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Evergreen Laurel Hotel has been frequently on the hot search list recently.

According to Guangming.com on August 16, a netizen named "Zhang Jiaoguan" revealed that he stayed at the Evergreen Laurel Hotel in Paris during the Olympics and found that the Chinese flag was the only flag missing from the flags of participating countries hung in the hotel lobby. He asked the hotel management to hang it but was refused. Once the incident was exposed, netizens expressed their firm boycott of the hotel's behavior. The official website shows that the Evergreen Laurel Hotel is a hotel brand created by the Evergreen Group of Taiwan, China.

According to a report by China.com on August 16, the netizen "Instructor Zhang" negotiated with Evergreen Laurel Hotel several times about not hanging the Chinese national flag, and offered to use the five-star red flag, but the hotel refused. Then the netizen "Instructor Zhang" asked to check out, and the hotel accepted the check-out, but did not refund the fee. The netizen "Instructor Zhang" said in the video that the hotel chef said the hotel originally hung the Chinese national flag, but was later asked by the general manager to cut it off. The video posted by Instructor Zhang received about one million likes.

According to reports, the official website of Evergreen Laurel Hotel (Shanghai) issued an apology statement on the 15th, signed by Evergreen Laurel Hotel, saying that the matter was not handled properly and did not want to affect the feelings of the people on both sides of the Taiwan Strait.

At present, domestic websites such as Ctrip, Qunar, Fliggy, Tongcheng Travel, and Meituan have all removed Evergreen Laurel Hotel and Evergreen Hotels from their shelves. In addition, many mainland companies have stipulated that employees on business trips are not allowed to stay at Evergreen Hotels.

According to the latest report from Jimu News, the apology statement of Evergreen Laurel Hotel did not eliminate the anger of netizens. Netizens left messages saying "firmly boycott". After the incident fermented, it quickly became a hot topic on major social platforms. Evergreen Group's image plummeted. The hot issues caused by the 175-hour blockage of the Suez Canal and the hot issues of issuing 40-month salary year-end bonuses were deeply dug out. Beijing News Sharp Comment: Those who eat and smash the pot will be in trouble!

Who exactly is Evergreen Group?

It is worth noting that the president of Evergreen Laurel Hotel, Chang Yung-fa, was mentioned in the apology statement. According to information, Chang Yung-fa is the founder of Evergreen Group in Taiwan, China. He was born in Yilan, Taiwan, China in 1927 and died in 2016.

Born in 1927, Chang Yung-fa officially founded Evergreen Marine in 1968. He started with an old ship and eventually developed it into one of the top ten shipping groups in the world.Today, Evergreen Group has multiple business segments, including Evergreen Airlines, Evergreen Steel, Evergreen Logistics, etc. These diversified business layouts have brought the group a wide range of income sources.

Public data shows that nearly 70% of Evergreen Group’s revenue comes from mainland China, which is one of the reasons why domestic netizens are so angry - "Eating from mainland China, but stabbing mainland China in the back!"

Evergreen Group was not well-known before, but it became famous in 2021 because its cargo ship paralyzed the Suez Canal for 175 hours. The "Ever Given", which is about 400 meters long and 59 meters wide, was suspected to have been hit by a sudden strong wind, causing the hull to deviate and run aground. This incident is considered to be the most serious congestion in the 150-year history of the Suez Canal.

Evergreen Shipping Group is the main operator of the merchant ship Ever Given. After the incident, Evergreen Shipping Chairman Zhang Yanyi quickly distanced himself from the incident, saying that the Ever Given was a long-term chartered ship and any operational errors or force majeure on board that caused damage to the ship were the responsibility of the shipowner. Japan's Shoei Kisen Kaisha is the shipowner of Evergreen Group and they also apologized for the grounding.

At this time, the founder of Evergreen Group, Chang Yung-fa, had been dead for 5 years. Chang Yung-fa was as famous as shipping tycoons such as Pao Yue-kong and Tung Chao-Yen, and was known as the "World Shipping King".

According to public information, Zhang Rongfa's father, elder brother and second brother were all seamen. At the age of 14, he entered a Japanese shipping company to work and study part-time, starting as a handyman, and gradually transformed himself into a professional seafarer through self-study. When he was 18, his father died in a shipwreck, and his mother raised Zhang Rongfa and seven other children alone. Zhang Rongfa officially became a seaman of the shipping company in that year. With the knowledge of shipping he had accumulated before and his hard work, he successively passed the examination to become the third mate, then the first mate, and finally became the captain.

In 1961, 34-year-old Chang Yung-fa and several friends jointly established the New Taiwan Shipping Company, but this venture was not successful and soon dissolved due to poor management. Later, Chang Yung-fa and others jointly established the Central Shipping Company, but it also ended unhappily due to conflicts with shareholders.

In September 1968, Chang Yung-fa founded Evergreen Shipping Company. At that time, the 41-year-old Chang Yung-fa was both the boss and the captain. Evergreen Shipping Company only occupied 80 square meters at that time and had only one 15-year-old general cargo ship, the "Evergreen", but gradually developed into one of the top ten shipping groups in the world. Today, Evergreen Shipping's green containers can be seen from Shanghai to Amsterdam, San Francisco in the United States, and even Cape Town in South Africa.

As of 2023, Evergreen Group has bases in 113 countries (regions) and 320 cities around the world, operates more than 150 routes, has a capital of NT$21.5 billion (RMB 4.77 billion), and ranks 7th in the world in terms of shipping capacity. In 2023, Evergreen Marine's revenue was NT$276.71 billion.

According to public data, Evergreen Group's hotel business accounts for a very low proportion of its revenue, about less than 5%. Shipping and aviation are its main businesses.

Performance decline in fiscal year 2023

At the end of 2022, Evergreen Group also revealed a hot topic: a year-end bonus of up to 52 months.

According to the statistics of Zhilian Recruitment that year, the average year-end bonus for white-collar workers in mainland China in 2021 was 10,227 yuan, and only about one-third of white-collar workers could get a year-end bonus.

Judging from the courage of Evergreen Group in giving out year-end bonuses, Evergreen Group's performance should be improving, but the financial report shows that Evergreen Marine was still in a loss-making state in 2019, with a net loss of approximately 50 million yuan that year.In 2020, the company turned losses into profits, with a net profit of approximately 6.9 billion yuan. In 2021, the net profit surged to 59.6 billion yuan. This may be the reason why Evergreen Group spent lavishly on year-end bonuses for dozens of months.

According to the financial report, Evergreen Marine's performance plummeted in 2023, with annual revenue of approximately NT$276.71 billion, a year-on-year decline of 55.9%, and operating net profit of NT$34.75 billion, a year-on-year decrease of 90.7%. Net profit attributable to the parent company was NT$35.34 billion, a year-on-year decline of 89.4%.

It is worth noting that Evergreen Marine's earnings per share fell sharply, from NT$87.07 in 2022 to NT$16.7 in 2023, a drop of 81%. Even compared with the earnings per share of NT$45.57 in 2021, there was a significant decline.

Investor Liu Bo believes that Evergreen Shipping's performance surged during the epidemic and it will be difficult to maintain high growth: "In 2020, Evergreen Shipping reaped the first wave of dividends from the epidemic and turned losses into profits. Under the specific environment at the time, its performance soared in 2021. After the end of the epidemic in the past two years, its performance decline has returned to the normal range."

The decline in performance caused Evergreen Marine to fall from the second largest carrier in the world to the seventh largest.This may have something to do with Evergreen Group’s reputation. More than half of Evergreen Marine’s business comes from China, but Evergreen Group has given its largest shipbuilding orders to Japan and South Korea.

It should be noted that previously, the tonnage share of South Korea's shipbuilding industry was slightly higher than that of China's shipbuilding industry. This situation did not change until 2020, when China's new orders accounted for 48.8% of the world's total, while South Korea's was 41.4%. China's shipbuilding completions accounted for 43.1%, while South Korea's was 27.3%. China's backlog of orders was 44.7%, while South Korea's was 33.9%.At the beginning of 2023, my country's shipbuilding market share will be about 80% of the world's total. If South Korea had not received a large shipbuilding order from Evergreen Group in 2016, the market structure of China-South Korea shipbuilding would have been reversed long ago.

Long-term negative spiral

Chang Yung-fa, the founder of Evergreen Group, has good intentions towards the mainland and has long been committed to cross-strait peace. Previously, mainland official media called him a "patriot". When the mainland suffered from disasters, Chang Yung-fa often donated generously. For the Wenchuan earthquake and Lushan earthquake, Chang Yung-fa donated 10 million US dollars, and also donated 10 million yuan for the Ludian earthquake in Yunnan.

Chang Yung-fa once said, "The Chinese can definitely build a world-class airline." When Chang visited the mainland in 2012, he also publicly stated, "I am Taiwanese, but also Chinese."

However, Chang Yung-fa probably never expected that the reputation he had accumulated in the country would be completely destroyed by the "national flag" incident, nor did he expect that after his death, his children would go to court to fight for the inheritance. It was these events that had a huge impact on the development of Evergreen Group.

According to public information, when Chang Yung-fa died in 2016, he left all his property and the position of president of Evergreen Group to his illegitimate son Chang Kuo-wei instead of his wife and four children. This decision triggered fierce conflicts within the family. This may be the fuse of the struggle within Chang Yung-fa's family.

Public information shows that Zhang Guohua, the eldest son of Zhang Rongfa's first wife, was extremely dissatisfied with his father's will. Before his death, Zhang Rongfa only left shares to his children born to his first wife. Zhang Guohua took advantage of his equity advantage in the company and took quick action to try to deprive Zhang Guowei of his position as president. A family civil war kicked off, and the company was in turmoil for a long time, and many old employees were also involved.

After years of fighting and the game of various forces, Zhang Guowei was forced to resign.Zhang Guohua also failed to get the position of chairman as he wished. The position of international chairman of Evergreen Group unexpectedly fell into the hands of company veteran Ke Liqing.

In September 2022, 67-year-old Zhang Guohua and his brother Zhang Guozheng reached a consensus to dissolve the two major holding companies under Evergreen Group (Evergreen International Panama and Evergreen International). Evergreen Group is gradually becoming divided, and Evergreen Shipping's influence and strength are also affected.

As the internal strife within the Evergreen Group gradually subsided, the Evergreen Laurel Hotel Paris, a subsidiary of the Evergreen Group, once again pushed the Evergreen Group to the forefront of public opinion, and the Evergreen Group was once again caught in a negative vortex.

The negative public opinion incident of Evergreen Laurel Hotel may be just the tip of the iceberg of Evergreen Group's chaotic management. The company has also seen a situation where its shipping business, which has a very high profit margin, is actually losing money. More than half of Evergreen Group's revenue comes from the mainland. How to calm down this negative public opinion will determine the future performance direction.

After all, the good fortune of becoming the "world shipping king" by relying on a broken ship will not always exist.

Author|Meng Xiao