2003: Starting with Foreign Trade

Chapter 753 Payment License
"Wow, the high-speed rail has slowed down."

Tan Jincheng, traveling from Ningbo to Hangzhou in the business class of the high-speed rail, was on his way to a meeting. This was the first time in his life that he had taken a high-speed train.

Last month, a shocking incident occurred on the high-speed rail in Wenzhou, causing many people to hesitate to take the train. Tan Jincheng's actions seem somewhat like a publicity stunt.

Of course, there's also the meaning mentioned above; there were quite a few celebrities on this high-speed train to Hangzhou.

After the meeting, he still has to go to Beijing.

For internet companies, especially power grid companies, the biggest event this year is the issuance of third-party payment licenses.

That's right. Before this, all third-party payment software, including Taobao, operated without a license. Now that licenses have been issued, operating without a license is no longer allowed.

Before September 1st, all third-party payment software must complete the application for a payment license; those that fail to obtain a license by the deadline will be prohibited from continuing to engage in payment business.

The central bank issued only 27 licenses in the first batch.

According to incomplete statistics, by the end of 2010, there were approximately 270 third-party payment companies nationwide. The People's Bank of China only issued licenses for 10% of the market share at a time, making the competition for licenses extremely fierce.

OrangePay is now a well-known e-commerce website with a considerable transaction volume, but its size is still insufficient to obtain a payment license. If it wants to obtain a payment license, it will have to find another way.

Back then, even a company as large as Taobao was able to obtain its qualifications by acquiring Tianhong Fund at a premium.

To put it bluntly, releasing only 10% at a time serves two purposes: firstly, to control the number of licenses and prevent them from becoming excessive, and secondly, to allow major online shopping companies to build their own networks.

Besides Da Ma and Xiao Ma, even Dong Zi doesn't dare say he's sure he'll get a license.

The time has come for the eight to cross the sea and each display their unique abilities.

Tan Jincheng chose to follow Lei Jun's path. Lei Jun left Kingsoft in 2008 and founded Xiaomi Technology in 2010. He did a lot of work during those two years.

Lei Jun started investing very early on, and his vision is quite unique.

It's no exaggeration to say that his life is like a cheat code.

Lakala is one of the companies invested in by Lei Jun. As early as 2005, Lei Jun invested $50 in Lakala, which was about 430 million yuan at the exchange rate at the time.

Lakala's founder, Sun Taoran, is a good friend of Lei Jun. It's said that this guy invested in the company to help his friend. When he was raising funds for Lao Sun, he talked a lot to the investors, but the investors said, "If you think it's so good, why don't you invest?" This was quite embarrassing.

It was after that investment that Lei Jun began to gradually start investing.

Tan Jincheng, a prominent post-80s entrepreneur, is the youngest member of the Zhejiang and Anhui Provincial Young Entrepreneurs Association. He was among the top 20 Zhejiang Provincial Person of the Year in 2010 and has been listed multiple times on the Forbes China Post-80s Entrepreneurs List. He also has some connection with the above.

However, it is clear that Orange Payment cannot obtain a payment license by relying on these titles alone, and Tan Jincheng would not actually go to the higher-ups for such a matter; that would be tantamount to courting disaster.

Through Lei Jun's connections, Lakala came into Tan Jincheng's sights.

Many people should know this company, but its shareholding is quite dispersed. The largest shareholder, Mouxiang Holdings, holds 31.38% of the shares, the founder, Sun Taoran, holds 7.67%, and Lei Jun holds 4.56%.

After pestering Lei Jun for more than half a year and meeting with the founder and the largest shareholder countless times through his connections, Lei Jun finally agreed to transfer 3.43% of the shares to Tan Jincheng.

Meanwhile, a certain controlling shareholder also hoped to intervene in Orange Technology through cash and share swaps, and agreed to transfer shares in exchange for benefits.

Similar to the case of Tong Mou Xiang Holdings, Tan Jincheng only acts as a financial investor and does not participate in the company's operation. The actual controller of Lakala remains Sun Taoran, which is a transaction that satisfies all four parties.

To be honest, if it weren't for the license, Tan Jincheng wouldn't have bothered with such a company. It doesn't earn much, but it requires too many exchanges of benefits.

In particular, there's a certain company that wants to take control; to be honest, Tan Jincheng doesn't really want to deal with this family.

It can only be said that when you're in the world of martial arts, you're not in control of your own destiny.

However, since we can't refuse, let's accept it gladly. In addition, through this cooperation, we can also cooperate with them in the ride-hailing business in the future, which can be considered as seeking some benefits for Weilai Auto.

“Based on the previous valuation system, Lakala was only worth 3.45 million yuan, but now that we have confirmed that we can obtain the license, the valuation can no longer be calculated in that way. Mr. Tan, you understand what I mean, right?”

Zhu Linan, who wanted to take control, looked at Tan Jincheng with a grin.

Lakala has a large turnover, but to be honest, the company is not worth much and has nothing to offer. The previous valuation of 3.45 million yuan is suspected of being inflated by Tan Jincheng.

However, now that Lakala has what Tan Jincheng wants most, Zhu Linan naturally wants to take this opportunity to make a killing, which is also in the best interests of all shareholders.

The most important thing is that Orange Technology's market value is too high. If you want to get more shares, you can't get more than a few even if you give him all the shares you have.

Benefiting from the explosive growth of last year's Singles' Day, the e-commerce concept in the capital market has entered a period of explosive growth this year, with Orange Technology's stock price rising to $30 and its market value reaching $27 billion.

Their investment company originally wanted to acquire 5% of Orange Technology's shares, but if they were to calculate based on a valuation of 3.45 million yuan, they would not only not have enough shares, but they would also have to put money into it.

Shares can be transferred, but even though someone wanted to take control, they didn't expect to withdraw from Lakala and still need to maintain a 10% stake.

"I understand. How much more would you like, Mr. Zhu?"

The only valuable thing about Lakala is its license. If Tan Jincheng hadn't known that he could get the license, he wouldn't have invested in such a shell company.

However, if they ask for an exorbitant amount, then forget it.

OrangePay is unlikely to get one of the first batch of licenses, but there are still ways. Alipay is still usable, as is Tencent's payment system. In addition, UnionPay is OrangePay's largest payment channel.

We can make do with it for a few years, and then wait for the second batch.

Zhu Linan raised a finger and smiled without saying a word.

"Ten times? Mr. Zhu's appetite is a bit too big."

This finger definitely doesn't mean one time, but ten times is a bit outrageous.

Zhu Linan made no attempt to hide his true feelings: "You can ask for an exorbitant price, but you have to negotiate the final price. If Mr. Tan doesn't agree, then what do you think is a reasonable amount?"

Tan Jincheng glanced at Lei Busi and Sun Taoran. Sun Taoran's expression remained unchanged, while Lei Busi seemed a little embarrassed to meet Tan Jincheng's gaze, clearly indicating that he already knew the news in advance.

However, he is not a major shareholder, nor does he participate in operations, so he cannot make decisions.

Tan Jincheng didn't blame him. He would have done the same if he were in his shoes. Anything is possible before the contract is officially signed.

It seems that 10 times is their highest expectation. But even if it's increased tenfold, it's only 34.5 billion yuan, which isn't impossible.

Lakala went public and its market value should be over 100 billion. Even if you invested ten times the amount, you would still make a profit.

After making up his mind, Tan Jincheng tapped the table: "Let's not use ten times the amount. How about we change the currency to US dollars? That way it will be easier for us to exchange shares."

With the current exchange rate around 6.45, a license plate is indeed worth nearly seven times its value.

That said, when Tan Jincheng was reborn, the exchange rate was still 8.3, and at its highest it reached around 8.7 or 8.8. In just a few years, it has decreased so much, which has made investment more convenient.

Zhu Linan and Sun Taoran exchanged a glance, both of them with a hint of joy. In fact, their bottom line was that the value would be three to five times higher, reaching a valuation of 15 billion yuan. Then their investment over the years would be completely recouped.

"Alright, Mr. Tan is very generous. We won't say any more and will do as you say."

Zhu Linan gave a thumbs up. From the previous negotiations, he knew that once this young man made a decision, it was basically the highest price he could accept, and he wouldn't talk to him anymore.

It has a youthful spirit to it.

With 21.38% of the shares, plus the 3.43% transferred by Lei Jun, Tan Jincheng acquired a total of 24.81% of Lakala's shares, becoming the largest shareholder. The license issue of Orange Payment was also resolved in the process.

"Mr. Zhu, how many shares of Orange Technology do you want? Let's make it clear first, these shares will come from my personal share, and Lakala's shares will also be counted under my personal name."

Because of the issue of Alipay's independence, Jack Ma didn't hesitate to fall out with shareholders of all sizes, causing a huge uproar. Tan Jincheng will definitely want to avoid this problem.

Operating independently from the beginning can avoid many problems.

“3%, and the rest will be discounted in cash; of course, if Mr. Tan can give us the same 3.43% of shares as Mr. Lei, then we can directly exchange them for shares.”

If Orange Technology's market value is transferred at a 10% discount, it would be US$23.62 billion, or US$7086 million, which is nearly US$3 million less than the 21.38% stake in Lakala.

If it's 3.43%, then Tan Jincheng's side would have lost $740 million.

"No problem, let's just consider it making friends. 3.43% it is. Mr. Lei, do you want shares or cash?"

Tan Jincheng said indifferently, "Since we need to cooperate with someone, we can take the initiative. We can continue to promote cooperation with Didi in the future."

A few million US dollars is a lot, but that's just market value. It's not of much use to Tan Jincheng if he doesn't reduce his holdings, so he might as well do him a favor.

This can be considered a disguised reduction in holdings.

"Haha, I don't want the shares, I want some cash, I'm short of money right now."

Orange Technology's shares are definitely very valuable. After obtaining the payment license, Orange Products will certainly have a market value of more than what it has now. In addition, he can probably guess that Orange Products will likely have something big planned for this year's Double Eleven.

Not only did he ask for a batch of Xiaomi 1 phones several months ago, but Sun Tongyu's schedule has been very busy lately.

However, he is indeed short of money recently, otherwise he wouldn't have sold these few percent of his shares. Originally, the two parties were talking about raising a total of 1200 million yuan for him, but now the unit has been changed to US dollars. It's like a godsend for him.

"Alright, that's settled then. Mr. Sun, is there anything you'd like to say?"

Sun Taoran is from Northeast China and is the same age as Lei Jun (CEO of Xiaomi). Strictly speaking, Lakala is not his main focus right now. Besides Lakala, he is also the co-founder of the well-known public relations firm BlueFocus. BlueFocus went public on the A-share market last year, listing on the ChiNext board, with a market capitalization of 34.88 billion yuan on its listing day.

Sun Taoran held 12.84% of BlueFocus's shares when the company went public, but his divorce in May of this year caused him to lose 4.59% of his shares, which caused quite a stir in May.

The trick of using divorce as a disguised way to reduce holdings is something that current retail investors don't quite understand, but this method has been used to death over the past 10 years.

With 4.59% of the shares just below 5%, no announcement is needed for any reduction in holdings. BlueFocus's current market value of 50 billion yuan is clearly inflated.

It's just a public relations firm.

Sun Taoran seems to particularly like creating asset-light companies; this is true for BlueFocus and Lakala.

"Haha, forget about me. I'm still thinking about taking Lakala public. I'll just keep these shares I have."

Sun Taoran, speaking with a Northeastern accent, burst into laughter. He knew what Tan Jincheng meant: this young man was rich and powerful, and he immediately converted the currency unit to US dollars. Even if you gave him all the shares, he would probably accept them all.

"Haha, I've heard from Mr. Lei that he made a bet with you that he'd give you a gold bar when the company goes public. Is that true?"

"Oh, Lao Lei has already told you about this, Mr. Tan. Yes, that's true."

Sun Taoran was somewhat surprised; it seemed that this young man and Lao Lei had a pretty good relationship.

It's a pity that I don't have enough shares myself, otherwise I could have done cross-shareholding.

"Haha, I've heard Mr. Lei mention this before. It's quite interesting, but I wonder if he'll actually keep his word."

Tan Jincheng's words were well said; they implied that Lakala would definitely be able to go public, and he liked hearing that.

Sun Taoran was very happy to hear this: "It's okay, if he doesn't keep his word, I'll ask him for it, and see if he'll feel embarrassed to renege on his promise."

"Do I really need to make such a fuss? It's just a gold bar."

Lei Jun rolled his eyes. It was just a joke back then, but it could serve as a benchmark when the investment company goes public in the future, as a small bonus.

In the equity transfer agreement with the three parties, Tan Jincheng first signed with Zhu Linan, exchanging 21.38% of Lakala's shares for 3.43% of Orange Technology's shares held by Tan Jincheng.

However, this agreement was also to be communicated to the board of directors of Orange Technology, the Nasdaq Stock Exchange, the SEC, and NASD. Orange Technology has been listed for more than three years, and Tan Jincheng's commitment period has long expired.

The disguised 'reduction' of 3.43% is not a big problem. After the reduction, Tan Jincheng and his family's shareholding in Orange Technology will decrease from 32.66% to 29.23%.

enough.

Lei Jun's side is even easier to solve. He's not a listed company. Just sign the equity transfer agreement and make the payment on time.

"1200 million US dollars, I'll call it 7800 million RMB. Transfer it to the account Mr. Lei designates within a week, is that alright?"

US dollars are more popular than RMB, so Tan Jincheng was somewhat reluctant to give it to him. After all, his business was currently based in China, and paying in RMB wasn't out of the question.

"Alright, RMB it is. You don't need to be in such a hurry. Just transfer it to me within half a month."

This kid really loves to take advantage of others, even with such a small benefit. But this time, he was a bit dishonest.

As an intermediary, his position should actually be neutral. Even if he cannot make a decision, he should at least inform the other party before the negotiations begin.

But in order to get more benefits, he couldn't resist.

In addition to signing agreements with Zhu Linan and Lei Jun, Tan Jincheng also needs to sign an agreement with Sun Taoran, allowing Lakala's financial license to be used in Orange Technology's payment system.

Speaking of how Lakala was able to obtain a third-party payment license, Sun Taoran and Zhu Linan must have considerable capabilities. Of the 32 companies initially announced, 5 were eliminated for unknown reasons.

Among the 27 third-party payment companies, there is UnionPay from the national team, as well as private enterprises such as Ali and Tencent. As for Dongzi, unfortunately, it did not obtain a payment license in the first batch.

If you want to obtain a payment license, you can only do what Tan Jincheng did and resort to acquisitions.

These 27 licenses are almost all concentrated in the three cities of Beijing, Shanghai, and Shenzhen. Many of them are from unknown companies. It's true that those who know, know; everything is within the rules.

After the legal team reviewed the three agreements, it was already the next day before they were officially signed.

Tuesday, April 2011, 8.

Orange Technology issued an announcement stating that its actual controller, Tan Jincheng, will transfer 3.43% of his shares to Yu Mouxiang through an agreement transfer.

At the same time, a certain company also issued an announcement on its official website, stating that it would transfer 21.38% of the shares of its subsidiary, Didu Lakala Network Technology Co., Ltd., to Yongcheng Chengyin Information Service Co., Ltd. through an agreement.

Chengyin Information Service Co., Ltd. has become the largest shareholder of Lakala, holding 24.81% of the shares. The actual controller and management team of the company remain unchanged.

Following the release of these two news items, Orange Technology (OOTL) surged 16.50% overnight on the US stock market, closing at $33.97 with a market capitalization of $30.573 billion, sweeping away the slump of the past month.

A reduction in holdings by the actual controller is usually a negative sign, but Tan Jincheng's reduction in holdings this time can obviously be seen as a positive sign. Orange Technology, which has a payment license, can still rank among the mainstream e-commerce companies.

"Wall Street reacted really quickly, pulling it up in no time. Your ranking will change again next month."

The next time I saw Lei Jun was at Xiaomi's new headquarters. Lei Jun laughed and pointed at Tan Jincheng.

This guy has been riding high lately, with Xiaomi's pre-orders exceeding 30 units. The next round of financing will take place next month, and these 30 pre-orders are the foundation of his confidence in raising funds.

As for the ranking he mentioned, he was referring to the Forbes rich list to be released next month, and unsurprisingly, the new richest person should be Li from Baidu.

Baidu, which went public in 2005, saw its stock price reach its peak this year, soaring to a high of $718, which shocked the Chinese people, following Google's withdrawal from China.

The performance of Chinese concept stocks in 2011 was mixed. Under the multiple challenges of the European debt crisis and the integrity crisis of Chinese concept stocks, the overall performance was not good. However, there were also some outstanding stocks, such as Baidu, hog farms, China Unicom, and even Orange Technology, which all had very good growth.

360, which debuted on the NYSE on March 30, saw a 134% increase on its first day of trading, reaching a market capitalization of $39.6 billion. It once ranked sixth among Chinese concept stocks by market capitalization. By the end of April, it had risen to $36, with its market capitalization soaring to $73.37 billion.

This year has been a triumphant one for Lao Zhou. Not only did he avoid being besieged by Pony Ma, but his company also went public, and he performed quite well.

"There's not much change, after all, I transferred 3.43% of my shares."

"Haha, but you've also become Lakala's largest shareholder. Do you think this isn't money? Just wait and see."

Lei Jun saw through Tan Jincheng's tricks in last year's Forbes list, but he also admired him. At such a young age, he knew how to hide his talents. If he hadn't had a mentor, he would definitely be a prodigy.

"It's okay, we'll figure something out later."

Ugh, what a headache. These old guys are all so shrewd. Tencent, owned by Pony Ma, had been steadily rising since July of last year. However, without any negative news, Tencent's monthly chart has been down for four consecutive months since May.

This is so obvious, it's really cunning.

It's always better to have your own company. You can't control companies like Apple or Tesla. Orange Technology was able to suppress the situation, but unfortunately, the US side had to issue an announcement.

Fortunately, FlashTech's recent performance has been mediocre, with its market value dropping by about 15% compared to last year, which is a small consolation.

However, Zeng Jixiang has already calculated that, as of last month, his publicly disclosed stock assets must be over 255 billion yuan, which is more than last year.

According to this calculation, this year's asset statistics should be less than 290 billion yuan.

Anyway, no matter what, we have to keep it outside the top 10. We'll have to ask Sun Taoran to help with public relations, and we need to keep a close eye on Zeng Jixiang.

"Actually, there's no need to be so careful. The social environment is different from before. Besides, you mainly work in the real economy, and your money is clean. As long as you're not in the top three, it won't have much of an impact on you."

Tan Jincheng said with a wry smile, "That's true, but we still can't be too flashy, you know what I mean."

Despite Tan Jincheng's efforts to suppress the hype, the mobile internet era has arrived, and the success of Xiaomi 1 has brought an uncontrollable surge in the exposure of Tan Jincheng, one of the earliest investors.

Lei Jun wouldn't help Tan Jincheng suppress the hype. As long as it's beneficial to Xiaomi, he'd love for the hype to be as high as possible. It would be good enough if he didn't add fuel to the fire.

"Haha, no matter how low-key you are, you can't escape the title of the richest boss in the private car industry; but on another note, Hu Run, that foreigner, is really quite annoying."

"Who can disagree? I really hope there will be more news that ordinary people like to see and more forms of entertainment. Otherwise, I won't be happy if this foreigner keeps making money."

BYD shares have fallen for 11 consecutive months, with the share price dropping to HK$16. BYD Electronics has fallen for seven consecutive months, with the share price at HK$2.34, a truly miserable situation.

Boatman's net worth must have shrunk to less than 100 billion this year, right?
But shouldn't it be a good time to buy at the bottom again? For Boatman Brother, a net worth of 10 billion is definitely a super bottom.

"By the way, the money has arrived. I was just passing by to let you know. I have something to do, so I'll be going now."

"Why are you leaving? It's almost lunchtime. Let's eat lunch first and then leave."

"No, I have something else to do."

"Where are you going? You said you were just passing by, is there something you need?"

"Oh, I bought a house in Hai D District, which will be convenient for my sister to study in the future."

After saying that, Tan Jincheng left, leaving Lei Jun completely bewildered.

"Damn, this kid and his sister are only seven years old, and they're already preparing a house for them to study in the capital? That's ridiculous."

(End of this chapter)