2003: Starting with Foreign Trade

Chapter 1066 "Unlucky Old Zhou"

"All our actions are market-driven. As long as we do our work honestly, everything will be fine."

Whether it's praise or not, for Wei Lai now, as long as he doesn't make any fatal mistakes, there won't be any problems. The Automotive News doesn't represent the will of the higher-ups; it's more about the power struggle between various companies and regions.

The most delighted by the sudden emergence of Xingyuan are Zhejiang Province and Ningbo City. Ningbo City has expressed its willingness to provide stronger support, including but not limited to land, taxation, and talent introduction.

Shenzhen, Shanghai, Hubei Province, and other places felt the pressure, but Guangzhou was under the most pressure. Although BYD was greatly affected, its strategy this year was still to take a bite out of the gasoline car market.

The company under the most pressure is GAC Group, which mainly sells joint venture gasoline vehicles. GAC Honda and GAC Toyota have been greatly impacted this year. GAC Group, which has not made much progress in new energy vehicles, stands out in comparison with Xiaopeng.

Furthermore, GAC's repeated rejection of chrysanthemums over the years, coupled with its general manager's public displays of disdain for chrysanthemums, has significantly impacted its reputation among chrysanthemum fans.

Although the headline in the car magazine was exaggerated and had the air of a copycat, at least one sentence hit the nail on the head: the weak were indeed driven to the brink of death by Wei.

The most representative examples are Leapmotor and Nezha. The markets of these two new energy vehicle companies, Leapmotor and Nezha, overlap significantly with Xingyuan, causing great panic. Leapmotor, a listed company on the Hong Kong Stock Exchange, experienced huge stock price fluctuations.

Investors' only hope for Leapmotor right now is whether their range-extended electric vehicle deliveries can become a market dark horse like the Deep Blue SL03, securing a place in the range-extended electric vehicle market below 20 yuan.

If Leapmotor, which has already completed its transformation, still has the ability to struggle, then Neta Auto has already been sentenced to death, at least in the capital market.

The revamped Nezha V, the main selling model, is basically at the same level as the Wuling Bingo in terms of product strength. The Nezha S, which is trying to move upmarket, is also facing serious obstacles, with its main model only maintaining an average monthly sales volume of around 5000 units.

Seven months have passed since 23, and Nezha's total deliveries are only 7.24 vehicles, a 6.1% decrease compared to the same period last year. Compared to Nezha's sales target of 25 vehicles set at the beginning of the year, the achievement rate in seven months is less than 30%.

As the worst performing brand among the new energy vehicle brands, this brand has six models on sale, with an average cumulative sales volume of only 1.2 units per model over seven months.

The entire product line has completely collapsed.

After Nezha announced its price and pre-sale results in the first three days, its financing in the primary market almost came to a standstill. New investors were hesitant to invest, while old investors were actively seeking exits, and the cash flow was on the verge of collapse.

Investors who were initially optimistic about Nezha's "cost-effectiveness" and "lower-tier market" story have found that its so-called core competitive advantage, price, is no match for its absolute technological advantage, and a large number of investment institutions have issued bearish reports.

The core argument is simply that in the second half of the technology-driven era, second- and third-tier emerging forces lacking core technologies will be the first to be eliminated, and Nezha has already been labeled as a discarded child of the times by institutions.

This point was also discussed in the automotive newspaper. In just seven months, Nezha went from being the top-selling new energy vehicle brand to becoming the most likely to go bankrupt among second- and third-tier new energy vehicle brands. The cruelty of this situation is self-evident.

"Do not respond to any of his attempts to extort money."

If we're talking about Nezha's current situation, besides their management, the person who's most anxious is definitely Zhou Hongyi. Ever since Star Wish announced its first month's delivery figures in May, Zhou Hongyi has been doing all sorts of live streams and making videos.

He was evaluating car models, saying he wanted to buy one, and mentioning in a live stream that he wanted to visit Weilai and talk to its executives. He also intentionally or unintentionally hinted at the possibility of cooperation or even financing with Weilai by mentioning his relationship with Zhang Yong.

Curious netizens also tagged Tan Jincheng, who was also unusually active at the time, in his comments. Both of them frequent Douyin, but after several months, they still haven't received any response.

"This old guy has no choice but to be anxious. This is a once-in-a-lifetime opportunity for him."

AI has become incredibly popular this year, making it the hottest sector in the A-share market. The company's stock price surged 166.82% in the first quarter, soaring from less than 7 yuan at the beginning of the year to a high of 20.85 yuan on April 4, with its market value approaching 150 billion yuan.

At its peak, the market value of the shares held by Lao Zhou in the listed company brought his net worth to 280 billion yuan, the highest since the backdoor listing. Reducing his holdings became his biggest need, because if he missed this opportunity, he might never have another one.

"Speaking of which, although Lao Zhou is very famous, he is not among the top internet founders in terms of how much money he has made. It's all about timing and fate."

Zhou Hongyi can be considered one of the first generation of internet founders. Back in the day, he was a figure who could rival Lei Jun and Pony Ma. This controversial internet figure had a net worth of over 100 billion yuan in 2017, the early days of his backdoor listing.

Unfortunately, at that time, his wealth was just that—wealth. Although he was enjoying immense success, he couldn't cash out due to factors such as sales restrictions. Later, although his company held absolute authority in the security field, its stock price declined year after year, eventually reaching a market capitalization of only 400 billion yuan, making cashing out impossible.

Having been in the internet industry for decades, he has built a well-known internet company both domestically and internationally, so his personal achievements are not considered a failure. However, in terms of how much money he has personally earned, it is pitifully small.

The root cause is that this guy is really not good at investment. Back in the day, Lao Zhou also invested in ByteDance, but he withdrew early. It felt like he was just a retail investor making short-term profits. When he crossed over into the automotive industry, his ability to choose investment targets was also lacking.

If you choose a rising new brand that continues to grow, even without the boost from this AI trend, its stock price will still rise due to investment benefits, and you won't need to use "divorce" as an excuse to divide shares and reduce your holdings in disguise.

It's 2023 already, and they're still playing this game, especially in trending sectors. Zhou Hongyi's actions have offended almost all investors in the secondary market and ruined the company's reputation.

From early April to July, the company's stock price halved. Despite the continued hype surrounding AI, it was completely abandoned by the market. As a hot project for the future, AI is almost destined to experience a second and third wave of price increases.

Companies with such tarnished reputations are unlikely to be chosen by the secondary market, even if they are being hyped up. They have almost completely cut themselves off from the concept stock sector, which is truly perplexing.

The attempts by companies like Weilai and others to stage accidents are simply a way to downplay their negative image among investors and to associate themselves with the "new energy vehicle" concept.

Unfortunately, neither Tan Jincheng nor other car company executives bought it. Their repeated criticisms of Zhang Yong during the live broadcast failed to win over the onlookers. In the eyes of the onlookers, Zhang Yong's downfall was "self-inflicted." However, this kind of behavior of being scolded by the boss also resonated with the working class.

“Listed companies can have various normal share reductions, but they must not treat investors like fools. Offending the secondary market will make it much more difficult for a company to operate.”

The retail investors in the secondary market may seem insignificant to many, but if you offend them, especially in an abstract way, the impact can be significant, particularly with consumer goods like automobiles.

Those who have spare money to invest in stocks generally have some financial strength. Moreover, these people are knowledgeable about everything from astronomy to geography, and when it comes to analyzing a company's business, they are even more proficient than professional analysts.

As a major consumer good, no car can claim to be without any flaws. When a stock price is in a prolonged downtrend, no matter how much the company's sales and profits increase, these investors will still "slander" your product in various ways.

To a certain extent, market capitalization management is also quite important among car companies. Weilai's market capitalization has always been relatively stable and has experienced a surge, which has enabled investors to make money. Its reputation is naturally incomparable to that of companies that have been continuously declining.

Before sales took off, Musk paid close attention to Tesla's stock price fluctuations. Short-selling institutions targeted Tesla to short it, aiming to undermine Tesla's fundamentals. Only when Tesla reached a certain scale could the impact of the secondary market on the company's operations be reduced.

Zhou Hongyi, who has not received a response from any company, to some extent represents the fate of Nezha. Since August, there have been frequent rumors of Nezha's tight cash flow, and there has been no news about the previously announced 70 billion yuan financing.

Currently, Nezha's only marketing highlight is its breakthrough in the Southeast Asian market. However, this will not be appreciated by investment institutions. For a new brand like Nezha, going global is just a gimmick; survival is their biggest need at this stage.

Nezha's status as an abandoned child foreshadows the start of the second stage of the elimination rounds.

In August, led by Wei Lai, the heads of major automakers frequently took to social media to release technology announcements, announce orders, respond to questions, and attract traffic for their brands.

The trend of CEOs becoming internet celebrities has reached its peak. Leaders of car companies, such as Li Xiang, Li Bing, and Da Zui, are constantly appearing in front of the camera, and leaders of traditional car companies are also getting involved to drive traffic to their brands.

One of the most noticeable changes is that most automakers have shifted from the original "new car launch event" model to "technology launch event," prioritizing the release of core technologies such as platform architecture, intelligent driving, and intelligent cockpit.

"Using technological strength to endorse the brand, the industry reshuffle led by Weilai has officially begun."

For car companies that don't want to die, cooperation and financing have become crucial. Nezha, which is almost sentenced to death, urgently needs a white knight. Zhang Yong has been unusually tired recently.

He finally understood what his boss meant when he said that once you miss something, you can never go back.

Compared to Nezha, He Xiaopeng was in a good mood. With Wei Lai's help, Xiaopeng's cooperation with Volkswagen was officially reached at the end of July. Unlike the previous negotiations, Volkswagen approached Xiaopeng with an attitude that was almost like that of a "student".

Xiaopeng acts as a technology supplier, collaborating with Volkswagen to develop new car models, platforms, and software, and jointly exploring cooperation opportunities, including in overseas markets.

Most importantly, Volkswagen provided approximately $700 million in cash in exchange for about 4.99% of Xiaopeng's shares. This $700 million injection is crucial for Xiaopeng at present. With professional investment institutions becoming increasingly cautious about second- and third-tier emerging companies lacking core technologies, and financing channels essentially closed, Xiaopeng's ability to secure this massive investment from its peers has significantly improved its financial situation.

Of course, all of this is the result of He Xiaopeng's hard work. When the company was in crisis, He Xiaopeng was able to stand up decisively and turn the tide, bringing the company back on track. This is the key to the public's recognition of Xiaopeng.

In January of this year, Xiaopeng Motors' overall sales plummeted to their lowest point in recent years. However, by July, Xiaopeng had recovered to a record of over 10,000 deliveries per month, with sales showing a gradual upward trend.

"Volkswagen didn't lose out either. They got almost five percent of the shares for $7 million, so they made a profit."

Based on the amount of Volkswagen's investment, Xiaopeng's valuation is approximately US$150 billion. This valuation is a sure thing for Xiaopeng Motors, which has returned to normal. Xiaopeng, which has been able to firmly occupy the first tier of intelligent driving, actually has something to offer.

This is the first "Weilai Group" car company to get out of trouble, while another "Weilai Group" car company, Leapmotor, which was in even more danger, also had good news in August.

On August 22, Tan Jincheng's 38th birthday, Leapmotor announced through a listed company that it had officially reached a strategic cooperation agreement with Strantis, with Strantis acquiring approximately 20% of Leapmotor's equity for 15 billion euros.

On the day the news was announced, Leapmotor's stock price on the Hong Kong Stock Exchange surged 10.17%, easing the downward trend of the past month. As the world's fourth largest automotive group, becoming a strategic shareholder of Leapmotor is equivalent to obtaining a top-level global credit endorsement, which greatly enhances the confidence of suppliers, partners, users and future investors in Leapmotor.

"At least morale has been stabilized, and I also thank President Tan for attending."

Zhu Jiangming, who has more than 30 years of experience in the manufacturing industry, is from Yiwu, just like Gu Qingqing. His cooperation with Tan Jincheng also started on this basis. The two met in Yiwu through an event.

"Of course, I am also an important shareholder of Leapmotor, so I can't just sit idly by."

The backing of the large group's credit stabilized morale, and the 15 billion euro investment directly solved Leapmotor's most pressing cash flow problem. In the current extremely competitive market environment with difficult financing, this is a lifesaver.

The ability to expedite negotiations with Strandis and reach a cooperation agreement ahead of schedule was also due to Tan Jincheng's involvement. When Leapmotor's stock price was facing a collapse, Tan Jincheng and his team joined the negotiation process between Leapmotor and Strandis.

Prior to this, ByteDance's advertising platform and Tan Jincheng himself issued a formal announcement promising not to transfer or reduce their holdings of Leapmotor shares in any way within the next two years.

Zhu Jiangming's choice to sign and announce the contract on Tan Jincheng's birthday can be seen as a way of returning the favor.

"Why are we optimistic about Leapmotor? We want to give self-developed technology a chance. Leapmotor has its own self-developed technology. Mr. Zhu and his team have more than 30 years of experience in the manufacturing industry, which also makes us believe that Leapmotor will have a bright future."

Attending the signing ceremony and making a public statement can be seen as Tan Jincheng and Wei Lai's strong support for Leapmotor. Such a statement from an important shareholder at a critical moment is very important for a company facing difficulties.

This scene has happened before with Xiaomi. When Xiaomi's stock price collapsed, Tan Jincheng stepped forward to support it and increase his holdings. Although he did not increase his holdings this time, he promised not to reduce his holdings within two years and attended the signing ceremony, which represents the same attitude.

"What does Mr. Tan think of Nezha Motors? There are rumors that Mr. Tan will invest in Nezha Motors and play the role of a white knight. I wonder if this rumor is true or false?"

During the signing ceremony, reporters inevitably asked about Nezha Auto again.

WM Motor has already failed under the onslaught of StarWish and is currently undergoing bankruptcy reorganization. Meanwhile, Nezha, which has been frequently reported to have a broken capital chain, is one of the most watched car brands besides WM Motor.

"If it were ten years ago, or even five years ago, we would have increased our stake in Leapmotor just like we did with Xiaomi back then."

Instead of giving a direct answer, Tan Jincheng smiled and pointed to the representatives from all parties who had just completed the signing, causing everyone to burst into laughter.

"I started working at the age of 18, and this year marks my 20th year. As Weilai's business grows larger and market competition becomes more intense, I will no longer pay too much attention to the investment field due to my limited energy."

"Neither Wei Lai nor I personally have any plans to invest in Nezha; the rumors are untrue."

When Tan Jincheng said that his energy was limited and he would no longer pay much attention to the investment field, the people present almost understood what he was going to say, and also understood why he used the fact that he did not increase his holdings of Leapmotor shares as a prelude.

However, when Tan Jincheng responded to the matter with a direct denial, there was a brief silence at the scene.

From the end of last month to the end of this month, domestic automakers completed the two largest financing rounds to date. Before Xpeng's $7 million and Leapmotor's €15 billion, the largest single financing round was Avita's 30 billion yuan Series B financing.

This also shows how much investment institutions dislike emerging companies. They were the darlings of last year, but have become the old hags this year.

Behind Xiaopeng and Leapmotor's financing, their cooperation with two major multinational automakers has also opened up a new financing model in the automotive industry. All of this is closely related to Wei Lai and Tan Jincheng, who are behind the two companies.

Although Tan Jincheng modestly stated that he would no longer pay much attention to the investment field, his personal influence and that of ByteDance's investment platform have never diminished.

From Wenjie back then to Xiaopeng and Leapmotor now, plus Zhidou which he acquired, all brands with Tan Jincheng's involvement have the potential for a turnaround.

The price war at the beginning of the year, the intelligent driving guarantee in March, and the technology transfer of Xingyuan in April have affected countless car companies. However, the car company that was "lucky" in this process is Li Bing's Wenjie.

Despite rumors of bankruptcy circulating every year, Wenjie managed to thrive in the first half of this year, despite the lackluster performance of Seres, thanks to its commitment to high-end products and circuit replacement. A growth rate of over 30% is considered acceptable.

Currently, the Wenjie brand has as many as eight models on sale, making its product matrix quite complete. If it weren't for the huge investment in battery swapping and the massive losses, Wenjie, which has consistently held the top spot in sales among new energy vehicle brands this year, would be an outstanding brand.

This is also inseparable from the support of Weilai in battery technology and suppliers.

Tan Jincheng's public denial, to some extent, indicates that the capital market has completely abandoned Nezha, and other investment institutions will also completely close their investment windows.

Zhou Hongyi's previous hints vanished with Tan Jincheng's public denial.

After the press release was released, Zhou's comment section inevitably became lively again. The comment section, which was dominated by haters, was quite amusing. On the 23rd, 360 opened lower and continued to fall, with a drop of more than 3% throughout the day, and the stock price hit a new low since April.

Since April 4th, the stock price has been steadily declining for five months. The unsuccessful attempt by Nezha to create a spectacle has further exacerbated the shadow of its continued decline.

According to Nezha's Q1 financial report, based on cash flow analysis, with the rumored 70 billion yuan financing falling through, its cash flow is only enough to support it until the end of Q1 2024.

In other words, Neta Auto has at most seven months left. Based on the survival timeline, Neta Auto will need to undergo the first phase of emergency shock therapy in the third quarter of this year.

Rumors of layoffs have already surfaced in non-core departments, which aligns with the company's current cash flow problems. Tan Jincheng's public denial of these rumors only exacerbates the situation for Nezha.

"Old Zhou is having a really tough time. Why don't you just stick to being an internet celebrity and stop messing around with investing and scamming stock market investors?"

In Zhou Hongyi's comment section, one highly-rated comment stands out: According to public information, Zhou initially promised to invest 29 billion yuan of his own funds in Nezha.

However, after completing the 19 billion yuan capital injection, the company subsequently transferred the shares at par value through a 10 billion yuan investment quota, which can be considered as timely loss mitigation. However, the so-called 19 billion yuan of its own funds was also invested through the listed company.

Prior to investing in Nezha, 360 had been profitable for five consecutive years. However, since 2022, its net losses to associates and joint ventures have reached 9.46 million yuan, of which the investment loss recognized under the equity method of Nezha Auto amounted to 8.94 million yuan.

As a listed company, huge investment losses not only affect the confidence of the capital market, but also bring potential debt risks from bankruptcy liquidation. The fact that 360, as a concept leader in the booming AI sector, was able to achieve a five-month consecutive decline and its stock price halved is inseparable from the potential risks of Nezha.

"See? That's why I like to make investments using ByteDance's advertising platform, funds, or my personal name."

No investment is guaranteed to make a profit, and investing through a listed company is inherently irresponsible to shareholders of all sizes.

Making a profit won't significantly improve a company's fundamentals beyond increasing cash flow. While investing the profits into production is generally a positive step, few listed companies are willing to do so.

If losses are incurred, all shareholders will have to bear the burden, which will also affect the company's specific operations. If Guomin Technology had not suffered investment losses, Tan Jincheng would not have had the opportunity to acquire it.

(End of this chapter)