2003: Starting with Foreign Trade

Chapter 903 How much money does Boss Tan actually have?

In business, we are intertwined.

On the surface, everyone gets along quite well, and there are very few situations where they directly break off relations, but competition behind the scenes is inevitable.

Tan Jincheng did not stay in Baoding for long, nor did he communicate with Wang Fengying privately, but they probably understood each other without saying a word.

Great Wall Motors is facing a variety of problems during its transformation period, but WILER, which is striving to become the king of new energy vehicles, is also facing a variety of problems. Next year's tenth anniversary will be a turning point for WILER, and also a turning point for the industry.

The Tesla Shanghai Gigafactory project, which has been under discussion for several months, has made concrete progress. The maverick Musk has decided to take a gamble and use a betting approach to gain the support of the Shanghai Stock Exchange and the entire Chinese government.

On October 18, Tesla Beijing R&D Technology Co., Ltd. was established.

Following closely behind was the exposure of the betting agreement between Tesla and the Shanghai Stock Exchange, in which the Shanghai Stock Exchange met all of Tesla's requirements for expedited approval, including sole proprietorship, funding, cheap industrial land, and approvals and distribution facilities.

In return, Tesla is required to pay no less than 22.3 billion yuan in taxes to the Shanghai Stock Exchange annually starting in 2023, and to invest no less than 140 billion yuan within five years, achieving more than 95% localization of its parts.

"Congratulations, but this is a crazy decision!"

Tan Jincheng was still in Beijing on the day Tesla's Beijing branch was established, and he learned about the contents of the betting agreement on the same day. During this period, he was busy with his own affairs and did not pay much attention to Musk's domestic schedule.

"I must thank you for your help, Tan. Let's find some time to sign the formal battery supply contract."

Masla's relaxed demeanor made it impossible to guess his inner thoughts. In reality, he was under immense pressure when he signed the agreement, and this was yet another high-stakes gamble for him.

"Don't worry, you'll get through this smoothly. You're a tech whiz on Wall Street."

Tan Jincheng didn't know what to say. Although he had guessed some of it, he was still very shocked when he actually heard the news.

Once a company has a performance-based agreement, its future becomes uncertain, regardless of the company's size.

Examples from the past include Mengniu and Morgan Stanley, Yongle Electric Appliances and Morgan Stanley, as well as Dingyun, Huiyuan Juice and Coca-Cola, and more recently, CAR Inc. and Warburg Pincus, and the performance-based agreement between Huayi and its executives before the company went public.

Oh, right, there's also the bet between that family and the capital that Xiao Wang mocked for not having many coins in their pockets, and Xiao Wang's own family's upcoming bet.

If successful, the company undergoes a dramatic transformation; if unsuccessful, it becomes mired in difficulties.

"I hope so. Come on, how about you buy me a drink to relax? You're very wealthy now, your net worth has risen to another level."

Tesla's move was a huge gamble, and so was the Shanghai Stock Exchange government's. From a God's-eye view, Tesla's "catfish effect" made the Shanghai Stock Exchange government very rich, but those who were involved would understand how great the risks were.

When the news was officially announced, it caused a huge uproar in society. Sole proprietorship, low-interest loans of tens of billions, and industrial land at only 10% of the original price—any one of these factors would be enough to change the fate of any company, or even an entire industry.

Such great terms, given to an American company?
It has to be said that he really has a lot of guts. Most people who care about themselves wouldn't dare to sign this document. He's already in that position, and as long as there are no problems, he's guaranteed to get promoted. This risk is just too great.

"No problem, let's go find a place to celebrate."

Regardless, the signing of the contract is a good thing for Tesla at this stage, and it is also a good thing for Weilai. Weilai's battery supply contract with Tesla is based on the mass production of the Model 3; otherwise, the renewal would not be very meaningful.

For the Shanghai Stock Exchange government, the agreement with Tesla, despite its numerous risks, is still something to celebrate, as it secured an investment of tens of billions of yuan, making it comparable in strategic importance to Apple.

For the entire new energy industry chain in China, the Shanghai Stock Exchange's requirement that Tesla's parts achieve 95% localization within five years is very good news.

Since the news broke, auto parts stocks in the A-share market have seen corresponding increases, with Tesla core concept stocks such as Top and Xushen showing the most significant gains. As a battery supplier for Tesla, Weilai Group's stock price has also experienced noticeable fluctuations.

"There's something I'm curious about, Tan, how much money do you actually have right now?"

The listing of Orange Group is the hottest topic recently, and how much money Tan Jincheng has is also a hot topic.

"Haha, I don't know either."

Can he say how much money he has? Of course not.

However, it's impossible not to know for sure; Tan Jincheng does know a rough figure, and the media has also analyzed how much money Tan Jincheng actually has.

To understand how much wealth Tan Jincheng and his family actually control, we must first understand the equity structure of his industrial empire, which has undergone more than a decade of hard work and multiple rounds of equity structure changes.

To date, Tan Jincheng's business is divided into four major sectors: Shanchi Group, Weilai Group, Orange Group, and Leichi New Energy Co., Ltd.

The assets of these four core sectors are all controlled through ByteDance Engine, which in turn is controlled by Cheng Yue and Jin Qing, wholly-owned offshore companies established by Tan Jincheng and Gu Qingqing, respectively.

These two companies currently hold 97.55% of the equity in ByteDance's advertising platform, a near-wholly owned model that allows Tan Jincheng to effectively control his assets through the platform.

These can be roughly divided into two categories. One part consists of companies like Weilai, which are controlled and operated by Tan Jincheng. The other part consists of investment companies, such as Xiaomi, Xiaopeng, Wenjie, and even Horizon Robotics.

In addition to these two main assets, Tan Jincheng and his family's assets also include real estate, securities, and cash, among other things.

In terms of real estate, securities, and cash, Tan Jincheng and his family do not hold a large amount of assets.

Including real estate investments worldwide, as well as some of its own stocks and cash, this part of the assets is approximately 70 billion yuan, mainly from real estate and stocks in Hong Kong.

Among the business segments it controls, there's not much to say about Leichi New Energy; it's a company that quietly makes a fortune.

The low-speed four-wheeled electric vehicle market, also known as the "old man's car" market, has always been a highly controversial sector in the new energy vehicle field. Now, the entire industry has annual sales of over one million vehicles, making it an area that cannot be ignored, with an overall market size that is expected to reach hundreds of billions of yuan.

Leichi is the leading company in the elderly care vehicle market. Unlike other elderly care vehicle companies, Leichi has the lowest cost in the industry, thanks to its two older brothers, Shanchi and Weilai, as well as its own industrial chain.

Currently, Leichi has achieved annual sales of over 300,000 vehicles and annual net profit of over 300 million yuan. Despite not receiving subsidies, it may seem like an inconspicuous company, but it is one of the major taxpayers in Beicang.

The Beicang District is not large. Originally, Tan Jincheng wanted to move the company out and convert the vacant factory land into Weilai's factory to save on land costs. However, the Beicang District would rather find ways to give Weilai land for free than let Leichi move away.

Beicang District really doesn't want to let go of such a major taxpayer that doesn't rely on subsidies and creates jobs, even though this industry seems quite controversial and its market prospects are far inferior to those of the real new energy industry.

But that's all for the future; let's wait until the laws and regulations are officially established before making any decisions.

Leichi's sales are not only dominant in the domestic market, but also in exports in recent years. The EU classifies low-speed electric vehicles as L6e/L7e, which allows them to be legally driven on the road.

Americans also have a habit of using low-speed electric vehicles as short-distance transportation. In the past two years, Leichi has also transformed its traditional "old man's car" into golf carts or light four-wheeled vehicles that meet European and American standards by modifying its production lines, producing compliant models and successfully entering the European and American markets.

With its huge cost advantage, even though domestic legislation this year has banned the production and sales of old men's products, Leichi has found a business that it can transform into. These are some attempts that Leichi is making for the future.

Based on the valuation of traditional manufacturing companies, it is not unreasonable to give Leichi, a new manufacturing company that can achieve an annual profit of more than 300 million yuan, a valuation of 3 billion yuan. Tan Jincheng, who holds the vast majority of shares, can be estimated to have a net worth of between 2 billion and 25 billion yuan in Leichi.

The Flash Group, which is where his career started, owns the listed company Flash Technology, as well as wholly-owned subsidiary Jinyi Industrial and holding subsidiaries Jinpeng Industrial and Bafang Electric. In addition, it has investments in supply chain and distributor companies such as Mingcheng Industrial (28%), Shengshi Flash (20%), Boneng Environmental Protection New Energy (15%), etc.

In addition, Tan Jincheng also indirectly holds 1% of the shares of a certain group and 1.5% of the shares of Ele.me through Flash Technology.

Meituan, which is currently planning an IPO, is valued at approximately US$300 billion, while Ele.me, the second largest player in the industry, is valued at approximately US$60 billion.

The entire Flash Group has built its own industrial investment chain around three core business areas: two-wheeled electric vehicles, clothing, and export trade.

Based on the current market value of FlashTech and the valuation of its unlisted portion, Tan Jincheng's net worth in FlashTech Group is at least around 250 billion yuan.

Because these two business segments involve a large number of unlisted companies, their valuations may vary. However, the valuations for Orange Group and Weilai Group are relatively clear.

Currently, Weilai's stock price is 139.27 yuan, with a market value of 3030.51 billion yuan. Tan Jincheng holds 51.304% of the shares through ByteDance's advertising platform, making his personal wealth 1517 billion yuan.

After the IPO of Orange Group, Tan Jincheng's shareholding was diluted to 49.79%. As Orange Technology is not yet listed on the Hong Kong Stock Exchange, its market value on Nasdaq is US$130 billion.

Based on the current exchange rate, this is equivalent to approximately 884 billion yuan, and the value of Tan Jincheng's shares is roughly 430 billion yuan.

However, this is without a Hong Kong listing. Once listed in Hong Kong, the market capitalization will see a significant increase, easily reaching a market value of hundreds of billions, and Tan Jincheng's personal wealth will rise again. In addition to his own businesses and investments in these areas, Tan Jincheng also owns shares in overseas automotive companies such as Proton and Lotus. Although these companies are not publicly listed, they still have considerable value.

These four business segments, roughly calculated, could bring Tan Jincheng a net worth of around 2287 billion yuan; of course, this is largely due to the recent continuous rise in the stock prices of the three listed companies.

Tan Jincheng's wealth mainly comes from the listed companies he controls and invests in. If a stock market crash of the magnitude of next year occurs, his wealth will shrink significantly.

Besides the wealth generated from these business operations, Tan Jincheng's largest asset comes from the accumulated investment returns from ByteDance's advertising platform over the past decade.

Orange Group's subsidiary, Orange Live, is a listed company. The combined market capitalization of companies like Horizon Robotics, Xiaomi, Douyin, Tesla, Nvidia, and Apple exceeds 1100 billion yuan.

In addition to these, ByteDance also operates four RMB and USD funds, which are all privately managed and each has a scale of over 10 billion RMB.

One of its dollar-denominated funds was once the number one single dollar-denominated private equity fund in China (Tesla, Nvidia, Apple, and other stocks were in this fund).

In the third quarter, ByteDance Asset Management (ByteDance series funds) became a dark horse in the fund industry with a total scale of 743.89 billion yuan. Unlike other fund companies, 99% of the assets of ByteDance Engine's funds come from its own funds.

This is extremely alarming. Traditional funds, whether public or private, are primarily funded by the market. When the market is down and investors redeem their funds in large numbers, the fund size will shrink exponentially. If they cannot generate profits in the long term, their credibility will be eroded.

However, ByteDance's private equity funds are different. They hardly need to raise funds from the market, and it is very difficult to participate even if you want to. The reason why there is 1% public fundraising is simply because Tan Jincheng left a loophole.

Simply put, these are massive funds that don't rely on management fees. Their size is all their own money, so they are unaffected by market fluctuations. Moreover, operating as private funds, their holding requirements offer far more flexibility compared to public funds.

When the market is bad, you can simply go to cash.

Based on a comprehensive calculation, considering the current valuations of major companies, the shares held, and financial market derivatives such as securities, ByteDance's massive investment platform could bring Tan Jincheng a net worth of over 1500 billion yuan.

All in all, Mr. Tan's net worth is close to 3800 billion yuan!
On October 12, the Hurun Research Institute released its rich list, with Xu Daipi ranking first with a net worth of 290 billion yuan, followed by Pony Ma with 250 billion yuan and Jack Ma with 210 billion yuan.

Tan Jincheng still ranks fourth with a net worth of over 2000 billion yuan!
There's no other reason than that he's willing to spend money to buy the cheapest option. Tan Jincheng doesn't want the empty title of the richest man; he'd rather let Brother Belt have it.

In fact, Xiao Ma and Lao Ma have similar ideas. If Tan Jincheng spent money on public relations, these two top figures in the internet industry did the same. In terms of actual wealth, they will definitely surpass Tan Jincheng.

Take Jack Ma as an example. His Ant Group valuation has been compressed a lot. If Ant Group were also a listed company, he would definitely be the richest man in China.

As for the title of "richest man in the belt industry," it's just a hollow name. How can the high leverage and high debt of the real estate industry compare to Tan Jincheng, who makes investments and has a large amount of cash flow?

Of the four companies, except for Weilai which incurred debt due to large investments in factory construction, the other three companies had very good cash flow.

"Why be curious about this? The stock market is too bubbly. We shouldn't worry too much about our wealth."

Tan Jincheng raised his glass and clinked it with Musk's. Thanks to the continuous rise of Tesla's stock over the past few years, Musk's net worth entered the global rich list for the first time. At this moment, the factory manager clearly did not have the composure of the world's richest man.

However, if we're talking about who has seen the fastest increase in wealth this year, Tan Jincheng and Elon Musk don't even come close. Wang Wei of SF Express saw his wealth soar fivefold due to SF Express's backdoor listing.

His net worth of 1860 billion yuan propelled him to fifth place, which is probably a must for every emerging large company going public. In recent years, almost every year has seen such a figure emerge.

"That's true, but this is a hot topic right now, so we can hype it up."

Musk, who entered the global rich list for the first time, had a different opinion. He had been paying attention to the rich list and, based on the data he collected, believed that Tan Jincheng's assets were definitely more than what was listed.

He didn't quite understand why Tan Jincheng did this.

"This is due to differences in cultural habits."

Tan Jincheng didn't say much. Given the cultural differences between the two countries, Musk would find it hard to understand why Tan Jincheng would do this. Besides, there are quite a few cases of wealthy people hiding their assets around the world, which Hurun has publicly acknowledged.

He could be the richest man, and he certainly will be in the future, but definitely not now.

The Chinese people value succession, and the position of the richest person in the country has always been passed down from generation to generation, from those born in the 1950s, 1960s, and 1970s. If it is not your turn to take over, sitting in that position will not bring you any benefits.

Although Mr. Chen, the owner of Shanda, escaped unscathed, his company was almost completely destroyed, while Huang Guangtou fared even worse – this is an example.

Pony Ma and his Tencent are often criticized and frequently appear in negative discussions, but when it comes to their character, they are definitely worth learning from; this guy is quite clever.

It's worth noting that Tencent's current market value exceeds three trillion RMB, ranking among the top ten globally, not to mention its numerous investments.

Tan Jincheng's net worth is nearly 40% derived from investment income. Pony Ma's investment income is no less than his; the number of shares held by Tencent in a series of listed and unlisted companies alone is difficult to quantify.

This guy's claim of only 2500 billion yuan is pure nonsense. He's gone even further than Tan Jincheng, clearly trying to squeeze his wealth to the bone so he doesn't want to be the richest man.

"Is that so? Is this your culture?"

Musk seemed to understand something, as if he had come to a realization.

When he first tried to build a factory in China, he was completely misled and returned home in high spirits, but nothing came of it. This time, however, the smooth progress and his in-depth communication with Tan Jincheng taught him some valuable lessons.

"Yes, we have a saying, 'When in Rome, do as the Romans do.' You'll understand when Tesla officially starts production in China."

"But no matter what, congratulations to you, congratulations on your super factory, and congratulations on entering the global rich list."

"Yes, congratulations to myself and to us."

Tesla's Shanghai Gigafactory project is progressing rapidly, and the production capacity of the Model 3 is expected to be resolved. When the news reached North America, Tesla's stock price changed.

10月23日，特斯拉股价单日大涨12.72%，报收294.14美刀，相较于10月11日的年内最低点247.77美刀，短短几个交易日里股价反弹了超过18%。

On October 26, A-share listed company Weilai Group and US-listed company Tesla both issued announcements stating that Weilai Group's battery supply contract with Tesla has been extended to 2021. Weilai Group will supply Tesla with a series of batteries, including the Model S, Model X, Model 3 and subsequent models.

Tesla also announced some progress on its Shanghai Gigafactory project, which is expected to begin construction next year and achieve mass production as early as 2019, alleviating its capacity constraints.

On that day, Tesla's stock price continued to rise due to the news, eventually closing at $330.9, up $5.09 on the day. Similarly, Weilai's stock price also rose sharply for three consecutive trading days due to the news.

In three trading days, Weilai shares hit the daily limit twice, with the stock price reaching a record high of 163.79 yuan and a market value of over 3500 billion yuan.

Weilai Shares, which had been relatively stable in its stock price, experienced a rare surge in just a few days, with its share price soaring by 25.44% in three trading days, causing Tan Jincheng's personal wealth to jump by more than 300 billion yuan.

Tan Jincheng is the primary beneficiary of Tesla's parts localization in China!

At this time, Tan Jincheng and his boss Gu Qingqing were already in Hong Kong, preparing for the listing ceremony of Orange Group on November 1st. Accompanying them were a series of senior executives of Orange Group, including Lu Qi, Cheng Hao, Gu Yanning, Cheng Wu, and Yao Xiaoguang.

In addition to the company's senior management, there were also representatives from investment institutions involved in the IPO process, representatives from orange suppliers, and employee representatives, totaling several dozen people.

Of all the IPOs and financing rounds, this one has the largest lineup yet.

The incredibly generous Mr. Tan even paid out of his own pocket to book a hotel near the Hong Kong Stock Exchange.

Wednesday, September 11th.

Orange Group, which has performed well since the grey market opened, is expected to have the largest fundraising and the largest bell-ringing ceremony of the year on the Hong Kong Stock Exchange.

At 9:30 a.m., six guests, including Orange Group President Tan Jincheng, Executive President and CEO Lu Qi, took to the stage and struck the gong together, officially marking Orange Group's listing on the Hong Kong Stock Exchange on its tenth anniversary.

On that day, Orange opened at HK$239, up 5.75% from its issue price of HK$226, with a total market capitalization of approximately HK$1350 billion (approximately US$173 billion).

"Congratulations, Mr. Tan."

"Congratulations! The rest of the oranges are up to President Lu. This is just the beginning."

(End of this chapter)