Chen Jiulin: Three "Magic Weapon" To Deal With Crisis

He used to be a "working emperor" and "aviation king". He made a state-owned company with only 1 million yuan assets and two people sharing a desk and made it into an international listed company. It increased its net assets by 852 times in 7 years, and increased the original investment of the shareholders by 5022 times. In two years and ten months, he was imprisoned in Singapore for the sensation of "China Aviation Oil" (a huge loss of US $550 million).

Today, fifty of the year is restarted.

He is the former president of China aviation oil.

。

Life is now calm, and smile is often hung on his face. He just changed the old "Chen Jiulin" to "Chen Jiulin".

A few days ago, the Xishui chamber of Commerce in Shenzhen invited him to share his experience.

As a native, he readily agreed to share with you the observation and thinking of "where to go in the crisis".

Analysis is a good time for mergers and acquisitions.

"At present, the slowdown in economic growth may continue for some time.

But we should not be too pessimistic.

Chen Jiulin believes that this is the moment of thinking and settling, the turning point of reform and the turning point of overtaking the curve.

For some enterprises, it is a good time for mergers and acquisitions.

At this time, it is the opportunity to buy other enterprises at a low price and extend the industrial chain to expand scale, reduce costs or diversify development.

It is gratifying to note that some Chinese companies have seized the opportunity of the European debt crisis and launched a series of heavy overseas acquisitions.

For example, in January 2012, there were three major Takeovers:

Heavy industry 374 million euros gained 75% of the global luxury yacht giant Ferretti group Italy.

Such successful mergers and acquisitions will effectively enhance the visibility and competitiveness of the relevant enterprises in the international market, and the cost of mergers and acquisitions will be greatly reduced compared with normal ones.

Chen Jiulin hosted several dozen mergers and acquisitions during the China aviation oil industry, involving the United States, Spain, the United Kingdom, Singapore, Indonesia, Hongkong, China and so on.

He believes that although mergers and acquisitions (or Greenland investment) are the two main ways of investment, with the acceleration of economic integration, M & A has become the most important way of investment in developed countries.

In view of the fact that the global market is at a low ebb, the value of all kinds of enterprises has been seriously underestimated, and the advantages of M & A have been very obvious.

"Entrepreneurs in our country really understand how capital works."

Chen Jiulin commented on this.

In real life, he is more aware that some businesses only know how to work hard and borrow some bank funds to maintain or develop enterprises.

Chinese businessmen tend to invest in new investments when there are good opportunities in the market: to build new factories, recruit new people, and repeat the construction with long investment period and low yield.

And when the market is not good, they dare not take the way of capital operation, and acquire large assets through mergers and acquisitions with less investment.

Case of Wuhan Iron and steel pig VS Pan Shiyi adjustment structure

As for how to deal with the crisis, Chen Jiulin cited two positive and negative teaching materials.

He thinks that when the price of a kilogram of steel is still less than 200 grams of pork, Wuhan Steel invested hundreds of millions of pigs to invest 39 billion yuan in pig farming, chicken raising, vegetable production, selling red wine, early childhood education, water and electricity maintenance, car rental and other three industries. It's puzzling!

If pigs are made to earn money, then they will go to raise pigs; then donate donkeys to make money, will they all have to donate donkeys again? How can we talk about the core competitiveness of enterprises? If so, can the world class brands be produced in our country? And the latest data show that in the thirty-seventh week of 2012, the average price of pigs sold across the country dropped by 27.44% over the same period last year.

{page_break}

In response to the crisis, the practice of SOHO China's Pan Shiyi has a positive significance: in the case of a 54% decline in its turnover and a decline in core net profit margin from 19% at the end of last year to 19%, SOHO China has made a major decision: to bid farewell to bulk sales and hold valuable properties in Beijing and Shanghai.

Its commercial property and office space now exceed 1 million 500 thousand square meters.

Three years later, the company's profits will mainly come from rental income. After five years, the annual rental income will exceed 4 billion yuan.

After that, sales revenue is gradually becoming auxiliary income.

As a result of these adjustments, China's first half year report released by SOHO showed that the company had ample cash, and the existing capital and sales revenue could support the pformation of the company.

The internal structure of the company is undergoing major changes, and the sales team will be compressed, and the existing sales team will be pformed into a business management department through training.

Sword three "magic weapon" to deal with crisis

Chen Jiulin believes that the important thing for enterprises is to "squeeze bubbles, adjust structures and catch opportunities".

The so-called "crowded bubble" means that no matter what the market trend is going down or rising, we should re clarify the previous train of thought through the reality of the current economic downturn.

When the economy is at a high level, enterprises tend to expand their minds, constantly expand, land, increase staff and raise salaries.

Especially in recent years, the low return rate or even negative rate of return of the real economy has led to capital flight.

In the current economic downturn, enterprises should calm down and grasp the opportunity of adjustment.

The layoffs should be laid off, and the salary should be adjusted to pay less.

Squeeze out the "bubble" before the "dry goods" are left.

"Structural adjustment".

The current situation is forcing us to clear our minds and make up our minds to readjust our structure.

It is necessary to change the industry. The extension of the industrial chain must extend the industrial chain, or even "break the arm with heroes", and cut off the unsuitable ones, leaving the most essential and core content.

However, this integrated "structural adjustment" does not mean that it chooses to invest hundreds of billions of dollars in non steel industries such as raising pigs and raising chickens at that time.

The major industrial enterprises should seek opportunities in their own industrial chains, so as to strike an appropriate balance between current interests and long-term interests.

We should practice hard work and integrate resources, external force and internal pformation and expansion, and promote team growth.

"Catching opportunities".

At the time of gloomy global manufacturing, it is time for Supply Chain Restructuring and industry reshuffle.

Industry downturn is a good opportunity to eliminate backward production capacity, take the initiative to adjust the structure, and shift to high-end industries or industrial chains.

"Winter" should wear "five clothes".

For enterprises, how should we face the economic downturn? Chen Jiulin believes that it is facing the economic downturn.

The pressure of falling companies is that five clothes can protect the cold.

First, cash is king and tighten the purse.

Adhere to the concept of "cash is king", prevent the chain of funds from breaking up and avoid the "black word" bankruptcy.

From the perspective of capital circulation, profits must be turned into cash.

If profits can not be converted into cash, the next round of production cycle will not start. Enterprises will easily lead to "black word bankruptcy".

{page_break}

Second, train employees, optimize products, strengthen innovation and enhance competitiveness.

Many enterprises reduce manpower investment while reducing layoffs, so as to reduce the cost of enterprises.

However, from the long-term development of society, this is a short-sighted behavior of enterprises and society.

In the face of low economic growth, enterprises should reserve talents and strengthen training for workers so as to be able to meet new challenges.

Third, forming strategic alliances and strengthening enterprise cooperation.

The formation of strategic alliances includes the following advantages: improving operational speed, especially when large and small companies are united.

It can share risks and enable companies to grasp opportunities with greater risks.

Technological exchanges can be strengthened to enable companies to maintain their competitive edge in their separate markets.

Access to important market intelligence, enabling companies to enter new markets smoothly, improve relations with new customers and improve sales.

Fourth, seize the opportunity to launch mergers and acquisitions in a timely manner, especially in Europe and the United States.

Fifth, maintain corporate integrity.

In the economic downturn, corporate fraud happens frequently.

However, only honest enterprises can really win business opportunities.