Translated by: MOS Education Group – Winsun
The Free Times reported on September 20 that Xinli Holdings, a well-known Chinese developer, plunged 90% in Hong Kong stocks on the 20th. Investors were generally shocked by the announcement of the suspension of trading before the market closed. At the same time, it was reported that all employees of Xinli had cut salaries and the amount of salary cuts for vice presidents as high as 70%. Financial distress is on the verge of triggering.
Xinli Holdings started in Jiangxi, relied on trust funds, and expanded its power with aggressive and highly leveraged financial operations. During the development process, it was deeply involved in rumors that the capital chain broke several times. Recently, Sony has experienced commercial bill delays and failure to redeem problems, and the problem of capital turnover has surfaced. Xinli’s financial report for the first half of the year showed that the company’s total assets were 112.038 billion yuan, current liabilities were 75.428 billion yuan, and the debt ratio reached 67%. In the next year, 13.24 billion yuan of debt will be due.
With the recent explosion in the financial business of Evergrande Group, a series of chain reactions of stock market volatility have been triggered. Other companies that have adopted the same type of high-leverage operating model have also been smashed by the media. Once the tide of debt default starts, the black swan of the real estate economy will soar into the sky, completely detonating the biggest time bomb of the CCP economy.
Proofread/Posted by: Xiaolunn
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