2003: Starting with Foreign Trade

Chapter 814 ABC Acquisition Plan
The noisy three days have come to an end.

The impact, however, is far-reaching. As a global conference, it attracted many top executives from American tech companies, and its positive influence on the industry is immeasurable.

From the 08 Olympics until 2015, our international reputation steadily rose.

These past two years have probably been the period when I was in the best condition.

Unfortunately, such good days are numbered. We must seize these golden years to make as much of a difference as possible, especially in high-tech categories that are suitable for intelligent driving.

"Proton?"

Upon returning to Beicang, Tan Jincheng and Shen Nanpeng went straight to the office. Shen Nanpeng was quite busy and couldn't stay in Beicang for long.

The Red Shirt survey has several results, but like the previous collaboration with Serene, they all have a recommended order.

This time, Proton is the most recommended.

"Yes, Proton, is there a problem?"

Tan Jincheng's suspicious look surprised Shen Nanpeng.

"Oh, it's nothing. I'll take a look first. Please sit for a while and have a cup of coffee."

Tan Jincheng's suspicion stemmed from the feeling that it was a coincidence. This thing must have been favored by Geely, right? Now it was recommended to him by Hongshan. Sure enough, in the world of capital, most choices are the same.

After thinking for a moment, Tan Jincheng still asked, "Oh, by the way, I heard that Geely is also interested in Proton?"

Shen Nanpeng, who had just picked up his cup, was taken aback: "No, where did you hear that? Our business investigations are very professional. According to your requirements, we certainly won't engage in vicious competition with domestic buyers."

"Oh, then it's alright. Maybe I misremembered. Geely also likes to acquire companies overseas, doesn't it?"

"Don't worry, that's absolutely impossible. We're an international business investigation team, okay? Meeting our clients' needs is a prerequisite."

That would be best if there weren't any. In recent years, domestic companies have done a lot of shameful things when they went overseas. State-owned enterprises and even among themselves, there was vicious price competition. Even when there were no other competitors, their own people could drive up the price to a very high level.

They've lost face internationally, and many have been taken advantage of as fools with too much money.

Tan Jincheng can't control other companies; if you want to embarrass yourselves, then go ahead and embarrass yourselves. But his companies certainly won't be the ones to suffer the consequences. Since Geely hasn't set its sights on Proton yet, that's even better.

As a Malaysian car brand, Proton was born with a halo of prestige. In 1996, it also acquired the British luxury brand Lotus. It is also the only fully-established vehicle manufacturer in Southeast Asia.

This is probably why Sequoia Capital highly recommends Proton; a mature system is very important. Otherwise, it would be better to build a factory in Southeast Asia.

"Despite its heavy losses, our analysis suggests that it still has significant acquisition value. The most important reason is that it can fill the gaps in Weilai's passenger car system, and it can also play a significant role in promoting the high-end market."

With a market value exceeding 1800 billion, Weilai is currently enjoying great success, but it is not without its shortcomings. Its sedan segment only has one model, the Aion S, which is an electric vehicle, and this somewhat affects its sales overseas.

Furthermore, any car company that wants to grow and become stronger in the long term must consider the high-end market. High-end brands may not sell as well, but they are essential. This is necessary for the company to enhance its own strength and image.

High-end R&D technologies can also benefit mid-to-low-end businesses.

Proton, which owns the Lotus brand, perfectly fills the gap in Weilai's high-end technology sector.

Currently, Proton holds nearly 20% market share in Malaysia and employs approximately 10,000 people, including 6000 in manufacturing and a sales team of 2700. It has two main production bases in Malaysia, with the Shah Alam plant having an annual production capacity of 215,000 vehicles.

In addition, the Marin plant has a very large area of ​​1200 hectares, which can be built into a base with an annual production capacity of 100 million vehicles, and currently has an annual production capacity of 15 vehicles.

The distribution network is also quite good, covering 18 markets worldwide, including Southeast Asian countries, the UK, Australia, Taiwan, and parts of the Middle East. In Malaysia, it covers the entire country.

"Lotus' strength lies in designing and manufacturing innovative and creative off-road vehicles, and we can try to incorporate these technologies into your Tank 300."

While watching, Tan Jincheng responded to Shen Nanpeng's introduction: "Speaking of which, Tesla's design philosophy is also based on Lotus. Their sports car is based on the Lotus Elise."

As a business investigator, Shen Nanpeng is quite responsible in serving his clients: "Yes, Tesla's design is derived from this. In fact, domestic companies can't even copy it properly. There's nothing wrong with referencing the inspiration of existing models for design, but you have to understand your own style. Wei Lai does this very well."

Wynn is also a company that values ​​design, especially after hiring the former BMW design director, which has made the design of its new models even more sophisticated.

This is not something that Tan Jincheng can accomplish simply by knowing a few good-looking car models from his previous life. All Tan Jincheng can offer is an idea, and at most, he can use his rudimentary design skills learned when he was doing clothing foreign trade to draw a few pictures.

The rest depends on the designers' abilities. However, one thing is certain: Boss Tan will absolutely not allow the design department to copy blindly. The situation of the "Zhongtai tape measure department" must never happen again.

“If we can’t take over the entire Proton, I think we can try to acquire the shares of Lotus held by Proton. That way, even if we can’t conquer the Southeast Asian market in the short term, Wei Lai can use the Lotus team to improve his design capabilities and also introduce the car to China and try to localize it.”

"Haha, I'm actually quite envious of their sales channels; damn, they cover 18 markets! If we could acquire those channels and use them to promote our brand, it would be a great approach."

"Haha, I knew you'd be tempted by this, which is one of the reasons I recommended it; of course, the main reason is that it's not expensive, even though I'm losing money quite a bit."

In fiscal year 2013, Proton sold fewer than 10 vehicles, with annual sales revenue of approximately 60 billion yuan, but their losses amounted to 15 billion yuan.

There's no way around it; it's the same old story. Due to geographical limitations, Proton can't expand by only selling domestically. But with such a large expansion, losses are inevitable.

I really admire Xiao Rizi for this; such a small place has produced so many car brands, and the vast majority of them have gone global.

"It's not expensive, but we can't take control of them."

The current value of Proton is roughly equivalent to that of Zhongtai. Even with a full acquisition and capital injection, a price of around 20 billion yuan would be considered a high premium, but its value is much higher than that of Zhongtai.

“This is indeed a bit difficult. There’s only one decent car brand in the whole of Malaysia. In addition, they have big ambitions and want to expand outwards. So I think the best way is to get as many shares as possible, and also to take over Lotus so that we can maintain a cooperative relationship with Proton with a strong voice.”

Proton is a Malaysian government-owned car brand, personally led by their fourth leader.

If we have to make a comparison, it's probably similar to the status of our Hongqi brand in the hearts of the Chinese people. No matter how well it sells or how impressive it is, giving up controlling stake in it is definitely not an option.

It's just that in capitalist countries, they don't care so much about this sentiment, but that doesn't necessarily mean they're willing to give it up.

"Let's try an acquisition first. If possible, I'd prefer a full acquisition. If that doesn't work, we can try a 50% stake. Of course, other forms of cooperation are also possible. The key is the final form of cooperation."

"Or we could try starting by acquiring Lotus's shares from Proton."

Proton holds a 51% stake in Lotus, which was also acquired by them, so it's possible they're selling this asset to get rid of losses.

The annual losses are equivalent to the market value; this is definitely not a sustainable solution.

The reason Proton is in its current predicament is that it made the same mistake as BYD: it took too big a step and ended up hurting itself.

The total annual sales of new cars in Malaysia are only around 50 units. Proton's claim of an annual production capacity of over 30 units is ridiculously exaggerated. Even if you add sales through other overseas channels, the number is still too much.

It's even worse than the annual sales of millions of vehicles by BYD. Fortunately, BYD reacted early and cut its losses, otherwise it would have ended up like Proton.

"Okay, then let's proceed in these directions, or should we handle the communication in between?"

Plan A is a full acquisition, Plan B is to acquire 50% of the shares, and Plan C is to acquire as many shares as possible as well as Lotus. Tan Jincheng's thinking is clear, and Shen Nanpeng has nothing to add.

"Of course, we've also set up a team here. You can contact me directly if you need anything."

"Okay, it's settled then. I'll go back and inform the company to form a team."

As an intermediary, Red Shirts also profit from this, as it's part of their business. Shen Nanpeng has no reason to refuse this lucrative opportunity, especially since they have extensive connections in Southeast Asia.

Whether they succeed or not, they will make money.

"One last question, what's your highest bid?"

Tan Jincheng thought for a moment and said, "If we can acquire it in its entirety, we can offer a total price of 20 billion yuan, and also promise to inject 10 billion yuan. Of course, I don't think this plan has much of a chance of success."

"Haha, you know that no matter how much Proton loses money, its major shareholders have limited influence."

The conditions are good, but not very realistic. Obviously, although option A is the best, it has the lowest probability of success.

Or rather, almost none of them. Can you imagine the State-owned Assets Supervision and Administration Commission selling off its prestigious subsidiaries?
"According to Plan B, if we acquire 50% of Proton's shares plus Lotus, I can offer up to 10 billion, with an investment of 5 million. In addition, I can promise to cooperate with Proton to allow them to enter our domestic market. Let's negotiate according to this plan first."

15 billion yuan is nothing to Wei now; he could come up with it all in cash.

"Alright then, let's settle on that for now and start building the team."

Tan Jincheng nodded, thinking that everything was fine, but Shen Nanpeng brought them another piece of news.

"By the way, it seems like Express and Didi are preparing for a new round of financing. Are they going to continue their battle?"

"Huh? Is that so? I didn't receive any news about it."

"Impossible. You probably haven't noticed, but everyone in the industry is talking about it right now."

"Yeah, let me take a look."

It's impossible that he wasn't notified, considering he was an angel investor in Didi Chuxing and remains one of its major shareholders with an 8% stake. Additionally, Gaode Maps also holds a 1.2% stake in Didi, which may seem small, but it's quite significant.

I checked my emails and sure enough, there were some. Didi sent them to Gaode, while Kuaiche sent them directly to Chen Weixin. I've been too busy these past few days to notice.

"It happened in the last few days, right? It seems the Internet Conference helped them build connections."

The Internet Conference brings together people from the internet industry, investment industry, and other major sectors, making it an excellent opportunity to expand one's network and attract investment. Tan Jincheng himself has recently met with many founders seeking investment opportunities.

"It should be. I only received the news last night. These two companies must be almost out of money."

Sequoia Capital couldn't possibly miss this capital feast. The problem was that these two companies were burning through money too fast. Shen Nanpeng had been investing for a long time and had seen all kinds of things, but he could only say that he had been amazed by the Didi Chuxing and Didi Chuxing war.

To be honest, both sides are now in a bit of a dilemma.

The subsidy war that began in January 2014 and continues to this day has only been a close-quarters battle where one party increases the subsidy by one yuan today, and another party increases the subsidy by one yuan tomorrow.

However, they failed to notice that in mid-May, both sides announced the cessation of the subsidy war at almost the same time, which can be considered as an unspoken understanding between them.

Although the subsidies are still in effect, the atmosphere is less tense.

In the early stages of the subsidy war, the offline teams of both sides clashed quite a bit, causing headaches for local governments.

"Haha, don't worry, the subsidy war should be over soon. This round of financing is probably just to scare the other side. Whoever loses in terms of momentum will be the winner in the future ride-hailing market."

"Are you that optimistic? What if those two keep fighting?"

“If we keep fighting, we’ll just transfer our shares. You don’t have to worry about finding someone to take them over.”

As far as Tan Jincheng knew, the two sides had made no fewer than three secret contacts since May. Such fierce fighting between the two sides was not beneficial to either side; investors were burning through money, and the founders were losing more and more shares.

The end result is that the founders lost their voice, investors burned through their money and became afraid, and later players got the bargains.

That is, the tree branch home.

The daughter of the tree branch family joined Didi in July as COO. According to reports, she was originally representing Gao Sheng in trying to invest in Didi, but after several unsuccessful attempts, she chose to work for Chen Wei.

However, this claim is purely deceptive and just a smokescreen.

However, some people do believe it now, including in investment circles where it's considered a great story. Only people like Tan Jincheng, who know the final outcome, and a small number of others don't believe it.

Before Shuzhi's daughter joined Didi, he had actually been in contact with Kuaidi, but ultimately the deal fell through.

However, this encounter also gave Liu Qing a certain understanding of Kuaidi.

Shen Nanpeng smiled and said, "That's true. Anyway, I don't want to play with them anymore. Damn it, I've never seen such a crazy company or industry. It's better to invest in companies like you, ByteDance, and Xiaomi."

"Actually, it's mainly related to the attitudes of Ali and Tencent. Just look at the wealth rankings to see how successful these two companies are this year. Old Ma has gotten a little too cocky, and Little Ma is too, wanting to do everything."

A company that holds 70% of the online shopping market share is highly sought after after its relisting. We've seen plenty of industry leaders from various countries, and very few of them remain humble.

Tencent, on the other hand, has the cash cow of games and has also invested in Jingdong. Two companies controlled by Tan Jincheng went public within a year, which seems impressive, but for Pony Ma, it's really not a memorable event.

Every year, many Tencent-affiliated companies go public as the largest or second-largest shareholder, and these things don't even reach Pony Ma's office.

Besides, although Tencent has changed its style and is no longer so domineering, its essence will never change.

"I also think it's a bit excessive; alas, everyone understands the principle that prosperity leads to decline, but few people can resist such temptation."

"you do not say."

In terms of interpersonal relationships, Tan Jincheng has always wanted to keep a low profile and quietly make a fortune. In his previous life, he certainly wasn't a loser, but he knew his own limitations.

He never imagined that he could achieve the scale he has now. To put it in terms of high emotional intelligence, he is low-key; to put it in terms of low emotional intelligence, he is somewhat timid and cautious.

This is why he has always been very resistant to the rich list.

Every year, we see his building rise and then collapse.

Even so, when Wei Lai rang the bell at the IPO, he still felt incredibly awesome, and his arrogant speech at the Internet Conference was a kind of manifestation of that.

"Let's not talk about that anymore. It's highly likely that these two companies will merge. The only question is whether Kuaidi or Didi will ultimately dominate."

"You're so confident? Then who do you think it will be?"

Many companies in the same industry will form a CO-CEO after merging, which is the so-called joint CEO.

However, this is obviously self-deception. How can a company have two people in charge?

Even Dongguan locals won't do!

"I don't care who he is, but if we really have to say, it's more in line with our opinion that express trains are dominant."

Having been with the company for almost half a year, Liu Qing must have gained considerable influence at Didi by now, right?

Tan Jincheng genuinely didn't want the tree branch to be overshadowed by the oriole behind. To be fair, Chen Wei's business acumen was indeed far superior to Chen Weixin's. Coming from humble beginnings, he was able to carve out a niche for himself in the fiercely competitive Beijing market and eventually rival Express Car. This was something not everyone could do.

But it was precisely because of his humble origins that he had no choice, as evidenced by Liu Qing's inability to take over the express train.

While Chen Weixin is undoubtedly capable, he would be a better fit as the leader of the new company after the merger. With less cutthroat competition, Chen Weixin and Lü Chuanwei would have no difficulty running the new company.

Most importantly, Chen Weixin has options; at least Tencent and Tan Jincheng won't covet the Express.

"Do you need my help?"

Seeing Tan Jincheng reveal his true thoughts, Shen Nanpeng couldn't help but make a joke.

"What can you do to help? This is something the two horses need to negotiate themselves. If they want to merge, they need to reach an agreement first."

"Haha, that's true, but we can't just do nothing, can we?"

"That's true. Let's all think of a solution."

Tan Jincheng recalls that the merger of the two companies should have occurred just before the Spring Festival, after this round of financing. It seems that both parties received a lot of money in this round of financing. Just when the outside world thought that the two were going to make a big splash, the two companies reached a merger agreement in a very short period of time.

Shen Nanpeng is right. We can't just do nothing. At least we have to find a way to move things in our favor.

But what is the best method?

"Forget it, we don't have a clue right now. Let's discuss it again in a few days. Come on, let me treat you to a meal first, and then I'll have someone take you to the airport."

Compared to the messy potential merger between Express and Didi, the planned acquisition of Proton is more important right now.

I remember that in my previous life, Geely's market value soared after acquiring Proton, which shows that the outside world recognized the acquisition and the value of Proton.

"I won't eat. Just have someone take me to the airport. I'll just grab something to eat there. But if you ask me, you should at least set up a decent branch in a prime location in Shanghai or Beijing. Beicang is just too remote."

"Alright, alright, I'll do as you say. We'll send someone to Shanghai to choose a site after the New Year, okay?"

"Don't try that. You agreed so readily, you must have had this planned in mind. Don't try to trick me into giving you something in return."

"Damn it, do I look like that kind of person? You all really misunderstood me."

"Get lost, I'm leaving, I'm not going to talk nonsense with you anymore."

You're not just like him, you are him. Damn it, he's really never met many founders who asked him for money on their first meeting.

"Haha, I don't know when we'll meet again. Happy New Year in advance!"

Shen Nanpeng rolled his eyes. It's only November, what new year?

After seeing Shen Nanpeng off, Boss Tan was in a good mood. The overseas expansion plan had officially started. Whether it would succeed was another matter, but at least there was something to look forward to.

With the increasing market share of new energy vehicles, the power battery sector is expected to become profitable in less than two years, at which point Weilai will be ready to fully expand overseas.

At least until 2017, the power battery business will definitely be able to achieve full profitability.

With a complete vehicle brand and core components, and a globalization strategy, what kind of company will Weilai be?
As for Shen Nanpeng's suggestion to set up a respectable branch in Beijing or Shanghai, he had indeed been planning on that for a long time.

There's a saying that's true: Beicang is indeed too remote.

(End of this chapter)