2003: Starting with Foreign Trade

Chapter 784 Financial Briefing Meeting
"The smog at the beginning of this year is quite severe. How much do you estimate there will be an increase in 13?"

"How would I know? It depends on the data department's calculations."

"You little rascal, you're not being honest."

"No, no, no, I'm being honest. But no matter how much it grows, even if we only sell 10,000 cars a year, the production capacity won't be a problem. There's nothing to worry about."

In fact, Weilai Auto can indeed predict some growth trends of new energy vehicles. Tan Jincheng has media resources and the Weilai APP displays real-time reservation data.

After obtaining this data and performing some statistical analysis, we do have some understanding of the growth trend for next year.

It certainly won't be like this year, but it won't be very low either. The overall growth trend is probably around 40% to 50%, which is the prediction made by the relevant departments of Weilai Auto using big data models.

This year, the total number of vehicles is less than 20,000, and next year it will probably be around 30,000.

This has nothing to do with whether there is smog or not. In fact, environmental protection is just a trigger. Even without such heavy smog, we would still vigorously promote new energy vehicle projects.

A brand new era has arrived, and everything is different. The former prefecture-level city of Chaohu no longer exists, the phone numbers in Luzhou City have been upgraded to eight digits, and Zhou Pangzi, the spokesperson for the Fengchi series of high-end electric vehicles, has released his 12th album.

Nokia officially confirmed its abandonment of the Symbian operating system while releasing its fourth-quarter financial report.

The new leadership team has officially stepped into the limelight, and everything has changed.

Wei Lai has his own data calculation system, but he can't just tell others about it. Wei Lai performed very well in 2012, but he can only be considered a rising star in the entire automotive industry chain.

In 2012, the Yuechi series sold a total of 28.15 units, ranking first in SUV sales. Among them, the Yuechi A3, which was launched in April, performed well, with a total of 73282 units sold throughout the year.

In its first year on the market, it achieved an average monthly sales volume of over 6000 units (in December), which would rank it 13th in total sales.

Weilai Auto holds the absolute number one position with a 23.9% market share in the SUV segment. The only drawback is that its title as the top-selling SUV model has been snatched away by the Volkswagen Tiguan.

This year's Tiguan is absolutely amazing. Even though it often uses the trick of stock shortages and price gouging, which has drawn a lot of criticism from consumers, it still sells very well.

With annual sales of 17.31 vehicles and a market share of over 9% for a single model, the gap between them and the second-place competitor has been firmly widened.

"All of the company's models have performed well this year, but the pickup truck division deserves the most praise."

Zhu Pei was beaming. The boss had singled them out in front of all the senior executives of the group, which was an affirmation for both him personally and Yangzi Motors.

Yang Zhijie, who accompanied them, was all smiles. This year can be described as a transformative year for Yangzi Motors.

The long-dormant Kirin sub-brand has been relaunched with a brand-new design, emphasizing practicality while improving interior space and other factors related to the driving and riding experience.

Despite the price increase, sales improved even more, with annual sales of 3.45 vehicles propelling it to second place on the sales charts. While its 15.45% market share was significantly lower than Great Wall Motors' 30% share, this growth rate was more than satisfactory for Yangzi Automobile.

Boatman admires Wei Lai's ability to play on niche tracks, including the pickup truck track. The entire pickup truck track has only sold 22.2 vehicles this year, and only a few companies have consistently performed well.

Although Yangzi is an old brand, it had begun to decline a few years ago under Changfeng. Unexpectedly, it was revived under Weilai and became the fastest growing pickup truck brand this year.

"Not at all, this is the result of everyone's hard work, but our performance this year is indeed commendable."

This year, Yangzi Automobile's output value exceeded 20 billion yuan, reaching 25.9 billion yuan, making it one of the most important private enterprises in Chuzhou and a pillar industry for the economy and employment in Langya District.

Furthermore, the changes brought to Chuzhou by the revitalized Yangzi Automobile are not limited to these. Benefiting from the planning of Weilai Group, which combines Chuzhou with Luzhou, and the planning of factories for lithium batteries, new energy vehicles, and engines, Chuzhou has achieved remarkable results in attracting investment in recent years.

Well-known photovoltaic cell companies, such as Flat Glass, Risen Energy, and Jinko Solar, have already started investing in and building factories in Chuzhou. In addition, Luxshare Precision, as the major shareholder of Luxshare Precision, has also chosen Chuzhou after being introduced by Tan Jincheng, which has developed rapidly in recent years.

Zhu Pei and Yang Zhijie are both natives of Chuzhou. Yang Zhijie has worked at Yangzi Automobile his entire life and has a deep affection for both his hometown and the company.

The Yangzi family was able to be saved by their boss, which also boosted the local economy. They are truly grateful to their boss.

Of course, increased income is also a reason. Zhu Pei once analyzed that the act of giving away cars during the Spring Festival that year played a big role, even though they were unsold inventory in the company and would be worthless now.

Back then, owning a car was a luxury for the locals. Even a car costing tens of thousands of yuan was not something many families could afford.

Although the boss was very tough when the acquisition took place and laid off many employees, it must be said that the remaining employees have indeed benefited greatly. Over the years, their income has continued to increase, and they have almost become one of the first to get rich in the area.

People are buying houses, cars, and insurance. Apart from no longer being recognized as state-owned enterprise workers, everything is better than before.

Looking back now, what the boss said made a lot of sense. As an ordinary worker, if I could work in a pillar enterprise in my hometown (a third- or fourth-tier city), as long as I worked honestly, I would have a secure retirement, even if it was a private enterprise.

"Haha, you don't need to be modest. You did a good job, and you deserve to be rewarded. The president's office will issue an internal notice to the entire company via email regarding the rewards for you senior executives. Also, you should submit the reward plan for Yangzi Automobile headquarters to me for approval as soon as possible."

"Also, the plan for factory expansion can be put on the agenda. Mr. Zhu can first contact the leaders of Langya District."

With a new administration, we can expand now and increase investment. Weilai's current revenue and cash flow are sufficient to support rapid expansion. This is also a major reason why Tan Jincheng suppressed the expansion in the past two years.

Economics is always intertwined with politics. Tan Jincheng doesn't have the same ambition as Ma Ying-jeou and isn't interested in these things, but he's not completely ignorant either; at least he knows how to protect himself.

The pickup truck market is not large; the overall market size seems to be only around 500,000 vehicles even after more than a decade. However, it is precisely because the market is small that the corresponding competitive pressure is less.

Selling tens of thousands of vehicles a year, following in the footsteps of Great Wall Motors and enjoying the profits, the cash flow is excellent. Not to mention, if Yangzi Automobile maintains its current sales volume for more than ten years, it will be a high-quality subsidiary of Weilai Group.

Zhu Pei perked up: "Okay, I'll contact the district when I get back."

He knew from the very beginning that the core of the group company was not pickup trucks.

The previous generation of entrepreneurs thought that once they obtained the car manufacturing license, they would sell everything they could and take out loans for everything they could, because that was the fastest way to see results.

The boss didn't do that. Instead, he continued to invest in revitalizing the Yangzi brand. He has already done more than enough. The rest depends on their own efforts.

From the perspective of the group's headquarters, Tan Jincheng really doesn't plan to invest much more in Yangzi Automobile. They can expand if they want, but they have to be responsible for their own profits and losses.

At most, Tan Jincheng can simply leave the money he earned from Yangzi in the local area, since he can also use Yangzi's shares to raise funds.

In addition, the engine R&D center and factory that Weilai has established in cooperation with Foton and Cummins are also located in Chuzhou, and have achieved some results over the past few years.

Most domestic car manufacturers started by relying on Mitsubishi engines, but in the future they will eventually have to break away from Mitsubishi. Now, some leading domestic brands are no longer just Chery developing their own engines. Companies with ambition, such as Great Wall, Didi, Geely, and others, are also developing their own engines.

To reiterate, developing things in-house may not necessarily be cheaper than purchasing them, but it ensures you won't be held hostage in critical moments. Having the choice in your own hands means there's no need to panic.

Tan Jincheng nodded: "In addition, our new energy vehicle department has also made great breakthroughs this year. To be honest, this achievement is really beyond everyone's expectations. I even received praise when I went to the capital for a meeting. I would like to thank everyone for their hard work."

Today's meeting is essentially the year-end review for the Weilai Group.

In 2012, a total of 1930.64 million vehicles were sold nationwide, representing a year-on-year increase of 4.33% (SUVs saw a year-on-year increase of 21.8%).

Volkswagen remains the top seller in the entire market, with a total sales volume of 205.02 million vehicles in China. Chery is the leading domestic brand, with sales of 55.7 vehicles, surpassing BYD's peak performance.

Weilai has performed very well this year. In addition to the sales of Yuechi series and Yangzi pickup trucks, the sales of new energy vehicles, Huanghai buses and sports cars, etc., totaled about 6000 units.

The total sales volume of all models throughout the year reached 32.2 units.

As Boatman Brother said, Weilai's total sales for the year ranked 17th on the overall list, just after Audi's sales of 32.87 vehicles.

Overall sales increased by 47.7% compared to 2011, with revenue reaching 223.62 billion yuan, a year-on-year increase of 51.87%.

Similarly, the 13.18% net profit brought Weilai Group a net profit of 29.47 billion yuan, and this is only Weilai Group's automobile business. It should be noted that Weilai also has a power battery business.

However, the power battery business is still operating at a loss, just like the new energy vehicle business, which has affected the overall profit of Weilai Group, much like BYD.

According to industry forecasts, BYD's revenue for 2012 is expected to be between 45 billion and 48 billion yuan, a decrease of nearly 5% compared to the previous year. However, in terms of net profit, BYD's net profit this year is likely to be only around 80 million yuan, a decrease of more than 90%. This net profit is likely the worst year for BYD since its establishment. The reason for the sharp decline in their net profit is the significant drop in their mobile phone components and assembly business, i.e., their OEM business.

The two most important clients were completely out of business. If it weren't for Tan Jincheng's help in facilitating the OEM business with Xiaomi, the losses in the mobile phone OEM business would have been even more severe. This is why Brother Chuanfu's attitude towards Tan Jincheng changed.

Initially, the boatman only regarded Tan Jincheng as an insignificant junior, but now he attaches more and more importance to him, and even listens to Tan Jincheng's opinions on the future of the industry.

In addition, their biggest loss was in the solar photovoltaic business. Almost all of their overseas business was wiped out. In the words of the boatman, they lost so much that they had to rescind their licenses.

Although the decision to cut losses was made last year, it wasn't so easy in terms of finance and actual operation. It's already quite good that we were able to finish cutting losses this year.

Dragged down by its battery business, Weilai Group's overall net profit performance was also mediocre. However, unlike BYD, Weilai Group actively incurred losses, which were mainly due to investments in mining and expansion of production lines.

There is a big difference between active losses and passive losses.

Similarly, BYD's automotive business is also quite profitable. The successful transformation of this business segment, once the photovoltaic business is also resolved, will make BYD a vibrant and thriving company again.

No one will underestimate BYD because of a sharp drop in net profit in a year, just as no one will think that the company is still the same small car company because of the losses caused by the heavy investment of the Weilai Group.

“The valuation of batteries is not easy to calculate right now, but the automotive business is easy to evaluate, and there are already very good benchmarks on the market.”

As the financial investment institution of Weilai Group, Shen Nanpeng of Sequoia Capital had access to Weilai's financial reports in advance. Shen Nanpeng also returned to China near the Chinese New Year.

Shen Nanpeng specially flew over to the year-end high-level meeting of Weilai Group, along with the heads of Luzhou City Investment, Chuzhou City Investment, and the host Beicang City Investment.

Although it was the end of the year and they were all very busy, they attached great importance to this meeting.

Everyone wants to see how Wei has performed this year as soon as possible so they can decide what to do next.

As Mr. Tan has already stated, in addition to informing shareholders of the financial situation, Wei Lai has further plans.

Shen Nanpeng, who was in the meeting, patiently looked at the financial report. For a financial investor like him, the company's revenue and profit directly affected the valuation of the market value. In previous years, it was not easy to assess the market value.

However, there is now a benchmark in the A-share market, namely Great Wall Motor, which went public last year.

Great Wall Motors, which went public in 2011, saw its stock price surge by 97.99% this year, reaching a market capitalization of 720.95 billion yuan. Weilai Auto's structure is extremely similar to that of Great Wall Motors, with similarities in both revenue and profit.

With revenue roughly 50% of Great Wall Motors', the simplest way to estimate the market value of Weilai Auto's business would be around 37 billion yuan.

This is only the valuation of the automotive business, not including the power battery business. In fact, the benchmark should be BYD, and not this year's BYD.

BYD has a market value of nearly 100 billion, so Weilai Group should have a valuation of at least 50 billion!
Even Shen Nanpeng, who was used to huge profits from investments, couldn't help but feel secretly shocked. In just a few years, Tan Jincheng had built a powerful industrial empire, and the investment profits of their Red Shirts were also immeasurable.

Currently, Sequoia holds 10% of the shares in Weilai Group. If they want to transfer them, selling each 1% stake for 600 to 700 million is absolutely no problem.

Goodness, this kind of growth for physical businesses is much harder to achieve than the bubble-like growth of the internet industry. This growth is actually built up through real sales volume.

Since returning from the United States, Shen Nanpeng has invested in many well-known companies, but if anyone were to ask him now which company's investment he is most satisfied with, it would definitely be Weilai Group or Tan Jincheng himself.

This guy is good at both physical stores and the internet. Orange Technology can be considered a trial run, but Weilai Group is really aiming to become a company worth hundreds of billions.

However, this company has already achieved such a high valuation before even going public. It will be a headache for them to go public in the future, as it will definitely be a mega-IPO.

It's a pity, Mr. Tan doesn't have any plans to go public right now.

"The group's overall performance this year has been very good, with huge profits from the automotive business. Don't be stingy, everyone should still receive the bonuses that are due. Since housing prices have risen quite a bit this year, let's give some money to the employees to help with their down payments."

Recruiting at various production bases is accelerating, and the group's employee dormitories simply cannot keep up with the pace. Long-term employees or those with higher incomes have no choice but to ask them to vacate their rooms to make room for new employees.

Small cities like Chuzhou are easier to manage, as most of the employees there are locals or from subordinate counties, so food and accommodation issues are relatively easy to resolve if the number of employees increases.

The situation in Luzhou is relatively easy to resolve right now, as the locals are still quite poor. However, areas like Beicang, which are mainly populated by migrant workers, are a real headache, as there's simply not enough time to build houses.

"Do any of you shareholders or business owners have any objections?"

Once he came to his senses, Shen Nanpeng spoke first, patting the financial report beside him and laughing, "With these results, what objections do we have? President Tan can distribute the funds however he wants."

The once arrogant local government investment bosses echoed this sentiment, as the financial situation of Weilai Group was simply beyond their expectations. They had inadvertently invested in a company that would become a trillion-dollar enterprise.

The happiest person among them was Mr. Du from Chuzhou City Investment. It goes without saying that Hongshan is the main investor, and Beicang and Luzhou are the core strategic areas for Weilai Group in the future. They have definitely gotten a bargain.

So what if they have the fewest shares? They've also contributed the least money. Besides, he's already decided that if Wei Lai can go public during his term, he won't sell a single share.

"Alright, in that case, the heads of each department should carry out the plan. Thank you all for your strong support."

The huge conference room was filled with a joyful atmosphere. Tan Jincheng had a feeling that, just like in the online novels, awesomeness had become a reality at this moment.

Okay, they've gotten a bit carried away. The financial report is just to lay the groundwork for these bosses and lower their guard.

"How about the next few bosses come to my office for some tea? I got some really good tea from my last trip to Beijing."

Tan Jincheng smiled and looked at Shen Nanpeng and the others. The important thing to talk about next was about to begin.

Being shrewd individuals, Shen Nanpeng, Xie Hongjun, and the others exchanged glances and then smiled as they replied, "Let's give it a try and see what kind of tea can earn such praise from President Tan."

Drinking tea was just an excuse; Tan Jincheng was preparing to ask them for money. The company was developing so rapidly that compared to their initial investment, it was practically a bargain. Beicang was going to build another factory, and the Luzhou New Energy Vehicle Industrial Park was also scheduled to start construction this year.

The initial plan was to invest 30 billion yuan by the end of 2013 to expand production capacity.

Hey, he spent all the money he earned in 2012.

Of course, with such a large investment, Tan Jincheng certainly didn't want to rely entirely on cash flow and bank loans. The initial investors had taken such a big advantage, so naturally they would have to pay some of the costs now.

Five people, including Tan Jincheng, entered his office. While making tea, they chatted for a while, and even asked Tan Jincheng if he was going back to his hometown for the Chinese New Year this year.

After a while, Zeng Jixiang delivered two documents. One was naturally the factory construction plan, and the other was about Weilai Group's production capacity and sales expectations for next year.

"Setting a sales target of 40 for 2013 is not particularly exaggerated. As you all have seen, SUV sales have been on the rise this year. In addition, we have an internal big data model, which makes our sales forecasts quite accurate."

"A 24% growth rate is not really that exaggerated, after all, our growth this year has been very rapid. In addition, the sales data of Yuechi A3 shows that it still has great potential."

Regarding data analysis capabilities, professional investment firm Sequoia Capital has something to say. Shen Nanpeng largely agrees with the sales forecast of 40 vehicles next year. In addition, Tan Jincheng has not given the impression of being an aggressive person in recent years.

But why tell them this?

Tan Jincheng smiled and took out the factory construction plan document, saying, "Since everyone agrees with this sales forecast, let's take another look at this factory construction plan. Our production capacity is not enough."

If you don't want to invest all 30 billion yourself, then you can only go through the route of capital increase, by expanding capital and registered capital to get minority shareholders to inject capital and bleed money out of you.

Of course, it's fine if they don't follow, then the only option is to dilute the shares. Three years ago, Tan Jincheng definitely wouldn't have dared to use this tactic. Not to mention Shen Nanpeng, he couldn't afford to offend any of the other three. But now, Weilai Group has the capital to do so.

Besides, urban investment companies have risen in status and made a lot of money in recent years. It's reasonable for them to contribute to the future new energy vehicle industry, right?

"Bosses, we need your help. We're all going through the company's channels, and our cash flow and debt are under a lot of pressure."

Shen Nanpeng glanced at the document casually, then rolled his eyes at Tan Jincheng. Good heavens, you dare to spend 30 billion after earning 29 billion? You really dare to spend! But I like this style.

How can you earn more if you don't spend it?
(End of this chapter)