2003: Starting with Foreign Trade

Chapter 1036 A May Full of Good News

P.S.: Still asking for monthly votes!

"I heard you guys collaborated with Lingdu?"

On May 20th, Boss Tan was in a good mood as he returned home from get off work, holding a bouquet of flowers in his hand. In 2022, the so-called "licking dog economy" was still quite prevalent, and festivals like 520 were exceptionally popular.

Even a big boss like him couldn't resist buying a bouquet of flowers to mark the occasion.

"Yes, but I don't need to go to the event."

Gu Qingqing smiled as she accepted the flowers. The department, which was based on TiMi Studio and Happy Games, has been upgraded to Orange Games, and is headed by Gu Qingqing. With the success of popular games such as Honor of Kings, Gu Qingqing has solidified her title as the Queen of Games.

Tencent and NetEase firmly hold the top two positions in the gaming industry. Orange Games and miHoYo, two game companies that mainly focus on mobile games, rank third and fourth respectively. Unlike miHoYo, Orange Games also has a lot of web games, which may seem low-end, but they are actually very profitable.

Orange Games' overseas expansion plan also started with web games. At that time, with heavily modified web games, they once occupied nearly half of the market in the Middle East, which was known as a "game desert".

"That's true. There are more and more game collaborations these days. If you attend all of them, you really won't be able to keep up."

The title of "Queen of Games" is not just a casual remark. Last year, Honor of Kings alone brought Orange Games $28 billion in revenue, with over 100 million daily active users. It's a national phenomenon, and this one game alone is enough to keep Orange Games standing strong.

In the internet field, Tan Jincheng has many proud achievements, but his most successful one is undoubtedly his snatching of the King of Glory franchise. Among the three BAT companies, he made a fortune with 91 Mobile Assistant on Baidu, and also made a killing with Wandoujia, Kuaiche, and others.

However, he didn't gain much advantage from Tencent; on the contrary, Tencent gained a lot from him. There was no way around it; back then, Orange was too weak and needed Tencent's traffic and "protection".

However, snatching the King of Glory deal can be considered a way to make up for this regret. In fact, since the launch of King of Glory, Pony Ma has thought about acquiring TiMi Studio quite a bit. Later, when TiMi Studio was merged into Orange Games, he even tried to increase his shareholding to increase his say in Orange Group and obtain acquisition opportunities.

However, how could Tan Jincheng, who was laying such a golden goose, possibly sell it to him? Besides, times have changed. It would be almost impossible for Tencent to acquire the Orange Group's businesses, which were actually controlled by Tan Jincheng, through off-market means.

According to the first quarter financial report just released, Weilai Group's revenue is approaching that of Tencent, with only a difference of more than 100 billion yuan. However, in terms of growth rate, Tencent is far behind Weilai Group. The market expects that Weilai Group is very likely to surpass Tencent in the second quarter, and its annual revenue is also expected to be higher than Tencent's.

The high revenue of the manufacturing industry is a completely different concept from that of the Internet. In the first quarter, Weilai Group achieved a revenue of 1312.1 billion yuan. It should be noted that the first quarter is often the lowest revenue quarter of the year for automobile companies.

The most conservative estimate for Weilai Group's revenue this year is over 5300 billion yuan, representing a nearly 50% increase compared to last year.

"A few years ago, collaborations were still a bit novel, but in recent years, they've been overused and aren't very effective anymore."

Gu Qingqing is now not only the general manager of Orange Games, but also the legal representative and president of Orange Group, while Tan Jincheng only retains the position of director in Orange Group.

On the surface, Gu Qingqing is the actual controller of Orange Group, and Tan Jincheng has no connection with Orange Group anymore.

"Yes, collaborations have become rampant, and Volkswagen is a bit late to the game."

In May, domestic oil prices rose again, with 92-octane gasoline exceeding 8.5 yuan per liter. Netizens joked that filling up a tank of gas could buy a bicycle. The Lamando, whose main sales are gasoline-powered vehicles, is considered a good design among Volkswagen models, but unfortunately, it was somewhat born at the wrong time.

When it comes to co-branding, there are countless brands that have collaborated with Honor of Kings. However, the Lingdu is the first car model to collaborate with Honor of Kings. The Weilai model has never collaborated with Honor of Kings, nor has it ever cooperated with Orange Games.

Weilai Auto primarily collaborates with miHoYo. In addition to Lingdu, Orange Games also has another game that collaborates with a car brand, namely the collaboration between Love and Producer and ORA.

Aside from the initial business relationship established between the Shanghai branch and miHoYo, the main reason is that Genshin Impact's influence is no less than that of Honor of Kings, and its popularity overseas is also very high, which highly overlaps with Weilai's internationalization strategy.

From virtual to reality, Genshin Impact has launched a custom vehicle skin for the Weilai vehicle, with map collaborations and real-world events featuring co-branded car models. Weilai owners also receive Genshin Impact items as gifts.

Since the collaboration began, the partnership has yielded excellent results. Through the exposure generated by the topic, Weilai saw a 30% increase in offline test drives, while the growth rate of Genshin Impact items was also very significant.

"You seem to be in a good mood today. Is there something good happening?"

Today is the day Liu Yifei officially announced her endorsement of BMW MINI, and also the day Zhao Liying officially announced her endorsement of Exeed S01, but obviously these are not two things that were already confirmed long ago.

In Tan Jincheng's words, in an era where the "simp economy" is prevalent, choosing to officially announce an endorsement on May 520th, or both simultaneously, can generate a lot of buzz.

When it came to choosing a spokesperson for Starway S01, there were indeed a few good actresses born in the 2000s, but their abilities seemed to be lacking. Tan Jincheng was not entirely satisfied and ultimately chose the most conservative option.

Choosing Xiao Zhao is also a good option. She has a high level of public favorability, and her inspirational image is more in line with the positioning of the Exeed S01 as a cost-effective model. Compared to the uncertain post-2000s actress, Tan Jincheng ultimately chose the safest option.

On the same day that the two companies announced their endorsements, fans of both companies argued fiercely online, analyzing which endorsement was better. One company said it had high sales and was a phenomenal product, while the other said it had a rich history and was elegant.

Both fan groups are quite powerful, generating a lot of buzz and achieving the desired promotional effect.

"Oh, today Seal officially announced the price and delivery time."

The pre-sale price of 212,800 yuan was higher than Tan Jincheng had imagined. He originally thought the Seal would be 10,000 yuan cheaper than the ET5, which would be 209,800 yuan, but it turned out to be only 7000 yuan cheaper.

It seems that Dizi's initial price for the Seal series was his estimated 20.98 yuan, which should be the price after the price increase across the entire series.

The psychological impact on consumers is completely different when a discount of 10,000 yuan is compared to a discount of 7,000 yuan.

Although orders for the Seal are still booming, Tan Jincheng is not worried. In the current B-class sedan market, which is quite high-end in the 20 to 30 yuan range, there are not many competing models. The Seal and ET5 have enough time to occupy the market.

In addition, as Boatman Brother said, the delivery at the end of August or the beginning of September also gives ET5 enough time to focus on the domestic market.

In terms of price, Seals don't have much of an advantage, so ET5 doesn't need to make any further price strategies. The most crucial factor is delivery time, which is Seals' biggest disadvantage. The boatman has already realized the disadvantages of their production model, but there's nothing he can do about it.

Once a business model has been established, even the founders rarely have the opportunity to change it; this is what is known as the "big company disease."

The advantage of Weilai is that Tan Jincheng realized this from the beginning. Weilai does not seek short-term gains and has clearly divided its various businesses. Although Weilai seems to be very large, it is much "leaner" than large groups such as BYD and Geely.

To put it simply, Weilai separates all its businesses. Weilai Group focuses solely on automotive-related businesses and doesn't get involved in anything else.

"That's it?"

Gu Qingqing was somewhat surprised; this shouldn't be a big deal, right?

Tan Jincheng smiled and said, "It's mainly about this matter, but it's not just about this matter; let's go shopping and stop talking about these things."

May was indeed a month of good news for Musk. Due to the situation in Shanghai, Tesla's production almost came to a standstill in April and only resumed normal production in early May. In addition, Musk's energy is not currently focused on Tesla.

Despite a strong 81% increase in revenue in the first quarter, the better-than-expected performance did not slow the decline in Tesla's stock price. The stock price plummeted by nearly 20% throughout April, and continued to be sluggish in May.

The main reason is market concerns about the risk of Musk raising funds to acquire Twitter by selling Tesla shares. Indeed, Musk sold approximately $84 billion worth of Tesla stock in April.

In addition, Tesla has recently been sued again in North America due to issues with its autopilot system. This highly controversial technology company has been embroiled in lawsuits worldwide.

Due to multiple factors, Tesla has decided to reach a settlement with Wei Lai ahead of schedule.

This is a major victory for Chinese companies, and even for domestic companies, in going global. Historically, it has been difficult for domestic companies to gain an advantage in lawsuits against top European and American companies overseas.

This time, Weilai's use of a countersuit and a direct confrontation in the EU to force Tesla to reach a settlement is a significant step forward. Furthermore, this antitrust lawsuit has opened up new opportunities for Weilai's future business in Europe.

Barring unforeseen circumstances, Wei Lai should not face similar lawsuits again in the future. Large enterprises are most troubled by these kinds of lawsuits, as a poor handling of them can cause significant problems and chain reactions in other regions.

Besides addressing risks, another breakthrough for Weilai in terms of exports is Zhidou Motors. Since resuming production, Zhidou Motors has maintained steady growth. Although its brand power is relatively weak, its low prices and rebranding almost perfectly replicate the operating model of the Hongguang MINI EV have allowed it to gain a certain market share in China.

Last year's MINI EV sold so well that this year's competition is even more intense. For large automakers, it's too easy to launch such a simple model quickly.

Established companies like Wuling (a dominant player in the market), Chery (starting with microcars), Geely, Great Wall, and BYD have all entered this market, along with emerging brands like Leapmotor and Nezha, making this year's market competition extremely fierce.

The Zhidou brand didn't have much of an advantage to begin with. Fortunately, when Tan Jincheng restructured Zhidou from the beginning, he didn't focus on the domestic market. Overseas exports were Zhidou's strategy.

In addition to reorganizing its traditional local and Brazilian channels, Zhidou began its expansion into the Southeast Asian market at the beginning of the year. Southeast Asia has a strong demand for affordable new energy vehicles, and with the help of Proton's distribution channels, Zhidou quickly established a foothold in the region. Besides its partnership with Proton, Zhidou also collaborates with local automakers in various Southeast Asian countries, exporting cars through CKD (Completely Knocked Down) assembly.

CKD assembly, simply put, involves disassembling a car, shipping it to a local assembly site, having Zhidou control the quality, and then releasing it for sale only if the quality meets the requirements.

Through these two export models, Zhidou Auto's output this year is conservatively expected to exceed 10,000 units, achieving remarkable results. It is worth mentioning that Zhidou's batteries have now been replaced with lower-cost Guoxuan High-Tech batteries.

Of course, this only applies to overseas markets. Domestically, the batteries still use Jinshidai batteries, which generate profits in overseas markets using lower-cost batteries to subsidize domestic consumers.

However, the biggest benefit for Zhidou Auto is that it was reinstated in the list of new energy vehicles for rural areas in April. With this subsidy, it can obtain subsidies in certain regions, and Zhidou Auto's sales in China can be increased by about 20% to 30% in the second half of the year.

At the end of this month, the government will introduce a policy to temporarily reduce the purchase tax on passenger vehicles by 60 billion yuan. For vehicles priced below 300,000 yuan with an engine displacement of 2.0 liters or less, a 50% reduction in purchase tax will be given.

In addition, many regions have introduced car purchase subsidies and policies that exempt new energy vehicles from purchase tax in order to stimulate consumption.

The growth of Zhidou Auto has greatly compensated for Weilai's advantages in exports. Through the two major brands and Yuechi Auto's fuel vehicle system, Weilai will be able to sell its cars to the world in the next few years, achieving true globalization.

Hard work pays off. Over the years, through gradual accumulation, the prototype of Weilai Automobile has been progressing step by step according to Tan Jincheng's vision.

"By the way, could you come with me to an event in a few days?"

Having been busy with work for many years, Tan Jincheng and Gu Qingqing didn't know where to go when they went out shopping. They could only go out for the same old things: eating and watching movies. Due to special circumstances, there were not many movies showing on May 520th, and the cinemas were relatively quiet with few people.

"The movies these days are really not worth watching. You can pretty much tell the quality just by looking at the title. What's the point of participating in any events?"

After buying the tickets, Gu Qingqing complained as she asked a question.

She randomly chose a screening of a movie, without even noticing the title, but the female lead was one of Meizu's brand ambassadors, and she recognized her.

"You can attend the National Technology event with them; you don't need to leave Ningbo."

Gu Qingqing's fame is no less than Tan Jincheng's, and in terms of popularity, she is even more popular. The user base of Honor of Kings is definitely not comparable to that of Weilai Auto. Gu Qingqing, who built Orange Games from scratch, is a figure who, in terms of both ability and popularity, is next to Pony Ma and Ding Lei.

In recent years, the two have made relatively few public appearances together. Tan Jincheng does not want to deliberately create a persona in front of the public, as this is not very beneficial to him now.

In addition, the reason why Weilai Auto has chosen to cooperate more with miHoYo is not only because the two companies initially established a connection, but also because it is intended to avoid conflict. Although Orange Group has no apparent relationship with Tan Jincheng, it is still considered an affiliated company of Weilai Auto.

"Oh, is it mass production at the wafer fab? Okay then."

The semiconductor industry has been politically correct in recent years. The chip shortage has continued under special circumstances. Although Weilai has stockpiled inventory and locked in production capacity in advance, the chip supply is still very tight.

The reason why ET5 focused on developing the European market in the past few years was partly due to the tight chip supply. In the future, it needs to internally balance the chip supply issues of various models.

However, this problem no longer exists.

After completing privatization, injecting funds, forming an automotive-grade team, securing 40nm production capacity from SMIC, and cooperating with the semiconductor industry in Beicang District to build a factory, National Technology completed its expansion after privatization at the fastest speed.

After going private, National Technology has been unusually low-key, but its progress is by no means slow. In Q2 of 2020, National Technology had completed the chip definition and shortened the design cycle by using mature IP cores.

In Q1 of 2021, Nationz completed its first tape-out, and in Q3 it produced engineering samples. In Q1 of this year, it officially passed AEC-Q100 certification, which is the most critical step for Nationz's self-developed automotive-grade chip.

After passing the certification, National Technology and Weilai Automotive started testing simultaneously. National Technology's chips will be prioritized for use in Weilai Automotive. In the fourth quarter of this year, National Technology's automotive-grade chips can achieve small-scale mass production.

Although the monthly output can only reach 5 pieces, it has extraordinary significance for National Technology and Weilai Automobile.

Having it and not having it are two completely different things. In the past two years, the chip supply of Weilai has been relatively loose and has not been greatly affected, which has aroused the jealousy of many companies. Two years have passed, and even the slowest companies have realized that there are many companies competing with Weilai for production capacity.

Chip manufacturers will also negotiate with Weilai based on this, controlling production capacity, raising prices, etc. If Weilai wants to become the world's number one, it must be able to independently control core components.

In 2023, National Technology's chips can achieve mass production. Combined with Horizon Robotics' production capacity and other domestic chip suppliers, except for the most core high-end chips, Weilai has already achieved self-sufficiency and control in the fourth quarter of this year.

This took faster than Tan Jincheng had imagined. It must be said that we have made significant progress in domestic chip substitution in recent years. National Technology can be considered a microcosm of the domestic chip industry.

However, the reason why National Technology was able to achieve mass production as quickly as possible was not only because it had mature technology and was supported by a large amount of funds from Tan Jincheng, but also because it partnered with SMIC.

Between 2020 and 2022, there was a global chip shortage, and wafer fab capacity was extremely tight. Automotive-grade capacity was prioritized for major manufacturers such as TI and NXP, and new players had to wait in line to enter the market.

SMIC's production capacity is similar. However, Tan Jincheng, who knew the trend, negotiated with SMIC early on and secured 40nm production capacity in advance. Although the 40nm process is not considered very advanced, it is more than enough for basic automotive-grade chips.

SMIC has already developed a mature 40nm process technology with a yield rate of 98%, which is the foundation for mass production. Although SMIC's yield rate is slightly lower in the 28nm process, it is not without opportunities in the future.

Horizon Robotics currently uses TSMC for manufacturing, while National Technology uses SMIC, which effectively avoids overlapping production capacities.

"May 29th, remember to make time for it; let's go, let's go in."

The movie theater was really quiet, with only a few people. The Tan Jincheng couple, who were holding popcorn, didn't attract much attention in the dim light because they were wearing masks.

"understood."

A movie might be dull, but for someone like Tan Jincheng, such a relaxing setting is extremely rare, and what movie he watches is completely unimportant.

It was past 10 p.m. when we left the movie theater.

"I don't know when this will end, sigh."

Back in the car, Gu Qingqing took off her mask and sighed.

"It'll be soon, almost at the end of the year."

Tan Jincheng, who also took off his mask, smiled and said that the fourth quarter of 2022 was a brand new beginning for everyone and for businesses.

At the same time, Tan Jincheng was also a little uneasy. His time window was about to end, and he didn't know what would happen in the time window he was unaware of, or what changes the new Wei Lai would bring.
Sunday, May 5.

The mass production ceremony of the National Beicang factory was officially held, with senior executives from the Beicang District Government, SMIC, National Technology, and Weilai Automobile participating. Executives from many companies attended the event.

Tan Jincheng also brought Gu Qingqing to the event, marking the first joint public appearance of the couple in nearly a year.

"President Tan, you have lived up to expectations."

At the reception after the event, Sun Yingtong, the general manager of National Technology, raised his glass to Tan Jincheng and said that Boss Tan had treated him well. Not only had he kept him as general manager, but he had also given him 0.5% of the shares, as well as the right to incentivize his team with 5% of the shares.

In other words, he had the final say on how to allocate those 5% of the shares, which greatly helped him establish his authority and gave him the confidence to quickly integrate the team.

However, he was also under considerable pressure. Although Boss Tan did not say it explicitly, it could be inferred from the dispatched president Cheng Linfeng that if mass production failed, Boss Tan would not mind disbanding National Technology.

Including the privatization acquisition and the investment in mass production, ByteDance's investment in National Technology has reached tens of billions of yuan, but for ByteDance, this tens of billions of yuan is completely affordable.

Boss Tan doesn't mind giving them shares; as for whether the shares are valuable or not, that's up to them.

At the time of its delisting, National Technology's market value was between 40 billion and 50 billion yuan. With the rumors of small-scale mass production, National Technology's market value has now risen to 60 billion yuan. According to market expectations, National Technology's market value is estimated to be between 75 billion and 125 billion yuan in 2024.

Sun Yingtong's personal wealth will also enter the billion-dollar club.

After clinking glasses, Tan Jincheng smiled and said, "This is just the beginning."

(End of this chapter)