According to media reports, Jinli Group, which has received much attention from the industry in recent months, has made a major breakthrough. A company with state-owned assets will fully take over Jin Li. A press conference will be held in due course to announce the detailed restructuring.
In response to this, Jin Li’s official response: Intention, not yet determined, all subject to official announcement.
The capital chain crisis has lasted for 4 months
Since the chairman Liu Lirong was frozen on January 16th, when 41.4% of the shares have been frozen, Jinli has been pushed to the forefront due to the capital chain crisis. Not only has Jin Li been involved in multiple lawsuits in Shanghai and Shenzhen, but many subsidiaries of Jinli have been caught in movable property. Mortgages, disputes over the transfer of claims also surfaced. Earlier, NetEase science and technology has reported that Jin Li may have reached 10 billion in external arrears, which owes banks 8.6 billion, arrears suppliers more than 4 billion yuan.
In addition to frequent debt collection and litigation, these affected suppliers also stopped or reduced the supply of goods to Jinli, which made Jin Li’s funds more difficult to repatriate.
In addition to the collective defeat of upstream suppliers, it is even more serious that Jinli’s once-existent channels of high-quality resources have also been rifted. As a result of the backlog of goods, the capital chain has been broken, triggering a series of chain reactions, and the downstream channels that Jinli is relying on to survive. Since the beginning of the reversal of water, the problem facing Jinli has been more than just the clearance of goods.
After the outbreak of the capital chain crisis, Jinli officials stated that “Since the crisis, we have adopted a pilot capital-guarantee production program. We will now adopt a cost-reduction method. In order to ensure the normal operation of the production line, Jinli Industrial Park not only retains approximately 50% of its costs. Employees continued to produce, and ODMs also assisted in the production of Jinli’s mobile phones to supply Jin Li’s orders both at home and abroad. “Liu Lirong promised to never run away and would repay debts step by step. He said that Jinli is actively introducing strategic investors. , If necessary, you can give up control of the company.
Prior to this, there were rumors that Hisense might take over Jin Li. Hisense has always had a heart for mobile phones, and Hisense has not been able to do it for 17 years. Therefore, it is also possible to strategically invest in Jin Li, the fifth-largest mobile phone maker in China. The news was denied by Jin.
Over-marketing, self-eating
Liu Lirong also said that there are plans to sell assets in order to repay debts. Public information shows that Jin Li had invested 80 million yuan in holding 3% of Weizhong Bank’s shares and invested 1.253 billion yuan in 9.49% of Nanyue Bank’s shares. Also owns the Jinli Building, an office building under construction in Shenzhen with a total investment of 1.235 billion yuan. It is near completion.
However, whether it is an investment bank or a building or a rumbling loss of gambling, it was not the main reason for the breakage of Jinli's capital chain. Liu Lirong once said in an interview with the Securities Times that the main reason for the outbreak of the Jinli capital chain issue was 2016. In 2017 and 2017, the marketing expenses and investment expenses were exceeded. In 2016-2017 Jinli’s marketing expenses invested more than RMB 6 billion.
Since July 2016, Feng Xiaogang, Yu Wenle, Xu Fan, Wu Gang, Xue Zhiqian, and Liu Tao have become Jin Li’s spokespersons. In addition, because Liu Lirong’s personal obsession with Go, Jin Li has sponsored the China Goliath League for 10 consecutive years. Invite the first person in the world to join Jin Li's luxury spokesperson team.
In addition to celebrity endorsements, during these two years, Jin Li also sponsored 12 kinds of variety shows such as "Most Powerful Brain", "Swordsman", Hunan Satellite TV's "2017 New Year Concert", and an average of 6 sponsorships each year. The title TV series Chu Chuo Chuan. According to calculations, Jin Li’s expenses for sponsoring variety shows and TV dramas exceeded RMB 3 billion in 2016 and 2017. Jin Li Zeng externally stated in 2017 that this year is only for S and M series products. The promotion cost is about 1.9 billion yuan.
On the marketing side, he did not hesitate to study OV's Jin Li, but did not obtain the ideal result.
Liu Lirong once said in an interview with the media that 'Jin Li’s appearance is only safe if the company achieves a global sales volume of 100 million units. 'But according to GfK's data, the sales volume of Jinli mobile phones in China in 2017 is Of the 14.94 million units, ranking seventh, with a share of only 3%. This is half of the target set by Liu Lirong at the beginning of the year to sell at least 30 million units at home.
Conclusion
According to the "Analysis of the Operation and Development Trends of the Domestic Mobile Phone Market in 2017" released by the China Institute of Information and Communication Technology under the Ministry of Industry and Information Technology, in 2017, domestic mobile phone shipments totaled 491 million units, a year-on-year decrease of 12.3%. China's smart phone market has a primary ceiling, mobile phone manufacturers The battle for competition has also become a zero-sum game of mutual elimination. The front-line mobile phone brands are gradually eroding the market share of other brands, and the Matthew effect is becoming more and more obvious. According to the Kantar World panel data of the market research organization, the 2016 Apple And 'Hami OV' (referring to Huawei, Xiaomi, VIVO, OPPO) accounted for 79% of China's smartphone market share, and this number became 91% in 2017. The former 'Zhuoxun' (ZTE, Huawei, Coolpad, Lenovo once became the leading manufacturer of domestic mobile phones, but it has changed hands for several years and become the world of 'Huami OV'.
From the start of the cottage, to the brand machine, and then to the smart machine, the ability to survive the Jin Li, whether to stand up again is also worth the wait.