How can you become a star without money?

Chapter 209 I Win Without Even Trying
Wang Yao took Huo Qigang to the Mulan Street branch in Beijing for two days to experience the business. Tan Hui followed along shamelessly. After two days of observation, Huo Qigang gained a good understanding of the Mulan Street business model.

After experiencing the convenience of the mobile app and online payment system firsthand, I became even more interested in this project.

The domestic electronic payment license hasn't been approved yet, but it can be used in Hong Kong. Wang Yao's acquired Xinghuo Payment (formerly Netbank Online) already has cross-border business, and with a little adjustment, it can be directly integrated into all of its 'international version' apps.

SparkPay can extend its business across Southeast Asia in Hong Kong and gain a foothold in the cross-border e-commerce B2B market. Currently, PayPal is the only online payment provider in Hong Kong, and the four major wallets have not yet ventured into online payment. If SparkPay is integrated with a series of group buying/e-commerce platforms, it will be very competitive.

"Mr. Wang, your project is quite good. Can you include me in it?" Tan Hui said with a smile after seeing Huo Qigang off.

“The angel round is finished. If Mr. Tan wants to participate, he can wait for the Series A round,” Wang Yao said with a smile.

"That's a pity. What was the valuation in the angel round?" Tan Hui asked.

“Two hundred million US dollars,” Wang Yao replied.

"How much?" Tan Hui was stunned, thinking he had misheard.

Is it 2 million Chinese yuan or 2 million US dollars?

Wang Yao repeated it.

"Why should we? I acknowledge the value of the mainland version, given its millions of users and revenue. But does the Huo family really accept the international version, even if it hasn't launched yet?" Tan Hui was somewhat confused.

Is financing in the capital market really that easy these days?
“Angel rounds are about finding like-minded friends. Don’t worry about the reasons, as long as someone is willing to pay,” Wang Yao said with a smile.

"No wonder President Wang looks down on such a small business as film and television." Tan Hui clicked his tongue.

If the international version of this project really succeeds, wouldn't the next round of funding be aimed at a valuation of $5 million?

You e-commerce companies are really good at making money.

"This turmoil at Alibaba hasn't affected you?" Tan Hui asked, puzzled.

“Definitely. If Mr. Ma doesn’t handle this well, Chinese companies listing in the US may face even stricter scrutiny in the future,” Wang Yao sighed.

"Two consecutive trust crises are indeed quite fatal, but Ma Yun is also very bold to dare to do such a thing as feigning one thing while secretly doing another," Tan Hui remarked.

Alibaba's stock price plummeted on Monday's opening, dropping another 15%, but it recovered over the next two days, presumably due to internal buying pressure.

The stock price has stabilized, but its reputation has absolutely collapsed. E-commerce platforms that have already gone public, such as Dangdang and Mecoxlane, have all come out to criticize Alibaba. Now it is truly beset by internal and external troubles and surrounded by enemies.

Even under these circumstances, Mr. Ma remained as steady as Mount Tai, showing no sign of speaking out, leaving people wondering how the matter would ultimately be handled.

“Mr. Ma is also trying to get the license, but as for why he didn’t communicate with the two major shareholders, I really don’t know.” Wang Yao smiled.

After parting ways with Tan Hui, Wang Yao rushed to Ren Quan's house.

After everything settled down, there were two options: one was to merge with Kanpianer.com to directly boost the stock price, and the other was to continue operating independently.

The sudden success left Ren Quan and the others still reeling. What they had initially thought was just a dream of a snake swallowing an elephant turned into a dramatic scene of a whale swallowing its prey.

The website Kanpianer.com merely acted as bait, which subtly altered their attitude towards Wang Yao once again.

The reason why Kanpianer.com has expanded to its current size is that the people behind it are somewhat wary of Wang Yao. Although he only owns 25% of the shares, he controls the absolute majority of the equity. Apart from daily operations, he makes almost all major decisions on Kanpianer.com.

However, Wang Yao was not one of their own and was not easy to control. They originally wanted to push for another round of financing after Q2 so that Ren Quan could gradually replace Wang Yao.

But they were caught off guard when the company collapsed before Q2 even ended.

After Meishe was acquired, Tianhuo held one of the largest shares in Chengtian. If the two companies merge, Wang Yao would most likely become the largest shareholder. Although the company's size would increase, Wang Yao's power would become even more unshakeable.

Furthermore, Wang Yao changed the plan from "snake swallowing elephant" to "whale swallowing" without informing them in advance, which made them uneasy. Therefore, they wanted to have a proper talk about everything this time.

When Wang Yao arrived, Ren Quan, Wang Jinhua, and Hu Mei had already finished dinner.

"Have you eaten? I'll make you something." Ren Quan asked with a smile.

"I've eaten before I came." Wang Yao greeted everyone, then asked knowingly, "What does Director Hu want with me?"

"Of course, it's to express our gratitude to the great contributor." Hu Mei smiled.

"I don't deserve such praise. It's all thanks to everyone. Without everyone's support, Kanpianer.com wouldn't have grown to this scale, and it wouldn't have had the opportunity to shake up Chengtian," Wang Yao said with a wave of his hand and a smile.

"President Wang, please don't be modest. We were just watching from the sidelines. When Xingmei entered the game, we were dumbfounded and ready to give up. But unexpectedly, things took a turn for the better the next day. President Wang is still the better strategist." Wang Jinhua said with a smile.

Wu Kebo was swept out of the game in this way, which certainly gave her a sense of satisfaction.

"I was forced into this situation. Alibaba was short of money and was clearing out its existing businesses, so I acquired Meishe on the side. I can only say it was a matter of timing and fate," Wang Yao said with a slight smile.

"God helps those who help themselves. Mr. Wang is truly capable. Let me toast you." Hu Mei held a glass of champagne and handed Wang Yao a cup of tea.

She was a witness to Wang Yao's inexplicable rise to prominence time and time again. If it was a coincidence or luck once or twice, it would be hard to convince people if it was just luck three or four times.

"Respectfully, Mr. Ren, you've worked so hard." Wang Yao said with a light laugh.

"I won by doing absolutely nothing," Ren Quan said with a smile.

After exchanging pleasantries and compliments, Hu Mei kept giving Ren Quan meaningful glances. Finally, Ren Quan had no choice but to bite the bullet and ask, "Emmm, what are the plans for this constant restructuring?"

“I haven’t decided yet. I looked at Pianer.com’s Q2 report. In the first half of the year, our box office revenue was 550 million yuan, accounting for about 8% of the entire box office market. The total revenue from commissions and publicity was 160 million yuan, and the net profit was more than 20 million yuan. Expansion expenses and liabilities amounted to 400 million yuan. Based on the PE ratio of 30 for domestic technology stocks, our current valuation is actually around 3 billion yuan or more,” Wang Yao said.

It is highly likely that Kanpianer.com will account for more than 12% of the box office market in the second half of the year, monopolizing 80% of the ticketing market. With the popularization of online payment and the added benefit of cinemas next year, it has basically formed an online monopoly. This valuation is considered conservative.

Although the company has paid out 4 million yuan in debt, it has mostly been invested in offline cinema partnerships and ticket subsidies, so the strategic losses are not severe. The main issue is that Humei's marketing and distribution segment generates nearly 1 million yuan in revenue, but its net profit is less than 5%, which significantly drags down the company's profits. Otherwise, the valuation could have increased further.

"Wow, it's grown to this scale without us even realizing it? Internet companies really do grow fast." Hu Mei's smile widened upon hearing this.

“But we’re also a technology company, aren’t we? Don’t we purchase our systems from third parties?” Wang Jinhua seized on the crux of the matter.

“Of course, we are the only buyer.” Ren Quan glanced at Wang Yao.

The PC platform and online ticketing technology and services of Kanpianer.com are all from a company called 'Xingyou', which everyone knows is Wang Yao's company.

“If we build our own development team, the profit margin might drop even further, but we can try developing it ourselves,” Wang Yao said with a smile.

“There’s no need for a second investment, and didn’t you say we’re about to enter the mobile era?” Ren Quan waved his hand.

"I heard you're going to buy a mobile app? The budget is 1 million per year? That's much more expensive than the PC version," Hu Mei said with a smile.

“We could also buy out the technology for a one-time fee of 1 billion, but the maintenance and iteration costs would be 10 to 2 million per year,” Wang Yao said with a smile.

"It's better to buy than to build; buying is the more cost-effective option." Hu Mei nodded.

They didn't understand the technical issues either. They knew the price might be problematic, but apart from 'Star Travel', there didn't seem to be any other company that could provide alternative technology.

"Or perhaps we could consider having Xingyou Technology invest in us?" Ren Quan suggested.

"That won't be necessary," Hu Mei shook her head in refusal.

If it's really valued at 10 billion, that would directly give them a one-third share of the company, would that be acceptable?
"Technology expenditures are actually not too bad. When Kanpianer.com's revenue exceeds 2 billion or even 5 billion in the future, technology investment will be negligible. The main issue will be user retention. Market value is based on market share and user base," Wang Yao said with a smile.

“Ah Yao is right.” Hu Mei seized the opportunity to say, “We’ve come to you this time to discuss another matter: whether there’s a need to merge with Cheng Tian.”

"Personally, I don't think it's necessary. The main purpose of the movie ticketing website is online ticketing; the cinema chain was just for its core business. Of course, if it's integrated into the largest cinema chain in China, that would be a good thing."

"But to be honest, if Kanpianer.com focuses on online ticketing, it should be able to reach a valuation of tens of billions in the future. They could consider divesting some of their offline cinema business and focusing solely on online ticketing," Wang Yao offered objective advice.

Hu Mei listened thoughtfully and asked, "What if we merge?"

"If it's a merger, we'll have to see how the stock price is after the market closes. If we restructure now, I don't think Xingmei will make too many concessions. They're undervaluing Kanpianer.com a bit," Wang Yao said, frowning.

"With a valuation of 30 billion, can we get 70% of Chengtian's shares?" Hu Mei asked.

"It's definitely impossible, we might not even get 50%." Wang Yao chuckled.

Hu Mei is quite greedy.

"How can it be so low? What makes it worth 30 billion? With such high debt, its market value is less than 10 billion," Hu Mei asked in bewilderment.

"Market capitalization valuation is hard to say in Hong Kong stocks. We don't look at net profit, but only at the business model and future, because investors are buying the future. This future includes not only the company's future development, but also the future decline in stock price. It's impossible to generalize."

After the restructuring, with Xingmei's investment and integration, it has firmly established itself as the leader in the cinema industry. As long as the domestic box office market continues to grow, the stock price growth rate will not be lower than the market growth rate. I estimate that the market value will be at least 30 to 40 billion in the second half of the year. Wang Yao shook his head.

Hu Mei seemed to be deep in thought after hearing this.

Wang Yao said that Xingmei was against it, but it's very likely that it was Xingmei that was against it, since he is the largest shareholder.

"Mr. Wang now owns two box office companies, one online and one offline. Will there be any conflicts?" Hu Mei asked again.

"I won't be focusing on the film and television sector in the second half of the year. I'd like to discuss this with everyone today. My energy is limited, so it's up to Brother Quan to take care of things from now on," Wang Yao said with a light laugh.

Wang Yao actually relinquished power voluntarily?

Hu Mei and Wang Jinhua were both taken aback.

"Ah Yao, you might have misunderstood." Hu Mei's face darkened, and she quickly explained.

"No, I do have a lot on my plate, and besides, there's nothing the website needs me for anymore. I plan to only handle some of the publicity and business work." Wang Yao shook his head.

Hearing that Wang Yao wasn't going to give up, Hu Mei's expression softened considerably.

She was conflicted. After all, everyone knew that the company's current size was due to Wang Yao. Although Ren Quan was already capable of handling things on his own, they were really worried if he were to relinquish control.

“That’s true. Mr. Wang is very busy. I can handle this little thing for him,” Ren Quan said with a smile.

He had a different idea from Hu Mei; he didn't think Wang Yao would sit idly by if something really happened.

"By the way, Sister Jinhua, are you interested in returning to Chengdu? Oh, it should be called Tianhuo now. After the merger, we plan to rename it Tianhuo Entertainment," Wang Yao said with a smile.

"Wu Kebo never dreamed that the 'sky' of 'every day' would become the 'sky of heavenly fire'," Ren Quan scoffed.

"Me." Wang Jinhua was somewhat tempted.

While going solo is easier, he lacks the backing of a large company and feels less confident. Moreover, with no big company controlling his artists, the original three-way relationship has become more equal, making them harder to manage.

“Tianhuo Entertainment will still be involved in film and television investment and artist management in the future. Sister Jinhua can take over the management department again and serve as the CEO of the branch. It’s okay. We can talk about it again after you’ve thought it through,” Wang Yao said with a smile.

If Wang Jinhua returns, it will be a major boon for Tianhuo Entertainment, and it will also be an advantage for Wang Yao in terms of future personnel costs.

"Okay, I'll think about it." Wang Jinhua nodded, secretly making plans.

(End of this chapter)