Shandong'S Richest Man Zhang Shiping Retreated After Wei Qiao "Empire": The Scale Of Textile And Aluminum Still Ranks First In The World.

After Zhang Shiping's retreat, the size of the "empire" of Wei bridge is still huge. However, whether the Wei Qiao mode, which depends on its existence and survival, can maintain its superiority in the future.

　　 On the evening of May 15th, the daily economic news exclusively reported that Zhang Shiping, the richest man in Shandong, was admitted to ICU. Chang Long Ping, a low profile, and the Wei bridge "empire" behind him caused concern.

Zhang Shiping is known as "the king of aluminum industry" and "the king of Asian cotton", and the brightest label is "the richest man in Shandong". Under the name of fame, he is only an ordinary person born in rural areas and only junior high school culture. Zhang Shiping started from the director of the oil and cotton plant of a supply and marketing cooperative, and gradually founded the Shandong Wei Qiao group (hereinafter referred to as Wei Qiao group) and China Hongqiao group (hereinafter referred to as China Hongqiao), which is very legendary across the textile and aluminum industry.

In September last year, Zhang Shiping, who was 72 years old, formally handed over his Wei bridge empire to Zhang Bo, and announced his retirement. After Zhang Shiping's retreat, the size of the "empire" of Wei bridge is still huge. However, whether the Wei Qiao mode, which depends on its existence and survival, can maintain its superiority in the future.

Huge textile and aluminum power Empire

At present, the Zhang Shiping family includes Wei Qiao textile (02698, HK), China Hongqiao (01378, HK) two H share listed companies, and a A share company, hongchuang Holdings (002379, SZ).

In 2017, Zhang Shiping passed a detailed description of his industry through his Hongqiao, Shandong's Hongqiao company, which was the predecessor of *ST Hongfeng. At that time, Zhang Shiping actually controlled 34 main enterprises, including Wei Qiao group, Wei Qiao investment and so on.

In Binzhou, Shandong, with the Wei Qiao group and China Hongqiao as the core, the Zhang Shiping family has formed two major industrial clusters, namely, textile and aluminum and electricity.

Among them, Wei Qiao group integrates textile, clothing, thermoelectric and other industries. Since 2012, Wei Qiao group has been selected among the top 500 enterprises in the world for seven consecutive years. China Hongqiao is the layout of the whole industrial chain of bauxite mining, alumina processing and aluminum products processing and sales. In 2014, China Hongqiao became the world's largest aluminum producer.

Zhang Shiping started in textile. It started from the textile workers, created its own spinning factory, and founded Wei Qiao textile. In 2003, Wei Qiao textile was successfully listed on the Hongkong stock exchange. By 2005, Wei Qiao group, Wei Qiao's textile parent company, has become the largest cotton textile enterprise in the world. Zhang Shiping is also known as "king of Asian cotton".

At the beginning, when Wei Qiao textile was expanding and expanding in large scale, it encountered the plight of serious shortage of thermal energy and electricity. At that time, China was in an era of tight electricity supply. To this end, the state has introduced policies to encourage competent enterprises to develop their own power plants. Zhang Shiping set up the first household electrical appliance factory by himself, which not only solved the electricity shortage, but also produced a large amount of surplus electricity. After the start of the printing and dyeing project of Wei bridge, electricity was not enough, so the second household electrical appliance factory started work again. As a result, its cotton textile industry chain is getting longer and longer until Zhang Shiping sees the electrolytic aluminum project. In the electrolytic aluminum industry, electricity costs account for 40%~50%, so the advantages of owning self owned power plants are obvious.

In 2002, Zhang Shiping set up an aluminum and aluminum production company - Wei Qiao aluminum (China Hongqiao Holdings). On the basis of the development of cotton textile industry, thermoelectricity is used as a link.

"From textile to power plant, to printing and dyeing, and then to expansion of power plants, and finally to the electrolytic aluminum project, we are like the same as noodle, with more water, more water and more flour, and finally to the present situation," Zhang Shiping once said.

Wei Qiao Group sales revenue declined in 2018

Later, the profits of aluminum industry gradually surpassed the textile industry and became the pillar industry of Zhang Shiping. At the end of 2018, Zhang Shiping disclosed the business performance in 2018 at the Wei Qiao group company's conference: sales revenue was 283 billion 500 million yuan, and profit was 8 billion 700 million yuan, which was enough for many enterprises to envy.

Behind this spancript in 2018, Wei Qiao group has a lot of pressure. In 2017, Wei Qiao group's sales revenue was 359 billion yuan, with a profit of 13 billion 150 million yuan.

China's Hongqiao has seen increasing profits and not increasing profits. In 2017 and 2018, the income of China's macro bridge has increased substantially compared with the previous years. It has reached the 100 billion yuan mark, but the profit has not been increased synchronously. In 2017 and 2018, the gross profit margin of the company was 15.95% and 17.07% respectively, which declined significantly compared with the previous years and the net interest rate also declined.

An aluminum industry analyst told the daily economic news reporter that from the macro environment, the end demand for aluminum consumption is at a relatively weak stage. The price of aluminum is far less than that of the previous years. "In the past few years, the price of aluminum has been over 10 thousand and 7, 10 thousand and 8, now 10 thousand and 3, 4, and the highest is not more than 10 thousand and 5". It said, "from a large-scale perspective, the capacity of Hongqiao has also declined."

To the outside world, the most important comparative advantage of the Hongqiao aluminum electrolysis business comes from the cost, especially the self owned power plant. Through self owned power plants, self built power grids, electricity direct sales and isolated network operation, the vertical integration of business and control of power generation time limits can be achieved. This is known as the Wei Qiao mode. Through this mode, China Hongqiao solved the power problem and made the cost of electrolytic aluminum lower than that of its peers.

However, because of the conflict with the existing power system, Wei Qiao mode is controversial. In the state to encourage the expansion of cross-border electricity trading measures to reduce the price of general industrial and commercial electricity, China's Hongqiao self-made power plant also has a potential risk of losing its cost advantage.

In September 2018, Wei Qiao aluminum and electricity announced that the Shandong Price Bureau has issued relevant notices one after another. Since July 1, 2018, the self provided power plant enterprises should pay the policy cross subsidy according to the spontaneous electricity consumption, the standard is 0.1016 yuan per kilowatt hour (including tax, the same below). In July 1, 2018 ~2019 December 31st as a spanitional period, the interim standard was temporarily executed at 0.05 yuan per kilowatt hour. Wei Qiao aluminum power was right at that time. If the policy is implemented, it will weaken the cost advantage of the Group owned power plant to a certain extent.