The collapse of HONGJIU FRUIT is not only the inevitable outcome of governance failures in a family-run business but also a case study of the breakdown in commercial logic under capital-driven expansion models.
On December 24, 2025, the Hong Kong Stock Exchange officially announced that Chongqing HONGJIU FRUIT Co., Ltd. would be delisted effective 9:00 AM on December 30, 2025. This decision marks the exit of the once $60 billion market-cap "China’s top fruit stock" from the capital markets.
From its high-profile IPO as the "first fruit stock" on September 5, 2022, to its forced delisting, HONGJIU FRUIT’s public listing lasted only three years. During this period, the company experienced a brutal fall from peak valuation to near-worthlessness—a tragic end to founder Deng Hongjiu’s entrepreneurial journey and a stark warning for China’s fruit industry capitalization.
From Dock Worker to "Fruit King" In 1987, 17-year-old Deng Hongjiu started as a manual laborer at Chaotianmen Port. By selling tangerines bought at 30 cents for 60 cents, he netted over 100 yuan in two days—a classic rags-to-riches story. In 2002, he co-founded HONGJIU FRUIT with his wife, Jiang Zongying. A pivotal decision came in 2012: betting on Thailand’s durian market.
Unlike industry norms of cash-on-delivery or short payment terms, Deng borrowed 100 million yuan to build factories, securing long-term contracts for 40,000 acres of orchards via prepayment—a high-risk, high-reward move that gave HONGJIU FRUIT control over scarce premium durian supplies.
This gamble fueled explosive growth: revenue skyrocketed from 2 billion yuan in 2019 to 15 billion yuan in 2022. At its IPO, HONGJIU FRUIT was China’s largest branded fresh fruit distributor, propelling the Deng family to an 8.5 billion yuan fortune on the Hurun Rich List.
Financial Hollowing and a "Bleeding" Business Model Behind the applause lurked fatal flaws. HONGJIU FRUIT’s model was summarized as "high prepayments, long receivables": prepaying months or even a year upfront for Thai durians and Chilean cherries while granting clients like supermarkets 188.5-day payment terms.
This created a cash-flow black hole. By 2022, cash reserves dwindled to 149 million yuan from 240 million yuan in 2021, while trade receivables ballooned to 7.667 billion yuan from 3.707 billion yuan. By mid-2023, receivables hit 10.151 billion yuan—92.4% of current assets.
To plug gaps, the Dengs repeatedly pledged shares for loans. By August 2024, Deng had pledged 14.04% of issued shares. Industrial Bank’s Chongqing branch sued over unpaid loans, with exposure reportedly in the billions.
Dubious $3.4 Billion Prepayments and Family Governance Failures The crisis erupted in Q4 2023. Auditors flagged 4.47 billion yuan in prepayments, including 3.42 billion yuan paid to new suppliers with no transaction history. Some suppliers had zero social insurance enrollees and registered capital below prepayment amounts.
By January 2024, HONGJIU FRUIT paid 1.52 billion yuan more to these suppliers but received only 405 million yuan in goods, leaving 4.2 billion yuan outstanding. These flows exposed governance flaws: pre-IPO, the Deng family held over 46% ownership, with key roles all family-occupied. External directors were powerless; oversight collapsed when three independent directors resigned in May 2025.
From Suspension to Delisting Trading halted on March 20, 2024, after auditor KPMG questioned its 2023 financials, missing disclosure deadlines. Despite a review application on October 13, 2025, the exchange upheld delisting on December 15.
Meanwhile, in April 2025, Deng and five executives were detained for suspected loan fraud and fake VAT invoices, revealing a broken financial chain. Operations froze as offices were sealed, though some employees later formed a task force to salvage the company.
Industry-Wide Crisis HONGJIU FRUIT’s downfall reflects broader struggles in China’s fruit retail sector. Rivals like Pagoda (百果园) and Xianfeng Fruit (鲜丰水果) also face crises: Pagoda’s 2024 revenue fell 9.8% with 966 store closures, while Xianfeng’s 300 million yuan frozen equity derailed its IPO.
Traditional players grapple with high cold-chain costs and competition from community group-buying platforms offering cheaper, faster delivery. As economic downturns spur price sensitivity, brand premiums erode.
At suspension, HONGJIU FRUIT’s shares were at HK$1.74—a 95.65% plunge from its HK$40 IPO price. Its collapse underscores the perils of unchecked family control and capital-fueled overexpansion.
Disclaimer: Views are for reference only. Accuracy cannot be guaranteed due to data and cognitive limitations.
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