Core Viewpoint - Xi'an Tourism has significantly shifted its fundraising strategy, moving from expansion plans to focusing on alleviating financial pressure through a new A-share issuance plan aimed at raising no more than 300 million yuan for working capital and debt repayment [1][3][5]. Fundraising Strategy - The company plans to raise up to 300 million yuan through a private placement of A-shares at a price of 9.8 yuan per share, with all proceeds allocated to supplementing working capital and repaying bank loans [5][6]. - This new plan marks a drastic reduction from the previous year's proposal, which aimed to raise approximately 400 million yuan for direct hotel expansion projects [3][7]. Financial Performance - In 2024, Xi'an Tourism reported a revenue of 582 million yuan, a year-on-year decline of 13.54%, with a net loss of 260 million yuan, representing a 69.13% increase in losses [10]. - The company has experienced continuous net losses for 12 years, with significant declines in its traditional commercial business, which previously accounted for over 60% of revenue [11][12]. Business Model Challenges - The shift in revenue structure has not led to profitability, as the hotel business has seen a further decline in gross margin, reaching -12.54% [13]. - Despite expanding its travel agency and hotel operations, the company faces a "bleeding growth" scenario, where increased revenue does not translate into profits, exacerbating resource consumption [14][15]. Strategic Implications - The drastic change in fundraising strategy signals a critical need for the company to optimize its cost structure and address ongoing losses in its core business [15]. - The competitive landscape in the cultural tourism industry is intensifying, and the company must confront the challenge of breaking the cycle of low margins, expansion, and financial losses [16].

Core Insights - The article emphasizes the importance of strategic actions in investment banking, including share buybacks, valuation adjustments, and securing investment quotas. Group 1: Share Buybacks and Valuation - Companies must ensure they can execute share buybacks before making commitments [1] - It is essential to adjust valuations, regardless of whether they seem reasonable or not [2] Group 2: Securing Investment Quotas - Companies should aggressively pursue investment quotas by presenting timelines for project approvals [3] - Initial high valuations can be used to negotiate better terms once other investors are locked in [4] Group 3: Investment Strategies - Early and small investments should be prioritized, but if they hinder project completion, they should be postponed [5] - If early investments do not materialize, focus should shift to ensuring successful project execution [6] Group 4: Management Fees and Fundraising - Companies should collect management fees upfront, even if they plan to return them later [7] - A target of raising 1 billion should be set, encouraging initial investments from limited partners (LPs) [8] Group 5: Capital Structure Adjustments - In cases where only existing shares are available, companies can facilitate capital increases by first executing share buybacks [9] Group 6: Investment Commitments - Companies should negotiate priority purchase rights, indicating they will only invest if other shareholders do [10] Group 7: Documentation and Compliance - Timely payments are crucial, and minor errors in transaction documents can be rectified easily [11] - Engaging third-party firms for evaluations and comparisons is necessary, regardless of the actual selection process [12] Group 8: Recruitment and Carry Commitments - Companies should promise carry to attract talent, with the option to revise policies once carry is realized [13] Group 9: Addressing Revenue Declines - When questioned about revenue declines, companies can attribute this to strategic decisions made by founders for long-term value [14] Group 10: Presentation Adjustments - During formal investment decisions, it may be advisable to omit certain details from reports presented to LP committees [15]