2003: Starting with Foreign Trade

Chapter 885 Finalizing the Acquisition Plan
After seeing Tan Jincheng off, the three of them were still somewhat reluctant to part.

"What do you think of what President Tan said?"

Liang Wenfeng gave a wry smile: "I don't know what you think, but I was terrified. I guess it's because President Tan and I are about the same age and we don't have much of a conflict of interest, so he was more relaxed."

This was the first time he had ever had a private conversation with an entrepreneur of Tan Jincheng's caliber, and it really was true that a casual remark could reveal a business opportunity.

Their fund also holds shares in Weilai Co., Ltd. If Tan Jincheng hadn't noticed in time, and had said even a few more words, it might have affected their holding plan.

"It can be said that it has pointed out the direction for us niche tracks. With technology as the driving force, it has also set the direction for our research."

The civilian application of robots started a long time ago. Currently, foreign companies like Boston Dynamics are mainly researching hydraulic drives, and we don't have much of a technological advantage in this area.

Wang Xinxin and his team mainly aim to make breakthroughs in motor-driven humanoid and quadruped robots.

Both have their advantages and disadvantages, and it's hard to say which is better. Originally, Wang Xinxin was a little hesitant, wondering if starting research in a new direction would be too risky. But Tan Jincheng's words gave him a stronger determination.

If the investors aren't worried, why should he be?

"Mr. Tan is right. Just like in the automotive industry, we don't have an advantage in traditional gasoline cars, but we've made great breakthroughs in electric vehicles. It doesn't matter if we fail; we can just start over."

"That's right, the big spender has said so, what are you still worried about?"

"When I first met Mr. Tan, it was indeed as others had said: he was quite tolerant of those he invested in; of course, the premise was that we had to withstand his tests."

"After giving the money, he didn't make too many demands, but he was quite sarcastic. According to Mr. Tan, it's a venture capital round, and we don't even know if the money will go down the drain, so making more demands is useless."

"Haha, interesting, but that makes sense."
-

Yangcheng.

The Pazhou Exhibition Hall is located next to the Westin Hotel, which has only been open for five years, yet it has already secured the cooperation between Weilai and Flash for four consecutive years.

During the annual Canton Fair, the International Auto Show, and other events, most of the rooms in this hotel are booked by companies under Tan Jincheng's control.

"What was that line you said before?"

"Oh, fortunes change every thirty years."

"It's truly lamentable that Meizu, once the only domestic brand that could stand up to Apple head-on and had countless die-hard fans, has ended up in this state."

"On the other hand, Meizu's problems are really significant. If you use Weilai to acquire it, its goodwill will increase greatly, which will seriously affect Weilai's business. Have you thought this through?"

In the room, Shen Nanpeng lay on the sofa without any regard for his image. He had just arrived in Guangzhou from Zhuhai, and he and Tan Jincheng were practically side by side.

If the acquiring entity is Wei Lai, on the one hand, he is entrusted by Tan Jincheng, and on the other hand, he is also an important shareholder of Wei Lai. Regardless of the reason, he must conduct due diligence on Meizu.

It was only when we investigated that we discovered a great deal of problems.

"We'll see. If it really damages our reputation now, then I'll use ByteDance's advertising platform to acquire it and then go down the data center route."

"The King of Cash in Zhejiang Province speaks with such magnanimity. On the other hand, you've amassed so many US stocks, you should probably sell some when necessary. Wall Street won't let you easily reap the highest profits."

"I understand. I'm selling off some of my Tesla stock next year, and we'll also reduce our Apple holdings."

“No problem. It’s safer to bring this money back or to Hong Kong than to leave it there. The main thing is that you have no leverage over the Americans. They don’t even sell your cars there. If you only take and don’t take, they won’t let you take it so easily.”

"Haha, speaking of which, we really only take from the Americans and don't take anything in return. Isn't that something to be proud of?"

"Alright, enough nonsense, take a look at this."

Shen Nanpeng took out two documents from his briefcase. One was Meizu's financial report for the past three years, including the latest expected financial report for this year, which he had also obtained.

The other document is Meizu's most detailed shareholder list to date.

"There are indeed significant problems. Although this year's financial report looks much better than last year's, it's all thanks to financing. Saying it's profitable is just a financial embellishment; there's actually not much change."

The actual profit margin for mobile phones is quite considerable. Meizu has accumulated years of experience, and in terms of both technology and reputation, it has an absolutely loyal following. It's quite impressive that they were able to achieve this without making a profit, given that they previously aimed for a small and exquisite business model.

According to its financial report, Meizu's performance last year was not ideal, with a net loss of over 10 billion yuan, total liabilities of nearly 89 billion yuan, and net assets of negative 16 billion yuan, putting it on the verge of bankruptcy.

This is probably why Huang Zhang had to embrace capital. Since he started making MP3 players, Huang Zhang has always kept a tight grip on his shares and absolutely would not allow anyone to touch them.

"This year's financial report is much better, but it is indeed similar to what you said, it has been beautified, but there have been significant changes, mainly due to the financing."

Meizu's total revenue in 2016 was roughly between 150 billion and 160 billion yuan, with much smaller losses, but Huang Zhang also gave up a lot of shares for this.

"Mr. Huang currently holds 49.959% of the shares, and Ali holds 28.828% of the shares. The two of them decide the ownership of Meizu."

Following Shen Nanpeng's explanation, Tan Jincheng picked up the detailed shareholder list. Apart from Huang Zhang himself and Ali, the remaining 21.213% of the shares were held by eight institutions, including Haitong Kaiyuan, Tianyin Holdings, and Shanghai Haitong Information.

Among them, Tianyin Holdings is the latest investor, investing 2 million yuan in October this year to acquire 0.655% of Meizu's shares. Tianyin and Haitong are mainly financial investors, while the rest are Meizu's partner companies.

Considering Tan Jincheng's financial situation, Shen Nanpeng didn't bother to explain the financial details further. After the financing, Meizu's debt ratio decreased significantly, and the total debt is currently around 30 billion yuan, which is nothing to Tan Jincheng.

Meizu was desperately short of money under Huang Zhang's management, but it was a different story under Tan Jincheng's management.

“What you care about is control, but even if you acquire all the institutional shares, including Ali’s, it will only be 50.041%, which is still a fight with Huang Zhang. So if you want control, you still have to start with Huang Zhang.”

"That's true. If we want to gain control, we have to start with Huang Zhang."

If Lao Ma hadn't misled him and acquired a 51% controlling stake, Tan Jincheng would still need to acquire 22.172% of the shares.

"Currently, we can confirm that we have acquired shares in three companies: Haitong Kaiyuan, Shanghai Haitong, and Tianyin Holdings. They are mainly financial investors and are willing to transfer their shares if we provide sufficient funds."

"I think I can get a share of Ali. I met with Jack Ma after the Internet Conference."

Shen Nanpeng glanced at Tan Jincheng and said, "You're quite something. You actually managed to persuade President Ma to transfer the shares to you. They're not short of money. But thinking about it, it makes sense. Meizu hasn't shown any investment returns for Ali yet."

"Hehe, that's not all. Lao Ma also promised to help me contact HTC's mobile phone team so that we can be prepared for both possibilities. If the acquisition of Meizu doesn't go smoothly, we can also try to acquire HTC's mobile phone team."

"Huh? Didn't you two not get along? How did you convince him to help?"

"That's utter nonsense! We just don't have close business ties, there's no way we don't get along!"

"Come on, what did you promise Mr. Ma?"

"Hehe, let him participate in Orange Technology's second IPO, and also strengthen the cooperation between Gaode and Dingding."

Shen Nanpeng smiled and said, "That makes sense. Gaode goes without saying, and Dingding is also very valuable to Ali. Both parties will benefit from the cooperation."

Dingding's millions of small and medium-sized enterprise (SME) clients made Ali extremely envious. Back then, he claimed to have made it easier for countless SMEs to do business, but in reality, he just wanted to control these resources and make these SMEs serve him.

As a result, Ding Ding stole his business. Tan Jincheng had spent a lot of money on Ding Ding over the years, and the customer resources he had accumulated were quite good.

Dingding's current strategy focuses more on user growth and market share expansion. The business process is still in its early stages, but last year's revenue reached 100 million US dollars.

The period when the most money was needed has passed, and the most basic requirement for an internet app—hundreds of millions of users—has been achieved. Handing it over to Orange Technology would actually be more beneficial for Dingding's development.

"Putting that aside, if Mr. Ma is willing to transfer his shares to you, then the difficulty will indeed be reduced a lot. We only need to persuade Mr. Huang and other institutions to transfer some of their shares."

"If all else fails, we'll have to resort to some underhanded tactics. Huang Zhang is thinking of taking Meizu public, right? How about we work on that?"

Shen Nanpeng said meaningfully, "Have you thought this through? You've always had a good reputation, but if you use this trick, your reputation in the business world will be ruined."

In business competition, Tan Jincheng is certainly not a good person. He will also use any means necessary when it comes to breaking the rules. However, his reputation in the business world is still quite good. If he uses such means to seize control of Meizu, he will be criticized for his ugly behavior.

"Let's try diplomacy first, then force. I'll talk to Lao Huang first. I'm willing to offer a certain premium, and I can also give him some personal compensation."

Based on the fact that Tianyin Holdings invested 2 million yuan in Meizu last month to acquire 0.655% of its shares, Meizu's valuation is equivalent to 305 billion yuan.

"A valuation of 300 billion should be the peak for Meizu. Tianyin was definitely bought at the highest point. If you give them this valuation, everyone except Huang Zhang should agree."

Meizu's normal valuation should be between 100 billion and 200 billion yuan, according to Shen Nanpeng's valuation calculation. The current valuation is arguably twice as high. Of course, if Meizu can weather this storm and maintain its current sales volume while clarifying its product strategy, then 300 billion yuan is indeed not expensive.

"Let's talk to Lao Huang first. We've had quite a bit of cooperation with him over the years, and it's been a pleasant experience for both sides. I haven't held them back in any way. If they're willing, I can still hand Meizu over to him to manage, but that's a bit unrealistic."

Having lost control, Huang Zhang would definitely step down given his personality. However, Tan Jincheng wasn't worried. He valued other members of Meizu's team, not Huang Zhang.

"Actually, you don't need to be so pessimistic. Things are different now. The fact that he can keep accepting capital investment and dilute his shares to below 50% shows that he has already begun to change."

"That's true. Once you've tasted the sweetness, the feeling is definitely different. Otherwise, how could he have had such a good financial situation and more than 10 concerts this year?"

"Let's be tactful. What he did was indeed a bit abstract, but it did increase brand exposure and had some effect on sales. It's just that it was too much of a bad thing."

"How about this, I'll arrange a meeting for you first. If Mr. Huang is willing to meet with you, then you can go. This way, we can save face for both of us."

"Another thing to note is the attitude of the Zhuhai Municipal Government."

Tan Jincheng nodded. Although Meizu is a private enterprise, they would definitely not agree to it if Tan Jincheng moved away after the acquisition. Whether or not to acquire Meizu depends on the attitude of the local government.

"There's no need to move it. It's fine to keep it in Zhushi. It would be a waste to move such a large enterprise."

“That makes things easier. If you acquire it, the local government will still see you as helping them.”

"Okay, let's do it this way for now. Let's meet with Mr. Huang and talk to him. Hopefully, we can persuade him."

After talking with Shen Nanpeng, Tan Jincheng's thinking became much clearer. He could persuade Huang Zhang from both his own perspective and the Zhuhai Municipal Government's perspective, and also by promising Meizu's listing plan. Huang Zhang, who was already open to capital, might not be so resistant to accepting the offer.

"There's one more thing we can help with."

"Oh? You mean Qualcomm?"

"Yes, you know quite a lot about this. It seems you've been well-prepared. When did you start targeting Meizu?"

Shen Nanpeng discovered that Tan Jincheng's understanding of Meizu far exceeded his expectations, and he even demonstrated a high level of expertise in some of Meizu's business areas. For example, Tan Jincheng was certain that Meizu's strategy of flooding the market with numerous models would definitely be discontinued.

There's not much controversy about this. Furthermore, Tan Jincheng even stated that even if Meizu abandons its strategy of releasing a large number of models, its sales next year won't be much better. I don't know where this information came from.

"Of course we know. Do you really think they don't want to use Qualcomm chips? It's all because of the patent issue."

Reaching a patent settlement with Qualcomm is Meizu's top priority; otherwise, they'll be ruined by MediaTek and Xiaomi. If Xiaomi uses MediaTek chips from Meizu's flagship phones in its Redmi series, it's a miracle if Meizu's flagship phones sell well.

Flagship models use Qualcomm chips, while the mass-market Meizu series uses MediaTek chips. Following the same approach as Xiaomi is the right way to go. In addition, we must quickly launch full-screen displays to keep up with the mainstream aesthetic preferences of consumers.

“We can indeed be of a lot of help in settling with Qualcomm. We can include this clause in the acquisition agreement, and the two of us will be responsible for dealing with Qualcomm.”

"No problem, then who will be the acquirer?"

Tan Jincheng thought for a moment and said, "Let's use ByteDance. What you said makes sense. If we acquire it but still can't make it look good, then we'll lose tens of billions in goodwill. Besides, a ByteDance acquisition can also make the IPO process smoother in the future."

"No problem, it's settled then. You set up the acquisition team as soon as possible, and I'll send people to assist you."

"Okay, the usual fee schedule. That's all for today. I won't disturb your rest any longer. I'm going to the auto show now."

Shen Nanpeng smiled and said, "You seem to be very busy. Okay, I'll take a rest first. Let's have a drink together tonight. Speaking of which, the hotel you booked is quite nice and quiet."

"That's right, it was all bought with money."

Weilai attached great importance to this year's Guangzhou Auto Show, booking an entire floor of the Westin Hotel. In addition, starting this year, all the vehicles used by the Westin Hotel to pick up and drop off guests have been replaced with brands under Weilai's umbrella.

Tan Jincheng has pushed advertising to its limits.

"I know you're rich, no need to repeat myself. I really envy you, kid. With your cash reserves, you can do a lot of things."

"Haha, money is only money when it's spent, right?"

During Tan Jincheng's trip to Guangzhou, ByteDance announced its data center construction design, benchmarking against the investments of Alibaba and China Mobile, the largest data centers in China. ByteDance plans to invest 60 billion to 100 billion yuan to build a super-large data center in China.

The entire "massive system" of artificial intelligence will be built through the construction of ultra-large infrastructure.

It's fortunate that Tan Jincheng was on the plane, otherwise his phone would have been ringing off the hook when the news was released. The main problem is that ByteDance's announcement of such a large plan did not mention where the data center would be located.

This gives local governments a lot of room for imagination.

"First of all, Ningbo is definitely out of the question. Such a large data center would consume an astonishing amount of electricity. It should be located in an area with cheaper electricity. Also, the temperature should be suitable."

"I still think the Southwest region is more suitable, and your province is the ideal place. Just write that down."

After half a day of fermentation and the news spreading, Zhao Xinyi was the most sought-after person. Zhao Xinyi needed to understand the boss's true thoughts in order to make the right choice.

"Um, if we exclude the city from the list first, will the city have any objections?"

"No, you'll understand once you look into how much electricity a data center uses. There are so many industrial enterprises in the city, and electricity is already tight during peak periods. They can understand. Besides, we've already invested a lot in the city. If all the large projects are located in one city, it could easily lead to policy imbalances."

"It's a bit unfair to other companies as well."

Your province has many natural advantages in the construction of data centers: cool climate, low heat dissipation costs, stable geological structure, and low disaster risk. Take my brother Ma's data center in Tianjin, for example, he was so scared that he wanted to move it overnight.

In addition, Tan Jincheng remembers that there seems to be a policy of calculating costs in the east and costs in the west in the future, which will also provide significant policy support.

Of course, the most important thing is safety. The whole place is in a cave, which utilizes the mountain barrier and natural low temperature, making it highly efficient and energy-saving while also giving people peace of mind.

"Okay, then I understand."

Once the boss has found a place she likes, she can spread the word. This will not only prevent further inquiries but also attract some favorable policies. After all, it's a multi-billion dollar investment; how can she do without some incentives?

Upon arriving at the exhibition hall, the Weilai booth was, as in previous years, packed with people.

After its launch event and promotion at the Internet Conference, the EP9 concept car had already gained considerable popularity before its debut at the Guangzhou Auto Show. Its cool design and numerous cutting-edge technologies as a pure electric sports car brought countless gimmicks to the EP9.

As soon as Tan Jincheng appeared in the Weilai exhibition area, he attracted the attention of many reporters who were squatting there to report.

"Mr. Tan, your company launched a concept car this year. Is it meant to compete with luxury car brands?"

In the mobile internet era, everyone is a "reporter." After the reporter from Autohome raised this question, Tan Jincheng was surrounded by even more people.

"Haha, you guys really love making things worse."

Faced with cameras and microphones and onlookers holding cell phones, Tan Jincheng didn't stop.

The Guangzhou Auto Show, known as the annual finale of the car market, has always been a battleground for major manufacturers. This year's Guangzhou Auto Show is no exception. Whether it's a coincidence or not, there are as many as 19 concept cars on display!
Among them are concept cars from luxury brands such as Mercedes-Benz and Lexus, but only three have attracted the most attention: the GAC EnLight concept car, which is competing on home turf; the Mercedes-Benz EQ concept car; and the Weilai EP9 concept sports car.

It's worth mentioning that these three most popular concept cars are all pure electric vehicles. In addition to these three, brands such as GM, Buick, and Volkswagen have also launched pure electric concept cars.

The number of new energy vehicles showcased at the Guangzhou Auto Show reached a staggering 146, making it a banner year for new energy vehicles.

"That's right, I want to compete with the big brands. We are the newcomers in the field of traditional fuel vehicles, and there is a lot we need to learn."

"However, in the field of new energy, especially pure electric vehicles, we are currently the market leader, no less than any other manufacturer. What they can do, we at Weilai can do as well. You can completely trust Weilai and domestic brands."

As expected of a "family" reporter, they really know how to ask questions. How can an exhibition that only lasts a few days be successful without creating some gimmicks to attract attention?
Besides the car itself and the tall, leggy models, what could be a better way to attract attention than the chairman's outrageous remarks?

Having already missed the opening ceremony on the first day, Boss Tan needs to make a splash.

"Boss, aren't you afraid of offending netizens by saying such arrogant things?"

"What I'm talking about is nothing. Go look at the mobile phone industry, they're the ones who are really arrogant."

Compared to always dominating and far ahead, Boss Tan is being a bit too conservative. However, there is good news: Shen Nanpeng, who acted quickly, told him during dinner that evening that Huang Zhang had agreed to meet with him.

"It's good that you're willing to meet. Everything can be discussed in person."

(End of this chapter)