Core Viewpoint - The recent announcements from three listed companies, Xiangyuan Cultural Tourism, Jiaojian Co., and Haichang Ocean Park, reveal that their common actual controller, Yu Faxiang, has been subjected to criminal coercive measures by the Shaoxing Public Security Bureau, indicating a significant financial crisis involving debts amounting to 20 billion yuan [1] Group 1: Crisis Trigger - The crisis first emerged on November 28, when multiple financial products guaranteed by Xiangyuan Holdings and Yu Faxiang began to default, revealing a significant risk as these products were backed by receivables from Xiangyuan's own real estate projects [3] - Over 200 financial products were involved, with a staggering amount of funds awaiting redemption, highlighting a self-financing model that poses a risk of explosion [3] Group 2: Operational Vulnerability - The operational model of Xiangyuan is characterized by self-financing, where the issuer is the company's own platform, and the guarantor is the controlling shareholder, leading to a seemingly secure but fundamentally fragile capital game [4] - The lack of genuine risk isolation in this model has become apparent as the real estate sector faces a downturn, exposing the vulnerabilities of this self-reliant structure [4] Group 3: Escalation of Crisis - The situation escalated rapidly, with the first acknowledgment of defaults on December 7, followed by the entry of a support team from Shaoxing on December 12, and the freezing of shares held by Yu Faxiang and Xiangyuan Holdings by December 16 [5] - By December 22, Yu Faxiang was subjected to criminal coercive measures, indicating a swift deterioration of the financial situation within just ten days [5] Group 4: Compound Risks - The crisis faced by Xiangyuan is a compound risk involving both financial and real estate sectors, with the self-financing model amplifying the risks [6] - The freezing of over 600 million shares of Xiangyuan Cultural Tourism and 274 million shares of Jiaojian Co. underscores the severity of the issues at hand [6] Group 5: Market Reaction - Despite assurances from the three companies that their operations remain normal, the market reacted negatively, with Xiangyuan Cultural Tourism's stock dropping over 17% and Jiaojian Co. plummeting 34% [7] - The market's lack of confidence is evident given the serious allegations against the actual controller [7] Group 6: Capital Warning - The downfall of Yu Faxiang, who previously built a 60 billion yuan business empire, highlights the dangers of poorly designed financial strategies [8] - The collapse of Xiangyuan reveals deep governance issues within private capital enterprises, including a lack of effective corporate governance and excessive reliance on leverage without adequate risk management [8] Group 7: Regulatory Signals - The swift action by the Shaoxing police sends a clear message about the increasing stringency of financial regulations, indicating that those who challenge legal boundaries will face severe consequences [9] - The Xiangyuan incident serves as a warning to investors to remain vigilant regarding "low-risk, high-return" financial products and to scrutinize underlying assets carefully [9]