On December 23, the capital market witnessed a collective shockwave across three listed companies under the "Xiangyuan Group." Shares of Zhejiang Sunriver Culture Tourism Co.,Ltd. (600576.SH) and Anhui Gourgen Traffic Construction Co.,Ltd. (603815.SH), both listed on the A-share market, as well as HAICHANG HLDG (02255.HK) listed in Hong Kong, opened significantly lower. By around 10:13 AM, the declines reached 2.07%, 4.64%, and 6.25%, respectively.
The immediate trigger for this market turmoil was a major announcement released simultaneously by the three companies the previous evening. On December 22, Zhejiang Sunriver Culture Tourism Co.,Ltd. and Anhui Gourgen Traffic Construction Co.,Ltd. disclosed in separate announcements that their actual controller, Yu Faxiang, Chairman of Xiangyuan Holding Group Co., Ltd., had been subjected to criminal enforcement measures by the Shaoxing Public Security Bureau due to suspected criminal activities, with the case currently under investigation. HAICHANG HLDG also announced that its Board Chairman, Executive Director, and CEO Yu Faxiang had been subjected to enforcement measures for alleged crimes.
All three companies emphasized in their announcements that, as of the disclosure date, their control rights remained unchanged, with boards and senior management functioning normally and operations unaffected. They stated that the incident was not expected to significantly impact normal business activities. On the same day, regulators acted swiftly, with the Shanghai Stock Exchange issuing regulatory letters to Zhejiang Sunriver Culture Tourism Co.,Ltd. and Anhui Gourgen Traffic Construction Co.,Ltd. regarding disclosure matters.
Meanwhile, Yu Honghua, a close relative of Yu Faxiang, resigned from her positions as Director and Audit Committee member at Anhui Gourgen Traffic Construction Co.,Ltd., as well as Non-Executive Director and Remuneration Committee member at HAICHANG HLDG.
The enforcement measures against the actual controller mark the latest and most severe escalation in the ongoing financial crisis surrounding Xiangyuan Group. The root of the issue traces back to late November 2025, when multiple financial asset income rights products—guaranteed by Xiangyuan Holding and Yu Faxiang personally and listed on the Zhejiang Financial Assets Exchange (ZJFAE) platform—began experiencing defaults upon maturity.
On December 7, the three listed companies jointly confirmed partial defaults of these financial products in announcements, clarifying that the products were unrelated to the listed entities and that they bore no repayment or guarantee obligations. However, market concerns persisted.
The crisis quickly spread to capital markets and legal proceedings. On December 16, Zhejiang Sunriver Culture Tourism Co.,Ltd. and Anhui Gourgen Traffic Construction Co.,Ltd. disclosed that substantial portions of their shares held by the actual controller and major shareholders had been judicially frozen or subject to sequential freezing. To mitigate further risks, local authorities intervened, with a Shaoxing City working group officially entering Xiangyuan Holding on December 12 to assess its assets and liabilities and oversee debt obligations.
At the center of the storm is Yu Faxiang, a legendary Zhejiang entrepreneur. Born in 1971 in Shengzhou, Zhejiang, he founded Weixiang Decoration (Xiangyuan Holding's predecessor) in 1992, starting in the decoration and real estate development sectors.
In 2008, Yu expanded into cultural tourism, acquiring over 20 renowned scenic spots nationwide—including Zhangjiajie's Huanglong Cave, Fenghuang Ancient Town, and Qiyun Mountain—rapidly establishing Xiangyuan Holding as a leading domestic cultural tourism service provider and a perennial member of China's "Top 20 Tourism Groups." His business strategy became clear: funding through real estate development while pursuing listed platforms via capital operations.
In 2017, he gained control of listed company Wanjia Culture (later renamed Zhejiang Sunriver Culture Tourism Co.,Ltd.); in 2019, he facilitated Anhui Gourgen Traffic Construction Co.,Ltd.'s A-share listing; and in October 2025, he completed his "A+H" capital matrix by investing approximately HK$2.295 billion to acquire control of Hong Kong-listed HAICHANG HLDG.
Notably, Yu Faxiang ranked 465th on the 2025 Hurun Rich List with a net worth of RMB 14.5 billion.
(Disclaimer: The content is for reference only and does not constitute investment advice. Investors assume all risks.)
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