Core Viewpoint - Chongqing Hongjiu Fruit Co., Ltd., once hailed as "China's first fruit stock," is set to be delisted from the Hong Kong Stock Exchange on December 30, 2025, after a rapid decline from a peak market value of over HKD 60 billion to approximately HKD 2.795 billion, marking a 95.65% drop in share price within three years [1][2][18]. Company Overview - Hongjiu Fruit was listed on the Hong Kong Stock Exchange on September 5, 2022, with an initial share price of HKD 40, reaching a market value of around HKD 60 billion shortly after [2][20]. - The company faced trading suspension on March 20, 2024, due to its failure to disclose financial reports on time, leading to a delisting decision by the exchange on October 3, 2025 [2][20]. Financial Issues - As of December 31, 2023, the company had a prepayment balance of approximately CNY 4.47 billion, with CNY 3.42 billion paid to new suppliers lacking historical transaction records [3][20]. - The company's accounts receivable surged from CNY 3.86 billion in 2021 to CNY 9.35 billion, while cash on hand was only about CNY 500 million, and short-term loans reached CNY 2.776 billion, indicating a significant liquidity gap [8][25]. Governance Problems - The company is characterized by a family-controlled governance structure, with over 46% of shares held by the founder's family, leading to a lack of effective oversight and accountability [4][21]. - The resignation of three independent non-executive directors in May 2025 rendered the audit committee ineffective, further exacerbating governance issues [5][22]. Operational Model Challenges - Hongjiu Fruit's operational model relied heavily on "high prepayments and long receivables," which created a fragile cash flow situation, with a collection period of 188.5 days [8][25]. - The company's financial strain was compounded by a market downturn in 2023, where the price of durians fell by 50%, leading to significant inventory losses [9][26]. Industry Context - The decline of Hongjiu Fruit reflects broader challenges within the Chinese fruit retail industry, where major players like Baiguoyuan and Xianfeng Fruit are also experiencing significant financial difficulties [10][26]. - Common issues in the industry include high supply chain costs, shifting consumer preferences towards cost-effectiveness, and competition from online fresh food e-commerce platforms [11][27]. Lessons and Future Outlook - The rise and fall of Hongjiu Fruit highlight the need for improved corporate governance and the importance of adapting business models to changing market conditions [30][31]. - The company’s experience serves as a cautionary tale for other firms in the industry, emphasizing the necessity for operational flexibility and effective cost management [30][31].
从市值600亿到强制退市：“水果第一股”洪九果品的兴衰警示录