Recently, a number of industrial e-commerce companies have released their interim results one after another, and their performance has generally shown a healthy development trend: 4 out of 10 listed industrial e-commerce companies have revenue exceeding 10 billion yuan, 8 have achieved positive revenue growth, 7 companies have positive net profit growth, and 6 companies have positive net profit growth.

Among them, Zhuoerzhilian (02098), which has a scale of 100 billion dollars, also achieved a significant increase in performance, achieving revenue of about 68.276 billion yuan (RMB, same below) in the first half of the year, an increase of 24.29% over the previous year; profit attributable to the company's equity shareholders was 49.817 million yuan, an increase of 122.76% over the previous year.

However, at the same time as the performance is improving, the company's secured bank deposits have been drastically reduced and the balance ratio has been rising, which seems to be vaguely revealing the risks and concerns behind the fundamentals. By the close of trading on September 11, the company's stock price fell by more than 6% during the day, and the trading volume was further reduced, which also seemed to reflect the market's pessimism about Zhuoer Zhilian.

The balance ratio rose sharply, and current liabilities accounted for 85.3%

According to the Zhitong Finance App, Zhuoer Zhilian aims to build an architectural system of “B2B transaction service+supply chain service+digital technology cloud service” using digital technologies such as big data, artificial intelligence, and blockchain as applications. The company's business involves various industries such as agriculture, steel, chemical plastics, etc., and it has various B2B trading platforms such as China Agricultural Network, Zhuogang Chain, Chemical Plastics Exchange, World Commodity Intelligent Trading Center CIC, and Hankou North.

By business, commodity supply chain management and trading business is still the backbone of the company's revenue. In the first half of the year, this portion of revenue reached 68.048 billion yuan, up 24.5% year on year; rental income from investment properties was 0.115 billion yuan, financing revenue was 34.9 million yuan, and revenue from property sales and related services was 54.3 million yuan.

Notably, although the company's revenue indicators improved in the first half of the year, the financial situation was unspeakably optimistic. As of June 30, 2024, the company's current liabilities were 42.346 billion yuan and non-current liabilities were 7.309 billion yuan, accounting for 85.3% of current liabilities. Of these, loans to banks and other financial institutions to be repaid within one year were $5.657 billion (fixed annual interest rate of 3.45% to 11.75%), and other loans to be repaid within one year were $2.594 billion (fixed annual interest rate of 4.00% to 12.00%).

Industry insiders pointed out that current liabilities account for a high share of current liabilities, which shows that it is increasingly difficult for Zhuoerzhi Lenovo to obtain long-term, stable, and low-cost loans from banks.

According to financial reports, the company's adjusted net debt increased by 185% to 7.187 billion yuan from 3.878 billion yuan in the same period last year, and the balance ratio rose rapidly to 51.90% from 28.09% in the same period last year, mainly due to a marked decrease in secured bank deposits.

Earlier, in order to ease financial pressure, Zhuoer Zhilian issued an announcement at the end of 2022 to sell its Tianjin e-commerce city project at a low price to recover 1 billion yuan in cash, 95% of which will be used to repay various types of debt. The net asset value of this project was about 1.205 billion yuan, and the company lost about 0.205 billion yuan as a result.

The “Zhuoer series” has a huge footprint, and its advantages spread frequently

In fact, the “Zhuoer Group” to which Zhuoer Zhilian belongs has been frequently unfavorable news in recent years, and there are still many hidden concerns about the safety of the company's capital chain.

In February 2022, Zhuoer fell into a “pay claim” crisis. Male soccer player Hao Junmin posted a post on Weibo asking for pay from the Wuhan Zhuoer Club, which was owned by Zhuoer at the time. “The wage promise was settled by the end of the year. Before the end of the year, before the end of the year, before and after the New Year.” In this Weibo post, which is open to asking for wages, Hao Junmin also made a special comment on @提到了卓尔系实控人阎志.

Yan Zhi is a soccer enthusiast. At the end of 2011, Zall spent huge sums of money to take over the Wuhan soccer team. It has been in operation for more than 11 years, with a total investment of more than 3 billion yuan. However, after being reported under a real name, a series of hidden box operations behind this huge investment gradually surfaced.

In January 2024, in the annual anti-corruption blockbuster broadcast on CCTV, Tian Xudong, the former chairman of Wuhan Zhuoer Club (who was the vice president of Zhuoer Holdings), appeared to confess that the club traded power and money and exchanged interests with Li Tie, the former head coach of the National Football League, and that the club used huge sums of money to bribe related personnel. Shortly after the incident, the Wuhan Zhuoer Club announced its dissolution.

Soccer is only one part of Dall's business landscape. Yan Zhi is good at telling stories about the industrial ecosystem to the outside world, and is happy to pursue a diversified, large and complete business empire. According to public information, “Zhuoer Series” owns 5 listed companies, including Zhuoer Zhilian, China Commerce, Lanting Jiushi, Huazhong CNC, and Hanshang Group. The business involves e-commerce, textile, agriculture, aviation, finance, pharmaceuticals, real estate, sports and other industries. Among them, real estate, soccer, private banks, P2P, etc. are all high-risk projects, and many irregularities have been revealed over and over again.

Zhuoer Zhilian is the core enterprise of the Group. At the beginning of its establishment, real estate was one of the core businesses of Zhuoer Zhilian. In addition to the wholesale market, it was also involved in the development of office buildings, large-scale urban complexes, and residential projects. Since 2015, Zhuoer Zhilian has transformed from a traditional real estate development company to an e-commerce company, but instead has not completely abandoned the real estate market, but has engaged in real estate development through two companies, Zhuoer Cultural Tourism (currently known as “Hubei China Travel Group”) and Zhuoer Zhicheng.

In the real estate sector, Dall's progress has not been smooth. For example, in the much-publicized Zhuoer Shenyang living room project, the development progress clearly lags behind expectations. In recent years, the company has also added multiple pieces of executee information. According to statistics, since 2022, the total execution amount of Zhuoer Cultural Tourism and its companies has reached 0.108 billion yuan. Zhuoerzhicheng was also listed by the court as an untrustworthy executee on December 1, 2022.

On the other hand, the financial sector under the “Dole Family” is also not developing well. Previously, Harvest Fund was involved in the P2P business, successively testing the P2P online lending platform “Qianduoduo” and the online loan information intermediary platform “Jia Pomegranate”. However, against the backdrop of stricter internet financial regulations, Jia Pegliu announced its withdrawal from the online lending industry in June 2020. In 2019, Zhuoer Zhilian divested its financial assets and sold all of its shares in Zhuoer Financial Services.

In addition to the P2P business, Dall also lays out various business segments such as industrial finance, wealth finance, and supply chain finance through Zhongbang Bank, Zhongbang Fund, and Zhongbang Financial Holdings, etc., and invests in government public projects (PPP, characteristic towns, industrial parks) and personal life (health, culture, tourism), etc.

According to the 2023 annual report, Zhongbang Bank can now be called a “feather in one place”: the asset size has fallen out of the top three, the non-performing rate has been rising for three consecutive years, and the capital adequacy ratio is at the bottom of the 18 private banks. The amount of forfeited money and the number of fines received due to illegal violations is the highest among residential banks. Furthermore, half of the bank's shareholders are embroiled in legal disputes.

From a media person running an advertising business to growing step by step to becoming the richest person in Hubei Province, Yan Zhi can be described as a master at enjoying the capital market. Through cross-shareholding with Fengsheng, he single-handedly promoted the market value of Zhuoer Zhilian to exceed HK$100 billion, and during the peak period, the value added of Zhuoer Zhilian shares held by Fengsheng Holdings reached more than 6.6 billion yuan. However, as Fengsheng Holdings experienced shorting and Zhuoer Zhilian's stock price dropped sharply, the investment income of both companies turned into losses, and the game of cross-shareholding gradually came to an end.

Through a series of operations in the capital market, in recent years, the “Zhuoer System” has successively controlled listed entities such as Hanshang Group and Huazhong CNC, and used them as pawns and tools for the next step in capital operations.

In February 2023, Huazhong CNC announced plans to purchase two land use rights and a total of 11 buildings with the properties and supporting facilities developed above from Wuhan Zhuoer Aviation City Investment Co., Ltd. (“Dall Aviation City”) at a price of 0.321 billion yuan. However, since the transferor Zhuoer Aviation City and Huazhong CNC were controlled by the same actual controller Yan Zhi, the related transaction caused market controversy. The Shenzhen Stock Exchange issued a special letter of concern requesting the company to explain the necessity and rationality of this transaction.

According to information, by the end of 2022, Dall Aviation City's total debt was 0.371 billion yuan. If the transaction is successfully completed, the “Dall Group” will receive cash flow transfer, thereby alleviating the debt problem.

According to data from Tonghuashun iFind, since its listing in 2011, ZhuoerZhilian has paid dividends only 5 times. The most recent was the 2018 annual dividend, which paid HK$0.0258 per share. In the five years from 2018 to 2023, although the company's revenue has grown from 56.116 billion yuan to 125.29 billion yuan, an increase of 123%, no dividends have been paid, which also indicates to a certain extent that the company is not well-funded.

In a situation where macroeconomic recovery is under pressure, Zhuoer Zhilian's debt ratio has risen rapidly, compounded by frequent “Zall” negative news. These will undoubtedly further shake the market's confidence in the company.