2003: Starting with Foreign Trade

Chapter 873 A Surprise on the First Day of School

"Boss, there's something really interesting. I don't know if you'd be interested."

On the first day of September, after Tan Jincheng returned from a business trip to Jiangxi Province and attended his sister's and son's opening ceremony for school, Cheng Linfeng, who was in charge of secondary market investment, mysteriously came to his door.

Tan Jinyue, who will soon turn 12, is already in junior high school. Tan Jinchuan, who is six years old, has transferred from preschool to first grade, officially beginning his nine-year compulsory education. This is a big event for the whole family.

According to Tan Jincheng and Gu Qingqing's plan, their three children, including Tan Jinyue, will definitely study abroad in the future to see the world and broaden their horizons.

However, we won't send them out when they're very young. On the one hand, we're reluctant to send them out when they're too young, and on the other hand, we're afraid they'll ruin their education.

Since having a child, Mr. Tan, who is concerned about his child's education, has been observing the growth process of some friends' children studying abroad and summarizing their experiences.

According to the information he had, most of those who studied abroad from a young age found it difficult to adapt to the domestic environment after returning home, and many were spoiled. Xiao Wang, who studied abroad from a young age, was already one of the best performers in this group.

This guy, or rather Old Wang, is very self-aware. He keeps him at a distance from the family business, gives him some start-up capital to do his own thing, and it doesn't matter if he becomes an internet celebrity or something, since it's all voluntary.

"Hmm? What's wrong? Tell me, your expression is a bit strange."

Cheng Linfeng chuckled: "You probably know that a lot of private equity firms have been established here in the past two years. Speaking of which, this matter is somewhat related to private equity."

"I know that a lot of private equity firms have been established. Speaking of which, the private capital in Zhejiang Province is really impressive. Their hot money can always find suitable places."

At the beginning of the century, in the real estate market, and during the bull market of 2014, these hot money funds had an exceptionally keen sense of smell, always managing to get ahead of other capital.

"Indeed, let's not talk about that for now, let's talk about something else, which is what I discovered."

Cheng Linfeng laughed and said, "Speaking of which, this matter is related to a trader in the company. He had a classmate who went to work in Hangzhou in 13. During the May Day holiday, he went to Hangzhou for fun, and the two of them met up for a while."

"His classmate works at a private equity firm. When the two talked about their business, his classmate succinctly described their company as using software to automatically place stock orders, and in good times, the returns can multiply several times in a few months."

"His first thought was, 'Isn't this a scam company?' But after asking for the company's name and address and checking it out, he realized it wasn't a scam company."

Tan Jincheng thought for a moment and said, "You mean quantitative analysis, right? Which company? That's not surprising."

Quantitative funds have become very popular in the stock market since 2020, but they were actually established much earlier. The most popular time for them in China was during the bull market of 2015, when a large number of quantitative funds emerged.

Using high-frequency trading patterns and algorithmic order placement to operate stocks is not yet mainstream. Some private equity firms and fund managers do not yet recognize it, and ordinary stock investors know very little about it.

“Quantitative analysis is not surprising. The boss has probably heard of the company’s name. It’s called Magic Square Technology. Their private equity fund has reached a scale of tens of billions in a very short period of time.”

Tan Jincheng nodded. Both public and private funds have rankings. A private fund with tens of billions of yuan is quite impressive in China. Huanfang has become quite a celebrity in the private fund circle in the past two years.

ByteDance's advertising platform also has private equity funds, but it currently operates in a traditional manner and has not yet integrated quantitative strategies.

"What's unusual about this company is that, as the employee revealed, they buy graphics cards in bulk whenever they make money. At first, I thought it was for mining, but after asking around, I found out it wasn't."

Tan Jincheng smiled and said, "If people who aren't mining need so many graphics cards, are they planning to build large-scale AI models?"

Cheng Linfeng chuckled: "The boss is insightful. That's right, they are planning to replace all the company's quantitative strategies with AI big models and use computing power to trade stocks. That's quite novel."

Like Baidu, the boss's company is also involved in AI and has been stockpiling graphics cards. In addition, the boss is competing with Baidu for Lu Qi, who is about to leave Microsoft, and wants him to manage the company's AI products.

This is why Cheng Linfeng specifically went to inquire, but he had never actually heard of AI being applied to stock trading.

"The application scenarios for AI are currently rather vague. Using it for stock trading is indeed a good direction, and it's quite an idea. No wonder it was able to reach a scale of tens of billions in a short period of time. You can contact them and see if you can reach some cooperation."

"Does the boss mean we should also launch a quantitative fund?"

This is what Cheng Linfeng finds novel. He knows that his boss is quite receptive to new things. Currently, ByteDance's investment in the primary market has decreased significantly, while resources allocated to the secondary market have increased accordingly. How to utilize these resources is something Cheng Linfeng needs to consider.

"Yes and no. I think the idea of ​​the private equity firm you mentioned is good. The goal of quantitative funds is to make money, but it's also good to try out the application scenarios of large AI models while making money."

"Your foundation is relatively weak right now, so you could try to find out how they operate and see if you can cooperate,"

Tan Jincheng doesn't understand AI at all, and the entire group has little experience with it. They're just learning from Baidu. Boss Li is quite forward-thinking, so it's fine to follow him and pave the way.

The same goes for snatching Lu Qi, this big shot. This amazing person didn't stay at Baidu for long in his previous life, less than two years before moving to Pinduoduo. Tan Jincheng hopes to bring in this amazing person.

The AI ​​and artificial intelligence market is constantly changing, and there will definitely be more and more experts and newcomers in the future, but for now, Lu Qi and his circle of friends are still very suitable.

"Okay, I'll go and contact them and see, I'll also learn from their experience."

"Don't underestimate quantitative analysis. With rising labor costs, it will play a significant role in the future. Most importantly, once the model is established, it will be far more effective than any other analysis."

Quantitative funds primarily rely on mathematical models and algorithms to develop investment strategies. Their advantages include strong data processing capabilities, avoidance of human emotional interference, and a variety of strategies.

The mere presence of someone with emotional interference is enough to prevent most fund managers from having malicious intentions, blocking the path for many to make money.

Therefore, it won't be easy to promote this product on a large scale in public funds. It can only be successfully promoted in private equity funds like Magic Square, where the decision is made by the owner alone.

The same model applies to ByteDance's funds, and quantitative funds are also applicable to ByteDance's funds.

"Understood. Our company doesn't have that many vested interests, so it's definitely feasible to scale up the project. I'll make the arrangements later."

"If you have the chance, introduce me to the boss of that company. The rent in Huijin Building is not cheap, and there are quite a few tech companies there."

Huijin Building is one of the few high-end office buildings in Hangzhou. Most of the tenants there are wealthy private equity firms, but there are also quite a few small technology companies. While we don't invest in internet giants like ByteDance, we don't say we don't invest in technology companies.

Of course, it is not easy for tech companies to successfully invest in them. Various factors such as the environment, industry, founders, etc. all affect the growth of the company. In addition, the attitude of local governments towards these small tech companies is also very important.

The conditions in Zhejiang Province and Hangzhou are arguably the best at present. The private capital in Zhejiang Province is very mature, and Ningbo has a large number of private equity firms and large speculative capital groups. State-owned enterprises are also very friendly to entrepreneurs.

Take Flash Technology as an example. At the time, Tan Jincheng only had a PPT and a future plan plus a rented dilapidated factory. Beicang District was able to provide money and land, and also provide comprehensive assistance including personnel recruitment, tax policies and so on.

Such an environment is extremely friendly to startups. The conditions offered by Hangzhou are even better than those in Ningbo. Coupled with the support of Zhejiang University, it is no surprise that a large number of small technology companies have incubated unicorn companies.

Furthermore, compared to first-tier cities like Beijing, Shanghai, Guangzhou, and Shenzhen, Hangzhou's housing prices are relatively more affordable.

State-owned enterprises are quick to seize opportunities, and private capital in Zhejiang Province is not far behind. Small business owners are making great strides. Some pig feed companies are transforming into biopharmaceutical companies, some real estate companies are starting to research and develop new materials, some clothing companies are transforming into lithium battery companies, and even small business owners in county towns are starting to invest in technology companies.

The overall atmosphere is quite favorable for the growth of technology companies.

Tan Jincheng grew up in this kind of environment in both his previous lives, and his sensitivity is no less than that of these small business owners. He didn't have the opportunity in his previous life, but now that Cheng Linfeng mentioned it, he felt that this private equity company was not simple.

I just don't know if they'd be willing to accept investment, since they're so rich.

"Okay, I'll contact them first."

Cheng Linfeng understood what his boss meant. He told his boss that there was a reason for this as well. His boss could often find investment opportunities from information that they didn't pay attention to, and he could also invest in very successful companies, which was something he didn't have.

"Let's go back now. I won't invite you to my house for dinner today."

"OK."

The place where Cheng Linfeng spoke to Tan Jincheng was near the school's playground, where his son also studied. Large enterprises have their own educational resources. For example, at the Beicang headquarters, Tan Jinyue and Tan Jinchuan attended a school invested and built by ByteDance.

It covers all age groups from kindergarten to high school, mainly recruiting students from the families of all employees of ByteDance, Weilai, Flash, Orange Technology and Leichi, as well as the children of management. It is managed by Zhenhai Middle School, which is one of the best schools in Ningbo in terms of educational resources.

ByteDance has no shortage of money. With modern teaching facilities, top-notch teachers, and scholarships, it provides more educational opportunities and career development paths for employees' children.

It's practically a mini-society. Generally speaking, the children of high-ranking officials who haven't gone abroad mostly study at this school, getting to be classmates with the boss's sister, son, and daughter from a young age. This is much better than studying abroad.

In addition, there are security considerations. Given Tan Jincheng's status, protecting his family is essential. Even if Tan Jincheng wanted to live a carefree life, the local government would not allow it, as they could not bear the responsibility if something happened.

Today, Tan Jincheng attended the opening ceremony, and many senior executives like Lin Feng from Tongcheng were also present. Even Zhang Xupeng, whose child is not yet old enough for preschool, came to join in the fun.

There are similar cooperative school programs in Tan Jincheng's hometown. In addition to being open to all employees, they also apply to children from his hometown. Any child from his hometown who wants to study in the county town can be given priority admission.

In addition, major users like Weilai and Jinpeng have special cooperation plans with surrounding colleges such as textile schools and Ningbo Vocational College, as well as cooperation programs with a number of prestigious universities.

How about a business trip to Jiangxi Province?

"It's alright. I need to go to Qinghai in a few days. How's it going on your end?"

On the way home, Zhang Xupeng chatted casually with Tan Jincheng.

Tan Jincheng's business trip to Jiangxi Province was mainly to investigate lithium resources and lithium mining companies. He has been paying attention to lithium resources for quite some time, ever since he entered the two-wheeled electric vehicle industry.

Overall, from 2005 to 2015, the price of lithium resources was relatively stable and low, with lithium carbonate priced at around $4000 to $5000 per ton.

However, with the rapid growth of the new energy vehicle industry and the gradual maturation of lithium resource development technology, especially the promotion of lithium extraction technology from salt lakes, production costs have been reduced, and the price of lithium ore resources has risen rapidly.

At the beginning of this year, the price of lithium carbonate soared to $1.2 per ton, more than doubling compared to last year. Factors such as supply and demand mismatch and market speculation have led to a rapid increase in enterprise costs.

What were the hottest stocks in 2016?
There are definitely two leading lithium mining companies: Ganfeng Lithium, whose market value has risen to around 250 billion yuan, and Tianqi Lithium, which is even higher, close to 400 billion yuan. Even Salt Lake Group, which is currently suffering heavy losses, is worth 370 billion yuan.

The latter two are somewhat overvalued, while Ganfeng's valuation is quite good for Wei. ByteDance's stock also includes Ganfeng's shares, and the two companies have a considerable cooperative relationship. This time, Tan Jincheng mainly wants to deepen their cooperative relationship.

Since 2016, the demand for lithium resources has been increasing. Although Tan Jincheng himself has some overseas mineral resources, domestic partners are also essential.

Currently, Tianqi Lithium's annual production capacity of battery-grade lithium carbonate is between 2 and 3 tons, while Ganfeng Lithium's is slightly lower, between 1.5 and 2.5 tons, which is why its market value is lower.

Although it has doubled this year, the rise will be even more dramatic later. Even if now is not a particularly good time to get involved, it is still better than waiting until it rises to talk about it.

The method is the same old routine: signing large orders and increasing shareholding through private placements to increase influence within the listed company.

As for going to Qinghai, in addition to the establishment of the Xining base, Tan Jincheng also wanted to see the salt lake. The company is currently mired in difficulties and even faced delisting at one point. In the end, it went bankrupt and underwent restructuring. Tan Jincheng wanted to see if there were any opportunities for cooperation.

It seems like it was delisted for a year? I vaguely remember Tan Jincheng. Back then, he had already entered the stock market. On the first day after the delisting, it seemed to have surged, with the market value directly exceeding 2000 billion yuan. It was like a phoenix rising from the ashes.

"My main headache lately is Jinpeng's business. There haven't been any major changes at Shanchi. Luckily, we entered the internet industry early, but we've still been hit quite hard."

"By the way, it was really wise of you to let us buy the shops and open them back then."

The apparel industry has been greatly impacted by the internet in the past two years, especially by Jack Ma's so-called retail concept, which involved waving checks and acquiring businesses everywhere, causing a huge impact on offline physical businesses.

The impact of capital intervention on ordinary people cannot be described as mere reduction; even companies like Jinpeng are suffering greatly.

"I came here to join in the fun, and also to find an opportunity to talk to you about whether we need to scale back."

"Let's talk when we get back. You can have dinner at my place tonight."

"Okay, then I'll invite Xiao Nie and the child along."

Tan Jincheng pursed his lips: "When are you two having a second child?"

Nie Ruoxi's job is relatively easy. She runs a 4S store with the best-selling SUV on the market, so she doesn't have to worry about making a profit. She usually just takes care of her children and occasionally goes to Tianmei to chat with Gu Qingqing.

"Don't rush, why do you always like to urge people to have children?"

Zhang Xupeng was speechless. Tan Jincheng's younger siblings, all over 20 years old, would ask him if he had a boyfriend or girlfriend when they met. Married colleagues would ask him when he was going to have children. He didn't know what kind of hobby this was.

"Hehe, isn't it because if you're born early, you still have a chance to train a new character if you're not raised well? Isn't that how little Tan Jinyue was born?"

"Your way of thinking is really speechless. Why do you have to train until you fail? Can't you think about the positive side?"

"Prevention is better than cure."

In the study after dinner, Zhang Xupeng and Tan Jincheng sat facing each other. Zhang Xupeng reported on the changes in Flashtech over the past eight months. Flashtech is a listed company, and Tan Jincheng often attends shareholder meetings and conference calls, so he is quite familiar with Flashtech.

He really didn't know much about Jinpeng Industrial's business. He didn't usually have time to manage such a clothing company. He would just look at the semi-annual report and financial report. To be honest, he didn't care much about how much money they made.

"With brands like Daphne and Belle closing a large number of stores, our GXG offline stores have also been significantly impacted. Many stores in less desirable locations due to urban development have also closed."

"Furthermore, environmental protection policies have increased our R&D costs, and the pace of mergers and acquisitions has accelerated significantly. Some large companies even want to acquire our GXG brand."

The industry, e-commerce, and inventory pressures, coupled with changes in popular culture, have made the past few years a tough time for the apparel industry. The transition period is often the most painful.

Tan Jincheng smiled and asked, "Have you ever thought about taking Jinpeng public?"

Zhang Xupeng said without hesitation, "Forget it. The stock performance of those companies that went public this year wasn't very good, and they weren't very popular in the capital market. In my opinion, if a company isn't a leading player in the apparel industry, there's no need for it to go public."

Capital always chases highs and shuns lows. Popular industries receive lavish funding, but unpopular industries face all sorts of restrictions.

Zhang Xupeng originally wanted to create another listed company under his own control, but now he thinks that even pushing Bafang to go public would be better than Jinpeng going public.

Jinpeng does meet all the requirements for listing, but he has lost interest.

Tan Jincheng thought for a moment: "Currently, Jinpeng's most core assets are GXG and the outlet mall. GXG definitely cannot be sold, but as for the outlet mall, it can be sold if someone is interested."

"So you mean we're going to adopt a contraction strategy?"

While Tan Jincheng completely neglected the day-to-day operations of FlashDrive, Zhang Xupeng was well aware that he would definitely seek advice from Tan Jincheng on major policies and strategies.

"It's not just that simple. Those shops you closed can actually be sold or rented, and we can increase partnership stores and dealer stores to maintain our offline exposure."

"Simply put, we'll adopt a light-asset model, explore digitalization, and try collaborating with some online influencers, since live-streaming e-commerce is quite popular right now."

For enterprises to achieve sustainable development, they must keep pace with the times, optimize supply chain management, shorten the design-to-shelf cycle, improve rapid response capabilities, and at the same time strengthen the digital management of warehousing and logistics systems to reduce inventory pressure.

"E-commerce is definitely the future of Jinpeng. Let Li Jinglan vigorously develop live-streaming e-commerce and do a good job in brand upgrading. These are the top priorities for your development."

By 2016, internet celebrities had become a mature group. For example, the shouting rap group on Kuaishou, as well as some dance and game streamers, all had a fixed fan base. Simba, who was involved in live-streaming e-commerce, had also begun to emerge.

The most influential influencer, Papi Jiang, has also started selling products through live streaming.

"Becoming an internet celebrity? Won't that damage the brand image?"

"Who told you to hire those rappers to sell products? You could have found some normal internet celebrities, or you could have trained your own live-streaming hosts and set up a dedicated live-streaming studio in the company to try it out first."

"Just watch, this will be another form of online shopping in a few years, and the GMV will definitely be high. You should hurry up and learn how to get started, just like when we opened our online stores and were among the first to join Tmall."

"Also, don't look down on those rappers. They make a lot of money. If you have time, you should learn more about them. Since you're in the clothing industry, you should also learn more about popular culture."

While you were still looking down on them, they were already collecting the Cullinan fragments.

After thinking for a moment, Tan Jincheng smiled and said, "Or you could become an internet celebrity yourself."

Since 2019, many business leaders have personally gone live to sell goods. If Zhang Xupeng can establish some influence online now, instead of being unknown as he is now, it would be a good supplement to his future business operations.

Zhang Xupeng was shocked: "Me, an internet celebrity? Are you kidding me?"

"Haha, what's so strange about that? I'm a kind of internet celebrity now. Here's what we'll do: ByteDance's Douyin is officially launching in a few days. Go register an account and create your own persona."

The two giants, enjoying their immense success, are about to face a true rival.

(End of this chapter)