Author | Matias
Source | Or Matias
From the perspective of financing, although Huawei is not listed, it can raise funds from internal shareholders at any time, and the cost is low and efficient.
In the past few days, Huawei's per capita dividend of more than 500,000 has brushed the screen.
Huawei's internal equity model, as Mr. Xiao said, enterprise bosses should not just talk about learning Huawei's fighting spirit or wolf nature, in terms of treating employees and giving employees equity, learn from Ren Zhengfei?
At the same time, Huawei's high dividends, there is also a situation for the sake of employees, that is, to reduce the tax burden.
According to media reports, 140,000 shareholders, the average dividend is more than 500,000 / person (certainly not everyone is so much). Everyone, the dividend income tax rate is up to 20%.
Considering the income of Huawei employees, this 500,000 is a bonus or salary, and the tax rate is not to say that it is the highest bracket, but it is almost, right?
70 billion, with salaries or dividends to internal shareholders, taxes are not old and young, right?
Moreover, this is 100% legal, not like a listed company to engage in a partner tax avoidance attempt, but also to be recovered 2.5 billion in taxes, and may even be suspected of criminal liability.
Huawei's power, regardless of the so-called leadership strategy and the background of the times, the most important point is that it is not listed, but it is listed.
The important purposes of listing are: financing, reducing holdings, enhancing the company's visibility, and improving the company's transparency. Huawei's current equity model, except for the so-called transparency, is satisfied; Because Huawei issues bonds/notes, it needs to disclose the offering memorandum, which is more transparent than other non-listed companies, such as unicorns ByteDance and Mihayou.
Huawei, (at the end of 2017), has about 80,000 internal shareholders, which is far more than the number of shareholders of most A-share listed companies.
From the perspective of financing, although Huawei is not listed, it can raise funds from internal shareholders at any time, and the cost is low and efficient.
The low cost is reflected in the fact that its financing does not require the so-called investment bank to do homework, which means that there is no need to pay underwriting fees, no road shows, which means that the company saves a lot of management costs.
Now, financing does not need to hold a shareholders' meeting in advance, does not require the approval of the exchange, and does not require the approval of the CSRC.
Just look at the time span from the announcement of the financing plan by the board of directors to the final implementation of the A-share listed company, and you will understand that there is no harm without comparison. As long as the board of directors decides to expand the share capital, then an invitation can be issued to eligible employees, and all that remains is to wait for subscription and payment.
The low and efficient equity financing further reduces the company's interest expense. Similarly, when internal shareholders withdraw, the company will repurchase "shares" according to the latest net assets, because Huawei has always been profitable, and its net assets per share have also increased year by year. In the long run, employees who hold shares will not lose money.
Huawei's internal stocks, two important points, to avoid becoming Ponzi financing: low internal financing valuation, said to be based on net assets for "additional financing"; And in the net profit of the past years, a considerable proportion of dividends: low buying valuation, high dividend payout ratio is high dividend yield, we invest in A shares, H shares or US stocks, isn't this pursuit?
Let's take a look at the disassembly of Huawei's ROE since 2006.
If 10,000 yuan of Huawei's internal shares are obtained at the end of 2005, according to the latest PB = last year's PBX this year's ROE, by the end of 2017, it will be worth about 170,000. This is a very good investment income.
Huawei's shareholder holdings are scattered, which determines that it is like Real Madrid Barcelona Club, and a small number of important shareholders can completely control the company. If the person is capable and visionary, then the company has a great advantage.
According to public reports, Ren Zhengfei holds the most shares, which is about 1.4~1.5% (at the end of 2017). In fact, it is equivalent to the founder/management using very low capital contributions and very high leverage to control the company. If you consider that Huawei is not a listed company, this equity system design is even more powerful than the so-called AB shares (different voting rights).
In the actual operation of the company, listed companies are usually subject to double constraints, with public accusations from activist shareholders and even calls for a vote of confidence by current board executives; Pressure on the company's earnings growth.
Therefore, many European and American listed companies, many require an EBIT rate of 12%+ to sign new business, otherwise, the company cannot meet Wall Street expectations, the stock price may fall sharply, the management will suffer from the pressure of radical shareholders, and even cannot keep its black hat.
Therefore, on the one hand, adhere to the business profit margin, on the other hand, they are reluctant to do some long-term profits, and pay more attention to the short term. Huawei, on the contrary, as long as the management headed by Ren Zhengfei decides, even if there is only 1% of the net profit, it can take orders.
However, in the face of this profit margin, companies outside Europe and the United States would rather lose orders than reduce prices and submit. Therefore, in this case, it is impossible to compete with Huawei. The management is wrong to do anything, only choose to do nothing, and watch the market be cannibalized by Huawei.
Does Huawei have the ability to achieve high profit margins?
First of all, what is the definition of high profit margin? If the EBIT rate is 15%+, then Huawei can hardly do it. However, if it is 8~10%, Huawei can still do it.
In any enterprise, where the distribution of sales revenue goes, various suppliers take a part (services, equipment, warehousing logistics or marketing), government taxes take a part, banks take a small piece, and the rest is distributed between employees and shareholders.
In China, if a company has one or two shareholders accounting for 20-30%+, the distribution between employees and shareholders will most likely flow to the pockets of shareholders, rather than giving more to employees.
However, Huawei's shareholder structure is 1%+, which is the absolute majority shareholder, so when it is distributed, it can be distributed more to employees, usually in the form of salary.
Huawei has 180,000 employees worldwide, and 80,000 employees are shareholders of the company, that is, almost one in two employees is a shareholder, so almost the rights of employees are equivalent to shareholders' rights. It is easy for companies to adopt high wages (Huawei labor costs of 600,000 yuan), plus high profit dividends.
There is a saying that "employees say too tired, high income does not make sense." ”
In fact, high-income industries, which one is not exhausting? BAT, which one is not tired? Which one has less overtime? In fact, overtime is hard and tired overtime is not a problem, the question is, the employee's effort, in the end, did he get the corresponding salary? This is the most important and the most central.
One point of Huawei, which I now agree with more and more, is that it has been mentioned many times on Weibo or on the WeChat public account: learn from special forces and football and basketball clubs - do not raise idlers and lazy people.
Huawei often ruthlessly cleans up idlers and lays off employees, but as far as I know, more often than not, Huawei's compensation is higher than the national standard.
Cleaning up idlers, or lazy people, is an important measure to maintain an organization efficient, foreign companies, such as Nokia, Ericsson, Siemens (communications business), etc., later can not compete with Huawei, in addition to the so-called Chinese engineer dividend, a very important one is the loss of efficiency of these companies.
When there is a rotten apple in a basket of apples, the right thing to do is to decisively dispose of the rotten apple, rather than let it go.
Simple truth, really done, not every enterprise, every enterprise manager can do.
Another great thing about Huawei is that it is often seen in the media - research and development expenditure.
Huawei's current annual R&D expenditure is about 80 billion+ (2017 data). This confirms another previous theory: in a fast-moving market (or country), quick decisions are more important than right decisions.
China is developing too fast and its needs are diversified, so it needs to make quick decisions, and there must be many wrong decisions. But it's not a bad decision that is useless; Wrong decisions will not bring good financial results (Huawei is precisely the largest company that is least burdened by financial results), and the company can have other gains, such as knowing that this road is not possible, such as training the team, and even planting melons to get beans.
In this world, there are no two identical leaves, nor do two enterprises that are exactly the same.