An unbiased Fortune 500 list should give the most importance to profit and employee income, the former representing ability and the latter representing conscience.
Author: Jinren
On September 12, the list of China's top 500 private enterprises in 2023 was announced, with JD.com, Alibaba (China) Co., Ltd. and Hengli Group Co., Ltd. among the top three.
▲Part of the list of China's top 500 private enterprises in 2023
I took a closer look at the list and felt that this is not a top 500 list, but a top 500 list, because it values "operating income scale" the most.
Therefore, JD.com ranks first because its total operating revenue in 2022 is 1,046.2 billion yuan. What about its profits? For the whole year of 2022, JD.com's net profit was 10.4 billion yuan, and the net profit under non-GAAP was 28.2 billion yuan, a year-on-year increase of 63.95%.
In fact, it is a very good result, JD.com is a company worthy of praise.
01 Evergrande Country Garden exceeded the entry threshold too much
I have great respect for all the private enterprises that are working hard, including JD.com.
For the "Top 500" list, I think its evaluation criteria are outdated, and the high-quality development stage should pay more attention to profit and employee income, rather than the scale of operating income.
Why do you say that?
What is strong? For the company, high profits and high employee income are strong, because strong and powerful.
The high scale of operating income only means that the plate is large, but if the plate is large and the profit is not good, is it still called strong? That's called virtuality.
According to public information, the entry threshold of the top 500 private enterprises in 2022 will be 27.578 billion yuan. In other words, as long as the scale of operating income exceeds this number, it can be ranked in the top 500.
I said two companies, they must be able to enter the top 500, but everyone must not agree:
In 2022, Evergrande achieved revenue of 230.07 billion yuan, with a total net loss of 125.81 billion yuan.
Country Garden's revenue in 2022 is 430.371 billion yuan, and the core net profit attributable to shareholders is 2.61 billion yuan.
These two companies exceed the "entry threshold of 27.578 billion yuan" is too much, should they be shortlisted in the top 500? Definitely should, because the data is at hand.
So, where are they strong?
One is in trouble, the other is also in trouble.
Needless to say, Country Garden also consciously did not participate in the election.
So I say that "Top 500" is not "Top 500", just "Top 500", it is really just big, it may be big and inappropriate, and it may continue to reduce salaries and lay off employees.
Among real estate enterprises, Country Garden will have the largest number of staff reductions in 2022, with a decrease of 30,773 employees, a year-on-year decrease of about 30.56%, and the number of staff reductions is almost equal to the total number of employees of a Longfor Group, winning the first place in the list of real estate enterprises in 2022.
02 The top 500 list needs transparent data
So, what kind of business should be in the top 500?
I think there are two core metrics to look at: the first is profit, and the second is employee revenue.
The current top 500 list is JD.com's first, but JD.com's net profit in 2022 is 10.4 billion yuan, and the net profit under non-GAAP is 28.2 billion yuan.
Do you know what Alibaba's profit was during the same period? 61.959 billion yuan.
Do you know how much profit Tencent made during the same period? 188.243 billion yuan.
But on the top 500 list, Tencent and Alibaba are ranked behind JD.com.
Let's look at employee income, Hangzhou Daily reported on May 31, 2022:
According to the ranking released by Pulse Circle of Colleagues, Alibaba employees ranked first with an average monthly income of 33,500 in the list of employees' average monthly income.
JD did not make it into the top 10.
I would like to state once again that I am only giving this example to illustrate the irrationality of the Top 500 list, not to have any dissatisfaction with JD.com, on the contrary, I think JD.com, which has created a lot of jobs, is a company worthy of respect.
Also, Zhengwei International is also in the top 500 list, so I won't say anything, only use the public reports of the media to speak.
"E Company" reported: Recently, it was rumored on the Internet that Wang Wenyin, founder and chairman of Zhengwei Group, was taken to restrict consumption, which attracted attention. On the evening of September 5, Zhengwei New Materials (002201), a listed company under Zhengwei Group, issued an announcement that the matter was a consumption restriction order caused by the dispute between other subsidiaries of Zhengwei Group and others over construction contracts, and it had been lifted, which did not have a great impact on the company's operation.
Beijing News reported: The latest financial data of Zhengwei Group after audit that the reporter can find can be traced back to the equity change report released by Zhengwei New Materials in November 2019, which shows that Zhengwei Group achieved revenue of 158.614 billion yuan and net profit attributable to the parent of 2.953 billion yuan in 2018; as of the end of 2018, the total assets of the group were 65.542 billion yuan, the total liabilities were 25.769 billion yuan, and the owner's equity was 39.773 billion yuan.
"Interface News" reported: On September 12, the reporter learned that Zhengwei Huaneng (Shandong) New Material Technology Co., Ltd., a subsidiary of Zhengwei Group, has delayed the payment of wages since the beginning of this year; Starting in June, monthly training examinations will be conducted, and those who score less than 80 points will be deducted from part of the performance salary, and the on-the-job employees will take turns to mow the grass.
Among the top 500 private enterprises in China, the top ten Guangdong enterprises are Zhengwei, Tencent Holdings, Vanke and BYD.
Zhengwei is actually in front of Tencent, Vanke, and BYD, is it appropriate?
Let's talk about another set of data:
From 2017 to 2020, Zhengwei International Group and some of its subsidiaries had multiple equity pledges and movable property mortgages. For example, it has pledged 366.52 million yuan of equity held by Quanwei Copper to the Anhui Branch of China Huarong Asset Management Co., Ltd.; Shandong Zhengwei Investment Holdings Co., Ltd. was mortgaged to Shandong Guohui Investment Co., Ltd. at a price of 500 million yuan; Anhui Susong Hanyu Mining Co., Ltd. was mortgaged to the Harbin Xiangjiang Branch of Longjiang Bank Co., Ltd. for 230 million yuan.
Zhengwei has not been listed so far, but in 2019, it acquired Jiuding New Material, a listed company specializing in fiberglass, and changed its name to Zhengwei New Material. The year-on-year growth rate of net profit attributable to the parent of Zhengwei New Material from 2019 to 2021 is also decreasing year by year, 50.62%, 23.17% and 19.72% respectively. Zhengwei New Materials reported a net profit of 36 million yuan in 2022, down 12.2% from the same period last year.
Is it appropriate that a company with opaque financial data is one of the top ten of the top 500 private enterprises, and it is the first private enterprise in Guangdong, surpassing many famous enterprises?
Will Ma Huateng, Dong Mingzhu, Yu Liang, and Wang Chuanfu find it a little funny?
An unbiased Fortune 500 list should give the most importance to profit and employee income, the former representing ability and the latter representing conscience.
A company that claims to have high revenue but continues to lose money, constantly defaults on employee income, and even cuts salaries should be like Country Garden, know its integrity and not sign up for the top 500.
An unbiased Top 500 list is built under an open and widely recognized audit of financial data, and without transparency and recognition, there can be no real Top 500 list.
Finally, I would like to say that whether there is this top 500 list or not, we should pay tribute to the private entrepreneurs who have fought the way, you are the real economic backbone!