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On April 4, Shenzhen Yintong Qianhai Financial assets Trading Center issued two investment promotion notices related to Baoneng's creditor's rights on its website, involving that many assets of Baoneng will be disposed of. They are Baoneng real estate entrusted loan claims and Baoneng auto trust loan claims, including a number of collateral and collateral, including Shenzhen Longgang Baoneng Science and Technology Park.

According to the investment promotion notice of the debt entrusted by Baoneng Real Estate, the debtor is Baoneng Real Estate Co., Ltd. the co-debtors are Shenzhen Zhonglin Industrial Development Co., Ltd., Shenzhen Laihua Real Estate Co., Ltd., Baoneng Automobile, Harbin Hengtai Real Estate Co., Ltd. Guarantee is Ju Shenghua, Baoneng Group, CHIA TAI (SHENZHEN) DEVELOPMENT COMPANY LIMITED, Yao Zhenhua. The mortgages include A1 to A7 buildings in area An of Baoneng Science and Technology Park, B1 to B5 buildings in area B, C1 to C3 in Phase C, 6 buildings of Baoneng Science and Technology Park (balance mortgage) and 9 buildings of Baoneng Science and Technology Park (balance mortgage). The pledge is 51% equity of Shenzhen Zhonglin Industrial Development Co., Ltd., and 12.5% equity of Shenzhen Jusheng Hua Co., Ltd. As of February 20, 2023, the principal of the entrusted loan is 4.223 billion yuan, interest 931 million yuan, fees, liquidated damages, etc. (the final actual calculation shall prevail).

According to the investment promotion notice of Baoneng Automobile Trust loan, the guarantors of the bond are Shenzhen Jushenhua Co., Ltd., Foshan Jiabaosheng Real Estate Co., Ltd., Baoneng City Co., Ltd., Shenzhen Qianhai Ruizhi Investment Co., Ltd., and Yao Zhenhua. The mortgages are A1 to A7 buildings in area A, B1 to B5 buildings in area B, and C1 to C3 buildings in Phase II C of Baoneng Science and Technology Park (Southern District), Longgang District, Shenzhen City. At present, the lawsuit has been filed, and the collateral and the real estate and land owned by the debtor have been seized. As of February 20, 2023, Baoneng Automobile Trust loan debt principal 2.29 billion yuan and interest 179 million yuan, fees, liquidated damages, etc. (subject to the final actual calculation), of which the principal 2.289 billion yuan of the creditor's rights have been distributed to the transferor.

The announcement could mean that many of Baoneng's assets will be disposed of. As of press time, Baoneng Group has not responded to the above news.

It should be noted that as early as May 2022, a number of information related to the auction of Qoros cars owned by Baoneng appeared on the judicial auction platform, and since then they have been drawn into the list of executees by many courts. In December 2022, the people's Court of Anhui Wuhu Economic and technological Development Zone issued an auction notice, the target is the automobile production line equipment of Quan Automobile Co., Ltd., the starting price is about 123 million yuan, the industry believes that The Guanzhi car production line has been auctioned by the court, and it is not far from complete bankruptcy. Since then, a large number of new Quan Zhi 7 cars have appeared on the judicial auction platform, including seized cars from Shandong, Zhejiang, Hubei, Henan, Chongqing and other regions.

Founded in 1992, Baoneng Group is headquartered in Shenzhen and chaired by Yao Zhenhua, which owns five sectors: comprehensive property development, finance, modern logistics, cultural tourism and people's livelihood industry. In March 2017, Yao Zhenhua officially announced the cross-border car building and the establishment of Baoneng Automobile Group. In December of the same year, Baoneng Group strategic investment Guanzhi Automobile became a major shareholder, forming Baoneng, Chery Automobile and Quantum shareholders.

At the beginning of 2018, Baoneng Group acquired a 51% stake in Guanzhi for 6.63 billion yuan, officially becoming the controlling shareholder of Guanzhi Automobile. In January 2019, Baoneng again bought a 12 per cent stake in Quantum for 1.56 billion yuan, increasing Baoneng's stake in Quan to 63 per cent. However, Qoros sales are not ideal. Data show that Qoros sold 63000 vehicles in 2018, an increase of 320% over the same period last year. The main source of sales is that Baoneng won an order of 95000 units for Qoros through its associated car rental company. Since then, Quan Chi car sales have declined year after year. The data show that Qoros sales fell to 22700 in 2019 and again to 13100 in 2020. By 2021, under the influence of many factors, such as internal staff turnover, protection of rights of external suppliers and dealers, and sales failure, its sales have halved again. Qoros sold only 5200 vehicles in 2021, while Baoneng, the "big financier" of Qoros, is also unable to protect itself. Due to financial problems, Baoneng Automobile has been exposed with many problems, such as "manufacturing base shutdown", "layoffs", "social security for severed employees", "shop closure" and so on. Since then, it has been deeply involved in the liquidity crisis. Faced with the dilemma of overdue exchange of financial products and debt default, Baoneng has to continue to withdraw funds by reducing its shareholdings in listed companies, pledged shares, and disposing of assets.

In November 2021, Yao Zhenhua, chairman of Baoneng Group, said: "this liquidity difficulty is unprecedented in Baoneng's 29 years of development." at the same time, he also pointed out that throughout the 29 years of development, this difficulty is not a bad thing for Baoneng, which is about to enter its thirties, but a wake-up call, "reminding us to deeply reflect on the problems in the process of operation and management." How to ensure that the same mistakes will not be repeated in the future development.

Surprisingly, although Baoneng Automobile and its Guanzhi Automobile were successively exposed as factory stagnation, disputes over social security and provident fund payments due to arrears of wages, shrinking service stores, production line auctions and other negative news, Baoneng Automobile still firmly released luxury and intelligent high-end brand models. The former Baoneng Automobile Group has three major passenger car brands, namely, BAO, au Poly and Quan Zhi, which will be held at the 2023 New year's meeting of Baoqi Group. Lu Xingze, chief executive of Baoneng, said that 2023 is a key year for Baoneng to ensure mass production of three key models, A3, GX16 and A6, and to take the first DS05 off the line this year. Yao Zhenhua, chairman of the board, said that the vehicle project should speed up the release of production capacity, and the A3 model is the top priority in the business plan. According to the plan, a new model will be launched every year in the future, with a higher positioning A00-class four-door electric car this year and an A0-class four-door electric car in 2024.

Yao Zhenhua said at the above meeting that Baoneng is facing unprecedented liquidity difficulties in 2022. Baoneng promotes financial payment, asset disposal, financing extension and debt optimization and restructuring. 2023 will be a new starting point for Baoneng's brilliant journey in the next three decades, and it will also be a decisive year for Baoneng's strategic acceleration.

However, judging from the current situation of Baoneng Automobile, Baoneng Automobile has come to the edge of the cliff. Since 2023, the information of Baoneng automobile executee has been increasing. According to Tianyan inspection information, as of today, 55 cases of Baoneng Automobile Group have been executed, with a total amount of 5.251476096 billion yuan. As for the development of Guanzhi Automobile, it is also beleaguered on all sides. as of today, there are 267cases in the history of Guanzhi Automobile. The total amount of execution was 1.031394631 billion yuan. Under the negative news such as the increasing information about the person subject to execution and the auction of the production line, it is doubtful how long Baoneng can go and whether it can still mass produce the above four models as scheduled, but in the context of the highly competitive car market, obviously there is not much time left for Baoneng.

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