Chapter 1029: "Sensible"
A few years ago, the market for resource products continued to expand and prices continued to rise.
This is due to domestic demand, including various reasons such as metallurgy (steel) and electricity. With the development of the economy, local areas are carrying out large-scale construction, and the demand for some products has increased sharply, thereby driving up market prices.
Take the most common construction steel, rebar, for example. In the early 1990s, the price of rebar was still hovering around a few hundred to nearly a thousand yuan. By 1993, it had risen to 2,500 yuan per ton. By 1999, the price had nearly doubled, rising directly to 4,500 yuan per ton.
Two thousand years later, the market price continued to rise reaching a high of 7,800 yuan per ton. Although this high price did not last long and later fell through regulation, the price has since remained between 4,500 and 5,000 yuan.
The same is true for electricity demand. Whether it is steelmaking or power generation, it relies on a few methods, among which thermal power (coal) is the most important one. Because of this, the price of coal has also risen sharply, and it has been rising for several years. This is also the reason why coal companies established in the past few years have maintained high profits and high returns.
But there is a saying that goes, "No one is good for a thousand days, and no flower is red for a hundred days." The same is true for the market, and the importance of resource products to the national economy is self-evident.
As product costs rise, some corresponding regulatory measures have emerged one after another, the earliest of which were regulations on safety and environmental protection.
Among them, new regulations have been made for the utilization of recycled materials, especially imports. Companies engaged in such products must have a certain scale of operation both domestically and abroad, and must obtain qualifications and licenses after registering with relevant departments before they can operate.
Moreover, in the operation, it is also subject to relevant supervision and audit, and even strict requirements are required in each link of storage, transportation, sales and reproduction. Of course, the purpose of these practices is to meet environmental protection needs, mainly to control the import of various "foreign garbage" and avoid pollution.
From a general perspective, this operation is certainly good, but in reality it also affects the circulation of resource recycling materials, while also increasing costs and circulation speed.
In addition, various regulations on the coal industry have been introduced, which has also affected some small and medium-sized coal mines and mining companies. Even large mining companies like Sun Yaoliang need to , which has also led to a continuous decline in profits.
Apart from these, there are some other reasons which I will not elaborate on one by one. Generally speaking, although resource products still have good prospects, they are much more difficult to make than before.
"What are your plans now?" Zhang Jian asked Sun Yaoliang.
Sun Yaoliang and Lu Hairong looked at each other and said, "The future is uncertain, so I'm going to quit while I'm ahead. If things don't work out, I'll sell the domestic mining company first. It can still be sold at a good price now. As for resource recycling, I'll only keep the processing of waste paper and scrap metals, and stop the rest for now."
"Is this necessary? Is this the result of your discussion?" Li Daqi couldn't help but interrupt and ask. The mining company also belonged to the Shenghua Group. Although the specific operations have always been in the charge of Sun Yaoliang and Lu Hairong, as the three pillars of the Shenghua Group, Li Daqi still raised his questions.
"I think Yaoliang and the others have some reason for their consideration." Luo Yang said at this time. Seeing everyone looking at him, Luo Yang said seriously: "I had dinner with some old friends in Yanjing some time ago, and they talked about this matter. In the future, the country will have more and more stringent requirements for these industries, and policies will gradually tilt towards state-owned enterprises. In the future, small and medium-sized mining companies will be gradually forced to close. Even large mining companies will have certain requirements. And if there is no certain state-owned background, no one can guarantee what the future will be like..."
"Is this information reliable?" Li Daqi asked with a frown.
"It's hard to say whether a private conversation like this is reliable or not, but judging by the current situation, I personally think it's very likely."
Luo Yang's words made Li Daqi silent. He might not care about what Sun Yaoliang and Lu Hairong said just now, but what Luo Yang said made him think deeply. It seemed that Sun Yaoliang and his friends were right to worry. The previous dividends had come to an end. Even if they could continue in the future, no one knew whether the benefits of input and return could reach a certain level.
Over the years, Shenghua has taken solid steps, even its investment in real estate has been steady and steady. Unlike some other companies, Shenghua rarely engages in capital operations except for its investment in the Internet, but this does not mean that Shenghua will not engage in capital operations.
The capital operation referred to here is the use of financial leverage to engage in capital "gambling". Shenghua will not refuse normal capital operations.
Shenghua is very disdainful of companies that unscrupulously expand in a very short period of time through capital means, use virtual valuations to convert into market value through listing, and then harvest and cash out. Shenghua has its own professional financial team and its own professional financial institutions, and it is extremely strict in controlling the corporate debt ratio. Over the years, Song Yuanchao has never dared to be negligent in this regard, and under the influence of Song Yuanchao, most people in the Shenghua system have the same idea. To put it simply, they tend to be relatively conservative.
Conservative is sometimes not a derogatory word.
Conservative companies will not die, at most they will miss some opportunities. Radical companies are different, they can become rich overnight, but they can also go bankrupt overnight. The operation of a company is not based on short-term expansion, and then wait until the expansion reaches a certain stage and explodes like a punctured balloon and is completely ruined.
Wall Street in the United States is a place known to financial professionals all over the world. It is also the place where capital operations first began and various capital means were created.
But in the American business world, those old companies that have been in existence for decades or even nearly a hundred years, although they are also keen on capital operations, in their view, capital operations are just a tool for capital acquisitions through financial institutions, while in the operation of the company they strictly adhere to conservative operations. The two are distinguished and separated from each other, and this is the real reason why these companies can thrive.
Li Daqi looked towards Song Yuanchao. After so many years of starting a business together, he had deep trust in Song Yuanchao. Sun Yaoliang and the others were talking about important matters, and Li Daqi, who was unsure for a moment, subconsciously chose to seek Song Yuanchao's opinion.
Song Yuanchao heard what they said just now, and in fact he was also thinking about this issue.
Sun Yaoliang's sense of crisis was correct, and Luo Yang's reminder was also correct, because the subsequent developments were indeed as they worried.
Without mentioning anything else, let’s just talk about the “coal bosses” who have made a fortune from coal mines in recent years. With the skyrocketing coal prices, the coal mining industry, which was previously loss-making, has become extremely hot all of a sudden.
You have to know that ten years ago, mining was still a very unprofitable business. Coal mines that could not continue to operate went bankrupt in many places, and small and medium-sized private coal mines were in an even more bleak situation. Many bosses lost money every day, and no one was willing to sell their businesses even if they wanted to sell them at a low price.
The Shenghua mining company was established at that time. It directly acquired several state-owned mineral resources in the northwest at a low price, and after reorganization, it established this large-scale mining company.
When Song Yuanchao made this decision, there were internal debates, but because of the support of Sun Yaoliang and Lu Hairong, the merger proposal was finally passed. This is also the reason why Sun Yaoliang and Lu Hairong were responsible for the specific operations after the mining company was established and held a considerable stake in it.
Times have changed. The days of low coal prices changed after the mining company was established. With the surge in demand, coal prices went from low to hot. In less than half a year, coal mining turned from loss to profit, and the profit was not small. Then coal prices changed day by day, rising straight up. This industry instantly went from being a stinking dog shit to a hot bun. It was also for this reason that a large number of wealthy coal bosses were created.
Especially in the past two years, the names of coal bosses have become known throughout the country. For example, they use sacks of money to buy houses and cars, spend lavishly in nightclubs, and so on. The incredible things they have done have been talked about by people all over the country, and people are left with a strong taste of sourness while eating the melons.
However, Song Chaoyuan knew that with the adjustment and improvement of many policies, the good days of coal bosses would be over. The days of making a fortune every day were about to pass. Except for a few lucky ones who successfully transformed and invested in fixed assets, many coal bosses were inevitably beaten back to their original form after experiencing glory. They lost their family business in just a few years and became ordinary people again.
"Yaoliang and the others have some truth in their ideas, and the coal industry has been too hot in recent years. You all know what will happen if an industry is too hot. Maybe these are just the beginning signs." Song Chaoyuan tried his best to express his attitude in a tactful tone, but everyone present was familiar with Song Chaoyuan, and since he said that, it meant that he was no longer optimistic about this industry.
"Alas, the mining company has made a lot of money in the past few years. It's a pity to give up like this." Qin Zhengguo sighed, but he continued: "What Yuan Chao said is right. I feel a little uncomfortable when he said that. Besides, in business, there is always money to be made. I support Yuan Chao's decision!"
"Haha, I didn't make a decision. I just expressed my opinion." Song Chaoyuan interjected with a smile.
"This opinion is enough. Don't forget the clothing company back then, and the paging station that came later. Oh! The same goes for VCD and DVD. My experience over the years has taught me that sometimes if I'm not sure, it's always right to listen to you." Qin Zhengguo said carelessly.
As soon as these words were spoken, everyone burst into laughter. Several old friends mocked Qin Zhengguo for being so good at saving troubles. Fortunately, he was still the chairman of Shenghua’s board of directors. Isn’t it too easy to be the chairman of the board of directors?
"What do you know? Chairman, chairman, don't you have to be sensible to sit in this position? How can I be the chairman if I'm not sensible?" Qin Zhengguo was not annoyed at all. Instead, he made a joke cheerfully. After he said this, everyone laughed even more.
