*ST Haiyi, formerly Lanhai Medical, faces delisting risk after it has been suspended from trading on the Shanghai Stock Exchange since early May. The company and its chairman Mi Chunlei are now under scrutiny from the market.
According to Sina Finance, *ST Haiyi is an A-share listed company. On May 5, it officially entered the delisting process. The company received a notice from the Shanghai Stock Exchange on the termination of its stock listing.
The removal of *ST Haiyi from the exchange has caused the market to pay attention to Mi Chunlei, the actual controller of the company. He is the husband of the famous CCTV host Dong Qing.
Mi Chunlei is also the chairman of Shanghai Life Insurance. On the 2021 Hurun China Rich List, Mi Chunlei ranked 647th with a net worth of 1.71 billion dollars.
An announcement from *ST Haiyi confirms that, since the beginning of May 5, Chairman Mi Chunlei has been unable to perform his duties normally. The company has repeatedly contacted Mi Chunlei but did not learn any information.
The group also failed to get in touch with him during self-inspection of fund occupation and illegal guarantees.
Some media, including Caixin, reported that he had been taken away by a local economic investigator.
2 money printing machines
Mi Chunlei was born in December 1978. He has been seen as low-key and mysterious. But after 2015, Mi Chunlei began to become a star in the capital market. He and a group of state-owned shareholders established Shanghai Life Insurance. He then controlled listed companies, invested heavily in banks.
His capital map involves insurance, banking, real estate, medical care, automobiles, mining and other fields. But his wealth rapidly expanded mainly thanks to two major money printing machines: real estate and finance.
At 44, he entered the Hurun Rich List. His wealth growth was quite astonishing, and his assets surpassed 1.7 billion dollars at one time.
The starting point of the Mi Chunlei family’s fortune was the infrastructure project on Chongming Island in Shanghai. In the 1990s, Shanghai’s infrastructure industry was in a golden age. His family had been involved in projects such as highway construction and highway engineering maintenance in Chongming Island.
As early as 1997, Mi Chunlei’s father, Mi Boyuan, began to get involved in the real estate industry and established Shanghai Waitou Real Estate Co., Ltd.
Subsequently, his family’s real estate business became bigger and bigger as they founded multiple property firms one after another.
Meanwhile, Mi Chunlei began to get involved in the financial industry, and successively entered the insurance and banking fields.
In 2015, Mi Chunlei established Shanghai Life Insurance with many well-known shareholders.
From 2015 to 2016, the registered capital increased to 6 billion yuan (nearly 900,000 dollars) , and his Lanhai Group also increased its capital 5 times.
Lanhai Group then invested in banks. In 2017 it was the tenth largest shareholder of Shanghai Rural Commercial Bank. In 2018, Lanhai Group became the largest shareholder of another bank with 19.5% stake.
With money printing machines of real estate and finance, Mi Chunlei’s wealth has expanded rapidly.
The empire collapses
Since Mi Chunlei took over Lanhai Medical in 2016, its stock price has collapsed all the way, with a cumulative decline of nearly 90%.
Data indicates that the predecessor of Lanhai Medical was China Ocean Shipping. In 2015, when the global shipping industry encountered a dark moment, China Shipping – the shareholder of China Ocean Shipping – intended to sell its controlling stake in the company.
At that time, Mi Chunlei was looking to buy a listed company. He decided to acquire a 45.22% stake in Zhonghai Haisheng through the transfer of some of the shares held by China Shipping and used Shanghai Life Insurance to buy it in the secondary market, at a total cost of 3.03 billion yuan (451,000 dollars).
After this deal, Mi Chunlei began to build a medical and health strategy platform. He renamed Zhonghai Haisheng to Lanhai Medical, divested all shipping assets, and deployed high-end rehabilitation hospitals, high-end medical clinics, and online hospitals.
After a series of capital operations, performance of the listed company deteriorated rapidly and frequently suffered losses. The deduction of non-net profit losses in 2020 and the revenue of less than 100 million yuan (nearly 15 million dollars) sounded the delisting alarm.
The situation did not improve in 2021, with non-net profit losses deducted for the second consecutive year. Lanhai Medical may not escape the doom of delisting.
In addition to Lanhai Medical, Mi Chunlei’s finance and real estate businesses also have hidden crises.
On March 28 this year, the Qujing Public Security Bureau froze the 492 million yuan (73 million dollars) equity of Qujing City Commercial Bank held by Lanhai Group.
In early May 2021, China’s central inspection team exposed the chaotic development of Dianchi Lake in Kunming, and Lanhai Group’s project was also suspended.
Lanhai Group’s tight capital condition is also reflected in equity pledges, meaning it uses shares at some subsidiaries as collateral for bank loans.
The 2021 annual report of Shanghai Rural Commercial Bank shows that Lanhai Group holds 3.87% stake, but all the shares it holds have been used as collateral for debt.
Shanghai Life Insurance also suffered hardship, with a loss of 278 million yuan (41.4 million dollars) in the fourth quarter of 2021. At the same time, the insurer’s comprehensive risk rating was also downgraded from Class B in the second quarter of 2021 to Class C in the third quarter, becoming a company that does not meet the solvency standards.