We analyze the causes of problems in Evergrande Group from four aspects: management, capital, market changes, and Xu Jiayin's personality:
Management issues:
There may be some problems with Evergrande's management structure. As a large enterprise, Evergrande needs a more standardized and refined management process to ensure the stable operation of the company. However, in the process of expansion, Evergrande may have pursued scale too much and neglected the improvement of internal management. This may lead to some problems in the company's decision-making, risk control, financial management, etc.
Funding issues:
Evergrande's capital chain is a very critical issue. In the past, Evergrande expanded rapidly through highly leveraged strategies, but this has also led to a surge in debt size. Especially in 2015, Evergrande took over a number of real estate projects, which further increased debt. Although Evergrande has returned funds by selling assets and other means, this cannot completely fill the hole in debt. In addition, Evergrande's diversification strategy has also increased the company's financial pressure, because diversification requires a large amount of capital investment.
Market changes:
Changes in the real estate market are also an important cause of problems for Evergrande. With the Chinese government's tightening of regulation of the real estate market, the competition in the real estate industry has become increasingly fierce. This puts Evergrande's sales revenue under pressure, while also increasing the company's operational risks. In addition, the impact of uncontrollable factors such as the epidemic may also have a negative impact on Evergrande's operating conditions.
Xu Jiayin Personal:
Although Xu Jiayin is a very successful businessman, a person's decisions and strategies may also be influenced by factors such as his personal background, experience, and perceptions. After taking over Evergrande, Xu Jiayin may have pursued rapid expansion and diversification too much, ignoring the importance of the company's internal management and risk control. In addition, Xu Jiayin may be overly optimistic and risk-taking in dealing with the company's debt problem, resulting in the company's debt scale expanding. The most serious personal problem involves breaking the law and committing crimes! The legendary life of Xu Jiayin, founder of Evergrande Group, recently came to an end, and he was arrested for breaking the law and committing a crime.
To sum up, the root cause of Evergrande Group's problems may be many, including management, funds, market changes, Xu Jiayin's personal violations and crimes. In order to solve these problems, the future takeover of the group will need to carry out in-depth internal reforms and market adjustments to improve the company's competitiveness and soundness.