Economic Observer Network reporter Chen Yifan Beijing reported that under the shroud of the epidemic in Wuhan, small and medium-sized enterprises are facing another "battlefield" outside the ward, facing a "test of life and death".
Before the interview, Wang Ge had just finished an online meeting with the company. February 4 is the second day of the Spring Festival to resume work, but Wang Ge has been working online for many days. Although it is only one day after the State Council issued a notice on February 3 to work normally, Guokejia and the front-line team have held online meetings with more than 90 companies to understand the needs of enterprises.
Wang Ge is the managing partner of Guokejia and The Fund, and is a veteran of the hard technology investment field for many years. Founded in 2011 and with a background in the Chinese Academy of Sciences, Guoke Jiahe is a first-class enterprise directly managed by Guoke Holdings, and its investment is mainly concentrated in high-tech innovation enterprises with technical barriers such as hard technology, information technology, and life sciences.
"The fundamentals are still the core competitiveness of enterprises, the epidemic will always pass, those who survive are good enterprises, and the epidemic will accelerate and amplify the problems that enterprises have existed in the past." Wang Ge said that everything is premeditated, deployed early, and arranged early, and it can benefit from the market rebound period after the end of the epidemic in the future.
With more than 90 invested companies, what is the impact of the epidemic? Wang Ge's judgment is: the situation is more dangerous. The economy is already in a downturn, and the direct consequence of the epidemic is that both logistics and the flow of people have been interrupted, and restoring lost confidence may be as important as preventing and controlling the epidemic. Wang Ge said that for enterprises, the first place in this period is to be alive, followed by the preparation for the market rebound in the later stage.
However, under the epidemic test, there are also enterprises that have partially benefited. Wang Ge said that the outbreak of the epidemic involves three types of enterprises, one is pathogen detection type; secondly, there is another type of enterprise is medical supply chain enterprises; and then artificial intelligence enterprises, such as some disinfection robots, long-distance robots, etc., can be applied in the application scenarios of hospitals.
Although these companies are facing positives at this time, they still need to be vigilant about whether there will be excess capacity after the epidemic and whether there will be a backlog after the epidemic.
Being alive is number one
Economic Observer: After the outbreak of the epidemic, how to communicate with the invested enterprises, and what aspects of the enterprises' concerns are concentrated?
Wang Ge: We have been working since the outbreak of the epidemic, meeting online with more than 90 companies to understand their situation and provide our resources, including paying attention to the health of employees.
Now the first level of concern for enterprises is the protective materials of employees, which are difficult to buy now, but the first thing that management ensures is the safety of employees.
The second is the survival of the enterprise itself, there are some enterprise cash flow may only be enough to maintain a limited period of time, the shortest is really 2-3 months, if the business can not have the ability to recover now, after two or three months of cash flow cut off can not continue to operate.
And some of the financing that has been negotiated will be delivered immediately, but the due diligence cannot be done, and the financing time is expected to be directly postponed.
The third issue is accounts receivable. The business survives, but what if the customer can't survive? Failure to do so will result in a large number of bad debts. This is a problem of the industrial chain. Therefore, it is necessary to look not only at the customer, but also at the customer's customer.
For example, for example, for enterprises that do SAAS platforms, customers are large-scale consumer enterprises or large-scale hotel chains that are managed in the background, and customers are in the hardest hit areas, and there is a high probability that they will have bad debts. This situation is that the enterprise itself is no problem, and it is also the leading position in the industry, but it will affect its own payment collection and cash flow due to customer operating difficulties.
The Economic Observer: What impact will the epidemic have on small and medium-sized enterprises?
Wang Ge: The impact should be seen in two parts.
For small and medium-sized enterprises, I personally think it is still more dangerous. During the economic downturn, there was also an epidemic, and it was still difficult for start-ups to live. The epidemic has caused many logistics, people flow communication and exchanges have been interrupted, and more troublesomely, everyone's confidence has been seriously affected, and now restoring confidence is even as important as the epidemic itself.
At present, companies are entering a state of defensive challenge to ensure that no layoffs are made. There is also the continuous expectation of the epidemic, because it is unknown when the epidemic will end, in this uncertain context, it is difficult for everyone to make a decision, the money that should be raised cannot be financed, because the due diligence of investment institutions cannot be done, and the pace of financing must be postponed, at least three months, which is a big challenge for the cash flow of enterprises, and survival is the first.
Finally, it is expected, because it is unknown when the epidemic will end, it is difficult for everyone to make decisions about the uncertain situation, the money that should be raised cannot be raised, the due diligence cannot be done, and the rhythm must be postponed, at least three months. This is a big challenge for the cash flow of the enterprise, and surviving is the first priority.
But the epidemic has also brought benefits to some enterprises.
For example, these three types of enterprises, one is pathogen detection, the second type of enterprises is medical supply chain enterprises, and then artificial intelligence enterprises, such as some disinfection robots, long-distance robots, etc. can be applied in the application scenarios of hospitals.
For example, the micro-remote gene we invested, using the microbial metagenomic to participate in the early detection of the new coronavirus in Wuhan, successfully developed the "new coronavirus (2019-ncov) nucleic acid detection kit (constant temperature crispr method)" in only 5 days, and now the company is working overtime, cooperating with 25 hospitals to complete more than 3,000 tests.
There are also some medical supply chain enterprises, such as our Yunhu Technology, which provided affordable materials to the epidemic area through platform subsidies for the first time and established a logistics support line in the epidemic area.
There is also titanium rice robot, according to the actual needs of the hospital, specially made 2019-ncov case disinfection robot, while providing the hospital with titanium rice isolation ward service robot, medical material delivery control robot, service in Wuhan Union Hospital and other frontline battlefields, reduce the probability of medical cross-infection, and truly achieve scientific and technological anti-epidemic.
Converge ideas to core competitiveness
The Economic Observer: For these problems of invested enterprises, how should investors respond?
Wang Ge: In view of the difficulties of anti-epidemic materials, we coordinate the relevant resources of medical enterprises to meet the government's calls and needs on the one hand, and on the other hand, enterprises to unite with each other to try to meet the needs of enterprise employees.
Second, we coordinate funds, and we coordinate convertible bonds for some good companies to provide potential investors to tide over the temporary financial difficulties of the epidemic.
We make business suggestions for each invested company, and use our years of experience to reassure them and do what they need to do. In addition, at present, Beijing, Shanghai, Suzhou and other places have introduced ways to support small and medium-sized enterprises, and we will work with enterprises to make good use of government policies.
For the situation that the financing of the enterprise cannot be temporarily delivered, it is necessary to take decisive measures, and the entrepreneur himself has to raise money or temporarily borrow from the existing shareholders.
If the new investor is very interested in the enterprise itself, but has not yet finished the due diligence, this situation can be part of the funds is debt-to-equity swap, through the way of debt to advance, if the due diligence is not satisfied, there is a bottom interest rate and corresponding clause under the debt-to-equity swap clause, so that the founder team promises to buy back. In any case, it is now necessary to solve the source of money through multiple channels.
For enterprises affected by the upstream and downstream of the industrial chain, the first is to ensure cash flow, and then consult with executives and employees, first pay the basic salary, and then make up, under the premise of legal and reasonable, the salary cost will be reduced, and the enterprise can be alive and running. The second is to lay off the business that should be laid off and maintain the company's core operational capabilities. Third, we should also call on the government and industry organizations to coordinate the introduction of relevant emergency measures, for these small and medium-sized enterprises upstream suppliers, can not slow down the charges, local government tax departments can also delay a period of time before collecting taxes.
The Economic Observer: What suggestions do you have for the development of small and medium-sized enterprises through the epidemic period and the market rebound period after the epidemic?
Wang Ge: Stable cash flow is the consensus, and I will not dwell on this aspect. There is also a core problem that in the end, everyone should converge their thinking on core competitiveness: whether there is a market for your technology and products, and whether there is demand. If there is really this market, there is this demand, then now these demands are just postponed, and when the epidemic passes, it will rebound in retaliation.
So I'm in a meeting with businesses right now to emphasize seeing the light in the darkest of times. Once the epidemic is over, the market as a whole will have to replenish inventory and take back time, and who is ready now will be able to benefit from the market rally period later. On the other hand, some enterprises that have benefited during the epidemic period need to pay attention to another risk. Now that demand has increased significantly and a large amount of inventory is prepared, will there be a large backlog after the end of the epidemic?
In addition, companies need to believe in the resilience of our national economy and need to lay down fundamental confidence at this stage. On the other hand, we must look inward and handle our own technology, products, team operations, management, and cash flow well, so that we can prepare after the market rebound.
The Economic Observer: What impact will the pandemic have on economic trends in 2020?
Wang Ge: The first impact of this epidemic is the toc industry, then tob, and finally tog.
From the category point of view, the first to be affected is the service industry, and the degree of impact depends on when the epidemic can be effectively controlled. In terms of imports and exports, the Sino-US trade friction in 2019, the import and export restrictions caused by the epidemic in 2020, we must at least wait until the port is restored before we can think about this matter. Then there is consumption, consumption will rebound, but it will not be so big, the first half of the year can not go to the movies, will all the movies be concentrated in the second half of the year?
The next GDP troika is still to look at investment, and I think the focus of investment after that is on investment in science and technology, especially in the field of medical and health care. This time the epidemic has more or less exposed that there are still obvious problems in our national public epidemic prevention system and medical and health field, so we simply take this opportunity to make up for the lessons and increase investment in the field of medical and health investment.
Whether it is the primary market or the secondary market, it is early prediction, early deployment, early arrangement, everything is pre-determined, and if it is not predetermined, it will be abolished. We are still confident that we will win this national epidemic prevention war in a relatively short period of time.