2003: Starting with Foreign Trade

Chapter 476 What is Changfeng Group Like? (Seeking Monthly Tickets)

It's not easy to find a listed company that has poor performance and is engaged in automotive-related businesses, but ByteDance's advertising platform actually found one.

That is Changfeng Group, headquartered in Xiangcheng, a company listed on the Shanghai Stock Exchange main board with a stock code ending in 991, which is quite in line with Tan Jincheng's preference for odd numbers.

The company's current market value is around 60 billion, and the major shareholder controls 45.9% of the company's shares, which is about 28 billion in market value.

Even at the current price, acquiring the shares held by the major shareholder is not out of the question. There are plenty of cases of small companies swallowing large ones in the capital market, and it is not impossible for this to happen to FlashTech.

"Their car sales are already experiencing significant problems. Although it hasn't been exposed yet, and their market value is still high, I'm certain that unless the stock market reaches 1 points, their market value will continue to decline during a normal correction."

"There is even a possibility of bankruptcy."

"Haha, this is good news for us. Are there any other companies keeping an eye on this?"

"Not yet. We only noticed it because Mr. Cheng noticed the shareholding ratio of his major shareholder and saw problems in the financial statements. In the current bull market, people don't pay much attention to it."

"That's good. Keep a close eye on things over there. If there are any issues with government relations that need to be resolved, let me know and I'll help you coordinate and resolve them."

The largest shareholder of Changfeng Group is Xiangcheng Trust, which is similar to Ningbo City Investment.

Unlike other state-owned holding institutions, the main task of urban investment companies is to make money. If Changfeng Group really has financial problems, their first choice is not to save the company, but to sell off their shares.

A 45.9% stake is already a substantial amount for a listed company, enough to secure controlling interest.

"The A-share market is still in a bull market, and Changfeng hasn't had any major issues yet, so it's probably not easy to handle. My idea is to maintain contact with Changfeng first, and give the reason that we are conducting research and learning some car manufacturing technology to help our batteries."

Tan Jincheng smiled at Cheng Linfeng: "Our kind of open research might even boost his stock price, damn it."

When an institution formally requests to conduct research on a listed company, it will appear in the company's announcement. Some listed companies even use on-site research by well-known institutions to stir up trouble and ride on the other party's reputation.

In the heat of the moment, it's not impossible for a stock to open higher or even hit the daily limit after a brief announcement, since there are plenty of retail investors in the market who would buy just because of a reputation.

"Haha, is this some benefit we're giving to the major shareholder before the acquisition?" Cheng Linfeng laughed.

He was quite proud of this, saying that the possibility of the stock price rising was actually quite high, and that ByteDance's engine deserved its reputation in the secondary market.

It has been almost a month, and as the index adjustment deepens, the massive engine that drove the sell-off above 6000 points is increasingly being mythologized by the market.

Although experts are still saying that the index will continue to rise, as long as this goes on, retail investors are bound to panic. This is only natural, and those who ran away early will be brought up again.

Cheng Linfeng, who is in charge of ByteDance's secondary market investment business, is now quite famous among secondary market investors. Although it has been almost a month, the legend continues.

"There's nothing we can do. That's how it is when the market is crazy. We can't control it. Mr. Huang, you should submit a formal research application to Changfeng Group. Let's make it look like we're doing it right. But Mr. Cheng, please don't show up. Otherwise, if something goes wrong, everyone will blame you. But Mr. Huang might suffer then."

This marks the first time that ByteDance's advertising platform, Ocean Engine, has officially and publicly conducted research on a company, and the person sent was the company's CEO. It is also the first time that Huang Ming has publicly performed his duties as the general manager of Ocean Engine.

Whether in the primary or secondary market, it is bound to attract considerable attention.

"Haha, this is nothing. If you're afraid of being scolded, then you shouldn't be an investor," Huang Ming said nonchalantly.

That's true. No one in the investment and finance industry is without a ruthless heart. If you're not ruthless, you can't do this job. Getting scolded is nothing.

Previously, Huang Ming had not issued a research request to Changfeng Group. These data were all obtained by Huang Ming privately using his personal connections and with the cooperation of a business investigation company.

As for the formal research application, it was just a formality to give Flashway an opportunity to get involved in the acquisition of Changfeng Group.

"Alright then, but don't stay there for too long. Remember to come back before the New Year. We can talk about other things after the New Year." Tan Jincheng nodded.

This was Tan Jincheng's first time officially using Dingding's video conferencing function. Whether it was due to Dingding itself or the Huangming Hotel's network, Tan Jincheng's experience with the meeting was not good.

The network is choppy; the Dingding project team needs to do some optimization.

"Oh, by the way, you two should give feedback to Dingding's project team about your experience using the video conferencing this time, give them some suggestions, and let them make some optimizations."

"Understood, no problem. But is there something you need from President Tan that made me come back before the New Year?" Huang Ming asked from the other end.

Currently, ByteDance's advertising platform is in a semi-vacation state. Apart from those on duty and two assistants left for Cheng Linfeng, the securities business departments have started to take turns on vacation, and investments in the primary market have been completely frozen.

Apart from the two bosses who still have some work to do, the staff's workdays are incredibly leisurely, practically like they're on an early holiday.

If it weren't for the fear that directly putting the company on holiday would have a negative impact on the A-share market, Tan Jincheng would have preferred to give all the employees of ByteDance's advertising platform a holiday, which would also save on electricity costs.

Huang Ming and Cheng Linfeng were in charge of the preliminary preparations for the backdoor listing. They weren't particularly busy. Cheng Linfeng's usual work was already quite easy. In addition to assisting Huang Ming in researching Changfeng, Huang Ming was also responsible for collecting information on lithium-related stocks as assigned by his boss.

The boss only asked him to collect relevant stock information from domestic and foreign companies, but not to buy them. This task was quite easy. However, if he were to buy them, he wouldn't have the money. Although ByteDance had more than 3 million yuan in cash in its accounts, it was not enough to support the project funds of both major sectors at the same time.

At present, the most important thing for Flashpoint is to go public through a reverse merger. Only by going public and having new financing channels can it obtain more funds.

"Nothing major, we just came back to discuss the company's investment plans for next year and the holiday arrangements for the Spring Festival, and also to celebrate New Year's Day."

Tan Jincheng didn't give a direct answer. He wouldn't interfere with Huang Ming's work; he could do whatever he wanted and go wherever he wanted in his daily life. Now that Orange Products Club was online, the need for him had greatly decreased. He only had this one project on his hands, and if he wasn't reminded, he might really stay in Xiangcheng for several months, and might even have to stay in Xiangcheng for the New Year.

Hunan Province also appeared to have suffered quite severely in the 2008 snow disaster.

"Okay, I understand. I'll go and make the arrangements."

Although I don't understand why the boss would specifically give this instruction, I'll just listen to it.

"Alright, that's enough for today. I'm not busy at work, so I'm not going to take up your weekend rest. This internet connection is also unpleasant. Let's leave it at that."

The three chatted for over an hour, and it seemed there was nothing left to talk about. Tan Jincheng had had enough of the video conference's quality and was ready to end it. But he had to put up with this terrible pixel quality for many years to come; it was really unbearable.

For those accustomed to 5G surfing, going back to the 2G era would probably be the most painful experience.

In the early hours of November 12, a Shanghai-listed company issued an announcement stating that Yongcheng ByteDance Investment Co., Ltd. had submitted a research application to the company. Sweeping the list of top gainers and losers, ByteDance, which had disappeared from the A-share market for nearly a month after the 6000-point mark, has once again appeared in the public eye.

Although it's the middle of the night, stock market investors don't go to sleep that early. Many of them are probably busy grabbing discounted Adidas and Nike shoes at the Orange Products Fair. And let me tell you, most of them have computers at home and are still awake late at night, and they probably have some money in their pockets.

"Holy crap, what does this mean? Hengshan Road, which has been missing for so long, has reappeared? But why is it out conducting research?"

"Boss Tan is really good at stirring things up. He's selling clothes and shoes here, and he's planning something else over there?"

"What the hell? I spent money on their website tonight, and they're trying to scam me out of my money during the day?"

The absence of Taoguba and Xueqiu does not mean that stock market investors of this era do not have their own ways of communicating. Although primitive, they all have their own channels, and every circle, no matter how primitive, has its own way of communicating.

What is Changfeng Group? Many shareholders and ordinary people don't know, but if you mention a car brand, many people will know it: Cheetah.

Changfeng Cheetah's start can be described as a perfect beginning. Originally engaged in military production, after the military-to-civilian conversion, they were relocated to Yongzhou, Hunan Province. Under the leadership of factory director Li Jianxin, they first solved the problem of feeding their employees by producing tires.

In 1985, Changfeng's original entity built a production line with an annual output of 30 tires. After solving its financial problems, it began to work on manufacturing cars, and the area they chose was the relatively niche off-road vehicle market.

In the early 90s, Changfeng partnered with Mitsubishi. It was during this period that Changfeng's predecessor was formally restructured into Changfeng Group, and the Cheetah trademark was also born during this time.

For a long time, the Changfeng Cheetah almost dominated all official off-road vehicles. In movies and TV shows in the 90s, the Cheetah was a common sight, and it was living a very comfortable life.

If we were to ask why Cheetah, once invincible in the business off-road vehicle market, has fallen to this point where it's on the verge of collapse, there's only one explanation: "They tried too hard!"

It is well known that Japanese cars are generally stingy with horsepower. Changfeng Cheetah, which wanted to enter the civilian off-road market, was no exception and had to cut corners on horsepower. With a price of over 30 yuan, the horsepower was insufficient, and the fuel consumption was too high for family use. Naturally, the development of the model was a failure.

However, relying on its old foundation, Changfeng was doing quite well before 2004. The turnover of their company alone was equivalent to half of Yongzhou's GDP.

However, in 2004, in order to achieve broader development, Changfeng moved the company to Xiangcheng, the provincial capital, and successfully went public, raising 10 billion yuan in the A-share market. It also acquired Yangzi Pickup. Everything seemed to be thriving.

However, things didn't go as planned. Faced with the rapidly developing economy, Li Jianxin, the leader, seemed to have lost his head. After all, off-road vehicles are a niche market, and Cheetah's sales have remained at around 2 units per year for the past few years.

Seeing competitors break through with sales of 10 or 20 units and even challenge international brands, Changfeng launched a family-oriented SUV model in 2006. At the same time, it cooperated with Bird in the sedan business to launch an MPV.

In addition, new models were launched in the existing off-road vehicle business, but inevitably some features were reduced in order to reduce costs.

The launch of multiple models and the compromise of the core business to the market did not bring about a qualitative change for the company; on the contrary, it was the beginning of deterioration.

According to the information collected and returned by Huang Ming, although Changfeng has two R&D teams, they are practically just sitting there, with no R&D capabilities whatsoever. After so many years, they haven't even fully grasped the chassis of the Mitsubishi Pajero, the company they first started cooperating with, let alone building new cars.

It has no advantage in the passenger car market, and since the factory moved to Xiangcheng, its quality has been somewhat questionable, with many basic errors occurring, ruining the military-grade reputation it once built.

It was also starting last year that Changfeng's finances began to deteriorate rapidly. They produced a whole bunch of models, but currently, the only thing keeping them afloat in the market is the original off-road model, along with government procurement.

In this respect, Geely is somewhat similar to him in the future. Geely also used a "car-sea strategy" for a period of time, and produced a lot of trademarks. If it weren't for the Emgrand, it would have been gone.

Many car companies have actually gone bankrupt in this way over the years. Getting into the car business is a money-burning affair. A once-glorious company may be pushed to the brink of collapse in an instant with just one wrong decision.

As for whether they can survive, that's up to fate. But it was precisely because of this mistake that Flashgate had the opportunity to try to intervene in Changfeng.

By using Changfeng as a shell company, FlashTech achieved its listing, becoming another star listed company with a brand-new and sound financial condition. As for the original automotive business, it was directly spun off; those that could be used were kept, while those that couldn't were cut.

The difficulties are considerable, but in Tan Jincheng's view, the opportunities are still great.

On November 12, the market opened at 9:30 a.m. Changfeng Group opened lower along with the broader market. Within five minutes of the opening, the stock price surged rapidly, with the highest fluctuation exceeding 6% and the increase exceeding 4%.

By the close of trading in the afternoon, Changfeng Group closed at 15.29 yuan, up 2.55% at the close, with a single-day turnover of over 1 million yuan, achieving a rise against the market trend.

Even a simple survey announcement is enough to show that ByteDance's advertising platform has already established its influence in the secondary market.

Cheng Linfeng stared at the intraday chart of Changfeng Group, feeling very satisfied. This sense of accomplishment was something money couldn't buy.

(End of this chapter)