Xu Jiayin's coup d'état, the new order of state-owned enterprises must be cautious in their expansion, focusing on the long-term development direction
Xu Jiayin. Xu Jiayin was born in an ordinary rural family. Compared with the rich second generation with the strong background of the old man as support, Xu Jiayin was born as a farmer.
The lack of parental companionship since he was a child did not discourage Xu Jiayin, and he relied on his own efforts to study all the way.
After the college entrance examination system was restored in 1978, Xu Jiayin was also admitted to the university with his own strength, letting everyone know that at that time, it was indeed a glorious thing to be admitted to the university.
Not only did he excel in school, but he also had a smooth career after graduation. Not only was he appointed as the leader of a workshop, but he also won several awards for his work.
However, in the early days of China's reform and opening up, he gave up his stable job and resolutely chose to go to the sea, hoping to break out of the business world, because he knew that the bigger the wind and waves, the more expensive the fish.
With his extraordinary wisdom and keen market vision, Xu Jiayin founded Evergrande Group, and slowly and steadily became a leading figure in China's real estate market.
So, why did the self-made Xu Jiayin fall into such a deep quagmire?
In fact, Xu Jiayin's fall is closely related to the development strategy mistakes of Evergrande Real Estate Group's blind expansion. It is normal for companies to have enough liabilities, but Evergrande Group's liabilities are very large, with fewer and fewer assets and larger liabilities.
In just a few years, Evergrande Group's assets have fallen sharply, but its liabilities have soared to 2 trillion yuan, and these figures continue to grow, which is simply beyond our understanding.
Evergrande's choice of industry.
Evergrande, the name of this enterprise is very popular, Evergrande means that Evergrande will always be big!The English translation of Evergrande is evergrande, ever is eternal, greatest means grand, grandiose. The name of the company is considered so important, and the performance is really as big as it gets!
At the beginning of 2019, Xu Jiayin comprehensively issued the planning standards, trend direction and development goals of Evergrande's diversified industries, which is to become bigger and stronger!
Evergrande has successively entered the grain and oil industry, the dairy industry, and the mineral water industry, but through exploration, it is not difficult to find that the annual market sales of the industry volume are hundreds of millions or billions, which is not consistent with the scale of Evergrande's annual sales of 600 billion. In terms of the choice of industry, Evergrande should be a bigger industry. "Xu Jiayin introduced that earlier in Evergrande's diversified industry selection criteria, that is, to be bigger, at least the marketing volume should exceed 100 billion. In addition to the real estate industry, it can only be the automobile and tourism industry.
Evergrande spent more than 40 billion yuan to buy Hengchi Automobile, and the cash flow brought by this transaction to Evergrande has a huge hole, which is not enough to make up for it!In the case that the automotive industry has become flat and the market competition is cruel, Hengchi Automobile will lose a total of more than 80 billion yuan in 2021 and 20222!
Evergrande's collapse into a state-owned enterprise has had a huge impact, but it has also aroused widespread attention and discussion from all walks of life. Enterprises become stronger and more specialized, never blindly seek to be bigger, which shows the attitude of the country's choice, first of all, to be stronger and more specialized. It is necessary to make the enterprise stronger, more specialized, bigger and stronger!It's not enough to have a false name, on the surface it always looks great, and you can do anything, but inside it is empty, deflated, and ostentatious.
Behind the blind scale expansion.
Blind scale expansion has long been an important problem for Chinese state-owned enterprises. In order to gain a larger market share, many state-owned enterprises borrow a lot of money and do not hesitate to expand their market share by expanding their scale. This blind pursuit of flawless expansion may seem to pay off in the short term, but it ignores the importance of corporate quality and sustainability.
This quest for perfect scale raises a series of problems, and debt is one of them. Large-scale borrowing of listed companies will not only increase their financial risks, but also lead to financial instability. Debtor companies are unable to cope with the sudden challenges of economic development and may fall into a severe economic crisis.
In addition, blindly scaling up can also lead to inefficiency in the company. In the pursuit of scale, enterprises generally ignore the development of internal management technology. This means that while companies appear to be large, they lack the competitiveness and innovation needed to become major competitors in international markets.
Evergrande has been in a state of loss for more than two years, not because the country does not give Xu Jiayin a chance, but because he doesn't want it at all!
As of the end of 2022, Evergrande's total liabilities were 258 trillion yuan, of which shareholders bear more than 100 billion yuan, Evergrande Real Estate Group bears 244 trillion.
In the Evergrande Group's 2Of the 44 trillion, 720 billion are contractual debts, that is, the owner has not paid for the house after buying the house.
More than 600 billion are bank loans and other debts.
The remaining 1 billion is the advance payment of the first business, including the project payment, material payment, lawyer fees, and public relations fees.
Therefore, two years ago, in the early days of Evergrande's thunderstorm, Xu Jiayin was not taken away, and Evergrande did not go bankrupt, because the state gave Xu Jiayin the opportunity to ask the other party to ensure the delivery of the building, and at the same time repay the money to the first merchant and bank as soon as possible.
In the end, Xu Jiayin, under the reminder of the other party, spit out all the money hidden in his hand and filled the hole.
In Evergrande, the net profit totals hundreds of billions of euros a year, but Xu Jiayin can earn tens of billions of dollars in dividends alone.
With the rapid development of domestic housing prices in the past decade, Evergrande's net profit and Xu Jiayin's investment portfolio have also risen outrageously.
From 2020 to some time ago, Xu Jiayin does not seem to have taken the responsibility he should take to fill this hole, but is operating in private again, transferring the wealth hidden in his hands abroad!
Fake divorce from your wife, file for bankruptcy in the United States, or even set up a trust abroad** to file for bankruptcy protection in the United States.
The real reason for Evergrande's decline is that it has blindly expanded into a big name.
What is the reason for the real decline of Evergrande?In fact, the most important point is that Evergrande is expanding too fast.
If the development of the car is used to describe the development of the company, then Xu Jiayin will be a rocket pressed on the car, and no matter how fast the speed is, the vehicle cannot control it.
At first, China's urbanization process accelerated, which promoted the development and growth of the real estate industry, but the urbanization process was basically completed, and real estate companies also had to control the number of houses built.
The vast majority of real estate companies understand this truth, and in recent years, investment and construction have been converging.
However, Evergrande is taking the opportunity to expand, and in the state of regulation of the real estate industry, it not only does not follow the national policy, but expands itself.
The higher the leverage, the higher Evergrande's debt will become, and it will become higher and higher.
The Xu Jiayin incident has also sounded the alarm for China's state-owned enterprises, which are prone to great success due to the complexity of their administrative organs.
State-owned enterprises are the lifeblood of China's industry, so there should not be an incident of blindly asking for large sums of money that leads to an excessively high debt ratio and no ability to repay, which will only cause chaos in our country.
Therefore, after the Xu Jiayin incident was **, China's relevant departments made new instructions to the national listed companies, and the company must develop steadily and must not seek perfection.
In general, Xu Jiayin has already collapsed on all fronts, and it has poked holes that it can't afford to poke, and it can only be punished by law.
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