With assets of 427 million yuan and annual operating profit exceeding 20 million yuan, what did this county-level urban investment company do right?

How many assets a company owns is a completely different matter from how much profit it can generate with those assets. This question is now testing urban investment platforms that are undergoing transformation.

In Menyuan, Qinghai, a county-level urban investment platform with total assets of 427 million yuan has an asset-liability ratio of 25% by the end of 2025, with annual operating profit exceeding 20 million yuan. Its businesses are not trendy at all: building materials, water utilities, scenic spots, and animal husbandry, all centered around local projects, residents and tourists in the county.

This set of data comes from a research report published by *Economic Reference Daily* on October 19. For people familiar with urban investment platforms, the highlight lies in the fact that an enterprise in a less developed region has begun to use specific businesses to answer the question of "how to survive after losing the government financing function".

For business owners and investors, this is also a window to observe the local economy. The transformation path of urban investment platforms will influence who operates local projects, who private enterprises cooperate with, and whether public resources can truly generate operating income.

The experience of Menyuan has its applicable boundaries, but the question it raises is very practical: what scale does a county-level urban investment platform actually need to operate well?

What Businesses Should Small Counties With Weak Foundations Prioritize

Menyuan County Urban and Rural Investment Co., Ltd. was founded in 2015. According to the report, in the initial stage of its establishment, it mainly undertook the county-level infrastructure financing function, had no market-oriented business, and its development relied on fiscal allocations. In 2020, the company launched a comprehensive transformation.

The challenges followed: the county-level market is limited, with insufficient industries, talents and management experience, where can the company find enough income to support its operation?

The choice of Menyuan is to start from the existing local demands and resources. Building materials serve local county projects, water utilities connect to public services, cultural tourism makes use of natural landscapes, and animal husbandry is based on local agricultural and pastoral foundations. The names of these businesses are ordinary, but they share one common feature: specific users and payment scenarios can be found for them.

The report revealed that the two mining sites under its subsidiary Jinyuan Building Materials generate an annual revenue of more than 30 million yuan, which not only supplies building materials to key projects, but also plays a role in stabilizing regional building material prices. For such enterprises, the distance between mining sites and project demands, transportation costs, and supply stability may all constitute operational advantages.

The logic of water utility business is different. It has continuous service demands, but all fees, pipe network maintenance and equipment renewal need to be calculated. Stable demand does not mean naturally stable profit. Only when income can cover operation and necessary investment can assets have the foundation for sustainable operation.

This is the most easily overlooked step in county-level transformation: first figure out who pays and why they pay, then decide what to build and what to purchase. If the order is reversed, that is, making investment first and then looking for customers everywhere, capital pressure will land together with the project.

For a company with limited scale, being familiar with the local market is also a kind of competence. Business scale can grow slowly, but the trial-and-error cost of unfamiliar industries may exceed its tolerance at one time.

Scenic Spots With Steady Tourist Flow Can Bring Operational Space For Enterprises

Another business in Menyuan is to turn natural scenery into operable tourism services.

According to the report of *Economic Reference Daily*, the company has operated two major scenic spots, Gangshika Snow Peak and Juyang Gully, since 2024. In 2025, the Gangshika Scenic Spot received more than 1.3 million tourists. The demands brought by tourists extend to links such as horse-riding experience, catering and travel photography.

The herdsman Danzeng mentioned in the report runs the horse-riding experience business, with a monthly income of more than 8,000 yuan in the peak tourist season; along the scenic spot, there are more than 120 stalls in total run by herdsmen providing horse-riding experience, pastoral home stays and travel photography services.

This is more interesting than only looking at the ticket revenue of the scenic spot. Whether a project can take root in the county also depends on whether it can leave participation space for surrounding residents. When residents have income, service supply can be easily sustained; when tourists are willing to consume and stay longer, the operation of the scenic spot can have more room for extension.

For local merchants, opportunities may lie in these small links. The urban investment platform undertakes the operation of scenic spots, and merchants provide services around tourists. Each party invests resources matching their own capabilities, which is often more feasible than everyone rushing to build heavy asset projects.

However, the figure of 1.3 million is the reception scale, which cannot be directly converted into the income of the enterprise, let alone the net profit. Whether tourists pay, which operating entity the consumption occurs in, and how the peak and off seasons are distributed will all affect the final earnings.

Plateau scenic spots also have to face the costs of weather, transportation and safety guarantee. Whether the prosperity in the peak season can cover the maintenance expenditure of the whole year requires data from a complete operation cycle. Cultural tourism can provide transformation opportunities, but enterprises still need to calculate each item carefully, and cannot let the one-year tourist boom make decisions for future investment.

Further Analysis Is Needed For The 20 Million Yuan Profit

By the end of 2025, Menyuan Urban Investment has total assets of 427 million yuan, an asset-liability ratio of 25%, and annual operating profit exceeding 20 million yuan, which are the core indicators given in the report.

These indicators show positive changes, but they need to be understood separately. "Operating profit" should not be directly regarded as net profit, let alone net cash inflow from operating activities. Revenue has been recognized, but the payment for goods may not have been received; profit has been generated, but the funds may be occupied in receivables, inventory and subsequent investment.

Therefore, to judge the quality of transformation, in addition to profit, we should also ask how much cash is received from operating activities, how long the customer payment collection cycle is, how much maintenance investment is needed every year, and how the maturing debts are arranged. The existing report does not provide complete audit statements and cash flow statements, which is not sufficient to make a comprehensive financial evaluation of the company.

The 25% asset-liability ratio also has similar boundaries. It reflects the relationship between liabilities and assets at a certain point in time. Debt maturity, financing cost and the realizability of assets also affect solvency. Low debt is a favorable condition, but subsequent expansion still needs to match the operation capacity.

The original report also takes a large district-level urban investment platform in eastern China as a comparison. This kind of comparison can remind the market to pay attention to operating quality, but due to different regional development stages, public construction tasks and asset structures, we cannot judge which model is better only by scale and several indicators.

The real inspiration provided by Menyuan is to shift the assessment focus from "how many assets are included" to "what contribution can the assets make every year". A mining site, a section of water supply pipe network, and a scenic spot all have different costs and returns. Enterprises need to calculate them separately before deciding how to allocate funds.

The Sustainability Of Transformation Depends On Whether The Boundaries Are Clearly Defined

With businesses in place, a mechanism to ensure the normal operation of these businesses is also needed.

According to the report, Menyuan Urban Investment has implemented competitive appointment for posts, tenure-based contractual management, and linked salary with performance. Among its more than 200 employees, the proportion of market-oriented recruitment exceeds 70%. Whether these measures can continue to produce effective results depends on whether the assessment covers real operating results.

If the management only pursues revenue, the enterprise may take over businesses with low gross profit and long payment period in order to expand the statements. If payment collection, cost and necessary maintenance investment are assessed at the same time, the operators will have more motivation to make transactions solid.

Clear accounts are also needed between the government and the enterprise. The report mentions that the Menyuan county government and the urban investment platform have established a list of rights and responsibilities, clarified the ownership of assets and debts and the boundary of market-oriented operation, and the government purchases services in accordance with market-oriented accounting methods.

The government can be a customer of the enterprise, but what services to purchase, how the price is formed, and when to make payment should all have clear agreements. Public services require continuous investment, and enterprises also need reasonable returns. Only by connecting the two ends with clear contracts can the uncertainty in operation be reduced.

The "335" requirement mentioned in the report involves the proportion of non-operating assets, non-operating income and fiscal subsidies. When understanding this case, it should be limited to the regulatory practice introduced in the report, and cannot be promoted as a unified exit standard applicable to all national urban investment platforms without verification.

Regarding the exit of financing platforms, public reports such as *21st Century Business Herald* mentioned the deadline of the end of June 2027. It is necessary to make it clear that exiting the financing platform involves stripping off the government financing function and carrying out market-oriented transformation, which does not mean that all urban investment enterprises will close down, let alone that the existing debts will disappear accordingly.

For private enterprises cooperating with urban investment platforms, this change will also change the way they evaluate projects. In addition to looking at the shareholder background, they should pay more attention to the contract subject, budget and capital source, payment terms, and whether the project itself can generate income. For investors, the completeness of operation disclosure will become more and more important.

The path of Menyuan cannot be copied to every county. Tourism resources, mineral conditions, population size and historical debts are different. Some places still need to solve the existing debt burden first to make room for operation.

But it provides a pragmatic starting point: starting from the locally acceptable demands, turning limited resources into paid services, and then using the returned payment to support the next step of investment.

The transformation of county-level urban investment platforms will eventually be implemented into whether a payment for goods is received on schedule, whether a service can cover its cost, and whether a project can operate sustainably. By making these accounts clear, local resources will have the opportunity to become businesses that enterprises can operate for a long time.