2003: Starting with Foreign Trade

Chapter 825 High Bonus Shares? Harvesting韭菜 (a metaphor for exploiting retail investors)?

The hottest word in 2014 was "Internet".

It wasn't just BAT (Baidu, Alibaba, Tencent); major internet companies took turns performing, from January to Lunar New Year's Eve, with almost one internet company jumping out to attract people's attention every month.

The "collecting blessings" battle between Ali and Orange Technology before Chinese New Year's Eve not only brought billions of yuan in red envelopes to netizens, but was also full of tension. The mutual attacks between the two sides on issues such as creativity and patent plagiarism pushed the year's internet craze to a new height.

The two companies argued for a week, but there was no real loser. If we're talking about a 'loser,' it would be Tencent, whose red envelope campaign completely lost the hype it had last year.

Alipay gained 11 billion new friend relationships during its week-long "Collect Blessings" campaign, and Orange Products also reaped huge profits.

On the first day of the Lunar New Year, when the event ended, Orange Club added 2.5 million friend relationships, bringing the total number of registered users to 2.5 million and the number of active users to over 5000 million, a 75% increase compared to the same period last year.

Similar to the impressive financial performance of Tongwei Lai, Orange Technology also had a stellar performance in 2014. According to the latest financial report, Orange Technology's revenue for the whole of 2014 was US$37.7 billion (approximately RMB 235.56 billion), representing a year-on-year increase of 122.4%.

Among them, the number of users on the mobile platform reached 82%, which is significantly higher than the industry average, indicating that Chengpin Club's transformation to the mobile internet has been very successful.

In this card collecting battle, Orange Products Club's reputation has greatly increased. It dared to challenge the status of internet giants, and even as the underdog, Orange Products Club gained a lot of goodwill.

The reputation that Ali lost is insignificant to them, but the goodwill that Orange Goods gained can greatly benefit this small, vertically focused discount website.

The employees of Orange Technology were in high spirits after the Spring Festival. Being able to personally fight against giants like Ali and hold their own is something that all the junior programmers are proud of.

Cheng Hao, who took the lead and acted as a vanguard, gained immense prestige within the company, and the impact of Sun Tongyu's retirement seemed to be gradually diminishing.

"It takes the founders and shareholders to work together to take a company from 0 to 1, but you can confidently hand it over to professional managers from 1 to 100."

On the tenth day of the first lunar month, which is the last day of February, He Xiaopeng, who had finished celebrating the Spring Festival in his hometown, came to Ningbo again. This time, he mainly came to discuss the financing of Xiaopeng Motors with Tan Jincheng, who had agreed to invest in Xiaopeng Motors in the first place.

To Tan Jincheng's surprise, He Xiaopeng's so-called angel round of financing only approached him. He planned to handle the rest himself, but the price was not low: $500 million for only 10% of the shares.

An idea, without even a PowerPoint presentation, is worth 3 million yuan. That's the internet.

However, given He Xiaopeng's team's successful experience with UC, they have already proven themselves, so this valuation is not particularly outrageous.

The main reason why He Xiaopeng only sought out Tan Jincheng was that he was not short of money and did not need too many investment institutions to share profits in the venture capital round. However, Tan Jincheng could provide them with technical support and business experience, which was exactly what they, as a startup, needed.

$500 million for 10% of the shares. Tan Jincheng didn't raise any objections. Strategic investment wouldn't be useful for so many shares; times have changed.

However, when He Xiaopeng asked about Tan Jincheng's suggestion during his last visit to let him manage his company, Tan Jincheng still gave his opinion.

"This has nothing to do with the strength or weakness of professional managers. Take Cook for example, his ability should surpass that of 99% of founders. There is never a shortage of top professional managers in China, but everyone's needs are different."

To put it bluntly, professional managers are just employees. They can maintain the status quo, but why should they be expected to build the country like you?
The benefits they can receive are limited. They can work for another company. The so-called "king of employees" are still just employees. It's unrealistic to expect them to align their interests with those of the founders and shareholders.

Tan Jincheng personally participated in the management and operation of each of his companies during the early stages. Even though he withdrew from management of Orange Technology early on, he still handed it over to his wife, Gu Qingqing, whose interests were aligned with his.

He will only hand over management to professional managers once the market stabilizes.

"Let me tell you the simplest example. There are hundreds or even thousands of auto parts suppliers. The CEO has the right to choose which supplier to pay first. He doesn't need to do anything underhanded to choose a bad supplier. He just needs to pay the supplier with the most kickbacks first."

"Although it is said that clear water has no fish, if your founders and shareholders do not pay attention to these things for a long time, the hole will only get bigger and bigger, eventually leading to high costs for the vehicles you produce."

"If you can't bring down costs, you won't have an advantage. If the leading companies start a price war, you'll be the first to die."

This is just the simplest example given by Tan Jincheng. In reality, there are many more intricacies involved, which is why many new energy vehicle companies have burned through billions or even tens of billions of yuan in investments without any results, or even went bankrupt.

The root cause is insufficient regulation. The so-called founders mostly see themselves as CEOs, since they haven't invested much money and the losses are not of much concern to them.

If you destroy this company, the whole name will remain.

"So my suggestion is that you manage Xiaopeng Motors yourself. You won't really learn anything from Ali. Ali is not what it used to be, and their investment is not easy to get."

The turning point for Xiaopeng Motors came after Volkswagen invested in the company and Wang Fengying joined. After Volkswagen invested, an investigation revealed some shocking findings.

Xiaopeng Motors' overall costs were nearly 30% higher than its competitors, which even surprised Volkswagen. This directly led to Xiaopeng's anti-corruption efforts, which resulted in its subsequent rebirth; otherwise, it would have been one of the companies that fell behind.

"I will seriously consider your suggestion, Mr. Tan."

He Xiaopeng was taken aback by Tan Jincheng's analysis and slowly replied that Tan Jincheng was giving him advice as a shareholder today, not as friends, so he had to take it seriously.

"Actually, you can also ask Lei Jun for his opinion. He has built Xiaomi into a unicorn company in just a few years, so his opinion is worth listening to."

He Xiaopeng smiled and said, "Actually, I did ask him, and President Lei's opinion is similar to yours."

Tan Jincheng spread his hands: "That's settled then. Listen to me, be a good student, don't hang out with Ali anymore. Ali has no future. Their two companies are already in beta testing, right? Now they'll just be a financial company."

The two apps scheduled to officially launch in April have already been tested by a limited number of users. This is the beginning of Ahri's rapid expansion, but it is also the beginning of his downfall. The leverage ratio was too high, and he tried to transfer the risk through the IPO plan. After the plan was rejected, it led to the complete ruin of Ahri's reputation.

In the PC era, the end of the internet was advertising; in the mobile era, the end of the internet is lending. To a certain extent, these few giants ruined it and set a very bad precedent.

Furthermore, Tan Jincheng also scoffed at Lao Ma's desperate promotion of advance consumption in front of the camera.

Ordinary people don't have much risk tolerance. You can do some things secretly and make a fortune quietly, but you can't publicize them like this.

"Okay, then I'll go back and seriously consider President Tan's opinion. Also, even leaving Ah Li will take some time, so please give me some time, President Tan."

The older brother and the investors are both outstanding entrepreneurs in the hardware and physical industries. They have managed to run their businesses successfully, and their knowledge and understanding are definitely more extensive than mine, a pure internet person.

Since they have repeatedly emphasized the founder's responsibility system, we can't ignore it.

"Of course, I'll be visiting Ali in a few days, and I might have to meet with President He again then."

After UC was acquired, two key figures, He Xiaopeng and Yu Yongfu, were also brought into the fold. It is almost certain that Yu Yongfu will work for Ali. In fact, in his previous life, he was eventually transferred to manage Gaode.

However, now that Gaode is in Tan Jincheng's hands, it's unknown where his fate will ultimately lead.

"Oh? Mr. Tan is going to visit Ali? That's quite a rare occasion."

He Xiaopeng wasn't stupid. He could see Tan Jincheng's attitude towards Ali. The two families fought so fiercely before the New Year that Ali's reputation was affected. He just didn't expect that there would be an arrangement to observe Ali after the New Year.

"We need to learn from them. If you want to run a successful physical business, you can't do without the internet. As a leading internet company in China, it is certainly a worthy role model to learn from."

Of the BAT headquarters, only Ali hasn't been there yet. Tencent went there a long time ago, and Baidu also visited because of the sale of 91 last time.

In addition, he has visited the headquarters of the pig farm in Hangzhou and Guangzhou. Anyone who is interested can easily find this information by checking Mr. Tan's past itinerary.

Old Ma's golden age will last for several more years. After that little showdown before the new year, it's definitely worth a visit. Otherwise, those nosy media outlets could easily make a fuss about it, which would be detrimental to the development of Orange Products Association.

He Xiaopeng came and went in a hurry. After signing the financing agreement with Tan Jincheng, he left Ningbo and returned to Hangzhou.

He is currently rotating through different positions at Ali's headquarters. His original plan was to work at Ali for a few years, learn from Ali's success experience, and then build up his network of contacts before returning to Xiaopeng.

It seems we need to change our plans.

The first official annual report of Weilai Group since its listing was supposed to be released on the first trading day of March, but it was actually officially released on the first day of March, as the stock market is closed on Sunday.

However, the release of Weilai's 2014 annual report after midnight still caused quite a stir in the market.

This is the first official annual report released by the Shanghai and Shenzhen stock exchanges after the start of the year, and it is also the official annual report of the largest weighted stock on the ChiNext board. The data in the annual report, released ahead of schedule, naturally attracts much attention.

If we were to say what the hottest words of 2014 were, they were almost all related to the internet.

So, 2015 was destined to be inseparable from the stock market. In December, the Shanghai Composite Index surged 20.57%, and even in the relatively quiet months of January and February, it still rose by more than 2.5%. The ChiNext Index, led by hot stocks such as Tonghuashun, was completely unaffected by the annual report disclosure period and continued to advance.

The Shanghai Composite Index has now risen above 3300 points, and the ChiNext Index is approaching 2000 points. The soaring stock market has made the term "bull market" frequently appear in the media and in people's lives.

On Taoguba, the most active forum community for stock investors, there is a high level of discussion about stocks. One retail investor, using the pseudonym "Haoran Zhengqi," even updates his stock trading career in a serialized format.

The post was extremely popular and frequently appeared on the homepage of Taoguba. Tan Jincheng had even seen it. The first stock this retail investor chose when entering the stock market was Wangsu Technology, a network company that mainly provides CDN services.

He had heard of this company, and it had some business dealings with Orange Technology. It was also one of the blue-chip stocks on the ChiNext board and was very popular.

Tan Jincheng had also read this post. This newbie, who called himself a novice investor, did quite well. The stocks he selected were mainly blue-chip stocks on the ChiNext board, such as Wangsu Technology, Tonghuashun, and Yinzhijie. He did have some insight.

In a bull market, securities firms always take the lead. While securities firms are making their moves, the focus is on small and newly listed stocks. This is an unchanging theme in the A-share market. Being able to choose stocks to enter the market on the ChiNext board and hold and track them for the long term, while maintaining flexible positions and avoiding frequent stock switching, is a method that even Cheng Linfeng finds very effective.

No wonder they dare to confidently update their holdings in real time.

Furthermore, there is currently no legal boundary between whether this method is illegal or not. It can also boost the popularity of one's holdings, so it can be considered a good operating method.

This is the benefit of integrating with the internet.

Any information, once it gains popularity, can be amplified infinitely.

(PS: This is a crossover with the previous book, hehe.)
As the top-weighted stock on the ChiNext board with a market capitalization exceeding 1800 billion yuan, Weilai Shares' stock price is destined not to fluctuate as much as other small-cap stocks. Take Tonghuashun and Eastmoney, two highly popular stocks on the ChiNext board, for example; their current market capitalizations are only 250 billion yuan and 470 billion yuan, respectively.

With just a little bit of capital, a stock can easily hit its daily limit. What's more, these companies know how to tell a story. Dongcai Securities suspended trading in February to prepare for a full acquisition of Guoxin Securities.

Speculative funds tend to favor stocks with specific themes, while institutional investors prefer large-cap stocks like Weilai, and even Flash Technology is favored by institutional investors.

There's no other reason than that they don't tell stories, their performance is stable, and they can provide fixed dividends every year.

The first financial report after the Lunar New Year showed impressive results, making Weilai Group the focus of attention on this day.

Experts see the details, while laymen only see the spectacle. Stockholders who don't understand the specifics of financial statements only focus on growth rates and profitability. To be honest, compared to the growth rates of tens or even hundreds of percent in recent years, the annual growth rate of a dozen or so percentage points of Weilai Group is really not impressive.

However, insiders noticed some details. First, the key project of this IPO fundraising, the power battery project, which Weilai Group claims is a core business, appeared in the financial report with an annual revenue growth rate of almost four times.

Most importantly, Wei Lai's business has finally turned a profit. The net profit of just over 6% is not very high, but it is a strong signal.

Another point is the turnover rate of the complete vehicle business. The fact that this rate is higher than the industry average demonstrates Weilai Group's excellent management capabilities in areas such as parts control and vehicle delivery.

To use an imperfect analogy, it takes BYD an average of 72 days to sell a car, while Weilai takes a maximum of only 65 days. Weilai can sell a car a week faster than BYD.

The variables this week have been quite significant.

As for sales figures and revenue, these are not so important to professionals, since the previously released data can already be used to make general inferences.

"The overall vehicle business is performing well, while the performance of fuel vehicles remains excellent. The investment in R&D is still substantial. The most impressive businesses are the new energy vehicles and power batteries. Weilai Group is still as strong as ever."

The analyst who initially predicted that Weilai would become a multi-billion dollar giant is now the ace of their brokerage firm, and his analysis report was dug up again when Weilai went public.

Incidentally, he was promoted as well.

Wang Chu, who is already the chief analyst and has a following on the internet, is a securities professional who has been tracking Weilai Group for a long time. He attaches great importance to Weilai's first annual report and has a high degree of authority to comment on it.

In reality, the so-called annual report confidentiality system is a joke. If Wei Lai hadn't released it right after the start of the new year, without giving the market a chance to react, this annual report would have already ended up in the hands of these people.

Information asymmetry is the primary factor for making money in any era and any industry, and this is especially true in the financial industry.

How can retail investors outmaneuver well-informed institutions?

In Wang Chu's view, Weilai's new energy vehicle business has not yet achieved profitability, but with this sales volume and gross profit margin, profitability is not a problem at all. Weilai's cost control and efficiency are truly excellent.

An excellent company, especially a large company, will inevitably suffer from the common problems of large companies as its number of employees increases, and Weilai, after eight years of development, is no exception.

However, in Wang Chu's view, this large-scale car company and parts supplier seemed to possess some kind of magic, still able to maintain their original aspirations and entrepreneurial passion.

With an annual net profit exceeding 50 billion yuan, it is a remarkable achievement among domestic brands. However, this seems to be just the beginning of its success.

"Let's increase our holdings, no need to say more. Also, let's raise Wei Lai's rating by one level."

Wang Chu took a deep breath. Weilai Co., Ltd. was currently trading at 84.37 yuan, with a market value of 1832.52 billion yuan. No one knew what short-term impact this annual report would have on Weilai.

However, Wang Chu knew that the market's previous valuation of the company at just over 100 yuan and a market capitalization of around 2500 billion yuan was a genuine undervaluation.

This is hardly the revenue performance of a company with a market value of 2500 billion yuan. Even if it were to report the 2014 annual report, it would still be over 3000 billion yuan.

Cheap, incredibly cheap, I'm snapping them up!

Most importantly, the listed companies under Tan Jincheng have always had a good reputation in the market. Orange Technology's nearly 10-fold growth has given shareholders huge returns, and Flash Technology, which has helped countless investors weather bull and bear markets, is a breath of fresh air in the A-share market.

"Let the company find an opportunity to conduct research at the headquarters in Weilai. I would like to meet President Tan in person, but I don't know if there will be such an opportunity."

Wang Chu is becoming increasingly curious about Tan Jincheng. This young entrepreneur has a unique charm: approachable, domineering and arrogant, yet low-key. These seemingly contradictory words seem to fit him perfectly.

It's not easy to meet Tan Jincheng, especially for a so-called securities analyst like him. He may seem to have a big reputation, but he's nothing in front of Tan Jincheng.

Given Tan Jincheng's consistently low profile and his principle of not accepting interviews unless absolutely necessary, it's really not easy to meet him.

Throughout Sunday, Wei Lai was the subject of much discussion, but Tan Jincheng had already put him out of his mind. Since the information had already been sent out, the stock price performance was left to the market.

What do you think about Flashspeed Technology's high stock dividend and share transfer?

Zhang Xupeng, Lin Yumin, Cheng Linfeng, and the others looked at each other in bewilderment. They had wondered what was going on when Boss Tan had called them over on the weekend.

Cheng Linfeng was the first to react: "Boss, why are you thinking of making Flashway have a high stock dividend? Haven't you always been averse to high stock dividends?"

Since its backdoor listing in 2008, FlashTech has maintained a total share capital of 5.1 million shares. Apart from dividends and some shareholders reducing their holdings, there has been no change, and Tan Jincheng's shareholding has remained unchanged.

"The stock market is going crazy. Look at the stock price of Flash Technology. If this continues, our liquidity will run out."

With the Shanghai Composite Index surging for a month, FlashTech has certainly followed suit. Currently, FlashTech's stock price is 39.27 yuan, and its market value is just over 200 billion yuan, but this stock price is really too unfriendly.

Based on the 5178-point level, the Shanghai Composite Index still has more than 50% upside potential. FlashDrive has always been able to outperform the index. According to this estimate, FlashDrive's stock price should be above 60 yuan when the index peaks, and in an exaggerated case, it could reach 70 or 80 yuan.

It's not impossible for the stock price to reach over 100 yuan. A stock price of over 100 yuan for an electric vehicle company? That's outrageous. How much does an electric vehicle cost?

Of course, the most important thing is that a high stock price is not conducive to liquidity, which is detrimental to the development of FlashChe. FlashChe is not Moutai. Tan Jincheng may not be interested in high stock dividends, but the company still has to do so when it needs to raise funds.

"That's true. Actually, it would be best if our stock price were to stay around 20 yuan. At least that's what I think."

Zhang Xupeng stroked his chin. As the CEO of FlashDrive, he was no longer the dark-skinned young man who knew nothing about stocks and even had some resistance to them.

"What do you mean? Tell me your opinion?"

"It's very simple. Moutai's stock price is so low, Moutai liquor is in short supply, electric vehicles are everywhere, and we're not the only option. If you ask me to spend 100 yuan to buy shares in an electric vehicle company, I would definitely rather spend 200 yuan to buy Moutai's stock."

Although the words are rough, the principle is sound. Zhang Xupeng, from the perspective of a complete novice, explained the simplest truth.

Inexperienced investors don't care about the total number of shares outstanding when buying stocks; they only look at the price. Even at 40 yuan, Flash Technology is practically worthless, let alone at a higher price.

(End of this chapter)