100 billion club with HNA Group and Pioneer Group in China, once attracted much attention in the capital market because of its crazy expansion.

This giant, which once called the wind and rain in the capital market and made crazy acquisitions, gradually lost the magic of capital to create wealth with the series of minesweeping actions set off by the national financial deleveraging policy.

At the end of October 2019, Guoan Group's assets fell to more than 180 billion yuan, while its liabilities were as high as 163.9 billion yuan, and it faced short-term debt repayment pressure of up to 66.7 billion yuan. Since 2019, a number of bonds of Guoan Group have defaulted in substance, and the overdue principal and interest in the past 6 months have exceeded 3.6 billion yuan, and the balance of defaulted bonds has reached 18 billion yuan. The three listed companies controlled by Guoan Group, including CITIC Guoan (000839.SZ), Baiyin Nonferrous Metals (601212.SH) and Sino-Portuguese Shares (600084.SH), suffered substantial losses in performance, and the equity of the above-mentioned listed companies held by Guoan Group was also frozen due to equity pledge disputes.

NetEase Qingliu Studio found that the above huge debts are covered with cause and effect. If you trace the beginning and end, the source of the above-mentioned debt crisis is nothing more than a boiling "shadow" mixed reform 4 years ago, and most of the former popular financial tycoons and politicians have gradually emerged in the hundreds of billions of funds plate after the mixed reform of Guoan Group.

After the mixed reform, Guoan Group carried out large-scale expansion, not only relying on the large-scale central enterprise CITIC Group to transfer large-scale financing to financial institutions, but also high leverage in the capital market to pledge all the equity of listed companies, and the subsequent realization of tens of billions of project funds has not met expectations, and the high-leverage asset plate is bound to be unsustainable, and the capital flow will be broken.

Super Player's "Capital Mixed Reform"

A "mixed reform of state-owned enterprises" in 2014 is now positioned by the media as a stage for several capital tycoons to amass wealth in the capital market. These capital tycoons include Wang Xuebing and Xu Fangming, who were once sentenced to 13 years in prison. As the events unfolded, they gradually emerged into an invisible shareholding structure.

In March 2014, the curtain of Guoan Group's mixed reform was opened. The enterprise, which was originally 100% controlled by CITIC Group, introduced five social shareholders - Huatai Automobile Group (hereinafter referred to as "Huatai Automobile") holding 19.764%, Guangdong Zhongding Group Co., Ltd. (hereinafter referred to as "Guangdong Zhongding") holding 17.787%, Henan Senyuan Group Co., Ltd. (hereinafter referred to as "Henan Senyuan") and Beijing Qianrong Investment (Group) Co., Ltd. (hereinafter referred to as "Qianrong Investment") each holding 15.811% of the shares, and Tianjin Wanshun Real Estate Co., Ltd. (hereinafter referred to as "Wanshun Real Estate") holding 15.811% of the shares. ) holds 9.882% of the shares. The five shareholders increased their capital by 8 billion yuan.

CITIC Group's original 100% shareholding was compressed to 20.945%. Guoan Group said that the shareholding structure is scattered and there is no actual controller.

In fact, this statement was once questioned with the subsequent changes in the shareholding structure. The above-mentioned so-called "mixed reform" has not only been questioned for underselling, but also behind more capital operations, the figure of the former capital tycoon has gradually emerged behind private shareholders.

The first five private enterprise shareholders, except for Wanshun Real Estate, the remaining four have transferred their equity in Guoan Group to Heilongjiang Dingshang Investment Management Co., Ltd. (hereinafter referred to as "Dingshang Investment"), Beijing Heshengyuan Investment Management Co., Ltd. (hereinafter referred to as "Heshengyuan"), Ruiyu (Shanghai) Equity Investment Fund Partnership (hereinafter referred to as "Ruiyu") and Gonghe Holdings Co., Ltd. within one year of participating in Guoan Group.

Behind the equity of the above-mentioned private enterprises, it is roughly divided into two groups of main control, one is CITIC Guoan; the other is Wang Xuebing and Xu Fangming, who are considered to be the most famous financial wizards in the capital market, who were sentenced to 12 or 13 years in prison in 2003 and 2006 for accepting bribes and abusing their power for personal gain.

Taking Ruiyu as an example, at the beginning of the establishment of the tracking, in July 2015, it was funded and established for CITIC Guoan and CHINA AFRICA CNCA (Shanghai) Equity Investment Management Co., Ltd. (hereinafter referred to as "SINO-AFRICAN CNCBI"), and in December of that year, when Ruiyu took a stake in Guoan Group, its shareholding structure became a trust company and a Sino-African CNCBI, the latter of which was still the fund management partner.

Behind the penetration of the shareholding structure of CHINA AFRICA CNCA, Guoan Group and Silver Nonferrous Industry Group Co., Ltd. each hold 30%, the latter has Guoan Group holding 41% of the shares, and CITIC Group holding 3.65%. Therefore, CNCBI is regarded as a controlled company of Guoan Group.

Behind the penetration of the equity of another newly joined shareholder, Ruiyu, the figures of financial tycoons Wang Xuebing and Xu Fangming emerged.

The shareholders behind Ruiyu are mainly controlled by Beijing Baoding Baichuan Investment Partnership (Limited Partnership). The latter is mainly The Fund of Daye Trust, and the fund manager is CITIC Guoan (Beijing) Fund Management Co., Ltd. (hereinafter referred to as "Guoan Fund").

At the beginning of its establishment, the Guoan Fund was held by Guoan Group and its holding company. On August 31, 2016, two companies, Beijing Huishi Technology Co., Ltd. and Beijing Huishan Venture Capital Technology Co., Ltd., appeared on the shareholder list of Guoan Fund, holding 67% of the equity and Guoan Group holding 33%.

The major shareholder behind the above-mentioned Huishi and Huishan companies is Wang Xuebing, holding 42.19% and 60% of the shares respectively. It is worth noting that the largest shareholder of Beijing Huishi Company is Wang Xuebing, and the second largest shareholder, Xu Fangming, holds 31.25% of the shares. Both were influential figures in the financial regulatory market.

Xu Fangming, 40, was honored as director of the Financial Department of the Ministry of Finance, and Wang Xuebing was the president of the CCB at the time, at the age of 48. Not only that, Xu Fangming is also a director of Central Huijin, which is also the largest shareholder of Bank of China and CCB.

The two were sent to prison for several years for using their power for personal gain. In 2003, Wang Xuebing was sentenced to 12 years in prison for accepting bribes, and in 2005, Xu Fangming was announced by the National Audit Office to obtain illegal personal benefits in a case of embezzlement of 810 million yuan by the Agricultural Development Bank of China. In 2006, xu Fangming was sentenced to life imprisonment in the first instance, and the second trial was changed to 13 years' imprisonment.

The two have a long financial background and similar experience, which has been speculated by public opinion as a "coincidence that is not accidental".

The "financial skills" of capital gamblers are invalid, and the hundreds of billions of debts are at the top

Guoan Group, which completed the mixed reform, has launched a large-scale attack on the capital market.

In December 2014, CITIC Guoan Group acquired Century Aiwan Investment Co., Ltd. to lay out the pension industry. In 2015, through the acquisition of Qinghai Heyi and Ming Aoke Fine Chemicals, it expanded into the energy industry. In 2015, Guoan (Hong Kong) Holdings, a wholly-owned subsidiary, acquired Yaoke International (0143. HK), renamed Guoan International in 2017.

The largest investment may have come from the acquisition of Hengtou Securities in January 2018.

Hengtou Securities is a Hong Kong-listed securities company under Xiao Jianhua tomorrow. At that time, the company was in the process of liquidation and divestiture. According to foreign media reports, Xiao Jianhua was detained in Shanghai and is cooperating with relevant departments to sell the investment held by his Tomorrow Department. Tomorrow Department, as a large financial holding group with at least 44 shares, the scale of equity assets is as high as 3 trillion yuan.

At that time, CITIC Guoan intended to take out 9 billion yuan, a premium of 3 times to acquire a 29.94% stake in Hengtou Securities. The investment plan lasted for 3 months and was finally aborted.

During this period, Guoan Group swept a large number of goods in A shares. According to incomplete statistics, Guoan Group is at least the largest shareholder of four listed companies, including CITIC Guoan (000839), Sino-Portuguese Shares (600084), Guoan International (0143), and Baiyin Nonferrous (601212).

In addition, Guoan Group has also indirectly invested in a number of enterprises such as Jiangsu Cable (600959) and Newspaper Media (838506) through its multiple platforms, and has also acquired gold, ore and other companies overseas.

Guoan Group's asset territory radiates finance, resource development, information network, cultural tourism, urban operation, consumer goods, health and pension and other fields, and the asset scale once exceeded 200 billion yuan in 2017, while the asset scale before the mixed reform in 2013 was only 94.8 billion yuan.

What followed was the soaring scale of Guoan Group's liabilities. Guoan Group not only pledged all the equity of the listed company it held in its hands for financing, but also issued bonds on a large scale to raise tens of billions of yuan. The Group's total liabilities soared rapidly from $78.8 billion in 2013 to $163.9 billion at the end of the third quarter of 2019.

The acquisition of Hengtou Securities in 2018 may stem from a lack of financial capacity. A month after announcing the termination of the acquisition in March, CITIC Guoan, a listed company owned by Guoan Group, issued an announcement that shares in the company held by CITIC Guoan Co., Ltd., a wholly-owned subsidiary of Guoan Group, had been judicially frozen and waiting to be frozen. Since then, the equity of many of its listed companies has also been frozen.

Guoan Group held two other listed companies, Baiyin Nonferrous Metals and Sino-Portuguese Shares, after the pledge financing, the stock price fell sharply, both faced the risk of liquidation, after the April margin call, the stock price continued to fall, and then the pledgee sued the court.

Shenwan Hongyuan said that due to the "Sino-Portuguese shares" shares, the closing price fell to 3.5 yuan per share in October 2018, resulting in the performance guarantee ratio under the Agreement being lower than the agreed minimum performance guarantee ratio. CITIC Guoan Co., Ltd.'s failure to fulfill its obligation to increase the performance guarantee ratio to the agreed value in accordance with the contract, and its failure to pay the interest due in full and on time and the pledged shares have been judicially frozen, which constitutes a breach of contract.

In 2019, Guoan Group was sued in court, and Shenwan Hongyuan pledged and raised up to 860 million yuan.

Since April 2019, Guoan Group has encountered debt claims from financial institutions. Minsheng Bank applied, and the 400 million assets of CITIC Guoan Group were frozen by the court.

NetEase Qingliu Studio found that CITIC Guoan Group and its controlled Beijing Cinda Real Estate Co., Ltd. had applied for asset freezing by the Beijing branch of Bank of Jiangsu in April 2019 for an amount of 250 million yuan. According to the statistics of China Execution Information Disclosure Network, as of now, Guoan Group and its subsidiaries have been executed for up to 4.3 billion yuan.

According to Guoan Group's 2019 3rd quarter report data, short-term borrowings reached 41.3 billion yuan, and non-current liabilities due within one year were 25.4 billion yuan, which also means that the debt repayment in the next year is as high as 66.7 billion yuan.

Liu Pei is a senior author at Qingliu Studio and is based in Beijing.

Source of this article: Clear Stream