2003: Starting with Foreign Trade

Chapter 286: The unique structure serves as a wake-up call.

Xie Junhong, who was constantly attending meetings, was feeling a bit dizzy after a morning of meetings.

As soon as I got back to the office, I saw a thick layer of documents on my desk, all bound together.

The top document had the words "Flash Technology" written on it in large characters.

He glanced at the documents and found they were financial reports from Flash Technology. He then looked at several other reports, including those from Orange Technology, ByteDance, Hangxin New Energy, and even Jinyi Industry.

"What does this mean?" Xie Junhong asked his secretary with some confusion.

As the head of Beicang City Investment, Tan Jincheng certainly knew that these companies belonged to him. Now, Tan Jincheng's every move in Beicang's business is being watched by the district. If a company is established this morning, the relevant people in the district will receive the information this afternoon.

In addition, the district's Administration for Industry and Commerce has adopted a special approach to handling all matters, both in terms of procedures and other aspects. As long as the procedures are not in violation of regulations, they are simplified as much as possible, and even door-to-door services are provided when necessary.

Their attitude was incredibly good.

However, these financial statements are all internal company data. Although they look simplified, what's the point of sending them to us? Beicang City Investment is just a shareholder of Flash Technology.

The secretary smiled and continued, "President Tan's secretary said that President Tan is planning to restructure FlashTech into a group. It is necessary to inform Beicang City Investment of these data, since we are also a shareholder of FlashTech."

Being a secretary isn't easy. Mr. Tan's secretary sent several emails. All the documents on the desk were printed and bound by him. Even the arrangement of the documents was particular. Flash Technology was placed on top to attract the boss's attention.

If it were something like Orange Technology or Superstar Engine, the boss might not have thought of it at the moment and would have simply overlooked it.

Xie Junhong was taken aback. A conglomerate?
He certainly understood what a group structure meant. There were exactly five companies here, which certainly met the standards for a group structure in terms of scale. Beicang City Investment only held a 5% stake in Flash Technology.

If it were a typical company, Tan Jincheng would have already been giving face by simply making a phone call to inform them about the group's restructuring. In fact, even with Beicang City Investment, Tan Jincheng could have done the same, and neither he nor the district would have said anything.

The conglomeration of FlashTech is beneficial to the district, even if it infringes on the interests of Beicang City Investment to some extent, the district and even themselves cannot say anything.

However, it's quite interesting that Tan Jincheng presented several companies' internal financial reports in such a solemn manner.

"He's sensible," Xie Junhong muttered to himself.

The district is selecting him as one of Ningbo's top ten youths, the media is hyping him up, and he made headlines in Beijing at the end of last month. Despite all this, he hasn't gotten arrogant and remains very disciplined, even going so far as to expose the financial data of his own companies.

Is this something a 20-year-old would consider? He's a prodigy.

If he were in Xie Junhong's shoes, he wouldn't be able to guarantee that he wouldn't get carried away and disregard his partners' opinions.

Xie Junhong quickly scanned through FlashTech's financial report. After reading it, he smiled. Beicang City Investment only paid 7000 million yuan in cash to acquire 5% of FlashTech's shares. The rest were just preferential treatment from the district and had nothing to do with Beicang City Investment.

Judging from this simple financial report, the 7000 million yuan has already been recouped this year. That's incredibly fast! Can you really do business like this?
A physical business that can recoup its investment in just one and a half years—that's an incredibly fast timeframe!
Needless to say, although this investment was initially undertaken at the beicang District government's behest, we were honestly a bit reluctant at the time. 7000 million yuan is not a lot for Beicang City Investment, but it is not a small amount either.

If you lose money on an investment, it's a bad debt that you'll have to bear the blame for.

Unexpectedly, it has now become one of its achievements, and FlashTech can boast about it in this year's annual report.

He then scanned the financial reports of several other companies, but there were no highlights, at least not in Xie Junhong's eyes. In particular, there was an investment company called ByteDance Engine, which had a strange name but only owned 100 houses as landlords.

Speaking of which, these 100 houses were part of the equity transfer fee given by Beicang City Investment when it invested. Xie Junhong couldn't help but laugh when he saw Tan Jincheng listing such companies. These were entirely his private property, and there was really no need to bring them to Beicang City Investment.

Is this just there to make up the numbers?

"Mr. Tan's Jinyi Industrial is quite profitable, with a very strong cash flow. The banks must be furious when they see this!" Xie Junhong couldn't help but tease when he saw Jinyi Industrial's financial report.

There are many such import and export trading companies in Beicang. Although they have a lot of money, Xie Junhong thinks they are just good, not amazing.

What truly concerned him was FlashTech's financial report: first-quarter sales exceeded 1 million yuan, and April shipments were projected to surpass 4 electric vehicles, making it highly likely to secure the top spot in monthly sales. Based on this, annual revenue would be at least 5 million yuan, and the peak season for electric vehicle sales hadn't even arrived yet.

With an investment of 7000 million yuan, Beicang City Investment has reaped a real business with revenue exceeding 5 million yuan in its first year. They've made a killing!

After reading it, Xie Junhong pondered for a moment and said to his secretary, "Make an appointment with the district, and I will go there to report on my work."

FlashTech sent five financial reports, which certainly means more than just the issue of group restructuring. There might be ideas for deeper cooperation. We need to discuss this with the district and also meet with Tan Jincheng.

"By the way, I'd also like to ask when Mr. Tan is available. If he is, I'd like to arrange a meeting with him to have a chat."

“I’ve already inquired with President Tan. He said he doesn’t have time before the 8th, but the 8th is fine,” the secretary quickly replied.

"The 8th? Are you that busy? Today is only the 3rd." Xie Junhong flipped through the calendar and then said, "Then let's arrange to meet President Tan on the 8th. Please make an appointment for me to report to the district office. Let's finalize it within this week."

"Ok."

How busy could Boss Tan be? He simply visits each company, talks to the heads of each one, and lets them know about the company's restructuring plans. From the management's perspective, the group restructuring is also beneficial to them.

With all companies integrated into the unified operation, corporate management becomes more compliant, and there are greater opportunities for advancement for management. Moving from a branch office to the head office involves not only changes in position but also in compensation.

In addition, Tan Jincheng has been consulting with professionals these days, seeking knowledge on equity design, and asking them to help design the equity structure of Flashway Technology to reasonably avoid more risks.

Using a family trust to control the group's parent company's shares is the advice given by most professionals. Some also suggested that Tan Jincheng set up an offshore company, but this suggestion has been rejected by Tan Jincheng for the time being.

It's not the right time yet, and we don't need these things for the time being. However, internet companies do like to set up companies overseas to facilitate listing on the US and Hong Kong stock exchanges.

FlashTech's plan is to list on the A-share market, so there's no need to make it so complicated. In addition, Orange Technology's positioning is actually to support the automotive industry in the future, and it doesn't plan to introduce many investors, so the need for listing is not very large.

As for industries such as batteries and automobiles, listing on the A-share market will be more convenient than listing overseas in the future.

It's okay if you don't need it for now, but you still have to register one. To facilitate future investments and other processes, after consulting with professionals and taking their advice, Tan Jincheng also established two overseas companies after the 3rd.

One company, Cheng Yue (BVI) Limited, is wholly owned by Tan Jincheng, and the other company, Jinqing Holdings Limited, is wholly owned by Gu Qingqing.

The so-called BVI is the abbreviation for the British Virgin Islands. The purpose of this is very simple: to avoid taxes. This tax avoidance does not mean paying less tax in the country, but paying less tax abroad as well.

With import and export business, the company will export both two-wheeled electric vehicles and automobiles in the future. The company's products are globalized, and the company believes in globalization. The necessary tax reduction measures should still be in place.

Tan Jincheng will later use these two companies to gain control of the future Flash Group.

As expected of professionals, after seeing their design, Tan Jincheng found the equity structure increasingly familiar. He later realized that it was practically the same as a belt company.

Because similar equity structure diagrams are hardly a secret on the internet in later generations, no matter how sophisticated they are, they will be thoroughly exposed. Tan Jincheng had naturally seen the equity structure diagram of the belt company.

"Fine, a belt it is then."

Even though something went wrong, it doesn't mean everything he did was wrong. At least in terms of the shareholding structure, he can guarantee that his descendants will be safe and secure, and their future will be similar to his.

He is indeed a reborn person, but who can guarantee that he will be in the future? It's good to have an extra layer of protection. He was in the limelight for 20 years, and when the accident happened, he was probably over 60 years old. He has enjoyed everything he was entitled to.

I'm only 20 years old now. Even if I'm successful for 20 years, I'll only be 40. I'd better be with an old man like Ma to feel secure, right?
If you're 40 and still using a sewing machine, you might as well not do it at all. This diagram can also better remind Tan Jincheng to do business honestly and live a peaceful retirement.

Of course, it's still quite a spectacle that Boss Xiao Tan has been taking her sister to inspect work at various companies and meet with professionals these past few days.

In just a few days, the fact that Mr. Tan, the boss of FlashTech, likes to bring his sister to work has become the talk of the town in Beicang District, and has become a popular topic of conversation.

(End of this chapter)