---
title: "Suning Holdings Pledges All Equity to Taobao; Latest Response from Suning"
description: "Suning Holdings Group recently pledged all its equity to Taobao (China) Software Co., Ltd., sparking public concern. Suning responded that it is a normal commercial cooperation with no substantial impact on operations."
author: "零售圈"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2020-12-11"
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# Suning Holdings Pledges All Equity to Taobao; Latest Response from Suning

> Suning Holdings Group recently pledged all its equity to Taobao (China) Software Co., Ltd., sparking public concern. Suning responded that it is a normal commercial cooperation with no substantial impact on operations.

Recently, Suning Holdings pledged all its equity to Taobao, and the announcement stunned the public!
Onlookers: Is Suning in trouble?
Suning: I'm fine!
**-01-**
**Suning Holdings Pledges All Equity to Taobao**
On the evening of December 10, the change information on the National Enterprise Credit Information Publicity System showed that **shareholders of Suning Holdings Group, Zhang Jindong, Zhang Kangyang, and Nanjing Runxian Enterprise Management Center (Limited Partnership), had pledged all company equity to Taobao (China) Software Co., Ltd.**
Among them, Zhang Jindong pledged 51,000 shares, Zhang Kangyang pledged 39,000 shares, and Nanjing Runxian pledged 10,000 shares.
The total pledged shares were 100,000, with a total pledged equity amount of 1 billion RMB, equivalent to the registered capital of Suning Holdings Group.
The equity pledge registration date was December 4, 2020.
In addition, the National Enterprise Credit Information Publicity System also showed:
Zhang Jindong also pledged 65,000 shares of Suning Real Estate Group equity, with the pledgee also being Taobao (China) Software Co., Ltd., and the registration date also being December 4 this year.
Business information shows that Suning Holdings Group Co., Ltd. was established in June 2011, with legal representative Zhang Jindong, registered capital of 1 billion RMB, and is jointly held by Zhang Jindong, Zhang Kangyang, and Nanjing Runxian Enterprise Management Center (Limited Partnership).
Suning Real Estate is a real estate development enterprise under Suning Appliance, with Zhang Jindong as the major shareholder, holding 81.25% and subscribing 650 million RMB.
Public information shows that Zhang Jindong is the founder and chairman of Suning Holdings Group, and a major shareholder of Suning Appliance Group and listed company Suning.com; Zhang Kangyang is Zhang Jindong's son.
Suning Holdings Group is the fourth largest shareholder of Suning.com, holding 3.98%, with business involving industrial investment, equity investment, asset management, etc.
**-02-**
**Suning Response:**
**Normal Commercial Cooperation, No Substantial Impact on Operations**
Regarding this equity pledge, Suning responded later:
**Suning Holdings Group holds 3.98% of Suning.com's equity. The equity pledge is a normal commercial cooperation and has no substantial impact on Suning.com's strategic development and normal operations.**
Over the past 30 years, Suning's innovative development has been inseparable from the strong support of strategic partners and the government. Since this year, facing the challenges of the pandemic, Suning has fully leveraged the advantages of its forward-looking layout in smart retail to achieve steady development.
Suning and Alibaba have maintained good cooperation for a long time. The two sides will further deepen cooperation and expand offline business scenarios.
What does the equity pledge of a limited company mean?
A lawyer explained that shareholders' equity pledges generally occur in two situations:
**First, shareholders themselves lack money, owe private loans, and creditors require the company to pledge the major shareholder's equity as collateral;**
**Second, the company lacks money, such as poor business performance or the need to increase production capacity, requiring financing. Whether through bank loans or private financing, it is possible to require major shareholders to use equity pledges as guarantees.**
An unnamed person said, "This pledge is an active move by Suning Holdings Group."
**"By leveraging Alibaba's advantages in online e-commerce and strong capital, it helps Suning achieve better development online and offline; the subject of this pledge is Suning Holdings Group, which holds only 3.98% of the listed entity Suning.com, a very small portion, not the entire listed entity."**
The person said, "Under current circumstances, Suning.com still has strong strength and room for maneuver."
An observer familiar with Jiangsu's industrial and economic conditions had similar analysis, choosing to pledge Suning Holdings Group's equity, not involving the listed company Suning.com, "the biggest advantage is that there is no need to make public disclosures to the capital market."
He believes that judging the liquidity of a large enterprise requires more indicators, data, and dimensions. For these two equity pledges, he tends to think that "at the end of the year, most enterprises need to finance funds; this is a conventional and similar operation method."
**-03-**
**Repeatedly Rumored to Have Tight Cash Flow**
**Reported to Police on December 8 to Refute Rumors**
In the past month or more, news about Suning has continuously attracted external attention.
At the end of November, foreign media reported that Suning.com was considering selling part of its e-commerce business to ease financing pressure, seeking a valuation of about $6 billion for the business.
Suning.com's official Weibo responded "not true" on the evening of November 27, which should be a response to the above rumor.
Then on December 8, external rumors spread that "Suning Group's capital chain broke, loans from Bohai Bank defaulted, and Minsheng Bank and China Construction Bank have withdrawn loans."
Suning Group subsequently responded urgently through its official Weibo:
Our company noticed some untrue rumors spread on the internet recently. We hereby solemnly declare that the above rumors are all untrue.
The rumors have caused a bad impact on our normal operations and brand reputation. The company has reported to relevant departments, verified the source of information, and will pursue the legal responsibility of the rumor makers and spreaders.
In 2017, Suning Group's Nanjing Runheng invested 20 billion RMB in Evergrande Real Estate.
Not long ago, after Suning Group decided not to take back the 20 billion RMB strategic investment for the time being, bonds issued by Suning Group's subsidiaries, such as "18 Suning 02", "18 Suning 05", "18 Suning 04", "18 Suning 01", "18 Suning 03", and "18 Suning 07", continued to decline.
Later, on the evening of November 23, Suning.com announced that to continuously enhance investor confidence, maintain the stability of corporate bond prices, and promote the company's long-term stable development, the company, based on its recognition of its own value and confidence in future development, combined with current actual operations and financial conditions, plans to continue using 2 billion RMB of its own funds to repurchase corporate bonds.
On the evening of December 2, Suning.com announced repurchase progress, saying that 7 bonds including "18 Suning 01" had completed repurchase, and the company would pay the bond repurchase amount in full to the bank account designated by Shenzhen Branch on December 9.
A bond market investor said: "Currently, Suning.com bonds are basically discounted by about 20%. From a financial perspective, the repurchase is actually very cost-effective."
On the evening of December 9, Suning.com announced the progress of the repurchase results of 18 Suning bonds. The company paid the repurchase amount of "18 Suning 01, 18 Suning 02, 18 Suning 03, 18 Suning 04, 18 Suning 05, 18 Suning 06, 18 Suning 07" bonds in full to the bank account designated by China Securities Depository and Clearing Co., Ltd. Shenzhen Branch on December 9.
**-04-**
**Suning's Pressure Is Indeed High**
Suning's operating conditions have been declining in recent years, causing market concerns.
**Financial reports disclose Suning's operating conditions in recent years, showing that Suning.com has had negative non-GAAP net profit for six consecutive years.**
From 2014 to 2019, the non-GAAP net profits were -1.252 billion RMB, -1.465 billion RMB, -1.108 billion RMB, -88 million RMB, -359 million RMB, and -5.71 billion RMB, respectively.
The third-quarter 2020 financial report is also not optimistic. In the first three quarters, Suning.com's revenue was 180.862 billion RMB, a year-on-year decrease of 10.02%, and net profit was 547 million RMB, a year-on-year decrease of 95.40%.
Among them, third-quarter revenue was 62.438 billion RMB, a year-on-year decrease of 4.58%, and net profit was 714 million RMB, a year-on-year decrease of 92.69%.
But what worries the market more may be the debt problem of Suning Appliance, the core asset platform of the Suning system.
**According to Suning Appliance's 2020 interim report, as of the end of June this year, Suning Appliance's total assets were 406.842 billion RMB, net assets were 106.553 billion RMB, of which restricted assets were as high as 81.102 billion RMB.**
Suning Appliance is the core asset platform of the Suning system and the main bond issuance and financing platform.
Suning Appliance's 2020 interim report shows that as of the end of June this year, Suning Appliance's total liabilities reached 300 billion RMB, of which interest-bearing debt was nearly 180 billion RMB.
The principal balance of bonds due and puttable within the next year is 28.525 billion RMB.
Among them, "17 Suning 07" with a scale of 1.04 billion RMB and a coupon of 7.3% will mature on December 14; "15 Suning 01" with a scale of 9.06 billion RMB and a coupon of 7.3% will mature on December 17.
This means that Suning will have to repay 11 billion RMB intensively in the near future.
**-05-**
**Conclusion**
What is the truth? It is hard to conclude.
But this equity pledge is unusual, at least meaning: Suning is really, very short of money.
Source: Retail Circle (ID: retailsphere)
If the tip is adopted, a reward of 400-2000 RMB will be paid.
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