Dream back to the Qing Dynasty. Later generations evaluated Emperor Kangxi as the first emperor of the ages.
He ascended the throne at the age of 8 and was outwitted at the age of 14. Pacify the three feudatories, unify the bay, defeat Tsarist Russia, and conquer Galdan three times; Efforts have been made to rectify the internal program and develop the economy, and have achieved remarkable results, which are worthy of praise for thousands of years.
However, when Emperor Kangxi died, the total amount of silver in the entire treasury was less than 8 million taels, which was not enough to pay the emperor's relatives for a year, and it had reached the point where it was unsustainable.
There are three main reasons for this difficult predicament: first, the imperial court's income is "limited"; second, the cost of continuous conquest is huge; Third, there is too much "dead debt" and "bad debt" that have accumulated all year round.
In the sixty-first year of Kangxi (1722), Emperor Yongzheng ascended the throne. At that time, the officials were corrupt, the prince was competing for the prince, and Yongzheng used thunderous means to clean up a series of "messes" and successfully "continue his life" for the Qing Dynasty.
History repeats itself. In the 21st century, a similar scene began to play out again.
Zheng Yonggang, a generation of business tycoons, from striving to be China's "suit king" at the beginning of his business, to decisively transforming into new energy at his peak, and then to acquiring LG Chem's polarizer business in the year of Huajia, building a huge Shanshan empire.
In February 2023, Zheng Yonggang passed away suddenly, also leaving a series of "messes" for his successors.
His son Zheng Ju faced a storm of "infighting" when he took over, and soon after, he faced multiple pressures such as the outbreak of financial crises and the emergence of compliance risks, and now its listed company may even change hands.
What is questioned is, can the Shanshan Empire still be evergreen?
Zheng Yonggang's era of "Kangxi Prosperity"
The story of Shanshan began in 1989, when it was just a garment factory on the verge of bankruptcy. Under the leadership of the founder Zheng Yonggang, Shanshan suit has become the first brand of clothing in China, with a market share of 37%.
The company was listed on the A-share market in 1996, becoming the first listed garment company in China. The sentence "Shanshan brand suit, don't be too chic" has also become the memory of many post-60s and post-70s.
Zheng Yonggang is known as the "cross-border king", and in the decades of shopping mall battles, he has carved "transformation" into his bones.
In 1999, when lithium batteries had not yet become the mainstream, Zheng Yonggang made a forward-looking layout of new energy, making Shanshan Co., Ltd. the first industrialized anode material enterprise in China.
Subsequently, Shanshan Co., Ltd. continued to expand its business areas and transformed into a new energy enterprise, whose business covers new energy businesses such as lithium-ion battery materials, lithium-ion capacitors, battery packs, charging pile construction, as well as new energy vehicle operation and energy management services.
At the same time, as a representative of enterprise investors, Zheng Yonggang has also carried out many successful capital operations in listed companies Addison (later backdoor by Shentong Express), Xinhualong (the predecessor of Jixiang shares), real estate, health, logistics and other industries.
Since 2020, Zheng Yonggang has adjusted his strategy, accelerated his slimming, focused on his core competitiveness, and divested a large number of non-core businesses. At the same time, it spent nearly 7.2 billion yuan to indirectly purchase 70% of LG Chem's LCD polarizer business and related assets in Chinese mainland, Taiwan and Korea, forming today's dual main business development model of lithium battery materials and optical materials.
With the take-off of the new energy industry, Shanshan Co., Ltd. achieved the best performance in history in 2021, achieving an annual operating income of 20.699 billion yuan, a year-on-year increase of 151.94%, and a net profit of 2320.00%.
According to CINNO Research statistics, the company's share of large-size polarizer shipment area will increase from 30% in 2022 to 33% in 2023, continuing to maintain the world's No. 1 position. The market share of the polarizer business for LCD TVs and the polarizer business for LCD displays ranks first in the world.
The "Yongzheng Dilemma" in the Zheng Jun Era
However, with the rapid expansion of the Shanshan Empire, a lot of dark mines have also been buried. Now, one by one, they have finally detonated.
In February 2023, Zheng Yonggang died suddenly, and his son Zheng Ju, the new emperor, faced a "palace fight" when he ascended the throne. On March 23, 2023, Shanshan elected Zheng Ju as a director of the company at the first extraordinary general meeting of shareholders in 2023. What Zheng Ju didn't expect was that his stepmother Zhou Ting made a big fuss at the shareholders' meeting, accusing the shareholders' meeting of illegal procedures in the name of Zheng Yonggang's current spouse and the legal guardians of his three biological children, and asked to inherit the actual control of Shanshan. It was not until May that the dust settled on the farce of Shanshan shares: Zheng Ju continued to serve as a director and chairman, and Zhou Ting was elected as the company's new non-independent director and did not participate in the daily operation of Shanshan shares.
What is even more coincidental is that, similar to the unsustainable situation of the entire country's finances when Emperor Kangxi died, Zheng Yonggang left Zheng Ju with a heavy debt burden.
On September 3, Shanshan Group announced the latest progress of 12 major lawsuits, most of which involved the repayment of bank debts, and the cumulative value of the subject matter of the lawsuits was as high as 1.835 billion yuan. Shanshan Group, Shanshan Holdings, and the new chairman Zheng Ju were also jointly and severally sued for joint and several liability.
Shanshan Holdings is the indirect controlling shareholder of Shanshan Co., Ltd., which not only holds shares indirectly through the holding of Shanshan Group, but also directly holds 4.11% of the shares of Shanshan Co., Ltd. Shanshan Group is the largest corporate shareholder of Shanshan Co., Ltd., holding 32.83% of the shares.
Analysts said that the financial difficulties faced by the controlling shareholder may restrict its ability to provide financial support to Shanshan shares, affect the flexibility of the company in major decision-making matters such as capital expenditure, mergers and acquisitions, and R&D investment, and the potential instability of control may also disrupt the long-term strategic deployment of the enterprise and form uncertainty interference on the future development path of the enterprise.
In the first half of the year, Shanshan's short-term borrowings increased by about 1.4 billion yuan to 8.075 billion yuan, and long-term borrowings also increased by about 800 million yuan, reaching a total of 8.889 billion yuan. As of June 30, the total interest-bearing liabilities of Shanshan shares have climbed to 19.948 billion yuan, far exceeding its monetary funds of 5.625 billion yuan in the same period, and the debt repayment pressure can be imagined.
On October 9, Shanshan Shares and Yongshan Lithium, two A-share listed companies controlled by Shanshan Empire, also disclosed a negative announcement that the company's shares held by the controlling shareholder will be frozen or will be subject to judicial auction, and the controlling shareholder and actual controller of Yongshan Lithium may change.
The crisis of the Shanshan Empire has completely surfaced.
160,000 shareholders waiting for "Qianlong Ningjing" in tears
In the secondary market, Shanshan shares have shown a unilateral downward trend since hitting a high price of 43 yuan per share in October 2021. As of the close of trading on October 16, the price was 7.90 yuan / share, down 0.88%. The stock price has lost more than 80% in three years.
When Zheng Ju took the helm of Shanshan at the beginning of 2023, the company's market value was about 38 billion yuan, and in just over a year, the market value of more than 20 billion yuan has disappeared.
As of June 30, 2024, the number of shareholders of Shanshan Co., Ltd. was 160,400, a decrease of 7.16% from the previous period. Although more than 10,000 households have "run", there are still 160,000 small and medium-sized shareholders who are suffering.
As the saying goes, "the trough of the industry is the touchstone". In recent years, Shanshan Co., Ltd. has faced challenges such as the decline in industry prosperity and declining operating performance, but it still has the resilience to grow.
Looking at the world, the two major businesses of Shanshan Co., Ltd. still maintain a leading position. According to public data, Shanshan's anode material artificial graphite production accounted for the first place in the industry, and its market share increased year-on-year. With long-term accumulation in the field of lithium battery materials, the company has established long-term and stable cooperative relations with global mainstream lithium battery manufacturers.
The polarizer business also achieved good results. In the first half of the year, Shanshan's share of the shipment area of large-size polarizers was 34%, continuing to rank first in the world, and the global market share was further improved. At present, Shanshan Co., Ltd. has built 10 world-leading polarizer production lines in many places.
In addition, Shanshan also plans to acquire LG Chem's OLED polarizer and automotive polarizer businesses, hoping to create a new growth pole through the "LCD+OLED" layout. At present, the buyer and seller are in further negotiations on the details of the transaction to move forward with the closing of the assets.
The future of the enterprise depends not only on its own reform efforts and the decision-making level of the management, but also on the recovery speed of the external market and the recovery of the global new energy industry. In the end, whether Shanshan can get out of the current predicament and usher in the next Bafang Ningjing, Shi and Suifeng, it will take time to answer.