2003: Starting with Foreign Trade

Chapter 178 Choices Under Historical Opportunities
In the financial market, there is a valuation standard for companies in various industries. The low valuation of manufacturing companies is generally between 15-20 PE, while the high valuation can be between 35-50 PE.

Unlisted companies tend to have lower valuations, but as a sunrise industry, a PE ratio of 20 for Flash Technology is not unreasonable.

The original plan was that FlashTech would have the capacity to produce 100 million electric vehicles per year after the industrial base was completed. However, given the development trend of the electric vehicle industry, an annual production of 100 million vehicles would not be enough in just a few years.

To a certain extent, the annual production of 100 million vehicles can even be considered as annual sales. Based on the current lowest ex-factory price of 1550 yuan for the Flash, the annual sales revenue could reach at least 15 billion yuan.

Considering the intense market competition and the risk of declining gross margins, and with certain discounts, FlashTech's annual profit can be estimated at at least 3 million yuan.

With annual sales of at least 15 billion yuan and profits of 3 million yuan, it is already considered a dominant player among private enterprises.

What's even more alarming is that FlashCar's payment terms are only one month. As a manufacturing company, such payment terms demonstrate top-notch risk resistance. Therefore, if it goes public, its valuation will reach a considerable level.

"So, if we fully support the Flash Electric Vehicle Industrial Park project, how can we maximize the district's benefits?"

"You also said that this young man comes from a respectable family and that his path to wealth is clear and straightforward, without any problems. You must have had some considerations, right?"

When questioned by a higher-level leader, the leader surnamed Gu nodded and said, "That's right. We only investigated this project because we saw its potential. Otherwise, there would be no need to do all this. We should still do some research on the person in charge of a project."

"Flash Technology's current equity structure is very simple. Like Jinyi Industrial, 2% of it is under the name of Tan Jincheng's father, Tan Lihua. In fact, it is wholly owned by Tan Jincheng."

“I was thinking, if the district wants to support this big project, could we use land resources or even the name of building new factories to invest in a portion of the shares? The shares don’t need to be too many. Firstly, it would express our support, and secondly, if it goes public in the future, the district could also benefit from it.”

It's clear that Boss Gu wanted to maximize the profits from this major project he had taken on during his tenure, as a way to secure his future. Otherwise, there would have been no need for him to investigate an investor privately, which seems rather illogical.

There is no airtight wall in the world.

Tan Jincheng has poured almost all the money he earned in Beicang into Flash Technology. If you investigate them behind their backs and people find out, and there's no benefit to it, this young man might just get angry and move the company away.

Therefore, it is necessary to provide a reasonable explanation and benefits. Using land resources and factory buildings as equity to reduce the pressure on its cash flow is the best way.

You want 150 acres of land? We can provide that. You can choose the location, and we can also take care of building the factory. You won't have to spend a single penny. All you need is a very small percentage of your company's shares, and it won't affect your business strategy.

Furthermore, we can also resolve the 2 million investment amount you promised through preferential loans.

With a series of preferential policies and the absolute support of the local government, even if you know that someone is investigating you privately, it won't matter much in the face of absolute benefits.

"So how many shares do you think is appropriate? If we consider the company's designed production capacity and future valuation, we really can't get many shares just for the land and factory buildings."

“We can talk to him about this. I believe he won’t refuse this kind of cooperation. Or we can invest some money under the name of the city investment company. FlashTech’s payment period is only one month, so this investment is very promising.”

"Indeed, this young man's business acumen is quite good; the cash flow of several companies is very healthy."

"Yes, he is a very talented young man. He operates a trading company with light assets and only focuses on profits, but he can also do so well in the real economy, which is a capital-intensive industry."

"So you think highly of him, right?"

"Yes, I think highly of him. This young man has great ambitions. His project proposal would be very attractive anywhere. Don't forget that he's currently renting his factory. Also, although he bought a house in Beicang, he's still renting a place to live."

The top leader frowned. Yes, this project proposal would be very tempting anywhere. If he took it back to his hometown, let alone 150 mu, he could easily take 1500 mu if he dared.

Most importantly, whether intentionally or unintentionally, this young man has hardly bought any property in the year or so he has been in Beicang. That house is practically a joke in terms of his current net worth.

What's even more frightening is that his business partner is the same way. Are young people these days so mature? They make money but don't think about going on a shopping spree.

He has money and clients now, and he has no shortage of resources to start up. If his requirements cannot be met, he can move the equipment away at any time and find another way out.

"It seems like he's begging us to approve the land, but it looks like the initiative is still with him," the senior leader said with a helpless smile. Since it was a private meeting, neither side was too serious, and the conversation was quite casual. Leader Gu also smiled helplessly, clearly having already considered the issue; it's hard to say what will happen if a young person gets upset.

Coastal areas have good conditions and a complete supply chain, but that doesn't mean they have to choose Beicang. They can do it anywhere else. For example, Xinri moved to Jiangsu Province. What if others move away too?

"How about this, let's arrange a meeting tomorrow to discuss this together. After the results are out, I'll arrange for someone to meet with him so I can see what it means to be young and promising."

"Okay, that's all for now. I won't disturb your work any longer."

The senior leader nodded, a look of satisfaction in his eyes. This person in front of him was capable; the projects he had previously managed had all been quite successful, and this time he had astutely seized an opportunity. If handled well, it could become a multi-billion dollar project.

As I've reported before, a simple land application allowed him to discover a major future project, and he even went so far as to conduct some investigations privately. He can be described as a person who dares to think and act.

The current economic environment of Beicang District mainly relies on the port. Although there are many large enterprises in the area, there is currently no industry like electric vehicles, which is a sunrise industry strongly supported by national policies. If such a project could be approved, it would indeed be of great benefit to the regional economy.

As people's living standards continue to improve, the demand for short-distance travel is naturally increasing. The future electric vehicle industry will definitely be much more than just a few billion yuan. In addition, if we rely on port resources and do a good job in exporting electric vehicles, the future is even more limitless.

It wouldn't be difficult for the district to have another listed company within a few years.

This project not only needs to be launched, but it needs to be completed quickly. We should strive to put it into construction as soon as possible. With the district's assistance, FlashChe might have a chance to compete for a leading position in the early stages of industry development! Then the district will have another leading domestic enterprise!
Looking back at the development history of two-wheeled electric vehicles in China, 2003 to 2004 was a turning point. Before the implementation of the new Road Traffic Safety Law on May 1, 2004, electric scooters could only be secretly driven on the road. With the implementation of the new traffic regulations, electric scooters ushered in a historic opportunity.

In 2004, the total production of electric scooters in China was only 676 million units. However, by October of this year, the production capacity had already exceeded 1000 million units, almost double that of last year, which shows how fast the market is developing.

The industry is facing unprecedented policy opportunities, and one of the hottest brands in the district has emerged this year. If we can’t seize such a historic opportunity, then we can’t even talk about attracting investment.

More importantly, this young man has this ambition, and if the district cannot meet his conditions, some unexpected things may happen.

It must be said that this young man is indeed insightful and bold. Despite limited production capacity, he dared to spend a lot of money to hire celebrities as spokespeople, which immediately boosted the brand's influence and made people remember the brand through advertising and marketing.

The first brand in the industry to hire a celebrity spokesperson, the first manufacturer to advertise on satellite TV, and with a wide variety of online marketing methods, insufficient production capacity has become an advantage under such marketing circumstances.

What's that phrase called again? Oh right, scarcity marketing. Apparently, their supplier customer service hotline is always busy, with orders already booked until next year, creating the impression that they're in high demand.

Among so many established companies and newcomers in the market, they have carved out their own niche with steady, accurate, and ruthless business tactics, showing a kind of unorthodox and unpredictable style.

"Young people are quick-witted and have a lot of tricks up their sleeves when it comes to business," the senior leader chuckled to himself.

However, in terms of business model, this young man can be considered to be running his business with integrity. He has handled the tax issues of several companies very well. In addition, it is rare that all employees are covered by social security. Currently, apart from the foreign-invested enterprises introduced by the district, there are not many private enterprises that can do this. This is indeed worthy of praise.

The senior leader's eyes flickered, and after a while he called out to the outside room, "Little Li, come in here for a moment."

Upon hearing this, Secretary Li reflexively grabbed the notebook from the table and quickly walked into the inner room.

"Boss, what are the arrangements?"

"Is there any time I can squeeze out of my schedule lately?"

The secretary naturally remembered the leader's schedule, but still carefully flipped through the notebook, thought for a moment and said, "There is a short meeting next Friday morning, about an hour and a half. The time between the end of the meeting and the start of work in the afternoon is free."

"Let's cancel the meeting. You can make arrangements to visit a company called Flash Technology in the district next Friday."

"Okay." Xiao Li quickly wrote it down.

"Flash Technology?"

(End of this chapter)