2003: Starting with Foreign Trade

Chapter 630 Second Sign-Up
After returning from Xiangcheng, Tan Jincheng received another piece of good news.

Hangxin New Energy, Shanchi Technology, Weilai Automobile, Hangxin New Energy's subsidiary Jinshidai, and Dexian Electronics.

Five companies under the Flash Group have been recognized as national-level new energy enterprises. In addition, its holding subsidiary, Bafang Electric, has been recognized as a high-tech enterprise due to its patent development over the past two years, which has resulted in a large number of patented technologies, as well as its expansion into overseas markets since last year.

Since being acquired by Flash Group, Bafang Electric has been able to resolve its concerns about orders, and the group prioritizes payment terms for its subsidiaries. With ample funds, Bafang Electric can conduct extensive research on motors.

Bafang Electric and Jinpeng Industrial have the same equity structure. Although they are called subsidiaries, they are more like partners, with the original founders actually managing the companies.

This model is somewhat similar to how Tencent acquired various companies in the later stages, providing traffic support without interfering with their operations. Overall, this model is quite good, and Jinpeng Industrial and Bafang Electric have achieved significant development under the protection of the group company.

Just like with the equity of Jinpeng Industrial, seeing Jinpeng Industrial expand in various ways and its self-operated brand GXG gaining wider and wider recognition, Wang Qinghua naturally did not stop at making money off the group company without any ambition.

For component manufacturers, the focus is naturally on internal capabilities and R&D. With ample orders and ample funds, Bafang Electric also established its new factory in the Suzhou Industrial Park in 2007, and began to invest heavily in R&D.

The new factory, better office environment, better cash flow, and no need to worry about the company having no business to do allowed Wang Qinghua, who is a tech-savvy person, to devote more energy to technological research and development.

It now seems that Tan Jincheng's acquisition of Bafang Electric based on some vague impressions has yielded good results.

Under the 4 trillion yuan stimulus package, new energy companies and high-tech enterprises receive subsidies and tax breaks. Five subsidiaries were listed as new energy companies at once, which is a huge windfall.

"Of course Dexian Electronics can be included. It mainly focuses on lithium battery business and can be considered a new energy company."

It's already April, and Tan Jincheng's work schedule is relatively relaxed. Apart from the annual report conference call, the only thing worth Tan Jincheng's attention is the Shanghai Auto Show at the end of April.

Before the Yuechi A1 prototype appeared, Tan Jincheng had to keep Weilai Auto in the spotlight, much like the periodic promotions before a movie's release.

His presence at the auto show is the best form of publicity.

At last year's Guangzhou Auto Show, although Weilai was still a small company, it was still a car company with three major vehicle types: sports cars, SUVs, and pickup trucks. As the boss of the car company, Tan Jincheng's decision to personally attend the auto show, setting aside his status, really surprised the media.

The entrepreneurs of 2008 were not as willing to lower their guard for competition as later generations; they all maintained a superior attitude. Tan Jincheng was an exception.

This kind of unconventional entrepreneur may not be liked or appreciated by everyone, but he is certainly liked by the media because he is newsworthy. Every time he appears in public, even if he does not give an interview, he can still exchange a few words with the media and reveal some useful news topics.

"President Tan, Shuguang Auto's financial report is out, and it doesn't look very good."

The visitor was Liu Shaofeng, the same Liu who initially made a fortune in the A-share market with Tan Jincheng, then started his own business, only to have his fund company acquired by Tan Jincheng during a bear market.

His fund company currently has two funds: one he manages himself, and the other mainly works in conjunction with ByteDance's actions in the capital market, doing things that ByteDance cannot do.

Tan Jincheng also made some changes to the shareholding structure. Through layers of design, he became the actual controller, but on the surface, he and ByteDance no longer had any connection with the company.

On the surface, ByteDance holds 8.2% of the shares in Shuguang Automotive, while the trust fund controlled by Gu Qingqing has been buying another 1.79% of the shares over the past month or so, keeping the stake at 9.99% and not making any further moves.

In fact, Tan Jincheng already controls more than 10% of the shares, and the rest are held by a fund controlled by Liu Shaofeng.

The negotiations between Cheng Linfeng and the management of Shuguang Auto regarding Huanghai Auto have been ongoing for a month without any progress. In reality, it is just the management of Shuguang Auto stalling for time.

Thanks to the covert accumulation of shares by trust funds and the support of other prominent individual investors and institutions, the stock price of Shuguang Auto has remained above 8 yuan, with several trading days even seeing explosive volume and limit-up moves.

Shuguang Auto, whose prices have doubled from their bottom, has also been one of the recent market focuses.

Shuguang Auto's performance was not good, especially last year, which was a special year. Few major automakers performed well, and Shuguang Auto, whose core business is auto parts, naturally did not fare well either.

Its ability to rebound more than double in a short period of time, following the market trend, is largely due to the shareholding increase of ByteDance.

However, after the share purchase, ByteDance's advertising platform, Ocean Engine, remained inactive. Meanwhile, Ocean Engine's vice president in charge of the secondary market went to Dandong, Liaoning Province, claiming it was a normal investment. But these actions left people wondering what Ocean Engine, or rather Tan Jincheng, was really up to.

The annual report data was mediocre, and the intentions were unclear. As a result, Shuguang Auto's stock price remained around 8 yuan, in a range of fluctuation and adjustment.

Cheng Linfeng was held up, and Liu Shaofeng was temporarily in charge of relaying messages, since he could use the shares he held, even though it was somewhat irregular.

Liu Shaofeng actually understood all of this; as a professional, how could he not understand the implications?

However, he still did it anyway. The capital market is just that cruel. If Tan Jincheng hadn't saved him back then, he would have gone bankrupt. This kind of help always comes at a price.

When he was a trader, he was naive and thought he could make a name for himself with his abilities, but things were not so simple after he entered the capital market.

Even if they find out, it's only worth about 60, at most a lifetime ban. If you've climbed onto such a high branch as the boss, why worry about that?

As for why Tan Jincheng did this?

It's actually quite simple: when you're testing the waters without involving core interests, the benefits far outweigh the risks.

"What do you mean? Will the stock price fluctuate significantly after the official earnings announcement?"

Having experienced the pitfalls of being a "leek" (a term for someone easily exploited in the stock market) and now having extensive experience in the capital market, Tan Jincheng quickly understood Liu Shaofeng's warning.

Liu Shaofeng nodded: "Pretty much. We haven't made any moves for so long, I guess some institutions or big players are thinking of taking the opportunity to run away."

After Tan Jincheng conveyed his intentions, the management of Shuguang kept trying to stall for time. He didn't have the time to get entangled with them, so he sent Cheng Linfeng over to play with them.

ByteDance's advertising platform, Ocean Engine, is now the second-largest shareholder of Dawning, but it has not yet appointed any directors to the board. However, it's unlikely that management will easily dilute its shares through a private placement. A private placement requires a shareholders' meeting, and without absolute control, Ocean Engine could certainly counterattack at the meeting.

The delay was merely an attempt to influence Tan Jincheng's decision through external factors.

"Okay, I understand. Don't make any moves for now, don't buy or sell."

Although there are gray areas, Tan Jincheng is still quite cautious. The fund controlled by Liu Shaofeng only buys and does not sell. This is an experience and lesson learned from Cheng Linfeng's last acquisition of Changfeng Group shares.

Acquiring shares in the secondary market through multiple fund products is something many fund companies do. Even if they are afraid of discovering that more than 10% has not been announced, ByteDance's data engine can respond by saying that it has not had time to collect the statistics.

Liu Shaofeng didn't know, nor did he need to know, his boss's specific intentions. He only needed to deliver the documents to his boss in a timely manner as instructed by Cheng Linfeng.

Seeing that his boss had no further instructions, Liu Shaofeng left the office.

After getting off the elevator, Liu Shaofeng entered the underground parking lot, got into the driver's seat of his BMW X5, and lit a cigarette.

He bought this BMW X5 at the end of 2007; it was an imported model, and he was full of vigor and ambition at the time.

No one expected that the market would change drastically in just six months. Liu Shaofeng knew that a bull market couldn't last forever, but he didn't expect the market to crash so badly throughout 2008.

He also encountered the subprime mortgage crisis, which presented Liu Shaofeng with the biggest challenge of his career.

His private equity funds all came from small business owners. These people aren't so easy to talk to. When you make money, everyone's happy, but when you lose so much you're bleeding, they don't care about profit and loss.

He had mortgaged the BMW X5 at the time, but his boss helped him redeem it and also appeased those small business owners.

Liu Shaofeng still remembers what his boss said when he handed the car over to him: "Drive it for a few more years. Even if you want to change cars in the future, keep this car and don't sell it. I'm reminding you that the financial market is not that simple."

When he resigned, his boss reminded him, but he simply wouldn't listen.

The secondary market may seem fair, but it is actually unfair. This is his biggest takeaway from working for his boss for the past six months.

"Things are pretty good now. All things considered, I'm quite lucky."

After finishing his cigarette, Liu Shaofeng chuckled to himself.
-
Wednesday, September 4th.

Shuguang Auto, which saw a steady upward trend in the morning, reaching a high of 8.29 yuan, suddenly experienced a sharp drop in trading volume near the midday close.

"Boss, it's moving."

"Okay, I got it. Don't move. Let me handle it this afternoon. I haven't traded stocks myself in a long time. By the way, how many shares should I buy?"

The traders at ByteDance were speechless for a moment. Shuguang Auto was going to officially release its 2008 annual report on April 27. In the past few days, the boss had been asking them to keep an eye on the stock price trend, and he would come over to check on it from time to time.

"About 30 shares should be enough."

"okay, I get it."

At 1 p.m., the two stock exchanges opened, and Shuguang Auto's stock price continued to decline. After supporting the price for less than half an hour, two large sell orders of more than 1.5 million yuan quickly pushed the stock price down to a drop of more than 4%.

"Hehe, 30 shares, that should be enough for around 240 million yuan, right?"

At this time, the stock price of Shuguang Auto was 7.82 yuan. Tan Jincheng was itching to get his hands on the stock. In fact, he had very few opportunities to operate the stock himself in his life.

It didn't cost 240 million yuan at all. Before Tan Jincheng could react, large sell orders started appearing frequently, and the stock price of Shuguang Automotive continued to fall. In just two minutes, the decline widened to more than 5%.

"This means that some well-informed major investors knew the specific data in the annual report in advance."

Tan Jincheng curled his lip. This kind of thing is commonplace during the annual report season. Financial consumers in their previous lives are already used to it.

With orders placed in multiple transactions and large orders appearing frequently, Tan Jincheng was not worried about not being able to get any chips and could still enjoy the pleasure of buying.

At 2:20 PM, Shuguang Automotive was trading at 7.50 yuan, with the decline widening to 8%, and the daily fluctuation was close to 10%.

"Damn, I bought it too early."

As the last order for 3 shares was placed and he pocketed the money, Tan Jincheng cursed in frustration.

He spent 228.9 million yuan on 30 shares, with an average cost of 7.63 yuan. However, by the close of trading, Shuguang Auto closed at 7.52 yuan, a daily drop of 7.84%, forming a large bearish candlestick with no upper or lower shadow and high volume.

Today's trade resulted in a loss of 3.3 yuan, bringing the total intraday loss to 1400 million yuan.

However, the desired result has been achieved.

"Send a letter to Shuguang Auto before leaving get off work."

Tan Jincheng looked at the major accounts after the market closed with lingering interest. The total holdings exceeded 2200 million shares, accounting for 10% of the total share capital. ByteDance had completed its second takeover bid for Shuguang Auto!

Barbarians of 2009?
(End of this chapter)