"Savior" Gao Wei?

Recently, I have carefully read the book "Value" just published by Mr. Zhang Lei of Gaoyan Capital, and there are many feelings that I can't get rid of. In the process of writing, I found myself thinking a lot, just taking this opportunity to explain my investment philosophy point by point.

I mentioned in my last article:

"Zhang Lei's book" Value "is really" valuable ". This book is one of the few books I have ever read without skipping a word. The ideas in the book do have his originality.

But I'm not just talking about how good this book is. In the process of reading, I am very happy: I can find and learn something from it, and I can also realize that some viewpoints in the book are debatable, which is reflected in the fact that some viewpoints are "confusing" and may sow dangerous seeds for novice investors.

The purpose of writing this series of comments is to make the key points clear in vernacular and point out the views that I think are more suitable for amateur investors. I think what I am doing is good for myself and readers, and I hope readers will feel the same way. "

Today's article is not quite the same as before. In front of it, I said a lot of good things about the ideas in this book and some of my feelings. In this article, I will begin to talk about my views on the other half of this book.

That is: if I want to label this book, the first word that comes to my mind is "stay away from novices", and an exclamation point should be added at the end.

1. Technological progress has greatly changed enterprises and their environment, and the valuation method of new economic enterprises is completely different from that of traditional enterprises. Finding reliable and forward-looking new variables has become the core of the evolution of value investment.

This statement is familiar.

Investors should be fully alert to the statement that "traditional valuation methods are no longer applicable" issued by anyone from any angle. Of course, there will be successful examples in the judgment obtained by the new valuation method, but we should always remind ourselves how many unsuccessful examples are unknown.

Investment is not purely for making money. Being driven by money is the most dangerous thing in this industry: either you make a lot of money, but you don't know what to do next; Either you can't make money all the time, or you even take risks for money.

If a thing is purely for making money, it is a waste of life to do it after a certain point of wealth.

The purpose of making money is to make life better, but once there is no equal balance between income and the purpose of making life better, making money is meaningless.

Observing all kinds of people, we will find that most people's abilities and patterns match their wealth, while those who have wealth that doesn't match their abilities and patterns often return to a balanced state soon.

For example, over the years, the winners of the two-color ball awards are mostly ordinary people. Judging from the incomplete information, it is regrettable that after they got the money, their subsequent lives have changed positively.

Then why should we invest? I think it comes from the desire to explore the world, and it also comes from the underlying motivation that enables people around us to live a better life, and even allows more people to live a better life because of their own existence.

3. It is often said in the industry that investing in biopharmaceutical companies is a dream from hell to heaven, but based on long-term and continuous research on the general trend, we know that there will be no ultimate success without long-term and resolute capital investment in anticancer drugs, especially innovative anticancer drugs. We hope to become the closest partner of Baekje Shenzhou's innovation from the perspective of financial support, or we will fully invest and support it in all directions.

This passage is a good case, which makes readers understand what I said again: "This book confuses the concepts of venture capital and value investment".

This passage will make people read it, and naturally there will be a feeling that "investing money in such a company and achieving such a great cause is the right way of value investment".

But take a step back and think calmly: what is the purpose of your investment? Is it to satisfy your sense of accomplishment or to make money?

If it is the former, it is no problem to make a judgment in the quotation marks above; If it is the latter, what we should judge is not the social significance of this matter, but the probability that this matter can help us make money. If it can make money at the same time, that's the best, but if not, let's go back to the original question: what's the purpose of your investment?

4. Besides Prologis, which delisted from Singapore, and Belle International, which delisted from Hong Kong, Gao Yan also participated in the delisting of Zhaopin from the United States and the spin-off cases of other large companies. Regardless of privatization or other cross-border M&A transactions, the starting point of M&A investment is not to pursue investment scale or pure investment income. It is more important to judge whether technological empowerment can become a new value to drive industrial upgrading, whether the existing business model can be refined and polished through technological innovation, and whether the long-term situation of the acquired company can be improved by introducing new resources.

Belle's case has been mentioned more than once in the book. I have some different views on this case and "Gao Ling's entry into the enterprise will bring great changes".

From the above excerpts, it can be clearly seen that Gaoling's consideration of M&A is to empower traditional enterprises with science and technology and finely polish the original business model, so as to try to change the long-term value of the company, that is, to uphold the concept of creating value.

In my early years, I had a deep contact with Belle because of my work. Belle used to have several competitive advantages. The first is flexible supply chain capability: Belle attaches great importance to replenishment mechanism. Specifically, when a new season begins, Belle will spread out all kinds of shoes and see which one sells well. When judging which SKUs may become explosions, we began to mass-produce with strong flexible production capacity, which is also very proud of Shengbaijiaosheng. This ability can only be achieved by Belle in the whole footwear market, and it is also mentioned in the book, but it is not in the most conspicuous position.

The second competitive advantage. In the past, shoes in China, especially women's shoes, were mostly sold through department stores. People born after 1980s and before have a very clear impression of department stores. Some women's shoes that were considered high-grade in China at that time were sold in department stores.

Here, I have to say another feature of Belle, that is, multi-brand. In addition to Scarlato, Zhenmeishi and Miaoli, there are numerous mid-range brands. Most department stores can see famous brands such as Timex, Tata, Belle and Senda. In my impression, Belle brand women's shoes can reach more than 20.

Let's go back to the department store. In the past, when China was not so rich in materials, every department store wanted to open. To put it mildly, if Belle Group has not moved in, it may be dissatisfied with the floor of women's shoes. In other words, Belle has a strong voice in the channel, which is reflected in more favorable settlement methods and better store locations. In addition, for consumers, there are actually not many choices. "These shoes don't look good. Let's go next door and have a look. "

However, people's living standards in China have improved, and a new retail species-shopping centers-has emerged. Shopping mall is much bigger than department stores, and there are many shops. The settlement method is based on rent, not on the turnover of department stores.

The impact of this on Belle is: on the one hand, because the space is too big, Belle can't fill it, and the original negotiation advantage is gone; On the other hand, the presence of various foreign women's shoes brands has also made the "product homogenization and quality equalization" that Belle has been criticizing more obvious; Finally, the rent system has great pressure on the cash flow of the whole company.

Belle has also tried many efforts to break through, such as the map multi-category store founded by Mr. Deng Yao's eldest son, but I always think that the most important thing for Belle, a consumer goods company, is the product, that is, the style and quality of shoes. I think this is an unsolved problem from beginning to end.

It's not that I don't want to solve this problem, but Belle is a channel and sales-driven company, and the general managers of the product division (such as Scarlato, Zhenmeishi and Miaoli) actually don't have much right to speak, and the real power lies in the hands of the responsible persons in various regions.

The most important thing in each sales area is to sell goods at a discount, which leads to serious homogenization of products and constant discounts, thus reducing the image of the brand in the eyes of consumers. Now speaking of these brands of Belle, consumers will not have a strong shopping impulse, and the quality of shoes is also lacking.

Let's talk about the introduction of Gao Ling. In the book, Zhang Lei also revealed some actions made after entering Belle, which can be summarized into two aspects:

On the one hand, the use of digital technology, through refined store management, such as customer trends after entering the store, customer group analysis and so on. To achieve an increase in single-store sales.

Second, through the operation of the capital system, a major business of Belle Group, namely sports business, will be split and listed.

However, if you carefully observe these two aspects, you will find that: in the first aspect, in fact, Gao Ying's role is not like an investment company, but more like an it consulting company-helping enterprises improve their business performance through information technology, and the second action is more like a means of capital operation, in other words, it is still a set of actions of "dismantling and selling".

As for whether the entry of Gao Ling has changed Belle's most essential products, there is no mention at all.

I can understand it this way: the genes of an enterprise are definitely not so easy to change. From the moment Belle brought the goods in the early days, from the moment when Sheng Zong and a dozen founders crowded into the cabin and even thought about how to sell an extra pair of shoes while sleeping, the sales and channel-driven genes of this enterprise have been laid.

Belle has no product-driven gene, which means that once the channel changes, the competitive advantage of this enterprise will be greatly threatened, which is why I am more cautious now.

What do I want to illustrate by giving this example? I want everyone to see clearly that the so-called "helping enterprises create value" is a very, very difficult thing, as difficult as reaching the sky and changing Belle.

Although Gao Ling has always said that entrepreneurs should sit in the driver's seat, like Belle's case, what is the essential difference between trying to improve the company's operating performance and creating a business and making it successful?

Besides, Belle is just one of many companies invested by Gao Yan. If you want to achieve such success in all industries, will your self-confidence be too overwhelming?

Let's go back to the essence of investment: investment is to find a fence one foot high, not something as difficult as heaven.

Finally, end this long list of sharing with a sentence I agree with and like:

There is no road in life in vain, and every step counts.

I wish you all a happy Mid-Autumn Festival!

Author: Willick