2003: Starting with Foreign Trade

Chapter 757 The Expansion of Weilai and the Reduction of the Burden of Shanchi

On October 5th local time, Apple co-founder Steve Jobs passed away at the age of 56.

"It's a pity that an era of Apple has come to an end."

The new CEO is very good at selling products, but in terms of innovation, he is still far behind Steve Jobs. Strictly speaking, the new CEO is just a very good businessman and a good salesman.

In fact, Apple's stock price had already reacted on the 4th, with a period of rapid decline of more than seven points during the trading day.

"What should we do with the stocks we hold? When do we plan to reduce our holdings?"

"No rush, let's talk about it next year."

Due to health reasons, Jobs resigned from all positions at Apple as early as the end of August, and his successor was also designated by himself, namely Cook.

The legacy left to Apple includes the iPhone 4S, iCloud, and the Siri voice assistant.

The 4 was a groundbreaking product, but compared to the 4, the 4S is still easier to use, has more functions, and its overall performance is superior to the fourth generation.

Apple's stock price plummeted on the 4th, but recovered on the 5th, currently closing at $378.25. Jinqing Investment and ByteDance's combined holdings are worth $19.87 billion.

Although Steve Jobs has passed away, the Apple ecosystem is still intact. The 4S sold very well after its official launch, and there is no need to reduce holdings before the iPhone 5 is released.

Tan Jincheng also vaguely remembered Apple's stock price.

It peaked at $700 in 2012, after which it underwent a stock split. Before the stock split, you could gradually reduce your holdings if the stock price exceeded $600.

Compared to now, there is still 60% room for growth, which is over 1 billion US dollars.

"If we don't plan to sell, then our investments this year will have to slow down, as we're running out of funds."

During the National Day holiday, Huang Ming and Cheng Linfeng appeared at their boss's villa to discuss the impact of Steve Jobs' death on ByteDance's advertising platform. Holding 525.3 million shares of Apple stock, they were also panicking.

The boss only talked, but the two of them had to figure out how to actually raise the money.

Take the $450 million investment in ByteDance as an example, which is nearly 3000 million yuan. Although it doesn't have to be paid in one lump sum, internet companies burn through cash quickly, and they might ask for a second payment at any time.

“Alright then. We’ve invested quite a bit over the past six months, so we’ll slow down a bit and shift our focus to semiconductors, paying more attention to companies in Luzhou.”

Luzhou's development speed may seem average in recent years, but with the backing of Zhongke University, its speed in subsequent science and technology strategies will be quite rapid.

This year's Davos meeting focused on the quality of growth, and also mentioned the idea that technology knows no borders.

Take that with a grain of salt, but we can use this honeymoon period to do something for businesses. Apple's iCloud provides a direction for cloud services, after all.

When it comes to technological innovation capabilities, our companies are indeed not as good as the Americans, at least not in 2015.

Intelligent driving places high demands on chips. After Apple sells its shares next year, Tan Jincheng is thinking of going all in on Nvidia, whose current stock price is only around $15.

However, as Huang Ming and the other person said, ByteDance's investment in ByteDance Engine will have to slow down for the time being.

Since 2009, ByteDance's advertising platform has invested in many companies in the primary market, but most of them are for technical cooperation and very few can be cashed out. The valuations seem to be going up little by little, but at the same time, they are limiting cash flow.

In recent years, the main sources of cash flow have been subscriptions in the primary market and buying low and selling high using existing stock holdings. In the US stock market, there has also been appropriate short selling and long selling.

In addition, there are loans and equity pledges, such as Tesla stock. Since there is no intention to sell, but it cannot be left untouched, most of the cash is obtained through equity pledges.

In addition, the listed company shares held by ByteDance's advertising platform that it does not intend to sell are basically used in this way to generate cash flow.

For companies like OFILM, Luxshare Precision, and Changying Precision, 60% of their shares have been pledged.

Money is not a problem; taking out three to five hundred million is not a big deal for ByteDance. However, equity pledging also carries risks. If a stable cash flow cannot be guaranteed, and the stock market changes, it will be necessary to increase the pledge or margin.

It's understandable that Huang Ming and Cheng Linfeng have these concerns.

"Semiconductors? Is this also preparation for Weilai Motors?"

All of ByteDance's strategic plans are in preparation for its automotive business, a fact that Huang Ming and Cheng Linfeng are aware of. As the controlling shareholder of Weilai Group, their goal is also to help Weilai Group achieve a successful IPO.

If you were to ask what ByteDance's biggest asset is right now, it's not Xiaomi, which it invested in, nor the future behemoth ByteDance, but rather WooLang Auto, and it always will be.

This is the core of the strategy, like the trunk of a tree.

"That's about it. In the future, automotive chips and new intelligent driving systems will be an important direction. Our new energy vehicles are not meant to be comparable to BYD, but to be comparable to Tesla, and even better than them."

If Xiaomi's main goal is to create an Android version of Apple, then everything about WYD Motors is actually a combination of BYD and Tesla, but ultimately its benchmark is still Tesla.

The reason it looks so out of place is simply because Tan Jincheng didn't have money in the early stages, unlike Factory Director Ma, who was a multi-millionaire with hundreds of millions of dollars in assets when he invested in Tesla and had plenty of money in his pocket, allowing him to start working on electric vehicles from the very beginning.

Even so, Director Ma almost burned through all his money.

Without gasoline-powered cars, Tan Jincheng simply couldn't afford them. The first generation of gasoline-powered cars was, frankly speaking, just an assembly project. While there were some truly self-developed components, they were negligible.

"The semiconductor industry requires a huge investment. With our limited funds, we can't invest in many companies, can we?"

"So there's no rush. We'll take our time to select one, then acquire it and create a BYD-level automotive semiconductor company."

Dizi is really strong. Besides the photovoltaic business that was wiped out, they also have semiconductors, which were established in 2004. Although they don't seem to have made any significant progress over the years, they have managed to survive.

Automobiles, photovoltaics, electronics, semiconductors, and Dizi Semiconductor eventually became a unicorn company, seemingly planning to go public in 2022, but later terminated the listing for unknown reasons.

Perhaps they're so flush with cash that they don't want to share the profits?

"Haha, boss, you have big ambitions. Acquiring a company is not the same as investing in one."

Investing in a semiconductor company is expensive, but getting around 10% of the shares is easy these days. However, if you want to acquire it, you'd need at least tens of billions of dollars to start, and the later you go, the more expensive it will be.

The value of money has depreciated too quickly in recent years. Nowadays, any company with a bit of substance, or with a few entrepreneurial experiences, will ask for US dollars when seeking funding.

"This is what I think: for new energy vehicles to control costs, the core components must be in our own hands, so the core components must be in our own hands."

“We can learn from what we don’t understand. BYD and Tesla are good examples to learn from. My Uncle Wang has not given up on his semiconductor project despite the difficulties he has faced in the past two years, which means there is potential in it.”

BYD has scaled back across the board this year, laying off employees and cutting many things that could be cut, but the semiconductor company has not been affected much and has continued to develop quietly.

New energy vehicles have far fewer parts than gasoline vehicles, but as the saying goes, good things come in small packages.

If we can ensure that we have all the core components in our own hands, we can greatly improve cost control. Some new energy vehicle executives in my previous life said in their speeches that only a few new energy vehicle companies will remain in the market.

This includes the topic of price wars, but in reality, only BYD and Tesla can afford to engage in a price war, and these two companies are definitely the ones that will survive.

Simply put, they possess absolute core technology.

Weilai Auto should aspire to be the kind of company that dares to take bold action when it comes to price wars.

As an assembly plant, what right do you have to engage in a price war? A price war isn't about being as cheap as possible. Cars in the same class can be sold for prices you can't even imagine.

Just like the Xiaomi Mi 1, it's already October, and the flash sales are still going on.

Lei Jun's reputation has been getting worse and worse in the past few months.

"Then we need to start saving money. Mr. Cheng, I'll leave this to you."

Huang Ming winked at Cheng Linfeng with a hint of teasing. A multi-billion dollar acquisition like this could be said to have caused a national sensation.

Of course, the difficulty is self-evident. Those who can get involved in semiconductors are not just anyone. It might really be necessary to go to Luzhou to take a look, as the boss said. Without the help of the Luzhou and Anhui provincial governments, it would probably be quite difficult.

"Haha, we really need to save money. We're counting on you two. If we can sell any non-core stocks or shares, we should."

Besides the massive engine, Weilai Auto also needs to start saving money.

Huayi's shares have been sold off, and next, Shuguang Auto's shares will also need to be cleared out, along with some other miscellaneous shares.

These various industries, pieced together, must amount to at least a billion, right?
We need to sell more cars.

The SUV market was highly competitive in September, with the major players clearly showing their strengths. The Honda CR-V ranked first with 20118 units sold, while the Yuechi A1 sold a total of 20029 units in September.

For the first time, monthly sales exceeded 2 units. In addition, the Honda CR-V also achieved its first monthly sales exceeding 2 units.

The two companies are still neck and neck, going back and forth between first and second place, while the Tiguan, which ranks third, only sold 13387 units in a single month.

The sales gap between the third and fifth place is between 3000 units, while from the sixth place onwards, the sales are less than 10,000 units, showing a significant difference between the three major groups.

The most surprising result was the BYD S6, which achieved sales of 7447 units in September, ranking 10th. This growth rate is truly astonishing.

Goodness, sales were only 104 units in the first month after its launch, and sales were mediocre in the following two months. Who would have thought that the growth rate would be amazing after August? It seems that monthly sales of more than 10,000 units are only a matter of time.

F3 and F0 sales are declining, G3 is barely selling, but the S6 has unexpectedly become a hit. Weilai currently has too few models; if Yuechi A1 sales decline, it will be very dangerous. Zhang Yong is currently promoting the Aion S everywhere for this reason.

In addition, Huanghai Bus's pure electric models have also sold well this year, with more than 300 units sold so far.

As for the Weilai ES6, this model has not yet been mass-produced and is planned to take the high-end customization route, so that it can lose less money.

The lineup of Yangzi Pickup, Huanghai Bus, Aion S, Yuechi A1, and the upcoming Yuechi A3 forms a brand-new product matrix, ensuring the sales volume of Qiweilai Automobile.

Speaking of which, it seems that Dizi's Dynasty series is already in preparation, right?
The first model launched in the Dynasty series was the Qin, which is considered an entry-level electric vehicle. The Song is the main model in the mid-range segment, while the Tang and Han are the main models in the high-end segment.

The Qin adopts a brand-new exterior design. Strictly speaking, this is Dizi's first self-designed model, breaking away from the idea of ​​"copying".

Xia Bing's departure is likely one of the reasons why Di Zi abandoned her previous design approach.

In the low-end segment, Weilai already has the Aion S. With its exterior design and its earlier launch than the Qin, it has no problem competing with the Qin. However, Weilai has not yet decided on a high-end sedan.

Should we seize Han?
I must say, Dizi's Han system is really quite beautiful.

Never mind, I'll ask Chris for his opinion later.

Chris Thomas, the designer of the BMW i3, has been in contact with Tan Jincheng ever since Tan personally invited him to Hawaii.

After more than a year of contact, Chris was very moved by Wei Lai's sincerity. He also thought that Wei Lai was a good car company, smaller in scale than any of the companies he had worked for before, but full of vigor.

Most importantly, Wei Lai's design philosophy really resonated with him and his team, which made him very interested.

Chris has already agreed to join Tan Jincheng in 2012. The BMW i3 has now been officially launched, so his work at BMW has come to an end. He will also come to China at the end of the year to personally discuss matters after joining the company with Tan Jincheng.

Group CEO and Sales Manager Zhang Yong, Automotive Research Institute Dean Yu Liguo, Vice Dean Hu Zhengnan, Manufacturing Department Manager Zhang Li, and the soon-to-be-appointed Design Director Chris Thomas.

The basic structure of Weilai Auto is now complete. Next, Tan Jincheng wants to recruit a few top-notch marketing personnel, and he wants to leverage Apple's experience in this area.

Apple's system is still intact. Although Cook is the successor designated by Jobs, he will also use his own people to take over, which will definitely cause a series of personnel changes at Apple.

Apple has a wealth of talent in manufacturing, marketing, and management. Leveraging its status as an Apple shareholder, ByteDance's advertising platform has also obtained a significant amount of Apple information.

Tan Jincheng wanted to take advantage of the turbulent period of personnel changes at Apple to try and earn some senior management positions in manufacturing and marketing.

It's a bit difficult. According to the multinational headhunting company that works with Wei Lai in the US, Director Ma seems to be considering this as well.

As a potential competitor, Weilai Auto did not choose the Android system for its in-vehicle infotainment system, but instead opted for a Linux-based system, just like Tesla.

Even the chips are supplied by the same supplier, Atom, as Tesla.

The advantage of Linux is that it is not prone to slowdowns even after long-term use. The disadvantages are that it is difficult to develop, costly, and requires a lot of work. In addition, Linux is completely open source and free, so there is no infringement involved.

Since the two companies have the same development direction, there will definitely be competition in terms of talent recruitment. For Wei Lai, it will be quite difficult to recruit people from the US to work for him while also having a competitor.

In addition, Tan Jincheng also wanted to poach Zhang Li's wife, but now is not the time, as Zhang Li has not yet established himself firmly.

Furthermore, a woman with such an iron-willed personality is not a good fit for Wei Lai at the moment.

In its early stages, Weilai was full of vigor and energy, and all aspects of its operations were going well. The employees were also very motivated. Iron-fisted leaders were actually not good for the company.

When the company reaches a bottleneck or encounters problems due to conflicts of interest, such an iron-fisted figure is the best tool to reorganize the company.

"Let's stop talking and eat."

The three of them were drinking tea and chatting in the villa's gazebo when it was noon, at which point Mom called them to lunch.

"Okay, let's eat first. It seems like it's been a long time since we've gotten together like this."

Cheng Linfeng stood up and chuckled, "Then I'll have to trouble you for a meal, boss."

In recent years, Cheng Linfeng has looked increasingly younger.

Compared to the cutthroat competition in Huang Ming's primary market investments, his work is relatively easier. He doesn't need to spend too much time on personal relationships when subscribing offline or buying stocks online, and he now has several fund managers under him.

In fact, it's been easier for him than when he was a fund manager.

Of course, this refers to matters of personal relationships.

When people relax, they live more easily and speak more freely.

“We’ve known each other for so long, Lao Cheng saying this is an expression of dissatisfaction.”

"Haha, I wouldn't dare, and I didn't mean it that way. It's just that I haven't tasted Auntie's cooking in a long time."

"Then you and Lao Huang should come over more often when you have the chance. I've been staying home lately."

Like Tan Jincheng, Huang Ming was from out of town in Ningbo. When he first arrived, Tan Jincheng arranged for him to live in this villa area, and he has lived here for many years.

Cheng Linfeng is different. He originally had a house in Beicang, but now he has moved to a newly developed community by Jinpeng Industry, where there are several detached villas and the environment is no less than here.

He also wanted to move to this villa area, as it would be closer to the boss. However, the development of this area had stopped, and the 20-odd villas had all been allocated to the wealthy and powerful.

Even if Tan Jincheng wanted to arrange for the senior executives to be here, he would no longer have the opportunity.

"Speaking of which, boss, how about we develop a villa area too? We could sell enough to just our own people, right?"

"It's not impossible, but I'm too lazy to deal with this. If you're interested, you can contact Mr. Zhang and see if he's interested."

The "General Manager Zhang" that Tan Jincheng mentioned was Zhang Xupeng, who has now been handed over to manage the Flash Group and has become the vice president in name and in fact.

Weilai Auto was initially established within the framework of the Flash Group and received considerable assistance from the Flash Group. However, Weilai has now become an independent group company, and its power battery business has also been incorporated into the Weilai Group.

Therefore, the two companies have no financial relationship other than normal business dealings.

Both are Tan Jincheng's companies, but they belong to two different camps. You could say they both belong to Tan Jincheng, or you could say they have no relation at all.

After taking over Flash Group, Zhang Xupeng, with the support of Tan Jincheng, carried out a series of reforms.

The biggest direction of reform is to reduce the burden on Flash Group and transform it from an asset-heavy to an asset-light model.

FlashTech is a listed company with its own independent management team and operating methods, so it is not advisable to make too many changes. However, it should be much more cautious about building new production bases.

Meanwhile, Jinpeng Industrial, which he used to manage, underwent a major restructuring. GXG focused on e-commerce business, stopped adding new offline stores, and tried to move towards OEM manufacturing in terms of production.

As for the original garment export business, it has been merged with Jinyi Industrial.

Jinyi Industrial became a pure import and export company, with export business including 3C electronics, clothing, etc.

The original Hangxin New Energy now belongs to Weilai Group, and ByteDance Engine has also become independent. The shares of Mingcheng Industry, Shengshi Shanchi and Boneng Environmental New Energy, which are related to Shanchi Group, have also been transferred to Shanchi Group.

Zhang Xupeng uses a newly established investment subsidiary to control these auto parts companies in which he has invested.

In addition, Flash Group has another subsidiary, Bafang Electric, whose performance has been booming in recent years, and Wang Qinghua has also considered listing it independently.

Zhang Xupeng also supports Wang Qinghua's idea, believing that it would be a good thing to create another listed company under his leadership.

As for Jinpeng Industry, Zhang Xupeng never considered listing it on the stock exchange; the asset-light operation was precisely to eliminate the idea of ​​going public.

Rather than going public, he would prefer Jinpeng and Jinyi to remain relatively pure; what kind of business would it be if a group of companies were all listed companies?

This is a conclusion he reached after investigating some established clothing brands, such as Hengyuanxiang. These established companies have sold their factories and even licensed their brands, so they can be said to be making money effortlessly.

The OEM model and the asset-light model are worth learning, but Zhang Xupeng is not optimistic about brand licensing. He believes that too much licensing will ruin the brand.

"Haha, Mr. Zhang is now going for an asset-light model, so it's not certain he'll agree."

"What does 'light asset' have to do with building a villa community? It doesn't require a large plot of land. Are you planning to sell it?"

If he were to actually build a villa community, given Zhang Xupeng's cautious nature, the scale would definitely not be large; at most, it would be a hundred or so units.

After getting married, this guy became increasingly stable in managing the company, which is similar to his behavior after marriage in his previous life.

Zhang Xupeng like this would seem somewhat out of place for Flashcart during its expansion phase, but he's just right for Flashcart now.

Reducing the burden on FlashDrive was also Tan Jincheng's idea.

Compared to the ever-expanding Weilai and the automotive business, Shanchi is more like his and Zhang Xupeng's private domain, especially Jinpeng's.

Going public has its advantages, but not going public also has its advantages; not all companies need to go public.

(End of this chapter)