2003: Starting with Foreign Trade

Chapter 808 The Tumultuous Capital Market and Wei Lai's Sales

Weilai Group's fundraising is the largest in the A-share market this year, but the situation is not the same nationwide.

On September 17, Ali officially set the offering price for its IPO at $68. Ali issued approximately 320 million ADSs, raising $217.7 billion, making it the largest IPO in US stock market history.

If the underwriters exercise their 15% over-allotment option, Ali's IPO will raise more than $250 billion, setting a new record for the largest IPO in the world.

No matter how much Wei Lai tries to steal the spotlight, the hottest topic in 2014 is still the internet.

At 9:30 a.m. local time on September 19, Ali's bell-ringing ceremony was unique. Instead of Lao Ma and his team, eight ordinary people from the Ali ecosystem appeared at the ceremony.

There are Olympic champions, customer service staff, post-90s college students, Taobao models, shop owners, and deliverymen.

Old Ma, sporting a slicked-back hairstyle and wearing a suit, appeared in the trading hall. After a two-and-a-half-hour inquiry process, Ali opened at $92.7, a 36.32% increase over the offering price.

This was the longest price inquiry on the NYSE in nearly a decade. The surge in Ali's stock price elicited cheers in the trading floor. At this price, Ali's market capitalization reached approximately $2300 billion.

Old Ma has become the richest man in China.

"Haha, Old Ma must be ecstatic now. With over a hundred billion in funding, he can confidently compete with BA at the same time."

By now, B has fallen behind in every aspect. It lacks both entry points and payment options. In the food delivery sector, it lags behind Meituan and Ele.me. As for ride-hailing apps, it has almost been driven out of the market.

The future will simply be a battle between AT (Alibaba and Tencent).

"Are you selling it?"

"Hold it for a while, it just went on sale today, no rush."

Wandoujia was sold to Alipay, and Gaode Maps also reached a cooperation agreement with Alipay, offering attractive preferential terms. In addition, Chengpinhui and Weilai APP, among other products under Tan Jincheng, also have cooperation relationships with Alipay.

As a result, the relationship between the two sides has eased somewhat. ByteDance's IPO process involved ByteDance's participation, as did the IPO of Weilai and the listing of Jingdong.

The shares they received were not many; it was mostly just a favor.

The first peak in market capitalization for internet companies was in 2018, and the second was in 2020. After that, the market turned downwards. Neither Ali nor Jingdong were particularly good investment targets, but there were still some profits to be made.

A valuation of over 2000 billion US dollars is considered an undervaluation for Ali right now, so it's only natural that his shares are being wildly speculated on.

Like Wei Lai, the fundraising of leading new energy companies is also highly sought after by capital in the A-share market.

Amidst the glitz and glamour of star IPOs like Ali, Jingdong, and Weilai, there are also smaller players pushing for IPOs, such as Orange Live. At the end of last year, Orange Live completed another round of financing, with investors including Tencent Investment and Sequoia Capital.

Orange Live, which secured $2000 million in funding, has signed contracts with several domestic esports clubs and sponsored clubs such as HGT, EDG, Royal Never Give Up, and OMG.

In the ongoing League of Legends World Championship, EDG, Royal Club, and OMG have all made it to the quarterfinals.

Orange Live, which focuses on game streaming, is developing rapidly. Together with YY, which focuses on voice streaming, they have become two major websites in the live streaming industry. Both have their own characteristics and are advancing side by side.

YY has already gone public, and Orange Live, which now occupies an important position in the game live streaming industry, has met the conditions for going public after its final round of financing before listing.

The final round of financing was led by Tencent, and the two companies mainly cooperated in areas such as copyright and resources.

Tencent is still Tencent. As long as it sets its sights on an industry, it is truly generous in its investment. In addition to copyright cooperation, multiple capital firms led by Tencent have also invested $100 million in Orange Live.

When Ali went public, Orange Live also went public on Nasdaq.

"How are you? Nervous?"

In the trading hall, Tan Jincheng patted He Jia, who was dressed in a suit and looked quite presentable. He Jia looked solemn and nervous.

"Of course I'm a little nervous. I never thought I'd have this day, that I'd actually be able to come to America to ring the bell."

Back then, He Jiacheng wasn't a high-ranking employee at Orange Technology, and he rarely had the opportunity to interact with management. It was only during an unexpected event that he met the boss and seized the opportunity to express his thoughts.

It was by seizing this rare opportunity that he had the chance to put his thoughts to use.

But ultimately, there are too many people who are technically skilled and have ideals, and not many are as lucky as him.

Orange Live issued 1500 million ADSs at a price of $12 per share, raising a total of $2 million. If the underwriters exercise their over-allotment option, Orange Live could ultimately raise $2.3 million.

Liu Mou, 23, Ren Yiyi, 25, and Shi Yue, 26, also looked on with curiosity. As the three main anchors of Orange Live, Liu Mou, who became an anchor after retiring from professional gaming, is currently the most popular.

As for Da Ma Hou, he was poached from Longzhu by Orange Live. He has only been doing live streaming for two years and is still a bit inexperienced, but his live streaming results are good. Some people are just born to be online streamers.

Shi Yue, dressed in a white suit, is the only female anchor among the three and also has the highest education level. She joined Orange Live at the end of last year. As a graduate with excellent grades, Shi Yue became a professional anchor, which caused a huge controversy when she joined Orange Live.

Shi Yue, a graduate of Tsinghua and Peking Universities, has surprised many by becoming a professional streamer and game commentator, sparking public concern about the devaluation of academic qualifications.

However, in Tan Jincheng's view, this was also a sign of her wisdom. Individual strength is ultimately insignificant, and adapting to the times is the best way to live.

After several years of development, the live streaming industry has attracted the attention of capital. The fact that a large number of venture capital institutions, such as Sequoia Capital and Tencent, have invested heavily in it demonstrates the abundance of opportunities.

On the other hand, the short video field has also taken off. Kuaishou has been established for four years and has nearly 100 million users. Sequoia Capital invested in Kuaishou's Series A round last April, and in this year's Series B round, it invested another 10 million US dollars in Kuaishou with ByteDance's advertising platform.

The valuation of a certain company also reached $8000 million after its Series B funding round.

Times have changed. While you were laughing at the young men waving their arms around, they were already making a fortune.

This choice is neither right nor wrong; it's simply a choice of the times. All ordinary people can do is go with the flow.

A new era has arrived, and all you can do is accept it.

"Mr. Tan, this must have cost a lot of money, right?"

Nasdaq held a unique game live stream, showcasing Orange Live's core business segments. The screen was filled with "666" (a Chinese internet slang for "awesome"), which seemed quite absurd.

Big Monkey is the most active and curious of the three. In fact, all three of them were guided by Tan Jincheng to join the company, but only Big Monkey paid a termination fee, which shows that Orange Live values ​​him quite a bit.

However, none of the three of them knew any of this.

"Spending money is definitely going to happen, but you'll have to ask your General Manager He how much."

In the US, there are often many tricks involved in going public, all in order to extract more money from the listed company. Compared to Orange Live's IPO, Ali's was extravagant. But who can blame them for raising so much money?

The pricing process for Orange Live was short and received a lukewarm response. In China, Mr. Tan has his investment aura, but on Wall Street, he is nothing special. Wall Street prefers the halo of being number one, and as the second listed live streaming concept stock, Orange Live lost that halo.

However, in terms of financing scale, number of top streamers, hosting events and resources, Orange Live, with the largest market share, is currently the number one live streaming website in China, and its leading position is enough to guarantee its popularity.

In addition, Orange Live can also promote the concept of being the "first stock in game live streaming".

According to Orange Live's prospectus, after several rounds of financing, Orange Technology holds 27.63% of Orange Live's shares, while Tan Jincheng's personal shareholding decreased to 5.4% before this round of IPO. He personally controls 33.03% of the shares.

Meanwhile, He Jia and his team hold a total of 5.88% of the shares.

Tencent, which participated in several rounds of financing, holds 25.88% of the shares, becoming the second largest shareholder of Orange Live. In addition, Tencent's voting rights in Orange Live are second only to Orange Technology.

Considering that Tencent is also a shareholder of Orange Technology, Tencent's involvement to some extent gave Orange Live the courage to go public.

"I wonder what the opening price will be. I hope it doesn't fall below the issue price, that would be embarrassing."

He Jia was no longer as composed as she usually was when managing her company. This was her first time participating in an IPO, and she was the absolute protagonist in it. It would be a lie to say she wasn't nervous.

"It's alright, we've got the money in hand. So what if it falls below the issue price? But the probability of it falling below the issue price is not high. These Wall Street gentlemen have money and are interested in our assets. Besides, our valuation isn't a huge bubble."

Based on the offering price of $12, Orange Live's market value is close to $30 billion. Wall Street has its own analysis of the prospects of the live streaming industry, and as the current leading company, this valuation is not particularly outrageous.

Orange Live's main goal is to attract more long-term investors and reduce stock price volatility.

After the inquiry ended, Orange Live's opening price was set at $15.50, a surge of 29.17%. Cheers erupted in the trading hall. He Jia was overjoyed and hugged Big Monkey, laughing heartily.

The chubby PDD standing next to her was also chuckling, and the somewhat aloof Nvliu was also all smiles.

As the main anchors and the team that rang the bell this time, Boss Tan was generous and gave all three of them some shares. Although it wasn't much, it was still a considerable fortune for these people who hadn't been in the industry for long.

"Are you relieved now?"

"I'm relieved, I'm relieved."

Unlike A-shares, which are guaranteed to rise on their first day of listing, many overseas stock markets see their share prices fall below the issue price on the first day of listing. The opening price generally reflects the attitude of capital, and the fact that the first game live streaming stock was able to open with a big increase means that the hype surrounding it was a success.

After the market opened, Orange Live's stock price rose all the way up, reaching a high of $17.07, and finally settled at $16.06 with a gain of 33.83%, locking in a market value of $32.37 billion.

"Congratulations, Mr. He! You're now worth over 100 million!"

As a core member of the team, He Jia holds 2.98% of Orange Live's shares, which is worth US$9646 million based on today's closing price, or approximately RMB 6 million.

The three anchors also earned a million today, chatting and laughing non-stop.

"You guys handle the rest yourselves. I have to go. I don't have time to keep you company."

Although Orange Live's IPO didn't have the same halo as Ali's, it still brought Tan Jincheng considerable profits. It was also his second company to be listed on Nasdaq.

Including Weilai, which is about to go public, he already has four listed companies.

Four listed companies are enough to build his business empire.

His trip to the US wasn't just about supporting He Jia; he also needed to visit Tesla and meet with CEO Ma to discuss patents and future battery supply issues. Since last year's National Day holiday, Wei Lai had been supplying Tesla with batteries for a year, so this could be considered a customer follow-up.

With the third quarter drawing to a close, judging from current sales figures, Tesla's sales target of 3.5 vehicles this year is unlikely to be achieved, mainly due to its poor performance in the China region, which has been severely hampered by the US.

The subsidies provided by the government are based on the purchase tax amount, which Tesla, with its million-yuan-level vehicles, simply cannot afford to provide.

All they can do is offer some preferential policies, but these small discounts are not enough to arouse users' interest, even though users who can afford million-dollar luxury cars may not care about these.

But having something and not having it are two different things.

However, global annual sales of 30,000 vehicles should be no problem. Tesla's stock price reached a new all-time high this month, soaring to a high of $291.

This is only true in the US stock market. With annual sales of just 30,000 vehicles, it can support a market value of over 35 billion US dollars. In China, Tesla might not even be able to go public.

"Hey, Tan, long time no see. You've caused us a lot of trouble."

Upon meeting, Director Ma warmly opened his arms, but his words were sharp and cutting.

"Haha, if Tesla wants to be one of the greatest companies in the world, it will inevitably have competitors like us. Isn't this a spur to you?"

“That’s right. We’re not afraid of competition. Let’s see who can become the world’s number one electric vehicle company first.”

In the pure new energy vehicle sector, Tesla is the most well-known, and the Model S has the highest sales volume of a single vehicle globally. However, there is still debate about who is the leader in the new energy vehicle sector globally.

The ES6 is sold worldwide and has a significant sales volume in China, while the ES6 has failed to expand its market in North America, Tesla's home turf. As two similar but different models, the ES6 has suffered a major loss in terms of sales channels.

However, in terms of sales volume alone, WILTE has more than just the ES6; they also have the Aion S. In addition, WILTE has a significant advantage over Tesla in terms of power batteries.

For every Tesla Model S sold, Weilai sells one more battery pack.

Its gross profit margin is not lower than that of a complete vehicle.

To be honest, there's still a lot of debate about whether China's Weilai or the US's Tesla is the best new energy vehicle company.

"I'd be happy to oblige, let's improve together."

In terms of market capitalization and influence, Weilai is not as good as Tesla, but in terms of strength, Tan Jincheng is not afraid of Tesla. In the field of gasoline cars, Weilai is just a company that is similar to an "internet celebrity".

However, in the new energy sector, Weilai's strength is already enough to influence the entire industry.

From the moment he decided to go public, Wei Lai’s only rivals were Tesla and BYD.

The main battlefield for new energy vehicles is still in China. To be honest, Tan Jincheng is eagerly hoping that Tesla will establish a factory in China as soon as possible, because that would be much more interesting.

In addition, it is also beneficial to the industry as a whole.

Wei Lai is a catfish, but that's not enough.

“Wei Laiye has also disclosed some of his technical patents and cooperated with Tesla. I believe Tan’s statement that he is not afraid of competition.”

Musk has his own personality and vision, but when faced with 29-year-old Tan Jincheng, he has to admire the young man's demeanor. From both a capital and business perspective, he is worthy of being his opponent.

"Oh, right, I haven't congratulated Tan on another company's successful IPO yet."

"Hey, that has little to do with us. The main credit goes to Tencent; we just played a role in incubation."

This wasn't just Tan Jincheng being modest; he was the one who incubated Orange Live, and he spearheaded the acquisition of AcFun. He also gave He Jia a lot of advice during that time, but overall, it was Tencent that enabled Orange Live to go public.

Tencent has access to resources for many popular games and has invested heavily to help Orange Live gain traction, as well as assisting with its IPO.

To put it bluntly, Pony Ma also saw the market potential of the live streaming industry. If it were before the 3Q War, Tencent might have done it itself. However, Tencent has clearly changed its style now, and it will invest heavily in companies it likes.

This applies to Orange Products, Jingdong, Kuaidi, and Orange Live.

It's more comfortable to get along with Tencent like this.

"Haha, those were also hatched by you. Tan, your wealth has increased by several hundred million US dollars."

Americans are just that direct; they're not at all reserved when it comes to money.

I took Tan Jincheng on a tour of the Gigafactory under construction, and the two sides exchanged views on optimizing the battery supply. Whether it's Apple or Tesla, the American supply chain still has many merits.

For example, in Tesla's supply chain, they would give suppliers a large profit margin in the first year so that suppliers would not lose money and have to continue operating during the development process.

Regardless, they will reduce profits every year, forcing companies in the industrial chain to make progress in production, manufacturing, and technological research and development, thereby reducing the cost of the entire industrial chain and truly perfecting the whole system.

In addition, they don't play any tricks when it comes to payment.

Weilai is wealthy and powerful, but Tesla provided substantial support to Weilai in the early stages of supplying batteries, which is their tradition.

The reason why domestic private enterprises are so successful is largely due to the supply chain provided by these foreign companies. Although working for others may not sound glamorous, it plays a significant role in both profit and job creation.

With a population of over one billion, how can we solve the employment problem for so many people if they all work in high-tech, prestigious companies?
In terms of the industrial chain, Weilai is also trying to learn from these companies and strive to make money throughout the entire Weilai industrial chain. Without mentioning the significance behind this, it is also quite beneficial to Weilai.

If the underlings can make money, then the boss can be more comfortable too.

After spending a few days at Tesla, Mr. Tan had to head back to China.

The purpose of my trip to the United States was twofold: to support Orange Live's IPO and to meet with Elon Musk. Now, both objectives have been achieved.

With most of 2014 already gone, the capital market is becoming increasingly noisy, with countless companies listing both domestically and internationally, and changes are already quietly underway.

The bull market of 2015 may seem like an accident to retail investors, but for capital, it was all part of a well-prepared strategy.

During the National Day holiday, the China Passenger Car Association (CPCA) released third-quarter car sales figures.

In the new energy vehicle sector, the Aion S topped the sales charts in the third quarter with 7712 units sold, making it the world's number one new energy vehicle brand. The Weilai ES6 also performed well, selling a total of 3717 units in the third quarter.

For new energy vehicles targeting the C-end user market, Weilai's sales reached 11429 units in the third quarter!
The average monthly sales volume increased nearly sixfold compared to the second quarter, and the sudden surge caught the market somewhat off guard.

"Let's slow down the delivery time a bit, give the market some room to react, and also give users a sense of urgency."

Sales were so good that Boss Tan was thinking of using some tricks, like scarcity marketing. This is a tactic that not only Lei Jun knows, but he does too.

However, it's not entirely a case of scarcity marketing. Take the Aion S for example; the plan for this year is to produce 3 units, but judging from the current number of orders, 3 units won't be enough!

It's important to understand that the sales figures released by Weilai only include delivered orders and do not include undelivered orders.

Consumers have this mentality: they'll follow the trend whatever sells well.

He had made plans, even prepared for a large inventory, but he didn't expect the market to react so strongly.

With nearly 10,000 Aion S vehicles delivered in three quarters, the Aion S is now one of the most common models on the streets.

It's important to know that besides being widely used by local government taxi companies, the Aion S is also the most common ride-hailing vehicle model. What kind of car is most often seen on the streets? It's definitely a taxi.

Although its overall sales volume is not high, the Aion S has a high level of brand awareness; it is at least one of the most commonly seen models.

It was during the National Day holiday that the listing date and stock code of Weilai Group were finally determined.

On November 3, 2014, the first trading day of November, the largest fundraising in the A-share market this year, Weilai Group, a leading new energy vehicle company, will officially be listed on the ChiNext board with the stock code 30XX77.

Sources revealed that the last four digits of the license plate number are 77, which is Mr. Tan's lunar birthday.

"Haha, are you satisfied now? It will be listed after October 27th. I bet Hurun will be furious when he sees it."

"Haha, who cares?"

This year, Boss Tan didn't give him any public relations expenses. Anyway, his assets are basically transparent. Besides, BAT is doing so well this year, so it's not his place to be the center of attention.

From the start of formal preparations for listing in early March, it took eight months for Weilai Group to complete the entire IPO process. This speed is considered exceptional in the A-share market.

Even during the National Day holiday, research reports on Weilai Group continued to emerge, with the market generally giving high expectations.

The ChiNext board is a constant, but the top player changes frequently. Before Weilai Group's IPO, LeEco was the top player on the ChiNext board. However, Weilai Group, which listed on the ChiNext board with an initial market value of 546 billion yuan, established its position as the top player from the very beginning.

Major securities firms have been enthusiastically promoting the company, generally giving Weilai Group a valuation of over 100 billion yuan, with Caitong Securities giving the largest valuation.

Caitong Securities gave Weilai Group a valuation of 50 times earnings, believing that a reasonable price for Weilai is 103 yuan, or a market value of 2015 billion yuan.

"Haha, you have good taste."

Boss Tan also saw the research report. Although brokerage research reports are often unreliable, given the size of Weilai Group, a fourfold increase in price is indeed nothing compared to the issue price.

Meanwhile, users in the secondary market also experienced a period of euphoria, reserving funds for IPO subscriptions, which put considerable pressure on the ChiNext index in October.

Incidentally, at that time, the A-share secondary market IPO subscription still adopted the prepayment model, which means that you pay first and get a refund if you don't win the bid. This also caused the index to be under pressure in the month before each large IPO.

Once you win a new stock offering, it's a sure thing that you'll make a profit. For short-term investors, instead of gambling on an uncertain future, the choice is not difficult.

Some users even sell their stocks to participate in IPOs, provided that the market value requirement is met.

(End of this chapter)