2003: Starting with Foreign Trade

Chapter 589 "The First Stock in the Electric Vehicle Industry!"

Hong Kong.

Cheng Linfeng was so excited he almost jumped for joy!
Following the direction given by their boss, their entire team began to tentatively short sell and work together. As September approached, their paper profits rose at an extremely rapid pace.

Today I heard some shocking news: Lehman Brothers, mired in crisis, is going bankrupt! Its third-largest shareholder, Barclays, announced its withdrawal from the rescue effort.

Hong Kong has a unique geographical location and a highly developed financial industry, allowing it to gather information that is unmatched in mainland China.

Choosing Hong Kong as the location for this short-selling operation not only ensures the safety of oneself and funds, but also allows for the rapid collection of a lot of useful information, which is much more efficient than doing so domestically. This money was definitely well spent.

Impatient, Cheng Linfeng immediately dialed Tan Jincheng's number: "Boss, Lehman Brothers is going bankrupt!"

"Ok?"

Half-asleep, Tan Jincheng checked the time. It was only a little before seven in the morning. He had drunk too much again last night.

"Oh, sorry boss, I got too excited. We're going to make a fortune this time."

Cheng Linfeng then realized it was still early. He hadn't slept all night, but had slept quite a lot during the day, so he was jet-lagged even though he didn't have one before.

After a moment of clarity, Tan Jincheng asked, "You mean Lehman Brothers is beyond saving?"

"Yes, Barclays is not going to bail them out. Wall Street's assessment is that Lehman Brothers is going to go bankrupt, and the stock market has already reacted to that."

Speaking of this famous company that is said to have triggered the global subprime mortgage crisis, it has actually been having a tough time since it started laying off all its employees in March of this year.

From layoffs and liquidation of three of its funds to its third-largest shareholder coveting its 0.6 price-to-book ratio and wanting to acquire it and replace its president, it has also accused Goldman Sachs of shorting its stock price, causing it to plummet.

After several months of turmoil, the company announced last month that it would sell $400 billion worth of assets. The frequent reshuffling of senior management at the beginning of the month also indicated that the company was actively trying to save itself.

Barclays, as Lehman's third-largest shareholder, had been actively acquiring Lehman Brothers for the past six months. The fact that even they gave up suggests that Lehman Brothers' financial situation was worse than imagined.

"Then let's increase the short selling pressure. The timing should be about right, and the most profitable time is coming."

The details of his previous life are unclear, but in this life, Tan Jincheng has been paying close attention to everything. Moreover, his knowledge is far superior to that of his previous life. Even if he is a complete novice in finance, he is still far superior to the gullible person he was in his previous life.

"That's what I mean too; we're preparing to increase our short-selling efforts."

This time, Cheng Linfeng is preparing to fully activate all short-selling accounts. If Lehman Brothers really declares bankruptcy, it will inevitably cause a major blow to the US stock market and even the global stock market. This is no ordinary profit.

As for whether a new acquirer will come forward, Cheng Linfeng believes the probability is low. Besides, Lehman Brothers has already started accusing Goldman Sachs of short selling, which is almost equivalent to turning against Wall Street.

If you fall, those capitalists on Wall Street will never come to your rescue; they'll just feast on your corpse.

Cheng Linfeng's actions woke Tan Jincheng up, making it impossible for him to continue sleeping. Gu Qingqing, who was next to him, was also awakened.

"Ugh, I've been drinking too much lately. I need to finish the negotiations as soon as possible. These bastards can't win an argument, so they try to get me drunk at the table. They're shameless, they have no shame at all." Tan Jincheng rubbed his head and said angrily.

"Why don't you add a little? It's not good to keep drinking like this. We still have to go back and prepare for the wedding, and then we have to go to Xiao Ri Zi in October. Our schedule is still very tight."

Gu Qingqing was also a bit annoyed. Every time Tan Jincheng was invited, she had to go along to take care of him, and she was getting tired of attending these banquets so frequently.

"I will definitely add a little bit. I know that market value and company valuation are two different things, but I can't just add it so easily. I have to talk to them little by little."

We've already left Changfeng Group's best assets to them. If we follow their pricing strategy, it would make them think we're easy to bully. Besides, there are still many issues to deal with after the acquisition, so saving every penny is better than nothing.

But that's about it. Rumors of the subprime crisis have recently reached China, and if this drags on any longer, they'll probably get anxious too.

9 month 12 day.

After five days and eight rounds of negotiations, Flash Group, Xiangcheng City Investment and Changfeng Group, and a three-party negotiation team finally reached an agreement on the valuation of Changfeng Group and Flash Technology.

After divesting its Jingmen industrial base and off-road vehicle business, and adding the previously sold Yangzi Automobile business, Changfeng Group, with its current market value of 20 billion yuan, is making this acquisition based on a 20% premium, or 24 billion yuan.

As for the valuation of FlashTech, it is based on 30 billion yuan, which is nothing to say. Back then, Beicang City Investment invested in FlashTech, which was nothing at an extremely high price.

The other two shareholders also paid a considerable price for their investment; the valuation of 30 billion yuan was considered a friendly price.

The automotive industry sounds more prestigious and has a different strategic position than the electric vehicle industry, but one is a bankrupt car company and the other is a profitable industry leader, so they are not comparable at all.

The concessions made by Flash Technology in its valuation were also a key factor in this acquisition, demonstrating the absolute sincerity of Beicang City Investment, Jinchuanling, and Wang Qinghua.

Of course, it's a profit for them too. A 5% stake is now worth 1.5 million yuan. It's not as high as the return on investment in the internet industry, but it's not low at all.

With a pre-IPO valuation of 30 billion yuan, Xie Hongjun could finally give himself a satisfactory answer. After missing out on Orange Technology, he was under considerable pressure, and it was Xie Hongjun who first proposed making some concessions on the valuation to expedite the listing of FlashTech.

"Finally, we've finished talking. I never want to negotiate with you again, kid. I'm completely convinced."

As he signed the agreement, Li Jianxin let out a long sigh of relief. Five days and eight rounds of negotiations was an extremely demanding work experience for Li Jianxin, who is already 55 years old.

It's not that he can't endure the hardship, but firstly, he's getting older, and secondly, he hasn't done this for many years.

According to the agreement, Changfeng Group will withdraw from the backdoor listing of Flash Technology during this acquisition process. Like Mitsubishi, they will receive cash. The shares of the new listed entity are not very useful to Changfeng Motor, and cash is more cost-effective.

“Yes, the younger generation is truly surpassing the older generation. Putting aside everything else, I really admire President Tan’s energy.” Zhou Kai echoed.

Eight rounds of negotiations is not just a simple number; it refers to a negotiation process that lasts for several hours each, sometimes without even leaving the meeting room, and sometimes lasts from 9 a.m. to 9 p.m.

Their negotiation team members are all senior executives of state-owned enterprises or people from public institutions; they rarely experience this kind of approach.

"Haha, don't say that. President Li and President Zhou are both people I admire and learn from. I'm just following in their footsteps to improve."

With the plan finalized, Tan Jincheng was in high spirits.

Li Jianxin was quite helpless at Tan Jincheng's sudden change of attitude: "You, you change your attitude so quickly. Is there any junior who would point a finger at a senior?"

"Alright, alright, let's stop talking and just sign it. I'll send it up for review after you sign it," Zhou Kai interrupted.

According to the procedure, this acquisition plan still needs to be approved by the provincial-level or higher State-owned Assets Supervision and Administration Commission. However, in Zhou Kai's opinion, Tan Jincheng has connections, so there shouldn't be any major problems.

As for Hunan Province, Tan Jincheng returned the core businesses of Changfeng Group to the local government. In addition, he plans to put into operation an electric vehicle industrial park with an annual production capacity of 100 million vehicles. They are also the beneficiaries, so there is no reason for them to stop it.

All three or even four parties got what they wanted, and so far, this acquisition can be considered a win-win situation.

At 9 p.m. on September 12, A-share listed company Changfeng Group issued an announcement stating that it will exchange some of its assets and liabilities as of the valuation date of the proposed disposal of assets for an equivalent portion of the 100% equity of FlashTech held by all shareholders of FlashTech.

The initial valuation of 100% equity of Flashspeed Technology is 30 billion yuan, which will enable the company to go public.

The announcement immediately sparked discussion in the secondary market, as FlashDrive Technology, one of the leading companies in the electric vehicle industry, which had been the subject of much discussion, finally took a crucial step toward listing.

If the transaction is completed, FlashTech will successfully list on the A-share market through a reverse merger with Changfeng Group.

This is the third listed company in Beilun District, the second listed company under Tan Jincheng, and also the first listed company in the electric vehicle industry.

Unsurprisingly, the title of the first listed electric vehicle company, like the first electric vehicle company to hire a celebrity spokesperson, has once again fallen to FlashTech.

It stirred up the capital market twice in one year.

The youngest CCTV economic figure since the company's inception has once again become the focus of national attention after a year of silence.

Back then, some members of the public and media questioned Tan Jincheng's qualifications, but now they are completely convinced. How many people in the country can build a listed company in the internet industry and a listed company in the physical industry within a year?
After signing the contract, Tan Jincheng was in a hurry to return to Ningbo. Zhou Kai, who came to see him off, instructed him: "Keep in touch after you get back. The China Securities Regulatory Commission will probably send us inquiry letters next Monday. Remember to follow the procedures then."

“Okay, I understand. I’ll make sure everything in the company cooperates.” Tan Jincheng nodded.

With all the procedures in place, the State-owned Assets Supervision and Administration Commission (SASAC) should have no problem approving the deal. The remaining task is to get inquiries from the China Securities Regulatory Commission (CSRC), focusing on aspects such as estimated value, profitability, and the assets being divested.

The entire group has been quite busy lately.

"Also, you should set up a securities division when you get back. Most listed companies have securities divisions, and Changfeng is no exception."

"We already have this; it was transferred from our ByteDance engine."

"Haha, I almost forgot. You're a young talent who's managed to get two listed companies in a year. I've been too talkative. Alright, let's keep in touch."

Zhou Kai waved and watched as Tan Jincheng and his group boarded the car and headed to the airport, his expression complicated.

According to the agreement, Changfeng Motor will withdraw from the new listed company, and 29% of the 45.98% stake held by Xiangcheng City Investment and Changfeng Motor will be transferred to Shanchi Group.

The 14.59% stake held by Mitsubishi will also be transferred to him in full. Including the 6.2% stake he previously held, Tan Jincheng will actually own 49.79% of the listed company's shares.

This is enough to completely control a listed company.

That's really something.

(End of this chapter)