2003: Starting with Foreign Trade

Chapter 393 "Poverty Makes One Short-Sighted, Like Tan Jincheng"

"Hasn't President Tan from Flashcar returned yet?"

"Yes, today is the tenth day."

"This kid, wasn't he supposed to be taking over an electronics factory? Why is it taking so long? Ningbo Vocational College is waiting for him."

Should I urge them?

"No need. If they haven't returned in two more days, let their vice president handle it."

Even so, after Zhao Jinsheng and the other leaders left, he still sent a message to Tan Jincheng, saying that Shanchi was interested in cooperating with Ningbo Vocational College to open several majors related to electric vehicles and clothing, and Ningbo Vocational College was of course willing to do so.

There is only one junior college in the entire Beicang District, which mainly serves the businesses in the district. It offers majors related to whichever industry is popular in the district. It has good relationships with the large enterprises in the district and is not short of money.

So even though it's just a junior college and not very well-known, the employment situation is actually quite good.

This is the advantage of having many businesses in the district. After students graduate, large companies absorb a batch, and small and medium-sized enterprises absorb another batch, leaving not many left.

The success of FlashDrive has created jobs for thousands of people, and an electric vehicle industry chain has been formed in Beicang. Naturally, Ningbo Vocational College is preparing to offer related majors.

The collaboration with Flashpoint mainly involved providing assistance in textbook writing, and then addressing the internship issue for graduates. We hoped Flashpoint could provide some internship positions, so we contacted Tan Jincheng.

Collaborating with universities to run programs is definitely beneficial for companies, and Flash will certainly have no problem with that. They will not only provide assistance but also encourage Ningbo Vocational College to offer more automotive-related majors.

Apart from Ningbo University, the universities in Ningbo don't have any particularly impressive academic credentials. However, one advantage is that it's located in a highly industrialized city, so each university has plenty of funding.

While they may not be able to handle high-end industries, they can certainly help train a significant number of mid- to low-level employees. This may not necessarily reduce labor costs much, but it is certainly more convenient.

In the future, after these graduates join Flashpoint and complete their training, they can be transferred to other industrial bases, thus giving the headquarters greater control over industrial bases in other regions.

The construction of the Tianjin base and the Wangjiang Industrial Park is in full swing.

To be honest, Tan Jincheng did break his promise. He was supposed to attend the groundbreaking ceremony for the Wangjiang Industrial Park after the Chinese New Year, but due to his busy work schedule after the holiday, the many things at Orange Technology, and the fact that he didn't go home for the New Year, he didn't go back.

The groundbreaking ceremony for the Wangjiang Industrial Park was attended by Zhang Xupeng, who was at home for the Chinese New Year. Zhang Xupeng is the general manager of Jinpeng Industrial and also holds the title of vice president of Shanchi Group.

In the apparel sector, Tan Jincheng mainly offered suggestions, while Zhang Xupeng was responsible for the actual execution. Given this position, it was quite normal for him to hold the title of vice president within the group.

Old Zhang is not much less idle than Xiao Tan now. He has to manage the factory, build the brand, negotiate with major brands about clearing out leftover stock, and also contact outlet malls to secure domestic distribution rights.

The latter two things alone will keep him busy for several years. This is equivalent to helping Orange Products establish offline channels, which cannot be accomplished in a short period of time.

Orange Products currently employs a light-asset, zero-inventory strategy. It leverages its internal logistics system to seamlessly integrate with offline operations and SF Express.

The so-called zero inventory does not mean that there is no inventory at all. Rather, it means that we monitor the status of orders in real time through our self-built warehousing and distribution centers, and then combine them with Flash's offline channels.

By allocating goods, resources can be shared across offline channels, reducing waste.

Even with a light-asset operation model, Vipshop's assets will not be low once it becomes successful. Just establishing warehousing and distribution centers across the country is a significant asset.

The $2000 million investment was made in 2007. If it had been a year or two later, after housing and land prices had risen across the country, $2000 million would not have been enough.

In Guangzhou, after several rounds of negotiations, Sequoia Capital and Tencent finally accepted Orange Technology's valuation of $1 million, or 7.6 million, thanks to Kuang Ping's insistence.

Kuang Ping's analysis is reasonable and well-founded. Even without Orange Products Club, Orange Technology's valuation is already close to 4 million. Although Tencent's financial report has not yet been officially released, many institutions already know the specific data.

Some data is only known to ordinary stock investors at the moment of its release, but large institutions already know it. Orange Technology has a cooperative relationship with Tencent, so it is not surprising that they know some relevant data.

The exact growth rate may vary. Since Happy Farm was integrated into QQ Space, the number of registered users on QQ Space has exploded, approaching 2 million. Many registered users are there specifically for Happy Farm.

Based on the ranking of traffic, visits, and interactivity, QQ Space is in the first tier and has truly become the dominant force among space-based community websites.

It is far ahead of the second tier of Kaixin.com, Xiaonei.com, Baidu Space, NetEase, and Sina Blog.

Compared to Facebook, a globally renowned social networking site that is a trendsetter in the Web 2.0 era, QQ Space has over 100 million monthly active users, exceeding nearly half of Facebook's 67 million users.

Fun fact: the Great Firewall isn't that serious these days. Google entered China last year, and Facebook, that alien, has been trying to please Chinese netizens all these years in order to enter our market.

Although we have a large population, it still doesn't compare to the total population of the world. In a truly internet-driven world, it's quite impressive that QQ Space was able to quickly surpass Facebook and gain a significant lead within just two years of its launch.

In the initial stages of many things, we are actually no worse than others.

The number of QQ Space users and monthly active users have surged, and Happy Farm has made a huge contribution to this. If there is anyone who hopes Happy Farm will have a longer life and be more popular than Orange Technology, it must be the QQ Space project team.

Kaixin.com and Kaixin Farm also have overseas versions, and Facebook is very interested in integrating Kaixin Farm into their client.

Based on these two points alone, Orange Technology deserves its valuation. Furthermore, if the financing fails, Orange Technology can completely abandon the Orange Products Club project, scale back its existing business, and rely on the fun of its subsequent mini-games to sustain itself for a few years before going public and cashing out—that would be no problem at all.

It's important to know that Orange Technology was fully profitable after scaling back its business. Being self-sufficient, it had no business with other organizations.

Even without going public, you can still receive steady dividends.

This reasoning left Ma and Shen Nanpeng speechless. The company was small and beautiful with a profitable core business, and the shareholders had certain backgrounds. If they really wanted to scale back their plans, there was really nothing you could do about it.

Based on the profitability of Happy Farm, plus the Plants vs. Zombies games currently under development, as well as mobile internet games like Fruit Ninja and Talking Tom, these few games alone are enough to guarantee the company's continued profitability in the future.

To a certain extent, given Orange Technology's current business structure, it can be positioned as a gaming company. Provided it can guarantee profitability, it could be listed on the A-share market in a few years.

There are quite a few game companies listed on the A-share market. They all caught the wave of the internet's development boom. Regardless of how well the companies perform, financing after listing is extremely convenient. Even a game like Baofeng, which only has a media player, was hyped up to that extent.

"Orange Technology will not do everything like other Internet companies. After raising funds, we will only focus on the sectors we are good at. Our company's positioning is small and beautiful, and we pursue profitability."

Besides the substantial profits from the future IPO, your investments will also benefit you from company dividends. So don't hesitate any longer, and don't let a difference of one or two percentage points in shareholding affect our cooperation. Let's have a bigger picture.

The group argued incessantly, and Tan Jincheng intervened to mediate.

Shen Nanpeng was speechless for a moment: "One point is worth several million. You're telling us to be more generous? Why don't you be more generous and give up two points to me and President Ma?"

Tan Jincheng was shameless: "I'm just broke. If I had money, I'd be very generous. I still owe you money, you know that."

"Huh? President Tan also borrowed money from President Shen?" Kuang Ping seemed to have discovered something.

"also?"

"Stop with the 'yeah' and 'yeah'. When you're poor, you lose your ambition. There's nothing I can do but borrow some from you big shots. President Kuang and President Shen have already lent me some. Why don't you lend me some too, President Ma? Good partners should be treated equally."

"This is the first time I've heard of such an equal treatment. You hold onto your shares so tightly, you don't even cash out during financing, and then you come to us to borrow money?" Even Pony Ma was speechless.

At the start of the share negotiations, Tan Jincheng stated that he would not choose to cash out in this round, and Kuang Ping also stated that he would not cash out, but he would not invest further either. However, even if he did invest further, Sequoia Capital and Tencent would not agree.

They were just hoping Kuang Ping would cash out and leave, so why would they agree to him investing more? Once Kuang Ping was willing to cash out and leave, either of them would be willing to take over all of his shares.

"It's not that I don't want to cash out; being in debt is tough. But I'm the founder of the company, and I have to set an example so that the bosses don't think I'm cheating them out of their money."

"Give me a break. You're the most cunning young man I've ever met. When are you going to give me back the QQ Farm trademark?"

"Huh? What are you talking about, Mr. Ma?"

Little Ma glanced at Gu Qingqing, whose expression had suddenly changed: "Mr. Gu Hongshun is President Gu's father, right? The QQ Farm trademark must have been President Tan's idea, don't think we don't know."

Compared to the shameless Tan Jincheng, Gu Qingqing is still a bit naive.

"That's called Qingqing Farm, not QQ Farm. Don't slander me, Mr. Ma. Besides, it wasn't registered for anything related to the internet. But if you want it, Mr. Ma, I can transfer it to you," Tan Jincheng said with a grin.

This thing poses no threat to Happy Farm now. Happy Farm has been operating for nine months, and its user base and game popularity have reached their peak.

It's safe to say that Happy Farm has no rivals when it comes to stealing vegetables. The initial protective measures are no longer very effective. Since Pony Ma has brought it up, there's nothing wrong with transferring the trademark to him.

After Tan Jincheng's interruption, the dispute over the shares was dropped. To be honest, Tan Jincheng wasn't wrong; it was just a dispute over a few million, and the question was who would give in.

After final negotiations, the two new investors each acquired a 10% stake in Orange Technology for US$1000 million, valuing the company at RMB 7.6 million.

Tan Jincheng did not choose to cash out this time, as he had no immediate need to spend money and would leave the debts unpaid, since he was not in a hurry.

However, both Gu Qingqing and Cheng Hao chose to cash out, each cashing out 1.6%, or about 1200 million RMB. Cheng Hao cashed out to improve his life, while Gu Qingqing planned to donate most of it to Ningbo University.

Although Ningbo University had its own needs, it must be said that its status and the funds it provided greatly helped Orange Technology. Without the help of Ningbo University, Orange Logistics and the agricultural assistance project could not have been established so quickly.

After two rounds of financing, Gu Qingqing cashed out 24 million yuan, eight times the amount Gu Hongshun initially invested.

At the same time, Cheng Hao is another multimillionaire at Orange Technology after Tan Jincheng and Gu Qingqing.

The wealth-creation myth of the internet continues even after the recovery of capital.

In the end, Brother Ma still didn't lend money to Tan Jincheng, which made Tan Jincheng feel a little disappointed. He was stingy!
With the announcement of Orange Technology's Series B financing, the reputation of Flash Group's chairman for liking to borrow money from investors also spread in the capital circle.

"Poverty makes one lose ambition," has become a common saying.

Of course, this was just a joke. Many people wanted to lend Tan Jincheng money, but he wasn't willing to accept money from just anyone.

(End of this chapter)