Kweichow Moutai, which has no borrowings, has generated less than 40 million yuan in revenue from more than 80 billion yuan. In fact, Kweichow Moutai has always had abundant cash flow due to its strong profitability, but its funds have been idle for a long time. Previously, the company had set up a financial company specifically for cash management.

Compared with Apple’s cash reserves, in the fourth quarter of 2017, Apple’s cash reserves reached US$285.1 billion (approximately 1.8 trillion yuan), a record high, and the company’s cash reserves in the previous quarter Its cash reserves are US$268.9 billion (approximately 1.7 trillion yuan).

Moutai’s cash reserves really pale into insignificance! So stop worrying about Moutai’s idle cash.

In fact, there are essential differences in the future investment of the two:

Kweichow Moutai’s parent company, Kweichow Moutai Distillery (Group) Co., Ltd., is preparing to invest in establishing a company that spans loans, insurance and The financial business entity of asset management has built finance into the second largest business pillar.

Generally speaking, if a company has sufficient cash flow, it will often choose to maintain and increase the value of its cash assets by purchasing financial products, bonds, etc. The financial expenses in the financial statements, in addition to exchange income, mainly include interest on deposits and loans and related expenses. If a company's financial expenses are negative, it indicates that the company's cash flow is relatively abundant. The larger the negative number, the stronger the ability to maintain and increase the value of cash.

On August 27, 2001, Kweichow Moutai, which was founded in Kweichow Moutai Town, landed on the A-share market and soon became famous for its strong profitability and sufficient cash. Therefore, in the 17 years since its listing, apart from raising 2.04 billion yuan in the initial offering, the company has not refinanced through rights issue, private placement, bond issuance and other channels.

In 2012, Kweichow Moutai invested 408 million yuan to establish Kweichow Moutai Group Finance Company with three related parties including its parent company Moutai Group and Moutai Group’s wholly-owned subsidiary Xijiu and Kweichow Moutai Distillery Group Technology Development Company. , Kweichow Moutai holds 51% of the shares and is the controlling shareholder, trying to improve the company's capital use efficiency.

With abundant funds and huge amounts of funds idle for a long time, Kweichow Moutai may build a financial industry to improve the efficiency of capital use. For example, asset management companies, small loan companies, etc., of course, you can also enter banking, securities, insurance, trust and other industries.

As of 2016, the company has 30 wholly-owned subsidiaries and holding companies, and 21 joint-stock companies. It is involved in industries including liquor, wine, securities, insurance, banking, property, scientific research, tourism, real estate, etc. .

Moutai Group is preparing to invest in the establishment of a financial business entity spanning loans, insurance and asset management, hoping to create a new growth area and make finance the second largest business pillar of Moutai. The new financial business will integrate the group's existing businesses in these areas and will account for approximately 15% of total revenue by 2020.

The astonishing cash reserves on Apple’s financial statements, which are increasing year by year, can also be seen as Apple’s assets are not well utilized, and its company’s decision-makers have not found better investment projects. , or in other words, the company has limited capabilities and has spent enough money on research and development, and is unable to launch new innovative products and cannot find new business growth points, resulting in nowhere to spend the money. But Apple also has its own considerations and logic. Although Apple has high cash reserves and too little investment in research and development, investment, new product research and development, etc., this does not conform to the general investment logic. From the perspective of general investment logic, a large sum of money is Earning interest on your own is definitely not as profitable as turning it into a best-selling product on the production line. Apple's high cash reserves are more passive due to U.S. tax policy. Apple has been able to make enough money relying solely on its existing smartphone software and hardware business, and there is little incentive to spend money to explore unknown areas that are full of risks. But having said that, whether Apple can be as profitable as it is now depends largely on whether the company can produce excellent products as before in the next few years. Apple is under regular pressure to bring more cash, higher dividends and more stock buybacks to shareholders, and has spent about $200 billion doing so. Returning all cash to shareholders "doesn't serve anyone's strategic interests," and Apple needs to find ways to diversify its business.

It can be seen that it is not that simple for industrially successful enterprises to enter the industrial financial market! Moutai's path to industrial finance must be based on investments that make up for industrial shortcomings.

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