The Birth of Shanghai's First Conglomerate

"Honey, it seems like we've made a bit too much money this year."

In late September evenings, Song Yanxi even started taking stock of her family's assets.

Not to mention their annual net profit of over 10 billion yuan, they have already made a fortune from the rise in overseas stocks alone.

Nvidia, in particular, has seen its stock price skyrocket, and it just won't stop.

This made Chen Pingsheng, who originally planned to cash out gradually, want to wait another year or two.

Anyway, he's not short of money now.

"This is indeed somewhat unexpected, but it also illustrates the importance of the AI ​​industry. Both the capital market and the global market are very optimistic about it."

"Honey, didn't you used to be thinking about making AI phones? Maybe next year our family can buy a major mobile phone manufacturer."

"The idea is indeed there."

It's already extremely difficult for new players to enter the mobile phone market; without any core technology, entering the market is practically a death sentence.

Just look at Dong Mingzhu, who used to make mobile phones, and 360 and Alibaba, and you'll know.

These people all once commanded great influence in the business world, but in the end, they were all greatly disappointed.

Chen Pingsheng wanted to do it mainly for two reasons: one is that Tengfei AI has invested over 80 billion yuan in it this year.

Over the past seven years, he has invested a total of 150 billion yuan, including over 100 billion yuan in solid-state batteries over the same period.

In these two core technologies alone, no other major domestic manufacturer can compare.

Furthermore, the core technologies of mobile phones are actually quite limited, and Android and Apple systems still dominate the two major camps in the global mobile phone market.

Besides that, there are Qualcomm chips and Samsung screens.

These are the core technologies that make up a smartphone. The assembly of the remaining components, including debugging, depends on the company's own management capabilities.

There is no doubt that Chen Pingsheng's advantages in large industrial factories are still very obvious.

In addition, AI is the core technology for the future of the mobile phone sector, and the company clearly has a greater advantage in this area.

In addition, there are Tencent Entertainment and Tencent Media, which he owns.

It is entirely possible that a global mobile phone brand will be established within the next two to three years.

He acted immediately, treating the matter as the group's top priority.

On October 1st, National Day, Chen Pingsheng took his wife Song Yanxi and their two children to visit a major domestic mobile phone manufacturer.

Such as Xiaomi, OPPO, Huawei, etc.

In addition to visiting the sites, he would also ask questions and seek advice from these veterans in the mobile phone industry.

His original plan was to directly acquire one of the top five domestic mobile phone brands.

To this end, he offered 150 billion yuan for the complete acquisition of Blue-Green Plant 2.

He bases his mobile phone development entirely on the AI ​​technology he already possesses, including solid-state batteries.

Having these two technologies is enough to give it a place in the future mobile phone market.

These are the only two major mobile phone manufacturers that might sell their products in China.

Unfortunately, the acquisition deal fell through.

Chen Pingsheng simply started from scratch, transferring a large number of senior managers from the group, and also drawing out tens of thousands of senior R&D engineers.

Yu Jinshan established a wholly-owned subsidiary of Tengying Group called Tengfei Mobile.

Many large manufacturers, when they first enter the mobile phone industry, usually start with contract manufacturing.

The aim is to obtain the greatest benefit with the least cost.

Of course, this is also one of the best ways to reduce risk.

Chen Pingsheng would definitely not do that.

He didn't hesitate at all; since he had taken on this task, he had to do it well.

The spending spree was also meticulously planned.

On October 12th, Jinshan Group announced in Shanghai that it would invest 13 billion yuan to build its own super factory for mobile phones.

With their management experience at Tengfei New Energy's super factory, this area is not difficult for them.

On October 15th, another investment of 22 billion yuan was announced to build the Eco-Lake Global R&D Center for Tengfei Mobile.

After completing the planning and construction of the super factory and R&D center.

On October 18th, it was announced that it would invest 10 billion yuan to establish branch R&D centers in three other top-tier cities in China.

If you want to make technology products, core technology is the most important thing.

After assembling the entire R&D team, he announced on October 21 that he would spend 13 billion yuan to buy Meizu phones and the entire team from Geely.

This was also the earliest domestic independent smartphone brand, second only to Taiwan's HTC before 2010.

Unfortunately, in the subsequent smartphone wars, it fell further and further behind due to internal chaotic management.

Unlike Luo Yonghao, who manufactures mobile phones, Chen Pingsheng doesn't need to raise funds at all, nor does he need to worry about his revenue for the next three years.

He could easily spend three to five years perfecting this.

Everything is based on the premise that we can become one of the world's top five mobile phone manufacturers in the future.

It may even go further and become second only to Apple and Samsung.

It's a bit too difficult to say that we can surpass it; surpassing it isn't just about sales volume.

Profit is more important.

Apple's annual net profit is over 100 billion US dollars, and Samsung Electronics' profit in 2023 was also around 80 billion RMB.

Samsung is number one in sales volume, but its profits are more than ten times lower than Apple's; they're not even in the same league.

Let's put it this way: Apple wants sales figures, so they release iPhones costing two or even three thousand.

It can easily surpass Samsung and has no rivals in the same class.

Profit is the ultimate and most crucial metric for evaluating a company, determining its future market value.

Apple still dominates the global mobile phone market.

Last year, the global mobile phone market generated a total profit of $1200 billion, with Apple taking $900 billion of that.

It accounts for nearly 90% of the entire industry.

This is unimaginable in any other industry, and only in the technology industry can such a dominant position be achieved.

He certainly wouldn't dare to think about surpassing Apple within five years, and he probably wouldn't dare to think about it in the next ten years either.

To be able to achieve something comparable to Samsung would be an unimaginable success.

In October alone, he announced the launch of hand dryers, a series of moves that far exceeded industry expectations.

He's throwing 70 billion yuan into this project, making him a prime example of someone in China who isn't short of money.

Chen Pingsheng has never believed in the idea of ​​making big profits with small investments; he usually makes big investments with large investments.

The same applies to technological products; car manufacturing has only succeeded because it has invested far more in the entire industry chain than its competitors.

The same applies to making mobile phones.

This month, he cashed out his entire 1% stake in Google, netting $165 billion.

It's roughly 1150 billion RMB, which will be used to develop Tengfei Mobile.

He originally planned to acquire a major brand directly, but none of them would sell to him, so he had to take out hundreds of billions of yuan to build his own business.

Besides the super factory, the acquisition of Meizu mobile phones, and the establishment of self-built R&D centers in four super first-tier cities.

The most important thing is to build offline mobile phone sales channels.

This is also the most time-consuming part.

Both OPPO and vivo have been able to maintain their positions among the top five mobile phone brands in China by relying on their extensive offline distribution channels.

This is also the main reason why it is difficult for major manufacturers to create a new mobile phone brand. To put it bluntly, it is extremely easy to make a mobile phone.

For chips, look to Qualcomm; for operating systems, look to Android; for assembly, look to contract manufacturers.

These three items together don't cost much at all; the key is that if you want to sell them well, you must build your own offline sales channels.

The old model of using a light-asset internet sales approach, like Xiaomi's, is no longer viable.

Xiaomi has effectively blocked this path. Before a mobile phone brand becomes established, it's impossible for any channel franchisees to be willing to join.

Once established, the franchise model will lead to profits being distributed among multiple layers, eventually making it impossible to maintain a cost advantage.

Xiaomi, which once sold mobile phones for 1999 yuan using an internet-based, asset-light model, had an absolute price advantage.

Now that Xiaomi stores are everywhere, this advantage is becoming increasingly rare.

It can only be said that the operating costs of offline stores are all passed on to mobile phones.

This is also the main reason why Xiaomi products are becoming increasingly expensive.

He has already invested 70 billion, and the remaining 45 billion is for research and development in the next year or two.

Initially, they had to build their own sales channels, so Chen Pingsheng invested another 10 billion yuan.

To put it bluntly, "getting started early on" means opening offline channel stores for mobile phone sales.

Based on an investment of 500,000 per company, he could open 20,000 companies at once.

It sounds like a lot, but considering the mobile phone stores that both OPPO and Vivo have in various towns and villages, you realize that 20,000 stores is just average.

The initial investments in mobile phone stores are mainly concentrated in first-tier cities.

Only by doing well in first-tier cities can we rely on the franchise model to expand to various towns and villages in the future.

Without even looking at anything else, just looking at his current amount of capital makes it clear why the mobile phone industry is so difficult to enter.

Without a base of tens of billions, Xiaomi and Oppo/Vivo can easily crush you.

He brought in hundreds of billions to secure a place in the future.

Not to mention that Tengying Group had accumulated a lot of experience in super factory management, as well as AI technology, including solid-state battery technology.

The only weaknesses are the system and the chip.

These two can be completely compensated for by having Android and Qualcomm.

He has been developing his own AI system. Whether he will succeed in the future is unknown, but it is clear that if he succeeds, it will be of great significance.

If Tengfei Mobile were to act quickly, it could be manufactured in just a few months.

Chen Pingsheng did not intend to do that. He planned to take one to two years before officially launching his Tengfei mobile phone.

Either don't launch it at all, or if you do launch it, it must be a phone with true core technology that can make a splash in the market.

After all, there is no shortage of mediocre mobile phones in China.

By absorbing all of Meizu's mobile phone technologies and relying on its own four R&D centers, it can cultivate new core technologies in the mobile phone field.

More importantly, they will apply all their AI technology, solid-state battery technology, and other technologies to the new phone.

Then, through an investment of over 10 billion yuan in a super factory, the perfect matching and assembly of mobile phone components will be achieved.

All of this takes time.

He wasn't in such a hurry as other big companies, mainly because his funding didn't require borrowing money from others, nor did he need to listen to their advice.

Disregard all short-term gains and pursue only long-term benefits.

This is the advantage of having your own capital.

Just like selling a house, once he buys the land, he can hold onto it for seven or eight years before selling it.

We're just waiting for the peak in housing prices.

The same goes for mobile phones; in October, a series of major investment directions were announced.

After that, he disappeared without a trace, as if he had never done it at all.

Those in the know understand that the behemoth that is Tengying Group has already set sail.

Just like when he was building cars, he invested the most money, and after it came out slowly and deliberately, he secretly surprised everyone.

Tengfei Mobile can quickly use money to penetrate the entire industry sector, but the technology sector includes team integration, the establishment of offline channels, and the development of proprietary technologies.

It all takes time.

He had prepared about 1600 billion yuan for the mobile phone project, of which 1250 billion yuan has already been invested, and another 350 billion yuan will be invested in the future.

The reason why we don't need to invest too much is because Tengfei AI has already accumulated the most important AI technology resources.

It's still calculated independently, and you have to know that AI is a strategic technology that he invests three to four hundred billion yuan in every year.

If you add that money into it, the annual R&D costs will be beyond imagination.

Not to mention the solid-state batteries he has already accumulated.

In terms of battery life, it will be the one with the longest standby time in the future; there will be no one else.

Seven years of investment accumulating over 100 billion yuan is no joke.

With these two trump cards, he already has enough to establish himself in the market.

It's impossible to be number one in everything; everyone has their own strengths.

Just like Apple won't release a phone priced around 1000 yuan.

No one can surpass Samsung in terms of screen technology.

It has been developing and accumulating experience since the 1990s, losing over 10 billion US dollars over a decade. It's not something you can just surpass.

With two core trump cards of his own, plus other top-notch technologies, he is absolutely capable of breaking into the current mobile phone market.

After investing in mobile phones, he won't be making any major moves for the next two or three years.

We must successfully digest all of this before we can find the group's next growth driver.

Otherwise, blind investment would be dangerous, as it would infinitely increase the risk to funds.

At least he is currently free of financial pressure.

They also hold 1% of Microsoft's shares and 4% of Nvidia's.

In addition, his current company can reliably generate 180 billion in net profit every year.

This is enough to ensure that he can push forward existing major projects, including core technologies, without any pressure over the next three years.

In three years, the technological accumulation of his entire group will definitely reach a whole new level.

As for the development of those two mountains in Jinshan, including custom-building the world's largest ocean liner, it will not be a burden for him.

He has the funds to complete this independently.

Since he invested hundreds of billions in the mobile phone industry, more and more people have come to him for cooperation, and some have even asked him to acquire their companies.

Unfortunately, Chen Pingsheng rejected them all.

He also announced directly that there would be no more major project investments in the next three years.

Everyone can understand, after all, he really spent a lot of money this year.

Whether it's building the world's largest cruise ship, developing a six-star hotel between two mountains, or now investing hundreds of billions in mobile phones and acquiring Wanda Plaza.

Any one of these actions would be impossible to complete without tens of billions of dollars.

He finished everything within a year, and for the next three years he can only rest or recuperate.

Fortunately, he had enough funds, which allowed him to complete everything within a year.

The most important thing is his AI technology, which requires an investment of 30 to 40 billion yuan every year. With such a heavy burden, he can only take a break for three years.

Time flies, and November is here in the blink of an eye.

Tencent Video Media has reached a market value of 500 billion yuan, becoming the first listed company in China's short video entertainment industry.

This is equivalent to pulling the entire entertainment industry up together against the odds.

Tencent Entertainment's market value has also recovered to over 100 billion.

He now owns more than six companies with a market value exceeding 100 billion yuan.

These are Deer Antler Coffee, valued at US$16 billion; Tengde Times, valued at 350 billion yuan; and Tencent Entertainment, valued at over 100 billion yuan.

In addition, there's Tengfei New Energy, with assets exceeding 420 billion yuan, as well as unlisted Wanda Plaza and Tengchao Commercial Management.

The group has become incredibly strong this year.

(End of this chapter)