Journey 1995:Non-Stop

Chapter 401 Assets Exceeding 100 Million
busy.

Throughout June, July, and August, Yan Hui was extremely busy. He hadn't actually calculated that his assets had quietly exceeded 100 million yuan that summer, and in reality, it was far more than that.

Yan Hui had thought for several years that he could retire once he earned the legendary 100 million yuan. But when he actually got to that point, he found that he simply couldn't stop.

Construction of the chemical plant continues to advance, and all construction projects have fully resumed. Currently, the company's total assets are fifty to sixty million yuan, but in reality, the company's valuation has long exceeded one hundred million yuan. The monthly net profit of three to four million yuan is like a money-printing machine, continuously supplying Yan Hui's other projects. Steel trading and tile production are going very smoothly.

With the support of the chemical industry, the tolerance for any project is very high. By August, the tile factory's production capacity and sales had reached 10 million per month, and the monthly profit exceeded 1 million for the first time.

The tile factory currently has total assets of about 30 million yuan, but its actual valuation exceeds 50 million yuan (due to increased profits). In just a few months, the tile factory has undergone a complete transformation. It now has six forklifts, and the factory is under construction while still in operation. The roads within the factory area have been largely paved, and Yan Hui has also leveled the roads leading out of the village with gravel.

The valuation of a company is something only insiders understand.

Two tile factories with the same assets of 30 million yuan, one with an annual production capacity of 50 million yuan and a profit of 4 million yuan, and the other with an annual production capacity of 150 million yuan and a profit of 20 million yuan, could have vastly different valuations. The latter could be valued at over 100 million yuan, or even 200 million yuan.

Yan Hui's chemical plant is now valued at over 200 to 300 million yuan.

Many laypeople don't understand this algorithm, which is the allure of the price-to-earnings ratio. This type of valuation is common among listed companies. For new companies, the valuation tends to be relatively conservative because the market needs time to prove and evaluate them.

Some companies are valued based on price-to-earnings ratios after going public. Those companies with valuations in the hundreds of billions are those with strong competitive advantages and profitability. If the leader becomes incompetent or profitability weakens, the company's valuation will plummet. Therefore, shareholders will not allow the company founder to retire easily; they are investing in that person.

To put it conservatively, Yan Hui's current assets exceed 100 million yuan; if we're not being conservative, we could say that Yan Hui's assets have exceeded 200 million yuan or even more.

There has been a lot of rain recently, and the road surface has experienced several problems. The factory immediately sent people to repair the road. As Yan Hui had planned, the road has been under repair, but it has not been paved.

August is Olympic month, and everyone is focused on the gold medal and total medal standings. However, Yan Hui didn't watch a single moment of the entire Olympics, including the opening ceremony. He had a lot of things to deal with every day, and in the past few months, he hadn't paid much attention to what was happening in Sichuan Province, only continuously sending funds there.

Every industry has its own way of operating.

Chemical companies rely heavily on technology and operate discreetly, often resembling hidden "little giants." Yan Hui, despite earning so much money at Heng Hui, has always maintained a low profile because all the clients he has access to in the industry are big shots.

Some automotive giants have shareholders who are more powerful than Yan Hui, so Heng Hui Chemical still needs to be cautious and do its best to improve its products, services, and R&D.

For example, Wanhua, which has been mentioned many times, is actually ranked first among listed companies in Shandong Province, but its reputation is far less than that of Tsingtao Brewery and Haier Electric Appliances. These are not the same type of companies. Apart from daily chemical and petrochemical companies, other chemical companies do not do much to-C business.

Steel trading relies heavily on capital and capital management. Everyone in the industry is a competitor, and even cooperation is approached with extreme caution. Yan Hui and Li Shengli from Linzi have known each other for a long time, but have never collaborated. Yan Hui's steel trading company has only seven or eight employees. As a core salesperson, he spends his days traveling to various bidding sites, witnessing all sorts of open and covert battles.

Tile factories are different. Through technological innovation, Yan Hui's products have achieved regional leadership in the 30*45cm tile market. In just a few months, he has also established his own small brand, to the point that many primary distributors revolve around him. He, a supplier, has become the client.

Yan Hui's most direct impression was that the tile factory gave him the feeling of being a boss.

This sounds contradictory. Didn't Yan Hui already become a big boss?

Actually, it's different. In the steel trade, he wasn't really a boss, and in the chemical industry, because he relied on technology and had many contacts with big shots, Yan Hui didn't have a passive feeling of being "superior."

And tile factories... they really exist.

For upstream suppliers, Yan Hui's purchase volume doubled, giving him strong bargaining power, to the point that several mines sent people over daily to discuss cooperation. For downstream distributors, Yan Hui's product sales were not a problem, and distributors flocked to him. Within the company, Yan Hui was a major shareholder, and he had increased everyone's salary by 1-4%, promoted more than a dozen people, and everyone respected him greatly. Many people even bowed and scraped, and would run towards him whenever they saw him.

It's no wonder some bosses get carried away with this feeling. If Yan Hui only had the ceramics factory as his perspective, he would also get carried away, because from this angle, he'd be like a local tyrant.

...

On August 26th, Yan Hui drove his Mercedes-Benz S350, which he had bought for over 1.7 million yuan in cash, to a new residential development in Qiaodong District to participate in a steel bidding process for a 150,000-square-meter high-rise building project.

This project involves a tender for 1.1 tons of steel, making it one of the larger projects in recent times. Yan Hui decided to go there personally.

All the preliminary materials were prepared. This trip was for bidding. Besides the driver, Sun Lei was also in the car.

“Based on the current information, Green Lake Real Estate Company has a very good reputation. It is a developer of high-end projects and has no problem with funding.” Sun Lei thought for a moment, “I have contacted people from their company before, and they have a state-owned enterprise background.”

“The company has sufficient funds now. Both the chemical and tile factories can get loans. We need to adjust our bidding strategy and win with our financial strength. We can accept payment terms of more than two months, and we can also accept delivering all the standard materials at once. We will use our scale advantage to grab some market share. I have been busy with the construction of the tile factory for the past few months. We need to get the steel trading business up and running as soon as possible. Because of this, we must have a thorough understanding of the bidding parties. As long as the background of the bidding parties and the materials are not a problem, we can just pay interest on the delayed payments each month,” Yan Hui said with a smile.

Many company loans aren't as simple as Yan Hui's. Sometimes, when real estate companies delay payments, they'd rather pay a 2% monthly interest rate than settle the loan later. A 2% monthly interest rate is effectively a 24% annual interest rate, far exceeding Yan Hui's loan interest. This kind of "disguised lending" is common, but it puts immense pressure on risk control.

“No problem.” Sun Lei felt it was very simple.

(End of this chapter)