2003: Starting with Foreign Trade

Chapter 583 "Changfeng is not a shell resource!"

Monday, April 8th.

Changfeng Group closed at 5.05 yuan, up 1.2% on the day, with a turnover of 367.82 million yuan. However, an announcement in the evening left Changfeng Group's shareholders somewhat bewildered.

"What the heck? Trading has been suspended?"

Xiao Zhang has already joined Dexian Electronics. After a brief training, he officially started working. Today is his first day on the job, working two shifts, and he's exhausted.

Changfeng Group's suspension announcement only stated "temporary suspension due to a major event," without mentioning the specific reasons.

"Forget it, let it be suspended. At least we'll lose less money."

Exhausted, Xiao Zhang was too lazy to think anymore. To be honest, working in an electronics factory is really inhuman. Luckily, he has a degree and only needs to rotate through two months of basic positions.

He was so tired today that he almost wanted to give up.

Tan Jincheng in Xiangcheng was also satisfied with Changfeng Group's performance today. The transaction volume was less than 400 million yuan. It seems that the specific reason for coming to Xiangcheng was not revealed at all.

The repeated manipulation of information sources has really made Tan Jincheng very uncomfortable. However, judging from the current stock price trend and trading volume, it seems that most of the institutions, large and small, have already fled.

That's good too. All those fools have run away, making the secondary market cleaner, which is actually more advantageous for acquisitions.

The aftershocks of the Olympics are still lingering, and the sudden suspension of trading in Changfeng Group has only attracted attention in the secondary market. Many institutions and investors have been inquiring about the reasons for the suspension, but so far all that has been learned is that Tan Jincheng, the president of Shanchi Group, has once again gone to Xiangcheng.

The specific reason is still unknown, which has sparked much discussion in the secondary market.

Since the beginning of this year, Tan Jincheng's holding companies have been making a series of moves. First, Orange Technology officially listed on Nasdaq in May, and then acquired Yangzi Automobile, which enabled its subsidiary Weilai Automobile to obtain automobile production qualifications.

The cooperation with Changfeng Group was thought to have ended there, but no one expected that Tan Jincheng would go to Xiangcheng again, and it is said that he brought a large team with him again.

"Can't you find out? What caused Changfeng Group to suddenly suspend trading?"

Although there are many loopholes in the rules, the fact that the China Securities Regulatory Commission (CSRC) can approve a sudden suspension of trading without giving a reason indicates that something major has happened.

"I couldn't find out. I asked around, but no one knew what Tan Jincheng did in the past."

It would be a miracle if they could find out. Currently, only Zhou Kai and Li Jianxin know Tan Jincheng's specific intentions. If they can figure it out, what level would they be? Would they even care about these three small things in the secondary market?

"This is unbelievable! Does Tan Jincheng have a split personality? There's been no movement at all since he went to Xiangcheng."

Tan Jincheng is extremely high-profile in Orange Technology's business, even daring to go head-to-head with Taobao, and he is also quite arrogant in front of the media. However, once he returns to Flash Group, he becomes as low-key as possible.

Normally, unless there are special circumstances, it's difficult to get an interview; you can't get any information at all.

Tuesday, April 2008, 8.

The atmosphere in the conference room of Xiangcheng City Investment Group was somewhat tense.

The major shareholder suddenly called for a management meeting, and most people were unaware of what had happened.

At 10 a.m., Zhou Kai led Li Jianxin and Tan Jincheng into the conference room. Liu Jianxin's expression was not very good, and Zhou Kai's expression was equally unreadable, while Tan Jincheng had a faint smile on his face.

Before the formal meeting, the three of them held a closed-door meeting. Just as Zhou Kai had thought, Tan Jincheng wanted to acquire the shares held by Xiangcheng City Investment and take control of Changfeng Group!

"Changfeng Group has a research institute, three key component factories including engines, transmissions and axles, three vehicle assembly bases, and a headquarters. Can you handle all of that?"

Li Jianxin was very resistant to the acquisition and didn't like Tan Jincheng as much anymore. He started off with a sarcastic remark.

In modern terms, this was a breach of his defenses. Selling Yangzi Automobile was already a great humiliation for him, and now, just a few months later, this little brat had come knocking on his door again.

Tan Jincheng responded calmly, "But your market value is only 20 billion now, and we can easily come up with 20 billion in cash."

Tan Jincheng has also shown his sharp edge, no longer the humble young man he was two months ago.

"So what if the market value is 20 billion? There are plenty of companies in China that can come up with 20 billion. And since the shares are in our hands, Mr. Tan can't force a takeover, can he?"

Zhou Kai was not as excited as Li Jianxin, and responded to Tan Jincheng's question about market value with a smile.

"But as far as I know, you're not selling any new cars, are you? You haven't even gotten past the National III emission standard yet?"

Holy crap! This time, not only Li Jianxin was on the verge of a breakdown, but Zhou Kai was also a bit overwhelmed. You can't hit someone in the face, because Changfeng Group really hasn't solved the National III emission standard yet, and there are currently no new cars for sale.

The civilian SUV market has almost completely stagnated, with only the off-road vehicle business procured by ZF supporting the company's formal operations. In the past, there was still a pickup truck that could be sold, but now even that is gone.

The new National III emission standard has been in effect for almost two months, and Changfeng has not yet solved this problem in the civilian SUV segment, which is much slower than other companies. Two months without any new cars sold is a very serious situation.

This news is being kept under wraps for now. As for sales figures, they can manipulate them; which car brand doesn't have a few affiliated dealerships? But no cars are no cars, and there will always be a day when the truth comes out. Besides, the third-quarter financial report will be released soon. Ordinary shareholders may not be able to tell, but institutional investors will know exactly what's going on.

"You can't talk like that," Zhou Kai said with a wry smile.

What's wrong with this young man? Why is he suddenly so aggressive? What a company fears most isn't how much money it owes, but having nothing to sell. If there's nothing to sell, there's naturally no future.

Li Jianxin was also quite angry; indeed, the truth is always the most hurtful thing.

"Please don't get so agitated, you two. We're here to discuss cooperation, and the basis of cooperation must be mutual benefit. If you two don't even listen to my conditions and already act like we can't cooperate, then we can't talk."

"Good grief, you've said the harshest thing, and then you said we wouldn't cooperate."

“What I’m saying is true. This is the biggest dilemma your company is currently facing. If you had new cars to sell, would the banks refuse to lend you money?”

Li Jian sighed in the news. "Yes, if we had new cars to sell, we could manage to survive. The money from the last sale of shares could support us for a while, but the problem is we don't have any."

"Without new cars to sell, the civilian vehicle market can't be opened up. Either you cut this part and go back to the government procurement status you had in Yongzhou, then your company can live comfortably for a few more years."

If Tan Jincheng were in this situation, he would definitely cut off the civilian vehicle market immediately, regardless of the consequences, just to get through the crisis first. But as a local state-owned enterprise, it is obviously not that easy.

Furthermore, if the company were to actually cut its stock price, it would be almost impossible to maintain its position. Selling just over 20,000 vehicles a year is simply not enough to support financing in the secondary market.

Li Jianxin retorted defiantly, "Even if you acquire it, will you have any cars to sell? Your Weilai Auto doesn't even have a demo car yet."

"Yes, I don't have cars to sell, but I do have electric cars. Our Flash Electric cars sold over 45 units in July and August alone."

The Olympics brought huge sales to Flash Motors' electric vehicles. Including August, Flash Motors has achieved monthly sales of over 20 vehicles for three consecutive months, and its total sales for the year have already exceeded 100 million vehicles.

"What do you mean?" Li Jianxin was still angry, but Zhou Kai, as an investor, keenly caught a key piece of information.

Good thing they've taken the bait.

Tan Jincheng smiled and said, "I know you definitely won't accept this acquisition if you only offer money, because money is useless to you. President Li needs the company to operate normally and to fulfill his automotive dream. President Zhou, you need more than just profits. Hunan Province also needs some other things."

"Money is the most useless thing, but I can give you things other than money."

"Stop talking nonsense and just say it."

"It's very simple. FlashTech wants to go public. I can use FlashTech to cooperate with Changfeng Group and take advantage of the restructuring opportunity to inject FlashTech into Changfeng Group, thus achieving a backdoor listing."

"Mr. Zhou can make a choice: become a shareholder of FlashTech or a shareholder of Changfeng Group."

Li Jianxin's situation is rather tragic. The vast majority of Changfeng Group's shares are concentrated in the hands of Xiangcheng City Investment, so what Tan Jincheng needs to do is to get the attitude of Hunan Province and Xiangcheng City Investment.

As for Li Jianxin's attitude, it's not that important.

Tan Jincheng greatly respected this automotive professional who had dedicated his life to the company, but business is business. Using Flash Technology as bait to attract Zhou Kai was Tan Jincheng's biggest trump card.

FlashTech alone had sales of 27.31 billion yuan last year, making it a truly large enterprise.

The automotive industry has the support of the government, and so does the electric vehicle industry, which also has a complete industrial chain and is not much worse than Changfeng Group.

"Are you willing to part with it? FlashTech's performance this year must be pretty good, right?" Zhou Kai asked, squinting his eyes. Clearly, he was already somewhat tempted.

"There's nothing to be reluctant about. FlashTech wants to go public as soon as possible, and a backdoor listing is the best way. If Changfeng Group doesn't agree, we will find other shell companies. In addition, if the cooperation is reached, FlashTech can also build another electric vehicle industrial park in Xiangcheng."

This is a gesture of goodwill from Tan Jincheng to Hunan Province. In any case, once the acquisition is successful, most of the good resources of Changfeng Group will definitely be taken by Weilai Automobile.

Although there were people in higher positions to facilitate the deal, there has to be some foundation for any cooperation. You can't be allowed to take all the benefits. As Li Jianxin said, it depends on whether you can handle it.

“Changfeng is not a shell company. Have you ever seen a shell company worth 20 billion?” Li Jianxin said in a low voice.

"They're all about the same. In my opinion, 20 billion is just a shell company. We have money."

That's infuriating! Li Jianxin really wanted to beat him up.

"We can talk about it. What's your opinion, Mr. Li?"

What else can we do? The major shareholders have said we can talk about it, so let's go discuss it.

On August 26, 2008, Flash Group formally proposed to Xiangcheng City Investment, the major shareholder of Changfeng Group, a plan to acquire 30% of the equity of Changfeng Group through cash and share swap!
The meeting in the city investment company's conference room hadn't even finished when the news reached the secondary market, causing a huge stir!

(End of this chapter)