2003: Starting with Foreign Trade

Chapter 553 Should we just sell it?
On Cheng Linfeng's return journey, Changfeng Group's stock price continued to decline, but there was already a clear indication of bargain-hunting funds entering the market.

Changfeng Group, which plummeted to 7.45 yuan in the morning, started a major rebound in the afternoon, with the stock price eventually rebounding to 8.03 yuan, forming a deep V-shaped trend.

7.45 yuan is the lowest point for Changfeng Group in nearly a year.

A year ago, its market value was 32 billion yuan. During the year, its market value peaked at 80 billion yuan. After a year, it returned to its original point, and all the hype was for nothing.

"The funds inside are really something else. Yesterday it opened high and then plummeted, then crashed. Today it opened low and then surged in a deep V-shape, washing out the retail investors to the point of despair."

These days, for ordinary investors, stock trading is far more difficult than in the mobile internet era. Not only is the information gap very serious, but there's also no mobile app for trading anytime, anywhere, and the cost of influencing stock price movements during trading hours is extremely low.

Today, the trading volume of Changfeng Group's deep V-shaped stock was only 1700 million yuan, and most of the funds entered in the afternoon, which obviously means that some funds have heard about the content of today's meeting.

In fact, the predictions were made as early as yesterday: a high opening followed by a low close, and a low opening followed by a high close. With such a combination over two trading days, it was possible to accumulate a considerable amount of shares.

"I remember that trading can be suspended in cases involving major acquisitions, mergers, capital increases, investments, or changes in shareholding, right?"

Mr. Tan was a little unhappy with this approach.

"Selling a subsidiary's equity is considered a major asset change, but the line for suspending trading is rather blurry. It can be suspended or not, depending on the wishes of Changfeng Group. We can't bring it up proactively, otherwise it would expose our ambitions."

Huang Ming smiled slightly, clearly displeased with the changes in Changfeng Group's stock price.

The boss had previously complained privately that he was the only one who took advantage of others, but unexpectedly, he was the one who got taken advantage of in the two separate incidents involving Changfeng Group. It was quite amusing.

Tan Jincheng was also somewhat speechless. The suspension mechanism of A-shares is already very chaotic. He remembered that in 2015, there was an experience of thousands of stocks being suspended from trading, and there were very few stocks available for trading in the entire market.

According to Huang Ming, it's impossible for Changfeng Group to agree to the acquisition of the parent company at this time. Not to mention acquiring a subsidiary, even if they agreed to acquire the parent company, he would have to hold out for a few days and try to raise the stock price.

According to the China Securities Regulatory Commission's regulations, the acquisition price of a company must be 90% of the average price within 30 days prior to the formal announcement of the acquisition. Changfeng Group's stock price has been falling for several months, and its highest price 30 days ago was only a little over 11 yuan.

Today's market movement hit a one-year low. Even if they wanted to sell, they would have to raise some money to boost the stock price. Today's unusual market activity may well be the result of the Changfeng Group's securities department taking the initiative.

So the boss's wish is likely to be dashed.

"Forget it then, negotiation is more important. The daily transaction volume isn't high anyway, let them take it all." Tan Jincheng scratched his head.

"But boss, you still need to learn more about securities-related knowledge in the future. I see that you don't understand many of the rules."

"Alright, I really should learn from this. I used to think of myself as a leek (a term for someone who is easily exploited), and I used the mindset of a leek. Now that I have a listed company, if I still handle things this way, I might suffer a huge loss."

During the negotiation process, Tan Jincheng also discovered that he was not very clear about many of the rules and was in a state of partial understanding. He often asked some unprofessional questions, leaving his subordinates completely confused.

After pouring each of them a glass of water, Tan Jincheng looked at Huang Ming and asked, "What do you think of President Li's reaction today?"

When it comes to acquisitions and investments, Huang Ming is quite professional. In addition, he trusts Xie Junhong more than Xie Junhong. Xie Junhong has his own interests, while Huang Ming's interests are aligned with Tan Jincheng's.

Whether it's acquiring Yangzi Automobile or the entire Changfeng Group, both are driven by ByteDance's massive investment. Once the acquisition is successful, Huang Ming's net worth will also increase.

"Although it was somewhat unexpected and there was no clear answer, as long as there was no rejection, it was possible, after all, Changfeng Group urgently needed new capital injection."

Changfeng Group's biggest challenge right now is to upgrade its production lines and digest its large inventory. With only two months left until the National III emission standard is officially implemented on July 1, the already poorly selling civilian vehicles will almost all have to be written off after July 1, given the current trend.

Throughout the history of automobile development, companies that focus solely on a small car model have struggled to survive. As one of the largest SUV manufacturers in China, developing mainstream sedan products has become an essential task for Changfeng Group.

Strategically speaking, Li Jianxin's heavy investment in the development of civilian vehicles is not wrong. Otherwise, a niche product of a single brand will eventually be acquired and merged, just like their acquisition of Yangzi Automobile.

Unfortunately, the company's efforts in the civilian vehicle market over the past few years have not been successful. Instead, the arrival of the National III emission standard has dragged the entire group into a deep abyss.

Self-rescue is already a necessity. Another reason is that, unlike non-listed companies, listed companies are not accountable to their shareholders. Impressive financial reports are sometimes a must, which is also an important reason why many listed companies commit financial fraud.

The market is currently in a continuous decline, and Changfeng Group can still attribute the reason to the general trend. However, if Changfeng Group still cannot solve the problems in the civilian vehicle market when the market stabilizes, then the stock price will inevitably continue to fall.

By then, it will be impossible to say.

According to Tan Jincheng's understanding, Changfeng was sold once in the middle, but later Li Jianxin bought it back for some reason. He was probably dissatisfied with it. However, because the cars he produced did not meet the China VI emission standard, the company ultimately could not be saved.

Changfeng went bankrupt once for meeting the National III emission standard and then again for meeting the National VI emission standard. It can be said that Changfeng has almost no R&D capabilities and doesn't know how to adapt.

The large R&D center that Li Jianxin was so proud of now seems more like an irony, but this might be related to Li Jianxin's personality and way of handling things. To be honest, Changfeng's success and failure can both be attributed to Li Jianxin.

If this old man, who had a deep affection for Changfeng, hadn't bought Changfeng back later, and had instead moved the headquarters back to Yongzhou with a large amount of money, Li Jianxin would have lived a very comfortable life for the rest of his days. I wonder if he regretted it in his previous life.

"Let's forget about that for now and focus on acquiring Yangzi Automobile. We want 51% of the shares. If Changfeng wants to retain more shares, we can coordinate with Xinhua Lian to acquire some more shares from them. In short, we want to achieve absolute control."

Only absolute control can ensure that Weilai Automobile's car manufacturing plan is not affected.

Recalling Li Jianxin's previous life's buyback, Tan Jincheng decided to start with Yangzi Automobile. Compared to the entire group, this was less difficult, and it could also buy more time until the situation changed drastically in the second half of the year.

It will take a long time before Weilai Auto's own models are available. In the meantime, they can invest in modifying Yangzi Auto's SUV production line and sell pickup trucks along the way. Yangzi pickup trucks have been known as the king of pickup trucks for years.

If it weren't for the problems at Changfeng Group's headquarters, Yangzi's future wouldn't have been any worse than that of pickup truck brands like Jiangling and Great Wall, which is truly a pity.

"Okay, let's try contacting Xinhua Lian. This will require Mr. Xie's intervention, as our level is still a bit too low."

"Indeed, I was a little surprised that President Li personally came to talk to us. I guess they really can't hold on much longer."

The financial report only provides a glimpse into the true state of Changfeng; only Li Jianxin himself knows the real situation.

Li Jianxin was willing to personally participate in the cooperation negotiations for this reason. Just like Tan Jincheng was having a meeting with his think tank, Li Jianxin did not sleep that night. The office was filled with smoke as they discussed the information revealed by Tan Jincheng and his group during the day.

Today's negotiations mainly conveyed two points: first, a strategic cooperation agreement was reached with Changfeng Group, under which Weilai Automobile will purchase Mitsubishi engines and other components through Changfeng Group.

Secondly, based on the first point, we will acquire the equity of Anhui Yangzi Automobile held by Changfeng Group, thereby obtaining our own car manufacturing qualifications and car manufacturing platform through Yangzi Automobile.

“This young man is something else. He’s been keeping an eye on us since last year. Last time he refused to meet us directly and only came after the National III emission standard was released.”

Li Jianxin stubbed out his cigarette and sighed.

Last year, Mr. Huang, who came with Tan Jincheng, conducted a research visit to the group. At the time, Li Jianxin thought it was just stock investment, so he didn't pay attention and didn't meet with Huang Ming.

The company's finances ran into trouble this year, and just then the other party launched its car manufacturing plan. Only then did Li Jianxin realize that they weren't after his stock.

The office had hinted at cooperation, but Tan Jincheng denied it during the live stream. Although he expressed his willingness to cooperate privately, he was ultimately being manipulative.

"Yes, they only contacted us now. Although the reasons are quite valid, it seems they were just waiting for the official release of the National III emission standard. They must be very familiar with our financial situation."

"So it seems this kid has his sights set on Yangzi Motors?"

Those present were all Li Jianxin's old buddies, mostly around the same age. Given their status and seniority, it was perfectly reasonable for them to call Tan Jincheng "little guy."

Furthermore, no one expected that Tan Jincheng's ultimate goal was the entire Changfeng Group. If Tan Jincheng hadn't repeatedly mentioned this to several key personnel, they wouldn't have believed it.

Even the non-core members of the inspection team were unaware of Tan Jincheng's ultimate plan, which was to acquire Yangzi Automobile.

"The profits from the Yangzi pickup truck are still quite good, so it's a bit of a pity to sell it now."

Even in times of crisis, a company may not want to sell its assets.

Yangzi Pickup was acquired by Changfeng Group in March 2005, which is only three years ago. After the acquisition, Changfeng Group invested a lot in Yangzi Automobile and transformed the new production line, which will not be officially put into production until May 30 this year.

In 2007, the number of pickup trucks in my country was 19, and this year, even the most conservative estimate is that it will reach 22. Yangzi pickup trucks are also frequently among the top 10 in sales.

By the way, Huanghai pickup trucks, a subsidiary of Shuguang Auto, also sold well last year, ranking eighth nationwide.

The upgraded production line can produce 5.5 vehicles per year, and Yangzi Automobile can be said to have a promising future. At this time, Tan Jincheng is simply reaping the rewards.

"Why don't we just sell it? The group's funds are really tight, and it's the only thing we can sell right now."

Li Jianxin sighed. He knew all too well that Tan Jincheng's actions were tantamount to picking the peaches for himself, but what could he do given the circumstances? Selling Yangzi Automobile could bring the group a large amount of cash flow.

In addition, the second quarter financial report looks much better.

Compared to Yangzi Automobile, Li Jianxin is more concerned about whether the stock price can be stabilized. If the stock price cannot be stabilized, how can they raise funds through this financing platform?
(End of this chapter)