In early December, multiple investors who purchased financial asset income rights products issued by the Shaoxing-based Xiangyuan group through Zhejiang Financial Asset Exchange Co., Ltd. (Zhejiang FAE) reported maturity defaults. Investors estimate that hundreds of products may be involved, with total outstanding payments potentially exceeding RMB 10 billion based on incomplete statistics.
A video provided by investors shows Shen Baoshan, Executive President of Xiangyuan Holding Group, addressing investors at Zhejiang FAE on December 5. Shen stated the company holds approximately RMB 60 billion in total assets against RMB 40 billion in liabilities. While assets theoretically cover liabilities, temporary cash flow strains have emerged due to real estate sector challenges. The company hopes for government credit enhancement to stabilize related listed company assets.
On December 8, inquiries to Zhejiang Provincial Local Financial Regulatory Bureau confirmed a comprehensive review of related financing products is underway. Yuecheng District Public Security Bureau in Shaoxing separately confirmed a special task force has been established to investigate.
Investor Ms. Zhu revealed her family had invested over RMB 3 million across nearly a decade through Zhejiang FAE without prior defaults. The issue surfaced on December 2 when a delayed payment—normally settled next-day—was resolved after intervention. However, by December 3 afternoon, widespread reports emerged of payment failures dating back to November 28. Ms. Zhu's December 3 product resale remains frozen, with the platform displaying "clearing in progress" restrictions on transactions.
Investors report typical product terms include 1-2 year maturities with semi-annual interest payments yielding 4.6%-5% annualized returns. A self-compiled registry shows products like "Shenglei Shaoxing" and "Lishui Lingdie" concentrated in late 2025 to Q1 2026 maturities, with new defaults continuously being reported.
Between December 4-6, investors received SMS updates about Xiangyuan leadership's communications with Shaoxing government regarding resolution efforts. A December 5 announcement redirected investor reception services to Xiangyuan Tower in Shaoxing, though December 6 visits were redirected again to a sports center registration point without executive access.
Zhejiang FAE's December 8 website disclaimer emphasized its role as transaction platform without guarantee obligations, reminding investors to independently assess risks. This follows Zhejiang regulators' October 31, 2024 announcement revoking Zhejiang FAE's financial asset trading license while requiring existing business resolution.
Legal expert Li Chongtuo noted post-license products continued secondary market trading activity. Some investors reported successful but discounted exits after the license revocation, with market normalization taking until January 2025.
Product documentation for "Shenglei Shaoxing" shows Yueyang Xiangyuan Industrial Co. (a Xiangyuan Holding affiliate) as debtor, with Xiangyuan Holding and chairman Yu Faxiang providing irrevocable joint liability guarantees. Similar structures appear across other products linked to Xiangyuan's nationwide property subsidiaries.
Despite its AA+ October 2025 credit rating from Hangzhou United Credit, citing tourism assets and operational strengths, Xiangyuan faces acknowledged debt repayment pressures from construction commitments. Three listed affiliates—Zhejiang Sunriver Culture Tourism (600576.SH), HAICHANG HLDG (02255.HK), and Anhui Gourgen Traffic Construction (603815.SH)—issued December 7 disclosures clarifying non-involvement in the redemption obligations.
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