2003: Starting with Foreign Trade

Chapter 256 Valuation of Peptides

"Currently, the valuation of the domestic automobile industry is based on SAIC Motor. Before coming here, I checked SAIC Motor's stock price, which is currently around 3.5 yuan. Based on their total share capital, their market value is around 115 billion yuan."

During the lunch break, it was the same leader who understood finance who was explaining the valuation of the automotive industry to Tan Jincheng.

Tan Jincheng lacked financial knowledge. Although his business was doing reasonably well in his previous life, he was a complete novice when it came to finance. After being thoroughly defeated by Zhongguo Ping An in the A-share market, he became much more cautious.

FlashTech will definitely go public and raise funds in the future. Tan Jincheng still has a lot to learn about industry valuation, so whenever he has the opportunity, he will learn from people who know about this.

It's not systematic enough, but in this busy phase of work, this is the only way I can gradually fill in my knowledge gaps. Once my business is on track, Tan Jincheng plans to take a course to learn more.

This leader also appreciated Tan Jincheng's eagerness to learn and patiently taught him as if he were a junior.

"3.5 yuan? 115 billion? Is SAIC's valuation really that cheap?" Tan Jincheng asked in surprise.

He hadn't checked SAIC's total share capital and didn't know it, but he did know its valuation of 115 billion yuan, and that SAIC Group's market capitalization would reach 150 billion yuan in a dozen years.

"Holy crap! This is a business opportunity! A 10-fold increase to the daily limit, isn't this even worse than buying Moutai? I have to find a chance to stock up on some, 3.5 yuan is too cheap."

The leader said with a wry smile, "There's nothing we can do. Everyone knows the automotive industry is a huge industry. A valuation of 115 billion is indeed ridiculously cheap. But even though our domestic cars have been doing very well in recent years, we still can't shake the market share of foreign brands."

There's something he can't say: the history of official vehicles is actually the best reference for my country's automotive industry. From the earliest Eastern European brands to Nissan, and then from Santana to Audi, they have always been foreign brands.

The lack of domestic brands reflects a sense of helplessness, as our automotive industry has been truly suppressed for decades.

Fortunately, with the arrival of the new century, domestic cars have begun to flourish. Although there are still no particularly outstanding brands at present, it is believed that in the near future, our own brands will also appear for official vehicles.

"What kind of valuation should we give for these peptides?" Tan Jincheng wasn't unaware of the meaning behind his leader's wry smile, but he didn't know how to respond to such a question, nor was he qualified to do so.

In his previous life, Zhongtai's highest market value was 300 billion. At this moment, his car has not yet been launched, so it is really difficult to value it. However, with SAIC Motor's benchmark of 115 billion there, there is a good reference point.

Can you be more awesome than SAIC?

How much was Zotye worth when it went public through a reverse merger? I think it was around 60 billion? But that was 10 years later.

Besides, he's using the parent company's shell; it's like the father buying the son's stuff, so the price is definitely inflated.

On the other side, Ying Jianren and Wu Jianzhong were also discussing the matter. Ying Jianren sighed and said, "It's not easy. The key is that our product hasn't been launched yet. Even if we say that we are optimistic about the market and that it will sell very well, it is still possible that it won't sell. So it's really hard to calculate the valuation."

You could say that Zhongtai is worth billions, or you could say it's worthless, but I happen to need automotive qualifications right now, and I need this cooperation. The other party is also coming with sincerity, so it's a bit of a dilemma.

"It's indeed difficult to value, so it's best if we don't set a price ourselves. Let them set a price and then we can discuss it. Do you want to try to get more information from that young man?"

"It's a bit difficult. That young man is very tight-lipped. I talked to him all morning, but apart from telling me his intentions, I didn't get anything out of him."

Ying Jianren shook his head, then said, "He told me that the condition for getting that license plate was that he spent 3000 million yuan, and he also invested in building a factory in his hometown. I don't know if it's true or not. Brother-in-law, do you want to ask around and find out?"

Wu Jianzhong also shook his head: "It's possible to find out by asking around, but it's too late now. However, the figure of 3000 million is probably fake. It's probably just to fool you or test you."

"I think so too, but it must have cost at least tens of millions. This kid is quite shrewd; we couldn't get a single word out of him all morning."

"That's normal. People in Beicang District seem to value him quite a bit. If he didn't have some skills, even with a powerful background, he wouldn't be treated this way."

He had met many young people with connections, but those who earned respect were all capable, especially in important matters like attracting investment. A district government wouldn't just listen to someone's opinion unless it was very constructive.

"Then it's settled. Let's start negotiating this afternoon, let them name their price, and if it's reasonable, we'll finalize it." Ying Jianren had been running around for months and was getting a bit annoyed; he couldn't wait to finalize things as soon as possible.

Wu Jianzhong glanced at his brother-in-law, smiled, and said nothing. He understood this feeling perfectly; their entire fortune was tied up in this car, and settling on it sooner would certainly provide a lot of peace of mind. He himself felt the same way.
-
"The automotive industry is a discretionary consumer sector. It is a daily consumer sector, but it also has the characteristics of discretionary consumer goods and has a certain cyclical nature. From a global perspective, the number of cars on the road is a very important indicator."

"From a global perspective, the world's car ownership has reached 4500 million vehicles. Some developed countries in Europe and America are already close to the situation after high growth. Therefore, the valuation of car manufacturers will not be very high, and some are even lower than the valuation of parts suppliers."

"However, our country is a bit different. We are an emerging market with a low ownership rate, and there is still a lot of room for growth in the future. Xiao Tan, if you are interested, you can buy some car stocks. I think there should be good returns in the future."

After getting to know each other for a while, the leaders became quite familiar with Tan Jincheng and spoke less formally in private. This leader, who was in the finance field, had previously heard Leader Gu jokingly say that Tan Jincheng was investing in stocks and was supposedly stuck with losses.

Stocks are always an unavoidable topic in finance. Although it was just a simple joke, he remembered it and couldn't help but bring it up to tease Tan Jincheng, and also to give him a hint.

“Okay, we’ll buy SAIC Motor when we get back.” Tan Jincheng nodded repeatedly.

Even if you hadn't mentioned it, I would have bought it anyway. I should thank you for bringing up SAIC; otherwise, Tan Jincheng, who isn't very familiar with A-shares these days, would have just been focusing on liquor stocks like Moutai. After all, many A-share companies have undergone multiple name changes, and even with a good memory, if you're not particularly familiar with them, you wouldn't know the historical name of a particular stock.

Unless you have a very good understanding of his fundamentals.

Investing in stocks based on fundamentals? What a load of rubbish! Just get some code and get to work!

"Haha, I'm just saying this, don't do anything reckless. I won't compensate you if you lose money, and besides, I can't afford to."

"How could that be? You're teaching me. I can't find someone like you to guide me normally. I'll have to ask you for advice often in the future."

Tan Jincheng also wants to buy shares of Moutai, QQ, and Ningbo Bank. Now he's added SAIC Motor to his list, and he might think of others in the future. Plus, he owns so many houses. It seems he should find someone to manage his personal investments.

In reality, these investments will amount to a considerable sum in the future, and they will indeed require dedicated personnel to manage them. The person managing them doesn't need to be exceptionally talented; some basic knowledge is sufficient, but they must be absolutely trustworthy.

"Damn, no wonder the protagonists in online novels love to build harems. It's definitely more trustworthy to have your bedmate managing some private businesses." Tan Jincheng couldn't help but think nonsensically.

Forget it, Kun'er can't take it.

He could endure hardship for a few years, and when his younger siblings grew up, he could hand the reins over to them. Tan Jincheng knew their character well.

"Sure, I'll find you a few books when we get back. You can read them when you have time. Now that your business is growing bigger and bigger, you really should study more. My suggestion is that you can audit some classes at Ningbo University when you have time. Getting an auditing qualification shouldn't be difficult for you, especially since your girlfriend is also from Ningbo University."

"Okay, I understand. Thank you for your guidance."

"I wouldn't call it teaching you; you're an outstanding young man who has a good conscience. I admire you just for paying social security for all the company's employees. In the future, many families will thank you for this."

These words were so high-sounding that Tan Jincheng felt a little embarrassed: "This is what I should do. Besides, I only paid the lowest grade, it's not as exaggerated as you make it out to be."

"It's already quite remarkable. You have to take things one step at a time. And don't underestimate the importance of all your employees paying social security. When your company has a greater influence in Beicang, other companies will follow suit, which can be considered a driving force."

In this era, very few private enterprises voluntarily pay social security contributions, which is one of the reasons why college students are unwilling to work in private enterprises. Moreover, because society is in a period of rapid development, everyone in the country is busy making money.

This kind of thing is basically tacitly accepted, which is actually a bad phenomenon. Without guarantees, it's impossible to attract outstanding talent. Without outstanding talent joining, there's no competitiveness, and it will definitely suffer losses at a certain stage of development.

"Returning to the valuation of Zhongtai, you chose a very good time. Their car hadn't been launched yet, so we wanted to have a certain advantage in equity when we were discussing cooperation, since the product hadn't been tested by the market yet."

“Taking SAIC as a benchmark, and looking at the current situation of other domestic car companies, such as Chery, Geely, and BYD, I think that a valuation of around 20 billion yuan for Zhongtai is reasonable at this stage. A higher valuation is also acceptable, but it cannot exceed 30 billion yuan.”

After listening, Tan Jincheng roughly had a idea of ​​the amount: between 20 and 30 billion. If it was a branch company, the amount could be reduced a bit, which would make things easier to negotiate.

Too many words, no more traffic, average daily subscriptions aren't increasing, I'm so upset!



(End of this chapter)