Text: Liu Qing Qingshidan

ID: BMR2004

Puji Hospital acceptance chart, source: Ningbo Haishu District Government official website

As a men's clothing giant, Youngor, building a hospital is a big deal, donating a hospital is even bigger, but on the 6th day after announcing the donation to Puji Hospital, he regretted donating, which is really shocking.

It is worth mentioning that this hospital, which caused the board of directors and the board of supervisors to "repent", caused "disputes" among shareholders, and caused the listed company Youngor to fall into a storm of public opinion, is Youngor's "thank you gift" for saying goodbye to Big Health. " is also another struggle of Youngor in the long-term development process of "side business surpassing the main business". One of the reasons mentioned in its "Donation Announcement" for donating to Puji Hospital is that "if we continue to invest in Puji Hospital and related assets, there may be a large imbalance in input and output, which is not conducive to the company's focus on capital and energy development. "

After all, before Youngor opened the hospital, it was no longer a simple clothing company, but had formed a business landscape of "clothing + real estate + investment". For a long time, the net profit brought by Youngor's clothing sector has been far less than that of the real estate sector and investment sector. Under this circumstance, it is really unworthy of the name to regard clothing as its main business.

Why did the donation change after 5 days? Why choose donation instead of selling, etc.? Is the clothing business still Youngor’s main business? How will Youngor’s diversified layout continue? "Business School" sent an interview letter to Younger in this regard, but had not received a reply as of press time.

"Repentance Gate" worth 1.36 billion

The reason why Youngor regretted donating is said to be the result of listening to the opinions of shareholders, but what behind it reflects its treatment of small shareholders as a listed company Indifference or even disregard of interests.

"Repentance Gate" originated from a "sudden" donation by Youngor.

On May 17, Youngor issued the "Announcement on External Donations" and donated Puji Hospital and related assets to the Ningbo Municipal People's Government. The book value of the assets to be donated is 1.074 billion yuan, and the remaining payment is The contract amount is 286 million yuan, and the estimated value is 1.36 billion yuan (subject to the final account).

Source: Wind Financial Terminal

Youngor pointed out that in recent years, the uncertainty of the domestic and foreign economic situation has increased, the reform of the national medical system has been deepened, and the company lacks operations in related industries. Team and experience, if we continue to invest in Puji Hospital and related assets, there may be a greater imbalance in input and output, which is not conducive to the company's focus on funding and energy to develop its main business.

Therefore, the company decided to further focus on its main business in terms of resources, funds, team and management, adjust the existing industrial structure, and plans to donate Puji Hospital and related assets to the Ningbo Municipal People's Government. The specific donation plan is proposed The general meeting of shareholders authorized the company's management to discuss implementation with the Ningbo Municipal People's Government.

At that time, Youngor held the 22nd meeting of the 10th board of directors and the 16th meeting of the 10th board of supervisors, and reviewed and approved the "Proposal on External Donations." But five days later (May 23), Youngor held another meeting of the board of directors and board of supervisors, and both unanimously approved the motion to terminate external donations. As a result, the "regret donation scandal" caused an uproar.

The above two "regret donation" meetings with highly consistent contents gave the exact same reason - "The company's board of directors and management have listened to the opinions of shareholders, and the company has decided to terminate this external donation."

In other words, Youngor announced that it would donate a hospital worth 1.36 billion yuan to the Ningbo government, but the majority of shareholders (including small and medium-sized shareholders) did not agree.

In this regard, Beijing Intellectual Property Database expert Dong Xinrui pointed out that the reason why Youngor regretted donating is said to be the result of listening to the opinions of shareholders, but what behind it reflects its indifference to the interests of small shareholders as a listed company. Regardless, as a listed company, free donations will have a greater impact on the company's performance. In addition, dishonest behavior of regretting donations will also have a negative impact on the company's reputation.

Wang Peng, associate professor at Renmin University of China, believes that the vision may have been good when he originally invested in Puji Hospital, but from the perspective of on-the-ground operations, his own abilities, levels, experience, funds and other limitations, as well as commercial Various reasons such as changes in the objective development environment may lead to the final decision to sell the hospital as a whole.

"When choosing to take action, the target was planned to be the Ningbo government, and the method of taking action was planned to be a donation. There must be some situations behind which small and medium-sized shareholders do not understand. The starting point of giving back to society cannot be ruled out. Common ones are also Including assets and liabilities, subsequent investment, etc., and then choose to transfer a series of assets and corresponding disputes, responsibilities, etc. to the local government," Wang Peng said.

Puji Hospital in the Troubles: It took 4 years to build but was difficult to implement

In any case, the hospital that took more than 4 years to build not only continued to increase its provision for impairment, but also was exposed Unable to be put into normal use.

As the public controversy over the "Repentance Donation Gate" rages on, the focus of this donation, Puji Hospital, has also emerged in front of the public.

The announcement pointed out that on May 24, 2018, Youngor won the state-owned construction land use rights of the CX06-05-02g plot in Jishigang Town, Haishu District, Ningbo City at a price of 75.0964 million yuan. The land use For medical and health purposes, it is planned to build a large general hospital with Class IIIA standards, and rely on this to develop the health industry and realize the transformation and exploration of the real estate sector.

In October 2018, Puji Hospital officially started construction, and everyone from all parties is full of expectations.

According to reports, Puji Hospital is a large comprehensive hospital built according to Class IIIA standards. It consists of an international medical center, a comprehensive building, supporting buildings and basements, with a total construction area of ??over 21 10,000 square meters, covering an area of ??8.16 hectares, and is adjacent to the planned Metro Line 6.

The official website of the Ningbo Municipal Government pointed out that the total investment of Puji Hospital is nearly 2 billion yuan. After it is put into use, it can provide 1,600 beds in the early stage, which will change the history of no large hospital in the west of Ningbo.

At the same time, Ningbo Puji Hospital entrusts Ningbo Second Hospital with comprehensive management. It hopes to rely on the strong expert technical strength and advanced management level of Ningbo Second Hospital, combined with the flexible mechanism of private hospitals, to create and train a It is a first-class large-scale comprehensive hospital in Ningbo and even East China.

But it can be said that the much-anticipated project took 4 years to complete the acceptance, but it has been delayed in opening.

When Puji Hospital broke ground as early as 2018, it was announced that the pile foundation construction was expected to be completed before the Spring Festival in 2019 and fully put into use in October 2021. Later, in September 2020, Puji Hospital held an induction ceremony for new employees in 2020 and announced that it expected to open before the end of 2021. But by the end of 2021, Youngor's financial report showed that the project progress of Puji Hospital was actually only 60.08%.

Team building for newly recruited employees of Puji Hospital, picture source: Youngor Group’s official WeChat public account

Obviously, the predictions have not been truly realized. Instead, Youngor’s predictions about Puji The amount of impairment provisions made by Ji Hospital continues to increase, rising from 24 million yuan in 2020 to 48 million yuan in 2021.

It was not until April 2022 that Puji Hospital finally completed its acceptance. However, it is reported that the hospital has been built, but the public transportation projects near the hospital have not kept up in time and cannot be put into normal use. Regarding the news, Youngor did not respond to its authenticity.

In any case, the hospital that took more than four years to build not only continued to increase its provision for impairment, but was also revealed to be unable to be put into normal use.

In four years, Puji Hospital has gone from being highly anticipated to being constantly controversial, and its future is still uncertain.

Buffett in the clothing industry:

Create a "clothing + real estate + investment" territory

In particular, Youngor invested in CITIC Securities at a cost of about 1.01 yuan per share His participation in the establishment of Ningbo Commercial Bank is regarded as a legend in China's capital market.

As a result, Li Rucheng is also known as the "Warren Buffett of the clothing industry."

The "regret on donation" incident has attracted a lot of criticism to Youngor founder Li Rucheng. The "Warren Buffett of the clothing industry" is facing doubts such as "generosity to others" and "renege on his words".

Li Rucheng is one of the group of young people who experienced the educated youth going to the countryside. He is an entrepreneur who has been tempered by hardships. In 1980, Li Rucheng, who was nearly 30 years old, returned to the city and came to a simple "Youth Clothing Factory" - the predecessor of Youngor Group (founded in 1979).

After joining Qingchun Garment Factory, Li Rucheng worked as both a designer and a dispatcher. He also contacted partners and found markets. Soon the factory's profits surged and he became the director of Qingchun Garment Factory. .

After establishing the first brand "Beilun Port" through horizontal joint ventures, in August 1990, under the careful operation of Li Rucheng, a new Sino-foreign joint venture Youngor Garment Co., Ltd. was established.

YOUNGOR is the English name for "Youth". Li Rucheng believes that "Youngor" not only has the historical continuation of the "Youth" factory, but also entrusts expectations for the future, and whether it is in English or Chinese, both written smoothly and with catchy syllables, is an almost perfect creation.

At this time, Li Rucheng's "ambition" has slowly been revealed. He sent a large number of employees to study abroad and learn from experience, and formulated the company's processes, technical procedures and quality inspection systems in accordance with the standards of top international products. This belief in "creating an international brand" allowed Youngor to grow rapidly, and orders came in like a snowflake. Li Rucheng described the situation at that time as "unstoppable."

In 1991, the "Youngor" brand won the title of "China's Famous Trademark", one of only two in the Chinese clothing industry at that time. Until now, Youngor is still the leading company in the national textile and apparel industry. The men's shirt category has ranked first in the national comprehensive market share for 25 consecutive years, and the men's suit category has ranked first in the national comprehensive market share for 22 consecutive years.

At the same time, the main brand "Youngor" has continued to maintain its leading brand position in the field of domestic men's clothing for many years. Based on this, it has formed a three-dimensional brand system extended by MAYOR, Hart Schaffner Marx, and HANP.

It is worth noting that this legendary clothing company also has other "legends": it got involved in real estate development in 1992, capital investment in 1993, and was listed on the Shanghai Stock Exchange in 1998. The closing price on the day of listing was The IPO price is 138% higher...

Youngor's official website shows that the company is one of the earliest private enterprises in China to enter the real estate market development field. Since its inception in 1992, it has always adhered to the brand concept of "pioneer in quality real estate" . It is understood that he continued to purchase land in Ningbo, Zhejiang, and Suzhou, Jiangsu, and once became the "land king" in acquiring land at high prices in the Yangtze River Delta region.

Moreover, Youngor is also one of the earliest private enterprises in China to enter the field of professional financial investment. It began to get involved in the field of equity investment in 1993, and then further got involved in securities, banking and other financial fields. It has invested in many companies such as Guangbo Group, Yike Technology, CITIC Securities, Bank of Ningbo, Haitong Securities, etc.

In particular, Youngor’s investment in CITIC Securities and its participation in the establishment of Ningbo Commercial Bank at a cost of about 1.01 yuan per share is regarded as a legend in China’s capital market. As a result, Li Rucheng is also known as the "Warren Buffett of the clothing industry."

Youngor’s official website states that the company has four major industries: fashion, real estate, investment, and international trade. However, in the eyes of the market, Youngor’s “clothing + real estate + investment” business landscape is even more impressive.

Men’s clothing giant that is “not doing its job properly”:

The net profit of the clothing sector accounts for only 18%

Judging from the financial data in 2021, Youngor’s revenue is 136.1 billion, a year-on-year increase of 18.57%. Among them, the net profit brought by the clothing sector was 940 million yuan, accounting for 18.3% of the total net profit. On the contrary, the net profit of the real estate sector accounted for 44.6%.

In Wang Peng’s view, Youngor’s layout of the health industry is actually telling the story of the real estate industry. After all, even the story of Puji Hospital and Youngor started from a piece of medical land.

In 2021, Youngor acquired another land parcel in Jishigang Town, Haishu District for 324 million yuan. The land use is other commercial land (land for elderly care institutions), which is similar to the Puji Hospital land parcel. Neighborhood - It is clear that the intention is to acquire land to build elderly care projects around the hospital to achieve complementarity between the medical and elderly care industries.

It can be seen that the "troika" of "clothing + real estate + investment" has led Youngor a long way.

For a long time, Youngor’s brand clothing business, real estate development business, and investment business have been the main revenue sectors in Youngor’s financial reports, but in fact Youngor has almost become “a company that wears the clothes of the fashion sector and eats food” A company specializing in real estate and financial investment."

Financial report data shows that since 2015, Youngor’s annual net profit from the clothing sector has hovered between 600 million and 1 billion, but the net profits brought by the real estate sector and investment sector far exceed that of the clothing sector.

Picture source: "Business School" compiled based on Youngor financial report data

Calculations show that from 2015 to 2021, Youngor's clothing business brought a net profit of 5.72 billion yuan (based on annual net profit (add up the divisors of profits), and in the past seven years, the net profit from the real estate sector has reached 10.23 billion yuan; the net profit from the investment sector has reached 12.88 billion yuan.

Judging from the financial data in 2021, Youngor’s revenue was 13.61 billion yuan, a year-on-year increase of 18.57%; the net profit attributable to shareholders of the listed company was 5.13 billion yuan, a year-on-year loss of 29.15%. Among them, the net profit brought by the clothing sector was 940 million yuan, accounting for 18.3% of the total net profit. On the contrary, the net profit of the real estate sector accounted for 44.6%.

Wang Peng pointed out that Youngor, as an older generation clothing brand in China, in the early stages of the development of China’s economic market, especially before “foreign brands” entered China, Youngor’s brand awareness, market share, and profitability were at a very high level. It's very commendable.

“Up to now, on the one hand, a large number of casual fast-moving consumer brands have emerged in the domestic clothing and apparel fields, such as Heilan House, Septwolves, Metersbonwe, etc., including Li Ning, Anta and other sports brands. Brands have also begun to enter the field of casual clothing and business leisure, and competition is becoming increasingly fierce. On the other hand, a large number of foreign brands have entered China and are constantly eroding Youngor's brand awareness and market share," Wang Peng said.

"When Youngor itself was still a listed company, after acquiring certain assets, as performance growth slowed down and profitability was eroded, it would naturally undergo further expansion and transformation." Wang Peng Said that Youngor's transformation process happened to catch up with the golden period of the rapid development of China's real estate - although the transformation of real estate has nothing to do with its original industrial chain, from the perspective of profitability, it has indeed contributed to the company Very profitable.

Next, a similar story continues with Younger in terms of investment - seemingly unrelated, but with huge returns. "Youngor's 'troika' was formed under the influence of such internal and external factors, and is the result of the company's pursuit of improvement and change." Wang Peng concluded.

Farewell to Big Health: Where is Diversity Going?

As a company with dreams, it is necessary to carry out industrial layout from the perspective of its own abilities, talents, teams and resources. Otherwise, it will not be conducive to the long-term development of the company, nor is it good for the corporate image.

The benefits brought by the "Troika" are really hard to refuse. Li Rucheng once admitted that making money through real estate and investment is faster than selling clothes.

Moreover, after forming three major business segments, Youngor has begun to enter the big health industry, including establishing Youngor Health Industry Fund, building hospitals, and building retirement bases, etc.

By 2019, the company will make major adjustments to its development strategy - it will further focus on the development of its main clothing business in the future. In addition to strategic investments and continuing to fulfill investment commitments, the company will no longer develop non-main business areas. financial equity investment, and select opportunities to dispose of existing financial equity investment projects to further focus on the development of the main textile and apparel business and reduce the uncertain impact of capital market fluctuations on the company.

This means that Youngor will gradually divest itself from its investment business. Although in the eyes of the market, the divestment of the booming investment business is very slow.

In 2020, Li Rucheng mentioned in the "Letter to Shareholders", "How to effectively integrate and make trade-offs among the existing diversified industries, we will face painful choices."

In 2021, Li Rucheng has become more thoughtful and cautious: Is it right or wrong to diversify operations and not put eggs in one basket? How long can Youngor maintain its multi-industry operation? Can Youngor succeed in the many emerging industries it has recently entered? The company will also re-explore and make choices.

At the same time, the company's development strategy for 2021 bluntly states "optimize the industrial layout and withdraw from the health industry." In May 2022, during the donation matter, Youngor also reiterated: "In order to further focus on the construction of the fashion industry and enhance the core competitiveness of the company, the company plans to withdraw from the health industry."

In short, Youngor is bidding farewell to the big industry. Health, and the main clothing industry is mentioned more and more frequently, hoping to turn the ship from the pattern of diversified development.

In this regard, Wang Peng pointed out that how China's national brands and established enterprises should continue to develop and become bigger and stronger has always been a topic worth thinking about.

"I believe that the answer to questions such as whether to continue to focus on the main business, whether to engage in secondary entrepreneurship, and industrial innovation is to 'run fast in small steps' and not to pursue excessive pursuits in other industries. Instead, we need to integrate it with the main business, do a good job in the main business, and lay out the upstream and downstream industrial chains of the main business, which may be more stable," Wang Peng said.

Wang Peng mentioned that on the road of business operation, it is okay to have commercial sensitivity for some good directions, but you cannot completely follow the trend. Especially as a company with dreams, it must make its industrial layout from the perspective of its own abilities, talents, teams and resources. Otherwise, it will not be conducive to the long-term development of the company, nor is it good for the corporate image.

Li Rucheng, who has always been low-key, has filled his 2021 "Letter to Shareholders" with question marks, but he is still extremely humble. He said that the company developed and expanded during China's social transformation period and has now been in development for more than 40 years. As social competition becomes more and more international, shortcomings in corporate development are increasingly exposed. Cultural construction, system construction, and team building are all placed on the company's development agenda.

Today, Youngor, a long-established clothing company, has entered the development stage of its second entrepreneurial innovation. It remains to be seen whether what will move the market next is the investment business that has vowed to be divested but has huge financial resources, is it the investment business that is greatly affected by policies, or is the main clothing business that Li Rucheng is obsessed with.