Weiqiao "Empire" after the retirement of Zhang Shiping, the richest man in Shandong Province: the scale of textile and aluminum is still in the forefront of the world-Shanghai Metals Market

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Weiqiao "Empire" after the retirement of Zhang Shiping, the richest man in Shandong Province: the scale of textile and aluminum is still in the forefront of the world

Translation 08:18:57AM May 17, 2019 Source:Daily economic news

SMM News: on the evening of May 15, the Daily Economic News exclusively reported that Zhang Shiping, the richest man in Shandong Province, lived in ICU, 's long-term low-key Zhang Shiping and the Wei Bridge "Empire" behind him attracted attention from the outside world.

Zhang Shiping is known as "the king of aluminum industry" and "the king of cotton in Asia". The brighter label is "the richest man in Shandong". Under the famous, he is only a born in the countryside, only junior high school culture of ordinary people. Starting from the director of an oil cotton factory of a supply and marketing agency, Zhang Shiping gradually founded Shandong Weiqiao Group (hereinafter referred to as Weiqiao Group) and China Hongqiao Group (hereinafter referred to as China Hongqiao Group). The industry straddles the textile and aluminum industries and is quite legendary.

In September last year, Zhang Shiping, then 72, officially handed over his own Weiqiao "empire" to his son Zhang Bo and announced his retirement. After Zhang Shiping retreated, the scale of Weiqiao "Empire" is still huge, but it remains to be seen whether the Weiqiao model, on which it depends for its survival and growth, can maintain its advantages in the future.

A huge empire of textiles and aluminum power

At present, the Zhang Shiping family has Weiqiao Textile (02698, HK), China Hongqiao (01378, HK) two H-share listed companies, and an A-share company Hongchuang Holdings (002379, SZ).

In 2017, through his Shandong Hongqiao (China Hongqiao company) into the predecessor of Hongchuang Holdings * ST Lu Feng, Zhang Shiping elaborated on its industry. At that time, Zhang Shiping actually controlled 34 major enterprises, including Weiqiao Group, Weiqiao Investment and so on.

In Binzhou City, Shandong Province, with Weiqiao Group and China Hongqiao as the core, the Zhang Shiping family has formed two major industrial clusters of textile and aluminum power, and the industrial scale is in the forefront of the world.

Among them, Weiqiao Group sets textile and clothing, thermoelectric and other industries in one. Since 2012, Weiqiao Group has been selected as one of the top 500 enterprises in the world for seven years in a row. China Hongqiao is the whole industrial chain layout of bauxite mining, alumina, aluminum product processing and sales. In 2014, China Hongqiao became the world's largest aluminum producer.

Zhang Shiping started his career in textile. From the textile factory workers, the establishment of their own spinning mill, to the establishment of Weiqiao textile. In 2003, Weiqiao Textiles was successfully listed on the Hong Kong Stock Exchange. By 2005, Weiqiao Textile parent Company Weiqiao Group has become the largest cotton textile enterprise in the world. As a result, Zhang Shiping is also known as the "cotton king of Asia."

At the beginning, at the time of the large-scale expansion and development of Weiqiao textile, it encountered a serious shortage of thermal energy and electric energy. At that time, China was in an era of tight power supply, and power restrictions occurred from time to time. To this end, the state has issued policies to encourage capable enterprises to develop their own power plants. Zhang Shiping raised funds to build the first power plant of the enterprise, which not only solved the power shortage, but also produced a lot of surplus electricity. After the printing and dyeing project of Weiqiao textile started, there was not enough electricity, so the second power plant started again. As a result, its cotton spinning industry chain is getting longer and longer, until Zhang Shiping is interested in the electrolytic aluminum project. In the electrolytic aluminum industry, electricity costs account for 40% to 50%, so the advantage of having its own power plant is obvious.

In 2002, Zhang Shiping established an aluminum co-production company, Weiqiao Aluminum Co., Ltd. (controlled by China Hongqiao). On the basis of the development of cotton textile industry and taking thermoelectricity as a link, Weiqiao Aluminum Industry has expanded to the field of marine chemical industry and deep processing of aluminum materials.

"from textiles to power plants, to printing and dyeing, to the expansion of power plants, and finally to the electrolytic aluminum project, we are just like noodles, with more water and more water, and finally we have developed to the present situation," says Zhang Shiping.

Sales revenue of Weiqiao Group fell in 2018

Later, the profit of the aluminum and electricity industry gradually exceeded that of the textile industry and became the pillar industry of Zhang Shiping. At the end of 2018, Zhang Shiping disclosed his 2018 operating results at the Weiqiao Group meeting: sales revenue of 283.5 billion yuan and profit of 8.7 billion yuan, an achievement that is the envy of many enterprises.

Behind the 2018 report card, Weiqiao Group faces a lot of business pressure. In 2017, Weiqiao Group received sales revenue of 359 billion yuan and a profit of 13.15 billion yuan.

On the other hand, Hongqiao in China has experienced a situation in which there is no increase in income and no increase in profit. In 2017 and 2018, China's Hongqiao revenue rose significantly compared with previous years, approaching the 100 billion yuan mark, but profits failed to achieve a synchronous increase. In 2017 and 2018, the company's gross profit margin was 15.95% and 17.07% respectively, significantly lower than in previous years, and the net profit margin also fell.

An aluminum industry analyst told the Daily Economic News that, judging from the general environment, the terminal demand for aluminum consumption is now at a relatively weak stage. The price of aluminum is also far lower than a few years ago. "in the previous few years, the price of aluminum (ingots) went up to 17, 18, but now it is about 13, 000 or 4, with a maximum of no more than 15, 000." "in terms of scale, Hongqiao's production capacity has also declined year-on-year," it said. "

In the eyes of the outside world, the most important comparative advantage in Hongqiao electrolytic aluminum business comes from the cost, especially the self-provided power plant. Through self-provided power plants, self-built power grid, residual electricity direct marketing, isolated network operation, to achieve vertical business integration, not controlled by the generation time limit, which is known as the Weiqiao model. Through this model, China Hongqiao solves the power problem and makes the cost of electrolytic aluminum lower than that of its peers.

However, due to the conflict with the existing power system, the Weiqiao model is controversial. Under measures such as the state encouraging the expansion of cross-provincial power transactions to reduce the price of electricity for general industry and commerce, China's Hongqiao self-provided power plants also have the potential to lose their cost advantage.

In September 2018, Weiqiao Aluminum Power announced that the Shandong Provincial Price Bureau had issued relevant notices one after another, and from July 1, 2018, enterprises of self-provided power plants should pay policy cross-subsidies according to their own electricity consumption. The standard is 0.1016 yuan per kilowatt hour (including tax, the same below). July 1, 2018 to December 31, 2019 as the transition period, the transition standard is temporarily implemented at 0.05 yuan per kilowatt hour. At that time, Weiqiao Aluminum Power said bluntly that if the policy was implemented, to a certain extent, it would weaken the cost advantage of the group's own power plants.

Weiqiao "Empire" after the retirement of Zhang Shiping, the richest man in Shandong Province: the scale of textile and aluminum is still in the forefront of the world

Translation 08:18:57AM May 17, 2019 Source:Daily economic news

SMM News: on the evening of May 15, the Daily Economic News exclusively reported that Zhang Shiping, the richest man in Shandong Province, lived in ICU, 's long-term low-key Zhang Shiping and the Wei Bridge "Empire" behind him attracted attention from the outside world.

Zhang Shiping is known as "the king of aluminum industry" and "the king of cotton in Asia". The brighter label is "the richest man in Shandong". Under the famous, he is only a born in the countryside, only junior high school culture of ordinary people. Starting from the director of an oil cotton factory of a supply and marketing agency, Zhang Shiping gradually founded Shandong Weiqiao Group (hereinafter referred to as Weiqiao Group) and China Hongqiao Group (hereinafter referred to as China Hongqiao Group). The industry straddles the textile and aluminum industries and is quite legendary.

In September last year, Zhang Shiping, then 72, officially handed over his own Weiqiao "empire" to his son Zhang Bo and announced his retirement. After Zhang Shiping retreated, the scale of Weiqiao "Empire" is still huge, but it remains to be seen whether the Weiqiao model, on which it depends for its survival and growth, can maintain its advantages in the future.

A huge empire of textiles and aluminum power

At present, the Zhang Shiping family has Weiqiao Textile (02698, HK), China Hongqiao (01378, HK) two H-share listed companies, and an A-share company Hongchuang Holdings (002379, SZ).

In 2017, through his Shandong Hongqiao (China Hongqiao company) into the predecessor of Hongchuang Holdings * ST Lu Feng, Zhang Shiping elaborated on its industry. At that time, Zhang Shiping actually controlled 34 major enterprises, including Weiqiao Group, Weiqiao Investment and so on.

In Binzhou City, Shandong Province, with Weiqiao Group and China Hongqiao as the core, the Zhang Shiping family has formed two major industrial clusters of textile and aluminum power, and the industrial scale is in the forefront of the world.

Among them, Weiqiao Group sets textile and clothing, thermoelectric and other industries in one. Since 2012, Weiqiao Group has been selected as one of the top 500 enterprises in the world for seven years in a row. China Hongqiao is the whole industrial chain layout of bauxite mining, alumina, aluminum product processing and sales. In 2014, China Hongqiao became the world's largest aluminum producer.

Zhang Shiping started his career in textile. From the textile factory workers, the establishment of their own spinning mill, to the establishment of Weiqiao textile. In 2003, Weiqiao Textiles was successfully listed on the Hong Kong Stock Exchange. By 2005, Weiqiao Textile parent Company Weiqiao Group has become the largest cotton textile enterprise in the world. As a result, Zhang Shiping is also known as the "cotton king of Asia."

At the beginning, at the time of the large-scale expansion and development of Weiqiao textile, it encountered a serious shortage of thermal energy and electric energy. At that time, China was in an era of tight power supply, and power restrictions occurred from time to time. To this end, the state has issued policies to encourage capable enterprises to develop their own power plants. Zhang Shiping raised funds to build the first power plant of the enterprise, which not only solved the power shortage, but also produced a lot of surplus electricity. After the printing and dyeing project of Weiqiao textile started, there was not enough electricity, so the second power plant started again. As a result, its cotton spinning industry chain is getting longer and longer, until Zhang Shiping is interested in the electrolytic aluminum project. In the electrolytic aluminum industry, electricity costs account for 40% to 50%, so the advantage of having its own power plant is obvious.

In 2002, Zhang Shiping established an aluminum co-production company, Weiqiao Aluminum Co., Ltd. (controlled by China Hongqiao). On the basis of the development of cotton textile industry and taking thermoelectricity as a link, Weiqiao Aluminum Industry has expanded to the field of marine chemical industry and deep processing of aluminum materials.

"from textiles to power plants, to printing and dyeing, to the expansion of power plants, and finally to the electrolytic aluminum project, we are just like noodles, with more water and more water, and finally we have developed to the present situation," says Zhang Shiping.

Sales revenue of Weiqiao Group fell in 2018

Later, the profit of the aluminum and electricity industry gradually exceeded that of the textile industry and became the pillar industry of Zhang Shiping. At the end of 2018, Zhang Shiping disclosed his 2018 operating results at the Weiqiao Group meeting: sales revenue of 283.5 billion yuan and profit of 8.7 billion yuan, an achievement that is the envy of many enterprises.

Behind the 2018 report card, Weiqiao Group faces a lot of business pressure. In 2017, Weiqiao Group received sales revenue of 359 billion yuan and a profit of 13.15 billion yuan.

On the other hand, Hongqiao in China has experienced a situation in which there is no increase in income and no increase in profit. In 2017 and 2018, China's Hongqiao revenue rose significantly compared with previous years, approaching the 100 billion yuan mark, but profits failed to achieve a synchronous increase. In 2017 and 2018, the company's gross profit margin was 15.95% and 17.07% respectively, significantly lower than in previous years, and the net profit margin also fell.

An aluminum industry analyst told the Daily Economic News that, judging from the general environment, the terminal demand for aluminum consumption is now at a relatively weak stage. The price of aluminum is also far lower than a few years ago. "in the previous few years, the price of aluminum (ingots) went up to 17, 18, but now it is about 13, 000 or 4, with a maximum of no more than 15, 000." "in terms of scale, Hongqiao's production capacity has also declined year-on-year," it said. "

In the eyes of the outside world, the most important comparative advantage in Hongqiao electrolytic aluminum business comes from the cost, especially the self-provided power plant. Through self-provided power plants, self-built power grid, residual electricity direct marketing, isolated network operation, to achieve vertical business integration, not controlled by the generation time limit, which is known as the Weiqiao model. Through this model, China Hongqiao solves the power problem and makes the cost of electrolytic aluminum lower than that of its peers.

However, due to the conflict with the existing power system, the Weiqiao model is controversial. Under measures such as the state encouraging the expansion of cross-provincial power transactions to reduce the price of electricity for general industry and commerce, China's Hongqiao self-provided power plants also have the potential to lose their cost advantage.

In September 2018, Weiqiao Aluminum Power announced that the Shandong Provincial Price Bureau had issued relevant notices one after another, and from July 1, 2018, enterprises of self-provided power plants should pay policy cross-subsidies according to their own electricity consumption. The standard is 0.1016 yuan per kilowatt hour (including tax, the same below). July 1, 2018 to December 31, 2019 as the transition period, the transition standard is temporarily implemented at 0.05 yuan per kilowatt hour. At that time, Weiqiao Aluminum Power said bluntly that if the policy was implemented, to a certain extent, it would weaken the cost advantage of the group's own power plants.