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Text / Chuanchuan
Source/Zinc Finance (ID: xincaijing)
The last time Zhang Lei’s “body” appeared was in August last year, when he attended a strategic cooperation signing ceremony in Hangzhou.
Now more than a year, after Gao Ling experienced a series of true and false “heavy losses”, Zhang Lei seems to hide his edge. The first brother of capital, who has received countless applause for his “long-termism”, “friend of time” and a book of “value”, except for the occasional video recording to participate in one or two events, he has basically never been seen on the rivers and lakes. figure.
Where is Zhang Lei? What is he doing?
To find the answer to this question, I am afraid we have to see what the trend of Gao Ling is this year.
After it was reported last year that Zhang Lei was “border controlled”, news about the personnel changes of Hillhouse Capital began to emerge one after another. A source said: In the first half of this year, Hillhouse began to lay off a large number of employees. Among them, the consumer sector was the “hardest hit area”. Cao Wei, the senior partner in charge of the consumer sector, has resigned. Currently, he only has a false name in Hillhouse, and many other core personnel Investors have begun to go to Singapore, the United States, Japan and other places one after another, and Zhang Lei himself has also “money” to Singapore – Hillhouse seems to be strategically shifting out of the domestic market.
The rumor was quickly confirmed by an exclusive report in Chinese Entrepreneur. It is reported that Hillhouse is disposing of a large number of domestic assets, seeking buyers to take over, and a considerable part of the investment team has moved overseas, and has built offices in Japan, Europe and other places.
Just recently, news came out in Hong Kong that Hillhouse’s latest round of layoffs is underway. Some of the laid-off employees of Hillhouse said that after the layoff news was released, Hillhouse asked them to hand in the computer and leave on the same day, and the plot was like Lehman went bankrupt. There are even more rumors that this wave of layoffs by Hillhouse not only involves its poorly performing secondary market team, but also spreads to its Hillhouse Ventures.
Recently, the emergence of another blockbuster news has also forced the industry to speculate whether Hillhouse is involved. According to Caixin’s report on October 26, Tian Huiyu, the former president of China Merchants Bank, was formally arrested, and the problems involved mainly focused on his asset management business. During his tenure, Tian Huiyu promoted its wholly-owned subsidiary, CMB International, to deeply participate in the multiple rounds of capital increase before the listing of CATL, and successfully reduced its holdings after the listing, which was extremely profitable. The Commission for Discipline Inspection used “big collusion between power and capital” to characterize Tian Huiyu’s series of illegal and criminal acts that enriched his personal pockets. A person close to Hillhouse broke the news that Hillhouse and China Merchants Bank are deeply bound. Many of Hillhouse’s large-scale private equity products are sold through China Merchants Bank, and the funds for many large projects, including the acquisition of Gree, all come from China Merchants Bank’s loans . Therefore, in the era of Dingzeng Ningde, it may be hard to believe that Hillhouse has nothing to do with China Merchants Bank. In recent years, the frequent occurrence of major cases in the financial system, including the fall of former vice chairman of the China Banking Regulatory Commission Cai Esheng and former vice chairman of the China Securities Regulatory Commission Yao Gang, are related to financing loans, mergers and acquisitions, and insider trading.
Hillhouse stall
Today’s Zhang Lei may miss that time in 2020.
This investment boss with a Zhumadian accent was once a guest at major high-end events. From “value investment”, “being a friend of time” to “heavy storage in China”, Zhang Lei has gained a large number of fans in China; from JD.com, Belle to Ningde and Gree, Hillhouse is stirring up the capital market with greatness. This kind of reputation is in The book “Value” reached its climax after the publication of the book.
But he probably didn’t expect that under his fame, he was in danger. These equal honors eventually turned into snowflakes in an avalanche.
In May 2021, starting from the “precise escape” before education stocks were sentenced to death, Hillhouse created waves in the market that were different from those in the past.
From the large package and the fixed increase project to being defined by the regulator as a “pseudo-war investment” to limit the exclusive share, the capital effect of Hillhouse concept stocks has begun to reverse, and it has changed itself from “long-termism” to “long-term quick money”. ” pushed further and further down the road.
In the face of the former “good brothers” JD.com, Weilai, Xiaopeng and other companies, Gao Leng was flickering, sometimes taking salaries from the bottom of the pot, and sometimes being overwhelmed by the army.
encounter waterloo
If the inconsistency of words and deeds at the value and technical level can continue to make Hillhouse earn a lot of money, Zhang Lei does not seem to have much problem. However, in the past year or so, Hillhouse has repeatedly staged Waterloo in the secondary market, which he is best at.
In March of this year, the market reported that Hillhouse’s US stock investment loss exceeded 30 billion US dollars and was about to be liquidated. It was subsequently denied by Hillhouse, saying that its total US stock position was only US$6 billion. According to the US Securities and Exchange Commission (SEC) data, as of the end of the second quarter of 2022, the total market value of HHLR’s US stock holdings was US$4.7 billion, which has shrunk again compared to the first quarter. If compared with the number of shares held in Q1 in 2021, the shrinkage is even more obvious. In 2021Q1, Hillhouse held 91 stocks in the U.S. stock market, with a total market value of $10.1 billion, while in 2022Q2, it decreased by about 53.9%.
Relevant data shows that BeiGene, the largest U.S. stock market position of Hillhouse Capital, has nearly “halved” this year, and fell by nearly 50% in the first quarter. BeiGene is the company that Hillhouse values most, and Zhang Lei regards it as the apple of his hand in “Value”. In the financing history of BeiGene, Hillhouse has supported almost every round, with a cumulative investment of more than 1.3 billion US dollars, ranking the third largest shareholder with a share ratio of 12.43%. Based on the current closing price of BeiGene at US$11.5 per share, the current book value of Hillhouse is only US$886 million. Once the share price of BeiGene falls below $8.9 per share, the most “long-termist” investment in Hillhouse will return empty-handed, and behind the collapse, it will cut a large number of shareholders’ leeks.
Hillhouse slumped in US stocks and suffered heavy losses in Hong Kong stocks. Hillhouse holds 49 stocks in Hong Kong stocks, and medical and health care and biotechnology are key industries, but these 49 stocks have all fallen since the beginning of the year, of which 38 stocks fell by more than 20%, and 13 stocks fell by more than 40%.
Not to mention A shares. Among the top ten shareholders of Hillhouse are 11 companies including LONGi, CATL, Hengrui Medicine, Glodon, Gree Electric, Conch Cement, and Gujing Gongjiu. Year-to-date, 10 of these 11 companies have recorded losses.
According to Sohu Finance and Economics, the largest floating loss of Hillhouse in A shares occurred in Gree Electric. In 2019, Hillhouse used 21.8 billion of its own funds and 20.8 billion of China Merchants Bank to underwrite loans, and entered Gree at a price of 46.17 yuan per share. At the end of 2020, Gree estimated that it once hit an all-time high price of 66.79 yuan per share, and then fell all the way below the Gao Leng position line, and finally fell to around 30 yuan.
In the past two years, Miss Dong’s strength has failed to save Gree’s stock price. Zhang Lei, a major shareholder who did not dare to take a seat on Gree’s board of directors, can only swallow the bitter fruit of over 13 billion losses and repay nearly 8 billion in bank interest every year. .
When the tide is high, everyone feels like a swimmer; only when the tide is low does one know who is swimming naked.
Is Hillhouse in “clearance China”?
Hillhouse’s free fall has caused quite a stir in the LP group.
Starting from the rumor that they were “border-controlled”, the news of Zhang Lei and Gao Ling stimulated the nerves of LPs over and over again.
Among them are not only institutional LPs, including insurance funds, state-owned assets, and local governments, but also many individual LPs who have purchased Hillhouse products through private banks.
Hillhouse’s threshold requirements for individual LPs have been kept at a low level in the industry, which also means that the huge risks that Hillhouse is currently facing have been passed on to thousands of individual investors.
Previously, “Chinese Entrepreneur” broke that Hillhouse was selling its assets. Some insiders said that Hillhouse planned to dispose of RMB fund assets at a 40% discount, and a bank that sold Hillhouse products on an agency asked Hillhouse to use S funds to take over the offer.
However, the news of the search for a “Panman” spread like wildfire, which led to LPs’ speculation about whether Hillhouse was facing a liquidity crisis. Hillhouse quickly stated that it would enter the S fund business, but soon some practitioners pointed out that Hillhouse did not even have an S fund team, and it was suspected that it was eager to hedge negative information.
In some private LP group chats, some people have begun to discuss whether redemption is necessary; and institutional LPs are questioning Hillhouse’s investor relations department: When can I see Zhang Lei?
The article “How Hillhouse Was Made” gave a good definition of Hillhouse. The rise of Hillhouse’s reputation is a leap-forward growth based on “symbolic events” and super deals, like fast-forwarding with a few big steps to its current size.
Under this model, the prosperity of Hillhouse is almost entirely rooted in Zhang Lei’s personal ability and his mysterious “circle of friends”. In addition to the rumored mysterious person who “specially took care” of Zhang Lei on JD.com, the fallen China Merchants Bank president Tian Huiyu is also inextricably linked with Zhang Lei – Zhang Lei’s more than 20 billion bank loans from Gree , mostly from China Merchants Bank.
Just like the Delong model of the year, it quickly boosted itself by moving assets like wind and clouds, but ignored risks and red lines. This “snowball” development model is out of the economic laws, becomes unsustainable, and eventually makes the tens of billions of assets into nothing.
From this point of view, there seems to be a logical and self-consistent inference for the reason why Zhang Lei, who lives in Singapore, is reluctant to return to China. But I don’t know if this first brother of capital, who has “all kinds of doctrines on his lips and all kinds of interests behind his back”, is doing well? However, the appearance of his haggard appearance at the Sina ESG Summit in the video this year seems to have given the answer.
This article is reproduced from: https://finance.sina.com.cn/tech/csj/2022-11-09/doc-imqmmthc3919928.shtml
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