2003: Starting with Foreign Trade

Chapter 982 "For Stock Prices to Rise, the Story Must Be Told"

"You've prepared very well. Let me take a look first. That's all for today."

Each plan has its own logic and feasibility. Originally, Tan Jincheng planned for Li Xiang to take over as CEO of Weilai after 2022, so that both Lotus and Weilai would be stable.

Incidentally, this wouldn't affect Lotus's IPO plans. If that's the case, it wouldn't really matter who Lotus chooses as CEO; promoting from within would actually be better.

However, given the current situation and the inability of Li Chunrong to return, hiring from outside is indeed the best option, as it can at least bring some publicity to Lotus's IPO.

All three candidates and their backups have strong resumes and their own strengths. Murong Tao and Stephen Winkelmann both have many years of experience in the high-performance car field and have rich management experience and technical background.

Murong Tao also has business management experience with a British background, and both can be a perfect fit for Lotus. At the same time, by leveraging each other's reputation, Lotus's brand image can be quickly enhanced.

The weakness is that neither of them has much experience with pure electric vehicles, which is an unknown variable for Lotus, which is currently moving towards electrification.

In contrast, Robin Danholm, while less experienced in the luxury car industry than the other two, has a far richer understanding of the operational models of new energy vehicle companies.

"Kids make choices, adults want it all; how about this, all four of you go and make your own, and see who you can win over."

It was uncertain when Li Xiang would be able to step down, but it was definitely necessary to start preparing now. After several days of research, Tan Jincheng decided to contact four people, including the president of Ferrari Greater China.

They extended offers to these four renowned executives through a top-tier executive search firm.

"So who does the boss favor? That way we'll have a clear target to focus our attacks on."

Without hesitation, Tan Jincheng said, "Robin. If we can acquire Robin, it will benefit our entire group."

Robin began working at Toyota Motor Corporation in 1989 as its financial officer, and subsequently worked for several other internationally renowned companies over the years.

In terms of personal experience, he has been engaged in finance-related work for more than 20 years.

Skilled in corporate strategic planning, cost control, and governance of technology companies.

“Generally speaking, for large group companies, the chief financial officer is the best candidate to succeed the CEO. Lotus’s IPO, whether successful or not, requires an excellent financial officer.”

Moreover, poaching Robin is the easiest task. Compared to Murong Tao and the other two, Robin's current role at Tesla is more like a strategic advisor and board member, rather than a full-time CEO.

A brand-new executive position, a brand-new work environment, and new challenges may be a tempting challenge for this legendary woman who rose to fame with Pokémon cards.

“We contacted these individuals through third-party consultants, emphasizing the non-competitive nature of the new opportunities and mitigating risks.”

Given that Robin and Musk have been working together for six years, Tan Jincheng would first need to avoid misunderstandings if he were to poach him.

Tesla is currently one of Jinshidai's most important suppliers, second only to Weilai Auto in actual status. Unless absolutely necessary, Tan Jincheng still doesn't want to cause any misunderstandings.

"In addition, we should not over-promise on strategic direction. We should rely more on actual market size forecasts and feasibility reports on technical routes to persuade the other party, and avoid making promises lightly."

"Another point is to respect the other party's existing career rhythm and not force them to start full-time immediately. A transition period of three to six months can be set to allow them to gradually hand over their existing positions at Tesla and other companies."

Li Xiang listened attentively, nodding repeatedly.

Lotus's core selling point for these globally renowned management figures is strategic leadership, cutting-edge technology, and a mission of sustainable development.

If possible, adding a flexible work schedule would make it even more attractive.

Of course, there are also preferential treatments in terms of benefits. Like most well-known companies, Lotus adopts a cash plus stock plus performance-based compensation model for its senior executives.

In addition, working at Lotus also provides opportunities to enhance one's personal brand value, and Li Xiang is one of the beneficiaries.

Before joining Lotus, Li Xiang was just a newcomer who switched from the internet industry to the automotive industry, and his position in the senior management ranks was not high.

Through his years of experience at Lotus, Li Xiang has not only increased his personal wealth but is also a well-known professional manager in the automotive industry.

Once Lotus successfully goes public, its status in the automotive industry will rise further. At the same time, Li Xiang's experience at Lotus over the past few years has allowed him to achieve a leapfrog development in his position within the company.

In addition to his role as CEO of Lotus, Li Xiang also holds a position as a senior vice president at Weilai Group.

"Alright, the rest is up to you. Go and make the arrangements. But there's no rush. Take it slow and focus on getting Lotus listed first."

After getting rid of Li Xiang, Tan Jincheng still had a lot of things to deal with; even as the richest man, he had quite a few troubles.

Aside from the turmoil caused by senior management, although Weilai is currently developing very smoothly, it also has many problems.

After years of operation, Weilai Group has long since evolved from a single-brand enterprise into a large-scale vehicle group with a multi-brand strategy.

The acquisition of Zhidou filled the last gap in Weilai's competitiveness in terms of price.

From economy cars priced at 50,000 yuan (Zhidou) to luxury cars priced at one million yuan (Lotus), covering more than ten price ranges, this avoids internal competition while also meeting the needs of users with different spending power.

The Yuechi brand focuses on cost-effectiveness, the Xingtu brand is more aimed at the young and sporty market, and the Weilai brand is the main player in the luxury electric vehicle market.

With its multi-brand strategy covering the entire market and maximizing its user base, Weilai is no longer a vehicle manufacturer targeting a single user group.

In terms of geographical reach, Weilai's layout has also formed a preliminary global trend, just waiting to bear fruit.

At the same time, the multi-brand strategy has brought great benefits in terms of technology and resource synergy, reducing R&D costs, risk diversification and brand protection.

However, risks also come with the multi-brand strategy. The management complexity is increasing and internal friction is inevitably aggravated.

For example, in the market segment between 10 and 15 yuan, the upcoming Exeed, Yuechi, and even the Aion series will be in competition with each other.

Once a price war breaks out in the new energy vehicle market, these major brands will inevitably lower their prices, dropping to below 100,000 yuan.

This would inevitably intensify the competition with Zhidou.

The multi-brand strategy has also led to an bloated organizational structure and increased R&D and marketing expenses.

Throughout 2020, Weilai's R&D expenditure increased by 22% compared to 2019, and its marketing expenses also increased by 16.64% year-on-year.

With revenue growth, expenses are also increasing, and in addition to these, Weilai has added a very large expense this year.

That is due to the current special circumstances, including the increased travel expenses for Tan Jincheng himself and a group of senior executives.

In previous years, Tan Jincheng and his executives were quite frugal with their travel, often combining public and private transportation such as airplanes, high-speed trains, and private cars.

While public transportation may occasionally be inconvenient, it can significantly reduce costs. In this regard, Tan Jincheng is quite frugal with his senior executives.

However, given the current situation, public transportation clearly cannot guarantee safety, especially for cross-border business, which is even more inconvenient.

However, it is clear that this situation is not feasible this year, and Tan Jincheng himself and the executives of his various companies have had to increase the frequency of their use of business jets.

For short-distance business trips, executives mainly choose private cars and private cars, while for long-distance travel, they rely more on charter flights and shared flights, including private jet leasing.

Even if public transportation is truly necessary, the priority is usually business class or first class, which offers greater privacy and less contact with others.

In addition to these, under the normalized travel pattern, travel has increased significantly in terms of safety, including itinerary planning, accommodation, and dining.

To facilitate travel, Wei Lai organized his own fleet of vehicles. These are unavoidable and will not change for at least three years.

This expense has inadvertently placed a certain burden on the company.

"From a local enterprise to a global group, a multi-brand strategy is an important support. Achieving rapid growth by expanding into new markets and through technological synergy is an important strategy for Weilai."

Throughout October, the biggest market focus was on Ant Group's IPO and the battle for the title of richest man in Hong Kong. By the end of October, Ant Group had officially passed the hearings of the Shanghai Stock Exchange and the Hong Kong Stock Exchange and listed on the A+H share basis.

According to the plan, Ant Group will be listed on the Shanghai Stock Exchange (STAR ​​Market) and the Hong Kong Stock Exchange simultaneously on November 5.

Ant Group's IPO was extremely popular, with subscriptions exceeding HK$2000 billion on the first day alone, and the financing quotas of many securities firms were quickly snapped up.

In Hong Kong, the red shoe mechanism guarantees that retail investors will receive at least one lot, resulting in exceptionally active trading. In A-shares, many retail investors are turning to the Hong Kong stock market because the STAR Market requires a minimum of 50 yuan in assets and two years of trading experience.

The impressive code and the rapid IPO propelled Jack Ma and Ant Group to the peak of their popularity.

No entrepreneur or company could rival Jack Ma and Ali in terms of attention throughout October, not even Tan Jincheng.

At the end of October, when Jack Ma and Ant Group were at the height of their fame, Wei Lai quietly held a conference call to discuss the company's third-quarter financial report and future strategy.

The meeting was attended by representatives from several securities firms, institutions, and some individual investors. Tan Jincheng personally chaired the meeting and answered questions from investors.

"Since the beginning of this year, our Wylie brand, including the ET5 and ES3 models, has achieved a very important breakthrough in the European market."

"Currently, in the Nordic market, the Weilai brand holds the number one market share in several Nordic countries, and in Germany, one of the most important markets in Europe, our brand sales have also steadily ranked among the top ten."

"In addition, we are also developing rapidly in the UK. Besides these important markets, we are continuing to expand into other European markets." "If we had to define it in one word, this year would be the first year of WIL's globalization. To turn our technological advantages into actual revenue, it is far from enough to just focus on the domestic market. Globalization is the trend for WIL and other car companies."

"Since the beginning of this year, Weilai has indeed increased its expenses in R&D and marketing. I also admit that there is some overlap and waste in some R&D, and the organizational structure is also somewhat bloated."

"However, this is an inevitable step in the group's globalization strategy, and it is also a very big challenge and test for me. So please give me and Wei some time."

Whether institutional or retail investors, what they care about most is the company's revenue and costs, which are directly related to the company's profit margin.

Due to both objective and subjective factors, it is certain that this year's profit margin will be significantly lower than in previous years.

To put it simply, although the acquisition of Zhidou Auto was a collaboration with Flash Technology and various city investment companies, at least 10 billion yuan would need to be invested to bring Zhidou onto the right track.

“We have noticed that Weilai Group has further reduced its R&D expenses for gasoline vehicles. Does this mean that Yuechi Auto will also shift to new energy vehicles?”

"Yes, that's for sure. New energy vehicles are the future trend, and not just this year, but we will further reduce the R&D costs of gasoline vehicles in the coming years."

"Until the transformation of Yuechi Auto is completed."

Over the next five years, the group will further optimize its brand portfolio, integrate sub-brands and models with overlapping positioning, and focus on core sectors.

Companies like Weilai (high-end pure electric and range-extended), Exeed (young technology), Yuechi (mass market), Zhidou and Yangzi, Tank and even Lotus will focus on niche markets.

As for Proton, in addition to using its home market in Malaysia to reach the Southeast Asian market, it is also an important springboard for exports to the low-end market.

The group's current export strategy is quite clear: to export high-end brands to the European market and target wealthy consumers.

Of course, there is also the global market for fabric, and Weilai and Lotus have huge development potential in these two markets.

The Volkswagen brand and the lower-end Zhidou cars will mainly be exported to Southeast Asia, South America, and Africa.

Proton's global distribution channels are very useful.

In addition to a clear market positioning, the group company also needs to strengthen its technology platform and establish a technology sharing platform to avoid redundant research and development.

Imagine achieving "tiered pricing" for technology through brand positioning differentiation, collaboration among parts suppliers, and even sharing a single part across multiple models. This would significantly reduce the cost of future models.

"Then, Mr. Tan, what is your definition of a globalization strategy? And how do you allocate resources?"

For a stock price to rise well, the story must be told clearly and concisely. Tan Jincheng's series of remarks in the conference call excited investors.

"We'll focus on in-depth localization operations. In the European and American markets, we'll be using Lotus and Vellfire, in Southeast Asia, we'll be using Proton and Elantra, and in the African and South American markets, we'll be using Zhidou Auto."

Zhidou manufactures microcars in China, but it can also develop a series of compact models and SUVs for overseas markets.

As long as it's cheap, it won't have trouble selling in markets like Africa and South America.

"In addition to these, we will also use data-driven methods to optimize product planning and resource allocation for each brand, reduce internal friction, and lower costs."

"For example, by expanding into lower-tier markets, we can provide test drive touchpoints for various brands, and so on."

Since it's about telling a story to investors, how can we forget about the most popular keywords right now, such as big data and cloud computing?

Tan Jincheng's ability to achieve great success in the investment field is naturally due to his mastery of storytelling.

The channels serving the Weilai Group are not limited to Weilai's own channels; they also include collaborations with channels such as Zhidou, Lifan, Shanchi, and Meizu.

In addition to these, the Exeed channel, which is under construction, and the joint venture channels with Mitsubishi and BMW can also provide some assistance to Wei.

Don't forget that Weilai has partnerships with two internationally renowned automakers. Although Mitsubishi is not what it used to be, its channel advantages are still strong.

In terms of distribution channels, Weilai is in no way inferior to independent brands. Meizu's development of offline channels in recent years has brought huge benefits to Weilai.

Chen Mingyong, who comes from OPPO, has the natural dedication of OV people to offline channels. Even in this year's environment, Chen Mingyong has not given up on expanding offline channels.

As of the end of October 2020, Meizu's offline store scale was second only to OPPO and Vivo, Huawei, and Honor, and even more than Xiaomi.

When it comes to developing offline channels, OV has been an incredibly successful force since the BBK era.

"Thank you, Mr. Tan, for such a clear and concise explanation of the group's business. However, I still have one question: is it true that Mr. Zhang Yong has been leaving the company recently, as rumored in the market?"

What's bound to happen will happen. Starting in mid-October, rumors spread that Zhang Yong, the vice chairman, CEO, and executive president of Weilai Group, would leave Weilai and join Nezha.

Zhang Yongzhi is a crucial pillar of Weilai's overall operations and B2B market, and an absolute hero in Weilai's growth.

At the same time, he is the executive with the most shares in Weilai Group, second only to Tan Jincheng.

Once Zhang Yong leaves his position, it means that the shares he currently holds, valued at over 77 billion yuan, will be directly available on the secondary market.

Currently, Weilai Co., Ltd.'s market value is maintained between 5500 billion and 5600 billion yuan, and it is continuing to rise.

Zhang Yong's stock holdings are likely worth tens of billions of yuan, and the rumors of his departure have put enormous pressure on the stock price in the secondary market.

Tan Jincheng nodded: "It's true. Due to his future career plans, President Zhang will be leaving the company on New Year's Day next year. On behalf of Wei, I would like to thank President Zhang for his many years of dedication."

Since joining Weilai in 2008, Zhang Yong, as one of the founding team members, has indeed made tremendous contributions to Weilai over the past 13 years as Tan Jincheng's chief steward.

Of course, Tan Jincheng and Wei Lai have also treated him well, as evidenced by his net worth of tens of billions and his improved status in the industry.

In other interviews, Tan Jincheng could be vague, or even tell a little white lie like Lei Jun (Lei Jun) would be fine.

However, this is a formal shareholder conference call, and it is not permissible to spread false information to mislead investors.

Even if the stock price is under pressure, there's nothing that can be done.

Tan Jincheng's public acknowledgment of Zhang Yong's departure elicited mixed reactions from the parties participating in the conference call.

For a moment, the conference call descended into brief chaos, but Tan Jincheng did not stop it, allowing everyone to fully express their emotions.

"It's so sudden, but this is also a common occurrence in the industry; we wish Mr. Zhang all the best for his future endeavors."

After processing his emotions, the manager of E Fund ChiNext ETF, which currently holds the largest number of shares in Wei Lai, remarked with emotion.

"Yes, the flow of talent in the industry is normal. Mr. Zhang's departure is indeed a great loss for Wei. However, when someone leaves, someone else will come. Please rest assured, my esteemed clients."

"Oh? So, Wei Lai already has a candidate for the new CEO?"

"Haha, I can't reveal that now, you'll all find out in time; Okay, next question."

The conference call with Wei Lai took place after the market closed at 10 p.m. on October 23 and lasted for two hours.

During the two hours, Tan Jincheng answered questions about company strategy, revenue and costs, October sales, and other related topics.

However, the most widely circulated news was Zhang Yong's departure, which was absolutely shocking for the automotive industry this year.

The news began circulating widely in mid-October, clearly a publicity stunt by Nezha. After half a month of rumors, it was finally confirmed.

After the conference call ended, Zhang Yong also wrote a heartfelt farewell message on his personal social media account.

Subsequently, Weilai Auto's official website and Tan Jincheng both forwarded Zhang Yong's farewell message, thanking him for his contributions over the past ten years.

Other senior executives of Weilai who are active on the internet, including Hu Zhengnan and Li Xiang, also forwarded Zhang Yong's farewell message and sent their blessings.

At 8 p.m., the hashtag for Zhang Yong's resignation quickly rose to the top of the trending searches on social media platforms such as Weibo and Douyin.

What's rather amusing is that, because it shares the same name as the current leader of Ali, many uninformed onlookers rushed to Ali's official channels to verify the authenticity of the news.

Compared to Zhang Yong from Weilai, Zhang Yong from Ali is more famous.

"This kid is definitely doing it on purpose."

When Lao Ma, who lives in Shanghai, saw the trending search terms, his brows furrowed. The terms only contained the person's name, without any job title or company information, which clearly indicated that Wei Lai's public relations department was behind it.

In recent years, the relationship between Ali and Chengzi has improved considerably. Through cooperation with SAIC and Xiaopeng, Ali has also had many exchanges with Weilai in the automotive field.

During the acquisition of Meizu, Tan Jincheng also received a favor from Lao Ma, and the two had a lot of exchanges.

Normally, Lao Ma might have called to tease Tan Jincheng, but he wasn't in the mood for that right now.

Despite his seemingly glamorous image to outsiders, Lao Ma is currently in a state of great anxiety, as he is scheduled to speak at the Shanghai Bund Financial Summit tomorrow.

(End of this chapter)