2003: Starting with Foreign Trade

Chapter 309 Another Victory (Happy Chinese New Year!)
Tan Jincheng showed little interest in Boneng Environmental Power's equity.

In addition, there was no such plan in terms of funding. The company acquired Bafang Electric and invested in the first phase of the Tianjin factory project, with a planned funding of 1.2 million yuan.

The 2000 million yuan from Bafang Electric has been received. Of the 1 million yuan for the first phase of the Tianjin factory project, 5000 million yuan is a low-interest loan from a local bank, and the remaining 5000 million yuan needs to be resolved by Flash Group itself.

The 1 million yuan must be transferred to the Tianjin branch's account within this week.

The main point is that Tan Jincheng has no interest in acquisitions outside of the overall industrial plan. Rather than spending the money on Boneng Environmental Protection, he would rather use it to buy shares in some lithium mining-related companies.

There are many industries that can make money, and there's no end to the money you can earn. Trying to be involved in every industry will only make your company look bloated.

"The cooperation between Flash and Boneng is going very well. I wonder what Mr. Jin thinks?" If you don't want to spend money, then listen to their opinion.

“Boneng’s production capacity is sufficient to supply all the needs of the Flash series electric vehicles. We hope to further deepen our cooperation with you and elevate the level of cooperation.”

"Exclusive supplier?" Tan Jincheng pondered.

Jin Chuanling nodded: "Yes, we can be strategic partners. I know your company has no intention of researching lead-acid batteries, and probably won't be very interested in shares in lead-acid batteries. However, having a stable supplier is a guarantee of quality."

"In addition, we also have some business in energy storage. If the two parties cooperate, this can complement your lithium battery business."

Companies like Boneng are not unaware that lithium battery technology can be applied to electric vehicles; it's just that the R&D investment is too large, and they develop lithium battery technology simply to sell batteries. Very few pure power supply companies do this.

With readily available technology, quick profits, and products that align with current trends, the rational approach is to focus on the present. If Tan Jincheng didn't have grand ambitions, he wouldn't have launched the lithium battery project.

"That makes sense. A stable supplier is indeed a guarantee of quality. But to be honest, we don't have that much cash right now. If possible, we can only do cross-shareholding."

Tan Jincheng is no stranger to the term "energy storage." Anyone who has been a "stock market novice" for a few years should be familiar with this term. Energy storage technology can be applied to multiple fields, and literally, it is a technology for storing energy.

Large power companies generally have this technology; the difference lies only in the strength of their technical capabilities. Hangxin Energy does need energy storage technology. If they can obtain it from Boneng and improve upon it, they should be able to save a lot of time in technology development.

When Jin Chuanling offered to provide energy storage technology support for Hangxin Energy's lithium battery development, Tan Jincheng was already interested in collaborating with him.

But like I said, I don't want to pay.

Unlike motors and controllers, there are so many stable batteries on the market. Even if you can't get Boneng, there are other companies that can provide them. And given Flash's current market position, it's not difficult to find batteries of better quality than Boneng's subsidiary brand, Asia Power.

“No problem, cross-shareholding is fine. We don’t have high financial ambitions; we just hope to maintain a stable partnership with Flashpoint,” Jin Chuanling said happily.

He then gave Zhang Yunhua a wink.

Zhang Yunhua immediately understood that the boss was responding to what he had said about President Tan not taking advantage of the situation.

"Then there's no problem. To be honest, we've launched so many projects recently, and without wanting to increase the company's debt, we really don't have much capital available in the short term."

“I understand that companies need to expand, but at the same time they need to control their debt ratio. I share the same philosophy as Mr. Tan on this point.” Jin Chuanling strongly agreed with this point.

The main entity for this collaboration remains Flashpoint Technology, excluding other businesses.

Boneng transferred its energy storage technology to Hangxin New Energy for a fee in exchange for the opportunity to cross-share with FlashTech. Since FlashTech holds a dominant position in this cooperation, the technology transfer will be subject to a certain discount.

Since it didn't involve cash transactions, a share swap was much easier. After Tan Jincheng and Jin Chuanling reached a general cooperation framework, Zhang Yunhua led his team to begin negotiations with the finance team of FlashTech.

Tan Jincheng then led Jin Chuanling on a tour of FlashTech's factory area, as well as the factory buildings under construction.

Five months have passed, and the Beicang District Electric Vehicle Industrial Park has taken initial shape. Under construction are not only the factory buildings of Flash Technology, but also the supporting facilities of the government and the factory buildings of other factories that have moved in.

Wearing safety helmets, Tan Jincheng and Jin Chuanling, followed by Li Yaohui, walked freely within the safety area under the guidance of the construction site manager.

"President Tan is quite remarkable. He managed to acquire such a large piece of land in Beicang. Judging from the speed of construction, it shouldn't be long before it's officially in production," Jin Chuanling exclaimed.

This was the first time Jin Chuanling had accompanied a client on a site visit.

It's true that the existing Flash factory is too small, there's not much to see. The bustling construction site, the factory under construction, and the large area of ​​land are a demonstration of strength. "It is expected to officially start production at the end of this year or the beginning of January. Judging from the construction, there shouldn't be any problems," Tan Jincheng said with a smile.

150 acres of land may not seem like much compared to the mega-factories of later generations, but in 2006 it was more than enough to build an electric vehicle industrial base, and could even be used to launch a car project directly.

Land prices in Beicang are not as cheap as in small, third-tier counties, so Tan Jincheng was very lucky to acquire so much land last year.

Beicang, a district that was just about to undergo large-scale development, did not yet have a complete industrial chain. The government urgently needed a leader to guide the district's enterprises to operate in a centralized manner and build their own complete industrial chain. Tan Jincheng's electric vehicle project just met the district's requirements.

Secondly, large enterprises in the district tend to build factories in the export processing zone, while Daqi is currently a concentration of small factories with few large ones, making it relatively easier to acquire land.

If it takes two nights or two years to acquire such a large plot of land in such a prime location, it won't be an easy task.

"Then starting in 2007, the production capacity problem that had been troubling Flash could be completely solved."

Tan Jincheng nodded: "Indeed, our biggest problem right now is that we can't completely solve the production capacity issue. Sales have been rising too fast recently, and the peak season hasn't officially arrived yet. The production workshop of Flash will still be under great pressure in the next few months."

Currently, FlashTech's maximum production capacity, including some outsourced processing, can reach 4.5 vehicles per month, with a maximum annual capacity of 50 vehicles.

The Beicang Industrial Base is designed to have a production capacity of 70 vehicles, while the Jinmen Industrial Base is designed to have a production capacity of 100 million vehicles.

Considering that the building density is designed to be slightly higher and more production lines are added, the existing two factories plus the two major industrial bases should have a maximum annual production capacity of 200 million to 250 million vehicles by the end of 2008.

Don't think this number is exaggerated. By 2023, when the electric vehicle market is nearing saturation, leading companies like Yadi and Aima will still be able to sell more than 10 million vehicles a year.

While a company's sales figures may be inflated to some extent, the inflation rate is not excessive. It's impossible for a company to claim to have sold 500 million vehicles and then boast that it sold 1000 million.

Last year, the leading chip brand only sold over 10 vehicles in a year, but this year, in just five months, the Flash sold 16.72 vehicles, which is barely enough to rank it among the top four in the country.

While FlashDrive is experiencing explosive growth, its competitors, such as ChipRi, Yadi, Luyuan, and other established regional brands, are also seeing explosive growth in sales.

In terms of market share, it is not high. Small brands, miscellaneous brands, and even unlicensed electric vehicles from all over the country are also frantically grabbing the entire market.

Today, the electric scooter industry is a real wealth-creating industry. In 2009, Aima invited Jay Chou to be its spokesperson and used a crazy marketing model to seize the low-end electric vehicle market. By 2010, their annual sales were approaching 200 million units.

With an annual production capacity of 250 million vehicles, FlashTech could only sustain itself until 2009.

Next year, FlashTech might build its third production base. This time, Tan Jincheng has specified that it should be an even larger industrial base.

"Take it slow. After this peak season, you should be able to accumulate some inventory, which will make your production tasks easier in the second half of the year."

After saying this, Jin Chuanling jokingly added, "Other manufacturers are eager to sell as many cars as possible, but for Flash Motors' electric cars, it seems that selling more is not a good thing."

I once heard a shop owner in Huzhou complain that it was extremely difficult to get Flash Motors electric vehicles; sometimes, you even had to give gifts to the dealers to get stock, especially since Flash Motors, a low-end brand, sells so well.

Tan Jincheng smiled wryly: "I do know about this. There are people online criticizing us for engaging in scarcity marketing, but it's true that our production capacity is limited, so we can only rely on first-tier suppliers."

Tan Jincheng couldn't and didn't care about giving gifts to distributors to get goods in advance. Since it could reach the point of being given as gifts, it meant there was profit to be made. It was a market behavior, and as long as the terminal retail price didn't fluctuate, it was fine.

If Shanchi sells 20 vehicles a year, Boneng Environmental Protection can generate 9000 million yuan in revenue from a single customer. If Shanchi sells more than 200 million vehicles a year, Boneng can generate nearly 10 billion yuan in revenue from Shanchi alone!
With such long-term expectations and ample market data to support them, the negotiations between Flashspeed and Boneng went very smoothly.

Jinchuanling exchanged 15% of its 95% stake in Boneng Environmental Protection, plus its energy storage technology, for a 5% stake in Flash Technology, becoming Flash Technology's second strategic partner and the exclusive lead-acid battery supplier for all of Flash Technology's electric vehicles.

To simplify the process, the share swap between Flash Technology and Boneng Environmental Power was completed through a private share swap between Tan Jincheng and Jin Chuanling, so the shares of small shareholders such as Zhang Yunhua and Wang Qinghua did not need to be diluted.

Tan Jincheng transferred the energy storage technology to Hangxin New Energy, while the 15% stake in Boneng Environmental Protection was transferred to ByteDance. Beicang City Investment had no objection to this.

How the company operates is none of Beicang City Investment's business. The share swap uses Tan Jincheng's shares, so there is no conflict of interest with Beicang City Investment. The energy storage technology will supplement Hangxin Energy's shortcomings, and Beicang City Investment will also benefit.

With this, the shareholding structure of FlashTech has changed again. With this change in the shareholding structure of FlashTech, Tan Jincheng has gained another advantage, and the weakness of the electric vehicle business has been patched up again!
(End of this chapter)