Hello everyone, I am Wang Xiaolong, Chairman of Cuncao Chunhui. The topic I will share with you today is ‘One Bed, Fifteen Years of Care.’

Cuncao Chunhui has been in elderly care for fifteen years, growing from one facility to twenty. In an environment where the industry average occupancy rate is about 50%, we have achieved purely market-driven operations and profitability.

Today I would like to condense the insights from these fifteen years into three aspects to share with you:

First, balancing quality and operations to solve the industry’s development pain points;

Second, implementing cross-city chains and achieving scale expansion through refined operations;

Third, deeply cultivating brand and employee culture to solidify the foundation for long-term chain development.

Our elderly care industry generally faces a common dilemma—’high-end doesn’t profit, profitable isn’t high-end.’ The key to breaking this dilemma lies in breaking the mindset that ‘quality equals cost’ and embedding commercial logic into the entire service chain. How exactly to do this? We have summarized three points: make trade-offs wisely, calculate in advance, and pursue win-win cooperation.

First, make trade-offs wisely: precisely screen projects, learn to focus, and dare to say no.

A company’s capabilities have natural boundaries; blindly taking on projects will only dilute professional strength and lower service quality.There are three types of projects we resolutely do not touch:

• The first type is structural defects—properties where building structure renovation is extremely difficult and there are irreversible safety hazards. Forced renovation costs are enormous, so they must be handled with caution;

• The second type is cost imbalance—projects where financial calculations cannot achieve payback and the input-output ratio is severely unbalanced. Stick to the commercial bottom line and do not blindly enter just because of the temptation of scale;

• The third type is ideological conflict—cross-industry projects in unfamiliar tracks, or cooperation where the client ignores industry professional standards and keeps lowering the service bottom line. Absolutely no compromise.

For example, our Zhengzhou Qifu Shangdu Institution, over 4,000 square meters with 80 beds, was formerly a community clubhouse with a swimming pool and badminton hall, and completing the paperwork was extremely difficult. But our partner, Zhengzhou Cultural Tourism Group, was excellent. They spent more than a year persistently pushing through approvals and made bold adjustments to the layout. At the same time, we developed home-based services to complement the institution, and in the future home-based services will soon surpass the institution. The cooperation model is fixed returns plus profit sharing, and it has now become a community benchmark.

Second, pre-calculation: pre-renovation financial modeling plus professional planning, with no compromise on standardized construction.

The core logic is putting operational needs first.We have seen too many projects where overly optimistic early-stage calculations led to them becoming unfinished for ten or even fifteen years, or suffering continuous losses. Therefore, before implementation, a full-dimensional, full-scope financial model must be completed to clearly and thoroughly calculate the client’s payment capacity and the entire project cost.

At the same time, using the real needs of frontline care and operations as the benchmark, we must repeatedly refine spatial circulation, supporting layout, and details.The design of one of our projects must go through 20 to 30 rounds of discussion, because only operations knows what it truly wants. A common problem among many large enterprises is that leaders have never worked in elderly care before, having been transferred from other industries, or property bosses and restaurant bosses suddenly say they want to do elderly care and think it is simple, but without professionals to carry out planning from an operational perspective, problems are bound to arise in the end.

There is another particularly important point: firmly uphold the bottom line of standardized construction, resolutely do not cut costs for age-friendly facilities and service support, and especially value the quality of concealed works.Why? Because the lower your routine maintenance costs, the higher your ten-year profit. Secondary renovation is very troublesome, as all pipelines must be relaid, and the longer you delay, the higher your profit. Therefore, concealed works must be done thoroughly, and that is profit.

Our Xidiaoyutai Courtyard is a typical case: 3,517 square meters, 78 beds, a medium-asset model, rent of 3.1 yuan per square meter per day, open for nine years, fully occupied with a waiting list for eight years, the first pilot unit for institutional standardization in Beijing, a five-star institution, and one of the top ten national model cases for age-friendly design.

There is also the Majiapu Courtyard, located on floors 4 to 6 of a street-facing commercial building, with an annual rent of 5.5 million yuan and 95 beds, operated under an asset-light model. It reached full occupancy within a year, and through elderly care it covered the annual property cost of 5.5 million yuan, turning into a cash cow and creating a win-win situation for both the landlord and the tenant.

ArticleThree, win-win cooperation: with partnerscommunicate candidly, and know when to advance and when to yield.

Face problems directly, seek truth from facts, do not conceal differences or evade conflicts. Hold the bottom line, be flexible for win-win outcomes, compromise when compromise is due, and persist when persistence is required. Our philosophy is to be sincere in conduct, responsible in work, and to do things well and succeed at each one. For example, the Hebei Tourism Investment Cuncai Chunhui Taihang Institution was originally an office building in the Shijiazhuang Pharmaceutical Group factory area, an east-west L-shaped frame structure with a glass curtain wall facade, making renovation difficult and costly. We used standardization to address cost and construction progress, and specialization to achieve rapid occupancy. Not only did we deliver high quality on schedule, but it also became a model of win-win cooperation with the landlord.

From one store to twenty stores, breaking through the “acclimatization” challenges of operating in different locations, we also relied on three things: building a standardized system, cultivating localized talent, and adhering to long-termism.

First, build a standardization system: full-process standardized management and control, anchored to the ‘three-effect integration.’

This is what I especially want to emphasize today.The three-effect integration means improving efficiency, enhancing quality, and increasing profitability.Many people ask me how to optimize costs. Is it reducing staff to increase efficiency? Is it cutting consumable costs? We do all of these, but I think the most reliable approach is improving efficiency. Lose one fewer employee, have one fewer elder fall, reduce one accident, and the money comes out—over the long term, the money comes out. Improving efficiency and achieving the three-effect integration is the best cost optimization strategy.

Cuncao Chunhui is the enterprise that has participated the most in formulating national and industry standards for the elderly care industry. It has successively participated in drafting and has published a total of 16 standards, including 11 national standards, 3 industry standards, and 2 local standards.

Second, deeply cultivate localized talent: independently cultivate talent and build a middle-level backbone echelon.

For cross-provincial chains, you cannot always send people from Beijing; places like Hebei, Henan, and Shanxi are different after all.So we insist on ‘local recruitment plus headquarters empowerment’ and boldly cultivate management talent.We place special emphasis on selecting and cultivating waist-strength talent, with middle-level management cadres as the focus of development. At the same time, we boldly employ newcomers, preferring high-potential newcomers with zero foundation; their greater plasticity and learning ability allow them to integrate and innovate faster than veteran employees with fixed experience. We promote cooks to become directors and train young people into backbones. In the short term, the cost is high; in the long term, the cost is low. We make training the greatest benefit. The backbone team of Cuncao Chunhui is one of the most stable teams in China’s elderly care industry.

Third, adhere to long-termism: improve the training and assessment system.

Firmly reject short-term profit-seeking thinking and deeply cultivate the industry with long-termism.Establish a normalized professional training mechanism and implement regular and irregular assessment inspections.I always say that you must explain things clearly and thoroughly to employees. Once they understand, they will not make mistakes; once they understand, they will cause one fewer fall, one fewer fall incident, and our costs will come down. So we must practice internal skills, fight clumsy battles, and build high walls. At the same time, support employee growth with an inclusive mindset and allow trial and error in exploration, but the same mistake must not happen twice. Keep reviewing and continuously improve.

Brand is the external business card of an enterprise, and culture is the internal soul of an enterprise. We build two major cultures: brand culture anchors the cornerstone of customer trust, and employee culture activates the organization’s internal driving force.

Chain brand development adheres to three major principles:

First, uphold employees first.Team stability is the cornerstone of service quality. We always put the growth and well-being of employees first. Whether it is a management meeting at the headquarters or at each institution, we must consider the interests of employees.

Second, uphold all-round education. The education system covers employees, elders, family members, and partners. We cannot only educate employees, nor only educate elders; we must let everyone resonate with us and grow together.

Third, uphold the creation of product power.Create the ultimate experience from the five dimensions of sight, hearing, smell, taste, and touch. Specifically: visual aesthetics, creating a comfortable, tidy, warm, and elegant age-friendly aesthetic space; a sense of superior status, providing tiered exclusive services and customized benefits; an inner sense of belonging, creating a warm community atmosphere so that elders can regain the warmth of a big family; emotional pleasure, carrying out diverse cultural and entertainment activities, supplemented by professional psychological counseling; a sense of value and gain, combined with the concept of use it or lose it, allowing elders to rediscover the value of life through learning and contribution.

Finally, let us use two financial data points as supporting evidence.

Xidiaoyutai Branch: project investment of 9.93 million yuan, break-even point at 70 beds, break-even in the second year of operation, investment payback period of 6.62 years.

Majiapu Branch: project investment of 2.55 million yuan, break-even point at 79 beds, also break-even in the second year, investment payback period of 5.24 years. Efficient investment and excellent service will surely achieve a win-win outcome for both Party A and Party B.

To summarize:

• In terms of operational trade-offs, adhere to calculation first and precisely select projects that suit you;

• In terms of scale expansion, act according to your capacity while striving to do your best, and establish a refined operational service system;

• In terms of long-term foundations, deeply cultivate both brand culture and employee culture, and build a professional and warm elderly care service ecosystem.

The core thread is to adhere to the development philosophy of ‘three effects in one’, driven by both quality and profitability, and steadily advance the continuous progression of a fifteen-year chain elderly care brand.