2003: Starting with Foreign Trade

Chapter 428 "Tan Jin Cheng Yue"

There were no major news events nationwide in May; the most impactful event was actually the Flash Group's reward plan of over 6000 million yuan.

Tan Jincheng certainly has the ability to cause trouble.

Following a reward program of over 6000 million yuan, Zhongtai announced a comprehensive cooperation agreement with Shanchi.

On the morning of May 17, Zhongtai and Flash Group signed a strategic cooperation agreement at Flash Group's headquarters building. The two parties will carry out extensive cooperation in the fields of new energy vehicle parts, automation services, and digital construction.

The signing ceremony was attended and witnessed by Tan Jincheng, founder and chairman of Shanchi Group, Ying Jianren, founder and chairman of Zhongtai Group, and relevant leaders from Beicang District.

This means that Flash has officially entered the automotive industry, getting involved in the automotive supply chain, and has also found a breakthrough for its own power battery business.

You could say he's radical, and he certainly is. With gasoline cars selling so well, and new energy vehicles practically just a concept these days, he's already jumping straight into researching battery systems. Is he planning to skip gasoline cars altogether, or does he believe new energy vehicles are the future?

"But you might say he's conservative, and he is indeed quite conservative. He takes it step by step, with each step linked to the next, from the overall assembly of electric vehicles to the electric vehicle battery, and then to the power battery. It's not abrupt at all."

"That's true. If we were to handle his expansion strategy, his cash flow would be extremely tight. But apart from the increased debt ratio, his cash flow is still quite good."

“You even have time to beat us up, tell me, aren’t you angry?”

"Sigh, this tactic is really unethical, even more ruthless than a direct price war. We can't sell even if we lower our prices, but they're using the guise of giving it away for free. Luckily, they're only using it to promote their lithium battery electric vehicles. If they were giving away lead-acid battery models, our sales would be greatly affected."

In the business world, May could almost be defined as the month of Flashback. When was it that Lei Jun gave away 1999 yuan red envelopes to Xiaomi 1 users? I think it was 2020 or 2021, anyway, that was more than ten years later.

Tan Jincheng pioneered this marketing method more than a decade earlier. In an era when economic conditions were rapidly improving, but entertainment and material resources were not yet particularly abundant, its impact was simply incomparable to that of the information-rich era more than a decade later.

More than a decade later, the mobile phone industry chain has become very mature. Although Xiaomi's marketing tactics were very sensational and covered almost the entire population of mobile phone users, while everyone was extremely envious of the free mobile phone, many people just admired it and that was it.

Take Tan Jincheng from his previous life, for example. He had seen Xiaomi's promotion of giving away mobile phones, but he only envied the Xiaomi 1 user group and forgot about it immediately. It was impossible for him to buy a Xiaomi 1 just because of his goodwill.

After 2020, mobile phone users have basically formed their usage habits and have a high degree of brand loyalty. Xiaomi fans are Xiaomi fans, Apple fans are Apple fans, and Huawei fans are Huawei fans. The boundaries are still quite clear.

Apple users are unlikely to buy a newly released Xiaomi flagship phone because of this positive impression. When buying a backup phone, they would choose the cheaper Redmi series. Huawei fans are even more likely to do so. The two companies often insult each other at press conferences and habitually flame each other in fan groups.

But now it's 2007, and times are really different. Consumers haven't developed brand habits yet, and some users will actually buy products because of this positive feeling and because they need them.

In fact, this situation is also common in later generations of live-streaming e-commerce, where consumers suddenly develop a strong liking for a certain domestic product and choose to make impulsive purchases.

The effect of Flash's 6000 million investment is something other manufacturers can hardly afford. They might be reluctant to follow suit, but they absolutely must engage in some price reductions and promotions. The competitor has already been so generous, so you have to give something in return.

Leading manufacturers have all opted to promote lithium battery models, since these batteries aren't profitable to begin with, and some models even lose money. They figure they might as well lose more and keep the profits on lead-acid batteries.

This was all caused by Flash's lead, forcing other manufacturers to follow suit. The worst thing in business is being passive and letting your competitors lead you into their rhythm; that feels very unpleasant.

For Tan Jincheng, May was a month in which he accomplished two major tasks, but it was not the end of the month.

A week after announcing its collaboration with Zhongtai, ByteDance's Ocean Engine, owned by Tan Jincheng, announced the arrival of its new general manager: Huang Ming, one of the earliest internet entrepreneurs and a well-known figure in the internet industry. Huang Ming formally became a shareholder in Ocean Engine by reaching a share swap agreement with it through his existing shares in the website company, and will serve as Ocean Engine's investment director, overseeing all aspects of the company's daily operations.

Superstar Engine will eventually become independent. Tan Jincheng has discussed this with the two major shareholders, Beicang City Investment and Zhang Xupeng. Zhang Xupeng's rare return this time was because Tan Jincheng called him back to discuss this matter.

When a subsidiary wants to become independent, especially one with certain potential, it naturally needs to discuss equity matters with the two major shareholders of the parent company.

Currently, the equity structure of Flash Group is relatively simple. Cheng Yue (BVI) Limited, controlled by Tan Jincheng, holds 92% of the shares, the second largest shareholder, Beicang City Investment, holds 5%, and the third largest shareholder, Zhang Xupeng, holds 3%.

There are only three major shareholders. Beicang City Investment is more understanding of Flash's idea of ​​spinning off ByteDance Engine for strategic reasons. Zhang Xupeng is even more so. The only thing to discuss is the value of ByteDance Engine.

The independence of ByteDance's advertising platform will still be implemented through the transfer of shares by Tan Jincheng, without the need for cash outlay. This will reduce the company's instability and alleviate the current pressure on Tan Jincheng, the actual controller, by not having to pay any cash.

For the two shareholders, a larger shareholding would mean higher future returns, which is beneficial to all three parties.

As for the valuation, there wasn't any auditing involved. It was just a discussion among the three parties. Since everyone knew each other well and was aware of the company's current situation, internal auditing would have been a waste of time.

Tan Jincheng was not a petty person. After discussions among the three parties, ByteDance Engine was separated from Flash Group, marking the second change in the shareholding of Flash Group's parent company.

After the change, Cheng Yue gave 4% of the shares to Beicang City Investment and Zhang Xupeng. Cheng Yue's shareholding in Shanchi Group decreased to 88%, Beicang City Investment increased to 7%, and Zhang Xupeng's shareholding increased to 5%.

Who do you think lost out on this?
It's hard to say. Tan Jincheng doesn't particularly value equity anymore. He has actual control of the company, so whether he has a percentage more or less doesn't really matter. In terms of personal wealth, whether he has a percentage more or less doesn't have a significant impact on the real company.

Since Flash Group is unlikely to go public as a whole, its equity valuation is relatively conservative, unlike that of internet companies.

Like all private enterprises, Tan Jincheng's current expenses, including those of his family, are all provided and reimbursed by the group, so he doesn't really need to spend any money on himself.

The donations also came from the group because they were tax-deductible; I don't care too much about personal wealth anymore.

Take the simplest example of changing cars. This time, Tan Jincheng changed to a Maybach. The company paid for it and he can use it. The company also pays for his usual fuel costs. If you want to transfer it to your own name after several years, you can do so.

This is already the most basic treatment. It's just that Tan Jincheng lives a relatively low-key life. If he were to live a more high-profile life, the company would have to spend a lot more money each year.

In addition to the equity change of Flash Group, the equity of the spun-off ByteDance Engine has also changed. It is still controlled by Cheng Yue's company. Tan Jincheng actually controls 90% of the equity of ByteDance Engine, while Huang Ming obtained 10% of the equity through his website.

At the same time, he also retained a portion of the equity in the website. For someone like Huang Ming, it is impossible to just talk about salary and become a real subordinate. He can only join ByteDance as a partner.

People who are not short of money will be treated differently even if they are working for someone else. Take Da Zui for example, would you dare to say that he is just a pure worker?
Huang Ming's joining the company caused a sensation, and the cooperation between Orange Technology and SF Express with Yiwu, one thing after another, kept Tan Jincheng in the limelight from May until the end of the month.

From physical manufacturing to internet technology, this unconventional traditional entrepreneur has taken marketing to its extreme, propelling the company's brand awareness to new heights.

This translates into actual sales of Flash Motors' electric vehicles entering their peak season ahead of schedule.

Who says advertising for businesses is useless?
The aroma of wine is also afraid of the deep alley.

(End of this chapter)