Preface
Thousands of calculations, I didn't calculate that Zhongzhi Group would go bankrupt one day...
You must know that it was a "popular enterprise" in the financial circle for 29 years, and at its peak, it had assets of 1.14 trillion yuan ahead of Evergrande.
At that time, its thunderstorm not only made a number of companies feel incredible, but also made its investors as high as 150,000 like a big enemy, and even lost all their money...
So, how did Zhongzhi Group rise? How did it thunder after that?
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Once stood at the top
Zhongzhi Group is also Zhongzhi Enterprise Group, which used to be a financial giant that is constantly climbing.
On the business map of China, Zhongzhi Enterprise Group is like a towering mountain, standing tall.
This enterprise group founded by Xie Zhikun, with its strong strength and broad business territory, interprets the ancient adage of "no accumulation of steps, no thousands of miles".
The wide scope of business of Zhongzhi Group can be called "eight immortals crossing the sea, each showing their magical powers". From financial services to industrial investment, to scientific and technological innovation, the tentacles of Zhongzhi Group have extended to almost all corners of the modern economy.
This diversified business strategy not only makes Zhongzhi Group invincible in the fierce market competition, but also provides a steady stream of power for its sustainable development.
As the core business of Zhongzhi Group, financial services can be said to be its "foundation". In this field, Zhongzhi Group has shown extraordinary strength and insight.
Through a number of financial institutions, Zhongzhi Group continues to innovate financial products and services to provide customers with a full range of financial solutions. It can be said that the achievements of Zhongzhi Group in the financial field confirm the statement that "finance is the blood of the modern economy".
However, Zhongzhi Group is not just a simple financial group. Its layout in the field of industrial investment is also impressive.
Zhongzhi Group is well versed in the principle of "industrial prosperity", and has not only created considerable benefits for itself by investing in various entities, but also made important contributions to the development of China's economy.
This development model of attaching equal importance to finance and industry has enabled Zhongzhi Group to maintain a strong competitiveness in the economic tide.
In terms of scientific and technological innovation, Zhongzhi Group is not inferior. The group is well aware of the importance of "science and technology is the primary productive force", and actively participates in various high-tech fields.
By supporting and investing in scientific and technological innovation enterprises, Zhongzhi Group has not only injected new vitality into itself, but also contributed to China's scientific and technological progress.
As one of the largest private enterprise groups in China, the scale of Zhongzhi Group is amazing. It has a number of listed companies and financial institutions, which not only demonstrates the strength of Zhongzhi Group, but also provides a broad platform for its future development.
As the saying goes, "it's good to enjoy the shade under the big tree", all subsidiaries and institutions of Zhongzhi Group have made great progress under the protection of the group.
Zhongzhi Group's influence in China's financial and investment fields can be described as "pivotal". As an important market participant, every decision and action of Zhongzhi Group may have a profound impact on the market.
This kind of influence is not only the result of Zhongzhi Group's hard work for many years, but also its important responsibility.
However, as the saying goes, "the tree is a big wind", the development path of Zhongzhi Group is not smooth sailing. In the course of operation in recent years, Zhongzhi Group has also faced some challenges and pressures.
However, it is these challenges and pressures that let us see the resilience and adaptability of ZZ Group. In the face of difficulties, Zhongzhi Group did not retreat, but rose to the occasion, constantly adjusted its strategy, optimized its structure, and strived to create a new situation in the changing situation.
However, only faith often cannot achieve their original goals, even if they are as strong as Zhongzhi Group, they have ushered in the day of thunderstorm.
Tree big moves?
In 2023, China's financial industry ushered in a storm that shook the entire industry. Zhongzhi Enterprise Group, which once "called for wind and rain", fell into an unprecedented predicament this year and staged a drama of "falling from the clouds". This turn of events can't help but make people sigh at the ancient adage that "a tree is big and easy to fall".
In June 2023, Zhongzhi Group's plight was publicly apparent for the first time. According to reports, the group and its affiliates face a staggering amount of debt, exceeding 100 billion yuan.
This number is enough to make people gasp, not to mention that when the debt snowballs, it becomes a "debt mountain" that may collapse at any time.
A direct consequence of the debt crisis is the frequency of defaults. Since July 2023, a number of bonds related to Zhongzhi Group have defaulted one after another, including corporate bonds, private placement bonds and other types.
These defaults are like a series of "dominoes", one of which falls and triggers a chain reaction. Each default caused ripples in the market and shook investor confidence.
In August 2023, the rupture of the capital chain made Zhongzhi Group fall into the dilemma of "it is difficult for a clever woman to cook without rice". Unable to repay its debts on time, the Group's funding chain ran into serious problems, resulting in a number of projects and businesses in trouble.
It's like if there is a problem with a person's circulatory system, the whole body will be affected.
In the stock market, in the third quarter of 2023, the stock prices of listed companies related to Zhongzhi Group fell sharply, triggering market panic.
For example, the share price of a listed company under Zhongzhi Group plummeted by more than 50% in just one month. This plunge in stock prices is like a cruel "vote" on the strength of Zhongzhi Group.
In September 2023, the severity of the situation even alarmed regulators. A number of relevant departments have issued announcements one after another, saying that they are paying attention to the development of the Zhongzhi Group incident and will take necessary measures to maintain market stability.
In October 2023, Zhongzhi Group's predicament not only affected itself, but also seemed to be like a boulder thrown into a calm lake, causing layers of ripples.
According to incomplete statistics, at least dozens of financial institutions and hundreds of enterprises have been directly affected, and the entire financial market has also been affected to a certain extent. This once again confirms the truth of "pulling a hair and moving the whole body".
So, what is the reason why Zhongzhi Group, which has been smooth sailing, is in such a predicament?
No man is content
The reason for this is that the problems of Zhongzhi Group may stem from many aspects. Factors such as overexpansion between 2015 and 2020, high leverage, and changes in the macroeconomic environment since 2022 may have contributed to the fuse.
First of all, ZZ's early success was built on a risky business model.
From the late 90s of the 20th century to the beginning of the 21st century, the group made a lot of money by buying low and selling high in the stock market, as well as investing in listed companies.
However, this practice of wandering on the edge of the law is tantamount to "drinking water to quench thirst", laying a hidden danger for future crises.
Secondly, there are serious flaws in the management model of Zhongzhi Group. The founder, Xie Zhikun, with proper management and some excellent arrangement, did have a good effect at the beginning, and also made the company bigger and stronger.
But at the same time, his management style actually buried huge hidden dangers, so that the internal management became very chaotic after that, even if many senior executives at that time realized that it should be rectified, but no matter how hard they worked, it was difficult to recover the company's decline.
As the saying goes, "a thousand miles of embankment, collapse in an anthill", this management method eventually became the fuse for the collapse of the group.
What's more, in 2021, the sudden death of Xie Zhikun dealt a fatal blow to Zhongzhi Group.
After all, with the management style of Xie Zhikun, all kinds of information he has are particularly important, and his death will make many senior executives and leaders do not understand the company's future planning and how to proceed next.
As the saying goes, "once a son of heaven and a courtier", the new management failed to effectively control the situation, but instead accelerated the collapse of the group.
Moreover, Zhongzhi Group failed to transform in time. When its traditional capital operation model gradually became ineffective, the group began to try to transform into an industrial industry.
However, this transformation is not complete and lacks the necessary experience and resources. As the saying goes, "interlacing is like separating mountains", and Zhongzhi Group's attempts in new fields such as real estate and agriculture ultimately failed to achieve the expected results.
In addition, there is a serious lack of risk control within Zhongzhi Group. In order to maintain the semblance of prosperity, some traders have begun to take risks and lure investors with beautifully packaged distressed assets.
This practice is tantamount to "drinking water to quench thirst", and the risks within the group are also snowballing.
Finally, changes in the macroeconomic environment have also had a huge impact on Zhongzhi Group. Since 2020, China's financial market has faced many challenges due to the impact of the global pandemic and economic downturn.
Zhongzhi Group has accumulated many problems due to its own problems, and it is even more difficult to continue in this environment.
This is like a person who is not greedy enough and wants to seize too many opportunities at the same time, but the result may be "taking care of one and losing the other", or even "the bamboo basket is empty".
Liquidation and Impact
On November 25, 2023, the relevant departments finally couldn't sit still and filed a case for investigation of the wealth company to which the "Zhongzhi Department" belonged, which marked the official start of the liquidation process of Zhongzhi Group.
This liquidation process has had a profound impact on financial markets and investors. First and foremost are the huge losses suffered by investors.
According to statistics, there are thousands of enterprises investing in Zhongzhi Group, and although the investment amount of many of them varies, some data show that 150,000 individual investors have invested more than 3 million yuan, so that the total investment amount is as high as 3.6 trillion yuan, which is close to the sky.
These investors are at risk of losing their money.
At the social level, the collapse of Zhongzhi Group may lead to the loss of a large number of employees, which will have a certain impact on social stability. Although the Group has continued to uphold philanthropy in the face of difficulties, its bankruptcy liquidation will undoubtedly affect its ability to give philanthropy in the future.
In general, the liquidation process of Zhongzhi Group is not only the end of an enterprise, but also a major test for the entire financial system, and its impact will continue to ferment for a long time.
In the face of the crisis, in November 2023, Zhongzhi Group announced the launch of a comprehensive restructuring plan, including asset restructuring and debt restructuring. It's like a drowning person, desperately trying to grasp any possible life-saving straw.
However, it will take time to verify whether we can successfully get out of the predicament.
Resources:
Jiemian News-248 enterprises including Zhongzhi Enterprise Group Co., Ltd. were applied for substantive merger and bankruptcy liquidation
https://baijiahao.baidu.com/s?id=1803098607080334731&wfr=spider&for=pc
Daily Economic News-Zhongzhi Group issued an open letter! Apologize to investors: debts exceed 420 billion, serious insolvency
https://www.toutiao.com/article/7304280824130929161/?channel=&source=search_tab