My 1999

"Let's talk about Jianlibao's external expansion."

Xu Liang nodded, "The original plan of the management of Jianlibao's external expansion was to focus on the Japanese market, but it was changed later.

The Japanese market is a relatively mature market, and the audiences of major brands are relatively stable, and the brand loyalty is very high.

If we go in, we need to spend a lot of money on promotion.

And the possibility of loss is as high as 80%.

So, it is safer to acquire local companies than to start from scratch.

But if it is acquired, it will require more funds.

It will put a huge financial burden on Jianlibao.

Once the operation of the acquired company has problems, it will affect the development of Jianlibao as a whole.

So, after comprehensive consideration, we temporarily suspended the development of Japan.

Instead, we turned our attention to Southeast Asia.

Although the beverage market here is not as big as that in Japan, there are no dominant big brands and the competition is not strong.

The price of acquiring local companies is not high, which is convenient for integration.

From 2003 to now, we have acquired 5 beverage brands in Southeast Asia, and the channel construction has been very effective. Now Southeast Asia has become our second largest source of profit after China.

It generates 3 billion Chinese yuan in revenue and nearly 500 million in profit for the company every year.

The development speed is also very fast.

According to our estimates, in the next five years, the revenue from Southeast Asia will exceed 10 billion Chinese yuan.

It has become our most important business support.

By then, the company's revenue and profit will be higher, and the time to enter the Japanese and Korean markets, or the European and American markets through mergers and acquisitions will be truly ripe. ”

“The countryside surrounds the city.” The old man said.

"You hit the nail on the head. That's the strategy.

Start rising from the edge that international giants don't pay attention to, and then enter their market competition after becoming stronger."

"Avoiding the strong and attacking the weak, and then fighting after becoming stronger, it is indeed a good way."

"You are flattering me."

The old man smiled, "Isn't the merger of Delong Group different from your previous mergers and acquisitions?

Its financial burden is too heavy.

And its own operation also has big problems.

Spanning many industries, the brand reputation and audience are not high."

"You are right, Delong's debt of 57 billion Chinese yuan is very shocking.

There are also big problems in management, and the brand audience is not as wide as Jianlibao.

But Delong has a good industrial foundation.

Xiang Torch is a leading manufacturer in the fields of auto parts and heavy vehicles. Merchants.

Alloy shares is the largest manufacturer of power tools and garden machinery in the country. After acquiring American Mao Rui, it not only made up for the technical defects, but also obtained foreign channels.

Tianshan shares is the third largest cement producer in the country.

It can be said that except for Shancheng Industry, Delong's industrial assets are very good.

As long as the management is done well and some of the debts imposed by Delong are stripped off, it will soon be able to turn losses into profits.

But Delong's biggest difficulty is his debt.

And this is the advantage of Hanhua and Hongyan.

We have ample funds to solve Delong's debt problem.

The old man nodded, "Although Delong's industrial assets are good, if you want to recover the debt of 23 billion Chinese yuan, it will probably take a long time.

If the same funds are invested in those companies that are already well-run, can you get a higher return?

In comparison, is the return on investment in Delong lower? "

Xu Liang was surprised at the other party's sharpness.

Strictly speaking, this is correct.

If he invested the 57 billion Chinese yuan in Delong in the A-share companies such as PetroChina and China Mobile, the return in five or six years would definitely be more than the investment in Delong.

But there is one thing.

Foreign investment in China needs to be approved.

Financial institutions around the world dream that China will allow them to establish more QFII funds.

But it's not possible.

Compared with strict financial audits.

Foreign industrial investment is more popular.

Not only is the audit easy, but there are also policy benefits.

But there are not many companies in China that can afford huge investments.

Delong is the most suitable one.

Acquiring Delong, Hanhua and Hongyan transferred 90 billion Chinese Yuan to China in the name of debt repayment and subsequent operating capital investment.

When the exchange rate of Chinese Yuan to the US dollar changes from the current 8.27 to 6.5, or even lower, this money will rise to more than 100 billion Chinese Yuan with the appreciation of Chinese Yuan.

Add debt tax deduction.

So the real debt that Delong brought to Hanhua and Hongyan is actually only about 23 billion Chinese Yuan.

In contrast, Delong's net assets are about 40 billion Chinese Yuan.

This is the real reason why Xu Liang is willing to acquire Delong.

"Hanhua and Hongyan have invested enough in the stock market. From a risk perspective, we are more willing to invest in some real industries.

In addition, you also know that the short-term capital gains tax in the United States is very high.

After merging Delong's debt, we can also reduce part of it through reasonable capital operations.

Therefore, the cost of the acquisition is not as serious as the outside world thinks. "

He concealed the part about the appreciation of the Chinese currency.

After all, this has not happened yet.

The old man raised his hand and nodded at him, smiling: "I know that your acquisition of Delong is not just about industrial assets, but also tax considerations.

But you are the only company in China that can do this. "

Except for Hanhua and Hongyan, no company can earn tens of billions of dollars in revenue from the United States in a year.

Xu Liang smiled and did not explain too much.

The old man glanced at him, "Let's continue the previous topic."

Xu Liang nodded and continued.

"The third reason for Delong's bankruptcy is 'strategic idealization'.

Delong has done a lot of exploration in the strategic model of industrial integration, and the results have proved to be fruitful.

For example, after entering Xianghuo Torch, through a series of industry mergers and acquisitions, its main business income increased from 124 million yuan to 11.39 billion yuan in six years.

Although the profit margin is not high, as a mechanical processing company without its own core technology, this profit margin is a bit low, but it is still successful.

More importantly, Delong can make more money by rapidly expanding the scale of Xianghuo Torch and sitting in the stock market.

Combined with the two, the money Delong made through industrial integration is very rich.

Moreover, it is easier to make money from the stock market than to operate the real industry with great effort.

So after they proved that this was an effective strategy in the operation of Tunhe and Alloy Shares, they completely embarked on the strategic development path of industrial integration and stock market manipulation.

But such a strategy is too idealistic.

As mentioned before, without the support of the real industry, finance becomes a castle in the air.

And stockholders and investment institutions are not fools.

You may be able to deceive people once or twice, but the truth will come out.

Especially when the macro policy changes, Delong's dilemma is aggravated. ”

“So you mean that industrial enterprises should focus on improving their management level and core business, and not pay attention to finance?” asked the old man.

Xu Liang nodded and said: “Every profession has its own specialty. Finance is a very professional thing.

If a company that focuses on industry shifts its attention to finance, it will lose sight of the other and end up with nothing. ”

“However, many industrial companies in the world are involved in finance, and they are doing well, such as GE. ”

“There is only one GE in the world.

Moreover, GE's financial business is mainly based on household finance and corporate credit, and the risk is relatively small. "

The old man smiled and nodded, and then turned his eyes.

"There is more than one GE in the world, there is also you."

"You are too kind. In fact, I am doing business in the way of investment."

"Investment?"

"Yes. Analyze the industry situation and the fundamentals of the enterprise, and finally decide whether to enter.

There are many such companies in the West, especially in the United States.

KKR, Blackstone, 3G Capital, etc.

The old man understood.

He also understands these foreign private equity giants.

He made a gesture to continue.

Xu Liang continued: "The fourth reason for Delong's bankruptcy is that it did not grasp the investment rhythm.

Delong did not do enough in the long-term, medium-term and short-term investment portfolios and the grasp of the investment rhythm.

The proportion of long-term investment is too large, ignoring the return cycle of industrial investment, affecting the liquidity of funds.

More just see the tempting investment opportunities and industrial integration opportunities, but ignore the potential risks brought by the company's rapid growth.

The fifth, macro judgment errors.

Since its establishment, Delong has been developing very fast and smoothly, and the government, banks and other aspects have also been very supportive.

In particular, the credit line granted by the bank is also very large, which gave Delong an illusion.

As long as there are good industries and good projects, they will not lack funds.

But I didn't expect that the contraction of credit would have such a huge impact on the entire society and directly caused the break of Delong's capital chain.

Article 6, use poison to dissolve poison.

In the financial industry, it is certainly possible to make money and easy to make money by raising the stock price of the company by means of speculation.

The price is that the company will ignore the operation of the real industry and focus more on the stock market where it is easier to make money.

But the stock market without the support of the real industry is destined to be a castle in the air and a mirage.

Once it encounters a crisis, it will be exposed. "

After a pause, after looking at the old man's expression, Xu Liang continued.

"What I said is relatively brief. If you want to understand it in depth, I will bring you a copy of our internal information. "

"That's great, I'm waiting for your information?"

"Well. "

After chatting for a few more sentences, the old man stood up.

"I have delayed you for so long, I should go now.

You should prepare yourself, I will listen attentively later."

"Have a good time."

Xu Liang stood up and saw him off.

After watching the old man disappear outside the door, Xu Liang breathed a sigh of relief and his expression relaxed.

"Mr. Xu, I didn't expect the Prime Minister to be interested in Delong Group?" Lu Hui said.

Xu Liang smiled faintly and didn't say much.

The Prime Minister was not interested in Delong, but warned him by asking about the reason for Delong's bankruptcy.