Rebirth 08: Rise from copycat phones

Chapter 600 Yihai Technology's Overseas Pressure and Listing

The official release of Zhiyun Group's annual financial report last year attracted global attention, but the stock market remained calm... After all, investors, especially large investment institutions, had already conducted statistical analysis through various third-party channels and had already analyzed Zhiyun Group's revenue and profits in advance.

Based on this, major investment institutions also bought or sold shares in advance, and after making their moves, they waited for Zhuyun Group to officially disclose its annual financial report.

As for waiting until Zhuyun Group releases its annual financial report before buying or selling shares, by then it will be too late...

After the annual financial report was released, although there were some discrepancies in various data, the overall revenue and profit, as well as the data of several core businesses, were largely the same, so there was no fluctuation and the stock price continued to remain stable.

However, the release of annual financial reports by Xu Shenxue's other listed companies has triggered some stock market turmoil!

After all, not all companies are like Zhiyun Group. There are many analytical and statistical agencies that are watching Zhiyun Group closely. Not to mention in China, even on Wall Street, there are a lot of financial analysis and statistical agencies that specifically study Zhiyun Group and regularly publish reports on it.

The main reason is that Zhiyun Group has too much influence... Whether it is doing well or not, especially the success or failure of some new businesses, will not only affect itself, but also a large number of other companies, and even foreign high-tech companies will be seriously affected.

Moreover, Zhuyun Group is a dual-listed company, listed and traded on the Hong Kong Stock Exchange. Most of its Hong Kong-listed shares are held by investment institutions around the world, including some heavyweight funds on Wall Street.

The operations of Zhiyun Group are truly a matter of great importance, with far-reaching consequences not only in China but also in the global economy.

In the past, some people said that if Zhiyun Group suddenly went bankrupt, the domestic economy would be severely damaged!

And now... we can expand this scope even further. If Zhiyun Group suddenly goes bankrupt, the global economy will suffer a significant negative impact.

If Zhiyun Group goes under, it's hard to say what will happen to other companies, but American high-tech companies like Google, Microsoft, Facebook, Oracle, and even Apple will be the first to suffer... With the AI ​​ecosystem provided by Zhiyun Group, without the APO series graphics cards, without a series of open-source AI algorithms represented by GTAI, and without the 'YUDA' GPU development architecture, what would they even be asking you about AI?

Without the 'YVWDF' virtual world development framework, what kind of virtual worlds would they be able to play with? They wouldn't even be able to develop virtual application software, let alone a platform.

Without the APO4500M series graphics cards, companies like Apple, Google, and Samsung would be forced to halt production of their VR virtual reality devices because they lacked even the core components.

The influence of Zhiyun Group has long covered both domestic and international markets and has profoundly impacted the global economy. To some extent, even many companies under the American conglomerate, its biggest competitor, have been hijacked by Zhiyun Group.

The same applies to Europe, not just the Americans!
Zhuyun Group has Europe's largest semiconductor manufacturing center in Germany, producing memory chips to supply the European market.

Zhiyun's automotive-grade chips, especially the PX chip and EYEQ solution, have in-depth cooperation with major European automakers, providing them with L2 and L2+ level assisted driving technologies.

GTAI, an open-source algorithm under the Zhiyun Group, provides industrial-grade artificial intelligence technology to major European high-tech companies, especially large-scale advanced manufacturing companies, to improve their production efficiency and reduce manufacturing costs.

It could even be argued that the more economically developed and industrially advanced a foreign country is, the more easily it is influenced or even held hostage by the Zhuyun Group…

On the contrary, countries with weaker economies and less advanced industries will not be greatly affected: they will all be dumped into markets, and at most they will not be able to buy some advanced consumer goods or enjoy AI-powered internet services.

Zhiyun Group has a large influence, but Xu Shenxue's other listed companies, although large in size, do not have as much influence... Not to mention globally, they can actually be replaced even domestically.

Take Hailan Motors for example. It's said to be the world's number one smart electric vehicle, but the domestic electric vehicle industry is already developing very well... Even if Hailan Motors is gone, there's still Weiku Electronics' Xiaolan Motors, as well as BYD, Geely, Chery, SAIC, GAC and a whole host of other domestic automakers' independent electric vehicle brands.

Having Hailan Auto is better, but losing it, while resulting in losses, won't have a significant impact on the overall economy... As for overseas markets, they're all competitors who would love for Hailan Auto to go out of business.

Vcool Electronics Group is a pure design and marketing smart terminal company. Although it has expanded into electric vehicles and VR virtual equipment, it is not irreplaceable... Even without Vcool Electronics Group, there is still Huawei and rice.

Vcool Industrial Group, this top-tier OEM manufacturer, is technologically advanced and large-scale. But in reality, it doesn't really matter who you outsource to. Even without Vcool Industrial, there are still a bunch of other OEM manufacturers like Foxconn, BYD, and Luxshare.

There's also Yihai Technology, which isn't publicly listed. While it owns ByteDance, a global video platform, and the multinational shopping platform Duohai, it also holds the world's largest market share in mobile games and virtual games, along with a bunch of other miscellaneous internet businesses in entertainment and related fields…

However, it's not irreplaceable. If Yihai Technology goes out of business, other internet giants in the domestic market can replace it in no time. As for overseas business, short videos can't replace it, but cross-border shopping can.

Xu Shenxue owns many companies, but there aren't many that are truly irreplaceable.

The core is Zhiyun Group, followed by Fairy Mountain Holdings, and then Nanmen Aerospace and Xiaojiang Technology, which are relatively niche but technologically leading vertical companies.

Others are large in scale and have influence, but they are not to the point where American or other foreign conglomerates have no choice but to acknowledge them.

In contrast, while many people are watching the three domestically listed companies—Weiku Industry, Weiku Electronics, and Hailan Auto—it's not the same as Zhiyun Group. Statistical analysis institutions can't possibly be watching them all at once; even if they are, it's mostly domestic analysis institutions.
This receives slightly less attention. Although many analyses and statistics are produced in various reports before the financial statements are released, they are still somewhat lacking, and the data may be somewhat biased.

In this situation, after these listed companies released their financial reports, the data in the reports differed from the data from some analysis and statistical agencies, which in turn led to some fluctuations in stock prices.

Among them, the stock price of Hailan Automobile Group fell slightly... Previously, some heavyweight domestic analysis institutions had overestimated Hailan Automobile, which also led some domestic investment institutions to push the stock price to a relatively high level in advance. Now that the financial report has been released, it has deviated from the previous estimates. As a result, the stock price of Hailan Automobile also fell, dropping by two percentage points.

The stock price of Vcool Electronics Group saw some gains, mainly because many analysts believed that Vcool Electronics' smart terminal business shrank last year, and there were also some predictions about the sales and profit margin of the Bluegogo 2020 car.

However, the sales of the Bluegogo 2020 model exceeded the expectations of many analysts. At the same time, the VR virtual equipment business was launched in November and experienced a supply shortage after large-scale shipments in December.

Although the smart terminal business has shrunk, the decline is within an acceptable range. In addition, although sales have fallen and revenue and profits have declined to some extent, the revenue in the software and Internet fields has continued to grow thanks to the massive global user base, which has to some extent offset the decline in the smart terminal business.

These factors combined led to a rise in the stock price of Vcool Electronics Group after the release of its financial report. Three days later, the cumulative increase reached twelve percentage points... These increases were mainly due to optimism about the automotive business and the VR virtual equipment business.

After the release of its financial report, the pure OEM company, Weiku Industrial Group, was quite stable, with revenue and profit both within the expectations of analysts. As a result, its stock price only rose slightly by one percentage point.

To be honest, the most reliable option is actually Vcool Industrial Group... Don't underestimate it just because it's an OEM manufacturer with low profit margins. It's backed by two major smart terminal manufacturers, Zhiyun Group and Vcool Electronics. The huge OEM orders from these two companies alone are enough to keep them thriving.

In particular, in the past two years, Weiku Industrial has also undertaken a large number of OEM orders for intelligent robots and virtual equipment from Zhiyun Group.

Last year, Weiku Industrial alone contributed 75% of the intelligent robot production capacity of Zhiyun Group, while the remaining 20% ​​was manufactured by BYD. In addition, Luxshare Precision also joined the intelligent robot manufacturing business last year. Although it has been a short time and is still small in scale, it still has a 5% market share.

In the realm of virtual devices, Vcool Industrial's production capacity accounts for 85% of Zhuyun Group's shipments, an even higher percentage, leaving only 15% to be taken by BYD.

Relying solely on the OEM manufacturing of these two new businesses, VKU Industrial Group has seen considerable growth in both revenue and profit... Moreover, due to the stability of the business, the impact on the stock market has been minimal, showing only slight and continuous growth.

After the release of financial reports, the stock prices of several of the company's major listed companies experienced some increase or decrease. This is normal and reflects the capital market adjusting its estimates of these companies based on the financial reports.

And slight fluctuations in stock prices will not affect the normal operation of these companies!
After finalizing the financial statements of these companies, Xu Shenxue went to Yihai Technology for a high-level meeting regarding the listing of Yihai Technology Group.

At a high-level meeting of Yihai Technology, Huang Jianian and a group of other senior executives of Yihai Technology gave Xu Shenxue a detailed report on the series of preparations for the listing.

This includes business restructuring, division, and financial integration, among other things.

Huang Jianian said, "After a year of continuous adjustments, Yihai has completed its strategic adjustment. The adjusted Yihai Technology Group has eight core business divisions and twenty-three core subsidiaries, with business covering more than 150 countries and regions around the world."

"The main business is social networking with short videos as the core."

"E-commerce business combining domestic e-commerce and cross-border e-commerce."

"Game business with mobile games and virtual games as its core."

"Entertainment businesses that integrate online literature, comics, animation, film and television dramas, and music."

"In addition, there are various supplementary services such as browsers, search, maps, local services, and internet finance."

"The group's total revenue last year was 680 billion yuan, mainly supported by two business segments. One is advertising, including short video advertising and e-commerce advertising, with overseas markets accounting for 53% of the revenue!"

"The second major source of revenue is gaming revenue. Last year, my mobile game business continued to grow, and the virtual game business saw significant growth, with overseas markets accounting for 45%!" "The group's gross profit last year reached 326 billion yuan, with a gross profit margin of 48%, which is a positive impact of the continued growth of the high-profit advertising business!"

"However, our R&D expenditure and capital expenditure both saw a significant increase last year, with R&D and capital expenditure in the field of artificial intelligence alone reaching 96 billion yuan."

"Capital expenditures on overseas warehousing and express delivery for our overseas e-commerce business are also increasing rapidly. Many of the countries we have entered lack warehousing and express delivery services, and we need to set up warehousing and express delivery businesses in advance, which has brought us considerable financial pressure!"

"At the same time, marketing expenses in overseas markets have also increased further!"

"In our overseas e-commerce business, the continuous and substantial investments from platforms like Amazon have put a lot of pressure on us. Last year, we were already competing head-on with Amazon and other e-commerce platforms in several countries, burning through a lot of money!"

"The field of artificial intelligence is developing rapidly. Other companies, especially Google overseas, have invested heavily in it. They have applied artificial intelligence on a large scale in their various businesses to improve the user experience, which has put considerable pressure on us in the overseas social media field. The pressure on social platforms with short videos as their core is also great, which will affect our overseas advertising revenue."

"Under numerous pressures, our net profit last year was only 31 billion... In fact, if it weren't for the goal of achieving three consecutive years of profitability and giving the investment market some confidence, we wouldn't have left with these profits last year!"

“The competition in the overseas social media business is fierce, the international e-commerce business is still in the stage of burning money and investing heavily, and we also need to increase investment in the field of artificial intelligence. Our financial pressure will continue to be significant!”

"We can no longer delay raising funds through an IPO. We must go public this year, raise enough capital, and then increase investment in international e-commerce and artificial intelligence!"

"Otherwise, in just a few years we will lose out to competitors like Google, Facebook, and Amazon!"

At this point, Huang Jianian glanced at Xu Shenxue's expression and then said, "Of course, although our investment is large now, our company's profitability has not weakened. Last year, our gross profit reached more than 320 billion."

"In fact, as long as we stop our continued expansion plans in overseas markets and stop our huge investments in the field of artificial intelligence, our net profit can immediately increase from the current 30 billion to at least 200 billion!"

"But if we do this, we will lose our future!"

As Xu Shenxue listened to Huang Jianian's words, he also flipped through the report in his hand.

The current situation of Yihai Technology Group is quite complicated... If you say it makes money, then it definitely does. Yihai Technology is now the largest Internet company in China, with the highest revenue and a huge influence.

However, unlike other companies that heavily rely on the domestic market, half of Yihai Technology's revenue comes from overseas markets, where competition is fierce.

While other internet companies are reaping profits from the domestic market, Yihai Technology is reaping profits from overseas markets on a large scale, and in the process, it is directly competing with companies such as Google and Facebook in overseas markets.

This has resulted in Yihai Technology having a fairly good reputation in China!

Among China's many internet companies, Yihai Technology is the only one that can directly compete with American internet giants...

However, it's only a matter of competing, but it's still being suppressed by American internet companies like Google, Facebook, and Amazon... There's nothing we can do about it; they developed and laid out their plans earlier. Although Yihai Technology later tried to catch up, the cost was higher and the results weren't as good.

This is also why Yihai Technology urgently needs to go public and obtain a large amount of financing... Expanding overseas markets requires huge amounts of funds to improve the logistics system and artificial intelligence services.

The domestic market is already quite mature, so the extra expenses aren't too large!

Yihai Technology mainly relies on short videos as its core business in the domestic market, supplemented by comprehensive development in multiple fields such as e-commerce and entertainment to compete with other companies. It is actually quite profitable, so there is no need to point it out further.

If Yihai Technology wanted, it could simply do the same thing as many other internet companies in China and wait to die.

However, Yihai Technology's top management is ambitious; they want to compete head-on with overseas internet giants such as Google, Facebook, and Amazon in the global market.

At the same time, Xu Shenxue also had certain requirements for Yihai Technology's influence in overseas markets... Other things could be disregarded, but the global reach of ByteDance Video must continue to develop and be maintained, as this is an important advertising platform that absolutely cannot be lost.

In order to develop overseas markets and to pursue artificial intelligence, Yihai Technology Group is currently short of funds, and not just tens of billions, but hundreds of billions.

Of course, if it's just a matter of lacking money, Xu Shenxue could actually come up with it himself!
The various investment institutions under his control are not short of money; they can easily come up with hundreds of billions of dollars in a matter of minutes.

However, Xu Shenxue has never been one to run a business alone; he prefers to work with various parties, and this is also true of his approach with Yihai Technology.

After several rounds of strategic financing, Xu Shenxue, through Liuhe Investment or other investment institutions and enterprises, holds 76% of the shares in Yihai Technology Group, while Xu's mother and Xu Weiwei hold 3% of the shares, and there are also about 5% of employee stock options.

The final 16 percent of the shares are held by seven or eight domestic investment institutions.

Now, Xu Shenxue plans to list Yihai Technology directly, introduce more strategic investors, and form a larger group of stakeholders...

In addition, there is another benefit that Xu Shenxue is particularly focused on regarding the listing of Yihai Technology, namely, the ability to attract a large amount of domestic capital... The listing of Yihai Technology Group will raise hundreds of billions of yuan.

This will provide a new investment channel for a large amount of domestic capital.

At the same time, it can also encourage some high-income families with large amounts of savings to withdraw their funds from the bank and invest them... Too much savings among residents is not a good thing.

By binding together more interest groups, sharing the dividends of development with more people, providing domestic capital with a new investment channel, and ultimately using the money to develop high technology, we can increase the competitive advantage in the high-tech field, create more jobs and tax revenue, and promote the continuous growth of the domestic consumer market!

This is the main reason why Xu Shenxue has been continuously getting the companies under his control listed on the domestic stock exchange in recent years!

His company's listing was never simply for the purpose of profiting from the stock market, nor was it to increase the company's market value to make himself richer, or to sell shares to cash out.

Rather, it has a series of comprehensive purposes!

Xu Shenxue's business has reached this level, and when he considers the gains and losses of things, he never considers the gains and losses of a particular business or company... but rather the gains and losses of the entire industry chain and even the entire market.

Ordinary large enterprises may not care about these issues, but Xu Shenxue must care about the impact on the macroeconomy.

Because his companies are so large, they inevitably have a significant impact on the overall macroeconomy. Just Zhuyun alone had a revenue of over six trillion last year, which is an astonishing figure!
Besides Zhiyun Group, there are also a large number of other companies such as Yihai Technology, Hailan Auto, Weiku Electronics, and Weiku Industry.

However, while his businesses are large and have a significant impact on the economy, they are also directly affected by the domestic economy.

The state of the domestic economy directly affects the performance of the companies under his control!
No need for any grand principles.

The simplest and most basic principle is: if the domestic market is full of poor people, who will he sell his products to?

Putting everything else aside, the S series phones alone have annual shipments of over 100 million units in China... If the domestic economy falters, the S series phones will be the first to suffer!

If consumers don't have money, why would they buy an S-series phone?
Similarly, this can be extended to many other products or services.

If the economic environment deteriorates, everyone will suffer. A monthly salary of 3,000 yuan will drop to 2,000 yuan... or even result in unemployment!
Many of Xu Shenxue's companies, which are deeply rooted in the domestic market and supply chain, will also be severely affected... This is a situation that Xu Shenxue does not want to see.

Therefore, over the past few years, Xu Shenxue has been very cooperative, helping many high-quality companies to list domestically, and even getting Zhuyun Group to list in both Hong Kong and mainland China... Zhuyun Group is not short of money and does not need to raise funds in the stock market. The reason it is still listed domestically is purely due to macroeconomic factors.

This IPO of Yihai Technology Group serves the overall strategy while also raising substantial funds for continued expansion in overseas markets and the development of artificial intelligence.

Rumors of Yihai Technology's IPO have circulated in the capital market for years, but have yet to materialize. However, this spring, the news resurfaced, with industry insiders reporting that Yihai Technology Group's senior management team recently held multiple rounds of talks with heads of several major domestic investment institutions to negotiate the introduction of strategic investment before the IPO.
This rumor has attracted tremendous attention in the financial market...

If this news is true, it means that another top company will be listed in the country!

That will be a financial frenzy!
(End of this chapter)