2003: Starting with Foreign Trade

Chapter 947 Solving the Pricing of Yingke VS Maodou 3 (Seeking Monthly Tickets)
P.S.: Still asking for monthly votes!

On May 31, the last working day of May, Inco Medical, which had become a hot topic at the beginning of the month, released another announcement, making it a hot topic again on the last day of May.

According to the announcement, with the approval of the China Securities Regulatory Commission (CSRC), the specific target of this share issuance is Tan Jincheng, which meets the requirements for subscription eligibility under the Measures for the Administration of Securities Issuance by Listed Companies and the Interim Measures for the Administration of Securities Issuance by Companies Listed on the Growth Enterprise Market (GEM).

"Unsurprisingly, Mr. Tan has made another move. I just don't know if he can save Inco Medical's stock price this time."

In May, Inco Medical's stock price experienced dramatic ups and downs, reaching a high of over 22 yuan, a new high since August 2018 and the highest price in 10 months.

For retail investors who lack confidence, this is the best opportunity to get out of their losing positions. The sudden positive news has brought them an excellent arbitrage opportunity.

However, the small and medium-sized enterprises in the market are currently in a slump, and coupled with the external situation, Inco Medical's stock price cannot continue to rise indefinitely. The overall market index fell by nearly 6 points throughout the month, and the ChiNext index fell by more than 8%.

Almost all retail investors who bought in later were trapped. Yingke Medical closed at 17.01 yuan for the month, a drop of exactly 10%.

As of the closing bell on May 31, Inco Medical's market capitalization was 33.34 billion yuan.

"By the way, did Boss Tan lose money on this private placement price? How exactly was it calculated?"

An ordinary private placement announcement, which couldn't be more ordinary, attracted a crowd of onlookers because of Tan Jincheng's popularity. Among them were many people who didn't even trade stocks, but were simply there to watch the spectacle.

According to the private placement announcement, Inco Medical will issue 4000 million shares to Tan Jincheng at a price of 17.86 yuan per share, raising 7.144 million yuan, which corresponds to a market value of 35 billion yuan.

As for what the funds raised will be used for, the general public doesn't care at all; they're just curious about the pricing.

"This price was set based on the 20 trading days prior to the shareholders' meeting or the announcement date, not today's price. It's normal for Mr. Tan to lose money, but if you include the shares his company bought before, he didn't actually lose much."

Based on the 2000 million yuan acquired in the previous block trade, Jinyoukang's cost was approximately 16.24 yuan, with a peak profit exceeding 35%, which was quite a topic of discussion in the market at the time.

However, if we add the private placement plan targeting Tan Jincheng himself, which involves 6000 million shares and costs a total of 10.39 billion yuan, the total cost rises to 17.32 yuan, resulting in a loss of 1860 million yuan compared to today's closing price.

"This amount of money is nothing to Boss Tan. What he wants is a percentage of the shares. But we can buy Boss Tan's shares at the bottom. He has a professional team, and the market value of 35 billion yuan he set must be based on something."

"That's right. We can buy as long as the market value is below 35 billion yuan. Those of you who are stuck with losses are in luck. You can buy more shares now."

Based on the existing share capital of 1.96 million shares, Tan Jincheng's shareholding ratio immediately rose to 30.61%. After the share capital registration is completed, the share capital will be 2.36 million shares, and Tan Jincheng's shareholding ratio will be as high as 25.42%.

"We need to wait until after September to implement the subsequent transfer agreement. Thank you, Mr. Tan, for this."

Liu Fangyi's gratitude was heartfelt, because no matter what, Tan Jincheng solved Inco Medical's most pressing funding problem. Unlike an IPO, the costs of a private placement are relatively low, and Inco Medical was able to obtain 7 million yuan in cash, which greatly supplemented the company's cash flow.

According to relevant regulations, Tan Jincheng and his related accounts, who are identified as financial investors, are prohibited from acquiring any shares in the secondary market within the next 12 months.

In other words, 60 million shares and a 25.42% stake after the share issuance are the most that Tan Jincheng can get. The regulatory authorities' punishment of Jinyoukang has actually been extended to May 30, 2020.

To gain control of Inco Medical, Tan Jincheng can only continue to increase his holdings through the primary market, acquiring shares from himself and other institutions via negotiated transfers.

In other words, he is now refusing to acknowledge his debts, and he is not afraid at all even if Tan Jincheng acquires the shares held by other institutions at a price higher than the market price.

Because as long as his shares remain unchanged, he can initiate an anti-takeover process by increasing his shareholding in his own name or in the name of the company, or by issuing new shares through private placement.

"Okay, then let's talk about it after the third-quarter financial report comes out in September."

Tan Jincheng looked relaxed. He was satisfied with the current situation. He had considered the potential risks of Liu Fangyi reneging on his promise, but he did not buy Inco Medical for absolute control.

He has no interest in running a medical company; he is only doing this to ensure that he and his companies have a guarantee in case of unforeseen events in the future.

It's important to know that by transforming its production lines, Dizi became the world's largest mask manufacturer, not only supporting society but also reassuring its employees. Tan Jincheng understood all too well the initial demand for masks.

This need is more of a spiritual one. In fact, in his past life, he often went around without wearing a mask. It wasn't because he was particularly rebellious, but because wearing a mask would make him short of breath and very uncomfortable.

After overcoming the initial period of psychological panic, he rarely wore a mask anymore.

But not everyone thinks like him. Even in the later stages, many people still hoard this stuff. With so many employees under him now, I believe many of them have this mentality.

If they can't buy it, they might not come to work, which would cause a huge disruption to the company's normal production.

Now things are much better. Their boss is a major shareholder in a personal medical supplies company, which can fully guarantee the supply, so the employees will definitely feel much more at ease.

So he wasn't that concerned about whether he was the largest shareholder or not. With this 25% stake, he could guarantee his say in Inco Medical. Moreover, he believed that Liu Fangyi wasn't that short-sighted.

He should be able to foresee the consequences of offending a business tycoon by resorting to dishonest means.

If the founder transfer agreement is followed, Tan Jincheng would need to acquire at least 1080 million shares to become the largest shareholder with a 30% stake, surpassing Liu Fangyi's 29.94% stake.

However, Tan Jincheng's ultimate shareholding target is 33%, or 7788 million shares. Currently, there is still a gap of 1788 million shares to reach this target. Whether to transfer the shares according to the minimum standard or to transfer 1788 million shares in one go is up to Liu Fangyi's own choice.

He didn't care and could accept it all. After all, once the transfer was agreed upon, Liu Fangyi wouldn't be able to make any other transactions for a short period of time, and the two sides would be back on the same starting line.

In reality, the impact of unexpected events at the end of the year on the stock prices of most medical companies will not be felt until February of next year. After all, these are unexpected events, and institutions that want to make big profits will have to build their positions slowly.

In terms of time, there is still time.

"Does Mr. Tan have any suggestions for Inco's business strategy?"

Although Tan Jincheng was defined as a financial investor in this private placement, Liu Fangyi absolutely did not believe that any financial investor would spend more than 10 billion yuan at once to buy more than 25% of a company's shares.

"I do have some suggestions, Mr. Liu, please take a look. However, I am not an expert in this field, so the final decision rests with you and the board of directors. If you think they are good, please adopt them; if you think they are wrong, just pretend you didn't see them."

Chao Chenglin gave Tan Jincheng a wink, and Tan Jincheng didn't make any gesture. Having acquired so many shares, his people would definitely be placed on the board of directors of Yingke Medical, and Chao Chenglin was the director he sent to Yingke Medical.

"That's a layman's talk. If we're talking about laymen, I'm a layman too."

Taking the documents from Cheng Linfeng, Liu Fangyi smiled, while also being slightly shocked by the efficiency of the man in front of him. It is said that Tan Jincheng's companies are highly efficient, and he could feel it through this acquisition and the documents in his hand.

The thick stack of documents was clearly the result of careful analysis, not as easily dismissed as he claimed. Perhaps he already had a deep understanding of the company from the moment he approached me, or even earlier.

Tan Jincheng's suggestions weren't particularly innovative; they can be summarized into four aspects: market expansion, product optimization, cost control, and capacity building. However, there were still quite a few highlights among them.

"This increased investment in e-commerce platforms is excellent; Mr. Tan truly understands the internet."

Inco's previous e-commerce strategy was indeed weak, mainly due to a lack of funds. E-commerce today is not like it was ten years ago; it requires a lot of traffic investment. While achieving full platform coverage would indeed greatly increase brand awareness, the investment would also be substantial.

Taking Taobao and Tmall as examples, the cost of just buying traffic alone can be quite substantial each year.

But now that he has money in his pocket, this problem no longer exists. If the sugar daddy doesn't mind, what is he afraid of?

Is there any explanation for converting the production line in Jiangxi Province into a mask production line?

"Oh, this is the result of our team's research. The production lines in Jiangxi Province are currently somewhat outdated. In addition, the assessment results show that if we invest in gloves, there is also a possibility of overcapacity."

"In that case, we might as well increase investment in other business areas and then increase brand exposure through e-commerce advertising."

Inco Medical's main business is making gloves, but it also has a mask business, mainly producing medical masks and ordinary KN95 masks. Even without considering the impact of emergencies, ordinary masks are the best way to expose the brand.

While not many families may stock up on medical gloves, quite a few do, especially in cities like Beijing where willow catkins fly everywhere every year, and for people with pollen allergies in the spring. They all have the habit of stocking up on masks.

After pondering for a moment, Liu Fangyi said, "It is indeed feasible, but I need to take it to the board of directors for discussion."

For a medical device company that produces personal healthcare products, product strength is undoubtedly the most important factor, but brand strength is equally important. In addition to the quality of their products, internationally renowned companies such as 3M and Honeywell also owe their success to their strong brand promotion efforts.

In China, peers like Winner Medical and Zhende Pharmaceutical have greatly increased their brand exposure through numerous e-commerce platforms and offline pharmacies.

Tan Jincheng's point, rather than being a preparation for unforeseen events, was actually aimed at building the Inco brand's strength. Only by establishing the brand can the company achieve stable profitability.

"I understand. Like I said before, if Mr. Liu thinks it's feasible, then do it; if he thinks it's wrong, just pretend you didn't see it." Liu Fangyi smiled but didn't say anything. The client's request to increase investment in the e-commerce platform was something he could decide directly, but changing the production line was a big deal. Although it was reasonable, it definitely needed to be discussed at the board meeting.

However, Tan Jincheng's attitude did make him feel much better.

People in the internet industry say that Tan Jincheng's investment style is similar to Tencent's; he will give advice and resources, but he won't really interfere with the company, which is completely different from Alibaba's domineering approach.

However, in a true sense, the ByteDance system is more moderate than the Tencent system.

"Okay, that's all for now. If there's any further communication, Mr. Liu can contact our General Manager Cheng, or you can contact me directly. I'll be going now."

Today is not only the day Inco Medical makes its announcement, but also the day Tesla announces the pre-sale price of the domestically produced Model 3. He still needs to go back and study it with his team.

The layout for the medical business is now pretty much complete. There will be some other investments later, but they certainly won't have such a big impact again, as the medical field is quite complex.

His father, Tan Lihua, was able to leave his small mountain village, and several of his uncles also had successful businesses. In addition to their own efforts, they also had some family wealth. In that era of scarcity, it was much more difficult to raise a vocational school student than to raise a college student today.

In the 1970s and 80s, vocational school graduates received very good treatment. Tao Qinian, the first person from his hometown to come into contact with him, had only a vocational school diploma as his first degree.

In fact, there are quite a few people in the Tan family who are in the medical field, and the family's initial plan for Tan Jincheng was also to study medicine. However, plans can change quickly, and it can be said that this circle is even more complicated than the automotive circle.

To put it bluntly, who would want to tighten screws if they could handle a scalpel, right?

"Okay, then I won't bother you any longer, Mr. Tan. If anything comes up later, I'll come to Ningbo to find you. It's too much of a hassle for you to keep coming to Shanghai."

In terms of sincerity, Tan Jincheng really gave him a lot of face, and also made him quite popular recently. From a profit perspective, in addition to bringing massive cash flow to Inco Medical, Tan Jincheng also attracted a lot of research from institutions.

Those funds and investment institutions that used to ignore him and Inco Healthcare are now eager to visit and conduct research.

While having a sword hanging over your head is certainly uncomfortable, having that sword by your side provides a great sense of security. With Tan Jincheng's vision and operational capabilities, no one will look down on Inco Medical anymore.

Even though the current market value is not as high as when Tan Jincheng took over, he believes that this is only temporary.

This document alone is worth a fortune. It's the analysis result from a team at a top domestic investment company with extremely strong connections, something Inco Medical doesn't possess.

Judging solely from the brand building capabilities and the expected growth of the second business, Inco Medical's market value would not be what it is now once the results are seen.

Transforming a production base that produces 100 million masks per month, and increasing brand exposure through e-commerce platforms and promotions, can not only drive a second business growth point, but also provide incremental growth for the first business point through this brand influence.

He has plenty of money, internet resources, and connections now; it's fair to say that the right opportunity has arrived for Inco Medical.

"One year from now, we will definitely no longer be the medical device company with the lowest market capitalization in both Shanghai and Shenzhen stock exchanges."

After seeing Tan Jincheng off, Liu Fangyi no longer felt the pressure of Cheng Linfeng's presence when facing him. He gazed into the distance and spoke with high spirits.

"That's for sure. I believe in Mr. Liu's abilities; of course, I have even more faith in our boss's judgment."

In just over a decade, it has grown from a private equity firm with very little money, which could only accumulate funds through short-term operations in the secondary market like speculative capital, into a well-known domestic and international investment institution holding shares in more than 100 listed and unlisted companies.

The difficulty involved is self-evident. As the direct decision-maker, Tan Jincheng's every decision in the early stages of ByteDance Engine could determine the life or death of the engine, because at that time everyone jokingly called his investment an all-in bet.

There was no other way; we didn't have much money. We couldn't invest in this and that like large institutions. Back then, Cheng Linfeng, Huang Ming, and others were all terrified, fearing that the company would go bankrupt one day.

He's alright; he can still find a new job. Huang Ming is different. He merged his entire company into ByteDance, so it's no exaggeration to say he's starting a second business. If it fails, he'll probably have to retire.

It was the boss who repeatedly proved his foresight amidst skepticism, demonstrating his remarkable abilities time and again. From the internet to the mobile phone industry chain, then to the automotive industry chain, and in recent years to tech stocks, the boss has always been able to identify companies that were facing various doubts at the time and intervene at the right moment.

At work, Cheng Linfeng may have different opinions from his boss, but he will always unconditionally accept the decisions his boss makes. Being proven wrong time and time again makes him a complete fan of Tan Jincheng.

So what if the healthcare industry isn't a strong point of operation? Just because it's not a strong point now doesn't mean it won't be in the future. So what if it's the medical device company with the lowest market capitalization in the two stock exchanges? How much lower can it go?

"I didn't expect President Cheng to be so supportive of President Tan's decision. It's clear that your company has a great atmosphere."

"Haha, not bad. If you get to know our boss better, you'll know that Mr. Liu's ability to run a company is hard to assess, but he's truly amazing in the investment field. Also, he's actually quite easy to get along with in private."

"Is that so? Then I'd appreciate it if Mr. Cheng could show me the way sometime."

Liu Fangyi didn't care much about Tan Jincheng's takeover, because it would bring him tangible benefits. However, there were also many people who disliked Tan Jincheng or were afraid that he would steal their business. The act of quickly acquiring more than 10% of Yingke's shares at the cost of violating information disclosure regulations was indeed highly criticized.

Some media outlets have linked this industry situation to the actions of the company when it took over Meizu. The company's strong takeover of Meizu purged the founding family, which transformed Meizu and brought it vitality and development opportunities.

However, people tend to sympathize with the weak. Even Meizu, with its size at the time, couldn't withstand Tan's aggressive attacks, let alone a company that was much smaller than Meizu.

In a sense, Tan Jincheng, in the capital market, is seen by some who dislike him as no different from Yao Zhenhua, a barbarian.

"32.8 yuan; haha, this price is quite interesting."

Boss Tan doesn't care what others think of him; he's not a hundred-yuan bill, so he can't be liked by everyone.

The pre-sale price of the domestically produced Model 3 has finally been released. Tesla officially announced the starting price through its official website and official media, and the price is quite interesting.

Based on the current exchange rate, the starting price of the domestically produced Model 3 is approximately US$4.82, which is somewhat different from the US$3.5 pure electric vehicle that Musk mentioned. However, it is still much cheaper than the imported version.

It's unclear whether owners of the imported Model 3 can accept the 9.3 yuan price difference.

"Leaving aside the $3.5 mark, it's unclear whether the market can accept this price. Also, with this pricing, the initial profit margin for the domestically produced version is likely to be low."

According to the information obtained, the price of 32.8 yuan was entirely determined by Musk. Tesla or Musk's intention was probably to test the market and clear the inventory of imported versions.

After all, once the price difference exceeds 10 yuan, there is really no need to buy the imported version. They are all pretty much the same, so why waste money?

"Indeed, this pricing is very favorable to us and does not meet market expectations."

The market generally expects the domestically produced version of the Model 3 to be priced under 30 yuan. This includes Tesla's own testing the waters, as well as the hype from companies like Weilai. From the perspective of corporate competition, a Tesla priced under 30 yuan is indeed very competitive.

The price of 32.8 yuan is definitely advantageous for Wei Lai, but psychologically speaking, Tan Jincheng hopes that the domestic version can be priced below 30 yuan.

There's no other reason than that this not only puts pressure on other companies, but also motivates future progress. It's difficult to make progress in a market without competitors.

Look at Apple over the years, it has been releasing incremental improvements, and as a result, its market share has been getting lower and lower.

If Weilai continues in this environment for a long time, it will be detrimental to the company's growth. No one can dominate the market share in the automotive market. Once a company relaxes its guard, it will easily be eliminated by the market.

"It's a pity that our Factory Director Ma is still so individualistic. I just don't know if his test will be accepted by the market."

If Tesla is the iPhone of the automotive world, then Weilai is positioned like Samsung. Both aim to gain global market share, and having such a competitor is a good thing for Weilai.

Unfortunately, Musk's persistence this time did not bring the pressure that Wei Lai had imagined. If he had really managed to get the number of people under 30, it would have been a huge breakthrough.

However, Tan Jincheng can understand Musk. Tesla is not lacking orders right now. They can't even keep up with the global delivery of Model 3s. Improving cash flow and gross margin is the most important thing for Tesla right now.

"Promote according to the established strategy and launch a key marketing campaign for ET5."

On June 3, affected by factors such as the lower-than-expected pricing of the Tesla Model 3, Tesla's stock closed at $178.97, a drop of 3.42%, with a market value loss of more than $10, and the stock price further fell to a new low.

Conversely, Weilai Co., Ltd., which is regarded by the market as Tesla's biggest competitor globally, saw its stock price rise by 1.85% to close at 137.88 yuan, with its market value returning to 3000 billion yuan.

From January to May, the global auto market performed poorly, and the stock prices of automakers also did not perform as well as before. Weilai Co., Ltd. has also remained below 3000 billion yuan for a long time.

The stock price performance of the two companies is considered a landmark event by the capital market, foreshadowing their different performances in the second half of this year.

(End of this chapter)