8 Years When A Brand Leaps Away From Industrialization

8 years is a short time for some people, but long for others.

A private capital enterprise that has lived in China for only 16 years has to spend 8 years to get rid of the industrialization mode that it first became famous.

This may be an arduous journey for every Chinese manufacturing enterprise in the process of industrial upgrading.

In constant innovation and doubt,

What is known as change and perseverence, what is accumulation and precipitation.

"In my mind,

It is the core industry, technology and investment are two wings.

It should be said that I have the deepest feelings for clothes. I am an investment decision maker in other industries.

Other industries outside the clothing industry get rich returns, but they just laugh. "

Zheng Yonggang, who fought for 16 years in Shanshan, explained the difficulties of an enterprise that he understood in the process of change with plain words.

In the Chinese business community, Zheng Yonggang and his fir have been widely debated for nearly 8 years.

In 1996, he listed the package of Shanshan stock as the first A share listed company in China's clothing industry. In the same year, he recruited two of the most famous designers in China to push the fashion ladies' "FLRS" to join hands with the famous teachers. In 1999, he carried out the "production stripping" and "channel reengineering", and changed the original self marketing channel to the franchise mode. After moving from headquarters to Ningbo, Zheng Yonggang was also involved in diversification, investing in eight lithium-ion battery materials with clothing. In 2001, Shanshan made a "NIKE like" mode of "multi brand internationalization" operation besides the core brand suit. Even Zheng Yonggang called himself "the man who likes to make nothing". In the early 1990s, he created the "production, supply and marketing one-stop" mode, which built the largest direct selling network of the domestic clothing market at that time.

The development of this kind of leaping development is very difficult to outsiders.

With the disappearance of the LOGO of the Shanshan suit from the high-end shopping malls in the big cities, "Shanshan" has come up with a number of new brands. "Shanshan phenomenon" has even become a topic in the management field.

　　在本刊看來，“杉杉現象”確實足以成為一個管理學話題，但并非因為這個昔日霸主市場占有率的下滑——我們發現，8年前鄭永剛和杉杉開始的改變，恰恰是今日諸多中國工業企業所面臨的共同課題：傳統制造業如何進行產業升級，沿著所謂“微笑曲線”的價值鏈向吳敬璉所說更高端的“生產性服務業”轉移?對一家主業有著輝煌歷史但過于成熟的企業來說，到哪里尋找更具成長性的“第二主業”，以規避原來單一主業的生命周期給企業帶來的利潤風險?中國企業除了依靠勞動力成本和銷售業務員人海戰術之外，應該如何樹立自己的品牌，超越OEM的系統鎖定?一個傳統企業向現代國際化公司的轉型，需要完成哪些組織架構、內部管理、戰略決策、執行機制、企業文化、績效評估、人才更替等方面痛苦的嬗變?

Zheng Yonggang has been thinking for years in the face of the difficulties facing most Chinese entrepreneurs.

Therefore, this article attempts to restore the practice of Shan Shan by changing its practice in 8 years through detailed interviews. It is a glimpse of the fate and exploration of this Chinese enterprise in the past 8 years under the economic climate change. It also shows some possibilities for the wider Chinese business community to move towards the future.

{page_break}

In the past 2005, Shan Shan has ushered in a bumper harvest: revenue exceeds 8 billion yuan, clothing sales increased by 25.8%, and profit grew by 59%, far exceeding the scale of Shan Shan's single clothing brand at its height.

Zheng Yonggang said he breathed a sigh of relief, but the success or failure was still too early.

For Chinese market-oriented enterprises with a history of only 20 years, under the ever changing and complex competitive situation, the only way for them to survive is to innovate continuously, just like the corporate slogan of Shanshan: "Lets change ourselves".

8 years ago, Shan Shan was a hot blooded wonder to the people of Ningbo. Today, Shan Shan is more like history.

At least, it has been shown in the streets of Ningbo which are already quite modern city style.

In the spring of March, Ningbo, the bustling overseas Chinese town on the street, 5 shops, Lecoq, Azzali, Renoma, three famous brand stores in France and Italy are dazzling and gorgeous. In contrast, the Firs Shanshan Western-style clothes shop next door is slightly ordinary.

"In the past 10 years, Shan Shan seems to be busy, but fame is not as good as it used to be."

A local man on the street told reporters.

"No wonder.

Outsiders can only see the surface, for today's Shan Shan, layout is more important than fame. "

After hearing the reporter's story, Zheng Yonggang smiled and was not anxious.

"The 5 brands you see in Oct are all controlled by Shanshan Group."

Zheng Yonggang, chairman of the board of directors of Shan Shan Klc Holdings Ltd, said, "this is the layout, which is the mature experience of the world. It is the result of learning and changing ourselves in the 8 years since 1997."

Such a scenario can indeed be found in the Champs Elysees of Paris.

The famous fashion Boulevard is lined with different brands of high-end clothing and luxury goods stores, a large proportion of which belong to a group.

。

Founded in 1987, the world's top fashion group has more than 50 top luxury brands, including 150 year old LV, ChristianDior (Dior), Givenchy, Ji Xue and Fendi.

"10 years ago, we could monopolize the 37.4% market of Chinese clothing on the basis of" one production and supply chain ".

Zheng Yonggang told reporters, "but today we must learn the complex thinking in the international fashion industry."

"We are prepared to remain silent for 3-5 years and do things steadfastly.

At that time, Shanshan and all garment enterprises in China were "harmonious but different".

Zheng Xueming said.

16 years ago, Zheng Xueming, vice chairman of the board of directors of Shanshan holding company and head of the Shanshan Group, which is in charge of clothing, built a brand of Shanshan with Mr. Zheng Yonggang, the owner of Shanshan.

And in the operation of the whole Shan Shan enterprise Zheng Yonggang seems, Shanshan and all domestic garment enterprises have not been on a level.

Today, compared with 8 years ago, Shan Shan has been quietly "beyond recognition".

The glory of the shortage era and the silence of the surplus Era

The wild fir has become steady. But for many years, there has been little change in the view and standard of Shan Shan.

{page_break}

"People are still used to looking for the old suit of 16 years ago."

Zhou Shifen, vice president of Shan Shan Invest-holding Company, said, "in fact, the sales income of Shanshan holding company is more than 8 billion yuan this year, of which clothing only accounts for 1/3, while Shan Shan suits only account for 8 to 1 billion yuan."

The origin of Chinese fir originated in 1989.

In those days, Zheng Yonggang took over a small factory which was on the verge of collapse. The company named Ningbo Yong Gang garment factory was the predecessor of the Shanshan Group.

Shortly after taking over, Zheng Yonggang saw a young man wearing a new style of suit when he was on a train trip. He inquired curiously and learned that it was a "clothing waste" imported from abroad.

This "junk clothes" not only keeps the traditional suits neat but also very light and soft.

Inspired by this "junk Costume", Zheng Yonggang immediately organized a technological force to develop a new suit after he returned to Ningbo.

The traditional Chinese style suits, which are very different from the traditional suits, are praised for their appearance. The slogan of "Shan Shan suits not too natural" is also suitable for the selling of Chinese fir suits at that time.

Zheng Yonggang also pioneered the mode of "production, supply and marketing". By 1992, Shanshan had built the largest direct selling network in China's domestic clothing market.

In 1997, the annual sales income of Chinese fir suits was 2 billion yuan, ranking the first in China's clothing market for 7 consecutive years. The highest share was 37.4% of the market.

In 1996, Shanshan Limited by Share Ltd (600884) became the first A share listed company in China's apparel industry.

8 years later, how did the brilliant builders evaluate this Chinese fir suit? "At that time, the fame and money it brought to Shanshan could buy a luxury car for one day and last for four or five years"; "it is an industrialized brand in the era of shortage of economy, positioning at 18 to 60 years old, regardless of consumption level"; "no design elements, imperfect understanding of the brand concept"; "one-stop mode, poor division of labor, no longer suited to market segmentation changes"; "in order to maintain 2 billion of revenue, inventory will have 8-9 billion, this is a time bomb".

These different points of view, especially the dangerous stories behind the flourishing age, have begun to appear in the 1996, which attracted Zheng Yonggang's attention.

"Zheng Yonggang is a person who loves to challenge, change or surpass himself, and can also be said to be a strong sense of crisis."

Zhou Shifen said.

Zhou and Zheng Yonggang have known each other for many years to understand the character of the godfather in the Chinese clothing industry and the hardship and pioneering way he has gone through.

{page_break}

Although the sales revenue was still heavy at the time, Zheng Yonggang felt the rain coming from a series of details: the stock was too large; the advance payment did not come; in the past, the terminal sellers who listened to the manufacturer's pricing and even waited in line to pull the goods demanded the price negotiations; the homogenized competition began to appear, and they began to advertise and introduce skilled personnel; most importantly, the gross profit dropped from 30% to 12%.

"The shortage era has passed, and the buyer's market has come."

Zheng Yonggang's strategic judgment is exceptionally accurate.

He began to consider the two aspects of sales network and design to get rid of the past industrial production mode.

In the era of industrialization, clothing production and sales are mainly reflected in the expansion of volume and the reduction of costs, ignoring the brand-new connotation of real clothing design.

Zheng Yonggang summed up in an internal speech at the time, "why should we change the old mode? There must be a premise for the one-stop mode of production and marketing: the demand of the market is enormous, and how much goods are sold.

Once the demand for the market slows down, the channel is no longer a channel, but a "storeroom".

Just like a city's pportation system has problems, streets and roads are temporary parking lots. "

At that time, there were 26 branches and more than 30 offices in the whole country, and there were as many as more than 6000 salesmen in the outlets.

"Direct shop is to buy fir products with the money of Shan Shan, and then sell products for Chinese fir."

Zheng Xueming said, "in fact, this is not a sale. It can only be regarded as a warehouse pfer. Everyone is willing to buy more goods. He can not sell it without selling it."

As the creator of the model, Zheng Yonggang recalled to "business weekly": "at the outset, in order to make the garment enterprises bigger, I first pushed the production and supply and marketing integration mode in the clothing industry, taking into account the special economic shortage in China at that time.

In fact, there is no such practice abroad. "

In 1999, Shanshan intended to smash the "public ownership" of private enterprises. The network began to be carried out drastically. All the outlets were canceled and changed to franchising.

Zheng Yonggang emphasized the principle of overcorrection: franchising is the only way out for China's clothing industry and even the clothing industry on the earth.

He mobilized: "in the past, Shanshan created a number of" millionaires ". After the implementation of the franchise scheme, we will create another group of" multimillionaire "in the next 5 to 10 years.

The stores of Shanshan are divided into two levels, one is regional headquarters, the other two is affiliated stores.

Whether it is the relationship between Shanshan enterprises and regional headquarters or regional stores and franchised stores, it has become a contractual relationship in sales.

The franchisee system successfully solved the problem of adverse selection and moral hazard in the principal-agent relationship of the original outlets. The stock discount that originally belonged to Shanshan was pferred to the franchisees, who had used the understatement of sales volume and accumulated inventory, so that the stores that were able to sell the discount to the headquarters in second years were in the original shape.

For the newly opened franchisee, Shanshan sells shops in installments or loans.

From the shortage of goods to the lack of money, it also means the benefits and risks of selling and selling the products of Shanshan.

{page_break}

Soon, the stock bubble accumulated by Shanshan in the past 10 years has been squeezed out.

The time bomb that threatened the Chinese fir was gone, and it recovered hundreds of millions of yuan of funds.

However, with the initial success of the franchise system, the negative effects also arise.

Shan Shan lost the market position of the western-style clothes boss.

In the interview, Zheng Yonggang also reflected on this: "this network pformation has solved the ownership problem, but because the large-scale clothing enterprise implements the franchise operation in China is the first time, therefore, indeed many thoughts and policies are exploratory.

Criticism is good or bad.

I will not take the initiative to comment. I insist that the best is for them.

"The era of the shortage economy, which has never returned, has always been remembered by Chinese fashion dealers. After the 1999 reform of Shanshan, Fujian and Zhejiang, including Ningbo local enterprises, have followed suit."

Zheng Yonggang firmly believes that what Shanshan is doing is what the industry needs to do in 35 years. He said: "Shan Shan has provided a forward-looking practice for the industry, reflecting the role of the leading enterprises and helping the industry to move closer to the international level in the process of industrial upgrading.

I am very pleased with this.

As for the current market share of Shan Shan suit, Zheng Yonggang thought it was not too low, but it was too high.

"From 1988 to 1999, the highest price of Chinese fir suits reached 37%, because the earliest brands of Chinese fir were almost in a state of no competition."

Zheng Yonggang believes that with the increase of brands, the reduction of occupancy is an inevitable rule. "Making brands should not pursue quantity."

For example, LV, Armani and other top brands only supply a small number of people. We can open 35 stores nationwide, such as our high-end brand Macro Azzali in Italy, and 100 stores nationwide. "

Therefore, he believes that the sales of 500 stores in Shan Shan suit suit is 1 billion yuan, which is enough. "More is not a brand, it should enter the wholesale market."

Know what brand is again and again.

Almost at the same time when the channel was rebuilt, Zheng Yonggang carried out another far-reaching change: the brand operation.

The purpose of brand operation change is also clear, that is, to increase product segmentation by subdividing the market, and to increase the design elements to enhance the brand's gold content and fashion sense.

At first, Shanshan seemed to regard brand operation as a leap from large-scale industrial products to design products.

Design is the soul, the designer is the carrier of the soul, and let the soul return to the throne.

I have no doubt that the era of Chinese designers has arrived.

This is the slogan Zheng Yonggang shouted at that time -- the first time the Chinese garment industry put forward the idea of independent innovation.

{page_break}

Some people say that the history of clothing is the 3500 year of human self display.

Unlike the west, China's clothing culture was constantly cut off from history until the late 1980s.

"China and Europe and the United States, the difference in clothing is cultural.

Compared with international brands, China's national costume industry lacks design art and culture.

Zheng Yonggang said.

He has long been clear about the fact that the suits produced in the factory of Shan Shan can be sold for ten thousand yuan with the same fabric, the same worker, the same machine, and some top international brands, while the brand name of Shanshan can only be sold for more than 2000 yuan.

As early as 1996, Shanshan began to combine the famous brand with famous teachers. This is the first step for the domestic garment enterprises and designers to join hands.

Zheng Yonggang paid two yuan per person per year to Zhang Zhaoda, Wang Xinyuan, the two most famous designers in China, and hired them to Shanshan, trying to design the best fashion woman "FLRS" in China.

In 1997, the two Chinese designers launched 17 series of more than 200 costumes.

Since then, FLRS women's wear and Venson men's wear have become the original brand of Shanshan according to the international advanced garment concept and quality.

The two designer brands were very confident at that time, because they not only had extraordinary designers, but also had strong management skills.

At the same time, Shanshan also sent technicians in batches to Japan and Italy for training, bringing the quality culture of foreign enterprises back to Shanshan.

Even Shanshan has set up its own design studio in Paris, the world's fashion capital.

The pformation of Chinese fir led to the entry of Chinese clothing into the era of "design brand" from the industrial age.

However, this landmark experiment to promote China's clothing industry has brought a new reconsideration to Shan Shan.

At that time, Zheng Xueming, general manager of the clothing design department of Shanshan, thought about that time: "Chinese designers are more like" politicians "in the design field. They only came to work for more than a week in a year, while others were busy with lectures, performances, and participation in appraisals.

Shan Shan's brand incubation period is usually 3 years, that is, one year deficit, two years flat, and three year profit.

But after 3 years of expiry, FLRS and von van's two companies, which were built as high-end brands, failed to achieve their expected goals, and the two original brands had to be pferred.

Where do famous designers come from? They can only come from the process of designing products into brands.

Designers without their own products are sad.

Zheng Xueming said.

To create designer brand, this road is blocked.

Since 2001, the company has embarked on a more effective brand approach from the market practice - "multi brand internationalization", that is, by co operating with the international Brand Company to stimulate its original brand.

At present, Shanshan Group has directly controlled 22 brands, including 3 self created brands, 9 international registered designer brands, 8 international cooperation brands, and each brand's cultivation period is 3 years.

In the practice of "multi brand internationalization", Shan Shan's understanding of brand has been sublimated again.

"We are now making brand operators, such as Nike, LV and Itochu trading company. Shanshan is investing in capital, which controls many fashion brands, but the operation of each brand is handed over to specific Brand Company, and production links are also stripped."

Zheng Yonggang said, "what we are doing now is the way for multinational companies to make money."

But Shanshan did not give up its dream of building an international fashion brand.

"We cooperate with the international Brand Company in addition to making money, but also in order to learn from others and train their designers and business people."

Zheng Xueming said, "without fame, he did not participate in the award. His professionalism is stronger and his market vision is more plastic."

{page_break}

Zheng Yonggang does not want to predict how long it will take to achieve this ultimate goal, because the history of product manufacturing can be accomplished by compression, but cultural connotations can not be obtained through compression.

"It must be admitted that for a long time, China's cars and clothing could not produce the world's top brands.

Because China's real costume design is only 20 years old, from extensive products to fashion, this qualitative change process has been used in France for nearly a hundred years, and Japan has used it for 50 years, and the clothing brand contains cultural and historical precipitation inside.

Zheng Yonggang believes that this needs Chinese culture to become the mainstream culture in the world, but he firmly believes that "with the improvement of economic strength, China will be able to have a world-wide mass brand, just like the POLO and CK of the United States".

Companies without products and assets that are not depreciated.

By 2004, the clothing industry and other new industries of Shanshan were in a period of adjustment, with little increase in revenue, but profit margins were rising.

Taking Shanshan stock as an example, its net profit margin in 2000 was 16%, lower than the average profit margin of 18% of the industry. By the third quarter of 2004, the net profit rate of Shanshan stock was 12%, much higher than that of the industry average net profit margin of 4%.

In 2005, fir came to a good harvest: clothing sales increased by 25.8% and profits increased by 59%.

From a numerical point of view, it is far more than that of the brand of Shan Shan.

Science and technology, investment and other sectors began to blossom in the same year.

"We have won the overall victory."

Zheng Yonggang said.

Zhou Shifen, vice president of Shanshan Invest-holding Company, said: "this is like planting seedlings on a hotbed. When pplanted to the fields, it will shrink, but only after pplanting can they grow into rice."

If the birthplace of Ningbo is the hotbed for breeding fir, then Shanghai, where the headquarters is located, can be seen as a rice field with a good harvest of Chinese fir.

At the end of the 1990s, the experiment of radical channel reform and brand operation mode carried out by Shan Shan made a new proposition for the decision making ability and strategic thinking of Shan Shan.

On the one hand, the income of Chinese fir suits is declining and the market size is shrinking. On the other hand, there are still nowhere to invest in the hundreds of millions of funds that have been accumulated.

There are two ways to develop at this time: one is specialization, and the other two is diversification.

"There is no right or wrong in these two directions, but we can only choose one."

Zheng Yonggang said, "according to the truth, the clothing industry can develop upstream and downstream, and extend the industrial chain, but from the situation at that time, this road is very slow.

Moreover, once we choose specialization, it means that we still have to stick to one place in Ningbo, which is against the goal of internationalization and modernization proposed by Shan Shan in its early years.

In January 1999, Shanshan Group moved its headquarters from Ningbo to Pudong, Shanghai.

Zheng Yonggang said, "Shanghai is a sea, and we will grow faster together with sharks in the sea."

However, not every old pioneer of Ningbo Shanshan has the opportunity to swim with sharks.

"There are only a few of them from Ningbo and I come to Shanghai."

Zheng Yonggang told reporters, "when the enterprise is young, what they want to do is what they want to do. However, after a large scale of business, the business needs specialization, which puts forward higher requirements for the structure of talents."

{page_break}

It is hard to say whether Zheng Yonggang has long been clear about this, but as early as 1996, Zheng Yonggang made equity arrangements through the capital market, and successfully solved the problem of the distribution of interests and the problem of staying behind in Ningbo.

In 1996, Shanshan stock company was listed. According to the national policy at that time, it could have internal shares of employees and allow internal shares to go public after 3 years.

"We have 300 to 400 old employees who are worth hundreds of thousands or millions of dollars at once."

Zhou Shifen, vice president of Shanshan Investment Holdings, said.

When the elders stayed in Ningbo, they began to take the responsibility.

Hu Haiping, a 31 year old vice president of Shanshan Group, surfaced.

Hu Haiping, chairman of the graduate student association of Zhejiang University, was an executive in the Asia Pacific Marketing Department of Procter & Gamble in his early years.

After his headquarters moved to Shanghai, Hu Haiping was appointed president of Shanshan science and technology company. His main responsibility is to build a high-tech sector of Shanshan with the help of Shanghai's policy advantages and talent resources.

In 1999, Hu Haiping introduced the first high-tech project, the industrialization of lithium-ion battery carbon anode materials, which belongs to the National 863 plan development project and filled the gap in China.

At present, Shanshan Technology Co., Ltd. has developed into the world's largest lithium battery composite material base.

On the road of high tech, Shanshan began to run wildly on the high tech road.

At present, Shan Shan has 4 National 863 projects, such as 18 micron copper foil material, lithium ion negative electrode material, heat shrinkable material, high temperature pressure sensor and so on.

In addition, it has 9 high-tech projects, such as biological aerobes, fermented garbage, nanomaterials, supercapacitors, and oswan materials.

Shanshan Group has invested about 1 billion yuan in hi-tech field and nearly 20 high-tech companies.

In August 2004, the Shanshan Klc Holdings Ltd was established and all enterprises in Shanshan were reclassified.

The holding company controls more than 50 companies, including Shanshan Group, Shanshan science and technology group and its subordinates, and is the highest representative of the enterprise community of Shanshan. The board of directors of the holding company is the highest decision-making body, and the board of directors has two committees, namely, investment decision making and strategic development.

To put it simply, the Klc Holdings Ltd of Shanshan is an enterprise community composed of all enterprises under the name of its wholly-owned, holding, share holding and intangible assets entrusted management.

Assets relations are the basic production relations of Shanshan enterprises. In general, the three level structure of "holding company industry group industry company" is the basic organization pattern.

The current structure is the holding company management of Shanshan Group, Shanshan science and technology group, Shanshan biological group, Ke Chuang economic and trade group and Songjiang copper group.

The responsibilities of the three tier architecture vary.

Holding company has the right of investment decision-making, personnel management and the right of investment income. It is the strategic investment decision center of Shanshan enterprise. The industry group has the executive, management and coordination power, and is the management center of the operation of Shanshan enterprise. The industrial companies have the right to operate independently and are the profit and cost accounting center of Shanshan enterprises.

Under this framework, Zheng Yonggang's direct management of Shanshan holdings does not involve specific products.

"As an investment company, its products are enterprises and talents."

Zhou Shifen said.

After the establishment of the holding company framework, the state-owned enterprise MBO, which improved the efficiency by changing the property rights system, gave Zheng Yonggang greater inspiration.

He once again introduced the principle of right to the enterprise management, and implemented the stock sharing on the second level of the enterprise structure of Shanshan, namely, the industrial company.

Zheng Yonggang divided the enterprises controlled by Shanshan into three categories according to how much they hold. The managers of these enterprises, whether big or small, are bosses and have the shareholding of their operating companies. ABC

Take Shanshan technology company as an example, President Hu Haiping personally invested 6 million yuan to buy 25% shares, while the holding company rewarded him 15%. Hu actually possessed 40% of the technology company.

{page_break}

"This is what I designed."

Zheng Yonggang told reporters that his expression was a bit proudly.

"Everyone does not admit defeat."

He said, "it is not enough to encourage others to work. If the operators do not invest, they are all rewarded equity."

In addition to the holding companies without products, the brand assets that will not depreciate and will continue to rise in value over time will become more and more important in Shanshan.

This is another important step in the industrialization of fir.

After the sales changed to join, the production of Shanshan began to lose weight.

At the beginning of 2002, Shanshan came out of the field of garment production and processing, and the controlling rights and specific operation rights of 5 garment processing factories wholly established in Ningbo by Shanshan were pferred to foreign companies or individuals.

At this point, Zheng Yonggang made a complete separation from the production and marketing through the outsourcing of processing and the help of franchisees.

According to the briefing, only half of the garments of Shanshan Group are produced by their own factories, and 30% of them are made in other factories in China, and another 20% are processed abroad.

"We have partially implemented global procurement and global orders.

Where to do well, where to do it.

Zheng Xueming said.

At present, the countries producing and processing clothing for Shan Shan include Japan, Korea and Italy.

After being separated from industrialization, the Chinese fir is focused on the "most core value" part of the clothing industry, namely, the brand, that is, to drive the independent brand through international cooperation.

The current cooperation has brought great confidence to Zheng Xueming.

"Two more years of learning, the rapid upgrading of the original brand is coming, and in 2007, we will start investing more."

Zheng said.

At the same time, Shan Shan will also cultivate its mature brand authorization pfer.

In 2005, Shanshan stock was benefited from the authorized operation of Shanshan denim clothing and Shanshan underwear.

"The era of defining the value of enterprises by the number of fixed assets such as statistical workshops, machines and so on is out of date. We value the intangible assets that will not follow the depreciation of fixed assets."

Zheng Yonggang said.