In recent years, Cao Dewang has undoubtedly been one of the most motivated entrepreneurs.
He was engaged in philanthropic activities, founded universities, participated in various activities of entrepreneurs, and often made sharp views on the education and manufacturing industry in our country.
In the capital markets, people are also very positive. His investment moves were like a storm that set off waves in the capital market. Recently, he invested 9 billion yuan in two consecutive investments in new projects, with the aim of expanding Fuyao Glass (600660.).SH) production capacity in the country. This investment in Fuqing City has strengthened his feelings for his hometown. One of the two investments was completed in Hefei, Anhui Province, with a total of 57500 million yuan; These two investments have made Fuyao Glass's production capacity layout in China more perfect. He was born in Fuqing City, Fujian Province, and the total amount of money involved is 32500 million. These two investments are the largest in China in recent years, and the time interval between the two is no more than a month.
Mr. Cao Dewang is a very unique figure in the entrepreneurial community in China. He dared to be the first in the shopping mall, dared to dare to work, and achieved his career with hard work. Over the years, he has earned widespread acclaim for his candid, direct words and generous acts of charity, and has been hailed as a "virtuous entrepreneur."
As the spokesperson of China's first benevolence and the real economy, he has gained certain immunity from the public. His remarks always seem to cause waves of sensation and set off discussions. When he says something relatively absolute, such as criticism of the new energy industry or criticism of college students' food delivery, he always seems to get some degree of rational feedback. Under the double attack of the real economy and the Internet, his words and deeds have become the focus of society. On the Internet, his management quotes and some rumors in his name, such as criticism of Jack Ma and the shelling of Tesla's salary raise, are everywhere. In this kind of social ** referee table, he has become a chess piece, being fiddled with left and right by people. At a certain level, he has also been labeled as Facebook and instrumentalized, used by netizens to tamper with and borrow as a way to vent their frustrations and choose to join the Sidelines.
Although Cao Dewang is seen as the conscience and model of business, his true identity as a businessman is obscured. In the changing market, Cao Dewang unrelentingly led Fuyao forward. Especially considering the profit growth and market competition pressure that Fuyao Glass has encountered.
This large-scale investment of 9 billion yuan in China is a clear example. Against the backdrop of a sluggish economy, Cao Dewang's move is even more courageous. At a corporate event a few years ago, Cao Dewang publicly called on industry colleagues to "unite and move forward", which was seen as a positive driving force in the eyes of many netizens. Cao Dewang's counter-cyclical strategy is not only to cope with the current market fluctuations, but also to think deeply about the future of the industry. But in reality, this is more a reflection of Cao Dewang's countercyclical strategy.
As we all know, the main production site of Fuyao Glass is automotive glass. In the vertical field of automotive glass, Fuyao Glass is undoubtedly the industry leader, with a market share of more than 60% in China and more than 30% in the global automotive glass market. This also means that Fuyao Glass occupies a pivotal position in the automotive industry chain. However, in the world of glass, Fuyao Glass's position is not indestructible.
In the 2021 fiscal year, Xinyi Glass, founded by Li Xianyi, who is also a Fujian businessman, surpassed Fuyao Glass in revenue and profit during the same period. Li Xianyi is proud of Xinyi Glass's achievements, but the reversal in the first half of the year has put him under pressure. In FY2022, Xinyi Glass's net income still surpassed Fuyao. The rise of Xinyi Glass is remarkable, but Fuyao Glass's gross profit continues to decline, showing the challenges it faces. In the first half of last year, the tide turned. However, from Fuyao Glass's perspective alone, its gross profit has actually been gradually decreasing, from more than 43% in 2016 to 34% in 2022. During this difficult period, the management team of Fuyao Glass is actively looking for new profit points. Due to the impact of foreign exchange losses, Fuyao suffered a dilemma of "revenue increased but profit did not grow" in the third quarter of 2023, and its net profit decreased by 15% year-on-year09%。
Let's ** Cao Dewang's business strategy again. Cao Dewang's business strategy is not only to focus on his own business, but also to insist on independent innovation. As we all know, Cao Dewang is known for his in-depth research in this industry, and he has always focused on the field of automotive glass for the past few decades, with little interest in real estate and finance. The advantage of this approach is that it is highly resilient to risk, while the disadvantage is that it may limit people's imagination and thus miss out on favorable development opportunities.
In 2021, Cao Dewang was surpassed by his fellow countryman Li Xianyi, which was closely related to the situation at the time. Cao Dewang was very dissatisfied with the overtaking of his fellow countryman Li Xianyi, and he decided to increase investment in the automotive glass business, hoping to regain the leading position in the industry through technological innovation and market expansion. The financial report revealed that automotive glass accounted for ninety percent of Fuyao Glass's total revenue. At the same time, Cao Dewang was well aware of the cruelty of market competition, and began to adjust the product structure of Fuyao Glass and increase investment in the research and development and production of high value-added products. During that period, Xinyi Glass's performance increased significantly, mainly due to the increase in sales volume and sales of related products such as float glass. Cao Dewang was once an industry giant, but focusing on automotive glass made him miss the opportunity for architectural glass. Float glass is mainly used in the manufacture of automotive and architectural glass, and its gross profit margin is significantly higher than that of automotive glass, and Xinyi glass has about 60% of its revenue**. In other words, Cao Dewang is too focused on completing a certain task, which also leads to the limitation of his development to a certain extent. Especially in recent years, due to the impact of the epidemic, the bulk consumer goods industry has shown a downward trend, and the impact of automotive glass, as a downstream link in the automotive industry, is obvious.
Cao Dewang tried to change his direction. Aware of the challenges faced by photovoltaic glass, Cao Dewang turned to increase his investment in the field of smart cars, focusing on high value-added products. In May 2021, he successfully raised 43The HK$1.3 billion fund, of which he boldly invested in photovoltaic glass, is a testament to this. Cao Dewang was well aware of the vagaries of the market and began to adjust his strategy. However, it is regrettable that the ** of photovoltaic glass has begun to gradually decrease at that time. The financial report pointed out that so far, the revenue brought by photovoltaic glass to Fuyao Glass is relatively low, and more are high value-added products used in smart cars, such as intelligent panoramic skylight glass, dimmable glass, head-up display glass, ultra-isolated glass, etc., and the proportion of revenue from these products is increasing, which has promoted the profitability of Fuyao Glass.
This also suggests that Cao Dewang, who was once pessimistic about the new energy vehicle industry, will now re-embrace the trend of smart electric vehicles. In the context of the rapid development of the new energy vehicle industry, how does Cao Dewang view this industry? As we all know, around 2021, Cao Dewang publicly criticized the domestic new energy vehicle industry for being too badly bubbled, and many automakers considered it fraud. In Cao Dewang's view, the technological progress of new energy vehicles is changing with each passing day, and it will continue to develop rapidly in the next few years, and its core competitiveness lies in its core technical capabilities. Objectively speaking, he was frank at the time that investment in the industry was too hot, which was consistent with his usual rational and cautious character. However, Cao Dewang said that he did not see this round of industry boom and thought that new energy vehicles were just a flash in the pan. However, in the context of the current rapid market growth, the continuous increase in the penetration rate of new energy vehicles has become an irreversible trend. As a leader in the industry, Fuyao Glass must not miss this wave of industry boom if it wants to maintain its market share and competitiveness.
This is the fundamental reason why Cao Dewang has gone all out and made a large-scale investment in China to continuously expand his product line of automotive glass business. Cao Dewang is well aware of the importance of industrial layout, and does not dare to slack off on the investment in Hefei, Anhui Province. When you invest and set up a factory in Hefei, Anhui Province, you will find that the logic is very clear, because Anhui is home to a large number of domestic vehicle manufacturers, which provides you with an opportunity to absorb production capacity in close proximity. Therefore, Cao Dewang did not hesitate to focus on Fuqing City, Fujian. Fuqing City is located in Fujian Province and is the headquarters of Fuyao Glass Company. The first production line of Fuyao Glass was born here, and it was put into operation in the second half of 1987. In order to adapt to the rapid development of intelligence in the automotive industry, the establishment of new projects has become an urgent need.
From fierce criticism of the new energy bubble crisis and exhorting auto companies not to make up stories for themselves, to large-scale investments in related projects, Cao Dewang, a businessman, has shown his soft personality. His transformation in the field of new energy makes people impressed by his business acumen. While this doesn't quite fit with his usual external image of toughness and stubbornness, it's all the more precious to entrepreneurs.
This shows that the 77-year-old Cao Dewang did not rest on his laurels, but continued to respond flexibly to changes in the market, constantly adjusted his business strategy, and updated and innovated products.
Everyone's face is diverse, even Cao Dewang, who is known as a myth, is no exception. In this fast-changing shopping mall, Cao Dewang may be a keen businessman, who is comfortable in the fierce market competition and has great love in the center of philanthropy. In a volatile market environment, running a successful business doesn't mean you can focus your whole life on one thing or take it to the extreme. Cao Dewang knows that the development of enterprises needs to take advantage of the trend and constantly adjust the strategic layout. In the capital markets, investors' voting decisions are based more on the prospects and future of the business than just on their emotions and feelings.
For entrepreneur Cao Dewang, emotions are not the only one, nor are they so simple.