Journey 1995:Non-Stop

Chapter 385 Let the Bullets Fly
The subsequent cooling, post-processing, grading, and testing work are all easy for anyone to understand; these are all done by the village workers.

Simply put, the production line is certainly functional, but the entire process—from material feeding and loading to inspection and packaging—relies on manual labor, with virtually no monitoring of the production process. Luckily, this is for producing ceramic tiles; if it were for polyurethane, the products would be stolen before even reaching the packaging stage.

As for environmental protection, it has not been considered at all.

“President Yan, even if this production line were to be transferred now, it could sell for at least 800 million. That large brick press alone would be worth almost 200 million!” President Zhou explained.

"What is the production capacity?" Yan Hui asked.

“One production line, currently producing 100,000 units per day,” General Manager Zhou explained.

"What if it's at full capacity?" Yan Hui asked again.

"This..." President Zhou looked at Pang Shaowen, "Brother Wen, how much can this line produce at full capacity?"

“Making 30 a day shouldn’t be a problem, but the workers will be working a lot of overtime. Tiles are too heavy, and many people can’t handle moving them around,” Pang Shaowen explained.

"So, one production line can generate 100 million units of production capacity per year?" Yan Hui thought about it carefully and felt that there was nothing wrong with the business.

While the profit margin in tile production isn't as high as that of polyurethane, it's still quite substantial, at least 15% or more, considering it's the production side.

These two production lines can theoretically generate 3000 million in profit per year.

"How is that possible? In the past two years, at its peak, each of these two production lines only generated a little over 30 million yuan in output value per year, and together they would only amount to about 50 to 60 million yuan." Pang Shaowen looked at Yan Hui, his expression somewhat unpleasant.

How come this new boss is such a braggart? Is he a complete novice?

The two brothers probably knew Yan Hui's identity and that Yan Hui might buy shares, but they didn't expect Yan Hui to start estimating the maximum production capacity right away. This was a very unprofessional approach, and such an unprofessional person could not be relied upon at all.

"So, the current trade route has a market of about 50 to 60 million?" Yan Hui looked at President Zhou.

"Yes, the production capacity and sales volume are fine. It's just that the profit margin is average, with a gross profit of only twelve or thirteen percent." General Manager Zhou was very patient.

“If production capacity increases, raw material costs can definitely be reduced by two or three percent, and there are other aspects as well. Mr. Zhou, you are actually right, this factory is still worth investing in,” Yan Hui concluded.

His judgment was based on the fact that the company was now entirely his own. With a market size of 50 to 60 million yuan annually, Yan Hui was confident in continuing to expand this market.

my country's ceramic tile consumption has been increasing since 2001, reaching its peak in 2016. Now is the period of large-scale infrastructure construction, and with many residents needing ceramic tiles, the market for this industry is bound to grow in the future, making it an ideal time to do business.

"That's true." Mr. Zhou listened to Yan Hui's words with a sense of helplessness. He understood the meaning behind every word Yan Hui said, but he found it difficult to participate in this opportunity to make money.

As the group was chatting, two men approached. One of them, who was older, said to Mr. Zhou, "Old Zhou, why did you sneak in again? Why didn't you say anything before you came?" "What do you mean by sneaking in? Old Pang, I don't like hearing that!" Mr. Zhou retorted.

The factory currently has nine shareholders, but only three share the same surname: four are surnamed Wang, four are surnamed Pang, and the other is General Manager Zhou. Except for General Manager Zhou, they are all locals.

"No matter what, I'm in charge of the daily production here. Isn't it inconvenient for you to come over and tell me?" Old Pang said.

“I can come and go as I please. If you’re not happy, you can take my shares at the normal price, and I can give them to you right now.” It was clear that President Zhou had a grudge against this old Pang.

"Tsk tsk tsk, how much equity do you own? You dare to talk such big? How about this, you take all of our shares, then you can boss us around as you please. 1000 million, show us! You secretly bought 7% equity when no one was looking, and now you're even more powerful than me!" Old Pang didn't give President Zhou a good look either.

"Alright, alright, you don't have anything else to say. I just came here to take a look, so don't give me this nonsense." Because Yan Hui was there, President Zhou decided to back down.

Old Pang didn't expect President Zhou to say that, but he still continued to retort, "You know, let me give you another piece of advice: it's not necessary! I'll say it again: if you want to sell your shares, just come to me anytime. At the same price as last time, I guarantee I'll buy them from you immediately. Now you think you can gain market share here with these few shares? Absolutely not!"

"That price? Are you going to sell? If you sell at that price, I'll take all your shares!" President Zhou retorted again.

The equipment here is worth over 15 million yuan, which is solid fixed assets, so 1% equity is definitely worth 1500 yuan. When Mr. Zhou bought it, he paid 130 million yuan for 7% equity, which is equivalent to 18.6 yuan per 1% equity. Old Pang offered Mr. Zhou 10 yuan per 1% equity.

Under these circumstances, how could Mr. Zhou possibly sell! On the contrary, if the other party were to sell at this price, Mr. Zhou would sell everything he owns to buy it!

The price of equity is a very elusive thing. In a normally operating company with stable shareholders, small-scale equity transfers are quite stable, basically based on the company's valuation. However, once a company is in a period of rapid growth or decline, the stock price becomes chaotic.

For example, a well-run startup with excellent resources and a top-notch team has reached a scale of around 500 million RMB, but has a very promising future in the industry. If the company then raises 1000 million RMB in Series A funding, what percentage of equity would that 1000 million represent?

Typically, it's only around 20%. That means the company's actual valuation could be around 5000 million.

Similarly, in a declining company, even if the fixed assets are valued at 1500 million, the value of the shares will still be diluted. Mr. Zhou's shares remain unsold, and he has no authority to sell the equipment, leaving him constantly at the mercy of the major shareholders. The major shareholders can continuously use company resources to profit their own channels, ensuring the company remains unprofitable. Eventually, Mr. Zhou's million-plus shares will be completely wasted.

Clearly, these people have this same purpose in trying to squeeze out outside technical personnel.

"What unrealistic dreams are you having? You're an outsider, what right do you have to talk about prices? Let me tell you, I'm willing to take your shares at this price now, but in a few months, you won't get the money." Old Pang threatened again.

As an outsider, Yan Hui didn't say a word, but silently analyzed the situation.

Now is absolutely not the time to make a move. If you wanted to buy this company now, you couldn't even get 2000 million. Once there's a large influx of outside capital, someone will definitely be hoarding shares in this factory and making them a highly sought-after commodity.

Let the bullets fly a little longer.

(End of this chapter)