2003: Starting with Foreign Trade

Chapter 576 collapsed again?
After the legal department prepared the contract and finalized the details, the official signing date was July 23rd.

The formal negotiations took exactly 10 days.

Apart from Shen Nanpeng and Xie Hongjun, who was very familiar with Tan Jincheng, everyone else was incredibly fast.

Xie Hongjun laughed and said, "This is already considered slow. President Tan has always done things this way. If our process wasn't a bit complicated, it would probably be even faster."

Shen Nanpeng chimed in, "Haha, that's true. I've worked with President Tan a few times, and he values ​​efficiency the most and doesn't like getting bogged down in procedures."

The other two nodded, indicating that they would have to be careful if they had the opportunity to work with this person again in the future.

Luzhou is interested in power batteries, Chuzhou wants to deepen its cooperation with Weilai Automobile, and the other two companies also want them. As a result, both Hangxin New Energy and Weilai Automobile have added three new shareholders in this round of financing.

Weilai Auto is 100% owned by ByteDance, with a clear shareholding structure and a relatively low valuation. All three companies wanted more shares, but Tan Jincheng was only willing to give up 10% of the shares from each company at most.

"Okay, fine. You get 10% of the shares for 6000 million yuan. And I said okay, if there are any further investments, your shares must be diluted accordingly."

Each company is given 10% equity. If the equity is not diluted in the same way during subsequent financing, it will greatly affect the financing. This is a point that Tan Jincheng has always insisted on. Either you can only co-invest and maintain the current share, but you must not increase it.

The most discussed point in the contract details was this: everyone wanted more shares, while Tan Jincheng wanted to secure financing while maintaining control of the company. He didn't mind having fewer shares, but he insisted on having full control.

As for A and B shares, this thing is somewhat unsuitable for the domestic market at present, and even Tan Jincheng himself may not be able to fully understand it.

As for Hangxin New Energy, Tan Jincheng only held 85% of the shares. He didn't want to give up too many shares, and the valuation was also quite alarming. Luzhou City Investment, which was cooperating with him for the first time, didn't dare to take too many shares at once.

Hangxin New Energy released 20% of its equity, of which the deep-pocketed Sequoia Capital took 10%, and the remaining 10% was split equally between Beicang City Investment and Luzhou City Investment.

Weilai Automobile, holding 30% of the shares, raised 1.8 million yuan, while Hangxin New Energy, holding 20% ​​of the shares, raised 5 million yuan.

5 million is not a lot, but with 5 million in cash, Hangxin New Energy can do a lot. Tan Jincheng plans to use all of this 5 million to buy up mineral resource stocks, especially those in the Kangaroo region, which has very rich mineral resources.

As for the 1.8 million from Weilai Auto, it's better than nothing; consider it as supplementary funding for the acquisition.

This round of financing is very satisfactory for Tan Jincheng. He has obtained the necessary funds, and the city investment companies in the cities where he has set up operations have also become involved in his industries, which can play a protective role in the local area.

In addition, Sequoia Capital's involvement is also a form of protection for itself. International investment institutions rarely care about controlling stakes in companies, but local government financing vehicles (LGFVs) are different; LGFVs do not mind controlling a company.

This is the first time that Tan Jincheng has cooperated with Luzhou City Investment and Chuzhou City Investment. If they really want to do something bad to take control of the company, although Tan Jincheng is not afraid, it will still be a troublesome matter.

The intervention of the red shirts can effectively prevent this from happening; they still care a lot about their reputation in front of these people.

This financing does not involve any listed companies. The only listed company, Changfeng Group, only holds shares in Weilai Automobile Branch, and it is only a shareholding subsidiary, so it has little substantial impact on this financing.

The father's financing has little to do with the son, but Tan Jincheng still informed Changfeng Group. As for whether they want to issue an announcement to ride the wave of attention, that's up to them.

With the month almost over, no matter how much the stock price tries to climb, it's unlikely to reach above 10 yuan.

Changfeng Group's stock closed at 6.54 yuan today. Since the stock price fell below 7 yuan on June 19, it has not risen above 7 yuan again. Although it is stable, it is very sluggish.

Tan Jincheng strongly suspects that this stability is due to his acquisitions in the secondary market, which have enabled him to maintain the stock price stability.

In the 24 trading days since the 20th, Changfeng Group has only had a total transaction volume of 4.14 million yuan, of which the fund institutions run by Cheng Linfeng bought more than 3000 million yuan worth of shares.

The drop is truly catastrophic. Its market value peaked at 80 billion, but now it's only 26 billion—a drop of more than half. And this is just the beginning.

The US stock market hasn't changed much so far. It's still in a high-level adjustment phase, having fallen by nearly 15% from mid-June to mid-July, but then rebounded in the latter half of the month.

It has to be said that Wall Street's control over the stock market is truly amazing. It's already the end of July, and Tan Jincheng simply cannot believe that they haven't discovered the risk of the subprime crisis. Their reason for doing this is nothing more than maintaining the price at a high level and then shorting it.

The real plunge in US stocks began around September, when Lehman Brothers went bankrupt. Tan Tan Jincheng remembers that this was around September.

Starting next month, if US stocks show a downward trend, it should be possible to start shorting tentatively. However, Boss Tan doesn't know the specifics of shorting, so he'll need the help of professionals like Cheng Linfeng.

Giving Cheng Linfeng shares in ByteDance's AI platform wasn't entirely useless.

This round of financing totaled 6.8 million yuan. Combined with the 12 billion yuan in cash already held by ByteDance's AI platform and trust, raising 20 billion yuan in cash should not be a problem for shorting US stocks in the short term.

In addition, Tan Jincheng also plans to take advantage of this opportunity to make a profit, determined to recoup the funds he previously spent on reducing his stake in Orange Technology.

Harvesting old rice is fine.

After the formal signing, there was a press conference, which was requested by the three urban investment companies. Tan Jincheng wanted to keep a low profile, but the urban investment companies obviously did not think so.

Flash Group is thriving now, and since the accident in May, Tan Jincheng's personal image has been enhanced in the eyes of some people. Shen Nanpeng dares to introduce Tan Jincheng to his superiors, but that's only because Tan Jincheng is willing to meet him.

After the incident, they responded proactively, donating money and supplies. The school they had previously donated to build unexpectedly saved many lives. Throughout the entire process, they remained remarkably low-key and never used these events to promote themselves.

This is very appealing. Regions that have cooperated with them also like entrepreneurs like this. In addition, most importantly, the projects undertaken by Flash Group are all very good and of excellent quality. In addition to being able to cater to the higher-ups, they can also achieve results quickly.

"Mr. Tan, could you reveal the financing method and other details of this round of financing? Also, as far as I know, Flash Group is not particularly short of money right now. What is the purpose of this financing?"

At the press conference, reporters focused their attention on Tan Jincheng.

"The financing method is still normal equity financing. As for the amount, I can't disclose it. The purpose is of course for the company's own development. Weilai Automobile will add production lines in Beicang and will continue to increase investment in Chuzhou to bring Yangzi Automobile's annual production to 10 vehicles. All of these require funds."

There are many ways and means for corporate financing. Some gray-area methods can actually raise a lot of money, such as opening several companies with different legal representatives and shareholders, and operating them in accordance with the normal company rhythm.

Several companies with no connection to each other can inflate their turnover through transactions, thereby enabling them to apply for bank loans. All procedures in this process are compliant, and banks are unlikely to refuse your loan request.

In an era of severe information asymmetry, many companies would have done this, but Tan Jincheng has not done so yet; all the financing channels he has used are normal.

In summary, financing can be categorized into three main types: equity financing, debt financing, and policy financing. The first two are easy to understand, but the last one is not something that every company can qualify for.

For example, currently only three companies in the industry qualify for policy-based financing: Hangxin New Energy, Weilai Auto, and Shanchi Technology. Orange Technology also receives some policy benefits. The apparel and foreign trade industries are not included in this category; at most, local governments provide some conveniences and preferential treatment.

What specific investment intentions are there?

"As mentioned earlier regarding the automotive sector, Hangxin New Energy mainly aims to acquire some upstream assets to reduce corporate costs."

Tan Jincheng had become quite adept at dealing with these local reporters.

After the press conference, Tan Jincheng went home. As soon as he entered the living room, Gu Qingqing teased him, "I heard you were spewing profanities at the meeting?"

Gu Qingqing has been staying at home these past few days, playing with Tan Jinyue. She hasn't had a proper summer vacation in a long time, and she definitely wants to take a good rest this summer.

While we're at it, we're also making some preparations for the October wedding. Tan Jincheng doesn't have much time to manage this, so she'll have to come instead.

Did you watch the press conference?

It's obvious that Gu Qingqing already knows about the press conference. The official meeting content only involves a few people, so it's impossible for it to be leaked.

"Yes."

"They weren't much better; they were just as foul-mouthed. That's how negotiations are, isn't it? Old Shen had nothing to say, so he used that to tease me."

Tan Jinyue is happy lately. She has someone at home to play with, and her brother comes home every day, so he doesn't cling to her as soon as he gets back. Right now, he is watching Pleasant Goat and Big Big Wolf attentively.

"By the way, go check out ByteDance's advertising platform in a few days. It's not good for you, as the vice president, to be so rarely showing up. You need to familiarize yourself with the business."

Gu Qingqing smiled: "What? Another new move?"

"I guess so. Next month, we plan to have our trust institution work with the company's account to make a big profit."

Last year he did something with A-shares, and this year he's going to do something with US stocks. There's no need to hide it. Tan Jincheng is planning to raise 3 million US dollars to short sell. He needs to prepare in advance how to get this money out safely and then back in safely.

The best approach is to partner with Sequoia Capital. They have significant influence in both the US and Hong Kong. By using their channels to short the US market, the money can remain in the US or Hong Kong, while they transfer the funds to their own country in China.

However, Tan Jincheng still needs to discuss with Cheng Linfeng, Huang Ming, and others how to carry out this specific operation.

$3 million was almost all the cash reserves Tan Jincheng could get his hands on. Any more would affect the company's normal operations. Even knowing the situation, Tan Jincheng didn't dare to gamble everything on the company; it was too dangerous.
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The trend of Changfeng Group in July was almost a miniature version of that in May, it was practically a copy.

"The price rose intermittently, and then on the last day of the month, there was a large fluctuation with a high opening and a low closing, resulting in a sharp drop at the close. The funds here really have one trick to make a fortune."

He may still be seen as a sucker, but Tan Jincheng's perspective has changed. He can see beyond the profit motive and understand the intentions of the funds behind it all.

"Yes, the average daily turnover is less than 2000 million, but today we made 1.1 million. It's a good thing we don't buy stocks just to make a profit, otherwise, no amount of money would be enough to cover this kind of averaging down."

"Haha, it's all about buying when prices are rising, not falling. Buying more during a downtrend is definitely not a good idea. It seems like the money in there is quite smart. But if we keep buying like this, will we end up buying into a market manipulator?"

"That's not the case. We don't do much trading; we just buy, buy, buy. There's no need to worry about that."

Changfeng Group hit a 30-day high of 7.29 yuan today, but closed at 6.7 yuan, with a daily fluctuation of more than 8% and a sharp drop of 3.03%. All those who bought before the close were trapped.

With such a large bearish candlestick pattern on high volume, there's no doubt that another major drop is coming next month.

On the last day of the month, the stock opened high but closed low with a sharp drop. There's almost no need to look at the sales figures anymore. It's obvious that Changfeng Group's sales of urban SUVs are poor, and these investors are the most sensitive to such things.

"It seems that Changfeng Group's problems cannot be resolved in the short term, and they still face the risk of bankruptcy. How many shares of Changfeng Group do we currently hold in total?"

Cheng Linfeng was clearly prepared for this question: "Including the negotiated transfer, it totals 6.15%. If we follow the acquisition requirements, we can get about 29%."

After a quick calculation, Tan Jincheng stroked his chin and said, "According to the rules of the acquisition, that's about 6.5 million yuan. Adding the previous 2.75 million yuan and the part we acquired, that's about 11.35 billion yuan, right?"

"Yes, but Changfeng Group will definitely not agree to this price. In addition, the process will be more complicated. We will have to struggle with it no matter what."

Tan Jincheng nodded, agreeing with this point. He wouldn't have sold Flash Group unless he was in dire straits.

"Okay, let's wait for it to drop further. It would be a miracle if it didn't. If necessary, you can also dump some shares on the market. At worst, we can just pay the fine. We can also contact Autohome and ask them to collect last month's sales figures. You know what I mean."

ByteDance's advertising platform currently holds 5% of Changfeng Group's shares. Normally, any further purchases would require notification to the company. However, the 1.15% stake acquired in the market is not registered under ByteDance's name.

Although it was somewhat irregular, Tan Jincheng didn't care about that. Normal acquisitions, unless you throw money at the problem, are never so orderly.

In the secondary market, it's common for buying and selling to generate negative news.

“I understand, I get it,” Cheng Linfeng said with a smile.

He definitely can't do it under the name of ByteDance Engine, since he's created quite a few aliases during this period.

On August 1, Changfeng Group opened lower and fell by 2.53%, and then fell for three consecutive trading days, although the decline was not significant.

On August 7, the day before the opening ceremony of the Olympic Games, Changfeng Group closed up 1.43% at 6.43 yuan. The total turnover over the five trading days was 86 million yuan, and the trading volume has returned to its previous level.

Just when the secondary market thought that Changfeng Group would resume its trend from the previous month, with the national celebration of the Olympics and little change in stock price, a batch of news quietly appeared on the Internet questioning Changfeng Group's inability to resolve the National III emission standard issue.

On the evening of August 7, these news items appeared in batches on major automotive websites and automotive sections of various forums.

"Hey, this is obviously done on purpose, taking advantage of the Olympics to attract attention and releasing the news. But who is it?"

At this time, Boss Tan was already in the capital.

(End of this chapter)