Chapter 36 Archiving our 6 mistakes

●"Expansion too fast" - In the past, we ate from the bowl and looked at the pot.The accelerated expansion in recent years has led to tight cash flow and hematopoietic functions of the enterprise itself.Due to the rapid expansion of the enterprise, especially after 2001, the financing pressure led to a single assessment reward and punishment index, poor internal management, serious violations in the development of financial business, and occupation of the funds of production-oriented enterprises in the self-rescue of financial institutions. In addition, the media The influence of hype and monetary tightening led to the debt crisis of Delong's related financial institutions, which quickly spread to production-oriented enterprises, thus affecting the healthy development of the financial securities market and social stability.

●“Did not resist too many temptations”—we are always eager to do those higher-end businesses, but if we don't grasp it well, it will bring disaster.The overall economic environment looks good, and Delong's brand and strength have attracted many partners. However, we are faced with too many temptations, and it is inevitable that we will expand too fast.In the face of many opportunities, Delong was a bit greedy for more, so that he underestimated the changes in the macro environment.For example, the recent tightening of loans by banks has put pressure on Delong's capital allocation.Because Delong's prediction is that Delong's own situation has not deteriorated and is still developing benignly. If it follows the past practice, it should be able to get financial support from the bank. However, due to the current monetary tightening, Delong's strategic deployment has been blocked Messed up.

●"Strategic idealization" - Delong has done a lot of exploration work on the strategic model of industrial integration, and the results have proved to be fruitful.For example, after becoming the owner of Hunan Torch, through a series of industry mergers and acquisitions, its main business income has expanded from 124 million yuan to 10.313 billion yuan in 6 years.However, due to Delong's lack of grasp of macro policies, some steps were too fast and too idealistic, which led to difficulties when some external factors changed.In the past, our understanding of problems was often based on intuition. We should not overthink whether we can embark on a bright road. We should go to the extent of the business itself. If we pursue it deliberately, the result will not be good.We may have wisdom, but we still lack the means.

● "Unable to grasp the rhythm of investment" - Delong did not do well in terms of long-term, medium-term and short-term investment portfolios and the grasp of investment rhythm.In the past, Delong focused on complementary investments in terms of horizontal and content, such as the complementarity between finance, industry, and industrial chain, but ignored the structural arrangement in terms of investment rhythm, that is, the proportional structure of long-term, medium-term and short-term investment. As far as is reasonable, the proportion of long-term investment is too large, which affects the liquidity of funds, and more attractive investment opportunities and industrial integration opportunities are seen, while potential risks brought about by the company's rapid growth are ignored.

●"Mistakes in macro judgment"—it is precisely some aspects that we didn't pay much attention to before that have become stumbling blocks.For example, our development has been very fast and smooth, and the government, banks and other aspects are also very supportive, and the credit line granted by the bank is also very large, which also gave us an illusion that as long as there are good industries and good projects, We are not short of funds.But what I didn't expect was that the credit contraction would greatly affect the cement and other industries. Coupled with some unexplained rumors in the market, it also caused difficulties in financing for our other industries, and the operation was affected.

● "Use poison to counteract poison" - in the financial industry, we made a serious mistake. First of all, we followed the trend, thinking that as long as everyone in the industry is doing what we do, it will not be too big of a problem. In the end, this became Delong Dead knot in the event.Secondly, when a social crisis arises, extraordinary measures are used to resolve the crisis, including guaranteeing the minimum investment income of customers in the marketing of financial companies, using multiple companies to actually hold financial companies, operating beyond the scope of operations, and illegal lending between financial companies. Using "shell companies" as the main body of investment and transfers and concealing related party transactions... This is equivalent to "using poison to defuse poison".