2003: Starting with Foreign Trade

Chapter 1059 High Stock Dividends and Huge Bonuses

Since its listing, the total share capital of Weilai has not changed much. At the time of its IPO, Weilai's initial total share capital was 21.72 billion shares, and it is still only 24.42 billion shares today, an increase of less than 3 million shares.

In the secondary market, Tan Jincheng has always been relatively restrained and has not engaged in much predatory behavior.

Take FlashTech as an example. After its listing, it had a high stock dividend and share transfer, and its total share capital reached a peak of 10.2 billion shares during that period. This was the period when FlashTech's total share capital was at its highest.

During the subsequent period of stock price decline, FlashTech conducted several share buybacks, either for employee stock ownership incentives or for direct buybacks and cancellations, gradually reducing the total share capital.

The practice of frequently issuing new shares to increase the total share capital does not exist among the listed companies controlled by Tan Jincheng. Currently, the total share capital of FlashTech remains at 8.69 million shares.

Currently, FlashTech's stock price is 48.37 yuan, with a market value of 420 billion yuan, which is a relatively high position since its backdoor listing. New energy vehicles performed poorly in the first quarter, but two-wheeled electric vehicles performed very well.

Driven by the concept of consumption downgrading, the entire two-wheeled electric vehicle sector performed well in the first quarter. Among them, Aima, which has the shortest listing period, performed the best. In the first quarter, Aima's overall increase was over 55%, making it the best-performing quarter since its listing.

FlashTech's overall market capitalization is currently considered relatively high, and its stock price is also at a high level, close to 50 yuan, which is relatively high. However, for a stock that has been listed for many years, FlashTech has no intention of continuing to issue high bonus shares.

Going forward, FlashTech will continue its share buyback program to further reduce the total share capital and increase its actual controlling stake.

As for Weilai Shares, due to different actual situations, high stock dividends are currently the best way to balance various types of capital, while also providing an investment opportunity for retail investors with limited funds.

According to retail investors who have been through the ups and downs of the A-share market, Weilai's current valuation is clearly undervalued. As a global new energy giant, although its valuation is not as good as that of US stocks, it is still three times lower than that of Tesla, which is definitely a serious undervaluation.

Based on the explosive growth shown by Weilai Group in 2022, Weilai's revenue can be maintained at over 700 billion yuan for a long time. As a comprehensive new energy company with the world's largest market share, Weilai's most conservative valuation should be around 2 trillion yuan.

Based on the current valuation level, Weilai still has at least 50% to 70% growth potential. From the perspective of long-term holding, the current time is a relatively suitable time to buy Weilai shares at the bottom.

"Let's do a 10-for-8 stock split, so the total share capital won't be too outrageous, but this year's dividend can be higher."

After several board meetings, Weilai finally finalized its share transfer plan: a 10-for-8 bonus share issue. Based on the current total share capital, Weilai's total share capital will eventually rise to 43.96 billion shares, which is a reasonable level for Weilai's size.

"That's a good thing. Higher dividends can indeed better balance the interests of various capital groups."

Speaking of dividends, the board members and representatives of various institutions were very happy. Since the company went public, it has distributed dividends once a year. However, in the first few years, the company's size and revenue were limited, and the company also needed to make investments, so the dividends were not much.

Since its listing, WIL has distributed nearly 30 billion yuan in dividends, which is not a lot, but it is not a small amount among technology companies.

"Alright, the finance department should come up with a specific profit-sharing plan as soon as possible based on the company's actual situation, and the percentage should be increased."

Previously, the profit-sharing ratio for Wei Lai was generally around 10% of the net profit.

In early April, a notice from Weilai once again caused a sensation in the A-share market. According to the 2022 annual plan, Weilai Co., Ltd. launched its first high stock dividend plan since its listing, based on a total share capital of 24.42 billion shares, and transferred 8 shares for every 10 shares held by all shareholders.

A total of 19.54 billion shares were transferred, increasing Weilai's total share capital to 43.96 billion shares. Weilai's reason was that with the rapid growth of its business scale, the share capital was relatively small, and the share capital increase could optimize the share capital structure and enhance the liquidity of the stock.

Alongside the high stock dividend, Weilai also announced its largest dividend payout since its listing, distributing a cash dividend of 30.55 yuan (including tax) per 10 shares. Based on 24.42 billion shares, Weilai's total cash dividend payout this time reached 74.6 billion yuan.

"The dividend payout ratio is about 15% of net profit, so Wei Lai is quite generous."

Last year during the interim reporting season, Weilai also distributed dividends. Although the amount was not much, considering the fiscal year 2022, distributing dividends twice a year shows that Weilai is truly willing to share profits with its shareholders.

This is much better than those stingy companies; of course, most of the 74.6 billion yuan in cash dividends will go to Tan Jincheng and his family.

Based on Tan Jincheng's shareholding ratio in Weilai Co., Ltd., he and Julang Engine Investment Co., Ltd., which he controls, will receive cash dividends of nearly 33 billion yuan in this distribution.

The huge dividend payout by Weilai has sparked considerable controversy. Among technology companies, Weilai's overall dividend payout ratio ranks among the highest. With this latest dividend plan, Weilai's cumulative dividends since its listing have exceeded 10 billion yuan.

The high dividends have sparked huge controversy, mainly because the majority of these huge dividends went to the Tan Jincheng family, who received nearly 33 billion yuan in a single dividend payout.

"There is no problem with dividends. ByteDance has invested in Weilai for many years and, as Weilai's largest shareholder, has provided assistance during Weilai's early growth process. Dividends are a return for ByteDance."

"As for me personally, do you think I would be after this bonus?"

At the shareholders' meeting, some minority shareholders raised objections to Weilai's high dividend plan. Tan Jincheng responded frankly, stating that his control over Weilai was mainly through ByteDance's advertising platform.

Since the shareholding changes, ByteDance's Jùliàng Engine currently holds 33.02% of the shares of WULA Group, while Tan Jincheng holds 10.22% personally, for a total of 43.24%.

ByteDance is ByteDance, and an individual is an individual. The actual cash dividends that he received were approximately 7.6 million yuan. This amount of cash is indeed a lot, but it is negligible compared to his net worth.

In addition, he also has to pay taxes. Individual shareholders of listed companies who have held shares for more than one year are exempt from personal income tax. However, Tan Jincheng is the legal representative of Weilai Group and also a legal corporate shareholder of the listed company. Under certain conditions, he can be exempt from corporate income tax, but this does not include all of them.

"Looking at it from another angle, even if I don't have to pay taxes, the money I personally receive is still 7.6 million yuan. Compared to Wei Lai's achievements in 2022, I should be able to accept this 7.6 million yuan with a clear conscience, right?"

"Everyone, I didn't make much money from the Weilai Group."

Tan Jincheng's blunt words made the shareholders, large and small, at the shareholders' meeting burst into laughter. It was indeed true that Weilai Group belonged to Tan Jincheng, but it could also be said that it did not belong to Tan Jincheng.

From a profit perspective, the 2022 annual financial report disclosed that Tan Jincheng's pre-tax annual salary was 600 million yuan, with a monthly salary of 50 yuan. He did not resort to the ridiculous trick of earning a one-yuan annual salary like Daqiangzi.

Compared to ordinary staff, this annual salary is astronomical, but compared to Tan Jincheng's status, it is not much. Even within Weilai, Tan Jincheng's annual salary only ranks ninth.

There are many senior executives at Weilai with annual salaries of tens of millions, but the one with the highest salary is Li Xiang. As a professional manager favored by Tan Jincheng, Li Xiang, who transferred from Lotus to Weilai in order to highlight the advantages of the company and to eliminate the impact of Zhang Yong's departure, has a very high salary.

According to the performance incentive plan for 2022, Li Xiang's income in 2022 exceeded 100 million yuan, of which more than 90% was equity incentives. The salaries of executives such as Hu Zhengnan, Yu Liguo, and Wang Fengying were also calculated based on equity incentives plus basic salary.

Within the Jinshidai system, veterans such as Zhang Xuhui and Lü Ruifeng also saw a significant increase in their salaries in 2022. However, the income of senior executives is determined based on the company's annual revenue and performance.

When business declines, these senior executives, who are professional managers, certainly won't have such income.

“That’s right, it’s not excessive for President Tan to take this income, and I absolutely support it.”

Zhang, who used to tighten screws at an electronics factory in Shenzhen, is now a portly old man. He is definitely Tan Jincheng's number one supporter in the A-share market. Since making a fortune from the backdoor listing of Shanchi Technology and accumulating his first pot of gold, Old Zhang has been relentlessly buying shares of Tan Jincheng's listed companies.

Currently, Mr. Zhang holds shares in a series of companies under Tan Jincheng, including Shanchi Technology, Weilai Shares, and Orange Group. Among them, he holds the most shares in Weilai Shares, with a total of 4.9 shares and a market value of over 2400 million yuan.

Including other stocks of all sizes, his net worth is close to 5000 million yuan. In just over a decade, Lao Zhang went from an ordinary retail investor to a multi-millionaire. Lao Zhang's entire secondary market investment career almost spans Tan Jincheng's entire capital operation process.

Except for three special years when it was held online, Lao Zhang would attend Weilai's annual shareholders' meeting in person every year. He was a familiar face among Weilai's shareholders, and in Shenzhen's investment circles, he was an absolute "Tan Jincheng fanboy." He was like a certain successful individual investor praising Moutai, which was understandable, as he had benefited greatly from the era and Tan Jincheng's influence on his rise to a multi-millionaire.

In the current new energy vehicle market, there is a lot of controversy regarding the valuation of Weilai. Most people believe that under the influence of objective factors such as the decline in new energy investment, economic downturn, and industry price wars, Weilai will not be able to reach the established valuation expectation of two trillion yuan.

However, Lao Zhang firmly believes that Wei Lai will definitely achieve its goals, and he holds on firmly. With this huge dividend, Lao Zhang will receive nearly 15 yuan in cash. He plans to use this dividend to continue to increase his holdings. After the high stock dividend, he will continue to increase his holdings, raising his total shareholding to 10 shares.

If Wei Lai's market value exceeds two trillion, then the value of his holdings will eventually exceed 4500 million yuan. This high stock dividend will be very beneficial to him.

"Haha, Mr. Zhang, you're too kind. It's not like that at all. Of course, Wei Lai's huge dividends are based on our strength, so everyone doesn't need to worry too much about the company's fundamentals."

The first share conversion by Weilai is not just about balancing capital. This share conversion also marks an adjustment in Weilai's secondary market return strategy. Combined with the increase in the cash dividend ratio, it reflects the company's confidence in performance growth and aims to optimize the equity structure and enhance market liquidity.

For investors, Wei Lai's adjustment strategy this time is of representative significance.

The first shareholders' meeting after the opening was very lively, with shareholders of all sizes coming from all over the country. Recently, the prices of flights to and from Ningbo have increased significantly. Most of these investors are long-term holders.

To some extent, this shareholders' meeting was also an emotional outpouring.

"In the first quarter, due to the price war and the guarantee, Weilai's market share has increased significantly, and its global market layout has also made considerable breakthroughs. Everyone should trust our management's decisions for the company."

For a long time, Weilai's market share remained between 27% and 30%. Before the launch of the Exeed and Galaxy series, the prices of its main models were relatively high, making it difficult to increase its market share.

Even with the Exeed and Galaxy series selling well, the market share did not increase quickly due to fierce market competition, mainly because of gasoline-powered vehicles.

This combination of price war and support policies allowed Weilai to seize a large share of the market for gasoline vehicles. By the end of the first quarter, Weilai's share of the new energy vehicle market had soared to 38.8%.

In the global market, Weilai's market share has soared to over 20%, and its growth rate in the first quarter far exceeded the industry average, with the most significant growth in overseas markets.

In January, in the UK and Spain, Weilai's sales increased by 551% and 734% year-on-year, respectively, and distribution channels in the Middle East, Southeast Asia and Australia are also gradually taking shape.

Even the rolling boats that came with the ship seemed insufficient.

"Currently, our global market share is equivalent to the combined share of Tesla, BMW, and Volkswagen. With the gradual commissioning of our overseas factories, we expect our global market share to exceed 25% in 2023, further consolidating our market advantage."

At a shareholders' meeting, since all attendees are investors, it's natural to say things they'd like to hear. Tan Jincheng, who was presiding over the meeting, also broke from his usual low-key approach and listed out Wei Lai's achievements one by one.

"Of course, this refers to the market share of new energy vehicles. If we're talking about the overall market share, Weilai's ultimate goal is to capture 4% to 5% of the global market share, maintain its position in the top ten, and challenge for the top five globally."

The global automotive market is estimated to be between 8000 million and 8500 million vehicles. To achieve the 5% target, Weilai's annual sales target must reach more than 400 million vehicles, which is quite a challenge.

"It's challenging, but now that we're seated at the main table, we should at least have some meat, right?"

The language was vulgar, completely unlike what the leader of a leading enterprise would say, but it was very inspiring. The major shareholders smiled knowingly, and the minor shareholders cheered.

"On a side note, just look at the price reductions of joint venture brand gasoline cars this year, with reductions of tens of thousands or even hundreds of thousands of yuan. You can see how much money they made back then. For a long time, we couldn't even get a taste of the soup."

"Now, it's time for this situation to change. Perhaps some of us here admire gasoline cars and look down on new energy vehicles, thinking that new energy vehicles have little technological content."

"But if we look at it from another perspective, isn't new energy vehicles an important strategy for us to gain control of the industrial chain and keep the profits in our own hands?"

"This is a strategic move at the big picture level. People may not like to hear it, but for consumers, many of the features on new energy vehicles are unmatched by gasoline vehicles. Take the most basic seat ventilation function, for example. Gasoline vehicles can't compare to that, right?"

Seat ventilation is a fairly common feature in the automotive industry. In the era of gasoline-powered cars, some models didn't even have the option to have it. For a long time, gasoline-powered cars with seat ventilation represented "high-end".

Nowadays, this so-called high-end feature has become a standard or near-standard feature on electric vehicles.

What was once exclusive to high-end models priced above 30 yuan has now been fully extended to mainstream models priced above 15 yuan, and even to some cost-effective models priced between 10 and 15 yuan, where it has begun to appear as a high-end version.

Almost every model of the electric vehicle comes standard with or offers seat ventilation as an option. In terms of driving experience alone, this feature alone demonstrates that electric vehicles have made a real contribution to the progress of the industry.

Without such extensive promotions and the massive configurations offered by major automakers, even these seemingly basic functions would require extra money to experience, let alone the so-called refrigerators, color TVs, and large sofas.

Refrigerators, color TVs, and large sofas actually existed long before the era of gasoline-powered cars. Tan Jincheng's earliest Maybach had these features.

Of course, objectively speaking, in addition to the reduction in cost, electric vehicles have a natural advantage in being equipped with seat ventilation function, which to some extent optimizes the range.

"Alright, having discussed past achievements, let's move on to Wei Lai's plans and goals for the second quarter. Before answering that question, I'd like to address the recent rumors about Aion's independence."

"To clarify, there is no intention to separate the Aion series from its current status. It will remain under the umbrella of Weilai Auto. In the future, unless absolutely necessary, Weilai will continue to concentrate its resources to compete in the global market."

"So let's not bring up this issue again in the future, and no one needs to worry about their interests being harmed."

The split of the Aion Group will certainly benefit the big investors, but it will be a loss for the small and medium-sized shareholders of Weilai. Weilai shares are listed as a whole group, and once it is split, its market value will definitely be greatly affected.

High stock dividends, bonus share distributions, and stock splits were the topics that lingered around Wei Lai throughout the first quarter of this year. Even though Wei Lai made such big moves in the first quarter, it did not suppress the various rumors. Capital can still be very powerful when it comes to exerting its influence.

This public response at the shareholders' meeting will put an end to this topic and these rumors.

"Oh, by the way, Weilai Group currently has no plans for a secondary listing on the Hong Kong Stock Exchange. Given Weilai Group's current revenue scale, we do not have a need for large-scale financing at the moment. Some small-scale financing can be resolved in the A-share market."

Manufacturing cars is extremely expensive, but Weilai is not short of money or financing channels at present. In the A-share market alone, Tan Jincheng actually controls four listed companies: Weilai Shares, Shanchi Technology, Bafang Electric, and Lifan Shares after its name change.

He certainly doesn't lack financing platforms.

“We expanded our advantages in the first quarter and were able to maintain growth on a high base. The challenge for the second quarter and the rest of the year is the same, including the market share in overseas markets.”

"Of course, Weilai will launch several new models in the second quarter. We will not announce the specific models here. Please stay tuned for our press conference later."

Leaving aside the fact that Geely releases new models faster than mobile phones, the strategy of launching one brand and one model per year seems a bit slow this year. Therefore, Geely will launch multiple models this year.

This includes Exeed and the L series, which will continue to launch new models. In addition, the E series, which has not had a new model for many years, will also have a new model launched this year, but not in the second quarter.

It has to be said that the market is changing so fast these days that it really has a bit of the feel of the mobile phone market.

(End of this chapter)