Interface·Financial Association Financial Annual Conference

The following is the transcript (abridged):

Moderator (Fu Weigang): Thank you Jiemian for this opportunity to communicate with all entrepreneurs. I am from the Shanghai Financial Law Institute Fu Weigang. The theme of this forum is the new pattern of "dual circulation" and shaping the core values ??of enterprises. Next, please introduce each guest to the core values ??of their respective companies.

Ma Yuan: I am Ma Yuan from BoCom International Internet and Innovation Center. Let me introduce us. First of all, for Bank of Communications, investment is not only to empower enterprises with equity investment, but also to empower enterprises with a package of other financial services, such as loans and financing. Secondly, in addition to pure investment, we also have strong research capabilities, and the accuracy of investing in companies is relatively high. The reason is that we use qualitative and quantitative methods to rigorously evaluate companies from macro and micro perspectives and consider the entire value of the company. Colleagues, we have also formed a complete system in investment. For example, in the first two years of C-side consumer Internet, we seized opportunities in several fields such as the O2O field, BAT core assets, and independent track unicorns, and transformed after two years. Investment in enterprise service 2B forms excellent enterprise rights, responsibilities and investments from top to bottom, from the SaaS level to the data center to the virtualization level. Above, thank you!

Han Gang: My name is Han Gang, from Cedar Holdings Group. Cedar Holdings was established in 1997 and is headquartered in Guangzhou. It is a Fortune 500 company. After more than 20 years of development, Cedar Holdings has become a private enterprise group with a relatively complete international network in the field of bulk commodities in China. Follow the host's instructions and describe the core values ??in one or two sentences. Cedar's bulk commodity supply chain network provides important services to Chinese manufacturing companies in ensuring raw materials and markets, and also plays an active role in solving bottleneck projects and introducing core technologies.

Wang Hongliang: I am Wang Hongliang from Hehe Asset Management (Shanghai) Co., Ltd., and our parent company is Hehe Futures Co., Ltd. Hehe Futures was established in 1993 and is headquartered in Taiyuan, Shanxi. Hehe Futures has certain advantages in terms of national qualifications. Since the introduction of new regulations on asset management, the state has required financial institutions to establish risk subsidiaries and asset management subsidiaries, which is actually beneficial to the development of Hehe Futures. Currently, of the 150 futures companies in the country, only 85 have 100% risk subsidiaries, 25 independently operate asset management subsidiaries, 17 have fund sales qualifications, 2 companies have full license qualifications, and 1 is currently in the A-share market. Listed. Therefore, relying on the advantages of established financial institutions, Hehe Futures has outstanding advantages in the futures market and products. Hejian Management is headquartered in Shanghai. Since its establishment, we have made many asset management products and some industrial products. In the future, we will focus on launching more standardized products, expanding the company's scale, and deepening our market competitiveness. When it comes to company value, we believe that "cooperation is the only way to win." We can win if we cooperate with customers, employees, enterprises, and society.

Liu Xiyuan: I am Liu Xiyuan from Royole Technology. First, let me introduce Royole. Royole is a technology company that produces fully flexible displays and fully flexible sensors through independently developed core flexible technologies, as well as a full range of new generation human-computer interaction products including folding screen mobile phones and other smart devices. Folding screen mobile phones have become very popular recently. In fact, the world's first folding screen mobile phone was produced by Royole. From the screen to the hinge to the operating system, it was all designed by Royole itself.

In 2012, three Stanford Ph.D.s returned to China and founded Royole, setting up offices in Shenzhen, Hong Kong and San Francisco. In 2014, we released the world's first fully flexible color screen, the thinnest with a thickness of only 0.01 mm. Before this, the so-called flexible electronic technology was only theoretical knowledge in textbooks, but Royole has turned it into a reality. In 2018, Royole's fully flexible screen large-scale mass production line was officially put into production, which symbolizes that Royole Technology has truly established the world's first fully flexible screen large-scale mass production line with independent intellectual property rights. In October of the same year, Royole released FlexPai, the world’s first foldable screen mobile phone. On September 22 this year, we released the second generation folding screen FlexPai 2. At the same time, Royole has also established partnerships with more than 500 companies around the world, including Airbus, Louis Vuitton and so on.

When talking about Royole Technology’s core competitiveness, it can be said to be independent innovation. In public perception, Korean companies have always occupied the technical route advantage in flexible display or the entire display field. But since 2012, Royole has launched an independent technology route that keeps pace with Samsung - the ultra-low temperature non-silicon process integration technology route, the English abbreviation is ULT-NSSP, which is also our core competitive advantage.

Moderator (Fu Weigang): Thank you very much for your introduction. I did my homework before hosting the roundtable forum and found that Royole is a pioneer and leader in the global flexible technology sector. As a leader, what challenges do you think companies face when exploring no-man's land?

Liu Xiyuan: Each stage encounters different challenges, which can be roughly divided into three stages. The first stage is the process from 0 to 1. There is no reference in this process. When our founder Dr. Liu Zihong looks back on this process, he often describes it as like digging a tunnel with a flashlight, without any light in front. , but we feel that the light is ahead, and we use the glimmer of faith to explore the way forward bit by bit. In 2014, it developed and produced the world's thinnest color fully flexible screen, proving that Royole's independent core technology route is feasible. This process is from 0 to 1.

The second stage is the process from 1 to N to achieve large-scale mass production of fully flexible screens. The investment in a flexible display mass production line is basically 30 to 40 billion. Royole did not have the funds at the time. How to achieve mass production? At that time, we received support from some investment institutions through various channels and invested the money into the production line as if we were crossing the river by feeling the stones. Because there is no reference, if you have to form a team to do it yourself, you need enough professional talents and funds, and enough support from all aspects. Each aspect has a huge workload. Our founder once said that there were more than 3,000 procurement meetings for this production line alone, with an average of three or four hours each. The time and workload spent behind this was huge, but without this process, there would be no Ways to use these resources to achieve new things. Finally, in 2018, we successfully launched the world's first large-scale mass production line for fully flexible display screens.

The third stage is the commercialization process. The biggest difficulty faced by many innovative technology companies in China is doubt. Royole's process from product development to mass production to commercialization needs to follow the historical laws of the development of things. Including our cooperation with Airbus, it took nearly four years from the establishment of the strategic partnership in 2017 to its further advancement this year. This process is relatively long. This is actually the same as Tesla. Ten years ago, people may not have thought that there would be a company like Tesla, but today, Tesla has broken out into its own world. It is indeed difficult to quickly introduce new products and technologies to the market, so we hope that everyone can give more support and understanding to innovative companies.

Moderator (Fu Weigang): Mr. Liu talked about the challenges Royole encountered, from 0 to 1, from N to N+. When we participate in various forums, we will also find that the format of the venue has changed. In the past, the background board was made of plastic spray, but now it is an electronic display screen. As technology advances, display carriers are constantly changing. Twenty years ago, the largest consumer of display carriers was televisions, but now many people think it is mobile phones. What other changes do you think will happen to displays as technology advances?

Liu Xiyuan: This is a very good question, and it is also a question that many investors and media often ask Royole. First of all, we see the trend of technological development: personal computers in the 1980s brought about improvements in work efficiency; later the Internet brought interconnection; and then to the mobile Internet, communication between people can be done anytime and anywhere through mobile phones. It can be realized; now and in the future will be the Internet of Everything, that is, the era of intelligent IoT. There are three very important infrastructures in this era. The first is AI. There are more and more links between things and things and people and things. The amount of data and calculation is very huge, which requires artificial intelligence algorithms with very powerful computing power. Process the data. The second is 5G. We must have high-speed channels to allow all information to be exchanged quickly without delay. The third is interaction. The true Internet of Everything is the interconnection of all items. Even flower pots, water cups, toothbrushes, etc. can become carriers of human-computer interaction.

Such interaction requires interactive interfaces and media that break through the limitations of two-dimensional physical space. This is why we cannot interact with all devices now. Fully flexible displays based on flexible electronic technology can break through the limitations of physical space and attach to any surface. to make the Internet of Everything truly possible.

Today I will introduce several cases so that everyone can more intuitively understand where fully flexible screens can be applied. The first example is Royole’s cooperation with Louis Vuitton. This cooperation originated from LV's future plan at that time. LV made luxury clothing, bags and accessories. After seeing Royole's fully flexible screen, they imagined that in the future, the surfaces of all LV's clothes, bags and other products could be made of screens. "Future Canvas". Therefore, LV and Royole worked together to create the world's first flexible screen handbag, which made its public debut at the Louis Vuitton 2020 Early Spring Women's Fashion Show in New York, USA. This kind of flexible screen bag can be completely interconnected with the mobile phone. The bag can control the mobile phone through touch, and the mobile phone can control the bag. In this process, the information exchange is very smooth. There is also the Airbus company just mentioned. They chose Royole for three reasons. First, the natural advantage of the fully flexible screen is that it is light and thin and can be used as an aircraft accessory. It can not only reduce the weight of the display device itself on the aircraft, but also further reduce the weight of the display device itself. The weight of the structural components used to fix the display screen; secondly, the application of flexible screens on aircraft can effectively reduce fuel consumption and carbon emissions while reducing weight. An aircraft can save nearly one million US dollars in fuel costs a year. This It is of great benefit to the aviation industry; third, the fully flexible screen will not break, which avoids the risk of fragile hard screens and accidental injuries to passengers, and improves flight safety. In addition, in smart homes, flexible screens are also widely used. Today's speakers can only listen to music, but in the future, flexible screens can be attached to the surface of speakers, which can simultaneously display information such as text, pictures, and videos, and enjoy an immersive visual experience. We believe that in the future, all items will be interconnected, and the data and information brought by the Internet of Everything will be interactive, which will bring more convenience and more possibilities to everyone's daily life.

Moderator (Fu Weigang): Thank you Mr. Liu for describing a future scenario where flexible screens are ubiquitous. Thank you. Next, I would like to ask Mr. Wang of Hehe Asset Management. We said that the parent company of Hehe Asset is Hehe Futures. Why was a Hehe Management Company established? I think the company’s main business is fixed income +, can you introduce it?

Wang Hongliang: Fixed Income+ is a product that Hehe Joint Venture will launch next year. We will launch Fixed Income+ next year. On the one hand, it responds to the newly launched new asset management regulations and promotes policy standardization and net-valued products; on the other hand, we launch Fixed Income+. On the one hand, it also improves investors’ returns through the secondary market and the use of some strategies.

Since 2016, Hehehe Management has mainly produced bill-based products, specifically bank bills. As we all know, China is currently the second largest economy in the world. Therefore, in the trade economy, the application of bills cannot be avoided in the exchange of goods between companies and between companies, so bills are widely used. From January to November 2020, I saw on the Internet that the current accumulated commercial bills have accounted for about 17 trillion, and all bills this year should exceed 30 trillion - so the domestic market for bills is very huge. We focus on the bill industry, focusing on fixed income + products. From a system and policy perspective, after the country implemented the Negotiable Instruments Law in 2004 and the implementation of the Transaction Management Measures in 2016, our instrument business has been standardized; after the electronic instruments became electronic in 2016, through technological innovation, the instrument exchange business has become more transparent , Flexibility. Bills brought convenience and liquidity to enterprises in terms of capital flow, which was one of the important reasons why we promoted it at that time. For Hehe, we have many years of bill experience and a very strong trading relationship. For investors, we are a good choice from the perspectives of risk, safety, and return. The above is our current product architecture.

Moderator (Fu Weigang): When Mr. Wang talked about your company just now, he talked about the new regulations on asset management. We say that the asset management industry and the financial industry themselves are financial risk industries, so new regulations are released almost every year. The risks are different every year. This year, many people in the fixed-income industry, especially those in the debt industry, are discussing the issue that the financial industry will never be able to escape debt. What do asset management companies or Hehe companies think about the debt or debt market?

Moderator (Fu Weigang): Thank you, Mr. Wang.

Next, Mr. Han just introduced that Cedar Holdings has many supply chain resources at home and abroad. How do you think commodity futures and bulk commodities can serve domestic users in the context of dual circulation? For example, some time ago, many cities experienced power outages. Some people say it is due to lack of coal, and we may encounter similar things in the future. How does Cedar Group provide services to the country? Thanks!

Han Gang: China is facing two major crises this year. One is the crisis caused by the epidemic challenge; the other is the crisis of Sino-US trade frictions, including traditional trade frictions, technological frictions, etc., especially the US in high-tech. Restrictions suppress us. The epidemic crisis and the Sino-US trade friction crisis finally led to a very different problem, that is, supply chain problems. In fact, whether it is the supply chain interruption caused by the epidemic or the supply chain interruption caused by Sino-US trade friction, supply chain security has become a hot social issue and has also become a national strategic issue. How to ensure the supply chain and how to provide supply chain services to enterprises, this is what Cedar can and is engaged in.

After 20 years of accumulation, Cedar has established the most complete international marketing network in China’s commodity industry around the world, with subsidiaries, offices and branches in more than 30 countries around the world. There are institutions in major developed countries and important developing countries around the world. These network institutions play an important role in solving my country's supply chain problems in three aspects.

First, ensure raw materials for Chinese manufacturing companies. The host just mentioned that coal is one of the important raw materials. The supply of coal in the south is relatively tight this year. In fact, the supply of not only coal but also iron ore is also tight. After more than ten years, iron ore has once again become a crazy stone, with prices rising sharply. These iron ores have significantly pushed up the manufacturing costs of steel companies. How to stabilize these high prices? There are actually many ways. For example, since this year, we have used our international network to directly import large quantities of pig iron from Brazil, Japan, Russia and other parts of the world to hedge against high-priced iron ore, increase profits and reduce costs for steel mills. Without a mature network to obtain primary supply, it is difficult to seize these opportunities and solve these resource bottlenecks. This is the first point. It is our contribution to Chinese manufacturing companies in ensuring raw materials. By ensuring raw materials, we ensure the stability of the supply chain of Chinese manufacturing companies.

The second is to protect the market. China's manufacturing industry is second to none and it is the largest manufacturing country. In the context of trade friction and the epidemic, how can we maintain foreign markets, especially foreign high-end markets? Our overseas network plays an important role. For example, two days ago, CITIC Special Steel and I were negotiating for next year’s annual cooperation. By the way, CITIC Special Steel is the largest special steel company in China and the largest special steel company in the world. It produces 14 to 5 million tons of special steel every year. This kind of steel is not ordinary steel, and the price is three to five times higher than ordinary steel. Some are 10 times more expensive, and their scale and value are very high. CITIC Special Steel produces high-end steel products and transports them to high-end markets such as Europe and the United States, which requires a lot of local technical services, after-sales services, and people. Since the epidemic, Chinese people have been unable to leave and foreigners cannot come in. At this time, our overseas network has played an important role - the overseas network is composed of local employees and can provide very timely services to local customers on behalf of CITIC Special Steel. Therefore, our cooperative relationship with enterprises is very harmonious, and we play an important role in protecting the market for Chinese enterprises.

The third is to introduce core technologies to prevent chain breaks caused by foreign technology monopoly. After the United States unreasonably restricts us due to technological friction between China and the United States, we can also highlight the value of the network in introducing technology. We took the lead in introducing Germany's green and environmentally friendly HPPO technology (propylene oxide) for the listed chemical company of Cedar Group - becoming the first German transfer of this technology globally; we also communicated information with some companies in the UK and France, We coordinated and negotiated and introduced some neck-locking technologies in new materials. I won’t go into specific projects here. In the future, China will face more and more technological frictions. We believe that through a two-pronged approach of domestic R&D and overseas direct introduction, we can acquire technology and protect the domestic industrial chain and supply chain.

In short, the role and value of the global supply chain we have is growing. Just now you asked what contribution Cedar has made to dual circulation. I think that Cedar’s mature supply chain network all over the world has made great contributions to our country’s manufacturing industry in terms of ensuring supply chain, raw materials, market and introduction of core technologies. A small contribution.

Moderator (Fu Weigang): Thank you, Mr. Han, for your introduction, and thank you Cedar for supporting Chinese manufacturing companies in raw materials, supply chain, and technical warfare. Despite the external world, especially the trade friction between China and the United States, China is opening wider and wider to the outside world. There must be many companies like Cedar going out and establishing their own networks around the world. As a relatively mature representative of going global, can Xuesong provide some advice to companies that still want to go global?

Han Gang: It should be said that our country’s manufacturing industry is very strong. In terms of supply chain, Cedar has done some work, which has certain reference significance. First of all, as an international enterprise, it is very important to focus on the construction of the international supply chain system. Cedar's international network was not built overnight. After 20 years of accumulation, we built it bit by bit through various forms such as establishment, preparation, mergers and acquisitions. This process was full of hardships, the ups and downs of the market, and maintaining the network was also difficult. Face various challenges. However, the group's senior management attaches great importance to network construction, focusing on persistence and long-term accumulation in this area, and finally formed a global network advantage.

Secondly, the construction of supply chain network facilities is an unswerving construction process, and attention must be paid to investment and development. For example, we have a dedicated terminal for scrap steel in the United States, a long-term leased chemical warehouse at a terminal in Belgium, and a steel processing center in France. The current supply chain cannot simply allocate trade. It is more about combining value-added processing with greater efforts and determination in infrastructure investment and construction.

Thirdly, to maintain the supply chain, we must pay attention to the long-term cooperative relationship with customers. Market prices fluctuate. Sometimes the price in China is high, and sometimes the price is low. We cannot export when the price is low and not export when the price is high. In fact, we need to maintain our international market share and have long-term agreements with key customers in the international market. Take the example of CITIC Special Steel I gave just now. What kind of customers will we face through long-term cooperation? Through European automobile supporting Tier 1 and Tier 2 companies, we directly face and serve first-tier companies such as German Mercedes-Benz, BMW, Volkswagen, and French Renault... These companies require you to cooperate for a long time, and the entry barriers are very high and require a lot of localization. service, but once you get in, you can do it stably for a long time.

Finally, I think a very important point is that building a mature international network cannot be accomplished by the Chinese alone. From a group perspective, it needs an international layout, but in the operation process, it needs to operate locally. Our international network executives are all native – Brazilian in Brazil, American in the US, Belgian in Belgium, British in the UK and German in Germany. We determine the general direction policies from the company's board of directors level and the group's strategic direction level, but during the implementation process, we must achieve localization and localized operations, so that overseas corporate networks can take root. Based on the country's dual circulation policy, we must make overseas networks a living chess game like a game of Go, so that we can develop sustainably and contribute to the international and domestic dual circulation.

Moderator (Fu Weigang): Thank you Mr. Han for sharing. I saw Mr. Liu from Royole Technology nodding frequently, and Mr. Wang also meant the same when sharing. Mr. Ma studies the Internet. I mentioned Dingdong Grocery earlier. Many companies like this have solved a lot of problems during the COVID-19 epidemic. Do you think China’s Internet-related industries can make great achievements under the dual cycle pattern?

Ma Yuan: Internet companies doing fresh food is not a very new topic. Hema, Little Elephant, etc. have already explored it. Let me start by saying that the entire set of explorations in the fresh food industry is actually a process of reshaping the supply chain. The original vegetables are transferred from the vegetable farmers to the vegetable market through different agents, and finally to the people's tables. For quite a long time, vegetable farmers have been swallowed up by supermarket renovations. The third wave of Internet exploration is actually a process of reshaping the supply chain. In a complete ecosystem, if vegetable farmers actively transform, they will also find their own position. Double circulation involves several concepts, one is to promote domestic demand, and the other is to promote supply efficiency. We talked about Internet+ back then, such as +e-commerce, +games, +education, +medical care, etc., which were all explored by Internet companies in 2C-side services. E-commerce has many benefits for serving the entire society, and there are still many ways to go in the future. On the supply side, Internet companies have not explored 2B very much because 2B brands are not particularly famous. As early as 2007 and 2008, Wang Xing talked about the transformation from 2B to 2C in the second half of the Internet talk. At that time, the Internet did a lot of 2B things. The most typical 2B was public cloud, including Alibaba Cloud, Tencent Cloud, etc.

The public cloud has empowered industries including party and government agencies, hospitals, financial institutions, manufacturing and other industries. Their data can be put on the public cloud, imported and stored, then analyzed using the data, and finally provided with business decisions. This is the exploration and contribution of 2B.

Are there any Internet companies that put hard technology into innovative business? There are fewer voices heard in this regard. I have studied the industry for many years. I first saw Baidu developing OE and AI, and I saw Tencent Research Institute hiring some well-known experts to explore in the field of AI. For example, they make AGV robots, drone delivery, and Meituan’s unmanned delivery vehicles. These are closely related to their core businesses. These are the core businesses of Baidu and Didi.

Employment can also promote consumption. For example, Didi has more than 1 million active riders, and Meituan has more than 1 million active professional riders. This is conducive to promoting employment and driving economic development.

Ma Yuan: This question is very good and very consistent with the current antitrust topic of community group buying. Antitrust is not a new term, nor is it a term specific to China. In the United States, there are many antitrust policies to encourage innovation and a relatively fair and good competitive environment. China actually has anti-monopoly policies. More than ten years ago, Focus Media and Sina were rumored to merge, but the merger was later halted due to anti-monopoly reasons. From 2015 to 2017, we saw a lot of mergers and acquisitions, and found that it was better for Internet companies to compete viciously with each other and burn money than to shake hands, draw boundaries, and maintain stability.

I think the recent antitrust measures include two aspects. On the one hand, they target mergers and acquisitions, and on the other hand, they target some special market competition behaviors. The policy's attitude towards mergers and acquisitions has changed the most. If it is just a fine, I feel that supervision can also promote it and increase the logic of support and encouragement for many Internet companies. The United States has more stringent measures against mergers and acquisitions.

Conversely, in the long run, where does the value of a company lie, that is, whether the relationship between the supply side and the demand side changes? The most critical thing is whether the company's supply can solve the pain points of the demand side. It would actually be okay if these two things don’t change, and the competitive landscape doesn’t change either. It’s just some short-term market behaviors, such as big data maturity, subsidies, etc. Long-term factors also depend on the node of fundamentals.

Moderator (Fu Weigang): There has always been antitrust. Whether a company has value depends on its value to users or the market. Thanks! This concludes our unit. Thank you to the four guests.