Since recent years, many well-known companies around the world have struggled to deal with the ultimate path to bankruptcy. In China, there are basically companies that cannot stand up every year, and there are many leading companies here, and many of their founders are the riche

Since recent years, many well-known companies around the world have struggled to deal with the ultimate path to bankruptcy. . In China, there are basically companies that cannot stand up every year. There are many leading companies here, and many of their founders are the richest people in the place. Longcin Group is one of them.

Loncin Group officially filed for bankruptcy and reorganization as early as September 2019. This year, its 13 companies were sentenced to bankruptcy and reorganization by the court. Many people who don’t know this company will be confused, but this is also a leader in the motorcycle industry and real estate industry, and has been glorious for more than 20 years. But in the end, I still didn't last until 2022. Do you know why Loncin Group went bankrupt?

1. The Loncin Group, which has been brilliant for 20 years,

Loncin Holdings Co., Ltd. occurred in 1983 and is also an old group with a history of nearly 40 years. has so far developed into an investment holding group that mainly includes industry, finance, and real estate. It has been awarded the top 500 Chinese enterprises in for thirteen consecutive years. The founder of Loncin Group is called Tu Jianhua , and he is also a pioneer of that era. Born in a poor family, he did not give up on himself, but went to work in the mine after graduating from middle school.

After experiencing the hardships of life, Tu Jianhua realized that only by starting a business can he get a better life, so he left the mine. But starting a business is not a simple thing. Tu Jianhua, who has no money and no connections, has no direction at all. Fortunately, he persisted and finally found that the future prospects of the motorcycle industry were very promising. So he started to borrow money from all over the world, and combined with his savings, he raised more than 100,000 yuan in total. It was a huge sum of money at that time.

Tu Jianhua used this money to build a motorcycle engine factory, but what he didn't expect was that he made a profit of 50 million yuan in just one year. In the following years, Tu Jianhua began to gradually explore motorcycle accessories production and assembly production lines. Five years after the factory was built, Tu Jianhua finally had his own motorcycle brand. By 2000, Tu Jianhua's Loncin Group had already had 1 billion assets.

By 2003, Loncin Holdings Co., Ltd. was established. Loncin has achieved the transformation from a single manufacturing industry to a diversified industrial group, and from a single industry to the integration of industry and capital. In the next ten years, Loncin Group's behavior changed its market strategy in a timely manner and has always occupied an important position in the motorcycle market.

2. Declare bankruptcy and owes nearly 10 billion

However, this company that has been glorious for 20 years has not survived 2022. Because Tu Jianhua focused on the real estate industry after 2003, he did seize the opportunity, but since 2018, the real estate industry has entered a cold winter, and many leading real estate companies have gone bankrupt and reorganized, and Loncin did not persist. According to the 2017 financial report, Loncin's total non-current liabilities reached RMB 21.9 billion, while the book funds were only RMB 4 billion.

In fact, Tu Jianhua did not give up at this time, but the path he chose was wrong. He put his hope in the real estate industry, but he did not expect that the real estate industry is more fragile than the motorcycle market. After 2016, China's real estate construction has become saturated and the country has also controlled this. However, Loncin still invested a large amount of funds here and even invested in the tourism industry. However, a sudden outbreak of the epidemic broke everything.

In the end, all the projects were forced to stop due to the breakdown of the capital chain. Almost all the commercial content involved in Loncin Group had problems, but in the end it still failed to persevere and declared bankruptcy.

3. How do Chinese companies develop?

In fact, we can actually get some warnings from the glory and bankruptcy of Loncin Group, that is, when an enterprise seeks new development goals, it should be cautious. is not something you can participate in by making money in all industries. Some projects that will not be affected too much when a crisis occurs are worth investing in.

After the bankruptcy liquidation, Loncin Group still has debts of over 10 billion yuan. Tu Jianhua himself was also listed as the person subject to 's breach of trust in , and was restricted from leaving the country and high consumption. The former richest man in Chongqing became the person subject to execution with debt of over 100 million yuan, which is also a pity. Therefore, entrepreneurs should still be down-to-earth when managing their businesses.

summary

There was already Evergrande and Xingfu Real Estate went bankrupt, and now Loncin Group appears again. The former leading companies eventually became history. In fact, we don’t want to see this ending. leaders are actually very capable and have the keenness to understand the market, but the past set of things still cannot resist in the face of emergencies, which means they do not have the ability to deal with crises.

We still need to pay more attention to the companies that are in the storm now. Many of them have been established for a long time in conscience, but under the influence of the epidemic and various emergencies, the company still needs to be more powerful.