2003: Starting with Foreign Trade

Chapter 983 "What goes around comes around"

October 24, 2020, Saturday, an ordinary weekend.

For factory workers who only get one day off a week, today is just a normal workday, nothing special, just like any other day.

The Shanghai Stock Exchange hall at 9:00 a.m. was a little different from usual. Countless staff members were working overtime in the hall, preparing the equipment and PowerPoint presentations needed for the bell-ringing ceremony of the company that raised $343 billion, the largest IPO in history in the world.

Unlike the Shanghai Stock Exchange employees who were somewhat emotional, the staff of this company were not affected by the "overtime" work. Even though they had rehearsed for the listing bell again and again, they still had to rehearse today.

Every employee participating in the rehearsal had a bright smile on their face. Everyone associated with the company was fully prepared and ready to embark on a feast of capital.

The employees' cheerful laughter contrasted sharply with the lukewarm demeanor of the Shanghai Stock Exchange staff, reflecting the confidence and composure that comes with financial freedom.

Prior to this, in September, after the IPO process was initiated, the real estate market in the city where the company's headquarters was located had already begun to stir. Taking Zhijiang Jiuli as an example, in less than a month, the average price per square meter soared from 4.4 yuan to 5.2 yuan.

The average listing price of second-hand homes rose by 12.4% month-on-month, with prices for super-large apartments and luxury villas also increasing, and homeowners' reluctance to sell taking the lead.

With a valuation of up to 2.1 trillion yuan, the world's largest IPO appeared in the East. When the listing was announced, related concept stocks surged, while blue-chip stocks fell sharply due to the pressure on funds to free up positions to allocate to Ant Group.

Market sentiment was also close to euphoria, with everyone chasing after it. The internet was flooded with related news. When the prospectus was released, 19 billionaires were born, and the combined wealth of these 19 people reached an astonishing $579 billion.

This is equivalent to 0.7 times that of Weilai Shares, or 13 times that of Shanchi Technology, and the number of millionaires is claimed to reach 1.6.

Some believe that if Ant Group successfully goes public, its stock price will rise by more than 50%, making it the largest listed company by market capitalization in the A-share market and creating at least 500 billionaires and 5000 multimillionaires.

It was truly a nationwide carnival.

However, behind the nationwide celebration, undercurrents were surging.

At this very moment, in the banquet hall on the second floor of the Peninsula Hotel in Shanghai, a very important summit in the financial industry was being held, and the founder and key figure of this company, which has created countless miracles since its inception, was sitting in the audience with a serious expression.

In another hour, it will be his turn to speak on stage.

Old Ma has always been adept at handling such grand occasions with ease and composure, but today he was quite conflicted. He knew very well what his prepared speech represented.

You could tell a thing or two from his expression. Even now, Lao Ma was still wondering whether to change his speech. He hadn't listened to a single word of what was being said on stage.

At 10:05, at the invitation of the host, Lao Ma walked heavily onto the stage, clutching his carefully prepared speech in his hand; Lao Ma often spoke extemporaneously.

"Wow, that's awesome! He's really bold. No matter what, we have to praise him for his guts today."

Like watching a classic movie, there are always things worth revisiting no matter how many times you watch it. Even though it was the second time Tan Jincheng had listened to Lao Ma's 20-minute speech, he still thought that this guy was absolutely amazing today.

Every high-profile event has its underlying logic. From announcing retirement to reducing the frequency of public appearances, there are special meanings behind each one.

Since the beginning of this year, Lao Ma has given far fewer public speeches compared to previous years, and the content he speaks about is no longer the kind of seemingly profound or sophisticated stuff that ordinary people would find ambiguous.

Instead, most of his posts revolve around the digital economy, making him much more "low-key" than before.

Once a person reaches a certain status, whether it's to protect their reputation or due to other concerns, they rarely make highly controversial remarks in public.

Ma's speech this time was highly controversial, as could be seen from the expressions of the audience. When Ma spoke, everyone in the audience was extremely serious, and they were all talking about the Belt and Road Initiative. Then he pulled this stunt.

After Lao Ma finished speaking, the host seemed somewhat at a loss and awkwardly tried to smooth things over.

"Yes, although he has always been outspoken, his remarks today were really too bold. Nobody expected this."

"That's right; alright, now there's nothing for you to do, Mr. Zhang."

Zhang Yong was invited to Tan Jincheng's home today as a farewell gift from Tan Jincheng before his departure. Also present were senior executives who remained in Ningbo, including Li Xiang, as well as senior executives from some core suppliers.

"Haha, now I'm definitely out of the picture."

During yesterday's conference call, the two sides discussed the topic of his departure. As Lao Ma guessed, the PR statement was indeed the work of Wei Lai's PR department, in order to minimize the impact.

Zhang Yong was initially worried about becoming the center of public opinion, but after Lao Ma's actions today, he was completely relieved, and the short-term impact on Weilai's stock price may also be minimized.

Tan Jincheng chuckled and said, "That's right. Old Ma's actions indirectly helped us. From now on, we have no buzz online."

Zhang Yong may have anticipated the buzz and controversy surrounding this speech, but at this moment, he certainly couldn't have imagined the extent of its impact or how long it would last.

In a sense, this speech marked the end of the years of unbridled growth in the internet industry.

"Let's not discuss whether what he said is right or wrong, but he certainly has a lot of courage. However, in my opinion, the internet industry really needs to be regulated. Now, every time I open an app on my phone, it tries to sell me loans. It's so annoying."

One of the senior executives from a core supplier began to criticize the current internet ecosystem based on Lao Ma's speech today, and indeed, what he said was true.

When a CEO of a large corporation leaves office, the handover process typically takes more than three months, and for complex businesses it may take up to six months, to ensure that the new CEO has enough time to familiarize himself with the business. Before the decision to leave is announced, the board of directors and the outgoing CEO begin to negotiate the handover plan, clarifying the timeline and key issues.

The people who came today were all here for Zhang Yong, and they didn't talk about work, so it was relatively relaxed.

"That's absolutely true, especially for older people like us. We have to be extra careful when using our phones, because we can easily accidentally tap something wrong."

"Speaking of which, I have to say your app is great, Mr. Tan, because it doesn't offer loan services."

Tan Jincheng quickly waved his hand and laughed, "You can't say that. I can only guarantee that our own company doesn't do this kind of business, but I really don't know if we help our competitors with this kind of advertising and promotion."

Orange Group and its nearby subsidiaries alone have multiple apps, each operating independently, with internet advertising everywhere, and loan-related ads being among the most generous advertisers.

Tan Jincheng didn't really know whether his apps accepted advertising promotions for this kind of business. He wasn't so meticulous as to manage the specific operations of each company, nor could he prevent each company from selecting advertising resources.

As long as they don't cross the line of illegality or irregularity, salespeople from major companies can't possibly refuse the sales targets they've already secured.

Because it was the weekend, information spread much faster than on weekdays. Before the meeting was even over, Lao Ma's 20-minute speech was already widely circulated online, and during the impromptu lunch break, it was trending on social media.

In a short period of time, public opinion became polarized. Although Lao Ma's reputation has not been as good as it used to be, he is still the business god who is admired by the whole nation. It is no exaggeration to say that he has the most fans on the entire Internet, and there are many people who admire him.

There were those who praised Lao Ma, and of course, there were also those who criticized and condemned him. The news of the departure of the CEO of Weilai Group, which was still trending on social media last night, was quietly swept away and no one paid any attention to it anymore.

All of Wei Lai's senior management were pleased to see this and threw themselves into their work.

There are only two months left in this year, and these two months are crucial for car companies. In the first half of the year, cars were almost impossible to sell, and no one expected that the second half of the year would be a V-shaped turnaround.

The new energy vehicle sector, in particular, is experiencing rapid growth. Companies like Wray, Tesla, and BYD, which are least affected by chip supply, are extremely busy.

"The market has seen positive growth for five consecutive months, with overall sales forecasted at 2500 million vehicles. Sales of new energy vehicles may exceed 130 million vehicles. Our good days are coming."

Since the end of September, Li Xiang has been unusually busy, traveling back and forth between Jiangsu and Ningbo, and the number of official trips he has taken has greatly increased.

Recently, the CEO handover has been underway. Whenever conditions permit, Tan Jincheng will take him along to participate in the handover. Although Tan Jincheng will fill in for him for a period of time, Li Xiang still needs to participate in the handover work.

Lotus has officially submitted its IPO application to the New York Stock Exchange. Compared to Nasdaq, the NYSE is known for attracting established automakers backed by large corporations, and Lotus has chosen the NYSE this time.

In addition, Lotus is secretly recruiting several preferred CEO candidates through a third-party company.

"That's right. This year, the proportion of new energy vehicles priced above 30 yuan has increased from 2.5% last year to about 25%, which is a tenfold increase, and it is very beneficial to us."

In cities without license plate restrictions, brands such as Weilai, Xiaopeng, and Wenjie have seen a significant increase in sales share, with Weilai, which has a first-mover advantage, being the fastest growing.

Zhang Yong, who participated in the handover, smiled and told Li Xiang that standing firm at his post until the very end and getting Li Xiang on his way as soon as possible was Zhang Yong's main task now. At the same time, bringing Wei Lai to a new level would also benefit his work in the future.

It's like a player transferring to a new club; it's definitely more prestigious to bring a championship to a new team.

In addition, in terms of policy, the subsidies for new energy vehicles and the exemption from purchase tax have been extended to the end of 2022, giving the new energy vehicle industry an additional two years of advantages.

"Lotus's business strategy differs from that of the group's parent company. You need to pay attention not only to changes in sales volume, but also to changes in the entire industry. In addition, you also need to readjust your mindset."

The CEO of Lotus has a big international reputation, but in the domestic car market, although he has a decent position, he can only be considered a "small fry". The CEO of Weilai Group is different.

To paraphrase Li Xiang's previous description in the internet industry, it's like jumping directly from CEO of Autohome to CEO of BAT (Baidu, Alibaba, Tencent), and the level of attention received is completely different.

"I understand. In fact, I've been appearing in Ningbo frequently lately, and some reporters have already started to pay attention."

Never underestimate these people's keen intuition. Li Xiang now has a temporary office at Weilai's headquarters and is appearing there more and more frequently. He also often goes down to the factory floor and contacts the strategic planning department and key clients. These were previously the responsibilities of Weilai's CEO, and Zhang Yong has also been seeing Li Xiang more and more often lately.

"Let them guess what they want. Let's not admit it for now."

Lotus's IPO is underway, so it's best not to cause trouble for yourself right now. Besides, this isn't exactly lying to the SEC. Li Xiang is indeed a candidate for CEO of Weilai, but it's not like he's indispensable.

Furthermore, it's unlikely that Li Xiang will actually take office until at least the second quarter of next year.

On the 26th, the stock price of Weilai Co., Ltd. was still affected to some extent, and it fell rapidly after the opening. Its performance that day was not very good. However, it stabilized as the market environment changed in the following days.

It all started with the influence of Lao Ma's speech, which caused quite a stir from the 26th to the 30th.

In fact, based on various subsequent confirmations, the general public should already know that new regulations for microloans are about to be introduced.

The new regulations on leverage ratios for fintech companies will directly impact Ant Group's business scale and future growth potential.

This will affect its IPO pricing, which would be a fatal blow to Ant Group. Jack Ma's controversial remarks were just an attempt to try and save the company.

On October 31, another Saturday, after a week of news circulating, regulators held their first meeting with Jack Ma and Ant Group's management.

More details have been revealed to the public, and it is undeniable that Ant Group's business is inclusive, serving small and micro enterprises, and has made considerable contributions.

However, leveraging 360 billion yuan of on-balance-sheet assets to control 1.8 trillion yuan of funds has indeed brought enormous risks to the financial system.

On November 1st and 2nd, for two consecutive days, industry leaders took to the field, personally writing articles to analyze and criticize Ant Group's business model.

The level was getting higher and higher, and public opinion was in an uproar. Old Ma's reputation also collapsed quickly.

If public opinion was polarized before the meeting, by this time Old Ma was practically universally hated.

"See? Things can change so quickly sometimes. Being famous isn't always a good thing."

Also on November 2nd, new regulations for microloans were officially released, impacting internet lending businesses including Ant Group.

These past few days, Tan Jincheng has been exceptionally busy, so busy that he hasn't had time to participate in the CEO handover process at Weilai Group.

As the actual controller of a large internet group that surpasses Baidu and ranks seventh in market value in China, he was forced to get involved in the actual operation of Orange Group after Lao Ma's speech.

"The 'O' in OTA has brought a lot of development opportunities to Orange, but you also need to be careful in the current public opinion environment."

The person Tan Jincheng was chatting with was the same benefactor from the beginning, Leader Gu. This person was basically semi-retired and now spent most of his time living in Beicang, leading a leisurely life.

“I know we’ve been busy with this lately.”

Orange Group has its own payment license, and Tan Jincheng has always instructed his companies not to participate in micro-loan business. However, Zhang Yong's farewell banquet that day made him realize some problems.

Money can be a powerful motivator. The Orange Group's headquarters will implement Tan Jincheng's strategy, but there's no guarantee that its subsidiaries will follow suit.

In addition, the advertising also needs to be cleaned up. Recently, the entire Orange Group system has been in a state of self-examination.

"Speaking of which, you were quite prescient. Although you were affected by this incident, it also brought you a lot of attention and benefits."

If there are negative examples, then there are positive examples.

Orange doesn't do those things. Its transformation from e-commerce to R&D investment in fields such as artificial intelligence, big data, cloud computing, and the Internet of Things has been going on for quite some time.

This is a completely different direction from the recently criticized fintech, and it will be least affected in terms of business adjustments.

Although it was Jack Ma who took the blame, other companies are not clean either. Jack Ma, Richard Liu, and Lei Jun all have very large businesses in this area.

“I understand that at this time I will only stay behind the scenes and not take the lead. In addition, I have already asked the team to keep an eye on public opinion on the Internet. I can’t get myself into trouble.”

Leader Gu was considered a benefactor to Tan Jincheng. His visit to Tan Jincheng was merely a reminder, with no other intention.

Weilai Group is a key enterprise, as is Orange Group, which is involved in artificial intelligence. One of them has already been involved, and the province does not want the other to be involved as well.

“You’ve always done a good job and are cautious, so I trust you on that. Don’t worry too much about this.”

As one of the earliest government officials to come into contact with Tan Jincheng, Lao Gu always paid attention to Tan Jincheng, regardless of whether he was working in Beicang or not.

Old Gu doesn't understand the internet industry as deeply as he does the traditional industry. During the peak of the internet finance boom, Orange Technology never got involved, and its market value was severely affected during that period.

At the time, no one understood why someone with a payment license would not take advantage of such a good business opportunity; it seemed like a waste of resources.

Old Gu was one of them, but looking back now, how correct Tan Jincheng's decision was.

Every business needs to operate within a framework. From the very beginning, Tan Jincheng was aware of the dangers of this industry and was able to resist the temptations.

This was such a cautious yet decisive decision. If you calculate it, this one business alone, over the years, could have added at least tens of billions of yuan in revenue for Orange Technology, given its market size.

Giving up a market worth tens of billions, or even hundreds of billions, takes real courage.

However, Orange Group is indeed not short of ways to make money. Its e-commerce business is generating stable output, its gaming business is developing better and better, and it has also driven the upstream and downstream industrial chains.

Although Gaode Maps and Dingding, its two core businesses, are still operating at a loss, their influence is growing.

This year's special events have brought tremendous development opportunities not only to Dingding, but also to Gaode Maps.

With 5.3 million monthly active users, it ranks fifth in the entire network, and its local services sector, including ride-hailing, is also developing well.

Gaode Maps has transformed from a map navigation tool into a national travel platform, further expanding its business into the field of life services.

In the high-precision map market, Gaode and Baidu occupy half the market share, and their huge traffic also provides Orange Group with a large amount of data for its research in artificial intelligence.

All four core business segments are developing well. If Ant Group is a fintech company, then Orange Technology is a true technology innovation company.

This public opinion storm has had a significant impact on both listed and unlisted internet companies, but Orange Group is one of the less affected ones.

This is the advantage brought about by Tan Jincheng's in-depth strategic planning over the years.

On November 3, the Shanghai Stock Exchange issued an announcement deciding to postpone Ant Group's listing on the STAR Market. On the same day, Ant Group announced that it would also postpone its listing plan on the Hong Kong Stock Exchange.

That evening, Alibaba's US-listed shares, which were the first to be affected, plummeted 8.14%, wiping out $678 billion in market value, marking the second-largest drop in its history.

On November 4, Ali's Hong Kong-listed shares plummeted by 7.54% on heavy volume, while Yunfeng Financial fell by 5.42%. Most Ali-related stocks in Hong Kong opened lower, with Ali Health and Ali Pictures both experiencing varying degrees of decline due to the news.

In the A-share market, the Ant Financial Index closed down 2.3%, with related stocks declining across the board. Junzheng, which had previously performed the best, was close to hitting the daily limit down.

"Alright, now you're firmly in control of your position as the richest person."

At 7 p.m., Tan Jincheng, looking relaxed after dinner, took a walk with his wife and children and ran into Zhang Xupeng and his family, who also looked content.

The postponement of Ant Group's IPO has had a significant impact on related concept stocks, but for A-shares, which are temporarily relieved of the pressure of capital outflow, it can be considered a "positive development".

The three major indices fluctuated and closed higher, with the banking sector rising across the board. Banks such as Ningbo Bank, China Merchants Bank, and China Construction Bank all saw varying degrees of gains.

It's worth noting that Tan Jincheng is also one of the major shareholders of Yongcheng Bank.

The automotive sector also saw significant gains, with Weilai Co., Ltd. rising 5.07% to close at 268.5 yuan, giving it a market capitalization of 5842 billion yuan.

FlashTech, whose stock price has performed well since the second quarter, also saw a good intraday increase, with a market capitalization of 292.01 billion yuan, a new high for the period.

Incidentally, FlashTech's plan to acquire Leichi New Energy has been approved by regulatory authorities.

The overall valuation is 40 billion yuan, of which 10 billion yuan will be paid in cash and the remaining 30 billion yuan will be paid through the issuance of new shares.

"Get lost, you just want to stir up trouble, don't you?"

The ten days of upheaval brought about changes to the entire industry, and the impact went far beyond that; in short, the landscape changed dramatically.

(End of this chapter)