2003: Starting with Foreign Trade

Chapter 639 From Small Shareholder to Major Shareholder
Seeing Tan Jincheng and Li Yaohui actually sitting in his office eating heartily, Ying Jianren was dumbfounded.

No, you're serious? I thought you were just trying to liven things up.

"Are you really going to push yourself this hard? Taking a meal in between won't take much time."

"Haha, we did eat a zongzi at a service area along the way, but we're young, we get hungry quickly."

Ying Jianren nodded in agreement. The zongzi at the service area were indeed something to remember. When you're tired from a journey, eating a hot zongzi like that can make you feel so good.

When he was young, he didn't have such good conditions. He always traveled on national highways, and he was always on edge when he encountered unfamiliar roads.

For entrepreneurs like Li Xianjin and Li Jianxin, who left state-owned enterprises or were directly involved in the reform of state-owned enterprises, the hardships endured by people like Ying Jianren and Dong Jinggui, who had little education but wanted to venture out and make a living, were far greater than those of Tan Jincheng's generation.

"Eat slowly. I've been free these past few days, just waiting for you at the factory. No rush. You really made time to come."

Ying Jianren could probably understand that Tan Jincheng didn't want to waste time, so he just grabbed something quick on the way.

"That's great! I was worried you wouldn't have time."

For a company of their caliber, scheduling a time is indeed quite difficult. Tan Jincheng didn't want to waste too much time due to his schedule, and he preferred to resolve things in one go if possible.

If it's a specific negotiation issue, that's fine, but if it's because of travel arrangements, then it's a real shame.

After a quick meal, Tan Jincheng accepted the tea brewed by Ying Jianren's assistant and followed Ying Jianren to his private office.

What are your thoughts on the Beicang factory?

Ying Jianren knew Tan Jincheng's style. Since he had already made a decision, he decided to get straight to the point.

"Can you rent it to me? I'll take over all the operating costs, including labor. You know we recently made a bid for Shuguang Auto. If we buy your shares, I really can't come up with that much money right now."

Ying Jianren smiled and said, "Didn't you sell your Yongzhou assets? That part of the assets should belong to Weilai Automobile, right?"

How much can you rent it for? If you want to sell it, just sell it directly to avoid trouble.

He can also free up his hands to do what he wants to do.

"Haha, the assets in Yongzhou were indeed sold, but to be honest with you, it was practically a half-sale, half-gift. It was only 1.5 million yuan in total, and it was paid in three installments."

Ying Jianren was speechless for a moment. This was practically a half-sale, half-gift. So many assets were given away for only 1.5 million, and the payment was to be made in three installments.

But after thinking about it, Ying Jianren understood the stakes behind the deal: "You really know how to share the profits, it's hard not to get rich."

Tan Jincheng's eyes darted around: "It's not that complicated, let's not talk about it anymore; brother, just tell me, I really do want the Zhongtai Beicang factory, to be honest, I have a new project."

It seems they don't want to rent it anymore, so the only option is to negotiate a lower price.

Anyway, Zhongtai is not a listed company yet, so the value of a subsidiary is not up to Ying Jianren. As for Beicang City Investment, Tan Jincheng will communicate with them.

"What project?"

Upon hearing this, Ying Jianren indeed became interested.

"Low-speed electric vehicles, simply put, are electric four-wheeled vehicles, but not cars. Or you can think of them as electric versions of your TT, but they are cheaper than your TT."

Tan Jincheng doesn't know when the term "old man's car" became popular in China, but currently this market segment is indeed a blank.

Even electric tricycles have only become popular in recent years.

In his previous life, Tan Jincheng had read an article about the market size of "old man's cars". At its peak, the overall market was close to 100 billion yuan. In addition, "old man's cars" were disliked in China, but they were very popular in foreign countries.

Perhaps due to different aesthetic standards, it is considered a strange thing in China, and is more popular in rural markets. The old man's car, which was eventually banned in most cities, is actually very popular among European and American consumers.

The phrase "Please be careful when reversing!" in particular became a popular catchphrase.

The old-age electric vehicles exported to Europe and America range in price from a few hundred US dollars to tens of thousands of US dollars per vehicle.

Actually, there's nothing new about these "old man's cars" – they're technologically outdated and can't guarantee basic safety. But foreigners just love them.

Cheap, compact, and easy to modify and DIY are probably the main reasons why it is popular among people in Europe and America. Another reason is that there are not as many restrictions as in China, so spending a few hundred US dollars to build such a toy seems pretty good.

"Oh, you mean something like what you provided for the Olympics last year?"

Ying Jianren didn't immediately understand what "low-speed electric vehicle" meant, but after thinking for a moment, he answered.

"Pretty much. We have the complete technology and blueprints for this. The Beicang factory is actually preparing to produce this project. This thing costs about the same as a motorcycle, but it can provide shelter from the wind and rain. It still has a large market in rural and underdeveloped areas." "Got it. It's just adding another wheel and a cover to the electric tricycles you're currently selling, and then selling them for double the price. Why are you making this so confusing? I was wondering what kind of low-speed electric vehicle it was."

"Haha, alright, if you want to put it that way, you've made a perfectly good business sound so awful. How about we do it together? You don't need to contribute anything, just sell me your shares at a discount."

Outdated technology is still technology. Besides, in 2009, the technology of the old man's electric vehicle from Sailing was not considered outdated, both domestically and internationally. Although he only spent a few million RMB to acquire it as a package, how to sell it was Tan Jincheng's own business.

"So what you're really trying to do is haggle over the price."

"Don't put it so harshly. You're definitely not at a loss. You said yourself that I know we share the benefits."

With his thick skin, he'll eat his fill. He wants to use the Beicang factory for the elderly entertainment project. Tan Jincheng will definitely want absolute control. He'll swindle some shares from Ying Jianren, and then swindle some more from Xie Hongjun when he gets back.

With a little persuasion from both sides, as long as the shareholding reaches 51% or more, it can be considered as using the project to raise funds.

"Although I don't understand exactly how you're going to do it, it sounds like it's something I could try. The main thing is that I trust your battery capabilities."

Ying Jianren nodded noncommittally. The battery used in their Zhongtai 2008 hybrid version was developed by Jinxin Times and had good stability.

He couldn't say whether low speed was good or bad, but thinking back to when he was doing business, having such a cheap and practical vehicle to haul small goods and provide shelter from the wind and rain seemed like a good idea.

"I'll send you the project description later, brother. If you're interested, we can finalize it. I also need to check with Beicang."

"Understood. How many shares do you want me to transfer?"

"That depends on you, brother. How much money do you want, and how many shares do you want to keep? Of course, my opinion is that you should not keep more than 10% of the shares."

Tan Jincheng's bluntness made Ying Jianren somewhat uncomfortable. Just before the meal, he was the largest shareholder, but after the meal, he was going to become the smallest shareholder.

However, this kind of thing is also very common in the business world.

Tan Jincheng has the technology; all he lacks is a factory. He can easily acquire one from anywhere, and if all else fails, they can expand their FlashTech workshop.

He could handle the entire project by himself without any problems.

"10% it is, I'll transfer 39% to you. How much are you willing to pay?"

After a moment of silence, Ying Jianren slowly said that he was short of money. If he could get some cash, he could leverage it. However, the project sounded pretty good at first glance. It was somewhat similar to a niche version of FlashTech and should be able to make some money.

If handled well, it will be a significant investment for Zhongtai.

"What do you think?" Tan Jincheng didn't answer directly, but asked in return.

He really didn't want to pay a price; he wanted to rent it, but what could he do if Ying Jianren wouldn't agree? He had no choice but to buy it.

"How about we include your technology as equity, and still value it at four hundred million?"

Ying Jianren said with some heartache that his brother-in-law had put a lot of effort into the Zhongtai factory, which was now in full production and was about to generate profits, but he had to give it up because of the acquisition of Fiat assets.

"It's a bit expensive. I only spent a small amount of money to acquire Yangzi Automobile. Mr. Ying doesn't think that Zhongtai Beicang Factory is more valuable than Yangzi Automobile, does he?"

BYD's F3 benefited from the policy, and the same is true for the Yangzi series pickup trucks. In March, monthly sales reached 2000 units, bringing Tan Jincheng closer and closer to making his first profit in the automotive business.

"Then how much did you say?"

Ying Jianren said somewhat resentfully, "This is indeed hard to answer. If we say that Zhongtai as a whole is equivalent to several Yangzi Automobiles, then when it comes to just the Beicang factory project, I really don't dare to say that."

"How about this, I won't be too harsh. How about an overall valuation of 3.5 million yuan?"

Tan Jincheng wanted his personal shareholding to reach more than 51%, which required acquiring at least 41% of the equity, spending around 1.5 million yuan to acquire a factory that could be fully operational, along with qualified workers. This was the price range he was willing to negotiate.

I don't want any more. If I want more, just like Ying Jianren thought, I might as well buy a small, semi-bankrupt company or expand it myself.

"Alright, 350 million it is, I don't care about the valuation of a few tens of millions."

Once he understood the situation, Ying Jianren readily agreed to transfer 39% of the shares at a valuation of 3.5 million yuan. He would receive 1.365 million yuan in cash, which was not a loss compared to his initial investment. As for whether he could make a profit, that would depend on how much the remaining 10% of the shares would appreciate.

To be honest, the initial valuation was a bit high.

"But you have to win over the people in your Beicang area. They are also major shareholders. If you, a small shareholder, want to acquire shares from major shareholders, it depends on your own abilities."

(End of this chapter)