Kaiyuan Company's original share capital is less than one billion. After many years of reductions, excluding the shares held by retail investors, all the equity that truly belongs to Kaiyuan Company is only a little over two hundred million. In contrast, Changda Group, any branch of its branch, is much larger than this, so Guan Yuntian only considers injecting a small part of the company's assets into it.

Old Zhu said with a little disappointed: "Mr. Guan, do you not plan to inject more high-quality assets?"

"Mr. Zhu, Changda Group is huge in size, and it can be said that all assets are excellent assets. We choose a part of the listed company that has been injected into the reorganized reorganized, which is enough to meet any requirements of the regulatory authorities." Guan Yuntiandao.

"Then I believe, but which part of the assets do you plan to use as a resource for restructuring Kaiyuan?"

"We intend to inject Changda Group's service industry into it. Specifically, the part involved in the restructuring is Changda Group's elderly care service industry." Guan Yuntian said bluntly.

"The elderly care service industry----? That means that Changda Group's high-end manufacturing industry does not participate in the restructuring. Mr. Guan, is the elderly care service industry reliable? Dealing with a group of silly elderly people and giving them their elderly care to the end. To be honest, I am not optimistic about the future of this industry, and I can't even see how this industry can make a profit." Lao Zhu seemed very frustrated.

"It depends on one's opinion on the future of an industry. The society has developed so quickly that we have not yet come back to our senses. Those industries we once looked forward to have disappeared without a trace. However, those industries that were previously looked down upon by people are now popular, and there are countless examples in this regard. It is precisely because with the acceleration of the aging process of society and based on a large number of research, we believe that this industry will become a sunrise industry. Therefore, Changda Group would rather withdraw from the hot real estate development industry than make arrangements in this industry." Guan Yuntiandao.

"I don't know much about the elderly care industry. Maybe your analysis and judgment are very reasonable, but what I want to know is, as an industry, what are the profit models or profit methods of elderly care services?" Lao Zhu said the problem he was worried about.

"Since I've talked about this topic, I'll take some time to talk to my friends at Kaiyuan Company about the ins and outs of the Changda Group's elderly care project." Guan Yuntian talked about the proposal of elderly care project, project research and final decision-making from the time he retired from real estate development.

The guests were a little fascinated by the hearing. Lao Hou, general manager of Kaiyuan Company, interjected and asked: "Mr. Guan, you have decided to withdraw from the popular real estate development industry. Do you not make money in commercial housing development?"

"On the contrary, we are still better in the real estate development industry than our ordinary colleagues. From counties to provincial capitals, Changda Real Estate Company not only gained a firm foothold, but also ranked among the top five among the many developers in the provincial capital real estate development market." Guan Yuntiandao.

"How courage does it take for you to withdraw from such a good industry?" Lao Zhu found Changda Group incredible about this move.

"Outsiders see the glamorousness of the real estate development industry, which is just a superficial phenomenon. The real estate development industry is indeed profitable, but the risks it faces are no less than those of traditional manufacturing."

"Oh, an industry closely related to people's livelihood, how can there be such a big risk?

?”The guests didn’t understand.

"The market risks are not scary. Here we refer to policy risks, which are simply unpredictable. We have been in the real estate development industry for more than ten years. The national regulation alone has caught up with two times, and there are also large and small land supply and financial policy adjustments, which have a great impact on enterprises. Outsiders have no feelings. As real estate developers, if they face national regulation, it is the winter of the industry. To be honest, if the company is not strong, some enterprises will not be able to stand it." Guan Yuntiandao.

"The seemingly hot real estate development market has such a serious crisis hidden. It is also wise for you to choose to retreat when you are in trouble."

"You can say that you can give up when you see the difficulties, but we have other considerations. In fact, we continue to stick to the real estate development industry and life is still booming. However, we believe that housing is a durable consumer product after all, and when the market is saturated in urban commercial housing sooner or later, and through analysis, we believe that the market will be saturated in the near future. Instead of waiting for passive withdrawal at that time, it is better to turn as soon as possible. With such an idea, we need to consider the next way out. In contact with the outside world, some people suggest that we pay attention to the elderly care cause."

"However, compared with real estate development, the profitability of the elderly care industry is not at the same level. How can such an industry attract your attention?"

"If we only consider profitability, the elderly care industry is indeed a bit bad, but this industry also has its unique advantages that are incomparable to other industries. First, this is a people's livelihood project and will receive universal support from local governments; second, with the intensification of the trend of social aging, the elderly care market will become larger and larger; third, the elderly care industry belongs to the service industry, and the service industry will receive unprecedented development opportunities under the encouragement of national policies. Comprehensive analysis, we believe that this is an industry worthy of attention." Guan Yuntiandao.

"Mr. Guan, although your analysis is very reasonable, if you want to inject the elderly care business into a listed company, the profit methods mentioned above have not been solved. What shareholders are most concerned about is the profit problems of the company. If this matter cannot be properly resolved, the restructuring effect will probably not be very good!" Mr. Huang, who is in charge of finance of Kaiyuan Company, said with concern.

"Even if the friends and shareholders of Kaiyuan Company do not care about profit issues, we will attach great importance to this matter. Although Changda Group is not profit-oriented, it never does lose money. In fact, when making feasibility reports, it has conducted a thorough investigation on the profit methods and profitability of the project. Our conclusion is that pension projects can not only make profits, but also have a stable profit, although the profit margin will not be too high." Guan Yuntian explained.

"Oh, this is a bit unexpected! Mr. Guan, can you tell us about the profit methods of this project here?"

"Not only reveal it, but also explain it to friends, otherwise everyone will have many doubts. As I once said to the board members of Changda Group, if we want to do pension projects, we must win by scale and seek benefits by scale. This is the main profit method of the project. In addition, we must do our best to get support from various policies."

"Of course, we must try our best to strive for policy support, and seek benefits based on scale, which is also a profit model. But I wonder how large the scale of Changda Group wants to make the elderly care project?" Lao Zhu said.

“In the provincial capital

The elderly care institution is planned to be a scale of 100,000 beds, and the first phase of the 25,000 beds has been completed and put into operation. Our ultimate goal is to make the elderly care business of Changda Group a chain across the province and across the country."

"Mr. Guan, what is your estimated profit margin for a nursing home with 100,000 beds in the provincial capital?"

"Because the project enjoys tax exemption policies, we estimate that its profit margin is about 5%. With various subsidies and support, the average profit is between 7% and 8%. This profit margin is similar to many traditional manufacturing industries, and it is actually not very low."

Lao Zhu looked at Lao Huang, the financial director on his left, and Lao Hou, the general manager of Kaiyuan Company on his right, and then said: "If seven or eight percent of the net profit can be maintained at this level stably, it is still OK."

"This is our conservative estimate. Changda Group's pension project in the provincial capital has only operated a phase one project. If all 100,000 beds are put into operation, its operating costs will be reduced, and the profit will be further increased at that time." Guan Yuntiandao.

"Mr. Guan, how much money has been invested in the pension project in the provincial capital? What is the budget for the entire project? When is it expected to be completed?"

"The investment in the first phase of the project is close to one billion, and the total budget of the entire project exceeds four billion, and it is expected to be completed in three to four years."

"Forgive me, Changda Group injects pension projects into listed companies. Do you want to raise funds for the follow-up projects of pension projects by raising funds in the stock market?"

Guan Yuntian understood Lao Zhu's idea, but in fact, it was understandable that even financing the subsequent projects. After Lao Zhu and his team went public, they could not find any use of the funds raised from the stock market, so they had to deposit it into the bank. That was really sad.

However, the purpose of Changda Group's backdoor listing this time is not to raise funds for the provincial capital pension project. Guan Yuntian explained: "We withdraw from the normal operating real estate development market and free up resources to build nursing homes in the provincial capital. Therefore, even if the follow-up project of the elderly care project is sufficient, there is no need to raise funds from the stock market. If we have to link the restructuring and listing with financing, perhaps in the future, we will need to go through the stock market to build a chain of provinces or nationwide."

Guan Yuntian's calm reconciliation made the guests relieved. As long as both parties treat each other with sincerity, the road to cooperation will naturally be smoother.

Because both sides understand each other and work towards a common goal, the remaining topics became much easier. At around 4 o'clock that afternoon, when the topic was about to end, Guan Yuntian said: "Changda Group and Kaiyuan Company have reached a cooperation intention, which is a win-win result. We should celebrate this. Mr. Zhu, I didn't have fun drinking the past two days. I will definitely accompany you to have two drinks tonight."

Lao Zhu smiled bitterly, "It is certainly a pleasure to reach a cooperation intention, but we dare not relax at all! Let's talk about drinking and having fun in the future."

Seeing Lao Zhu's miserable appearance, Guan Yuntian was a little puzzled, "What's wrong with Mr. Zhu? Didn't you do it just now? Do you have any doubts that you haven't expressed?"
Chapter completed!