It was learned from China Minsheng Investment Group (CMIG) that the privately-invested group has recently appointed Lv Benxian as the president responsible for daily operations, while the former president Li Huaizhen, who currently serves as Executive Vice Chairman of the Board of Directors, will focus more on the strategic level.
Prior to joining CMIG in November 2016, Lv worked at the Bank of Communications for many years, and has extensive experience in practice and management. It is understood that Lv Benxian also served as the chairman of CMIG Assets, CMIG Capital, THCAPITAL, CMIG Healthcare Industry Financial Leasing Co., Ltd. and other companies, all of which are part of CMIG.
CMIG, a large-scale investment group approved by the State Council, initiated by the All-China Federation of Industry and Commerce, and jointly established by 59 leading privately-run enterprises, was created in the context that China’s economic development had entered a new normal state. China’s reform had entered the deep-water zone where tough challenges must be met, and the development of private economy reached a new stage. This mechanism mode of co-construction and sharing has formed a strong demonstration and leading role, as evidenced in that a number of provincial-level private enterprise consortiums such as Sumin Investment, Chongqing Private Investment Co., Ltd. and Guangdong Private Investment Co., Ltd. have been established, together with those under preparation in several provinces and municipalities.
So, what have been the development conditions for CMIG in the past four years? What is its investment logic like? Where will it head in the future? Lv Benxian recently detailed the development and future strategies of CMIG in his exclusive interview with Shanghai Securities News.
Shanghai Securities News: How did CMIG as an investment group perform in the past four years?
Lv Benxian: On a mission to “aggregate capital energy, unlock mechanism vitality, and serve national strategies”, CMIG insists on the unity of social value and company value as well as the unification of private enterprise development and industrial upgrading, which shows a good overall development trend, and various businesses are advanced in an orderly manner.
By the end of 2017, the assets of CMIG had totaled 306.1 billion yuan, with a cumulative net profit of more than 18 billion yuan. At present, it mainly involves new energy, prefabricated buildings, home-based care, healthcare, general aviation, finance and real estate and other industries, as well as insurance, financial leasing, asset management, investment banking and other financial and similar financial segments. In particular, thanks to four years of pioneering and expansion, CMIG has become a national leader in some segments with greater clout in the market.
Shanghai Securities News: Since you joined CMIG in 2016, what do you think is the biggest challenge the Group faces?
Lv Benxian: As a large-scale, highly innovative, piloting, privately-invested group, CMIG is faced with a new road where no model can be used for reference and is tasked with leading the development of privately-run enterprises as a model. In addition to business development, we also need to change with the times, keep pace with the times, and act after accurate planning, and to constantly adjust and improve our development strategies and business models so that they align with the national strategy, external environment and market demand.
Shanghai Securities News: How will CMIG optimize its development strategy and business model during the next phase of development?
Lv Benxian: In the face of new internal and external opportunities, we are actively promoting adjustment and transformation.
In terms of strategic objectives, we will continue to remain true to our original aspiration of “leading private capital investment and promoting economic transformation and upgrading”, and put the spotlight of strategic implementation on “focusing on people’s livelihoods, integrating urban and rural resources, and building an investment group featuring the combination of industry and finance” to truly realize “private investment benefiting the people, people’s livelihoods geared towards the people, and being people-oriented.”
As for positioning, we stay committed to “combining investment and holdings with the priority given to investment”, and pool together professional resources and talents to do a good job in the overall design and implementation of fundraising, investment, management and withdrawal.
We will accelerate strategic transformation from rapid development to high-quality and steady development; from traditional formats and traditional business models to new formats and new business models; from underlining asset management to underestimating asset management; and from a focus on capital input to a focus on solutions.
Shanghai Securities News: How will you drive strategic transformation?
Lv Benxian: We will make greater efforts to implement Strategic Focus. After four years of development, CMIG has made a far-sighted layout in business forms and created competitive advantages in some industries. However, there are also problems of being less focused. In the next plan, CMIG will focus its strategy on two major areas.
The first is to invest in others’ business models. Based on insurance and asset management funds with private equity and financial investment as the carrier, we will cast our eyes on startups with innovative business models in emerging industries. And we will integrate CMIG’s investment platform on the Chinese mainland and its Asian asset management platform in Hong Kong. Meanwhile, we will leverage Sirius Group, a CMIG company, to seize the opportunities brought about by China’s efforts to open further to foreign capital insurance, through which we can apply directly for business, instead of only establishing a branch three years after a representative office is opened.
The second is to cultivate our own unique business model centering on current industrial resources and application scenarios. Specifically, it is to build two major platforms: an urban community service sharing platform and a rural revitalization service sharing platform. As of June 30, 2018, CMIG Futurelife, a part of CMIG, has completed the M&A and integration of a leading property management company in China, operating in 155 cities with 400,000 employees who offer high quality services to 30 million residents and mobile workforce in 4,500 residential, commercial and public communities. This proves itself as a service portal and platform of great value. In the coming three years, we will further increase investment, striving to see the fact that the area under CMIG’s property control reaches 1.5 billion square meters and that the direct service population will hit 50 million within three years.
In the city, centering on consumption upgrade, we will leverage the existing community property as our underlying assets to build new formats such as health management; home-based care; smart mobility dominated by shared parking and eco-friendly car washes; modern community services; and community-based inclusive finance.
In the countryside, we are committed to the improvement of the production scene, wealth growth, and the spiritual and cultural life of farmers. In addition, based out of village squares, we will promote the development of new formats such as small cinemas, distributed photovoltaics, agricultural e-commerce service networks, prefabricated buildings, and rural financial services, with an aim to create a rural revitalization and sharing platform.
I feel strongly that the vast rural areas have great potential. The rural revitalization comes just at the right time when there is guidance and promotion from the central government, focus and input from social capital, care and support from local governments, and hopes and aspirations of trillions of farmers. CMIG has currently taken a small step in the revitalization of the countryside by acquiring some enterprises that have already made achievements in rural revitalization in the market and starting a pilot project in a selected county from Henan, Shandong or Hebei.
At CMIG, with our main mode supported by village stations and village squares, we have customized the rural revitalization plan of serving the countryside by providing culture, medicine, new energy, e-commerce, AgroSciences education, and new residents, as well as bringing agricultural products to the city. We also work together with internationally renowned companies such as Chia Tai Group to cooperate in deep processing of agricultural products and bringing featured agricultural products to the city, and use the e-commerce logistics platform and interactive big data to allow them to directly go into urban communities, thus connecting urban and rural service chains.
In the next three years, we will build about 2,000 village squares and serve 100 million farmers through rural revitalization and the sharing platform. In this way, CMIG will be able to serve 50 million urban residents and 100 million farmers in the countryside by creating two platforms. It is believed that CMIG will become a highly valuable and competitive company.
According to the above strategic objectives and business model, we will accelerate efforts to adjust, improve and withdraw from existing industries, so as to implement a well-balanced business strategy. In addition, we will fully promote the implementation of a new type of business and new strategies. For industries and projects that are at variance with the overall strategy, we will gradually adjust and withdraw from them. Even for some industries that currently show a positive sign of development and growth, we will also gradually withdraw from them, as long as they are not aligned with the overall strategic layout.
From now on, CMIG will start the listing plan in due course, which also represents a big boost for its development.