If you respect the bottom line and common sense, you will be able to build a long-lasting business
As the Year of the Rat ends and the Year of the Ox approaches, what are the lessons to be remembered from the past year's business ups and downs? We have selected the top ten failures for our readers. "The top ten business failures remind us once again to respect the bottom line and common sense in order to build a long-lasting business.
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Schoolboys: Sudden death of a unicorn in the cold wind December 2020, schoolboys bankruptcy collapsed the news rushed to the hot search. Previously, known as the "unicorn", "Hurun gazelle" of the school, is a miracle in the hearts of many TMT entrepreneurs. Xuebajun, started with a photo search product, once with the ape question bank, homework help. After accumulating raw traffic with learning tools, Xuebajun began to explore more educational forms.After 2016, only 1 to 1, small class lessons and photo search questions were retained.In 2018, Xuebajun said to the public that the 1 to 1 single-month revenue exceeded 100 million, and the renewal rate was as high as 87%, and it is expected that the end of the year can reach 1 billion in revenue. After Xuebajun suddenly declared bankruptcy, a large number of parents and employees began to collect the tuition and wages owed. Many of them were unknowingly saddled with education loans. According to data made public by Zhang Kailai, the majority shareholder, founder and CEO of Xuebajun, 50,000 students, 3,000 employees, 1,000 teachers and more than 100 agents were affected. Behind the fall of Xuebajun is the epitome of the K12 online 1-to-1 track. Zhang Kailai said in an open letter that in the past three years, Xuebajun has not financed a large sum of money, and at least five times wandered on the edge of the capital chain break. This is the predicament of most online 1-to-1 companies. In order to salvage the decline, Zhang Kailai also tried to sell small class lessons to save 1 to 1, and then failed to complete the transaction due to negative news. But even if the sale is successful or get financing, to get the opportunity to move, but also to make the school to last a little longer, things have not changed essentially - the cost of customer acquisition is rising, the low gross profit situation is difficult to change, and the independent blood a few is a luxury. At present, the Internet venture capital bubble is dissipating, the business model can not run through the company more and more difficult to get the favor of investors, the capital chain break a few is inevitable. After the storm, the executives of Xuebajun in the active aftermath, contacting other educational institutions to take over the staff, docking Xuebajun's students for other educational institutions, and selling the photo search business to fill the gap between the class fee and wages. 2021, at the end of January, there is news that Shenzhen Parallel Online Education Company is negotiating the acquisition of the Youxue small class. The story of Xuebaojun is a wake-up call for small and medium-sized online education organizations. Since it is becoming more and more difficult to obtain external financing, and there is no way to arm wrestle with the head of the company, compared to the placement, it is necessary to calm down, polish the product features, refine the operation, in order to avoid dying in the next winter. 9 Shrimp music was marginalized by Ali and shut down On January 5, 2021, Shrimp Music announced that it would shut down its service in a month. on February 5, Shrimp Music stopped its service completely, and Shrimp's history was stopped in the year of the Gengzi rat. Shrimp Music was founded in October 2007 by Wang Hao, a guitarist in a college band, and Zhu Qi, a folk musician. 2008-2010, Shrimp Music completed three rounds of funding from SZV and Shanda Group, and in 2013, Shrimp Music was acquired by Alibaba. Shrimp rice was once a high light of the giant, the platform had more than 20 million registered users. According to a number of industry insiders interviewed by Finance magazine, Shrimp is special only because it is "a product made by musicians". The most unique value of shrimp music for musicians is twofold: one is that it has the most complete library on the web; the other is that it helps independent record labels find artists with similar styles. But for non-professional music lovers, Shrimp's value is limited. Capital pursues revenue, while users follow the copyright. Shrimp Mi's model of users uploading on their own has led to a large number of pirated songs on the platform. In 2015, the National Copyright Administration began to regulate music copyright and combat piracy. Shrimp music's other competitors, in this year a large number of copyright purchases, and Ali executives have never been copyright to an important strategic position, ultimately leading to shrimp missed the opportunity. As of June 2020, there were 281 million monthly active users of Kugou Music, 268 million of QQ Music, 164 million of Coolmusic, 138 million of NetEase Cloud Music, and about 40 million of both Migu Music and Shrimp Music. Shrimp music is constantly being marginalized by Ali, lack of copyright, user loss, data performance is poor. A Shrimp executive told Caijing that the shutdown of Shrimp is a normal business adjustment, and that the next step will be to explore more music business scenarios, and to launch a "sound conch" platform to help musicians and labels to expand the use of more music channels. Shrimp's failure was due to copyright, but its original goal was to help musicians make money. This slightly ironic contrast reminds us that the musicians who create copyrights and the music platforms that sell them are two subjects of interest, and that a thriving platform doesn't mean that musicians are better off, but the latter is the source of all the prosperity. 8 The actual controller misappropriated a huge amount of funds from Shede Wine, and the local government made a difficult situation Shede Wine, one of the six golden flowers of Sichuan wine (600702.SH), is in the middle of the 2020s, when the liquor sector has been singing high. The plate all the way to 2020, suddenly ST, is the industry's largest "thunder". But watching the company's financial report, a variety of data is very healthy. 2018, 2019, its operating income of 2.21 billion and 2.65 billion, respectively, non-deductible net profit of 300 million and 510 million, respectively. Even in the midst of the epidemic, the first three quarters of 2020 saw revenue of 1.76 billion yuan and a net profit of 290 million yuan from non-deductible net profit, which is not a bad performance. The nature of its being ST, very special. Neither continuous losses, nor insolvency, but by the original real controller misappropriation of funds - Tianyang Group and its related parties in two years, the combined misappropriation of funds of more than 4 billion yuan. As of the incident, there is still 480 million yuan not yet returned. Even if the misappropriation of huge sums of money, as of June 30, 2020, ST Sheds on the books still have money funds of 1.16 billion yuan, did not hurt the bones. Sichuan Tuopai Shede Group, which holds 29.91% of the shares of Shede Wine Industry, was originally 70% held by Tianyang Group, Shehong local government accounted for 30% of the shares. Tianyang misappropriated the funds of the listed company, the local government began to make trouble. 2020 in the fall, a large number of Shede liquor industry executives were controlled by the public security department, the charge is "suspected of breach of trust damage to the interests of listed companies crime". The company's main goal is to provide the best possible service to its customers. At the end of 2020, in the local government maneuvering, Tianyang Group's holdings of 70% of the shares of Tuopai Group, was a public auction, and finally fell to Yuyuan shares (600655.SH), the price of 4.53 billion yuan. Compared to the 3.822 billion yuan spent by Tianyang in 2016, the value-added is not large. From then on, Guo Guangchang became the real controller of ST Schenker. At that time, in order to raise funds for mergers and acquisitions, Tianyang Group took out a loan of 2.3 billion yuan, and issued 1.5 billion yuan of debt through companies under its banner. Unexpectedly, the Beijing real estate in the encounter after the purchase restrictions and other policy blows a wail. In Langfang Yanjiao real estate invested huge sums of money in Tianyang, but also deep in the mire. Finally, tearing down the east wall to mend the west wall of Tianyang, the black hand to the Sheridan wine industry. Misappropriation of funds from listed companies by the actual controller was a common problem for some state-owned holding companies, and the ST Shede thunderstorm proved that private capital holdings are not immune to such malpractices. The company's management team has been working hard to improve its corporate governance structure and strengthen the capital market supervision, which is still a long way to go. A fair assessment, Tianyang manipulation of the Sheridan wine industry in the past few years, the company, whether brand, market, or specific performance, are well received by the industry. After Guo Guangchang took over, ST Shede is the share price soaring, showing that the capital market is bullish on its future. 7 State-owned coal giant Yong Coal Holdings defaulted on a number of credit bonds In mid- to late-November 2020, Yong Coal Holdings failed to make payments on a number of credit bonds on schedule and fell into persistent default. The company was condemned by the China Association of Interbank Market Dealers and suspended from debt financing instruments for one year; the three lead underwriters involved in the underwriting of the "Yong coal bonds" were penalized, and six institutions, including China Chengxin International, were warned. Yong coal holding is a large state-owned coal enterprise in Henan Province, China's top 500. Henan Energy and Chemical Group, a wholly owned company of Henan State-owned Assets Supervision and Administration Commission (SASAC), holds 96.01% of Yong Coal, and Societe Generale International Trust (SGIT) holds the rest. At the end of 2018 and 2019, the total assets of Yong Coal Holdings were 162.34 billion yuan and 164.27 billion yuan; the total liabilities were 125.59 billion yuan and 126.01 billion yuan. During the same period, the operating income was 48.99 billion yuan and 47.02 billion yuan; the net profit of the mother was -1.14 billion yuan and -1.32 billion yuan. Yong coal holding big but not strong, in addition to the enterprise's own operating level is not high, coal is the core business of Yong coal holding, the main contributor to the gross profit, the enterprise benefit is too dependent on the coal market. Yong coal holding non-coal business profitability is poor, of which the chemical business in recent years the gross profit margin from 18.1% to 2.1%, dragging down the company's overall performance. More seriously, Yong Coal Holdings has been heavily occupied by the internal affiliated units of its major shareholders.At the end of 2019, the related parties accounted for as much as 10.446 billion yuan! Yong coal default, a serious blow to investor confidence in the bond market, the relevant industry, the relevant provinces part of the credit bonds once plummeted, but also made a number of bonds cancel the issue. The industry expects that the event will cast a shadow over the financing environment of some provinces and some state-owned enterprises in the coming years, making bond issuance more difficult. 6 Eggshell Apartments, Eggshells Broken In the winter of 2020, Eggshell Apartments (NYSE: DNK) broke its capital chain, triggering a domino effect. In the cold wind, a large number of landlords who could not collect rent asked to terminate the contract with eggshell, and triggered a number of violent conflicts between landlords and tenants. At present, eggshell housing all shelves, business interruption. Eggshell Apartments was founded in Beijing in January 2015 and landed on the New York Stock Exchange on January 17, 2020, with its top three shareholders being Tiger Fund, Pleasure Capital, and founder Gao Jing. The business model of Eggshell Apartments is a "second landlord" type of housing rental, and the company's main source of revenue is rent, with total revenue of 7.13 billion yuan in 2019, net income of -3.44 billion yuan, and total debt of 8.63 billion yuan. In June 2020, Gao Jing was suddenly taken away by the relevant agencies for investigation, and co-founder Cui Yan acted as CEO.Previously, the beginnings of a cash flow crisis had already appeared in eggshell. First, there was a general default on payments to suppliers, resulting in owed cleaning, maintenance and other service providers unable to spend, the quality of eggshell services declined, and tenant complaints increased rapidly. By the winter of 2020, landlords who couldn't collect rent and tenants were in violent conflict. The most important reason for eggshell's explosion is blind expansion. 2017-2019, eggshell in the number of camping rooms increased nearly 30 times; in the direction of expansion, eggshell also has a strategic error. 2019, eggshell expansion focus area is the second-tier cities with low ping efficiency. Eggshell paid a huge upfront investment for the new listings. According to eggshell's prospectus, the average cost of each new listing takes 12-20 months to recover. 2017-2019, eggshell's annual loss rapidly increased from more than 270 million yuan to more than 3.4 billion yuan. The sudden outbreak of the new crown epidemic also hit the rental market hard, catalyzing the eggshell explosion. Because of the optimism about future rent increases, eggshell in the contract with the landlords, generally signed a 4-6 year long contract, and in order to compete for the market, provided a higher offer. But with the epidemic, prices in the national rental market have generally fallen, and eggshell's customer unit price has slipped, and occupancy rates have come under pressure, making it impossible to ensure sustainable cash flow. After the explosion of eggshells, the government coordinated and promoted, eggshells housing owners, tenants and eggshells one after another to terminate the contract, "rent loan" provider micro-banking to give up on the tenant's personal debt, and turn to the eggshells receivables. However, the suppliers' outstanding payments, employees' unpaid salaries, and long-paying tenants' rent advances have not yet been substantially resolved. 5 Beijing-ringed real estate giant Huaxia Happiness has overdue debt of 5.255 billion On the evening of February 1, 2021, Huaxia Happiness (600340.SH) released an announcement admitting that its debt was overdue by 5.255 billion yuan. As of January 31, 2021, the company's available monetary funds were 800 million yuan, and it was unable to pay the debts due to financial institutions. Huaxia Happiness was founded in 1998 by Wang Wenwen, the company's main business is industrial new city and commercial office operations, the Beijing region is its home base. Huaxia Happiness' industrial new town construction adopts the model of cooperation with local governments, with the government taking the lead, enterprises operating and enjoying the benefits*** Since 2018, Huaxia Happiness has completed the layout around 15 core metropolitan areas across the country, including Beijing, Shanghai, Guangzhou, Nanjing, Hangzhou and Wuhan. The large scale expansion does not mean that the fundamentals of the enterprise are good. In July 2018 and February 2019, Ping An of China has twice injected capital into Huaxia Happiness, investing a total of 17.9 billion yuan, thus becoming the second largest shareholder with a 25% shareholding, but compared to Huaxia Happiness's interest-bearing liabilities of more than 200 billion yuan (as of mid-2020), Ping An's injection of capital is still difficult to salvage the tide. In the debt committee meeting, Wang Wen will be the debt crisis is largely attributed to three points: one is the reason for the epidemic. in September 2019, Huaxia Happiness 11.6 billion yuan of heavy positions in Wuhan, the epidemic outbreak led to the near interruption of the business plan; second is the misjudgment of the situation of the ring of Beijing, the investment is too centralized. in 2017, the ring of Beijing in Langfang, Zhangjiakou, Baoding, and other places issued a "purchase restriction order", the property market in the ring Beijing suffered a heavy blow, although the sales of Huaxia Happiness increased by 25% in 2017, but its operating cash flow turned from positive to negative, at -16.228 billion yuan, a drop of up to 309.04%; Thirdly, the expansion of the previous period is radical, and the management is not sufficiently fine, in 2019 and 2020, Huaxia Happiness The scale of land acquisition each year is more than 30 billion yuan. In addition to this, the business model of industrial new towns has indirectly led to the cash flow tension of this company. Its industrial new town projects are mostly in cooperation with local governments, and the project billing period is generally 3-5 years, with a payback cycle of at least two years more than ordinary commercial real estate development. Huaxia Happiness is seeking support from the Hebei provincial government and Langfang municipal government. The mayor of Langfang said that the government will provide policy support, urgently allocate financial funds to accelerate the repayment of a portion of the government's payables, and make every effort to help the enterprise to accelerate the sales return. 4 "Mr. Mansion" Thai Harvest Group defaulted on a Chinese invoice and became the industry's "King of Losses. On July 6, 2020, Taihe Group (000732.SZ) defaulted on its medium-term notes and broke its capital chain. Founder Huang Qisen decided to give up his position as the largest shareholder and introduce investors. However, in addition to Vanke Group's support of 2.4 billion yuan under harsh conditions, Taihe Group did not find more support, nor did it reach a settlement with its creditors. On January 30, 2021, Taihe Group announced that it expects an annual loss of 4.17 billion to 5.52 billion yuan in 2020, and there is little doubt that the real estate industry will be the "king of loss" in that year. Taihe Group is a representative of the Min system of real estate enterprises, founded in 1996. The sales volume was 20th. In 2019, Taihe showed signs of crisis - high debts, loss of executives, tight cash flow, and frequent accidents. A year later, Taihe's capital chain broke, falling from the peak to the bottom. As of early February 2021, Taihe's market capitalization was $6.77 billion, down nearly 95% from its 2018 peak. There are three main reasons for Taihe's rapid fall: First, the central financial regulation tightened after 2018, Taihe's determination to deleverage on the regulatory layer was not assessed enough, misjudged the situation, and still enlarged the leverage of funds when the industry was contracting; Second, the company's main layout is in the first tier, and its main products are high-end residential, when the first-tier cities limit the price, purchase and sale of residential property, and the main push of the just demand, the luxury residential market becomes difficult; Third, the pace of transformation just demand is too slow.At the end of 2019, Taihe planned to sell off a number of high-quality just-demand houses, but suffered an epidemic, resulting in no centralized delivery projects, accelerating the break of the capital chain. 3 A big "buy buy buy", Purple Group is in a deep debt crisis In 2020, Purple Group is in a deep debt crisis. As of February 1, 2021, ZiGuang Group has a cumulative amount of debt maturity of RMB 2.11 billion, the company's wholly-owned subsidiaries have a total of USD 1.56 billion in principal and interest on the maturity of the dollar debt. ZiGuang Group was founded in April 1993. 2010 through the share reform introduced Beijing Jiankun Investment Group, holding 49%; Tsinghua Holdings is still the controlling shareholder, holding 51%. Zhao Weiguo, the chairman of Jiankun, has been the chairman of UVG since 2010. After taking the helm of UVG, Zhao launched a number of acquisitions, positioning his business in the two hard-tech fields of chips and cloud devices. Currently, UVG has become the largest integrated circuit company in China. It has a number of chip-oriented subsidiaries, such as Yangtze River Storage, ZiGuang State Micro (002049.SZ), ZiGuang Zhanrui, and France's Linxens; other subsidiaries, such as Xinhua San and ZiGuang Cloud, are oriented to the IT equipment and cloud services market. ZiGuang Group in the first half of 2020 revenue of 34.75 billion yuan, net profit of -3.38 billion yuan; total assets of 299.65 billion yuan, total liabilities of 202.94 billion yuan. Industry insiders generally believe that the debt crisis of ZiGuang Group today, it is from the previous large-scale "buy buy buy", excessive acquisition and excessive reliance on bond financing. In addition, its subsidiary Yangtze River storage needs long-term, large amounts of money. 2021 ZiGuang debt crisis will roll bigger and bigger, so that into bankruptcy reorganization? There is no lack of concern in the industry. But compared to the earlier default of Beifang Founder, Tsinghua Purple for the independent chip leader, the strategic importance of a higher, its follow-up program has been in the limelight. 2 Brilliance Group, a key state-owned enterprise in Liaoning, went bankrupt On October 23, 2020, Brilliance defaulted on its private placement debt. Brilliance Group announced that the debt defaulted on a total of 6.64 billion yuan in principal and interest. on November 20, Shenyang Intermediate Court ruled that Brilliance Group entered into bankruptcy reorganization procedures. Brilliance Group is a key state-owned enterprise in Liaoning Province, with the majority shareholder, Liaoning State-owned Assets Supervision and Administration Commission (SASAC), holding 80% of the shares, and the second shareholder, Liaoning Social Security Fund Council (SSFC), holding 20% of the shares. In 1992, capitalist Yang Rong founded Brilliance Group, and in the same year acquired the assets of the old state-owned Jinbei Automobile to go public in the U.S., becoming the first Chinese company to go public in the U.S. In 2001, it became the first private enterprise to enter into a joint venture with a multinational automotive giant. 2002, Brilliance became a wholly-owned state-owned enterprise. 2006-2018, Brilliance was always helmed by Qi Yumin, the former vice mayor of Dalian City. In March 2019, Yan Bingzhe, former vice mayor of Shenyang, took over as chairman of Brilliance. After 2006, Brilliance led the way in building its own brand for a while, with models such as the Zuni and Junjie going off the market. But after the Chinese auto market entered a mature stage, Brilliance's own brand because of poor product power quickly fell behind, by Geely, Great Wall and other private companies and SAIC, GAC and other veteran state-owned enterprises to overtake. The Brilliance Group has four listed companies, of which Brilliance China (1114.HK) owns 50 percent of BMW Brilliance, but that will drop to 25 percent after 2022. Looking at the financial reports alone, one can't conclude that Brilliance Group is in high jeopardy. in the first half of 2020, Brilliance Group made a net profit of 6.3 billion yuan and an operating cash flow of 5 billion yuan; in 2019, the figures were 11 billion yuan and 24 billion yuan, respectively. However, this is the data after consolidating the statements of subsidiaries, Brilliance Group can not use the funds on the books of listed companies, and can only use the money of wholly owned subsidiaries of independent brands, Zhonghua and Huasong, which have poor sales, and have been shut down so far under the blow of the epidemic. As of the end of June 2020, Brilliance Group had total assets of 193.3 billion yuan and short-term debt of 102.7 billion yuan, while Brilliance Group's available funds were only 34.6 billion yuan. Brilliance Group, as a holding company, is not engaged in the physical business itself, but as a financing body, financing for its subsidiaries. But where is the money invested and how effective is it? In the creditors' meeting on November 30, 2020, the representatives of Brilliance Group, who were asked many times, did not respond. On January 12, 2021, the SSE publicly condemned Brilliance Group, its chairman Yan Bingzhe, then chief accountant and head of information disclosure affairs Gaoxin Gang for Brilliance Group's bond default. The industry is not optimistic about Brilliance Group after the reorganization. Sun Yong, director of Sino-German Nuhao Institute of Automotive Vocational Education, believes that due to the deterioration of the political and business environment and the loss of credit of the enterprise, coupled with the BMW joint venture into a minority shareholder, the Brilliance Group in the future to be merged and reorganized, is a probable event. 1 Ruixing Coffee financial fraud, triggering delisting + infighting In April 2020, Ruixing Coffee (Nasdaq:LK) exposed itself to fictitious sales data and financial fraud of 2.2 billion yuan. Two months later, Ruixing Coffee was flash delisted in the U.S. On January 31, 2020, the shorting agency Muddy Waters claimed to have received an 89-page anonymous shorting report, which directly pointed out that Ruixing's data was falsified. Ruixing Coffee opened its first store in October 2017, and went public on Nasdaq in May 2019, creating a record for the fastest listing of a Chinese startup. Ruixing Coffee's rapid wealth creation and rapid bursting of the bubble is undoubtedly the most shocking capital market story of the year of the gung ho rat. "Ruixing speed" of the two founders, once the first and second largest shareholders Lu Zhengyao and Qian Zhiya in the forgery after the incident lost all the shares of Ruixing, with the largest voting shareholders, Dane capital should be Ruixing current party. In September 2020, the China Securities Regulatory Commission (CSRC) decided to impose fines of up to 2 million yuan on each of 45 companies, including two Ruixing-related companies, in response to Ruixing's false advertising. in December 2020, Ruixing agreed to pay a fine of $180 million to reach a settlement with the U.S. Securities and Exchange Commission (SEC). Ruixing announced that former CEO Qian Zhiya and former COO Liu Jian were responsible for the financial fraud, but they have yet to take any legal responsibility after being fired. In December 2020, Ruixing disclosed unaudited financial information for the first 3 quarters of the year, stating that the company's revenue was growing in double digits and that everything was on track. However, the shocks of financial fraud continue. In early 2021, Ruixing staged an infighting between Lu Zhengyao and Qian Zhiya, who demanded the removal of CEO Guo Zhanyi, with internal conflicts and battles that were far more complicated than the outside world understood. Lu Zhengyao, who no longer holds any position at Rexchip and does not own Rexchip stock, was supposed to be completely cut off from Rexchip, but recent events have shown that this is not the case. Over the past few months, Ruixing has stopped diversifying its business such as fawn tea franchising, focused on its main coffee business, reduced subsidies, and closed hundreds of offline coffee shops. Some Ruixing employees told "Financial Times" that there are many people who have left the company and want to leave, and the sales volume of a single store is lower than before the outbreak of the counterfeiting door. Ruixing's financial fraud is so bad that it not only violates the law but also seriously undermines business ethics. But from a business point of view, Ruixing's main coffee delivery, online and offline integration services, to make up for the coffee old Starbucks service gap, enhance the coffee "pro-popularity", business model is sustainable. Through the Ruixing incident, we also see that Chinese consumers are relatively tolerant of financial fraud companies, and they are willing to pay for good quality coffee at a low price. So the future of Ruixing, which has been hit hard by financial fraud, is still in its own hands. Afterword Since there are different kinds of misfortunes, it's hard to summarize the rules, but if you don't, you'll feel shortchanged, so we'll take the risk of saying a few more words at the risk of being snake-footed. First, "Virtue comes first. Small companies do things, big companies do people", this is the old generation of entrepreneurs Mr. Liu Chuanzhi's aphorism. Mr. Lu Zhengyao and Lenovo also have a connection, but unfortunately, the aphorisms through the ears, greed to stay in the heart, hard to Ruixing's hand of good cards played to pieces. The company's main goal is to provide the best possible service to its customers," he says. Secondly, entrepreneurs should have a spirit of adventure, but adventure is not the same as gambling, ten to nine is conservative, but at least ten to five to be sure. Huaxia Happiness, Taihe, eggshell in self-summary all emphasize the external environmental factors, epidemic, regulation, government receivables uncontrollable, etc.. But the same external environment, why Vanke Longhu did not have an accident, why since the apartment did not have an accident? You can't make business decisions assuming that everything is in place, except for my kick in the door. If you have to be ABCDEFG and other prerequisites to set up your ambition to realize, missing any one of them will lead to a domino effect, then your planning is basically bullshit. For example, the government accounts receivable problem, all industries have had this problem for many years, then it is not a variable, but a constant, you do not cover this inherent risk when making decisions, not gambling and what is it? Third, the scale of the complex should not be done, the essence of doing business is to shareholders, employees, customers and society to create value, empty a big head, inside but diabetes, heart disease, osteoporosis a bunch of problems, such a big business meaningless. Fourth, product power is the foundation of everything, product power is 1, marketing power, capital power, business model power and so on are 0, no 1, the back of the 0 more useless. The top ten defeats in the year of the rat, every bureau applies to this sentence. If you want to cite a typical, that is not Brilliance. As a car company, in addition to the car owners to key out the word "Brilliance BMW" in the car label, you have also seen a few Brilliance cars running on the street? Fifth, state-owned enterprises are not safe havens, and the government will not be a bottom-feeder, so investors must be fully aware of the risks. In the past, SOEs enjoyed advantages in financing and billing periods because of the government's implicit credit endorsement. The year's events remind us that corporate credit and government credit are two different things, and that the government will not give unlimited endorsement to SOEs, and this is especially true in areas where SOEs are concentrated and the government's financial resources are limited. Investors should be vigilant enough about this and try to stay away from companies that treat credit as nothing and regulations as child's play, such as Henan Nengchem Group, Sichuan Tianyang Group and their affiliates that have wantonly misappropriated funds from their listed companies.