Extraordinary Genius - Chapter 523 – Losses or gain?
Feng Yu had purposely offered such attractive terms. His objective was to own more Lenovo shares. Just the reason for Liu Chuanzhi and his team were in Lenovo, was worth Feng Yu paying such a huge price.
In Feng Yu’s previous life, many MNCs were trying to pouch Liu Chuanzhi. They offered 10 million USD annual salaries and also shares, but Liu Chuanzhi never agreed. It was because Liu Chuanzhi firmly believed that he would gain more if he remains in Lenovo.
Actually, not only Liu Chuanzhi and his team were capable. They also have lots of connections with the higher-ups of the Chinese government. Liu Chuanzhi was already the forerunner of the Chinese IT industry now.
Liu Chuanzhi still has lots of friends both in China and overseas. His friends were all giants in the IT industry. Although he will lose contacts with most of them in the future years, now, he was still close to the senior management of many IT MNCs. This was why Lenovo had been doing so well in the past few years.
In Feng Yu’s past life, Liu Chuanzhi had never made any wrong strategic decisions in Lenovo. This was due to the experiences he learned from his friends.
If Feng Yu were to manage Lenovo himself, he could not guarantee that he will perform better than Liu Chuanzhi. Also, Lenovo was considered a big company, and it was not easy to manage such companies.
Although Feng Yu had let Wind and Rain Electronics and Aiwa Electronics hired some fresh graduates to groom them, but it would still be years before these new graduates were ready to take on the higher management positions. Feng Yu had also approached those successful businessmen from the future years. But they refused to work for Feng Yu, or they were still not capable now.
Having paid such high prices, Liu Chuanzhi did not disappoint Feng Yu. He had successfully helped Feng Yu get 49% of the company’s shares. This percentage was much higher than expected.
It seems Feng Yu was right to make his promise with Liu Chuanzhi. If Feng Yu had approached the leaders in CAS, it would be hard for him to succeed and he also could not sell Liu Chuanzhi the favor.
After speaking with Director Li, Director Li told Feng Yu that he will give him an answer 3 days later. If nothing goes wrong, they will sign the contract then.
Zhong Qingxian just happened to be in Shenyang to sign a contract. He decided to set up a new factory in Shenyang next year. As the Energy of Life’s advertisements were removed from CCTV, Le Bashi’s yogurt drinks’ sales were also affected. Although the yogurt drinks’ sales did not drop overnight like the Energy of Life, it was falling steadily.
But there was still a demand in the yogurt drinks market, and Lehaha was happy to fill this gap. Lehaha’s AD Calcium Milk sales had been rising. Their tea beverages sales were also increased.
Lehaha’s production could not meet this demand, and Zhong Qingxian decided to set up a factory in Shenyang to meet the needs in the 3 northeast provinces and the Beijing region. As Lehaha was already an established brand, the agreement was settled in no time.
Zhong Qingxian heard that Feng Yu was in Beijing and he made a trip over. He wants to report about Lehaha’s developments to Feng Yu. Lehaha’s finance department were all Feng Yu’s men. Zhong Qingxian was making a considerable investment, in the new factory and Feng Yu will be informed. But Zhong Qingxian still wanted to tell this to Feng Yu personally.
Feng Yu nodded after Zhong Qingxian report: “You can make all these decisions yourself. If you need me for anything, just let me know.”
Feng Yu still does not intend to interfere with Lehaha’s operations, and Zhong Qingxian was glad.
“Manager Feng, I thought you are studying in Hong Kong now? Why are you back in Beijing?” Zhong Qingxian chatted with Feng Yu.
“I am here to talk about my investment in Lenovo.”
“Lenovo? What company is this? What does it sell?” Zhong Qingxian asked.
Feng Yu: “……” Lenovo will be a world-renowned IT company in the future, and their current scale was already massive. But this Zhong Qingxian had never heard of this company?
Oh, this Zhong Qingxian also does not buy IT products. There were only 2 PC in his company and Lenovo had never advertised before. It was natural for Zhong Qingxian to not know about this company.
“Electronics products. The company makes computers. Have you heard of Lenovo 1+1 Computers?”
“Computers? There should not be many people buying computers now. Can this company make money?” Zhong Qingxian asked.
“Then let’s set up a computer company.”
Feng Yu looked at Zhong Qingxian speechlessly. He had never heard about Zhong Qingxian entering the IT industry in his previous life. Did history change? Or Zhong Qingxian had entered the IT industry and failed. But this was not recorded. It was just like Nintendo had sold instant rice before, but not many people were aware of it.
“You also want to invest in Lenovo?”
“If I follow you, will I still make losses?” Zhong Qingxian smiled cunningly.
“How much can you invest? I can let you have some shares. But I need to tell you that I am paying a premium of 3 times the market value for these shares. I can sell some of my shares to you, but I can’t sell you too many shares.”
“3 times premium price? What do you mean?” Zhong Qingxian was shocked. Can this company make so many profits? 3 times the market value of the shares? Feng Yu had gone crazy?
Feng Yu told Zhong Qingxian about Lenovo’s current value, his total investments and the shares he would own.
“Manager Feng, that means if I invest 10 million, I can only get 2% of the company’s shares?” Zhong Qingxian’s eyes opened wide.
“Hmmm…. Maybe it might be less than 2%. Based on the current value, you will only get about 1.6% or 1.7% shares. If you calculate based on the amount I acquire the shares, you will not get even 1%.”
“Huh? Manager Feng, are you sure about this? You said that this company is worth less than 180 million and you spent 300 million plus technology for 49% shares? And the current value of the company is not even worth 400 million RMB? Aren’t you making a big loss?”
Zhong Qingxian could not understand. 300 million RMB would at least get more than 60% of the company’s shares. This was still based on the full amount as the invested fund. Now, the other party had too away 100 million, and Feng Yu should be getting at least 77% of the company’s shares.
Feng Yu was getting only 49% of the shares. Could this be some sort of plot against Feng Yu?
Could it be that Feng Yu was conned in this business deal? Cannot be. Feng Yu still had not handed over his money, and he was still smiling. Zhong Qingxian had already decided not to invest. The dividends he got from Lehaha can be used for something else. If there were no other investment opportunities, then he will buy a villa at West Lake area.
Feng Yu was thinking in his heart. I had made a loss? Even if I do not do anything, the market value of Lenovo in 3 years will be over 2 billion RMB. In 10 years, it will be worth over 20 billion. Most importantly, without CAS and its connections, without the brains of Liu Chuanzhi and his men, even Feng Yu could not achieve this feat.
The annual returns will be 50%. Even the experts in wall street could not guarantee such returns. Zhong Qingxian felt Feng Yu had made a significant loss, but Feng Yu thought he had gotten a great deal!