2003: Starting with Foreign Trade

Chapter 802 Wei Lai's IPO Launched!

The fierce battle between internet giants is not something a traditional business can easily gain attention from.

Even if Weilai Group launched an investment plan of over 40 billion yuan, it would not attract attention, simply because Ali and Didi were extremely arrogant.

The latter declared that it would always receive one dollar more in subsidies than its competitors.

That's really interesting; just this one sentence is enough to attract a lot of attention.

"It's mainly related to the interests of netizens. To put it bluntly, let alone our investment of 50 billion or 5 billion, even if we invest 40 billion, what does it have to do with ordinary people? But they can really get 400 or 6 yuan."

Yes, billions sounds exaggerated, but what does it have to do with ordinary people?

Take the hottest topic in February as an example. In fact, many major events happened in China and abroad in February, but the sweeping of Dongguan City at the end of the month became the hottest topic on the Internet.

The huge investment that Weilai Auto made in Shanghai has generated less buzz online than their official announcement that Hu Ge has become the spokesperson for the ES6.

Hu Ge's fans were overjoyed, and even fans of the first Legend of Sword and Fairy were ecstatic. Boss Tan had finally assembled the combination of Li Xiaoyao and Zhao Ling'er.

The overlap between the fans of these two groups is quite high, and they are considered a relatively rational group. Over the years, Liu Yifei's fans have maintained a favorable impression of Tan Jincheng and his company.

Although they didn't provide Liu Yifei with any resources in the entertainment industry, longtime fans know that if it weren't for Tan Jincheng and his wife protecting her all these years, she wouldn't be living such a comfortable life.

Liu Yifei's endorsement contract only has one year left now, and it's unknown whether it will be renewed.

"It's signed, right? If there are no surprises, we won't change our spokesperson anymore. But as for Liu Yifei, I'll have Qingqing talk to her. You don't need to worry about that."

These two topics have been quite popular online, so much so that Zhang Xupeng knew about them. As soon as Tan Jincheng returned to Ningbo from Changzhou, he asked him about it.

Under normal circumstances, the spokespeople chosen by Tan Jincheng should not have any major problems, and long-term cooperation should not be an issue.

If it's not necessary to replace it, then it's best not to.

"Alright, it's only a year away, so signing the contract early is perfect. We can also take advantage of the popularity of Weilai Motors."

Zhang Xupeng is currently in charge of the Flash Group's affairs. He and Wei Lai belong to different camps, so in principle, he shouldn't be involved in such a small matter. Lin Yumin should be able to make the decision.

However, the spokespeople were chosen by Tan Jincheng, so even if they wanted to change them, they would need to inform him first.

Signing a contract (renewal) together could certainly generate some buzz and reignite discussions about Flash Motors electric vehicles. However, it's already 2014, and after nearly a decade, Flash Motors' electric vehicles are already a household name.

The significance of a spokesperson is actually not that great anymore, but we still need to have one, and besides, listed companies don't need that little bit of money.

It was already the end of February when Tan Jincheng returned from Changzhou. He was preparing for the annual Two Sessions again. Wei Lai, who had just received the second boss's inspection at the beginning of the year, was destined to become the focus during the Two Sessions.

Besides some familiar issues, the biggest focus of the 2014 Two Sessions was environmental protection.

These are almost all publicly available.

During the preparations for the Two Sessions in Ningbo, Tan Jincheng welcomed a special guest, Shen Nanpeng.

"Going public?"

Tan Jincheng frowned. The A-share market had been declining for a long time, and IPOs had been suspended until January 17 this year when they were restarted and the first new company was listed.

To be honest, Tan Jincheng had been avoiding the issue of Weilai going public.

Whether it's executives or shareholders, the issue of listing Weilai has been raised more than once. Listing on the US stock market is no longer possible, as it involves issues of political stance and company security, a point that Tan Jincheng is very clear about.

The outside interpretation of why Gaode was privatized is that Gaode was cheap enough and privatization would be profitable for Tan Jincheng. However, he himself must have considered it from a security perspective, as he is someone who knows the international situation ten years from now.

"Yes, you're planning to invest four or five billion yuan in Shanghai this time, and then you went to Changzhou for inspection. I think you must be planning to build a third electric vehicle base, right? So where will the money come from? Going public is the best way."

Tan Jincheng sighed; Shen Nanpeng had seen through his intentions.

To scale up a power battery project, you need to achieve large-scale production. In its previous life, Ningwang's industrial bases were located all over the world, and its large-scale production lines and installed capacity were one of the reasons for its success.

With ample production capacity, customers don't need to worry about delivery issues at all.

But where does this money come from? Investments of four or five billion yuan are simply not enough for Weilai Motors to support its national strategy, let alone its global strategy, if it were to operate on its own.

Setting up three or five industrial parks like the Lingang Industrial Park in Shanghai would require at least 200 billion yuan, and as the economy develops, the amount of capital needed will only increase.

In his previous life, Prince Ning also began to expand rapidly only after the company went public.

Yes, going public is the best way, but can the A-share market support Weilai Motors' IPO right now?
"I would like to, but look at the current A-share market, hovering around 2000 points. I'm afraid it won't be able to withstand the pressure if we go public."

Since the A-share market fell below 2000 points last June, it has been in a state of neglect, with only institutions like them slowly accumulating shares, while ordinary retail investors are more focused on cutting their losses and exiting the market.

"There are difficulties, but how do we know it won't work if we don't try? The support from above for Weilai Auto is quite substantial right now. Besides, we've already prepared for the shareholding reform. As long as we sort out the financial statements for the past few years, we can go public directly."

"At that time, we'll have the money to expand our power battery business."

As a top-tier investor, Shen Nanpeng was clearly able to discern Tan Jincheng's intentions and ambitions, and was naturally able to offer the best persuasive solution. Over the years, Shen Nanpeng has been very successful in China.

He has invested in several food delivery companies, including Meituan and Ele.me, where he is a major shareholder. He has also invested in the ride-hailing sector, ByteDance (which is doing well), and Xiaomi (which is valued at over 10 billion US dollars).

Compared to his previous life, Shen Nanpeng acquired a significant portion of the shares that originally belonged to a certain capital firm, DST. Among those facilitated by Tan Jincheng were Xiaomi and ByteDance, two of the most important companies, and Shen Nanpeng acknowledged this favor.

However, personal relationships are one thing, and interests are another; capital is most concerned with interests.

If retail investors can't see the signals in the A-share market, how could top investors not see them? The resumption of IPOs in the A-share market, along with other policy trends, all indicate that the A-share market is about to enter a rebound phase.

Besides, how could he not know the movements of ByteDance's advertising platform? The establishment of several major private equity funds last year is the best proof. Does he really think Tan Jincheng wasn't confident that he would bring in some interested parties?

Although all of this is legal and compliant, and profits and losses are borne by the investor, wouldn't it be a disgrace to his investment reputation if there isn't a good rate of return?

The 2013 annual report and the first quarter report of this year have not yet been released, but from the changes in the daily trading volume of some stocks, it is not difficult to feel that large funds are buying at the bottom, and all of this can be reflected in the private equity fund holding curve of ByteDance's stock trading platform.

"If you're interested, I can help you with the process. We have experience in this area. Just find a top-notch brokerage firm in China to cooperate with. It might be difficult, but it's not impossible."

It must be said that Shen Nanpeng is a very good investor. After presenting a feasible plan, he successfully persuaded Tan Jincheng.

Yes, if they don't go public, they won't be able to raise more funds, and how will they compete with companies like BYD and Ning Wang in the future?

Although Prince Ning has lost the scale of his previous life and has been suppressed to some extent by Tan Jincheng, the truly powerful ones are not Prince Ning himself, but the group of people who control him. Do you know when they won't turn the tables?
Just like the Aima electric car, even without Fatty Zhou, it still managed to carve out a bloody path amidst fierce competition.
Today, Flash, Yadi, and Aima have firmly established themselves as the top three players in the two-wheeled electric vehicle market.

Tan Jincheng was somewhat reluctant to go public so early, mainly because next year would see a crazy bull market, and Weilai's stock price would definitely be hyped up, leaving countless investors trapped.

The major shareholders chose to have Shen Nanpeng persuade him, which must be because they are optimistic about the future market. It is also possible that some major shareholders or executives have a need to reduce their holdings, and the earlier the listing, the greater their interests will be.

Forget it, this is something I can't control. At worst, when a stock market crash comes, Wei can just use some of the funds to buy back shares and stabilize the stock price.

Without Wei, the investors have other places to lose money.

"Alright, let's hold an emergency shareholders' meeting. Those who can't attend can participate via video conference."

Since the decision has been made to launch an IPO, it's better to do it sooner rather than later. This time, a backdoor listing is not an option; it must be a legitimate and publicly announced IPO plan. This will undoubtedly involve another process of distributing profits.

“For an IPO of our size, one sponsor is definitely not enough. I suggest at least three sponsors to make the IPO go more smoothly. Also, you should start preparing to audit Wei Lai’s financial statements for the past three years. There’s still a lot to do.”

From preparation to application and pre-disclosure, then to approval and listing, the whole process normally takes at least one or two years. However, since Weilai is a star stock, the time may be shorter.

But no matter how short it is, it's still at least six months or more. In other words, starting preparations now and being able to go public before the end of the year is the fastest we can do.

It's alright, we were still able to catch the tail end of the bull market, allowing savvy investors to make some money.

That's fine too. If it had gone public at the very end of a bull market, Wei Lai might have had to bear the brunt of Guotai Junan's reputation from its previous life.

In the past, Guotai Junan, which raised 300 billion yuan for listing in the later stages of a bull market, was regarded as a stock that buried the 2015 bull market. As a result, large-scale fundraising will cause market panic and investors will run away in advance at the end of each round of market.

Later on, even the establishment of large funds followed this pattern.

But then again, it makes sense. It's like a stock that's been rising for years and suddenly gets included in a major index – you have to be careful, it might be a way to unload shares through ETFs. Shen Nanpeng was very happy to have convinced Tan Jincheng.

He was also pleased with Tan Jincheng's decisiveness. Once a decision was made, it was immediately executed without hesitation. This kind of actual controller is a true actual controller, and he admires him.

In the process of enterprise development, we are not afraid that the decisions made by the actual controller are wrong. We can correct mistakes.

The real concern is that the controlling shareholder might be indecisive and miss the opportunity.

But what's even more frightening is that indecisive people are often the ones most prone to regret. For ordinary people, regret is not a big deal, but when the actual controller of a company regrets it, it's quite terrifying.

Shen Nanpeng represents the interests of capital and major shareholders. His personal visit to persuade Tan Jincheng to launch the Weilai listing plan clearly indicates that he is not the only one with this idea.

The video conference went very smoothly. Everyone was overjoyed to hear that Boss Tan had agreed to launch the IPO plan.

There's no way around it. It's not that they're short-sighted and can't see Weilai's position in the new energy market or its development direction, but rather that any investment institution has an exit mechanism.

If a company doesn't go public for an extended period, its shares will have to be sold in the primary market. For example, if Tan Jincheng doesn't go public in the next two years, they will have to start looking for buyers for their shares.

As for whether to reduce holdings after listing, that's another matter. Anyway, you can do it anytime after the lock-up period expires. This can be decided based on the company's development needs and stock price changes.

尉来股份目前的总股本是20亿股本，按2013年3月1日股改之时的定价，市值是350亿元。

By the end of February this year, it will be exactly one year since the company's founding. In the past year, Weilai Group has made continuous progress, including increasing its automobile production capacity and sales, planning a new industrial base, and expanding its customer base to include Tesla.

A valuation of 350 billion yuan is definitely not enough; the question is, what will the final price be?

"For underwriters, let's find a leading domestic company, and also some Zhejiang companies. As for the third one, we'll look into that later."

"As for the other fundraising plan, how about we raise the maximum amount of 50 billion yuan that you are investing in the Lingang Industrial Zone this time?"

In early March, news of Weilai's plan to launch an IPO spread from Ningbo, sparking reactions from all sides. In the A-share market, Weilai-related auto parts companies also became a rare bright spot amidst the lukewarm market conditions.

The A-share market was frozen in 2013, so the data cannot be used as a reference. However, globally, 110 domestic companies still completed IPOs throughout the year. Among them, Hong Kong stocks were relatively active, with China Everbright Bank raising the largest amount of funds.

The HK$183.5 billion raised was the largest fundraising by a domestic company last year.

Currently, IPOs have officially started in the A-share market, but most of them are small and medium-sized enterprises listed on the SME board and the ChiNext board, with an average fundraising amount of about 600 to 700 million yuan.

The 50 billion yuan fundraising is the largest fundraising scale in the A-share market so far this year.

"It's a bit difficult, but not impossible. The companies that have gone public in the last two years are either in finance or the internet, and most of them have gone overseas. The A-share market really needs a real, high-tech company to go public."

That's right, Weilai Auto also claims to be a high-tech enterprise, and it also receives subsidies.

However, it does live up to its name.

"Let's give it a try. Let's raise as much money as we can. While we're auditing the finances, we can also do some public relations with the various departments."

The China Securities Regulatory Commission (CSRC) is the most crucial factor in ensuring a smooth listing process. Ultimately, the key to a successful IPO lies with the CSRC, as Wei Lai's financial reports are not very attractive.

Despite the high sales volume and decent profits of Weilai Automobile, the expenses associated with the power battery project are unbearable.

From a purely financial perspective, achieving profitability is certainly not a problem, but it certainly won't look good. How can a less-than-ideal financial statement secure a reasonable valuation and the desired amount of fundraising? That's quite a headache.

Capital and major institutions are there to share profits, not to offer assistance.

Once the IPO is launched, the money is flowing out like water. On March 5, several major accounting firms moved into Weilai Group to conduct a financial audit of the previous three years.

At this time, Tan Jincheng had already set off for the capital to attend the Two Sessions, as was customary.

"I never imagined that a large IPO would be so troublesome. Compared to this IPO, our previous two were really a piece of cake."

Little Ma also came to the capital. After meeting with him, Tan Jincheng began to complain. With Wei Lai's qualifications, going public would definitely not be a problem, but the interests involved were just too great.

This is a major project with a planned fundraising of 50 billion yuan, all in cash. If it goes public successfully, the Lingang Industrial Park won't even need a five-year plan; it can just get started.

"Haha, this is a society based on personal connections. There's nothing you can do about it. You've seen it for yourself."

Orange Technology's IPO was on the Nasdaq. They didn't have profit requirements. As long as everything complied with the regulations, and with Sequoia Capital securing Wall Street's support, it was relatively easy. Besides, the scale wasn't large, so it wasn't something most people would consider.

Flashpoint Technology's backdoor listing was even simpler; all that was needed was to secure the shell company from all parties involved.

Back then, Tencent's IPO was also very complicated, and their scale wasn't as large as it is now.

"Oh, let's not talk about that; by the way, how's the fight going between you guys and Ahri's side?"

Little Ma rolled his eyes at Tan Jincheng, who really knew how to rub salt in the wound. Ah Li's offensive was quite aggressive; Tencent offered 2 million yuan, and they immediately went up to a subsidy amount of 5 million yuan.

Although Tencent gained some ground during the Spring Festival red envelope campaign, its market share still cannot compare with Alipay's. Under Ali's full-fledged efforts, Didi's development speed is very fast.

In just a few days, Didi's market share was almost catching up with Kuaidi's.

Of course, Didi is not targeting the express car market, but rather the market share of some smaller ride-hailing apps. These smaller apps will definitely be the first to fail. In addition, Dahuangfeng is also under a lot of pressure recently.

Based in Shanghai, Bumblebee now faces not only attacks from ride-hailing services, but also from Didi, which is moving south.

Spurred by Ali, Tencent quickly increased the subsidy amount to 10 yuan; of course, just like the plan Tan Jincheng had mentioned before, it was random. In addition, Tencent also planned to provide subsidies to drivers.

Ali, on the other hand, adopted a wait-and-see approach. Since Tencent gave them 10 yuan, they would give them 11 yuan. Chen Wei even made a bold statement that Didi's subsidies had no timetable and they would spend the 5 million yuan first.

The tension between the two sides was palpable, but they calmed down somewhat during the meetings these past few days.

"Haha, you guys should get ready to spend money this year, but don't rush, you'll have a bigger advantage later."

Ali was very strong in the early stages, but lacked staying power. The fundamental reason is that they did not have a social business. After WeChat banned Didi from sharing in chat history, their decline began.

Chen Wei and Ali are so arrogant now, but there's nothing they can do about it. If they don't play like this, they'll easily lose market share.

Maintaining momentum and leveraging financial advantages are crucial to preserving market share.

"I know that too, but I really can't calculate how much it will cost right now, and there's no way to do it, because we have no idea how long the fighting will last."

Seizing market share is necessary, but Pony Ma, who is usually stingy, is feeling a bit of a pinch. Tencent has never conducted such a large-scale marketing campaign before. Given the current momentum of Ali and Didi, if the subsidy war continues, the marketing investment will be at least 10 billion yuan.

"Take it slow, it's not going to end so easily anyway; okay, I'm not talking to you anymore, I have to go see the brokerage firm."

The Two Sessions are not only a time for meetings, but also a time for networking. In addition to Zheshang Securities, Shen Nanpeng recommended two securities firms to Tan Jincheng: Zhongxin Securities and Gao Hua Securities, which has a Goldman Sachs background.

With a leading domestic company (headquartered in Beijing), international capital (Wall Street), and local Zhejiang provincial power, Shen Nanpeng is truly skilled in IPO planning, paving the way for the future of Weilai Group.

On March 10, the sponsor for Weilai's IPO plan was determined. Zhongxin Construction Investment was very willing to be the sponsor. After Tan Jincheng visited the headquarters of the investment company, the two parties quickly reached an agreement.

Just kidding, this is a fundraising project worth as much as 50 billion yuan, and it's listed domestically.

Generally speaking, the costs incurred during the entire IPO process (including underwriting fees, audit fees, legal fees, etc.) account for roughly 6% to 20% of the total funds raised.

Generally speaking, 10% is a median. If Weilai Group wants to succeed in its fundraising this time, it will need to spend about 5 million yuan, which is already the total amount raised by several small IPOs.

The sponsorship fee accounts for about 1%, and signing the agreement means that at least 5000 million yuan will be received.

On March 11, after the sponsor was determined, the joint lead underwriters for Weilai were also confirmed, namely the two companies recommended by Shen Nanpeng.

In this way, the most important preparatory step can be considered complete.

"Does Mr. Tan want to list on the Shanghai Stock Exchange or the Shenzhen Stock Exchange?"

At the first joint meeting of the sponsors, the person in charge of Jiantou asked Tan Jincheng his first question.

Both the Shanghai and Shenzhen stock exchanges have invited Wei Lai to list on their stock exchanges, a question that truly stumped Tan Jincheng.

(End of this chapter)