In Depth: How China’s Tech Elite Got Burned by Luxury Car Dealer’s IPO Mirage
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Yu Haijun.
On July 24, 2022, some of China’s best-known technology and business figures gathered at a private villa at Qiandao Lake in Hangzhou, summoned for what was billed as shareholder and board meetings of luxury car dealer Baolide Holdings Group Co. Ltd.
But one attendee, Hithink RoyalFlush Information Network Co. Ltd. (300033.SZ) Chairman Yi Zheng, later said the meetings were largely a pretext — the real focus was a lavish private banquet.
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- Baolide, once a leading luxury car dealer in East China, collapsed in 2024 after its funding chain broke, leaving unpaid wages, customer complaints, and unmet financial obligations.
- The downfall involved altered financial statements, failed IPO attempts, and investors losing over 1.3 billion yuan; key backers included NetEase's William Ding, Hillhouse, and Alibaba executives.
- Audits exposed misappropriated funds and circular transactions, highlighting relationship-driven (guanxi) investment risks; recovery for investors is unlikely due to deep insolvency.
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Who’s Who
- Baolide Holdings Group Co. Ltd.
- Baolide Holdings Group Co. Ltd. was a major Chinese luxury car dealer that collapsed due to financial mismanagement, mounting debt, and a failed IPO attempt. Many prominent investors, including NetEase founder William Ding and private equity firm Hillhouse, lost significant investments. The company faced bankruptcy proceedings in November 2025.
- Hithink RoyalFlush Information Network Co. Ltd.
- Hithink RoyalFlush Information Network Co. Ltd.'s Chairman, Yi Zheng, attended a private event hosted by Baolide Holdings Group Co. Ltd. in 2022. Yi Zheng later stated that the event, ostensibly for shareholder and board meetings, was primarily a lavish banquet. After Baolide's collapse, Yi Zheng investigated the role of a key connector in the affair.
- NetEase Inc.
- NetEase Inc. is a Chinese internet technology company and one of the largest video game companies in the world. Its founder, William Ding, invested nearly 1 billion yuan ($140 million) through multiple entities in Baolide Holdings Group Co. Ltd., a luxury car dealer, and held a 20% stake in one of its subsidiaries. This investment highlights NetEase's involvement in diverse ventures beyond its core business.
- Baolide Co. Ltd.
- Baolide Co. Ltd. is a subsidiary of Baolide Holdings Group Co. Ltd. It was involved in a bet-on agreement with Minsheng Life Insurance Co. Ltd. and had a 20% stake held by NetEase founder William Ding. The company faced mounting financial pressure and ultimately became part of a consolidated bankruptcy liquidation of Baolide-related entities.
- Hillhouse
- Hillhouse, a prominent private equity firm (高瓴), invested 300 million yuan in Baolide Network in July 2023 through a convertible bond. This investment was based on audited financial materials presented by Baolide's then board secretary, which later proved to be altered, showing inflated net profits and assets. Hillhouse is among the institutional investors ensnared in Baolide's collapse, highlighting the risks in relationship-driven investing.
- Minsheng Life Insurance Co. Ltd.
- Minsheng Life Insurance Co. Ltd. was an investor in Baolide Holdings Group Co. Ltd. They acquired a 25% stake in a subsidiary, Baolide Co., in 2016 with a bet-on agreement. This required Baolide Co. to repurchase Minsheng Life's 645 million yuan investment at a 12% annualized return if the company didn't list by the end of 2018. The listing never happened, leading to a substantial debt of nearly 1.2 billion yuan by late 2023.
- Mercedes-Benz
- Mercedes-Benz is a luxury car brand for which Baolide Holdings Group Co. Ltd. held dealership rights. Baolide was once a market leader in East China's luxury car dealership industry, operating over 30 dealerships for various high-end brands, including Mercedes-Benz.
- Baolide Network Technology Service Co. Ltd.
- Baolide Network Technology Service Co. Ltd. was established as the primary entity for Baolide Holdings Group's Hong Kong IPO, absorbing core dealership assets during a restructuring prompted by mounting financial pressure and a failed prior listing attempt. The company secured investments from prominent figures like NetEase's William Ding and Hillhouse, with financial figures later found to be altered to inflate profitability and assets. The collapse of its IPO plans in September 2024 left investors with significant losses.
- Alibaba Group Holding Ltd.
- Alibaba Group Holding Ltd. was mentioned in an article about Baolide Holdings Group Co. Ltd.'s collapse. The article states that then-Alibaba Group Holding Ltd. executive Hu Xiaoming was among the new investors who transferred shares in Baolide subsidiaries, helping Baolide raise approximately 1.3 billion yuan between late 2020 and early 2022.
- LianLian DigiTech Co. Ltd.
- LianLian DigiTech Co. Ltd. is a Hong Kong-listed fintech firm founded by Lü Zhonglin. Lü Zhonglin played a significant role in introducing Baolide's founder, Yu Haijun, to technology executives and business figures, helping Yu secure financing and guarantees due to Lü's credibility.
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What Happened When
- 2016：
- Minsheng Life acquired a 25% stake in Baolide Co. under a valuation adjustment mechanism that included a repurchase obligation if an IPO did not occur by end of 2018.
- 2020：
- Audited financials used for fundraising (later found to be altered).
- Between late 2020 and early 2022：
- Baolide raised about 1.3 billion yuan by transferring subsidiary shares to new investors, suggesting a Hong Kong IPO was imminent.
- By the end of 2018：
- Deadline for Baolide Co. to complete a listing to avoid the buyback obligation owed to Minsheng Life.
- Between 2016 and 2024：
- Baolide paid nearly 2 billion yuan in interest on private loans (according to government audit).
- July 24, 2022：
- Prominent tech and business figures gathered at Qiandao Lake in Hangzhou for Baolide shareholder and board meetings, which turned out to be a banquet.
- Late 2021：
- Minsheng Life demanded repayment from Baolide after the listing did not occur.
- July 2023：
- Hillhouse invested 300 million yuan in Baolide Network via a convertible bond.
- December 2023：
- Principal and interest owed by Baolide to Minsheng Life had risen to nearly 1.2 billion yuan.
- September 2024：
- Baolide’s funding chain collapsed and the crisis became public.
- July 2025：
- Baolide founder’s wife, Chen Yingfei, left the Chinese mainland after being placed under exit restrictions.
- November 2025：
- A Hangzhou court ordered substantive consolidated bankruptcy liquidation for 57 Baolide-related entities.
- As of 2026：
- Yu Haijun denied allegations of fraud in an interview with Caixin; a local government department's report led to investigation of alleged misappropriation of funds.
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