2003: Starting with Foreign Trade

Chapter 957 Technology Alliance and an Amazingly Efficient Acquisition Team
The so-called trip to the research institute was naturally a joke, and the boatman chuckled along. However, to be honest, he was still a little scared. Wei Lai's treatment of technical personnel was recognized throughout the industry, and it was difficult for anyone to refuse Wei Lai's poaching.

"Alright, stop talking nonsense. He calls you 'Uncle' all the time, but he shows no mercy when he gets going."

Both semiconductors and the new energy vehicle market are currently booming industries with promising prospects. However, there are not many domestic companies that can produce automotive-grade chips on a certain scale.

Although the subsidiary was dragged down by a major customer and suffered a financial crisis, it did not simply lie down and wait for the parent company to bail it out. Instead, it actively sought new customers. Moreover, Snow Industry is now one of the mainstream anode material suppliers in China and has a certain reputation.

It's impossible to say that no capital has coveted National Technology, which has been without a controlling shareholder for many years. National Technology is also extremely useful to BYD, but there are very few companies that dare to take action like ByteDance's ByteDance Engine.

There are many reasons why they dare not make the move, but the biggest problem is that they don't have the money. Even though National Technology has fallen to its lowest point in recent years, it still has a market value of more than 30 billion yuan, and the acquisition requires 50 billion yuan in cash.

In the current climate of capital market contraction, there are not many investment institutions or companies willing to invest 50 billion yuan in semiconductors at once. Even Hillhouse Capital, which claims to invest in high-tech companies, has put its money into Gree in search of stability.

The ambitious domestic semiconductor substitution initiative is currently not viewed favorably by many, including retail investors in the secondary market. It's mostly driven by speculation, with industrial capital, local governments, and large corporations being the main investors.

Ms. Dong's claims about manufacturing chips are mostly hype. Even Lei Jun's Xiaomi has been talking about it for years, but the actual investment is barely noticeable. This is the current state of the domestic semiconductor industry.

Those who are eyeing National Technology are just big-time speculators who play with chicken cups, only thinking about making a profit during the stock price speculation. No one really wants to take over a semiconductor company facing difficulties.

"Speaking of which, National Technology and BYD are both located in Shenzhen. Uncle, haven't you ever been tempted by them all these years? Their patents alone are quite useful."

National Technology has been without a controlling shareholder since 2013, which is now seven years ago. Both Weilai and BYD operate across the entire industry chain, so National Technology is also of strategic significance to BYD.

The boatman rolled his eyes at Tan Jincheng, annoyed: "Isn't that obvious? Don't you know what our company was like in 2013?"

From the photovoltaic market that started in 2008, to the dealer grid exit scandal in 2010, and then to the impact of smartphone upgrades, BYD has actually had a tough time all these years.

It wasn't until last year, with the rapid development of the new energy vehicle market, that they were able to truly recover. The whole process lasted for almost ten years.

BYD's new energy vehicles are well-known, but if you were to ask consumers about their impressions of BYD in the gasoline car market, aside from poor quality and the F3, the only other thing they might recall is the story on a car forum about an F0 owner's girlfriend being stolen away by a BMW owner.

It has to be said that this scandalous news back then dealt a very heavy blow to BYD's brand image.

BYD's poor performance in the investment field is not because it doesn't want to invest, nor because the CEO only values ​​technology; otherwise, they wouldn't have created DiChain. No company boss can truly resist finance and investment.

The root cause is still a lack of money. Investing is not a sure thing. If Dizi loses money on a few investments, their stock price may crash again, repeating the situation of the past.

"Speaking of which, the model you came up with is pretty good. Once we've accumulated some more strength, we can try to learn from your massive model and make some investments."

Unlike internet companies, physical businesses don't have such extravagant cash flow. Tan Jincheng is known as the cash king of Zhejiang Province, but that only applies to ByteDance. If Weilai Group were to take the lead in acquiring Guomin Technology, they still wouldn't be able to afford it.

Many industrial companies' financial deterioration actually begins with their investments. For example, National Technology, in a sense, Zhang Xupeng's cautious and resolute business strategy of not making reckless investments is very much in line with the current market environment.

Tan Jincheng developed ByteDance Engine a long time ago because he had experience in physical business operations. He used ByteDance Engine to lead investments, and if it lost money, he would stop and focus on his main business, which had a smaller impact on the company.

On the other hand, the controlling shareholder makes a large number of investments and acquisitions, and then uses the controlling shareholder as a link to connect the invested and acquired companies with the main business, thereby promoting cooperation among these companies in the industrial chain.

There are two major advantages to doing this. First, it reduces risk. ByteDance only has money left, so if a company it invests in or acquires loses money, it won't harm ByteDance itself. Second, this cooperative model can also bring a certain amount of business to the invested and acquired companies, thus activating the entire system.

Take Meizu as an example. By cooperating with Weilai, Meizu has gained a major client like Weilai, which can bring certain revenue to the Flyme business unit. After the business matures, it can also gain more clients.

Wei Lai believes that this cooperative model can also reduce R&D expenditures. If Guomin Technology successfully acquires Guomin Technology, it will follow the same path as Meizu. However, Tan Jincheng has some other ideas about Snow Industry.

"Speaking of which, Yuechi Auto is already cooperating with us on plug-in hybrid technology. When will you, Weilai, be able to have some discussions with us on pure electric vehicles?"

Everyone says hybrids are good because they offer more range options, but in reality, pure electric vehicles sell better. To date, the sales share of pure electric vehicles and hybrid vehicles has been 74% and 26% respectively.

Pure electric vehicles are selling very well in the current market, and almost all new energy vehicle brands are choosing pure electric models. BYD initially developed plug-in hybrid technology, and after years of research and development, its technical strength is quite good, but unfortunately, the current market only recognizes pure electric vehicles.

This is also why BYD's sales have always been suppressed by Weilai. Although BYD has increased its investment in pure electric vehicles in recent years, Weilai's established reputation in the pure electric vehicle market is hard to shake.

Compared to BYD's genuine commitment to hybrid technology, Woolai seems to be taking a more "cunning" approach to hybrid technology. Range-extended electric vehicles are a type of hybrid, but they require significantly less technical expertise.

Tan Jincheng knew that range-extended electric vehicles were selling well. After Huawei entered the car manufacturing system through Xiaokang, including Dazui, there was a lot of criticism of range-extended electric vehicles. However, after several models were blocked, he still decisively chose to join the range-extended camp.

But nobody knows what the future holds. Tan Jincheng believes in Brother Boatman's strategic vision. Even if short-term sales are greatly affected, BYD will insist on developing the hybrid platform. There must be a reason for that.

"That's also why I came here today. Actually, our two companies could set up a research and development company focused on new energy power-related research and development, and then share the technology, how about that?"

"Or we could unite a few car manufacturers and supply chain companies to form a technology alliance, pooling everyone's resources to develop technologies related to new energy vehicles."

Technology alliances exist in every industry. No matter how powerful a company is, it is impossible for it to be proficient in all technologies and do all jobs. Such a scenario only exists in novels.

Wynn has its own strengths and weaknesses, and the same is true for BYD, as well as other companies, including Tesla. Take intelligent assisted driving technology as an example. Back then, under pressure from all sides, Wynn chose to "wait and see" them.

They provided BYD with some technical support at the time, but what about a few years later? These traditional companies have achieved less in intelligent assisted driving than even emerging car companies like Xiaopeng.

Such a great selling point, is it that they are unwilling to develop it? Actually, it's due to various factors leading to technological shortcomings. Just like Tencent can do everything, but it just can't make e-commerce work, and Ali is also unable to do well in the social field.

Establishing a small-scale technology alliance and sharing the resulting technologies is relatively advantageous in terms of R&D costs, addressing weaknesses, and improving the supply chain.

The boatman chuckled and said, "The idea is quite good and feasible, but how should other car companies choose, and who will take the lead?"

Cooperation, competition, competition within cooperation, and cooperation within competition – this is the current business model. BYD does not oppose the concept of a technology alliance proposed by Wei Lai, but as Brother Chuanfu said, who should take the lead?
Whether it's a research institution or a company, it's impossible to function without a core leader. Just look at National Technology; if it had a controlling shareholder, it wouldn't have ended up in this predicament, facing delisting and acquisition.

“No one should be in charge. We can refer to the model of Horizon Robotics or iFlytek, find an industry professional with entrepreneurial intentions in this field, and each of us will provide funding and initial technology, while the startup team takes the lead.”

By using performance indicators, startup teams are given specific goals, such as what results to develop within a certain timeframe. If they perform well, they are given equity incentives; if they perform poorly, they are subject to corresponding penalties.

It's like a gamble; that's how we're dealing with the horizon right now.

Horizon Robotics, which has completed its Series B3 financing, has attracted domestic and international investors including ByteDance, SAIC Motor, Sequoia Capital, Intel, and SK Hynix. These investors have placed great trust in Yu Kai's team and have also formulated development plans for them.

Yu Kai's team initially received 5% of the shares. For each goal achieved, the entire team would receive a certain percentage of equity incentives. This was essentially a pie-in-the-sky process. By completing the goals set by the investors, Yu Kai and his team could one day become the company's largest shareholder in a real sense.

It is precisely under this incentive that Horizon Robotics has developed rapidly in recent years.

At the beginning of the year, Journey 3 was released, and Journey 2 also entered the mass production stage. This is the first automotive-grade AI chip in China, marking an important breakthrough for Horizon Robotics in intelligent driving chips.

It is precisely because of this breakthrough that Horizon Robotics has undergone significant changes this year, cutting off non-automotive businesses including toy robots and smart home products, going all-in on autonomous driving, and reducing the number of employees from 1200 to 750.

The Journey 2 chip is Horizon Robotics' core product. Based on Horizon Robotics' self-developed BPU architecture, it features high integration, low power consumption, and high performance, which can meet the needs of the current low-end electric vehicle market.

On the customer side, Horizon Robotics has a number of leading manufacturers, including Woolly, SAIC, Changan, Great Wall, Hongqi, Audi, GAC, BYD and others. It can be said that most of the mainstream domestic car companies have expressed their intention to cooperate with Horizon Robotics.

It's worth mentioning that ByteDance's acquisition of National Technology does not conflict with Horizon Robotics being its largest shareholder. There are many automotive-grade chips available, but Horizon Robotics focuses on automotive-grade chips for the autonomous driving field.

The automotive-grade chips developed by National Technology are used in the automotive electronics market, including intelligent headlight control, motor control, body control, virtual instrument panel, and smart cockpit.

In addition, there is a security chip, which includes functions such as security encryption, security authentication, and anti-tampering, to provide protection for vehicle security.

These are all highly compatible with WIL's current research and development in the field of intelligent cockpits. In addition to these two types of chips, there are also power chips, sensor chips, memory chips, and so on.

Automotive chips can be broadly categorized into nine types, including control chips, computing chips, and sensor chips.

A high-end pure electric vehicle can use around 2000 chips, and in the future high-end intelligent electric vehicle field, the number of chips installed in a single vehicle is expected to reach more than 3000, which is a huge demand.

All Tan Jincheng can do is try to gain control over one or two aspects of the process, thereby reducing the overall cost of automobiles. This is the case with Horizon Robotics, and it is also the case with National Technology. "This approach is indeed feasible. You made an excellent choice in selecting the Horizon Robotics team. We can certainly try to replicate Horizon Robotics' experience again."

After saying that, the boatman laughed and said, "Everyone says that you are quite domineering when it comes to equity, and that is indeed the case, judging from your acquisition style of Meizu, National Technology, and even Inco Medical."

"But you are also quite permissive in some aspects; you really are a contradictory person."

"There is no contradiction. Equity is a guarantee for my own and the company's interests, while delegating means entrusting professional matters to professionals and avoiding outsiders instructing insiders."

"You seem quite lucid."

BYD has also invested in Horizon Robotics. As Horizon Robotics' largest shareholder, Tan Jincheng has provided substantial support to the company, including funding, test vehicles, and even some of the initial work done by the Wei Lai team.

There was very little interference from Horizon Robotics. Even in terms of financing, the opinions of Yu Kai and his team were the main focus. Whether in public or private, Yu Kai has stated more than once that Horizon Robotics' rapid breakthroughs were largely due to the support of its major shareholders.

Without the performance of the W1 chip, Horizon Robotics' chips could not have accumulated so many customers so quickly, nor could they have become an important part of domestic substitution in the field of intelligent driving chips.

"Uncle, since you think this is a good idea, let's study it carefully."

"What? Aren't you busy with your acquisition anymore? The news has spread that you demanded a meeting from the management of National Technology as soon as you entered the company, and now you're not in a hurry?"

“I don’t need to be involved in negotiating the share transfer agreement. If I have to handle such a small matter, then what’s the point of bringing them here?”

"That's true, Mr. Cheng is your right-hand man."

The negotiations, personally led by his capable lieutenant Cheng Linfeng, progressed very quickly. His first priority was to secure deals with Liu, the bigwig behind the Chicken Cup, and Yu Bo, the third-largest shareholder.

"Mr. Liu, Mr. Yu, according to the agreed price we offered, the profits you two would make from National Technology are quite considerable. Why don't you just part with it?"

Liu Yiqian and Yu Bo together hold 2.65% of the shares of Guomin Technology. Adding the 0.914% stake held by ByteDance, the total shareholding reaches 3.564%, making ByteDance the de facto largest shareholder of Guomin Technology.

"Your company seems to be trying to reap the benefits."

Unlike Yu Bo, Liu Yiqian was somewhat annoyed by the sudden appearance of the massive engine.

He got involved with National Technology very early on, as early as 2013 when he made a large purchase of National Technology shares, at which point his shareholding exceeded 4.5%, approaching the threshold for disclosure.

He spent 2 million yuan back then, and through subsequent share transfers and reductions, he has long since recovered that 2 million yuan cost. He has made a fortune from National Technology.

According to the acquisition price offered by Cheng Linfeng, the shares he currently holds are worth 8220 million yuan.

As an investment tycoon who made millions in A-shares back in 1990, this 8000 million yuan is not much for him, and he will hold onto it unless something unexpected happens.

According to Liu Yiqian, the company suffered two consecutive years of major financial crises, which almost wiped out all the profits it had made since its founding. However, on the other hand, Guomin Technology was now at its most undervalued since its listing.

It's important to understand that although National Technology has experienced a financial crisis, its main business has not been affected. In fact, its subsidiary Snow Industry, which also experienced a financial crisis, is very valuable. ByteDance's intervention at this time is simply reaping the benefits.

Of course, he also had to admit that large investment institutions like ByteDance had very sharp eyes.

"You can't say that. Mr. Liu doesn't lack an investment company. As long as he has money in his pocket, there are plenty of opportunities in the A-share market, don't you think?"

Cheng Linfeng still holds this kind of super-skilled individual investor who grew up in the early days and has been active in the A-share market for nearly 30 years in the industry. He hopes that the deal can be reached smoothly.

Liu Yiqian squinted at Cheng Linfeng and said slowly and deliberately, "8000 million yuan is really not much to me."

Cheng Linfeng understood perfectly well what he was thinking. He simply wanted to obtain some benefits through other means, such as the subsequent private placement of Weilai Shares, offline subscriptions for other companies in the Julang Group during their IPOs, or even making connections for a certain investment.

"Haha, I understand, but I can't promise you anything right now. However, I can recommend you to our boss."

Cheng Linfeng said he couldn't make the decision, which Liu Yiqian thought was pure nonsense. It wasn't a violation of any rules. However, that was enough. He decided to accept the offer and stop while he was ahead. The price of 9.15 yuan offered by the other party was really very sincere considering the current state of national technology.

What can he do if he doesn't sell? Unless he also acquires shares on the market at a price of 9.15 or higher, but even if he acquires more than 10%, it won't have any effect. ByteDance can still use other means to privatize National Technology.

Preventing ByteDance from privatizing National Technology? He's not stupid.

"Thank you very much, Mr. Cheng. If I have the opportunity to meet Mr. Tan and have a private chat, that would be something I look forward to very much."

Liu Yiqian was very curious about this young man who had achieved great success in the industrial and capital circles at the age of only 34. After learning about the acquisition process from Sun Yingtong, Liu Yiqian was deeply moved.

Using professional tactics, he persuaded Sun Yingtong to suspend the trading of Guomin Technology through his connections. Then, riding the wave of public attention, he made a surprise visit to Guomin Technology's headquarters and, without giving the management any chance to react, demanded an extraordinary general meeting of shareholders in a forceful manner.

All these choices demonstrate that this legendary young man has a very precise grasp of timing and interpersonal relationships.

Huang Zhang's loss was entirely justified.

"No problem. Our boss will be attending the shareholders' meeting on Sunday. I can introduce you then. Speaking of which, our boss has mentioned you before."

"Oh, really? Why did you mention me?"

Cheng Linfeng was momentarily speechless. "How would I know how to bring this up? I was just saying it casually, it was just a polite remark."

After securing Liu Yiqian's deal, Yu Bo, the third-largest shareholder, had an easier time. Unlike Liu Yiqian, Yu Bo was not a professional secondary market investor. Having also come from ZTE, he was more of an entrepreneur. His purchase of National Technology was simply due to his optimism about the company's future prospects and his familiarity with it.

In addition, Yu Bo got involved relatively late, and his cost basis was 8.19 yuan. At the current price, he was already losing a lot of money. Now he was able to exit with a profit of more than 10% instead of a loss of more than 20%. He has nothing to complain about. Moreover, there is the relationship with ZTE.

"Besides Mr. Sun, Mr. Liu and Mr. Yu, the three major shareholders holding more than 1% of the shares, have already signed agreements with us. We are now the largest shareholder in effect."

At night, in the hotel, Cheng Linfeng reported on the day's work: the two major shareholders had been dealt with, and the subsequent smaller shareholders would be relatively easy to handle.

As of August 17, the day before the extraordinary general meeting of shareholders, Cheng Linfeng signed a 4.036% equity transfer agreement through continuous meetings, increasing his shareholding in ByteDance Engine to 4.95%.

"That's really cheap. They only spent 2 million to acquire 4% of the shares."

Looking at the documents, Tan Jincheng felt a sense of absurdity. It seemed even more absurd that he could become the largest shareholder of an A-share listed company with less than 5% of the shares.

This is the A-share market; nothing new is new here.

"Continue the acquisition, and also prepare for tomorrow's extraordinary general meeting of shareholders."

Synopsis: Originally, Lin An just wanted to play games to pass the time.

Until he discovered that he could obtain martial arts techniques and skills from his girlfriend in the game...

Everything has changed.

...

My name is Wan Wanqing, the youngest martial arts master on Blue Star.

Originally, I thought that only martial arts were worth pursuing in life.

Until I met Lin An…

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(End of this chapter)