My thanks to my intern researcher Adam Kim for his help on this video Links: - The Asianometry Newsletter: asianometry.com - Patreon: / asianometry - Twitter: / asianometry
Fundamentally the problem with these acquisitions is the company overpaid. If the acquired asset is worth what the company paid then there really isn't a debt issue.
In its original territory, Hainan Airline actually did quite well. Pretty much all Chinese students in Massachusetts have flown from Beijing or Shanghai on HNA.
Chinese banks are legendary in their insanity. One time we went to withdraw money from a bank and we were told to come back in two hours. Apparently the jag-off running it deposits the bank's deposits to other banks to earn interest. So the teller actually ran out of the bank to withdraw the banks money from another bank.
... Once in the morning, I met a teller of a local bank in Bangkok to withdraw an interest. She told me to be back in the afternoon. I asked her why it takes so much time? She replied the interest had to take a ride to get here. .............
I actually flew with Hainan, from Guilin to Sanya, in 2000 ... Small plane. Two Chinese pilots, assisted by a very big German guy sitting on a stool just behind them. All visible to the passengers because the cockpit door wasn't closed!
Pre 2001 it wasn't uncommon for Passangers to even be allowed in the cockpit, I as a child was invited multiple times into the cockpit and I know from others that they regularly were allowed as adults inside after asking. For small planes it is still possible today.
I believe the small plane you referred to is Dornier 328 , a germany made airplane now stocked, the German guy there is for a training pilot from manufacturer. Back then b4 911 there’s little cockpit protection , now it’s totally changed.
An asianometry video release always makes the day a good one. I appreciate how you just give a factual explanation of the history of the subject matter without any need for flash or flair. It makes things like this very easy to digest, ecen for a layman; I never even heard of HNA before this video.
I just love it when these companies tout their alleged connections to the Chinese government; They are simply appealing to the investors greed by essentially saying, yes this thing is all corrupt and a mess, but don't worry you will benefit from it. Of course it's nonsense, when the bonds come due, the government is not going to pay you
To big to fell, but HNA don't as important as Evergrande can kidnap all indebted property companies and pre order customers. Actually, even Evergrande their somehow government link and knock on effect can't let government bail it out from debts mess, and only give some loans let them maintained floats for a while until property market preparing well.
@@slypear could we interest you in a little war?. Hmmm?. Would you like a little war?. War is our greatest export, couId I interest you in a little?, hmmm?. (Very good for business?)☝🏽
I remember reading the news about Frankfurt-Hahn Airport being sold but for some reason the investor would not show up and could not be contacted. It was actually treated like a scandal for the regional government since the public opinion was that they fucked up the due dilligence. There were articles about this for weeks in german newspapers. Thanks for giving me the background to this story I already forgot 😂
Our theory was that they didn't pay attention to the 'which Frankfurt?' question - Hahn isn't even in the same country or close to the actual city (germany has quite a few Bundesländer, meaning it consists of several countries). Also: since HNA was the only investor interested in the airport and everyone just wanted to get rid of it the claim that DD was not all that diligent and nobody on the german side cared is true.
@@Katharina-rp7iq Hi just wanted to clarify that the correct translation of German ''Bundesländer'' is counties, not country. ''Länder'' is our word for countries and a direct translation of ''Bundes-Länder'' might be ''union-countries''.
LOL I took it as a humorous dig at the stereotype of democratic countries being infamously partisan, acting as if separate countries -- literally "federated countries" as you point out!
Very interesting topic - thank you for this presentation! I (American citizen) did a lot of business travel to and in China in the early and mid '90s. Then in the 2000s my wife booked a ticket to visit her family in Beijing on a Chinese airline I'd never heard of before: Hainan. It puzzled me at the time that an apparently brand new Chinese airline could appear that wasn't part of the original China family of airlines. Of course as a whole lot of financial constructs are busy unraveling in China, this story of HNA Group birth and collapse now makes a lot of sense.
It really is kind of shocking to me just how much growth out of China wound up being a huge bubble. It was always obvious that a worryingly large portion of it was, but the scope has been _staggering._ It's like Chinese companies looked at the worst excesses of American banks and went all-in on the exact same strategies, dialing them up to eleven.
They are not even backed by the Bank of China, are they? Or even ICBC... Right ? So how come, these individuals go above the national banks.. and the central banks... to borrow this way ? And do a "side way move" like that ? PRC should not have joined the WTO at all... and what is that World Bank individual doing ? They are controlling agriculture.. right ? What has HNA got to do with agriculture ? And wasn't HNA also involved in some kind of weird entertainment sector as well ? Does anybody DO any actual accountancy any more ?!!?! Chi sin !!!
Have you noticed that people don't get such news any more ? Prc has now done the utterly wrong thing of expanding their tech sector to bury two sectors into one. The worst is yet to come..... Even if you are a skilled engineer. You cannot find the company to work for to hold their stability.... This is insane. I thought that it was odd too with these various vertical integration which is common in the UK or Europe. But this is another level altogether. Cos he tries to be like Li Ka Shing. A lot of SE Asian holding companies are like that. You would think that a typical manager has an actual fiscal budget control ? They didn't even have that. It is all about sell and buy. I get these people don't even have the basic understanding of a set of books and account. I mean... Most people know how to run a household budget. What comes in. What goes out. Simple maths. What are they doing ??... And in such a large scale too.
Wow, what an amazingly detailed, yet comprehensible history and discussion of a very complex topic! This sort of deep dive into recent history is extremely valuable in helping the public understand how some of China’s largest companies grew as quickly as they did, and why so many are running into trouble, now that the Chinese government is paying attention the the debt levels of its largest borrowers.
This is why the world needs real, clean data. Transparency is generally seen as diminishing privacy, but advanced cryptographic methods exist to allow both. We need to automate the accounting processes to eliminate systemic risk. Data data data
@@goldnutter412 why would people with capital who benefit from keeping controls in their favour allow it and how easily can they suppress any attempts of open source transparent data world You people are busy in your idiotic petty little squabbles
@@goldnutter412 As a retired aerospace engineer, I was taught that Data is everything and that Everything is data. Thus if we believe that knowledge/information/data is power -- (which it is) -- then know that Power begets Control. Looking forward, we can expect that the continuing acquisition and Processing of knowledge/information/data will be the basis of AI's Growing Power and Control of Events, if truth be told. For our human capacity is limited by our slowness and confusion, compared with Artificial Intelligence's clarity of insight and vision. But you already know that. Or maybe you don't. In any case, time will tell; it always does.
Airline companies all around the world are running on razor thin margins. US airlines like United and SW are mostly in the credit card industry. Many airline's value is not their flights or planes, like how Amazon is actually AWS and the nonprofitable Amazon site. Seems like this integration is just inevitable.
@@PercocetPete theory acc which the rate of profit-the ratio of the profit to the amount of invested capital-decreases over time. Some communist crap. Basically diminishing returns.
I just want to say that I understood, comprehended, analyzed and cogitated over everything you said. A total and complete understanding was achieved. It was very simple. Or maybe not. Anyways, I don't know what's going on with these people
MAY NOT BUT WHAT I GOT OUT OF THESE IS GREED WAS THEIR UNDOING. MORE BILLIONS THEY GOT THE MORE BILLIONS THEY WANTED TO MAKE DIDNT KNOW HOW TO LEAVE WELL ENOUGH ALONE AND JUST RIDE WITH THAT INTO THE SUNSET THEY WANTED TO BE BIGGED THAN SAMSUNG CAUSE THEY OWN A WHOLE BUNCH OF OTHER COMPANIES BUT IT TOOK THEM HUNDREDS OF YEARS TO BE SUCCESSFUL HNA TRYING TO DO THIS FLY BY NIGHT THOUGH A WHOLE BUNCH OF ACQUISITIONS BY BORROWING OFF THE VALUE OF THE COMPANY THEY WAS TRYING TO ACQUIRE
I love your straightforward and concise yet simplistic approach to explaining some really intricate things. Definitely helps me understand things on other channels I wouldn't. Great work 👍
1. Have a lot of connections 2. Get your connections to lend you a lot of money 3. Use the lend money to buy other businesses and stock 4. Put family members and you with insane salaries in top positions 5. Bankrupt the company because of the high leverage.
Thank you very much for the video. Im a commercial aviation fan so heard hna group's name a lot and noticed Hainan Airlines flew some international routes that seemed pretty marginal.
Yeah that’s how I knew about them as well. Back in 2015-2017, They were offering routes from LAX to HKG for like 20% of Cathay Pacific airfares. I was like no way they were actually making a profit. As it turned out, they weren’t and the flights disappeared as soon as they appeared.
Have to keep reminding myself to click "like" as soon as I start watching an Asianometry video. I would always get too focused on the content, then eagerly look for another old video I missed previously, and forget the click like. Now I have to come back to click like for this video. There has never been a video here that doesn't deserve a "like" anyway.
This is what I saw when studying overseas, there were non-stop jokes about how 'slow' Westerners are and how much more clever the Chinese are. But what it really came down to was how willingly the Chinese pushed legal boundaries and almost always prefer shortcuts for short-term gains. Eventually things go pear-shaped (e.g. Evergrande), and accountability is nowhere to be seeing. The workers, average joe share holders, contractors are left holding the bag.
We never leave workers, average joe share holders and contractors left holding the bag after a corporate collapse. FTX and Theranos come to mind. 😃😃😃😃😃😃
@@John77DoeFTX isn’t a company, crypto is decentralized, no one nation owns that stupidity, in fact China is the largest crypto player on the planet. Anyone who buys crypto knows full well they go in with their pants down, it isn’t security or currency, it’s speculation, so there’s no obligation or risk protection for that purpose. Theranos got arrested, so there’s Justice in that.
In China, EVERY transaction is an opportunity for kickbacks. From the janitor who will skim dollars, to the managers who will take thousands to the higher ups who will take millions.
Hi Jon! Not sure if this is the best way to reach out to you, you have a business email on your channel but this is not business related. I love your videos but I usually listen to them on Google podcasts. I see you upload less frequently on Google podcasts and Spotify and there are quite a few videos that are currently only uploaded on CZcams. I was just wondering if you aim to upload audio versions of every video or if only a selection of your videos get the podcast treatment? Thank-you
One detail I noticed was the Ingram Micro 1% profit margin. Electronics distribution is in some ways like selling fruit or vegetables. Speed and inventory control are all-important. Just like an over-ripe banana has no sale value, the previous model of consumer electronic hardware can hardly be sold. Generally Ingram Micro is the middleman selling other company's products to resellers. Transactions are is done in volume and decisions depend on price and availability. If I was a businessman flying from Southern China to Beijing there are few choices and I am not going to quibble about a 20% difference in price. But if was running a chain of electronics stores then a 5% higher wholesale price might be enough to put me out of business.
Just one question, how did no one thought about shorting the stocks of such a badly run company!?? Why did rating agencies saw nothing wrong when such senseless purchases were being made? Where were the Hindenburg's and the Burrys?
Just flew hainan airlines round trip between Beijing and haikou a week ago, with no knowledge of HNA’s history, I felt that it was a great experience with good service
@0:17 I was surprised to see Hahn on your channel! I was stationed there in the mid-1980s. If you look into the middle distance you can see the 100m microwave tower, where I saw a German pilot do a loop around it in a Tornado (he was too close to the ground, unauthorized of course)
A very impressive and detailed corporate report. You guys should be teaching in MBA in Harvard or work Due Diligence for the big banks. I'm impressed beyond. I'm going to require my students to follow your reports and test them on how much they could understand it. You just won a new tribe.
A very interesting post thanks Asianometry. It was surprising to hear that Hainan were able to mortgage their planes twice, if they could do that then why not go for a 3rd or even 4th time?
I have once visited a small port on the far western side of Hainan island back year 2009 for business trip. Unlike major cities like Haikou and Sanya, as I recalled during the time, the major transporting vehicles on the Island are bicycles, and mini buses only use between remote villages.
lol....i lived there long time before covid and i can assure you its full of motorways that cross the island - all those are full of cars. In cities they do have tons of eBikes/motorbikes but theres plenty of cars. Also the island has a Hi-speed train going along the coast in a big circle connecting the cities on the beach. Very pretty island.
Wow! Great job explaining what unfortunately isn't unique. I had reason to look up the "South Sea Bubble" of 1720 recently. The similarities are striking. But this is on a scale several magnitudes greater. Sad that it can still happen. Thanks!
In relative terms, the South Sea Bubble was way larger in magnitude. It peaked at several times the entire UK economy - that’d be like a $50t Chinese conglomerate collapsing.
Around that Era, most commercial pilots were ex fighter pilots with limited English skills. Some planes had third young pilots who can communicate in English with the air traffic controlers.
How can you even run a company that complex? With so many parts and legal structure would you even have enough hours in the day to draw an org chart from memo?
A bit of an honest recommendation you may take a look into: try practicing your narration and/or adjust recording so that you dont end up with big inhales after every other phrase. It gets a bit distracting from what's anyhow an amazing presentation!
4:08 I'm pretty sure using that image isn't intentional. The text is wrong with the character 南 missing the component ¥ which looks like the symbol for the RMB currency. I think its suppose to be a jab that Hainan has no money.
Frankly also shown all those "genius" Western investment firms, blindly going along with a business plan they clearly knew nothing about (or if they did know, thought they could outsmart or profit of). I suppose it did work for some, but there's always somebody who is ultimately left with just the debt ...
that's what _finance_ is about. getting out before the fall and leaving the -retards- plebs investors to sink with the ship while still fleecing them... 😑
Astounding! I have never heard such a story of business history. I can't think of anything close to this level of complexity and speed. It really looks like China's best attempt at a global supercorporation. Audatious, but at some point you have to actually make profit to make it work.
The plandemic sealed their fate😅😂 who knows they might have pulled off the most daring and outrageous global businesses coup of the decade😅😂😂. Overleveraging is man's over ambitious blind spot apart coupled with the dodgy business sharp practices
I lived in China from 2011 to 2019 in several Pacific rim cities. I was amazed at the speed of development of China and made many friends there. Overall China is a great country but to discover how China works compared to western cultures would be an understatement. I saw the complexity of Chinese culture as over whelming since historically its cultural development is several thousand years old, meaning their way of doing things is ingrained into their DNA....something that westerners may misinterpret by a wide margin. I often questioned and was often puzzled by the speed of change and development....changes that would take place right before my eyes every single day...changes that would leave me scratching my head as to how they were happening.
I visited China twice from the UK in 2017 and 2019 and I was puzzled and dazed by the dizzy exponential growth of their economy. Now I understand it was just a leverage house of cards waiting to collapse from an epic debt bubble of the century 😅😅😂😂
Too many high level chiefs and no Indians. That describes them the best. And now. They are training backwardly highly skilled individuals for very low pay. What do you suppose will happen ? Social unrest and mortgage defaults are happening. Fake coins to move money around is created. Even at this stage.. they refuse to reform their society... It's too late now.
I think I saw one of your videos before, the conglomerate from Korea, Daewoo? The founder was in very similar situation, borrow and borrow money lake crazy and at the end it was impossible to pay it back like in the case of HNA? Please correct me if I am wrong, thank you.
Fundamentally the problem with these acquisitions is the company overpaid. If the acquired asset is worth what the company paid then there really isn't a debt issue.
"Why should I lend you so much money for this collateral?"
"I have government connection. Just trust me bro~"
I think a staggering amount of business transactions go down like that. Just look at the sub prime mortgage crisis for example.
*Linus has entered the chat*
Happens daily no doubt
Lol 😅😅😂😂
dude your channel is basically bloomberg with indie humble vibes. Kepp going, you are awesome
In its original territory, Hainan Airline actually did quite well. Pretty much all Chinese students in Massachusetts have flown from Beijing or Shanghai on HNA.
I can imagine so however over leveraging the golden goose crush the business with a gigantic amount of debts.
Good airline IME. They were making very attractive deals if you could buy a dozen or two business-class seats trans-Pacific.
Chinese banks are legendary in their insanity. One time we went to withdraw money from a bank and we were told to come back in two hours. Apparently the jag-off running it deposits the bank's deposits to other banks to earn interest. So the teller actually ran out of the bank to withdraw the banks money from another bank.
Lol classic Chiiinaah with my Trump accent 😅😅😂😂😂
This has aged poorly in light of what's happening in the US 🤣
Chinese Bank business model doesn't operate like traditional western banking industry.
... Once in the morning, I met a teller of a local bank in Bangkok to withdraw an interest. She told me to be back in the afternoon. I asked her why it takes so much time? She replied the interest had to take a ride to get here. .............
@@johnyossarian9059 nothing?
I actually flew with Hainan, from Guilin to Sanya, in 2000 ... Small plane. Two Chinese pilots, assisted by a very big German guy sitting on a stool just behind them. All visible to the passengers because the cockpit door wasn't closed!
On the Job Training at a new level. 😂😂😂😂😂
Pre 2001 it wasn't uncommon for Passangers to even be allowed in the cockpit, I as a child was invited multiple times into the cockpit and I know from others that they regularly were allowed as adults inside after asking. For small planes it is still possible today.
@@leonfa259 might as well if people are cool
I believe the small plane you referred to is Dornier 328 , a germany made airplane now stocked, the German guy there is for a training pilot from manufacturer. Back then b4 911 there’s little cockpit protection , now it’s totally changed.
@@Jobless-guy I think you're absolutely correct! At the time I knew what plane it was, 23 years later only 'German' stuck in my head. Thanks!
An asianometry video release always makes the day a good one. I appreciate how you just give a factual explanation of the history of the subject matter without any need for flash or flair. It makes things like this very easy to digest, ecen for a layman; I never even heard of HNA before this video.
This summary was much better than trying to follow the real-time version!
The left wing news media, with the reckless CPP PROPAGANDA tried hard to screw the free world 🌎 over "in kind".
I just love it when these companies tout their alleged connections to the Chinese government; They are simply appealing to the investors greed by essentially saying, yes this thing is all corrupt and a mess, but don't worry you will benefit from it. Of course it's nonsense, when the bonds come due, the government is not going to pay you
Precisely this.
To big to fell, but HNA don't as important as Evergrande can kidnap all indebted property companies and pre order customers.
Actually, even Evergrande their somehow government link and knock on effect can't let government bail it out from debts mess, and only give some loans let them maintained floats for a while until property market preparing well.
It was the CCP's corrupt baby, beginning to end .. just like the property development sector.
@@slypear could we interest you in a little war?. Hmmm?. Would you like a little war?. War is our greatest export, couId I interest you in a little?, hmmm?. (Very good for business?)☝🏽
Just like the banks, allowed to invest 89 percent of investor funds. They lost it, now the people cant get their money
I remember reading the news about Frankfurt-Hahn Airport being sold but for some reason the investor would not show up and could not be contacted. It was actually treated like a scandal for the regional government since the public opinion was that they fucked up the due dilligence. There were articles about this for weeks in german newspapers. Thanks for giving me the background to this story I already forgot 😂
Our theory was that they didn't pay attention to the 'which Frankfurt?' question - Hahn isn't even in the same country or close to the actual city (germany has quite a few Bundesländer, meaning it consists of several countries).
Also: since HNA was the only investor interested in the airport and everyone just wanted to get rid of it the claim that DD was not all that diligent and nobody on the german side cared is true.
Thank god you have eyes. Im not being mean im so serious you give me hope.
@@Katharina-rp7iq Hi just wanted to clarify that the correct translation of German ''Bundesländer'' is counties, not country.
''Länder'' is our word for countries and a direct translation of ''Bundes-Länder'' might be ''union-countries''.
LOL I took it as a humorous dig at the stereotype of democratic countries being infamously partisan, acting as if separate countries -- literally "federated countries" as you point out!
@@nocomment3294It isn’t. A county would be a Landkreis. A Bundesland is a State.
Credit for putting this together. One can’t help but shake one’s head. If it’s feels too good to be true, it often is, too good to be true.
Fantastic research and a fantastic and informative vlog. Well done to all involved!!
Very interesting topic - thank you for this presentation! I (American citizen) did a lot of business travel to and in China in the early and mid '90s. Then in the 2000s my wife booked a ticket to visit her family in Beijing on a Chinese airline I'd never heard of before: Hainan. It puzzled me at the time that an apparently brand new Chinese airline could appear that wasn't part of the original China family of airlines. Of course as a whole lot of financial constructs are busy unraveling in China, this story of HNA Group birth and collapse now makes a lot of sense.
It really is kind of shocking to me just how much growth out of China wound up being a huge bubble. It was always obvious that a worryingly large portion of it was, but the scope has been _staggering._ It's like Chinese companies looked at the worst excesses of American banks and went all-in on the exact same strategies, dialing them up to eleven.
@@PhysicsGamer You should take a look at the failure of American capitalism which is significantly worse.
@@AFlyingCookieLOL Chinese capitalism _is_ American capitalism minus all the safeguards, it seems.
Search HNA and miles guo together. The HNA ceo was assassinated in France under the order of ccp.
They are not even backed by the Bank of China, are they? Or even ICBC... Right ? So how come, these individuals go above the national banks.. and the central banks... to borrow this way ? And do a "side way move" like that ? PRC should not have joined the WTO at all... and what is that World Bank individual doing ? They are controlling agriculture.. right ? What has HNA got to do with agriculture ? And wasn't HNA also involved in some kind of weird entertainment sector as well ? Does anybody DO any actual accountancy any more ?!!?! Chi sin !!!
If Enron did planes
Have you noticed that people don't get such news any more ? Prc has now done the utterly wrong thing of expanding their tech sector to bury two sectors into one. The worst is yet to come..... Even if you are a skilled engineer. You cannot find the company to work for to hold their stability.... This is insane. I thought that it was odd too with these various vertical integration which is common in the UK or Europe. But this is another level altogether. Cos he tries to be like Li Ka Shing. A lot of SE Asian holding companies are like that. You would think that a typical manager has an actual fiscal budget control ? They didn't even have that. It is all about sell and buy. I get these people don't even have the basic understanding of a set of books and account. I mean... Most people know how to run a household budget. What comes in. What goes out. Simple maths. What are they doing ??... And in such a large scale too.
@@MeiinUK yoloing
Wow, what an amazingly detailed, yet comprehensible history and discussion of a very complex topic! This sort of deep dive into recent history is extremely valuable in helping the public understand how some of China’s largest companies grew as quickly as they did, and why so many are running into trouble, now that the Chinese government is paying attention the the debt levels of its largest borrowers.
This is why the world needs real, clean data. Transparency is generally seen as diminishing privacy, but advanced cryptographic methods exist to allow both. We need to automate the accounting processes to eliminate systemic risk. Data data data
@@goldnutter412 why would people with capital who benefit from keeping controls in their favour allow it and how easily can they suppress any attempts of open source transparent data world
You people are busy in your idiotic petty little squabbles
@@goldnutter412 As a retired aerospace engineer, I was taught that Data is everything and that Everything is data.
Thus if we believe that knowledge/information/data is power -- (which it is) -- then know that Power begets Control.
Looking forward, we can expect that the continuing acquisition and Processing of knowledge/information/data will be the basis of AI's Growing Power and Control of Events, if truth be told. For our human capacity is limited by our slowness and confusion, compared with Artificial Intelligence's clarity of insight and vision.
But you already know that. Or maybe you don't. In any case, time will tell; it always does.
C O R R U P T I O N
CCP. STYLE
VinFast learned the MO from HNA, so watchout people.
Airline companies all around the world are running on razor thin margins. US airlines like United and SW are mostly in the credit card industry. Many airline's value is not their flights or planes, like how Amazon is actually AWS and the nonprofitable Amazon site.
Seems like this integration is just inevitable.
Dunno why it reminded me of the concept of "falling tendency of profit".
@@aniksamiurrahman6365 what's that ?
@@PercocetPete theory acc which the rate of profit-the ratio of the profit to the amount of invested capital-decreases over time.
Some communist crap. Basically diminishing returns.
@@CountingStars333 lol got you
But that's got NOTHING to do with HNA.It was the CCP's corrupt baby, beginning to end .. just like the property development sector.
your research is always so detailed. your video always very informative.
Damn man. This makes the south sea company look honest and transparent in comparison.
I just want to say that I understood, comprehended, analyzed and cogitated over everything you said. A total and complete understanding was achieved. It was very simple. Or maybe not. Anyways, I don't know what's going on with these people
MAY NOT BUT WHAT I GOT OUT OF THESE IS GREED WAS THEIR UNDOING. MORE BILLIONS THEY GOT THE MORE BILLIONS THEY WANTED TO MAKE DIDNT KNOW HOW TO LEAVE WELL ENOUGH ALONE AND JUST RIDE WITH THAT INTO THE SUNSET THEY WANTED TO BE BIGGED THAN SAMSUNG CAUSE THEY OWN A WHOLE BUNCH OF OTHER COMPANIES BUT IT TOOK THEM HUNDREDS OF YEARS TO BE SUCCESSFUL HNA TRYING TO DO THIS FLY BY NIGHT THOUGH A WHOLE BUNCH OF ACQUISITIONS BY BORROWING OFF THE VALUE OF THE COMPANY THEY WAS TRYING TO ACQUIRE
Excellent as always.
:eyes:
How is there a 2 month old comment on a 1 hour old video
Money :p
I love your straightforward and concise yet simplistic approach to explaining some really intricate things. Definitely helps me understand things on other channels I wouldn't. Great work 👍
Your videos are stunningly well researched. My thanks too to your researcher on this.
1. Have a lot of connections
2. Get your connections to lend you a lot of money
3. Use the lend money to buy other businesses and stock
4. Put family members and you with insane salaries in top positions
5. Bankrupt the company because of the high leverage.
I remember listening to a NPR podcast about HNA a few years ago when it was buying up businesses like crazy. Guess things took a turn quickly.
ALL THESE BILLIONAIRES Story THE SAME GREED BE THEIR DOWNFALL MORE MONEY THEY GOT THE MORE THEY TRY TO GET
@@saramcdonalds9038 I think the reason is very often it’s debt they have.
@@adamesd3699 Yup flying too close to the sun 🌞 lol
State run info about state run company...
What could go wrong?
Thank you very much for the video. Im a commercial aviation fan so heard hna group's name a lot and noticed Hainan Airlines flew some international routes that seemed pretty marginal.
Yeah that’s how I knew about them as well. Back in 2015-2017, They were offering routes from LAX to HKG for like 20% of Cathay Pacific airfares. I was like no way they were actually making a profit. As it turned out, they weren’t and the flights disappeared as soon as they appeared.
Great job on a difficult-to-explain (and fathom) corporate saga! 😎✌️
Have to keep reminding myself to click "like" as soon as I start watching an Asianometry video. I would always get too focused on the content, then eagerly look for another old video I missed previously, and forget the click like. Now I have to come back to click like for this video.
There has never been a video here that doesn't deserve a "like" anyway.
This is what I saw when studying overseas, there were non-stop jokes about how 'slow' Westerners are and how much more clever the Chinese are. But what it really came down to was how willingly the Chinese pushed legal boundaries and almost always prefer shortcuts for short-term gains. Eventually things go pear-shaped (e.g. Evergrande), and accountability is nowhere to be seeing. The workers, average joe share holders, contractors are left holding the bag.
We never leave workers, average joe share holders and contractors left holding the bag after a corporate collapse. FTX and Theranos come to mind. 😃😃😃😃😃😃
@@John77DoeFTX isn’t a company, crypto is decentralized, no one nation owns that stupidity, in fact China is the largest crypto player on the planet. Anyone who buys crypto knows full well they go in with their pants down, it isn’t security or currency, it’s speculation, so there’s no obligation or risk protection for that purpose. Theranos got arrested, so there’s Justice in that.
Actually, China is fast forwording through US and Japan story. They both had their rapid growth and economic crises.
Yeah... Only China has such things...
@@lonyo5377 Like forgetting what US has done on its way of development.
In China, EVERY transaction is an opportunity for kickbacks. From the janitor who will skim dollars, to the managers who will take thousands to the higher ups who will take millions.
Hi Jon! Not sure if this is the best way to reach out to you, you have a business email on your channel but this is not business related. I love your videos but I usually listen to them on Google podcasts. I see you upload less frequently on Google podcasts and Spotify and there are quite a few videos that are currently only uploaded on CZcams. I was just wondering if you aim to upload audio versions of every video or if only a selection of your videos get the podcast treatment? Thank-you
Reminds me of Adani group.Run for the hills.😂
One detail I noticed was the Ingram Micro 1% profit margin. Electronics distribution is in some ways like selling fruit or vegetables. Speed and inventory control are all-important. Just like an over-ripe banana has no sale value, the previous model of consumer electronic hardware can hardly be sold.
Generally Ingram Micro is the middleman selling other company's products to resellers. Transactions are is done in volume and decisions depend on price and availability.
If I was a businessman flying from Southern China to Beijing there are few choices and I am not going to quibble about a 20% difference in price. But if was running a chain of electronics stores then a 5% higher wholesale price might be enough to put me out of business.
Just one question, how did no one thought about shorting the stocks of such a badly run company!??
Why did rating agencies saw nothing wrong when such senseless purchases were being made?
Where were the Hindenburg's and the Burrys?
Honey wake up - new Asianometry video
So original. Chinese?
Impressive work Jon and team!🎉
Another clean direct and informative video, thank you.
Just flew hainan airlines round trip between Beijing and haikou a week ago, with no knowledge of HNA’s history, I felt that it was a great experience with good service
Man, Ingram Micro is an OG computer company.... haven't heard them in like YEARS!!!
Really appreciate the subtitles. Thank you.
Fantastically interesting. Please do more of this sort.
I flew Hainan home from Shanghai and it was the best flight I’ve ever taken
@0:17 I was surprised to see Hahn on your channel! I was stationed there in the mid-1980s. If you look into the middle distance you can see the 100m microwave tower, where I saw a German pilot do a loop around it in a Tornado (he was too close to the ground, unauthorized of course)
Thanks for a clear, in depth and concise explanation of HNA Group's spectacular collapse during the pandemic lock-downs.
I had no idea on any of this with HNA.. Thanks for the awesome insight on this!
Hainan province was still 8-bit back in the 1990's 1:40
Great video as always and provides a lot of insight. thank you
Great research. Nicely done.
i really enjoy your videos when i'm driving - content is great
Thank you for making this video.
Extraordinary reporting thank you
Great job as always !
Love your videos, have been binge watching them. Especially your Singapore series as well as Chinese communist party history and politics series
Emmy award winning SEO Title. Props.
Very well researched and presented!
HNA group and Adani group seem to have a lot in common, hopefully Adani group doesn’t end up having a tragic end too
I like your conclusion about dodging oversight.
Omg I’m amazed by the depth of information in this video
A very impressive and detailed corporate report. You guys should be teaching in MBA in Harvard or work Due Diligence for the big banks. I'm impressed beyond. I'm going to require my students to follow your reports and test them on how much they could understand it. You just won a new tribe.
U'll be misleading ur students, these guys are lying but I know it won't matter as long they're saying bad things about China. 😂😂😂😂.
@@glenwjohnson809 care to expose some of the ‘lies’? Or you’re just gonna sit there spewing lies of your own? 🤡
HNA acquisitions were crazy.
Great video as always
A very interesting post thanks Asianometry.
It was surprising to hear that Hainan were able to mortgage their planes twice, if they could do that then why not go for a 3rd or even 4th time?
Because the debts still appear on their balance sheet
Lol😂😅
@Peter Off balance sheet financing Lmao 🤣😂
They also acquired United Stack through HNA Technology, which led to a knowledge drain of that company (about 65% of the employees resigned)
Excellent explanation and a fascinating tale
I have no idea how your mind can consume this complex mess and make sense of it. My head was spinning about 30sec in.
Once you understand jargon of subjects you'll get it in no time as well.
he outsourced to an intern
Wow, great presentation. Thanks❤
I have once visited a small port on the far western side of Hainan island back year 2009 for business trip. Unlike major cities like Haikou and Sanya, as I recalled during the time, the major transporting vehicles on the Island are bicycles, and mini buses only use between remote villages.
That's nice. I'd use my bike everywhere if the infrastructure allow it.
lol....i lived there long time before covid and i can assure you its full of motorways that cross the island - all those are full of cars. In cities they do have tons of eBikes/motorbikes but theres plenty of cars. Also the island has a Hi-speed train going along the coast in a big circle connecting the cities on the beach. Very pretty island.
Hainan is a great airline.
Flying with them twice monthly international flights, over a decade
One more great professional presentation, Thanks
Thank you for the informative videos
It's like the back story to a sequel of the The Big Short.
Impressive piece, Asianometry.
You’re the best ⭐️⭐️⭐️⭐️⭐️ all my family enjoy a lot your videos. Great research’s. thank you 🙏 and don’t stop, never!🇨🇦
Great research! Thanks
Wow! Great job explaining what unfortunately isn't unique. I had reason to look up the "South Sea Bubble" of 1720 recently. The similarities are striking. But this is on a scale several magnitudes greater. Sad that it can still happen. Thanks!
Well their is more money around today. The South Sea Bubble brought down a government.
In relative terms, the South Sea Bubble was way larger in magnitude. It peaked at several times the entire UK economy - that’d be like a $50t Chinese conglomerate collapsing.
@@Fishmans also it made UK withdrawal crown's debts that almost bankrupted it after the war for Spanish heritage.
This is small beer compared to the ponzi scheme the US government is running with the USD.
Evergrande is the modern day "South Sea Bubble"😅😂😂
Around that Era, most commercial pilots were ex fighter pilots with limited English skills. Some planes had third young pilots who can communicate in English with the air traffic controlers.
Awesome VERY informative video!
Love the way you put this together. Please make one on Adani group.
Thanks Adam !
One of the best channels on CZcams
How do you research about these companies? I am curious.
How can you even run a company that complex? With so many parts and legal structure would you even have enough hours in the day to draw an org chart from memo?
A 31 minute A-om video. My Sunday is complete.
"The Super X Plan" sounds like something out of a Godzilla movie.
Considering what HNA was facing, that's a better analogy than I first realized.
A bit of an honest recommendation you may take a look into: try practicing your narration and/or adjust recording so that you dont end up with big inhales after every other phrase. It gets a bit distracting from what's anyhow an amazing presentation!
15:45 I used to fly on Comair back when I lived in Zimbabwe.
Great ! You make my day !
Fascinating. Can't wait for the movie
Ooh, an intern. Hitting the big time now!
Good job Adam
4:08 I'm pretty sure using that image isn't intentional. The text is wrong with the character 南 missing the component ¥ which looks like the symbol for the RMB currency. I think its suppose to be a jab that Hainan has no money.
Frankly also shown all those "genius" Western investment firms, blindly going along with a business plan they clearly knew nothing about (or if they did know, thought they could outsmart or profit of). I suppose it did work for some, but there's always somebody who is ultimately left with just the debt ...
that's what _finance_ is about. getting out before the fall and leaving the -retards- plebs investors to sink with the ship while still fleecing them... 😑
Amazing video 🙏
Great recent history review
Good research.
Astounding! I have never heard such a story of business history. I can't think of anything close to this level of complexity and speed. It really looks like China's best attempt at a global supercorporation. Audatious, but at some point you have to actually make profit to make it work.
The plandemic sealed their fate😅😂 who knows they might have pulled off the most daring and outrageous global businesses coup of the decade😅😂😂. Overleveraging is man's over ambitious blind spot apart coupled with the dodgy business sharp practices
There are definitely way better (successful) attempts. Like hauwei, SHEIN, Temu, even Tiktok kind of counts.
None of those companies are worth anything close to $170 billion, so I don't see your point @@icodestuff6241
Anyone know what the black-colored craft is pictured at 7:55 ? Upper right side of screen? Giant Man-o-War jellyfish? Great video-study as always.
I lived in China from 2011 to 2019 in several Pacific rim cities. I was amazed at the speed of development of China and made many friends there. Overall China is a great country but to discover how China works compared to western cultures would be an understatement. I saw the complexity of Chinese culture as over whelming since historically its cultural development is several thousand years old, meaning their way of doing things is ingrained into their DNA....something that westerners may misinterpret by a wide margin. I often questioned and was often puzzled by the speed of change and development....changes that would take place right before my eyes every single day...changes that would leave me scratching my head as to how they were happening.
To answer your question, fraud and government handouts to stimulate the appearance of growth
Anti China folks hate China regardless. Racist xenophobia is pervasive in youtube and can't even get abbreviations right.
When bribe to ccp officials is written as a business expense, sorry but it is a crooked system
I visited China twice from the UK in 2017 and 2019 and I was puzzled and dazed by the dizzy exponential growth of their economy. Now I understand it was just a leverage house of cards waiting to collapse from an epic debt bubble of the century 😅😅😂😂
Too many high level chiefs and no Indians. That describes them the best. And now. They are training backwardly highly skilled individuals for very low pay. What do you suppose will happen ? Social unrest and mortgage defaults are happening. Fake coins to move money around is created. Even at this stage.. they refuse to reform their society... It's too late now.
Deep understanding of the modus of many similar state-owned entities.
I think I saw one of your videos before, the conglomerate from Korea, Daewoo? The founder was in very similar situation, borrow and borrow money lake crazy and at the end it was impossible to pay it back like in the case of HNA? Please correct me if I am wrong, thank you.
The voice makes this videos more better
4% of watchers supporting this epically good work with likes. Get this production group up, people!!!!