article: Liu Yang
Count the history of China's transportation changes, from cows, horses, , mule, to 38 big bars, and from two-wheeled motorcycles to four-wheeled cars, the evolution of transportation can be regarded as a microcosm of the changes of the times and is of great research value. It seems that the emergence of every era means the demise of the previous era.
Nowadays, for most consumers, cars are no longer rare objects. Not only that, in some urban families, there are even more than 2 private cars. Under this circumstance, the former motorcycle king has also fallen into the torrent of the times and has not survived 2022.
019, the former "motorcycle king" Loncin Holdings is in a crisis. The company founder Tu Jianhua frankly admitted that he had been in a very painful life in the past year. And now, Tu Jianhua's pain continues. Faced with high debt, deteriorating operations, and tight cash flow, Tu Jianhua finally bets on bankruptcy reorganization.
Loncin Motorcycle was once one of the top 500 private enterprises in China and the earliest group in the motorcycle industry. The taxes paid every year are billions. Such a huge company has been reported to be bankrupt and reorganized in February 2022. Many people may find it incredible. What happened to defeat this private enterprise giant? Today, the editor will take you to find out.
The "motorcycle king" has been brilliant for 20 years
In the 1990s, Tu Jianhua, chairman of Longxin Group , started from scratch and walked step by step from the bottom to today. At that time, like most young people, Tu Jianhua dreamed of owning his own motorcycle, so he began to trade some motorcycle accessories along with the trend. Gradually, Tu Jianhua integrated into this circle from selling motorcycle accessories and earned his start-up capital with his outstanding sales results.
After working for a few years, he has gained his own unique insights into the motorcycle market. His ideal is no longer to just own one of his own motorcycles, but to create a motorcycle brand that belongs to him. So, with the savings he earned from working in the past few years, he went abroad to study and study more motorcycle techniques without hesitation. At the same time, he also tried to contract the motorcycle accessories business.
After Tu Jianhua returned to China, the domestic motorcycle market demand increased day by day, and even showed a situation of supply in short supply. Tu Jianhua seized this opportunity and decisively invested in building his own factory and his own motorcycle. In 1993, Tu Jianhua gave his all to found Chongqing Loncin Transportation Machinery Co., Ltd., which gradually evolved into Loncin Group.
The company was founded in the early days, and its main business was to produce engines for high-performance motorcycles. When Tu Jianhua's self-built motorcycle engine received unanimous praise in the society, the company also began to make profits, and the first batch of engines brought it more than 50 million yuan in capital income. After earning his first pot of gold in his life, he immediately led his employees to start designing motorcycle fuselage. Not only that, his ambition is not limited to the development and production of engines. He also wants to manufacture a high-performance motorcycle product to lead the company to achieve transformation and upgrading.
It is undeniable that Tu Jianhua is indeed a very business-minded person. Sure enough, under his leadership, the Loncin motorcycle quickly rang all over the country. Afterwards, Tu Jianhua stepped up the promotion of advertising on TV. This brand of motorcycles quickly entered the public's vision and was widely loved and recognized by all walks of life. Therefore, Loncin has become the "motorcycle king".
Loncin's initial development was indeed very fast, but just two years after they produced their first motorcycle, China introduced relevant policies and ban on motorcycles. This was a blow to the booming motorcycle market at that time, and Loncin was not spared. In desperation, Tu Jianhua decided to reform Loncin and carry out diversified development. So he began to enter many fields such as real estate, finance, and industry. Among them, Loncin Real Estate once became a dark horse in real estate, and as soon as it appeared, it became one of the top ten real estate giants in Chongqing.
Tu Jianhua's ambitions are more than that, he wants to promote the listing of Loncin Real Estate. To this end, Loncin Real Estate began to expand rapidly, buying a large amount of land across the country to expand its company scale. The diversified layout has allowed Loncin's scale to grow rapidly and its assets to continue to rise. It is understood that the asset scale of the "Londin Group" once reached 40 billion yuan. This also allowed Tu Jianhua to gain a lot of wealth. He once became the richest man in Chongqing with his net worth of 12 billion yuan.
from diversified expansion to the end
I thought Tu Jianhua would always be proud, but I didn’t expect that as of January 2021, Loncin had already borne a debt of 6.037 billion yuan. In June, the liabilities increased to 9.1 billion yuan, but the company’s assets were only 8.592 billion yuan, which was obviously in a state of insolvency. As of the end of 2021, Loncin Group's liabilities reached 12.496 billion yuan.
It turns out that after 2018, due to factors such as macroeconomic policies and Loncin's own excessive investment, Loncin suffered liquidity difficulties and eventually bond defaults. As soon as the matter happened, Loncin's credit rating was immediately downgraded, and they could not get a bank loan, and their financial situation was not optimistic. Tu Jianhua even said that Loncin could not withstand it.
In fact, Tu Jianhua also wants to save Loncin Holdings. He has resold a lot of Loncin's real estate in recent years. This was originally a wishful thinking, but we all know that the real estate industry has also suffered a significant blow in the past two years. The buyer owed more than 6 billion yuan and did not return it in time, which has pushed Loncin Holdings into an endless debt crisis.
Longcin's situation is getting worse and worse, and the company is also shaking, and Tu Jianhua has also fallen from the position of the richest man in Chongqing.
is like this, because the real estate project crushed Loncin Group, and coupled with the 2020 " Black Swan Event ", Loncin completely fell. Finally, in February this year, 13 Loncin companies were declared bankrupt and reorganized, and Loncin Group came to an end.
Nowadays, we can only wait and see how Loncin is. However, from the development history of Loncin, we can also learn some lessons. Diversified development will indeed bring high profits, but at the same time, the risks also increase exponentially, which is exactly the same saying: Diversification is a double-edged sword. What do you think about this?
