Shenzhen Hongtao Group Crumbles: Real Estate Crash Topples 740M Yuan Building Giant

Shenzhen Hongtao Group Crumbles: Real Estate Crash Topples 740M Yuan Building Giant

Sofia Delgado-Cheng
2 min read

Shenzhen Hongtao Group Collapses Amid Real Estate Market Downturn

Shenzhen Hongtao Group Co., Ltd., a leading building design and decoration company based in Shenzhen, China, has announced the cessation of its operations, effective June 20, 2024. Founded in January 1985, Hongtao Group has been a major player in the architectural decoration industry for nearly four decades. However, the company has succumbed to the prolonged economic downturn, adjustments in the real estate sector, and the impacts of the COVID-19 pandemic. These challenges, compounded by banks withdrawing loans and delayed receivables, have rendered Hongtao Group incapable of sustaining its business operations. The company declared a revenue of 740,674,909.05 Yuan in 2023, but despite efforts to stabilize, the stock price plummeted to 0.56 Yuan by June 18, 2024, leading to the inevitable delisting from the stock market.

Key Takeaways

  1. Industry Impact: The collapse of Hongtao Group, a major downstream supplier in the real estate market, highlights the ripple effects of the Chinese real estate market crash.
  2. Employee Layoff: All employees of Hongtao Group are put on standby from June 20, 2024, with a monthly wage of 2500 Yuan during the waiting period.
  3. Financial Strain: Chairman Liu Nianxin and his family have personally provided financial support and guarantees exceeding 10 billion Yuan in attempts to save the company.
  4. Market Downturn: The company’s stock remained low post-2023 audit, failing to recover and leading to its delisting from the stock market.


The downfall of Shenzhen Hongtao Group is a stark reminder of the vulnerabilities in the construction and decoration sector, particularly for companies heavily dependent on the real estate market. The economic downturn and real estate market adjustments have hit downstream suppliers hard. The banking sector’s tightening of loan policies and delayed receivables further exacerbated Hongtao’s financial woes. Despite attempts by Chairman Liu Nianxin to inject personal and family finances to stabilize the company, the continuous decline in stock value proved insurmountable.

Hongtao Group’s business spanned a wide range of services, from interior decoration and design for public buildings to mechanical and electrical design consulting. The company was known for its contributions to high-end spaces like hotels, office buildings, and cultural centers, making its collapse a significant blow to the industry. The announcement of placing all employees on standby, with minimal wages, underscores the severe financial distress the company faces.

Did You Know?

Shenzhen Hongtao Group was formerly known as Shenzhen Hongtao Decoration Co., Ltd. before it changed its name in March 2019. Established in 1985, it has been a prominent name in the architectural decoration industry, providing comprehensive services including curtain wall design, lighting services, and soft decoration design. The company also produced and sold a variety of decorative materials such as wood products, stone products, and LED lighting appliances. Despite its significant contributions and long-standing presence in the industry, Hongtao Group could not withstand the compounded economic pressures, leading to its unfortunate collapse.

The demise of Hongtao Group serves as a critical case study in understanding the broader implications of market fluctuations on the construction and decoration sectors, emphasizing the need for robust financial strategies and adaptive business models to navigate such turbulent times.

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