2003: Starting with Foreign Trade

Chapter 107 Stocks and Dividends

As a major shareholder and legal representative of a trading company, business trips or future trips abroad are unavoidable.

Tan Jincheng must have already obtained all the necessary permits and passports. If he couldn't even think of that, then he wouldn't be worthy of being a reborn person.

For Tan Jincheng, going to Hong Kong under the guise of business was not a difficult task.

Last year, when I attended the Canton Fair, I had a plan to go to Hong Kong, because there was also a fairly large trade fair there. However, since the Canton Fair was doing quite well, I didn't end up going.

Now it seems necessary to make a trip!

However, the purpose was clearly not for import and export trade, but for QQ's stock. It is possible to open an account in China, but the procedures are relatively complicated. Since we are already in Guangzhou, it is more convenient to open an account on the other side of the strait and buy directly.

The most important thing right now is naturally to raise funds. It's impossible to take over the entire company for a few million. Even if it were all given to Tan Jincheng, it still wouldn't be able to hold on without capital support.

But if you raise enough funds, you can acquire more shares in the primary market. Buying and selling stocks is legal and compliant, and there's no need to hide anything, as long as you have enough money.

Raise money, then go to Hong Kong to buy stocks, and try to buy as many as possible when the stocks are cheapest. Tan Jincheng probably knows better than Ma Hua what size QQ will be in the future.

If he truly had such confidence in the future, he wouldn't have planned to sell the company for a few million; he's not short of that money!
The key issue is that even at several million, it couldn't be sold; nobody wanted it. It's said that the Sohu boss only offered a few hundred thousand, which sounds quite surreal, but in the current market, it seems to be true.

After researching for so long and reading so many news articles, Tan Jincheng now seemed to understand what the problem QQ was facing was: Fetion, which was a mobile platform, and the cooperation with China Mobile had run into problems.

The company's strategy to become a virtual telecom operator was blocked at the beginning of this year. The wireless value-added services it relied on for survival are also being cleaned up by the mobile operators. The company is facing many problems such as being unable to monetize traffic and not being able to find new profit outlets.

The internet industry is a winner-takes-all industry. With Shanda at its peak and the three major portal websites still dominating the mainstream market, and the giant China Mobile eroding the market from behind, it can be described as a wolf in sheep's clothing.

Under these circumstances, it's understandable that someone might consider selling the company.

The next step should be to use games to break the deadlock. Tan Jincheng doesn't know the specific operational details, but he understands the general direction. Once a new profit model is found, QQ can be considered to have officially transformed and completed its metamorphosis.

Take QQ Space, which just started its internal testing this month, for example. In the future, a mini-game in QQ Space will be completely popular, namely FarmVille, and a series of versions will follow.

This thing doesn't seem to be their original creation, but thanks to QQ's network, it was incredibly popular back then. Tan Jincheng and Zhang Xupeng, who were selling boxed lunches at the time, would steal vegetables after closing up shop, and they even added a lot of strangers online to do so.

"Hey, Little Ma's life is really tough these days. If we're just talking about surfing the internet, even Mop.com is more popular than him these days," Tan Jincheng chuckled as he scrolled through the news.

In 2005, a year of change, everything was just right for Tan Jincheng.

Returning too early means missing the opportunity and having no money; returning too late means only scraps. But this year is different. Given the current size of Tan Jincheng's company and his network, without using Jinpeng Trading's shareholder dividends, making a million or so is relatively easy, if not more.

The two houses can be mortgaged, and although the car is registered under the company's name, Tan Jincheng, as the legal representative, can also mortgage the car. He can also use the rest of the money to buy stocks.

Making a million or so is no problem, and at the very least, we can make four or five hundred thousand. Once the electric vehicle factory is built this year, we can make even more money.

After clarifying his general thoughts, Tan Jincheng put away his computer. Next, he would wait for the Canton Fair to end and then return to Ningbo to raise money to buy stocks!

In addition, Tan Jincheng currently holds 3000 shares of Moutai liquor. He has made up for the shares he didn't buy during the Chinese New Year months. A few days ago, he also used the prize money he won from the Milan Derby to buy Moutai shares. He should have kept them.

Currently, Moutai's stock price has reached around 53 yuan, while my own holding cost has also been raised to 42.78 yuan. I've made 30,000 yuan in the past six months, a 20% profit. In terms of efficiency, doing business is not as fast as investing in stocks right now.

However, this is a long-term measure, intended to provide a guarantee for the future. Business is unpredictable, and bankruptcy can happen in an instant, which is not uncommon. Even those who are reborn cannot absolutely guarantee that such a thing will not happen.

For example, so-and-so has taken a liking to your factory, right?
Therefore, it is still necessary to have a fallback plan. For example, Moutai liquor and QQ, which are about to be acquired, are one's own fallback plan for the future. At the very least, one can become a wealthy man and ensure a peaceful and safe life.

However, with Moutai's stock price rising recently, the strategy of dollar-cost averaging is no longer viable. Buying 500 shares every month would cost nearly 30,000 yuan, which is not advantageous in terms of capital utilization.

It would be better to wait for a big drop and buy it all at once. Although Moutai's stock price has been relatively stable, there are always periods of sharp decline, and that's when I should buy in.

Before the stock market peaked at 6000 points in 2007, you could buy during any time of a sharp drop, sell when it reached 6000 points, and then buy it back during the 08 stock market crash to make a profit.

With light steps, Tan Jincheng weaved through the crowd toward his own booth.

A short while later, upon arriving at his own booth, Zhang Xupeng saw Tan Jincheng walking towards him from afar and asked with a suspicious look, "Why did you take so long?"

Tan Jincheng sat there for more than two hours, and it was almost lunchtime.

"Nothing much, just found a way to make some money. How was your morning?" Tan Jincheng replied with a smile.

"I received an order this morning, it went pretty well; what's a good way to make money?"

"I won't tell you. Grab the computer, I'll go buy you guys some food. It's my treat today."

"Who's the older brother here? Get me a spicier dish, it'll be more satisfying to eat."

"Okay, be careful not to get too hot, it's so hot."

In the afternoon, Tan Jincheng did not participate in taking orders. Apart from occasionally helping with translation and introducing samples, he just watched from the side. After a group of customers left, Tan Jincheng would also give pointers on the shortcomings of his conversations with customers, as well as those of Zhang Xupeng and the other two.

For the next few days, this pace continued for most of the time. In order to help Zhang Xupeng grow quickly, Tan Jincheng intentionally or unintentionally relinquished the initiative, allowing Zhang Xupeng to make his own decisions on various matters, big and small, at the exhibition.

Two or three days later, Zhang Xupeng also realized that Xiao Tan was preparing to withdraw from Jinpeng Trading and cultivate her own prestige.

Zhang Xupeng readily accepted this. The Canton Fair is very important, and he has the final say. While order volume will definitely be affected to some extent, it's also an excellent learning opportunity. I also talked to Xiao Tan about his new company. Xiao Tan seems to have far-reaching ambitions for it, not just doing trade as he previously said. He's even thinking of setting up a factory, specifically producing two-wheeled electric vehicles!

Producing this thing requires a huge investment. From standardized factory buildings and equipment to labor and spare parts procurement, it's a huge expense. Even if we calculate based on a daily output of 100 units, as Xiao Tan said, the investment for just one production line would be several million yuan.

Goodness, the first time I started a company, I invested 10 yuan, and the second time it increased dozens of times. Before I could establish myself, I lost millions of yuan. Once I did, I had to increase my investment, expand production capacity, and invest in new production lines.

This is just buying hens, selling their eggs, and then buying more hens. Eventually, the business grows bigger and bigger, but the risks also increase. Your net worth may skyrocket in the process, but you don't seem to have much personal asset.

Just hearing the plan made Zhang Xupeng worry for Tan Jincheng, as the risks involved were obvious. Therefore, Zhang Xupeng fully understood why Tan was so eager to hand over control of Jinpeng Trading to him.

Having worked with suppliers and managed logistics, Zhang Xupeng knows that an electric vehicle is not comparable to a piece of clothing. From a battery to a screw, the procurement of all the parts, big and small, requires a great deal of effort.

When the factory was officially completed and ready to go into production, even if Xiao Tan wanted to take care of Jinpeng Trading, she wouldn't have the energy for it.

"Hey, what are you thinking about? I'm going to Hong Kong in a few days. Do you need anything brought back?"

Seeing Zhang Xupeng standing there in a daze, Tan Jincheng nudged him.

"What are you going to Hong Kong for? To do business?" Zhang Xupeng asked with some curiosity.

Having traveled to many countries, even without in-depth travel experience, Zhang Xupeng wouldn't be particularly excited to hear the words "Hong Kong." He was just a little curious as to why Xiao Tan wanted to go to Hong Kong.

The company does have two clients in Hong Kong, but their purchases are not large, and they don't require special visits.

If we were to make a special visit, we would first have to go to the United States to find James, who is currently the company's number one client.

“It’s not about business, it’s just a personal matter. If there’s anything you need to bring back to Ningbo, write me a list.”

Immediately afterwards, Tan Jincheng said to Zhang Xupeng in a serious tone, "There is another matter I would like to discuss with you."

Seeing Tan Jincheng's serious expression, Zhang Xupeng straightened up and asked, "What is it? Tell me."

"You know I'm short on cash lately. I was thinking, if possible, we could split the profits from last year and the first quarter of this year, and I'd also transfer 10% of my shares to you to get some cash. How about that?"

Whether it's setting up an electric vehicle factory or buying stocks, these things can't be delayed. Factories need to race against time, and the same goes for stocks. If you buy late, they'll be more expensive. Just look at Moutai liquor; when it was first bought, it was less than 40 yuan.

Moreover, stocks can be pledged. When I inquired about the loan, the bank staff told me that they also accept this type of asset. After buying stocks, I pledged them to the bank and used the cash to invest in the factory.

When the year-end arrives, Jinpeng Trading will pay back the dividends, killing two birds with one stone. The risk isn't too great. Only professional con artists can pull off this kind of trick. It seems I'll have to hire a professional financial advisor when I have more assets in the future.

These words plunged Zhang Xupeng into silence once again. Tan Jincheng was very familiar with the gestures of his eyes narrowing and his eyebrows slightly raised as he pondered his own words.

Seeing this, Tan Jincheng, who was lying in bed, picked up the remote control and turned the TV volume down.

Zhang Xupeng was indeed thinking about this issue. He would need to look at the financial statements to see the specific figures for last year's and the first quarter of this year's profits, but he knew the approximate figures, which were around 300 million yuan.

Because of the support of advance payments for subsequent orders, the company does not need to keep too much cash on hand. Apart from advance payments to OEM manufacturers and other suppliers, Jinpeng Trading's operating expenses are not very high.

There is no problem with distributing all the profits from the two quarters as dividends. Xiao Tan's share is 57%, and mine is 43%. Without calculating the tax rate, Xiao Tan's share is about 170 million yuan, and mine is about 130 million yuan.

All of that was fine. Zhang Xupeng's main concern was the 10% stake. Judging from Xiao Tan's attitude, he would definitely be in full control of Jinpeng Trading after returning. With this 10% stake, he would have a more legitimate claim.

To be honest, it would be a lie to say I wasn't tempted by the increase in company equity from 43% to 53%. You have to understand that the company's biggest profit this year started in May, and the profits in the first quarter are negligible compared to the revenue in the second half of the year.

Take James' contract as an example. The $600 million order started in May of this year. Based on a 40% profit margin, Xiao Tan's 10% share would yield a dividend of about 200 million yuan. And this is just from one order.

Two million yuan, not 20,000 yuan! How could he not be tempted? But Zhang Xupeng really couldn't do it. Accepting Xiao Tan's 10% stake at this time would be taking advantage of her vulnerability.

If it were anyone else, even a relative, Zhang Xupeng wouldn't mind, but this is Tan Jincheng, and no matter how tempted he is, he has to hold back.

Zhang Xupeng knew very well that without Xiao Tan's amazing performance over the past six months, he would not have been able to receive 130 million yuan in dividends in just two quarters.

"Dividends are no problem, but share transfer is out of the question. If we really want to transfer, let's talk about it a year from now."

Seeing that Tan Jincheng was about to say something, Zhang Xupeng waved his hand and said, "I know you're short of money, and the dividends are definitely not enough, so you're thinking of transferring your shares. But I can't take advantage of you like this. Accepting your shares now would be like taking advantage of your misfortune. If we're brothers, let's not say such things again."

"As for your lack of money, that's easy to discuss. You're talking about profit sharing, right? I've calculated it, and I should get around 130 million. I'll lend you 100 million then, and I'll keep 30 to buy a house. I'll also ask Uncle Qingliang to renovate it for me, how about that?"

"That's not a good idea. One million is not a small amount. How about we calculate it as a share transfer?"

"I've already said, if we're brothers, let's not talk about shares anymore. Of course, 100 million is no small amount, so you'll definitely have to give me some interest as a token of our friendship. How about we do it at the bank's interest rate?"

Xiao Tan was short of funds, and I couldn't accept the share transfer, so I decided to help him out again. I don't have many expenses right now; my salary already covers most of my regular expenses, and entertainment expenses are paid to the company.

Once the Passat is back, it's yours to keep. You can use the small portion of the dividends to buy a house, and then you'll have both a motorhome and a car, and you won't lack pocket money. What more could you ask for?

Today's chapter is the third one; tomorrow's might be a little later.

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(End of this chapter)