The New Year's Eve announcement of Bank of Zhengzhou's (002936) victory in a 1.1 billion yuan housing-related lawsuit has instead highlighted the stalled predicament of the "most educated housing project," involving 1.62 billion yuan in misappropriated funds.
On December 31, 2025, Bank of Zhengzhou disclosed a notice stating that the first-instance judgment for its financial loan contract dispute with Zhengzhou Jinwei Industrial Co., Ltd. and other entities had been finalized. The court ruled that Jinwei Industrial must repay the 1.1 billion yuan principal and relevant interest, with Yongwei Real Estate, its actual controller Li Wei, and Jinqiao Real Estate's actual controller Cui Hongqi bearing joint liability for repayment.
This legal victory represents a step forward in Bank of Zhengzhou's debt recovery efforts. However, the 1.1 billion yuan claim involved is intrinsically linked to a significant recent event in Zhengzhou's real estate market—the stalling and delivery crisis of the Xitang project, dubbed "Zhengzhou's most educated housing project." It also serves as a microcosm of the bank's deep entanglement in real estate sector credit exposure and the resulting pressure on its asset quality.
The story's origins trace back to 2020. At that time, Zhengzhou's real estate market still retained some warmth. Cui Hongqi, who possessed the land resources of the former Zhengzhou Boiler Factory site, found a quick partnership with Yongwei Real Estate, a local developer renowned for its "quality."
The two parties jointly established Jinwei Industrial, with Jinqiao Real Estate holding a 51% stake and Yongwei Real Estate holding 49%. They adopted a cooperation model of "Jinqiao provides the land, Yongwei manages the development." In August 2020, the project named "Yongwei Jinqiao Xitang" officially launched. Benefiting from its prime location adjacent to Zhengzhou University and Yongwei's brand reputation, the development rapidly became the top-tier project in Zhengzhou's High-tech Zone.
Even with selling prices three to four thousand yuan higher than surrounding properties, homebuyers flocked to purchase, resulting in the cumulative sale of over 1,600 units and total sales proceeds reaching 3.379 billion yuan.
The premium was supported by a highly educated demographic with extremely high demands for quality of life.
Among Xitang's 2,515 homeowners, based on self-reported statistics, 481 held master's degrees and 189 held doctoral degrees. This group included numerous university faculty and key research personnel, with 246 individuals even receiving talent introduction subsidies from Zhengzhou City.
However, it was precisely this rational, highly educated group that faced one of life's most irrational reversals by the end of 2021. In November 2021, construction was suspended citing a "winter work stoppage order," but failed to resume after the Spring Festival.
Initially, sales consultants responded evasively to homeowners' inquiries. It wasn't until March 2022 that the acute internal conflict between the two developers erupted during a tripartite discussion.
The truth gradually emerged through subsequent multi-party investigations: the Xitang project failed not due to a sluggish market, but because of an extremely aggressive large-scale fund misappropriation.
An internal meeting memo reviewed by parties including the Zhengzhou High-tech Zone Administrative Committee revealed that, by the end of April 2022, the Jinqiao faction's actual controller, Cui Hongqi, had collectively misappropriated 1.62 billion yuan from the Xitang project.
The destination of these massive funds pointed precisely to another luxury residential plot—the Zhengzhou Beilonghu project. Between May and June 2021, under the Jinqiao faction's direction, 1.01 billion yuan from Xitang's sales proceeds was transferred out in batches to pay the bid deposit and land payment for the Beilonghu plot. Cui Hongqi originally promised to return the funds within a month, but as the Beilonghu project stalled due to insufficient capital, the money ultimately vanished.
During this process, the prudent principles of financial institutions also seemed to be compromised. In August 2021, Bank of Zhengzhou's Zhongyuan Road Branch disbursed a 1.1 billion yuan development loan to Jinwei Industrial, guaranteed by the actual controllers of both Jinqiao and Yongwei and their affiliated companies.
Yet, according to later exposed financial dispute documents, after this loan, which should have been "used exclusively for its designated purpose," was received, it was not fully invested in Xitang's construction. Instead, portions were allegedly funneled to affiliated companies.
The Yongwei faction argued that its CFO, Du Limin, had requested using the funds to repay loans not yet due, while the Jinqiao faction accused Yongwei of refusing to pay construction costs, leading to the work stoppage. The two sides publicly aired grievances against each other in sales offices and online platforms, even resorting to highly emotional public curses like "damn Yongwei, damn Jinqiao."
Caught in this capital deceit, the most severely hurt were the homeowners who had spent their life savings, or even borrowed money, to buy apartments.
Some professors lamented helplessly outside the construction site that "education makes everyone equal in the face of a stalled project," while other talented young individuals faced the invalidation of their provident fund loans because online signing had not been completed.
Although Zhengzhou City subsequently established a special task force, introduced state-owned platform supervision, recovered some misappropriated funds, and facilitated the first batch of deliveries in August 2024, the earlier construction disruptions and funding shortfalls continued to plague the project with accusations of "performative restart" and quality disputes.
For Bank of Zhengzhou, winning this lawsuit feels more like a "pyrrhic victory."
Even though the judgment clearly stipulates the 1.1 billion yuan repayment obligation, the primary defendant, Jinwei Industrial, has zero paid-in capital. Furthermore, its core asset, the Xitang project, was successfully delivered on July 15, 2024, following the intervention of the government task force and the implementation of fund supervision.
Meanwhile, the guarantors, Cui Hongqi and Li Wei, are already deeply mired in lists of dishonest persons subject to enforcement and orders limiting high-consumption due to the systemic crises affecting their respective real estate companies.
This judgment, effective on the last day of 2025, legally confirms the creditor's rights. Yet, on the actual financial ledger, how to convert these "paper assets" into real value remains a significant question mark.
The 1.1 billion yuan financial loan dispute over the Xitang project is merely one example of Bank of Zhengzhou's prolonged debt collection efforts during the real estate sector's deep adjustment period. As early as the beginning of 2024, the bank was involved in three major non-performing loan cases related to real estate, with involved principals totaling nearly 2.2 billion yuan—a figure exceeding the bank's entire 2023 net profit of 1.859 billion yuan.
Compared to the Xitang dispute fueled by infighting among local developers, these three larger, longer-spanning cases directly implicate two former giants that once dominated Henan's real estate scene: the Xinyuan Group led by Zhang Yong and the Kangqiao Group controlled by Song Gewei.
Within this 2.2 billion yuan debt storm, the largest single claim involves an 1.1 billion yuan principal loan, with the defendants directly pointing to Xinyuan Group's subsidiary Xinying Real Estate and its affiliated guarantor companies. As the first Henan-based developer to list in the US, Xinyuan Properties (XIN) was once immensely prestigious: in 2007, Zhang Yong led the company to ring the opening bell at the New York Stock Exchange, briefly setting an industry benchmark.
Now, this former star developer has completely sunk into a debt quagmire: as of October 2025, total overdue debt reached 5.926 billion yuan; its mid-2025 financial report showed a net loss of 1.433 billion yuan, with revenue plummeting nearly 90% year-on-year. Simultaneously, Xinyuan Properties is involved in multiple lawsuits with claims exceeding 50 million yuan and has been listed as a dishonest被执行人.
Performance in the capital markets is equally dismal. By the end of 2025, Xinyuan Properties' stock price was only $1.94, with its total market capitalization shrinking to $15-16 million, evaporating over 97% since its IPO. In a bid for self-rescue, the company plans to spin off its property management unit for a Hong Kong listing, its US subsidiary has applied for bankruptcy, and it attempts debt repayment through affiliated companies "offsetting debt with assets." But this developer, which once built over 50 projects across 16 cities, now sees its iconic assets put up for auction; founder Zhang Yong himself, involved in cases exceeding 1.6 billion yuan, has been repeatedly subjected to high-consumption restrictions by courts and, along with the listed entity, listed as a dishonest被执行人, his former glory reduced to冰冷的 execution notices.
The situation of Song Gewei, another former "leader" in Henan's real estate circles, is equally lamentable. The developer he actually controls is implicated in two core lawsuit debts totaling over 1.09 billion yuan, with the collection process repeatedly encountering obstacles. Among these, although Bank of Zhengzhou won its lawsuit for the 660 million yuan loan to Kangqiao Real Estate, the court terminated the current execution procedure after finding no executable assets—this loan, issued at the end of 2019, remained unrepaid even after an extension. The other case involves a 434 million yuan loan issued in 2021 to Meijing Xinrui Real Estate; Song Gewei held a controlling stake in the company through Kangwen Real Estate at the time and provided a guarantee. Now that Meijing Xinrui cannot repay, the case has entered the collection stage.
Looking back at Kangqiao Group's peak, its sales exceeded 50 billion yuan in 2020, ranking 63rd among national developers; in 2021, Song Gewei successfully listed "Kangqiao Yue Life" (02205) on the Hong Kong Exchange, catching the wave of property management capitalization. But now, the Kangqiao system is under comprehensive pressure: subsidiaries like Anji Kangqiao Real Estate have entered bankruptcy liquidation proceedings, with total unsecured claims exceeding 800 million yuan; Song Gewei himself remains on the list of dishonest被执行人 and is subject to high-consumption restrictions.
The situation of the listed platform Kangqiao Yue Life is also far from optimistic. In the first half of 2025, the company achieved operating revenue of 455 million yuan, a year-on-year decrease of 6.6%; net profit was 43.35 million yuan, down 18.6% year-on-year. More critically, its related-party receivables from entities controlled by Song Gewei amounted to 3.164 billion yuan, and it is involved in a guarantee recourse case of 608 million yuan. Although the court deemed the relevant letter of commitment invalid, Kangqiao Yue Life still needs to bear 40% responsibility for the remaining debt, representing a potential liability of approximately 140 to 180 million yuan.
Against the backdrop of frequent debt disputes in various projects, Bank of Zhengzhou's financial data for the first three quarters of 2025 continued to show growth in both revenue and profit—the Q3 report disclosed in October showed the bank achieved operating revenue of 9.4 billion yuan in the first three quarters, a year-on-year increase of 3.9%; net profit attributable to shareholders of the parent company was 2.28 billion yuan, up 1.6% year-on-year, maintaining this dual-growth trend throughout the year so far.
However, the quality of this growth is questionable. Q3 report data shows that net interest income, the bank's traditional core revenue, reached 7.82 billion yuan in the first three quarters, only a slight increase of 5.8% year-on-year, while the net interest margin had narrowed to 1.6% in the same period, indicating continuously compressed profit margins; net fee and commission income was 330 million yuan, still down 7.1% year-on-year, showing no significant improvement in revenue generation from retail and intermediary businesses. The real support for performance came from financial market operations: investment income in the first three quarters reached 1.46 billion yuan, a substantial year-on-year increase of 42.9%. The high growth of this segment became the core underpinning force for the dual growth in revenue and profit, and its year-on-year growth rate for investment income in the first half of the year even exceeded 111%, making the reliance on growth from non-traditional deposit and loan businesses increasingly prominent.
Of greater concern within the industry is the反常 performance of asset quality indicators. As of the end of Q3, Bank of Zhengzhou's non-performing loan (NPL) ratio remained at 1.76%, with a provision coverage ratio of 186.17% and a loan provision ratio of 3.28%—superficial data appearing stable. But contrasting with industry trends, the bank's NPL ratio for personal consumption loans in the first half of the year was only 0.67%—in the current industry environment where NPLs for consumption loans are generally rising, this figure is not only far below the industry average but even lower than its own NPL ratio for personal housing mortgages of 0.76%.
Simultaneously, the bank's total loans and advances had increased to 406.72 billion yuan by the end of Q3, up 6% year-on-year. The "stability" of the NPL ratio amidst this scale expansion has also raised market questions about whether the bank is diluting risk through new lending or relaxing risk classification standards.
Behind the "stability" of performance and asset quality, risk signals have not subsided. Although Bank of Zhengzhou has not disclosed Q3 overdue loan data, the situation in the first half already revealed potential hazards: at that time, the bank's total overdue loans reached 21.09 billion yuan, accounting for a high 5.19% of total loans during the period, while the NPL balance was only 7.17 billion yuan. The corresponding NPL deviation (loans overdue over 90 days / NPL balance) was approximately 149.1%, far exceeding the regulatory suggested red line of 100%. Among these, approximately 7.77 billion yuan in loans overdue for over a year were still classified as non-NPL. While this practice temporarily maintains the "good appearance" of asset quality indicators, it potentially pressures future provisions, capital adequacy ratios, and other core metrics.
The victory in Bank of Zhengzhou's related debt disputes, while legally confirming creditor rights, also reflects problems left by its previous aggressive foray into the real estate sector.
As a core force among regional financial institutions, facing project delivery obstacles and the deep adjustment of the real estate industry, Bank of Zhengzhou is confronting the dual challenges of self-rescue and transformation—winning lawsuits is merely the first step in debt recovery. Clarifying its true asset quality and finding new growth pillars amidst regional economic restructuring are the answers it must provide to the market in the future.
