Rebirth Tokyo 1986

Chapter 406 The Surprise at the Internet Cafe

"Xinghai Lifestyle is also doing well. Its subsidiary, Xinghai Apparel, has revenue of $81 billion; Xinghai Food has revenue of $53 billion."

Xinghai Apparel and Xinghai Food are both subsidiaries that Xinghai Life focuses on operating.

Xinghai Apparel, after several years of expansion and development, has even surpassed Nike Group in revenue.

However, Xinghai Clothing has higher costs and lower prices, resulting in very weak profitability, with annual profits not exceeding $5 million.

This is also related to Xinghai Garments' large-scale investment. Once the company's business stabilizes, profits are expected to increase to over 20%.

The minimalist brand now belongs to Xinghai Apparel.

Another major subsidiary, Xinghai Foods, has less revenue than Xinghai Garments, but its profitability far exceeds that of Xinghai Garments.

If too much money hadn't been spent on expansion, the profit margin could have reached over 30%.

Even if Xinghai Foods spends huge sums of money building factories and distribution channels everywhere, its profitability still surpasses that of the apparel industry, reaching the level of $10 billion.

"Wow, there are so many in China?"

Masato Takeshita was a little stunned, never imagining that in 1995, Xinghai Foods could achieve sales of $17 billion through the Chinese market.

"So that's how it is, no wonder."

In 1995, China's annual sales of instant noodles reached 60 billion servings.

Among them, Xinghai Foods owns 45% of the instant noodle market, which means annual sales of up to 27 billion servings.

The retail prices of these instant noodles range from 1.2 yuan and 1.5 yuan for the cheaper ones to 3 yuan for the more expensive bowl noodles, with sales easily exceeding 40 billion yuan.

In the beverage sector, sales were equally unbeatable, even slightly surpassing instant noodles, reaching 43 billion.

However, the beverage market is also highly competitive, with not only major international brands but also a wide variety of local products.

For example, the famous Jianlibao is the top-selling beverage brand in China.

In 1995 alone, sales reached 54 billion RMB.

For example, Xurisheng Iced Tea is in short supply this year and is expected to be Xinghai Beverage's biggest competitor next year.

If they're not careful, Xinghai Beverages might stumble one day and lose its position as the industry's second-largest player.

Besides instant noodles and beverages, Xinghai Foods (China) has also sold a lot of candies and chocolates this year.

Especially the candy business, relying on the unique national brand recognition of White Rabbit, has earned more than 30 billion RMB, becoming another pillar of Xinghai Foods.

Xinghai Foods also sold fairly well the remaining potato chips, spicy strips, jelly and other casual snacks.

However, while Xinghai Foods (China) boasts impressive revenue, its profits are not so good.

Despite accounting for one-third of Xinghai Foods' total revenue, its profit was less than 10 billion RMB.

The main problem is that establishing sales channels and expanding factory size are too expensive, consuming most of the company's profits.

However, next year, investment in distribution channels will be significantly reduced, and Xinghai Foods (China) will generate more profits.

Xinghai Construction, one of the three pillars of Xinghai Life, also had very high revenue last year.

Their own engineering projects alone amount to several billion dollars.

However, the construction industry earns hard-earned money. Xinghai Construction ranked first in annual revenue, but its profit was only over 7 million US dollars.

"Sigh, Xinghai Tongxing's revenue and profits have dropped again."

The only subsidiary of Xinghai Tongxing is Matsumoto Manufacturing, the company that produces trolley suitcases.

It was originally the core of Xinghai Group's early development, generating annual profits in the range of $10 billion. However, with the decline of Japanese consumption, Matsumoto Manufacturing's mid-to-high-end product lines shrank across the board.

As for the low-end market, it's doing quite well thanks to its connection with Chinese factories.

Unfortunately, the profit margins for low-end products are too low. If it weren't for the patent fees that can be collected, Xinghai Tongxing would hardly have achieved a profit of $8 million this year.

Yes, Matsumoto Manufacturing's annual profit has dropped to $8 million, making it one of the few declining businesses in the Xinghai Group.

However, compared to Xinghai Technology's disaster emergency radio company, Matsumoto Manufacturing is still in a better position.

Disaster relief radios are simple in structure but heavily reliant on government contracts. As a result, Starsea Rescue's business quickly shrank dramatically, and now only generates three to four hundred million US dollars in profit.

Even so, this is the result of Xinghai Group's continuous investment in political figures.

After carefully reviewing the financial reports of Xinghai Technology and Xinghai Life, Masato Takeshita began to look at the third financial document.

"As expected, the financial industry is still the most profitable."

Xinghai Capital didn't make any particularly big moves this year, but relying solely on the management fees from the third phase of the Xinghai Fund project, as well as the revenue from subsidiaries such as Xinghai Investment, Xinghai Asset, and Galaxy Capital, its annual profit easily exceeded US$50 billion.

However, most of this wealth is still kept in overseas tax havens, ready to be spent through the Xinghai Group platform at any time.

Of course, we shouldn't go too far.

A portion of it needs to be repatriated to China, where it will be used as the company's reserve funds after taxes are paid.

If the revenue and profits of Xinghai Technology, Xinghai Life, and Xinghai Capital are still within the range of what young people expect.

Then Xinghai Communications gave him a real surprise.

First and foremost is our core business: base station operations.

This isn't too far off from Masato Takeshita's prediction. Revenue was over $30 billion, but profit was less than $2 million.

The main problem is that too much money was spent on developing future projects such as CDMA, which resulted in most of the profits from PHS base stations being swallowed up.

Secondly, there is the Xinghai Internet Cafe Alliance.

This subsidiary really gave the young man a big surprise.

With over 20000 internet cafes and 210 million computers worldwide, Starsea Communications generated $75 billion in sales.

Not only are the sales figures high, but the profit margins are also exceptionally high.

After deducting all expenses, it has a profit of nearly $50 billion.

That's right, the profits of internet cafes in the early days were that outrageous.

Taking the Chinese market as an example, in the early days of internet cafes, an investment of 10 yuan could be recouped in six months or even a few months.

If an internet cafe owner's profit is less than 10 after a year of investment and deducting all costs, then the owner is extremely incompetent.

Internet cafes in their early days were incredibly profitable.

However, once personal computers become more widespread, internet cafes will decline year by year.

First, it takes two or three years to break even, then it takes four or five years to have any hope of making money, and at least you can only make money in a few places with a large number of workers.

In short, the key to internet cafes is to seize the opportunity as early as possible.

"Well, I guess in a few years, internet cafes in the US will be shut down on a large scale, right?"

Xinghai Group has invested in more than 5000 internet cafes in the United States and is making a lot of money in a short period of time.

However, given the rate at which computers are becoming widespread in the United States, they will be nearing the end of their lifespan in another four or five years.

The specific timeframe is roughly equivalent to after 2015 in China's previous life.

Good locations can be maintained, while average ones will be eliminated, leaving only a few hundred companies in the end.

As for Europe, it's much better than the United States. Western Europe has a more dense population, making it more suitable for internet cafes. Also, computer adoption is nowhere near as rapid as in the US.

However, it is estimated that only about 1000 will be preserved in 10 years.

Japan and South Korea are actually much better in this regard.

It is estimated that the number of internet cafes will not shrink significantly until the mobile internet era arrives.

Even so, keeping two or three thousand of them wouldn't be a big problem.

The situation is similar in the Chinese market, but the number may be larger.

5000 years is the overall goal that Masato Takeshita envisioned for the Xinghai Internet Cafe Alliance in the mobile internet era.

The Southeast Asian market is unique in that it has a particularly long history, and the impact of the mobile internet era is not particularly significant.

"Not bad, I estimate we can get 20 billion."

In the 1990s, broadband internet access was very expensive, so Xinghai Communications partnered with local telecom giants and governments to establish its internet cafe chain companies in various locations.

Even in Japan itself, this is no exception.

Therefore, of the $50 billion profit, Xinghai Communications can only take half, which is $25 billion.

However, the Xinghai Internet Cafe Alliance still needs to operate, so it cannot take all the profits. Therefore, the final estimated amount received is only $20 billion.

"That's great, I love internet cafes the most."

Masato Takeshita was somewhat intoxicated and wished he could immediately double the size of the Xinghai Internet Cafe Alliance.

After all, who wouldn't like a business that pays for itself in just a few months?
However, upon reflection, he realized that even if he were to eat meat, he should at least give others a chance to have some soup. Takeshita Masato restrained his greed and abandoned the idea.

The Xinghai Internet Cafe Alliance can occupy more than 20% of the market in various regions. Going any further will cause all sorts of trouble.

After reviewing Xinghai Communications' financial report, the young man suddenly thought of Xinghai Jingyuan, another company.

"Should we separate Xinghai Wafer from the financial statements as well? That would make Xinghai Technology's profits look better."

Excluding Xinghai Wafer, Xinghai Technology's profits can even rival those of Xinghai Capital.

There's no way around it; the investment scale of a wafer fab is simply too large.

An 8-inch wafer fab can cost over a billion dollars.

If four such facilities are built simultaneously, they can devour all of Xinghai Technology's profits.

"Forget it, let's talk about it later."

The three major wafer foundries are not large enough yet, so it's not too late to wait.

Takeshita Masato stopped thinking about the problem and picked up Xinghai Software's financial report.

Xinghai Software Company also had a very good year last year.

Relying on products such as Xinghai operating system and office system software, as well as EDA industrial software and Xinghai internet cafe management software, the company's revenue has reached the level of 20 billion US dollars.

Profits were also exceptionally high, reaching $10 billion.

In summary, even if Xinghai Software, which monopolizes the Asian and Australian markets, continues to operate with a "wait and see" attitude, its profits will gradually increase.

As for Xinghai Entertainment, it also experienced a major boom that year.

But it's not a gaming subsidiary, it's a record label subsidiary.

After several years of development, electronic dance music has finally replaced rock as the new trend in Japanese pop music.

Seikai Music also achieved continuous breakthroughs in performance thanks to Tetsuya Komuro's genius compositions and Masato Matsuura's hard work.

However, Xinghai Music doesn't have much profit yet.

Because the parent company was flush with cash, Matsuura Masato reinvested all his earnings back into the company, helping it grow and expand.

Xinghai Entertainment is quite good, and Xinghai Media is not bad either. Thanks to Masato Takeshita's ideas and the support of the Xinghai Group, they have achieved new highs in revenue and profit.

However, media companies are destined not to make much money. With revenue of three to four billion US dollars, the final profit was only 2 million.

Fortunately, Xinghai Group doesn't expect Xinghai Media to make money. As long as it can maintain the image of Takeshita Masato and Xinghai Group, this investment will not be a loss.

"What?! StarSea Lithography actually made a profit this year?"

Masato Takeshita was shocked when he opened a new financial report. He never expected that his little-known lithography machine R&D company would be profitable in the 1990s.

He was prepared to lose money until the early 21st century, but he never expected to turn a profit so many years ahead of schedule.

"Oh, I see. I didn't expect it to be like this."

The young man carefully examined the details of the financial report and discovered the truth behind Xinghai Lithography's profitability.

It turns out that Xinghai Wafer's three major subsidiaries have all started purchasing Xinghai Lithography equipment, which in turn boosts the company's profits.

"Well, it seems that Starsea's lithography technology is already quite good."

Masato Takeshita was very happy because Starry Sea Lithography could finally stand on its own and was no longer a bottomless black hole for the group.

Next, he quickly found information related to Xinghai Lithography, wanting to know exactly where his company was positioned.

"Second only to Nikon, and slightly inferior to Canon?"

The young man browsed through the report word by word and quickly found the evaluation report by Sato Kaede, president of Seikai Lithography, regarding the company's lithography machines, ion implanters, and other equipment related to wafer manufacturing.

The lithography machine has barely reached the top level in the industry, and is even slightly ahead of ASML, the monopolistic company that later developed the EUV lithography machine.

Etching equipment and thin film deposition equipment are also among the top tier in the industry, second only to the industry leader...

In summary, Xinghai Lithography, which is developing in the wafer equipment manufacturing industry, has formed a semi-high-end coverage of the entire industrial chain of its products.

As for the cost, that's a minor matter. Problems that can be solved with money aren't big problems.

Of course, Starsea Lithography also managed to find a loophole.

Even if Japan is not restricted by agreements like COCOM in 10 years, it will not be able to buy these technologies from other countries.

It's worth noting that in the past, as the importance of lithography machines continued to rise, the United States rallied South Korea and Taiwan in Asia, as well as the entire Western and Northern European countries, to develop more advanced equipment, and then tacitly restricted Japanese companies from purchasing them.

"Indeed, it seems this year's bonus was too low. Hmm, then let's put it in the middle of next year."

The company is about to have a holiday, so there's no need for departments like finance to work overtime.

However, just to be on the safe side, Masato Takeshita not only wrote it down on his computer, but also reminded his secretary to write it down for him.

Besides the projects that are already on track, Xinghai Group also has a large number of subsidiaries that require huge investments for development.

For example, Xinghai Medical is currently in the large-scale construction phase, but it has already cost Xinghai Group more than $10 billion.

It is estimated that it will cost several billion more to purchase equipment and equip the hospital with doctors.

Internet subsidiaries such as Baidu, Google, Xinghai Mall, and Xinghai E-commerce are also in the stage of loss-making investment.

However, the amount of funding is still relatively small, and even when all of it is added up, it is not as much as a fraction of the funding for medical projects.

As for the logistics system construction of companies such as Xinghai Life and Xinghai E-commerce, it is currently still in the project planning stage.

Large-scale investments will not be made until at least next year.

(End of this chapter)