**The changes in the industry are like a drama in the entertainment industry, and this time, the planting system has once again set off a sensation. On the evening of November 29, two listed companies, *ST Tianshan and Meijim, issued an announcement at the same time, announcing that the chairman had lost contact.
The two companies seem to have nothing to do with each other, one is *ST Tianshan, which produces milk, and the other is Meijim, which focuses on the education sector. However, these two missing chairmen have one thing in common, they are both current executives of the Zhongzhi system. Although the announcement claimed that the reason for the loss of contact was not clear, industry insiders speculated that this was closely related to the plant explosion some time ago.
Not long ago, on the night of November 22, the storm finally broke out. Zhongzhi Enterprise Group*** issued a letter of apology to investors through the mini program, and several key points involved in the letter were shocking:
First, the company took a series of self-help measures to turn around its business difficulties, but it failedSecondly, the company's products have been in material breach of contract one after another;In addition, the company is currently facing huge debts, and after deducting the margin, there are still 420-460 billion outstanding debtsFinally, in addition to being insolvent, the company's only 200 billion assets are also difficult to recover, and investors need to be thoughtful.
The apology letter is more like a threatening letter, jaw-dropping. Initially, the court classified Zhongzhi as a civil case, but on November 25, the Beijing police directly announced that it was a criminal case, signaling that the arrest was about to begin. This means that the investors involved will change from lenders in civil cases to "non-collectors" and "non-absorbers" in criminal cases, and it will become more difficult to recover their investments and obtain compensation.
Fortunately, although the planting system involved huge losses, it did not affect ordinary investors. Among the 150,000 investors in the planting system, the minimum investment amount has also reached 3 million, which is obviously a relatively wealthy group, and for ordinary people, this is just a lively look. However, people are still curious, as China's largest private financial giant, why did the Zhongzhi system fall into such a huge crisis
This has to involve the development model of the planting system, and they have brought the profit model of "private equity investment + market value management" to the extreme. In short, the planting system promotes the development of enterprises through private equity investment, and then promotes the listing of these enterprises. Subsequently, its financial subsidiaries were used to carry out internal leverage dismantling, and the limited funds were continuously amplified through the flow of capital. Through the capital operation between subsidiaries and grandchildren, combined with their own voice in the capital market, they continue to hype up the concept, rapidly push up the market value of listed companies, and finally cash out at the highest point of market value to achieve profitability.
However, the economic environment has changed in recent years, and this model is prone to problems. For example, the chairman of the Meijim who lost contact this time, the planting system took over at the climax of the concept of early education, with a purchase price of nearly 40 yuan, and now due to policy adjustment and education rectification, the stock price has fallen to 34 yuan, directly causing huge losses.
The loss of such a small project is already shocking, not to mention the large real estate project, and the final accumulated loss may reach hundreds of billions. Moreover, it is difficult to recover the investment in such projects, which leads to insolvency and eventually has to explode.
The thinking triggered by this Sino-planting turmoil is not only limited to capacity and investment risks, but also involves some deep-seated problems in China's financial system. The collapse of Zhongzhi's development model, once one of China's largest private financial giants, could be symptomatic of a larger systemic problem.
In the past, the company relied on a profit model of private equity investment and market value management, but this model is becoming increasingly fragile in the current economic environment. Changes in the regulatory environment, adjustments in macroeconomic policies, and changes in the domestic and foreign investment environment have all had an impact on this highly financialized mode of operation.
Another issue worth paying attention to is whether the profit model of the planting system reflects some structural problems in China's financial market. Excessive leverage, liquidity problems with internal funds, and market manipulation may be the challenges facing the current financial markets. This is not just a case of the Chinese planting system, but also the direction that the entire financial system needs to review and adjust.
And in this turmoil, investors have become the most direct victims. Investors in the planting system once had high hopes, but now they are in huge economic trouble. This raises questions about the transparency of financial markets, the protection of investors' rights and the effectiveness of the financial regulatory system. How to maintain the vitality of the financial market while strengthening supervision and protecting the legitimate rights and interests of investors has become an urgent problem to be solved.
Finally, the fall of the Chinese plant system may also give rise to a deep rethinking in the financial industry. Should the model of the past, which relied on high leverage and market capitalization management, be revisited?Should financial institutions pay more attention to risk management and social responsibility while pursuing profits?Behind this turmoil, there may be some warnings and enlightenments for the future development of China's financial system.