Hunan’s first private enterprise New Hualian, the boss fu Jun owes 8.4 billion into Lao Lai, investment four times even lost 2.15 billion
The list of 2021 Top 500 Chinese Private Enterprises has been released. However, it is worth mentioning that Hunan Xinhualian, which has been listed in the list for 16 consecutive years, has disappeared from the list for the first time. Why?Originally, xinhualian had lost its former glory. After becoming the first private enterprise in Hunan province in 2020, it quickly fell into a huge loss, so that it was heavily in debt and its boss became a veteran.According to the financial data released by the company in 2021, in the first six months, the company lost 700 million yuan. No matter its wholly-owned subsidiaries or invested enterprises, there are more than 100 in total, but all of them failed to escape the fate of losing money and owing money.As a result, on November 3, 2021, Fu Jun, founder and group boss of Xinhualian, was restricted from high consumption because he could not repay 8.4 billion yuan in arrears, and became what we commonly call Lao Lai.Such news may be hard to believe for those who are familiar with Xinhualian, because xinhualian was once the “pride” and “benchmark” of the whole Hunan enterprise.In 1990, Xinhualian was formally established. From the beginning of engineering equipment production, to liquor production, and then to the automobile and real estate business, the development mode of Xinhualian was diversified from the beginning.Fu jun even declared in a public corporate meeting that he admired his wise choices over the years, since xinhualian could almost make a profit by investing in a company at that time.As a result, Fu Jun founded shandong Dongyue Chemical And other key enterprises, jin Liofu, Changfeng Automobile, etc. Fu Jun also participated in the figure.Even in 2020, on the eve of the company’s debt crisis, Xinhualian was able to surpass industrial giants such as Sany Heavy Industry and become the first private enterprise in Hunan province with 105.5 billion yuan of recorded capital.But Mr Fu’s investment vision, on which he prides himself, was ultimately the root of the company’s decline.In 2016, At the invitation of his friend Jia Yueting, Fu jun donated $50 million, or 300 million yuan, to help Jia build a car brand belonging to LeEco.But to the surprise of everyone, including Fu, Jia’s car project went bankrupt and he even fled to the United States with the money, where he has never returned.In other words, Fu Jun’s investment failed this time, so he decided to open up a new investment project again. Soon in 2017, Fu Jun focused on OFO shared bikes, which was popular at that time.Despite attempts by company officials to dissuade him, Fu spent $25 million, or 150 million yuan, to help OFO expand its bike-sharing business.However, we all know about bike-sharing. At that time, OFO was in a rush to go public and launched a massive expansion across the country. As a result, its capital was spent in advance and eventually failed, so Fu jun’s second investment also went to waste.Fu Jun’s third investment was in 2019, when taizinai, a domestic dairy brand, was preparing to expand its scale, and Fu Jun invested 700 million yuan in it again. However, the taizinai brand failed to take off. As a result, Fu Jun’s investment failed again when facing yili and other giants with no competitive advantage.One of fu Jun’s most important investment objects is ant Group, which is going to be listed in 2020. At that time, Fu Jun took out 1 billion yuan in one go to make up for the previous deficit through ant’s listing.However, Ant group failed to go public in the same year, and So did Fu jun’s idea of exchanging his 1 billion yuan investment for a higher return.In general, during Fu Jun’s four investments, the company suffered a cumulative loss of 2.15 billion yuan, almost none of which could fill the investment deficit for Xinhuilian.It is precisely because of frequent large-scale investment behavior, the book capital of New Hualian has broken, and the company’s various businesses are difficult to maintain by capital circulation, so it will frequently explode thunder.From 2019 to 2021, the debt ratio of Xinhuilian keeps rising, from 81.68% to 86.09%. Meanwhile, the company’s revenue data keeps declining, and it is inevitable for the company to fall out of the top 500 list due to the serious loss and deficit.As can be seen from the development process of Xinhualian, the company has fallen into such a predicament because it has spent a high amount of money for diversified investment and development for a long time, resulting in an over-long investment front and a lack of reserve funds to maintain the existing business.Now the former no. 1 private enterprise in Hunan has disappeared from the list, and fu Jun, the boss, is worried about debt. Who can help Xinhualian in the future?What do you think?