Recently, I came across some of Duan Yongping's insights on business models, and I found them particularly worth pondering. He places the first filter for investment on the business model itself, with the core logic being to find those "money-printing machine" businesses that generate continuous cash flow and are hard for competitors to imitate.

Duan Yongping summarized five evaluation criteria, which I find especially practical. First is stable and sustainable cash flow and profitability—that is, the company’s future ability to keep making money. He emphasizes that buying a company essentially means buying the present value of its future cash flows, so it's not about how pretty the accounting profits look, but whether real cash can keep flowing in.

The second key criterion is the moat, meaning a long-term sustainable competitive advantage. Duan Yongping straightforwardly states that a business model without differentiation isn’t really a good model, because profits come from lack of competition. That’s why companies like Apple and Moutai can keep raising prices without losing customers—they have products that customers can’t do without.

The third standard is asset-light, high-return businesses. Good businesses don’t need to keep pouring huge amounts of capital to sustain themselves; they can achieve the highest returns with minimal investment. Conversely, businesses that require continuous large investments to survive—Duan Yongping calls these "bitter businesses"—are profitable but very exhausting to run.

Next is resilience to change. A good business model isn’t easily destroyed by new technologies, policy shifts, or changes in consumer preferences. Duan Yongping describes this as "long slope, thick snow"—a long industry lifecycle (long slope) and high, sustained profits (thick snow), enabling the business to go far.

The last criterion is pricing power—being able to raise prices without losing customers. Duan Yongping emphasizes that this pricing power comes from irreplaceable value, not from monopoly. Look at how Apple raises prices with each new product cycle, or how Moutai consistently increases prices annually—that’s the logic.

In fact, the brilliance of Duan Yongping’s framework lies in its focus not on hunting for businesses with explosive profits, but on finding those that can generate stable, long-term earnings that competitors find hard to copy. This approach is especially valuable for ordinary investors when selecting companies.