In 2024, Evergrande Automobile failed to wait for the savior, and bad news followed one after another. Just now, Evergrande Automobile Hong Kong Stock Exchange issued an announcement,Executive Director Liu Yongzhuo has been criminally detained in accordance with the law on suspicion of illegal crimes..
Seeing tall buildings collapse
Author｜Qin Zhangyong Wang Lei
Liu Yongzhuo also has another identity——President of Hengchi Automobile. He has a well-known saying in the automotive circle. He once said confidently, "The pre-sale of Hengchi 5 exceeds expectations, and it is a foregone conclusion that it will be a big seller. "
However, Hengchi 5 has been in mass production for more than a year, and there are frequent reports of production discontinuation. The monthly sales data are even more difficult to verify.
The news of Liu Yongzhuo's detention is still brewing. Affected by this incident, Evergrande Automobile fell more than 13% after resumption of trading, and once flashed 20%. As of press time, it was trading at HK$0.385, with a total market value of 4.175 billion.
Just a few days ago, Evergrande Automobile issued an announcement stating that the share subscription agreement and debt-for-equity swap subscription agreement with Newton Group were originally scheduled to end on December 31, 2023, and have now expired. This also means that the previous investment plan of US$500 million (RMB 3.57 billion) was ruined.
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 person in Evergrande.
Liu Yongzhuo, born in 1981, joined Evergrande Group in 2003 and was highly regarded by Xu Jiayin. He has held important positions in Evergrande Group for many times, including Vice President of China Evergrande Group and Chairman of Evergrande Football Club.
This post-80s generation was also in charge of Evergrande's companies such as Evergrande Cultural Industry Group, Evergrande Agriculture and Animal Husbandry Group, Evergrande Internet Finance Group, and Evergrande High-tech Group.
Liu Yongzhuo's progress is very rapid. In addition to Evergrande Football Club, Xu Jiayin once focused on developingEvergrande mineral waterLiu Yongzhuo was also appointed as the leader, and Xu Jiayin's importance to him is evident.
He is indeed very capable. During his tenure as chairman of Evergrande Football Club, he invitedLippiAfter joining, Evergrande Taobao Football Club won the AFC Champions League championship in 2013, becoming the first Chinese team to reach the top of Asia since the reorganization of the AFC Champions League.
In November 2015, Evergrande Taobao Football Club officially listed on the New Third Board of the stock market and became aAsia's first football stock.
Liu Yongzhuo not only built Evergrande's football empire, but also spent more than one billion on advertising for Evergrande Ice Spring, successfully completing sales of one billion.
In 2020, Liu Yongzhuo was appointed as the executive director and president of Evergrande Automobile. In 2022, Liu Yongzhuo's total salary was 43.984 million yuan. Evergrande Automobile's 2023 interim report disclosed that Liu Yongzhuo owned 21.635 million shares of Evergrande Automobile, accounting for 0.2%.
If you want to look at academic qualifications, Liu Yongzhuo is not that outstanding. He graduated from East China Normal University with a bachelor's degree and later obtained an MBA from Wuhan University of Science and Technology. But the interesting thing is,Xu Jiayin also graduated from Wuhan University of Science and Technology, both are alumni.
Judging from his work resume, Liu Yongzhuo is more like a layman in the automotive industry. However, since becoming the president of Evergrande Automobile, he has frequently appeared in the automotive industry and accepted media interviews.
In July 2022, Liu Yongzhuo revealed in an interview with the media that after the pre-sale conference, the market response of Hengchi 5 was very good, exceeding expectations, and a big sale is a foregone conclusion.
Liu Yongzhuo's last public appearance was on December 26, 2023, when Hengchi Automobile held a "large customer car delivery ceremony" at its Tianjin production base. Liu Yongzhuo revealed that the delivery volume of Hengchi 5 has steadily increased in the past year.
However, I am afraid only they themselves know the actual delivery volume of Hengchi 5.
See him rise tall buildings, see him tall buildings collapse.
02
Hengchi Automobile is difficult to save itself
In addition to sudden changes in key figures, the "white knight" who extended the life of Evergrande Automobile also encountered uncertainty.
This started on August 14 last year. Evergrande Automobile issued an announcement stating that the company would acquire Newton Group’s GundamUS$500 million strategic investment.
At the same time, the two parties also signed a transitional financial support agreement. If the prerequisites in the agreement are met, Newton Group will provide Evergrande Automobile with a total amount of interest-free and guaranteed transitional funds of RMB 600 million in three tranches for the research and development, production and sales business of Evergrande Automobile.
US$500 million (Approximately RMB 3.57 billion) Although it is a drop in the bucket, it can be said to be "a drop in the bucket" for Evergrande, which is on the verge of bankruptcy.life-saving money".
Evergrande Automobile's 2023 semi-annual report shows that as of June 30, 2023, total assets were 42.852 billion yuan, total liabilities were 75.692 billion yuan, and net assets-328.4billion.
It can be said that Evergrande Motors had no money to burn at that time, and Newton Group became the long-awaited "white knight" of Evergrande Motors.
However, as a series of compulsory measures were taken against Evergrande's actual controllers such as Xu Jiayin, this "life-saving money" also began to encounter obstacles.
Less than two months later, Evergrande Automobile disclosed another announcement saying that it had received a letter from the subscriber Newton Group.
Newton Group said that in view of the recent series of changes in China Evergrande Group, it will bring significant uncertainty to the share subscription agreement and the proposed transaction. In this case, Newton GroupSuspension of performance of relevant obligations in the share subscription agreement, Newton (Zhejiang) Automobile Co., Ltd. suspended the second and third payments to Evergrande New Energy Vehicle (Tianjin) Co., Ltd.
Until a few days ago, Evergrande Automobile admitted that the share subscription agreement and debt-for-equity swap subscription agreement between the company and the Emirati new energy vehicle brand Newton Group were originally scheduled to end on December 31, 2023, but Newton Group did not agree to extend the deadline.The original subscription agreement has expired.
Although strategic investments have been blocked and core figures have changed frequently, Evergrande Motors has made quite a few moves recently.
According to the Hengchi WeChat public account, Hengchi Automobile will open a total of 4 sales display and experience centers in Guangzhou, Chongqing, and Yunnan from December 10 to 18, 2023.
On December 23, 2023, Hengchi also launched a limited-time car purchase preferential policy, with a disguised price reduction of 10,000 yuan. At the same time, there is also a limited time flash sale price. You can get a discount of 15,000 yuan when buying a limited edition car, which means you can get a discount of up to 25,000 yuan, and this also reduces the lowest price of Hengchi 5.154,000.
But even so, the sales of Hengchi 5 are still dismal, with only 760 units delivered in the first half of 2023. A total of deliveries were made in the first 11 months of 2023937 vehicles, the average monthly sales volume is still less than 100 vehicles.
Judging from the current situation, although Evergrande Automobile is still trying its best to maintain sales, it is difficult for an insolvent company with poor sales to gain the trust of consumers.
The current dilemma is that it is difficult for Evergrande Group to transfuse blood to Evergrande Auto, and the latter obviously has no hematopoietic ability.
Not long ago, WM Motor set an example. On January 3, WM Motor stated that it had officially submitted an application for pre-reorganization to reorganization to the Shanghai No. 3 Intermediate People’s Court on December 13, 2023, and was ruled to accept it.
There don’t seem to be many choices before Evergrande Automobile. Besides learning from WM Motor, can Evergrande Automobile still find a “white knight”?