Those Years When I Was Forced to Top the Forbes List

Chapter 265 Zhuhai Guanyu
On that day, public opinion was in an uproar.

The connections of Gu'an's top management have spread across most of the south, and when fully utilized, they are truly astonishing. In addition, given the numerous flaws of Datang, people feel no qualms about criticizing it. They contacted more than 20 media outlets, and ultimately 12 of them published articles.

Online, Chen Xuebing didn't bother Li Xueling anymore.

The YY platform started construction in February and is currently in public beta testing, so Li Xueling is very busy.

However, a user named "Chen Xuebing" on Sina Blog commented.

It was just a reprint of an original article from the "New J Report".

They said nothing, yet it seemed they said everything.

The timing was impeccable, at 11:30 a.m., the closing time, leaving an hour and a half for everyone to spread the news and stir up emotions.

At 1 p.m., Datang Telecom's stock price began to plummet, starting from 9.18 yuan and briefly touching -8% during the day.

Chen Xuebing's blog once again made it to the homepage, with the comment section filled with question marks.

"Brother, are we going to smash it or not?"

Chen Xuebing did not reply. Market sentiment improved slightly towards the end of the trading day, closing at 8.62, a drop of 6.1%.

With just a slight move, President Chen caused Datang's market value to shrink by several hundred million.

It had been performing very well previously.

Datang suffered losses for several consecutive years, but its stock price never collapsed and even rose, which is not because the market was optimistic about Datang.

The listed company "Datang Telecom" is just a subsidiary of "Datang Telecom Technology Industry Group", which mainly deals in microelectronics and communication equipment. Its total profit is negative every year. However, Datang's parent group also has an unlisted subsidiary "Datang Mobile", which is Datang's technology-driven subsidiary and leads the research and development of 3GTD.

There have been persistent rumors that Datang is going to be restructured, with the technology assets of "Datang Mobile" being used to introduce numerous partners and then incorporated into the listed company's financial statements.

3G hasn't arrived yet, but everyone thinks it could arrive at any time. This is a huge positive expectation, and Datang can use this expectation of 3G technology assets to boost its stock price from time to time.

This listing design was brilliant; it could be said that it gave the Tang Dynasty several lifelines.

This knife is more useful when it's not drawn; as long as it's not drawn, it can keep creating suspense for everyone.

But today, the overwhelming articles are attacking the Tang Dynasty, this sword that has not yet been drawn: it is rusty, and may even be a broken sword.

One afternoon, all the stock market investors of Datang were diligently searching for news about Datang. With such high-frequency searches, the data was transmitted (sold) from various search engines to portal websites. Starting at 5 p.m., the three major portals successively reprinted today's offline media reports about Datang, especially the article in the New J newspaper.

Caijing.com also began organizing experts to comment on the situation of Datang.

Most of the news is negative.

Investors who bought at the close began to regret it: Oh no! They bought the dip only to find themselves halfway down the mountain!

The emotions are still brewing.

But Chen Xuebing didn't even look at the blog; the article he posted at noon was reposted by Ren Ying.

He is very busy.

The first half of the day was spent in a remote conference room meeting with Cai Zhijian and Spreadtrum to discuss the cooperation framework for a technology joint venture with Huawei.

This framework design is complicated because communication technologies are interconnected. MIMO-related technologies cannot be taken as separate research and development directions without proper planning. Otherwise, the joint venture's R&D personnel will not receive continuous technical support from both parties, which will create significant obstacles to R&D.

However, if no blocking design is implemented, both parties will have to continuously invest relevant technologies into the joint venture, causing the joint venture's technology scale to grow larger and larger. In that case, the 4G R&D of both parties, and even the mature 3G technologies, will be integrated.

Spreadtrum certainly doesn't rule it out.

But it's obvious that Huawei wouldn't agree, because this isn't just about TD technology; many of the enhancement technologies are shared by all 3G and 4G protocols.

Chen Xuebing was also unwilling. Although Huawei was strong, Spreadtrum focused on the smooth upgrade from TD-SCDMA to TD-LTE, which was much less burdensome than Huawei's bet on all tracks. It was still unknown who would prevail in three years.

The discussion lasted a long time.

In the afternoon, Chen Xuebing gave two more telephone interviews, then looked at some materials on communication technology before receiving a report from Changzheng Capital about the sharp drop in Datang's stock price today.

Chen Xuebing was only slightly satisfied with the news. He went out and went to the Wuzhou Hotel to keep his appointment.

Xu Yunfeng's father has arrived.

It's been a long time since I've had a proper meal.

Golden Wing Soup with Baked Green Dragon, Crispy Roasted Pork Belly with Secret Recipe, Chrysanthemum Crab Meat Soup, Braised Pork Ribs with Rice, Caviar Phoenix Eye Dumplings, and several other Hunan dishes to go with rice.

Xu Yunfeng, a Northeasterner, is not a picky eater at all; he just has the typical Northeastern taste, ordering all the dishes he wanted and enjoying his meal to the fullest.

Chen Xuebing, however, didn't seem to have much of an appetite. He flipped through a document, his eyes filled with surprise.

Xu Yanming sat opposite him, eating his food slowly and methodically, quite composed.

After a long pause, Chen Xuebing spoke up: "President Xu, is this new company you've started under the Guangyu Group? Are you managing it?"

Guangyu Group is a listed company.

Starting out as a battery manufacturer, the company went public in Hong Kong in 99. Its subsidiary, Guangyu Games, recently released a very popular game called "Ask Tao".

Chen Xuebing also knew that this company later created a lithium battery subsidiary, whose market value exceeded that of the parent company.

It's called Zhuhai Guanyu.

The company that Xu Yanming is going to start is called Zhuhai Guangyu Battery.

The location and parent company match, so it's highly likely.

“Oh, it’s like this,” Xu Yanming explained. “I’ve worked for several companies before, Guangyu was one of them. Later, I started my own company, which did quite well and secured some aviation orders. But I’m a tech person, and my partners weren’t very good at management, so the company was a bit chaotic. I’ve always wanted to start a new business, and my former boss at Guangyu kept contacting me, asking me to bring my original company’s technical team to Zhuhai to help them start this company. The equity is currently theirs, and they bear the operational risks. But once it reaches a certain scale, our team can acquire equity, and we can also repurchase their shares through profits. It’s kind of a risk-free startup.”

Xu Yunfeng looked up again and added, "How can there be no risk? That company used to be quite profitable. If you pull all the people out, the original business will be impossible to continue."

Seeing that Xu Yunfeng seemed a little guilty, Chen Xuebing thought about it carefully and realized that Xu Yunfeng's father wasn't exactly rich.

A battery factory with over 100 technicians, plus a few hundred workers, probably? And then there are the partners. At most, their family fortune is in the tens of millions, definitely not a hundred million.

He used over ten million yuan to open a shop.
This is the ultimate example of sponging off one's parents!

Xu Yunfeng acts all high and mighty every day, driving a Ferrari worth millions, causing the whole school to speculate about him. He even said he didn't want to inherit his father's business, but apparently, his father didn't have much business to inherit!

They might not even be as wealthy as Hu Li's family.

However, if his father's company is indeed the Zhuhai Guanyu of later generations, he would definitely be a super-rich second-generation heir, just enjoying life a bit too far ahead of his time.

"Mr. Xu, you used to make power batteries, right? What made you decide to make polymer soft-pack lithium batteries?"

"Guangyu has made power batteries, and we want to differentiate them from the parent company's main business. Consumer electronics are developing rapidly now, which aligns with our team's R&D direction over the past two years, and it's also what I want to do. I heard that you have some orders, Mr. Chen?"

Halfway through the meal, Xu Yanming finally asked about the main topic of the day.

Today, he visited an old friend in Shenzhen and learned that Mr. Chen's company, Qidian Technology, had quite a reputation in the Huaqiangbei market and had a considerable number of orders. Otherwise, he wouldn't have been so responsive to his questions.

The key point is that they also own a financial company.

His son's business was in someone else's hands, and the returns from that fund were even more tempting to him.

Chen Xuebing had previously reviewed Xu Yanming's company information and had been eager to collaborate, but after hearing this introduction, he hesitated slightly.

Because the development of lithium batteries in China has been too rapid in the past year, Japanese companies are far ahead in this field, but they do not have a particularly large market advantage. In the past year, many related companies have opened companies in mainland China, resulting in more choices.

How does your technology compare to ATL's?

"Mr. Chen is joking. We only have a dozen or so patents in this area, while ATL has more than 400, which is 26 times more than us. Our stacking process is far inferior to theirs, and our battery energy density is 10% to 15% lower."

Xu Yanming bluntly stated the technological gap, and seeing that Chen Xuebing showed no surprise, he continued:
"However, we are researching a new technology that can significantly improve high-temperature safety. Moreover, Japanese companies do not trust the domestic supply chain. Our supply chain and labor costs are lower than ATL's, and our profit margins are also lower. Given some time, we can surpass ATL by a large margin in terms of safety and cost-effectiveness. We can also make batteries with the same parameters, just a bit thicker than ATL's."

Chen Xuebing nodded slowly. After several years of entrepreneurship, it was quite impressive to have obtained more than a dozen patents in a field that was being blocked by Japan. He became more and more convinced that this was the "Zhuhai Guanyu".

Moreover, what he wanted was cheapness, safety, and a core value that matched his needs.

"What exactly is this technology? Can you tell me? How long does the research and development take?" Chen Xuebing asked probingly, preparing to go back and investigate.

"Regarding the gel electrolyte technology, we have actually moved beyond the laboratory stage and applied for a patent. It is not difficult to integrate it with industrial production. It will not take too long, about six months to a year, before it can be put into industrial processes."

Xu Yanming was somewhat embarrassed, but still revealed some of it.

After listening, Chen Xuebing saw an opportunity. He put down the documents in his hand, sat up straight, and said, "It's like this, my order volume is indeed very large. Once it's running smoothly, I get at least a million orders per month. Supporting a battery factory with several hundred people is definitely not a problem. But I plan to invest in your current shareholding structure."

Xu Yanming's expression froze.

"Millions per month?"

Xu Yunfeng stopped eating and stared at Chen Xuebing, saying, "Brother, you've switched to selling MP3 players now?"

What man in his twenties doesn't care how much money his family makes?
He didn't understand the technology in his father's business, but he was very clear about the market.

Currently, domestic mobile phones do not emphasize thinness and lightness, and there are relatively few that use soft-pack lithium batteries. Nickel-cadmium batteries are more common. Most orders are concentrated in MP3 players and laptops. MP3 batteries are 500-600 mAh and cost around ten yuan each. 1000-1500 mAh (mobile phone) batteries cost around 30-50 yuan. Laptop batteries with 2000 mAh or more are different. The technology is much more complex, and they can sell for over one hundred yuan, with higher profit margins.

The profit margin in this industry is not high, with small factories making only around 10%. However, it relies on economies of scale. A factory that produces 200,000 medium-sized batteries or 100,000 large batteries (laptop batteries) per month can reduce supply chain costs to 70-80% of those of smaller factories in the same industry, and more than double its profits.

His father's goal at that time was to target the laptop market, leverage his technological advantages, and capture the profits from BMS (battery management software) and packaging, aiming to produce 10 units per month.

His family's factory had already reached that figure, earning three to five million a month, but his father's business partner would take a cut.

Compared to this, a monthly production order of 100 million is terrifying.

"Mobile phones," Chen Xuebing reiterated, "and it's at least one million. If it's more, it's hard to say. I have my own factory with some production capacity, and I also have some production capacity from Huaqiangbei. I can start production in less than six months. I also have an order from a large factory outside."

Let alone Huaqiangbei, if we could persuade Rong Xiuli to use their batteries, Tianyu alone would have monthly orders exceeding 100 million units in the next two to three years.

What is in-depth industry cultivation?
By controlling upstream orders, they can make a lot of profit just by controlling the downstream supply chain.

As long as smartphone production resumes, the sheer volume of orders he has will attract countless factories to his company.

"The mobile phones in Huaqiangbei all use nickel-cadmium batteries, right?" Although Xu Yanming didn't believe that a billionaire could talk nonsense, he still couldn't figure out the math.

“I have a way to get them to use it. Mr. Xu will naturally know the answer to this question in two months.” Chen Xuebing smiled and said, “I just want to know how much money and how long it will take for you to build this factory, and whether I can become a major shareholder if I take this order.”

“With a production capacity of one million, the construction method would be completely different now.” Xu Yanming took a deep breath and said, “The factory area needs to be twice the size, and the investment would be at least more than 100 million.”

He glanced at Xu Yunfeng as he spoke.

Xu Yunfeng sensed something was wrong and shoved his hand into his pocket: "I don't have any money!"

“He does,” Chen Xuebing laughed. “He has over 30 million in my fund, and his share should be over 20 million. If you plan to build your own factory, I can help you withdraw the money.”

Xu Yunfeng's face turned red, and his lips moved as if he were casting a spell.

“However,” Chen Xuebing added, “my orders will be valued as equity, and I can’t contribute much of the money to build the factory.”

Xu Yanming hesitated for a moment: "President Chen, this is no small matter. According to you, I must confirm the order quantity, and at least meet with the manufacturer. Moreover, my former employer invited me to come and inspect the site. It would be unreasonable and inappropriate for me to leave them out."

There was something else he didn't say.

Guangyu is a senior figure in the industry. Betraying him will make it very difficult to do business in the future.

“Then let’s have three companies invest. I want 34% of the shares. I’ll put up 2000 million in cash. Meeting the manufacturer shouldn’t be a problem. I’ll arrange it in a month. You’ll also have enough time to discuss it with Guangyu. However, if the company goes public in the future, before the IPO, they must exit at the average valuation of the last two rounds of financing, and the shares will be taken over by you and me. This needs to be signed in a contract.”

They've even started talking about IPOs.

Chen Xuebing presented him with orders and discussed going public; it was really hard for Xu Yanming to refuse such a tempting offer.

"Alright! I can postpone the factory opening. If Mr. Chen can really get me to meet the manufacturer, I'll talk to Guangyu about it! It shouldn't be a big problem!"

"You'd better settle on a factory location first, don't waste time," Chen Xuebing added.

Seeing Chen Xuebing's confidence, Xu Yanming's excitement slowly dissipated, and he reached out his hand from in front of Chen Xuebing across the table.

"Great! I wish you a successful collaboration!"

Chen Xuebing smiled and shook hands with him; this was the smoothest collaboration he had ever had.

With upstream orders in hand, business is indeed much easier to negotiate.

“However, the name Zhuhai Guangyu…” Chen Xuebing probed with his eyes.

Xu Yanming paused for a moment, then remained silent.

"What do you think of the character 'guàn'?" Chen Xuebing didn't specify which radical it was, continuing to probe.

Xu Yanming suddenly realized what was happening and felt as if everything was right.

His eyes lit up: "Guan? Guanyu? Unparalleled in the world! That's a great name! Our technology should aim to lead the industry!"

Regardless of whether Xu Yanming was flattering him or not, Chen Xuebing smiled happily.

Seeing that the two were chatting so smoothly, Xu Yunfeng nervously reiterated, "Old man, I really don't have any money! This is what I earned by betting correctly back then! If I told you, you definitely wouldn't let me invest! You take out the money from my fund now, and we can break off our relationship as soon as possible and go our separate ways."

Xu Yanming glanced at him, remained silent, and resumed his fatherly composure.

Family matters can only be discussed at home.

Only then did Chen Xuebing begin to eat properly and start chatting.

"Actually, the stock market is doing very well right now. With three companies investing, I'm sure Mr. Xu won't be able to put in much money, and there's no need for him to withdraw it. This money can still make money, and as the capital grows, your family's business will be more prosperous in the future."

Xu Yanming smiled.

He had long heard of this person's investment talent and had witnessed the returns firsthand. With this statement from the person, his desire to cooperate became even stronger.

He nodded and stood up: "Mr. Chen, the food is getting cold. I'll ask the waiter to heat it up for you."

After Xu Yanming left, Xu Yunfeng started talking non-stop.

"Brother, you have to tell me now, right? You said last time that if Tencent had taken a liking to me, I'd be doomed. What did you mean by that?"

Chen Xuebing smiled and asked, "What terms did they offer you?"

“Eight million, and they want the same equity as you, 34%. They also said they would lead the next round of investment if things go well. Our company only has 640 million in total, and they're putting up 800 million for a third. It's not a bad deal, is it?” Xu Yunfeng looked at Chen Xuebing with a questioning gaze.

Chen Xuebing scoffed.

"Is this how you calculate the internet business? Others invest 50 and can raise millions in the first round with just an idea. You, Young Master Xu, have only spent half a year, plus my business advice, and you think you're worth that little? If you raise hundreds of millions for the company, how many shares will we have left?"

Xu Yunfeng asked curiously, "Then how much should we take?"

Chen Xuebing raised his finger.

"Let me tell you about an industry practice."

“From the time we started raising funds, to the subsequent capital increase, this company has already entered the seed round. At this point, the valuation can no longer be calculated based on the invested capital; it needs to be doubled. In other words, we need to value it at 1200 million.”

"Based on our starting price of tens of millions, once the prototype is validated and initial user accumulation is completed, we will have entered the Series A round. Each round of financing should increase the value by 3 to 4 times. In other words, if you want to raise funds in the current public beta stage of your game, the company valuation should be between 3600 million and 4800 million."

"If you can't estimate the value, then don't raise funds; just continue being a user."

"By the way, it seems that startups in the gaming industry have a separate method for anchoring user value. How long have you been in public beta, and how many users do you have?"

Upon hearing the figure of 3600 million, Xu Yunfeng immediately perked up and said, "Our advertising investment isn't high. We have 20 registered users, and over 8 are online at any given time, right? We've been in open beta for over a week! The data is growing rapidly! We've opened two servers!"

"Let's wait until you've compiled your monthly data. Your data is too honest. If you get someone to manipulate it, the backend data can be increased two or three times. Each user is worth about 10-20 yuan. The key is that you're now being targeted by Tencent. They love to copy, especially probability-based gacha games like yours. And the user base is huge. Games are an industry where it's hard to build patent barriers. Apart from the engine and UI, other patents are hard to define. If you agree to cooperate, they might find loopholes in the contract terms. If you don't agree, they'll copy you."

"Damn it." Xu Yunfeng's expression changed several times. Chen Xuebing was a major shareholder; he wouldn't come to scare him for no reason.

"If they insist on copying it, I can't register the copyright patent for the Three Kingdoms!"

Chen Xuebing seemed a bit relaxed: "First, stall them, sign a letter of intent, and say that some of the ideas are still being technically implemented and we want to see how the market reacts next. During this time, quickly register the copyrights for the art, UI, copywriting, and even the button layout. Then, take Tencent's letter of intent to Shunwei Capital in Beijing to find Lei Jun and ask him to introduce you to two investors who are willing to pay high prices. Once you have the money, increase your advertising investment and speed up the acquisition of customers."

"The most crucial thing is to develop in depth and iterate quickly so that they can't keep up with you. Make the resource pack bigger and the gameplay more varied to increase their cost of copying. I'll give you some feedback on this when I have time to try out the game."

"Hold on, and once my artillery support arrives, you won't have to worry about their user competition strategies anymore. Once you grow into a company with a group of loyal users, I'll help you select a few good games to continue developing."

Xu Yunfeng was stunned: "Artillery support? What do you mean?"

Chen Xuebing smiled but did not answer.

"I'll stay with you after dinner; I have other things to do."

(End of this chapter)