As one of the top 500 companies in Fortune China for 14 consecutive years, Zhejiang Merchant Zhongtuo is full of legends in its development history: from the foot of Yuelu Mountain to the bank of the Qiantang River, from a traditional trader to an industry-leading supply chain integration service provider, from the industry's "top stream" to actively transform and successfully "start a second business".
With a strong interest in Zheshang Zhongtuo, led by Han Hongling, professor of the EMBA "Strategic Financial Statement Analysis" course of Zhejiang University, the 2023 class 2 students walked into Zheshang Zhongtuo Group. Lei Bangjing, deputy general manager and secretary of the board of directors of Zheshang Zhongtuo Group Co., Ltd., and Xu Jiannan, deputy general manager of Zheshang Zhongtuo Group Co., Ltd. (EMBA2021 students of Zhejiang University), respectively shared the themes of "Zheshang Zhongtuo Management and Innovation" and "Analysis and Application Practice of Photovoltaic and Energy Storage Industry".
The comprehensive gross profit margin of bulk trade is about 2%.
Ultimate risk management under the profit model
Before the visit, the students had a suspense: the comprehensive gross profit margin of the trade industry is very low, and the operating risk of any business will need to be made up by the operating profits of N businesses, so how does Zheshang Zhongtuo maintain profitability and continuous growth? How can it achieve a return on net assets of as high as 25% for many years? Zheshang Zhongtuo's profit model must contain the ultimate business philosophy and exquisite risk management system.
When entering the exhibition hall with a sense of science and technology, students immediately found that the exhibition hall itself reproduces the core course teaching scene of the business school, presenting the mission, vision, values, strategy formulation and implementation, organization and management, business model, risk control, selection and employment mechanism, etc.
Lei Bangjing, vice president and secretary of the board of directors of Zheshang Zhongtuo Group, introduced the company's business ideas, organizational structure, incentive and restraint mechanism, cross-regional and multi-category operation and management, strong risk management and control, infrastructure construction and the fruitful results brought by it from the company's strategic decision-making. He said that the company focuses on the business philosophy of "professionalism is the winning rate, and delicacy is profit", and through the innovation of market-oriented systems and mechanisms, it gathers internal resources to empower excellent entrepreneurial teams, and provides an entrepreneurial platform for teams with "ideals, goals, passions, tenacity, responsibilities and achievements".
Lei Bangjing, vice president and secretary of the board of directors of Zheshang Zhongtuo Group
In Mr. Lei's introduction, Zheshang Zhongtuo's "Eight Classic Models" have turned the traditional bulk commodity trade into a modern supply chain integration service, opened up the intermediate processing links, integrated digital applications, integrated industrial chain resources, achieved the ultimate risk control, and achieved continuous growth in net profit with low gross profit, forming a core competitive advantage. Through the values of altruism and long-termism, as well as the customer-centric mission, we have built the cornerstone of our long-term business. Zhongtuo organically combines the high-quality resources of state-owned enterprises with the flexible mechanism of private enterprises, and establishes an insurmountable moat in the bulk commodity trading and logistics industry. With the six-energy performance management model of being able to enter and exit, to go up and down, and to be more and less, we continue to stimulate the passion of each employee to start a business, so that Zhongtuo can creatively enter the booming new energy track from commodity trading. Through the study of the management model of Zheshang Zhongtuo, we have the opportunity to combine classroom knowledge with excellent business management practices, and have a deeper understanding of the role of financial reporting in corporate strategic decision-making.
Continuous Business Innovation: The Rise of the New Energy Division
Xu Jiannan, vice president of Zheshang Zhongtuo Group, gave an in-depth analysis of the development status, future trends and solutions of the photovoltaic and energy storage industry in his keynote speech on "Analysis and Application Practice of Photovoltaic and Energy Storage Industry".
Xu Jiannan, vice president of Zheshang Zhongtuo Group, Xu Jiannan, vice president of Zheshang Zhongtuo Group
He shared the layout of Zheshang Zhongtuo in the field of photovoltaic and energy storage, development planning and cooperation mode, as well as the achievements of laying out a new track of new energy to create a "second growth curve". He emphasized that photovoltaic energy storage technology has a wide range of application scenarios, which can not only be used for power supply and distributed energy systems in urban and rural areas, but also provide stable and reliable power guarantee for industrial and commercial fields. In addition, photovoltaic energy storage technology is playing an increasingly important role in the field of mobile energy solutions. After the keynote speech, the students' questions were answered in detail.
As a state-owned enterprise with a revenue of 200 billion yuan, corporate culture is the cornerstone of standing firm and growing steadily. The spirit of "entrepreneurship, innovation and efficiency" advocated by Zheshang Zhongtuo has been integrated into the daily work of employees. During the visit, we noticed that the management style is pragmatic and trusting, the communication between the management and employees is full of respect, and the teamwork is tacit, which undoubtedly provides a strong impetus for the sustainable development of the company.
Han Hongling, Professor, School of Management, Zhejiang University, EMBA "Strategic Financial Statement Analysis", Zhejiang University
Finally, Professor Han Hongling, who is also an independent director of Zheshang Zhongtuo, made a concluding speech. He believes that as a large-scale enterprise with a revenue of more than 200 billion yuan, such a large-scale enterprise maintains a healthy operation with low gross profit and steady growth, and the enterprise management must have unique advantages, coordination and communication between various departments, management innovation and talent incentive mechanism are worthy of our learning. This visit is very enlightening and worth thinking about for EMBA students.