Causes of debt crisis of Longnan Hengtai Group

Excessive expansion and blind diversification.

1. Excessive expansion: In the process of rapid development, Hengtai Group has continuously expanded its business scale and investment scope, resulting in tight capital chain and increased debt burden.

2. Blind diversification: Hengtai Group is too blind in diversification and has set foot in many unfamiliar fields, such as real estate and finance, which leads to scattered resources, increased management difficulty and decreased profitability.