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recently, there have been rumors in the real estate circle that wang zhenhua has returned to sunac china holdings (601155.sh) and is involved in the company's affairs "at a distance".

in fact, wang zhenhua had already served his sentence in july this year, but at that time no one could confirm whether wang zhenhua would regain the management rights of the company. from july to early september, new town holdings was relatively calm until the day before yesterday.sunac china holdings announced the removal of ni lianzhong from his position as vice president and the transfer to judicial authorities。

this isafter wang zhenhua's return, the first senior management changes of sunac china holdings were exposedthe notice was issued by the xincheng audit and supervision center and the organization and human resources development center. some media reports pointed out that they were likely involved in corruption. whether there will be more senior management changes in the future remains to be seen.

at present, wang zhenhua is still the controlling shareholder of three "suncity group" listed companies: suncity holdings, suncity development (1030.hk) and suncity joy service (1755.hk). although he has not made his position public, according to media reports such as the paper,wang zhenhua has convened meetings of the senior management team and inspected urban projects. some new town employees also believe that the company's marketing, finance and other lines will be adjusted accordingly.

currently, the chairman, president and legal representative of xincheng holdings are all wang xiaosong, the son of wang zhenhua. wang xiaosong took over the position of chairman after wang zhenhua was criminally detained for "child molestation" in 2019. it has been 5 years now.

wang xiaosong was elected as the company's chairman in 2019 source: company announcement

now that his father wang zhenhua has returned, who will lead the subsequent development of sunac china holdings? wang zhenhua is only 62 years old, not too old, and there are still many things he can do.

wang zhenhua "storm"

five years ago, on july 3, 2019, a scandal that shook the industry broke out. wang zhenhua's life, which had been full of success and glory, suddenly turned downhill, allowing people to see his unknown side.

on the same day, new town holdings (601155.sh) issued an announcement confirming that the former chairman wang zhenhua wascriminal detentionon july 10, 2019, the pudong district procuratorate of shanghai charged wang zhenhua with child molestation.arrest approvedon june 17, 2020, wang zhenhua was sentenced for child molestation.five years in prison。

source: supreme people's procuratorate portal

from the outside world's intuitive perception, the biggest change in wang zhenhua in the past five years is the shrinkage of his wealth. according to the rich list,wang zhenhua's family wealth has shrunk by 70% from 43 billion yuan in 2020 to 10 billion yuan in 2023, and the stock price of the "sunac china" listed companies he founded has also fallen sharply by 80% to 90% from its peak.。

in an open letter on july 5, 2019, sunac china holdings stated, "for sunac china, july 3, 2019 was undoubtedly a storm." the "storm" here refers to the "wang zhenhua incident."

according to the xinmin evening news, wang zhenhua was suspected of molesting a girl in a five-star hotel in shanghai on the afternoon of june 29, 2019. after the incident, the molested girl called her mother in jiangsu and cried. the mother went to shanghai to report the incident to the police, and wang zhenhua was immediately taken into custody. on july 1, 2019, wang zhenhua was taken away by the police for investigation; on july 2, wang zhenhua was detained for suspected crimes, and sunac china holdings announced this on the evening of july 3.

source: official weibo of shanghai public security bureau putuo branch

subsequently, sunac china holdings announced that wang zhenhua had resigned from his management position in the company and his son wang xiaosong was appointed as the new chairman; on june 19, 2020, after wang zhenhua was sentenced, sunac china services (1755.hk) announced that wang zhenhua was the actual controller of the company, but wang zhenhua did not hold any position in the company.

as a well-known entrepreneur in changzhou, jiangsu, wang zhenhua is well-known in the real estate industry.in just 10 years, sunac china holdings increased its sales volume from 10.5 billion yuan to 270.8 billion yuan in 2019, and its industry ranking from 35th to 8th.

from 2015 to 2017, it took only three years for sunac china holdings to increase its sales from 31.9 billion yuan to 126.5 billion yuan, and another year for its sales to increase to 221.1 billion yuan. in 2018, sunac china holdings also planned to rank among the top five in the industry by 2020.

while new town holdings was making rapid progress, wang zhenhua also won many honors.he has won the national "may 1st" labor medal, jiangsu province model worker, jiangsu province outstanding private entrepreneur, jiangsu province socialist construction contribution award, shanghai united front (work) advanced individual, changzhou star entrepreneur, and china charity outstanding contributor and other personal honors.

however, after the above-mentioned illegal incidents occurred, wang zhenhua's personal honors were successively revoked:on july 8, 2019, wang zhenhua was stripped of his membership of the 13th shanghai municipal committee of the chinese people's political consultative conference; on july 23, 2019, wang zhenhua was stripped of the honorary title of "jiangsu province model worker"; on may 29, 2020, wang zhenhua was stripped of his title of "national model worker", his medals, certificates, etc. were taken back, his related treatment due to the honor was stopped, and his bonuses and other material rewards were recovered.

after wang zhenhua was sentenced, his defense lawyer chen youxi said that wang zhenhua had clearly filed an appeal and requested that the second instance court find him not guilty. lawyer chen youxi released a statement on social media saying that "wang zhenhua has not changed his confession" and that "from the investigation stage, the prosecution stage, and the court stage,his confession was consistent. he denied that he had committed indecent acts against the young girl and insisted that he had not molested the girl in this case.”

on may 19, 2021, the shanghai second intermediate people's courtthe appeal of wang zhenhua was dismissed and the original judgment was upheld.

regarding this case, there have been different opinions in the outside world, such as wang zhenhua was "honey-trapped" and "a rich man who played with a little girl met with a stubborn parent". however, since only the underage girl and wang zhenhua knew the situation at the time of the incident, wang zhenhua was eventually punished by law.but in the end, after the lawyer's defense, he was convicted of indecent assault, not rape.。

the sentencing for this case is also highly controversial.some people believe that wang zhenhua hired a well-known lawyer, obtained the best judicial relief, and received a lighter sentence.but some people hold the opposite view.because wang zhenhua is a celebrity and under great pressure from public opinion, his sentence is heavier than that of ordinary people.

when wang zhenhua was imprisoned, the lead lawyer of shaanxi xuegao law firmliu jing once wrote an article pointing out that we must be wary of wang zhenhua's disguised "escape from prison" by taking advantage of medical parole.later, in early 2022, there was news that wang zhenhua applied for medical parole, but it was not confirmed later.

source: wechat official account

the "wang zhenhua incident" was one of the "black swan" events that had a major impact on the a-share market that year. after the incident, sunac china holdings' share price hit the daily limit for four consecutive trading days, and its market value evaporated by nearly 20 billion yuan; the share prices of its hong kong-listed companies sunac china development (1030.hk) and sunac china joy service also fell sharply.

in the past 5 years, the real estate industry has changed dramatically!

from controlling a real estate company worth hundreds of billions of yuan to being thrown into prison, 2019 was not only a turning point in wang zhenhua's life, but also the performance of new town holdings, which he founded, declined in the following years.

in 2019, sunac china holdings' sales were 270.8 billion yuan, its highest performance to date. by 2023, its annual sales have dropped to 80 billion yuan, and its industry ranking has fallen out of the top ten. its net profit attributable to shareholders has also dropped sharply from a peak of 15.26 billion yuan (2020) to 738 million yuan (2023).

source: cric

tianyancha shows that wang zhenhua once had actual control over 38 companies, involving real estate, investment consulting, financial management, insurance, culture and film, banking, finance, technology, machinery and other fields. currently, there are still 19 companies in existence. people are more familiar with new town holdings and new town development, which are engaged in real estate development, and new town yue service, which mainly operates properties (new town yue service is a property management service company under the "new town system" and is a property management platform within the new town group system).

among them, xincheng holdings is undoubtedly wang zhenhua's core asset. in the four years from 2018 to 2021, its annual net profit attributable to shareholders exceeded 10 billion yuan, and its revenue exceeded 100 billion yuan for four consecutive years from 2020 to 2023.

source: eastmoney.com

in addition, the share prices of three "sunac china holdings" listed companies, including sunac china holdings, also fell sharply in the past five years. as of september 13, sunac china joy service's share price was hk$3 per share, a drop of about 88.94% from its peak of hk$27.14 per share, nearly 90%; sunac china development fell from its peak of hk$10 per share to hk$1.46 per share; and sunac china holdings fell from its peak of rmb 51.23 per share to rmb 9.66 per share.

as the share prices of listed companies shrank, wang zhenhua's family wealth also suffered a significant "discount".

in various rich lists in the past five years,the highest wealth of wang zhenhua and his son is 43 billion yuan according to the "2020 shimao shenzhen-hong kong international center hurun global rich list"., ranked 357th on the list; but by march 25, 2024,wang zhenhua's personal wealth is 7.2 billion yuan, ranking 3058th on the hurun research institute's "2024 hurun global rich list".

in fact,although wang zhenhua's wealth has "shrunk", he is still considered "lucky" compared with other real estate tycoons of his time.over the past five years, the real estate industry has taken a sharp turn for the worse, with many companies defaulting on their debts or even going bankrupt, and their founders either struggling to stay afloat or being arrested and imprisoned.

if the total debt exceeds 2.3 trillion yuanchina evergrandenot only did the company's debt explode, but its founder xu jiayin was also jailed for financial fraud and other illegal activities. his luxury homes in hong kong were forced to be mortgaged or sold by creditors, and he was recently fined the maximum amount of 47 million yuan by the china securities regulatory commission.

source: canned food gallery

another examplecountry gardensince 2023, it has been unable to repay debt interest on time, and was later filed for liquidation by creditors. the founder yang guoqiang officially announced his retirement in march 2023. today, country garden is taken over by his daughter yang huiyan.

in addition, sun hongbin'ssunac china, xu rongmao'sshimao group, lin tengjiao'ssunshine cityetc., have already defaulted on their debts and are still struggling to stay afloat.

in comparison, sunac china holdings has not yet experienced a debt explosion in the open market. although wang zhenhua's personal wealth has shrunk, it is still in his hands.

the only remaining real estate company that has not exploded.

but it is in urgent need of financing to "replenish blood"

as one of the "minority" real estate companies that has not yet encountered debt defaults, xincheng holdings is also lucky.

yan yuejin, research director of e-house research institute, believes that,during the period when wang zhenhua was sentenced to prison, xincheng holdings coincidentally did not expand its land acquisition significantly, which actually saved its life.if it had expanded significantly at that time, coupled with the wang zhenhua incident, and encountered market changes from 2020 to now, sunac china holdings might have been in an even more difficult situation than it is now. "

yan yuejin also emphasized thatnow the overall market pressure will continue to be transmitted to real estate companies.problems may continue to be exposed and will continue to drag down the company. xincheng holdings must pay more attention to risks.

as of the first half of 2024, xincheng holdings achieved operating income of 33.904 billion yuan, a year-on-year decrease of 18.8%; net profit of 1.318 billion yuan, a year-on-year decrease of 42.2%; sales of 23.554 billion yuan, a year-on-year decrease of 44.45%.

although xincheng holdings' performance has declined significantly, it is already very "lucky" that it can still make a profit in the context of the still declining real estate market.

after wang zhenhua returned to new town holdings, the biggest problem he faced was how to ensure stable cash flow and avoid the "debt explosion" that occurred in many real estate companies.

as of the first half of 2024, sunac china holdings had rmb 15.78 billion in cash and cash equivalents, while short-term liabilities were approximately rmb 904 million and non-current liabilities due within one year were approximately rmb 15.36 billion. the balance of cash and cash equivalents at the end of the period was only rmb 11.63 billion, and its liquidity pressure is still considerable.

on social platforms such as xiaohongshu, many users said they were discussing the year-end bonuses for sunac employees in 2022 and 2023. some users said that the 2022 year-end bonuses have not been issued yet, while others said they have received part of them, and some users said that the year-end bonuses for their projects have all been issued. judging from the content of the posts, some users are from sunac wuyue plaza.

source: xiaohongshu

yan yuejin said, "due to poor sales data, many real estate companies do not have year-end bonuses. this is a common pressure for real estate companies, not just sunac china holdings."

for sunac china holdings, the most important thing is to repay debts and ensure delivery, which all depends on whether the cash flow can be maintained stable.

the latest data shows that the sales of sunac china holdings in august 2024 were only 2.501 billion yuan, the lowest in many years. from january to august this year, the cumulative sales of sunac china holdings were about 29.542 billion yuan, a year-on-year decrease of 45.75%. how to increase cash flow is still an important issue.

previously, at the shareholders' meeting of sunac china holdings held on may 28, chairman wang xiaosong bluntly stated that in the future "the company's sales will continue to decline...operating income will definitely decrease" and that the company will consider doing some light-asset projects.

regarding commercial real estate, wang xiaosong said that the company's commercial management revenue in 2024 will be approximately 12.5 billion yuan, and the net profit is expected to be 4 to 5 billion yuan.however, wang xiaosong also said that although the company has the assets of wuyue plaza, its cash flow is far less than that of real estate development.

source: canned food gallery

in addition, xincheng holdings is already planning new financing. it plans for xincheng holdings and its holding subsidiaries to carry out direct financing at home and abroad, with the total amount of new financing not exceeding rmb 20 billion.

in addition, sunac china holdings also plans to borrow a total of no more than rmb 15 billion from sunac china development, a hong kong-listed company, including a balance of rmb 6.743 billion in used and unexpired loans (as of the end of february 2023).

since wang zhenhua was imprisoned, his son wang xiaosong has been in charge of sunac china holdings for five years. facing the current market environment, wang xiaosong said that now they should pursue maximum profits with the help of good underlying assets, rather than pursuing scale.

with wang zhenhua's return and gradual involvement in the company's affairs, wang zhenhua and wang xiaosong can be described as "father and son fighting together". can the "big and small wangs" work together to lead sunac china holdings to turn the situation around?