How far is China's security enterprise from spring in the high-cost era?

The "Wenzhou Capital Chain Crisis" that began to emerge in March of this year seems to have developed into a situation that endangers the survival of enterprises after six months. When the small and medium-sized enterprises evolved from a small number of bankruptcies to a situation in which a large number of enterprises and large-scale enterprises collapsed, the government began to restless. In early September, the State Council held an emergency meeting on the development of small and medium-sized enterprises, and introduced a supportive policy for the development of small and medium-sized enterprises, aiming at alleviating the difficulties of financing for SMEs and financing. However, so far, the effectiveness of the government’s support policies seems to not ideal. Judging from the overall environment, this year's “surge of corporate closures” is even more “chilly” than in 2008. Various factors such as the lending rate, the exchange rate of the renminbi, the salaries of workers, and the rise in land transfer fees have made the era of high costs that has already come over a deeper chill.

In such a large environment, how much is security companies affected by the tightening of bank money and inflation? What is the status of financing for security companies? With such questions, the author interviewed security companies in Shenzhen, Hangzhou, and Beijing. In this interview, the author has a new understanding of the status quo of security companies in China.

The actual situation of security financing for SMEs In the interview, the author learned that the impact of security companies in China in the financing difficulties and the closure of SMEs has not been as serious as previously reported. As a whole, security companies are not directly affected. In the author's investigation and media reports, there have been no cases where security companies have closed down in batches. However, in the Zhejiang area where the “closed tide” is most serious, the development of security companies is still relatively good.

In this connection, the author interviewed Yan Meng, a manager of the HC East China Security Industry, and he said: “This is the most affected private financing crisis mainly due to the traditional industries such as shoemaking. Security companies in East China are less affected. This is mainly because Most of the security companies in East China are high-quality, technical, financial strength and other aspects are relatively strong enterprises, and there are many listed companies in East China, these companies have more formal financing channels and a variety of financing methods, so the ability to resist risks is also relatively strong. Although security companies in East China are relatively optimistic about their financing performance, Yan Meng has also shown some hidden concerns about the future of security companies. “In the context of inflation and high costs, security companies are not affected by this aspect. The cost of raw materials, production, labor and other aspects of the company have been raised, and there have also been operating losses. Compared with previous years, the security industry The profits have become thinner, and there are also a few security companies that have been hit by the collapse, but the vast majority of these companies have transformed into security system integrators who can work with agents to work on projects and even OEMs of branded products. ."

Shenzhen, which is known as "the capital of security," is the birthplace and gathering place of China's security companies and brings together 60% of the country's security companies. Although there are numerous security companies in Shenzhen, the vast majority are small and medium-sized micro enterprises. Will these small and medium-sized micro-enterprises be more vulnerable to a financing crisis if there is no sufficient capital chain for protection? Among the many security companies that the author interviewed, most companies have stated that the current closure tide and inflation have some impact on companies, but overall the impact is not great. Although difficulties in profit space and capital withdrawal have been observed in previous years, it is far from the point of closure.

Hangzhou, Shenzhen, and Beijing are the three most concentrated cities in China's security companies. The security companies that grew up in these three regions are completely different because of the regional environment. The enterprises engaged in security in Beijing are mainly agents, with fewer production companies. Some security companies have established production bases in Shenzhen, and the headquarters are mainly R&D and marketing centers. In the interview, the author learned that the sales volume of Beijing security manufacturing enterprises has decreased compared with previous years, and overall profits have been reduced this year. However, the impact of financing and closure has not been significant.

In the case of security and small and medium-sized enterprises outside the “bank loan” front, the security companies have not been affected so much in the financing and closure crisis that has affected so many cities across the country. Many people may feel puzzled. The main reason for this “collapse” was that banks tightened monetary policy, the interest rate of private lending continued to rise, and the capital chain of enterprises broke. According to the author's understanding, more than 80% of Shenzhen's security companies have not borrowed in banks, and companies have mainly developed through their own capital turnover. The proportion of companies that have loaned in banks is less than 15%. Hangzhou security companies that have not borrowed from banks have reached more than 90%.

As a production enterprise of surveillance products, Jin Cheng, general manager of Shenzhen Chuangsisi Technology Co., Ltd., said in an interview with HC Security Network: “This year’s inflation has affected the number of companies, plant rent, staff salary, and materials. Purchases, infrared lamp housing, production costs, postage, etc. all rose, which virtually added more cost burden to the company.More and more companies entered the security industry, the difficulty of the industry is getting bigger and bigger. "In the interview, Jincheng also said that Shenzhen's security companies, like Chuangsi Si, have developed their own funds, which is related to the particularity of the security industry." Jincheng also compared the stainless steel industry with the security industry. According to Jincheng, companies that make stainless steel are generally large and have large quantities. An order can reach several million units. Although its added value is low, but its rolling capital is large, an export order for a stainless steel foreign trade enterprise will reach hundreds of orders. Thousands, this requires a lot of cash flow, so many companies will choose bank loans. The security industry is not the same. Although the security industry is relatively high profit but the amount is very small, the volume is not comparable with the stainless steel industry, which also leads to a short capital chain in the security industry, does not require a large amount of capital turnover, generally can be digested by itself, most do not Need to borrow from the bank.

According to Zhang Wenjiang, general manager of Hangzhou Topsound Electronic Technology Co., Ltd., “The current closure boom and financing issues have little direct impact on Hangzhou security companies, but indirect impacts are still there. Due to the harshness of bank loan policies, the security of small and medium-sized It is very difficult for enterprises to make loans and the number of companies borrowing private loan sharks is also relatively small, but due to the recent “checkout tide” in Hangzhou, the checkout and price reduction of the property market have a significant impact on the sales of our Hangzhou security products. The monitoring project is a big project for Hangzhou security companies, and the cooling of the property market will have a direct impact on us."

Security SMEs experience an unprecedented "payment difficulty"

While interviewing security companies in the three places, although security companies were not directly affected by the financing and closures, these enterprises have encountered unprecedented difficulties in “returning funds”.

Hou Gang, general manager of Shenzhen Diweile Technology Co., Ltd., also said in an interview: “This year’s overall environment is not good for security companies and the funds are tight. However, security companies’ capital shortages are not due to the bank’s tightening of monetary policy, but to difficulties in making payments. Diweile mainly takes the domestic brand route, and the company’s foreign trade business only accounts for 7%, so the impact of exports on us is not great. Now that Diweile is undergoing a share reform, the company needs financing for institutional reforms, but we are not able to finance the bank. Capital, security, most companies in the bank's basic loans to the less than the Shenzhen side of the bank's requirements of Shenzhen local real estate mortgage and other conditions will shut out many businesses, so we are now the financing method is to develop agents into shareholders. The previous development method has always been the company's own capital turnover.” Although Di Wei Le has some obstacles in terms of funds, but due to the influence of the security industry's environment, Di Wei Le's development speed is still very fast in the past two years.

Jincheng, the general manager of Chuangsi Science and Technology, told the author that the company has encountered a vicious cycle of arrears. Party A owes money to the agents and the agents owes money to the production companies. There are millions of owes to Chuangsi. The money was not recovered, which had a certain impact on the further production and development of the company. Jin Cheng believes that this may also be indirectly affected by the entire economic environment. This year's "recovery payment" is harder than the previous year.

Hou Gang deeply feels for the issue of repayment: "This year's repayment and capital circulation is very slow. Now it is very difficult to collect funds and it has become a common problem in the industry. The money that can be returned in the past 20 days may now take 2 months. This repayment problem is very difficult to solve. Now that the funds are still very tight, the big environment still has an impact on us." And for Dewei Le General Manager Hou Gang, their unpaid amount of 10 million will likely become a "dead Account."

In response to the issue of payment, Hangzhou Xuntou Electronics was directly affected by the industrial chain. "According to the impact of the entire economic environment, some of our projects will also be affected. Taking the real estate business as a comparison, the receipt of non-payment by the real estate developers of Party A also indicates that our contractors and dealers will not receive any refunds. As a result, we will not receive payment, and we will be affected by the industry chain." Zhang Wenjiang said.

Conclusion The security industry is a sunrise industry. It is also evolving at a high rate each year. However, many security companies have stated that this road is getting harder and harder. Wei Gang, the general manager of DeVille, compared this stage to the “fall” of the security industry. This is both a season of harvest and a season of gradually chilling. The “winter” of the security industry has yet to arrive, but it will encounter a Field "winter". Our views are relatively optimistic. Under such an era of high costs, high pressure, and high challenges, China's security companies have entered the "winter". Difficulties are numerous, but the methods will be more difficult than difficult. Naturally, the spring of the security industry will not be too far away.

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