that period, Real estate, decoration companies, gas stations, polymer companies, Hong Kong trading companies..
But Cao Dewang has been wondering
why he is so busy but can't make more profits?
At this time, Cao Dewang first thought about whether Fuyao's future should be mixed or professional?
Coca-Cola, IBM, General Electric..
It tells operators with numerous lessons from the past that focusing on the main business is the right way to resist the temptation of unlimited expansion and avoid the trap of diversification. In
2018, in an interview with a European reporter, Cao Dewang said bluntly: "I have been focusing on making a piece of glass for 40 years. Am I stupid?"?
"If it were not for the focus on manufacturing, Fuyao would not have today's development.". Someone pulled me to engage in real estate and finance, but I refused.
According to the composition of Fuyao's business, more than 90% of them are in automobile glass. In 2021, Fuyao accounted for 31% of the global automotive glass industry and over 60% of the domestic market.
Cao Dewang also wrote in his autobiography Xin Ruo Bodhi: "Looking back on my life, the most youthful years have been devoted to China's automobile glass.".
Today, automobile manufacturers around the world, including Mercedes-Benz and Tesla, are also using Fuyao's automobile glass.
Cao Dewang won in focus, but he also lost here.
In 1987, when Cao Dewang set up Fuyao Glass in Fujian, he became the first Chinese enterprise to enter the automotive glass industry. The following year, Li Xianyi also set up Xinyi Glass in Henggang, Shenzhen.
the beginning of the century," When the two companies had just gone to sea, Cao Dewang and Li Xianyi fought side by side and won the Canadian anti-dumping lawsuit.
However, many years later, when the two fought again, the winner was not Cao Dewang, who was more focused, but Li Xianyi.
In 2021, Xinyi Glass achieved revenue of HK $30.4 billion and net profit of HK $11.5 billion, which is the first time that Xinyi Glass has surpassed Fuyao Glass since its listing in 2005.
According to the 2022 Hurun Global Rich List, Li Xianyi's wealth is 51 billion yuan, while Cao Dewang's is only 24.5 billion yuan. In terms of wealth, Li Xianyi's wealth is more than twice that of Cao Dewang. As a result, Li Xianyi, the founder
of Xinyi Glass, was crowned as the new "King of Glass". The wealth
rolling in comes from the glass business.
But unlike Cao Dewang, who focuses on automotive glass, Li Xianyi also operates photovoltaic glass, building glass, and even solar power plants, battery energy storage and other businesses, and he has completed many industrial chain extensions.
"Focus or diversity?" Is a controversial topic in the business world. So, when did the fork in the road between Li Xianyi and Cao Dewang begin?
In 1982, when Cao Dewang, 36, was still working as a buyer in a local glass factory in Fujian, Li Xianyi, 30, began to rush into Hong Kong for gold, started an auto parts business and set up several auto parts companies.
At that time, a great event took place in China. After the reform and opening up, Shenzhen, across the sea from Hong Kong, became the hottest place for entrepreneurship in China overnight.
Because of the low rent of land in Shenzhen and the various policies of the government to develop the economy, investing in the Mainland has become the choice of many Hong Kong businessmen. After
thinking deeply, Li Xianyi, a from Fujian, decided to leave Hong Kong and return to the mainland to fight in Shenzhen, a newly developed special economic zone, to set up a new automobile repair factory.
Opening a garage is not the end of Li Xianyi.
In the process of operating the repair shop, Li Xianyi found that there was no enterprise producing automobile glass in Shenzhen, and the glass purchased by the automobile repair shop had to be imported from overseas.
After years of auto parts service, Li Xianyi smelled the business opportunities of auto glass.
In 1988, Xinyi Glass Company was formally established. "China has low per capita wages, good management and low costs, so the glass we make is cheaper than that made in the United States and Canada," Li Xianyi later concluded.
According to the information at that time, most of the domestic automobile glass was imported products, and the cost of Japanese glass was only 100 yuan, but it could be sold at a high price of thousands of yuan. It
is for this reason that Xinyi Glass has risen rapidly with its low price.
to 2001, More than 70% of the automobile glass produced by the company has been exported.
However, relying on low cost and low price, China's automobile glass, which sells well, was soon accused of anti-dumping. In February
2001, in the name of dumping, the United States decided to impose an anti-dumping tariff of 3% -124% on Chinese automobile windshields from April 2002. In September
2001, Chinese windshield enterprises, including Xinyi Glass, received another notice of Canadian anti-dumping investigation.
Later, Cao Dewang and Li Xianyi both chose the hard bar to the end, produced data reports over the years, relying on domestic and foreign sales reports, cost reports and other detailed evidence to prove that they did not dump, and won the anti-dumping case. The
two lawsuits also indirectly let the industry know about Xinyi Glass Company. After the anti-dumping lawsuits in the United States and Canada, the business of Xinyi Glass did not suffer a blow, but sold better and better. In
2005, Xinyi Glass successfully landed on the Hong Kong Stock Exchange, and Li Xianyi harvested the first IPO in his life. At this time, the revenue and profit of Xinyi Glass reached 1.381 billion yuan and 2.
But Li Xianyi felt that the cost was not low enough. Li Xianyi, who has
tasted the advantages of low-cost prosperity, thought of extending to the upstream industrial chain to further reduce the cost of enterprises.
In 2005, Li Xianyi made a decision to build a float glass production line.
As the main raw material for automobile glass production, Li Xianyi mentioned in the annual report that the new float glass production line will help to control the quality and production cost of the main raw materials and improve the profits of listed companies.
It is worth noting that float glass also has a wider range of applications, in which ultra-white float glass is mainly used in high-grade construction, decorative glass, imitation crystal products, lamp glass, precision electronics industry and so on.
This also allows Li Xianyi to get rid of the concentration risk of relying solely on automobile glass. Today, architectural glass has become the third largest business income of Xinyi Glass, accounting for about 12% of the company's total revenue.
In the process of laying out float glass, Li Xianyi also found a bigger market.In terms of
forming process, photovoltaic glass is mainly divided into ultra-white rolled glass and ultra-white float glass. The former has strong light transmittance, while the latter is thinner and has low production cost, which is widely recognized by photovoltaic module manufacturers.
With the experience of float glass in the early stage, the first photovoltaic glass production line of Xinyi Glass with a daily melting capacity of 300 tons was put into operation in January 2008. Since then, photovoltaic glass has been regarded as one of the key development directions of Xinyi Glass in the future.
By 2009, the contribution of automobile glass to the revenue of Xinyi Glass was less than 50%. However, in the field of photovoltaic glass, Li Xianyi continues to extend the industrial chain, go deep into the upstream and downstream, build power stations, buy mines and so on.
Because the cost of photovoltaic glass is mainly composed of silica sand and fuel power, they account for the majority of the total cost. Li Xianyi, who is good at building cost advantages, immediately expanded his downstream power plant business in 2014 and even bought a mine.
"We are now developing upstream, buying some placer mines for our own use and stabilizing costs.". If the cost can be controlled, the gross profit rate can be relatively stable. Liu Xiyuan, CFO of Xinyi Glass, once said so.
Since 2013, Li Xianyi, like a skilled glass worker, has been cutting out pieces of shining glass and building a huge commercial building.
In 2013, when the revenue of the photovoltaic glass sector was close to HK $2 billion, Li Xianyi implemented the first business split, and the photovoltaic glass sector operated independently under the name of "Xinyi Solar Energy" and was listed at the end of that year.
Subsequently, Li Xianyi continued to work on the spin-off task, splitting the core business from Xinyi Solar Energy in May 2019, and independently listing the photovoltaic power plant business in the name of "Xinyi Energy".
The automobile glass maintenance business was independently operated and listed in 2016, named "Xinyi Hong Kong", and renamed "Xinyi Power Storage" in 2020, which sent a clear signal of business transformation to the outside world and became an investment holding company mainly engaged in battery pack and energy storage system business.
After several splits, Li Xianyi now owns four listed companies in Hong Kong, namely, Xinyi Glass, Xinyi Solar Energy, Xinyi Energy and Xinyi Power Storage, with a total market value of more than HK $150 billion, far exceeding the total market value of Fuyao Glass, which is only about HK $100 billion.
In the photovoltaic glass sector, Xinyi Light Energy and Flat are even in a duopoly position. In 2021, the combined market share of the two companies reached 52%. Among them, the market share of Xinyi Solar Energy reached 31.
Then some people began to question: "Is Cao Dewang, who sticks to auto glass, too conservative?"? Maintaining diversification
in a familiar industrial environment, improving efficiency and creating an industrial chain that echoes each other is something that every entrepreneur in China can learn from, rather than blindly expanding across borders.
浙公网安备33010802003254号