20 years of restarting life

Chapter 3688 The Procedure of Loan First, Mortgage Later

Although ASML's sales reached $7.95 million last year, its net profit margin was only 13.3%, and its net profit margin from continuing operations and return on equity attributable to shareholders have been consistently negative. As a result, the shareholders are essentially losing money to gain publicity and are just having a good time.

This is also a major reason why ASML's total market capitalization is still not high, even though it has achieved the second position in the industry, because these shareholders have different purposes for holding shares than companies like Intel.

These shareholders are in it for investment profits, while Intel and its partners are more interested in using capital to gain control of the company.

ASML is now pushing the TWINSCAN AT:750T to change this disadvantage, attract more investment, increase market value, and enhance the company's bargaining power, so as not to be plundered by companies like Intel with very little capital.

In fact, Zhao Chang'an could also hold ASML shares in another way, which is to use real money to directly buy up ASML shares in the stock market.

Just like last year when he repeatedly bought and sold RIM shares.

However, even if Zhao Chang'an invests $1 billion, the money will not go into ASML's R&D account. Instead, it will go into the hands of many shareholders who will cash out and make profits. ASML will still be short of $300-400 million in R&D funds.

Especially now that Philips is determined to continue reducing its stake in ASML, let alone Zhao Chang'an investing $10 billion, even if he invests $50 billion, Philips could drain all the funds in his hands.

Of course, Zhao Chang'an couldn't come up with $50 billion either. Even the $10 billion he promised would have to be split into two parts, and he could only come up with $4 million this time.

Moreover, he had to scrape together the 4 million by borrowing from banks through various means, such as mortgaging his assets.

Zhao Chang'an certainly wouldn't dare use RIM shares as collateral for a loan. Those shares had long been coveted by countless greedy eyes, but they just hadn't found a way to seize them. If Zhao Chang'an chose to use them as collateral, not to mention $10 billion, even $20 billion would be easy for him.

However, it won't be long before RIM's stock price is targeted by a large amount of capital for a precise margin call, in order to wipe out Zhao Chang'an's pledged shares and reduce his holdings to zero.

Zhao Chang'an also mortgaged a portion of his RIM shares, only 6%, to North American banks to borrow $3 million.

This small amount of shares is not worth the effort these financial giants put up, because any economic activity carries corresponding risks. Even if they got their hands on these shares, it wouldn't make up for the time, effort, and money they spent.

Instead, they continue to use domestic assets as collateral for secondary loans. Starting last year, they have been raising funds and borrowing. Now, many domestic industries have seen significant appreciation, and they can certainly use these appreciated assets to apply for additional loans.

However, starting last October, Zhao Chang'an borrowed several billion RMB in installments, which, in theory, leaves very little room for further domestic borrowing.

However, Zhao Chang'an's target this time is ASML, the world's second-largest high-tech company in the lithography machine field. If he can acquire enough equity and support ASML's 193nm immersion lithography machine R&D project, Zhao Chang'an could use this as a gimmick to persuade domestic foreign exchange management agencies to risk giving him funds.

In fact, Wen Ye had already reported this matter to Chu Daofeng, which is why he agreed without hesitation when Su Bo suggested that Fan Chufei come over.

Chu Daofeng was very interested in this matter and had already reported it to his superiors, including Zhao Chang'an's fund transfer methods.

The solution is to first re-evaluate the collateral assets in the domestic market, and then slightly increase the valuation by four or five hundred million US dollars. This would allow us to successfully secure the loan.

Moreover, this money is clean, with no trace of government involvement, thus circumventing some international restrictions. At the same time, OneNano and a shadow company under the Ministry of Information Industry signed another agreement: if OneNano is unable to repay this money in the future, its shares in ASML will be transferred to this shadow company.

As for the remaining $6 million, Zhao Chang'an is pinning his hopes on Cretaceous going public in North America this fall. If the IPO is successful, he should be able to easily secure the funds by mortgaging his shares in Cretaceous.

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Returning to the topic of why Zhao Chang'an couldn't directly acquire ASML shares from the stock market, like he did with RIM last year, but instead resolutely chose to acquire ASML shares through negotiated expansion.

Because the $4 million he can currently provide is only available if he can convince the Ministry of Information to use the funds specifically for their intended purpose.

If Zhao Chang'an were to use this money to accumulate shares through stock speculation, he would not be able to get past Chu Daofeng in the very first step.

Moreover, even if they get through the hurdle and receive the money, Zhao Chang'an's accumulation of shares might cause ASML's stock price to surge. Currently, ASML's market value is approximately $190 billion, and its stock price has remained strong due to its upcoming development of the next generation of lithography machines.

If this $400 million is poured in, and shareholders are reluctant to sell, it could easily create a leverage effect, rapidly driving up the stock price. In that case, how many shares Zhao Chang'an will ultimately be able to acquire with this $400 million is an unknown.

It's very likely that it won't even reach 1.6%.

Moreover, the next $6 million investment will not be available until at least October this year. By then, it is unknown how high ASML's stock price will rise. If another $6 million is invested, it is very likely that even if this $10 billion is invested, we will not be able to acquire even 3% of the shares of one nanometer.

What's even more critical is that this means that one nanometer's investment in ASML is entirely a stock market investment, with such a small shareholding that it has no say or influence over the company.

Once the Twinscan AT:750T is successfully developed next year, the stock price will definitely see another surge. Intel and other companies will invest another four to five billion US dollars to expand R&D. If the 10-nanometer chip is sold off by the end of next year, the company should be able to get at least 30%, or 3 million US dollars in profit.

However, in the end, ASML had absolutely no connection with one nanometer; it was more of a speculation than an investment.

Zhao Chang'an's current goal is to use this $10 billion to acquire at least 3% of ASML's shares, which is roughly the number of shares he could acquire through stock market means.

Secondly, the friendly cooperation between the two parties, and the fact that OneNano North America's Zhengzhou mobile phone factory would gradually establish its own chip processing plant, created a huge demand for lithography machines. This gave OneNano the same financing and expansion qualifications as North American companies such as Intel, Motorola, AMD, and IBM.

By then, while Philips will continue to reduce its stake in ASML, Zhao Chang'an hopes that with the expansion of investment capital, OneNano North America's shareholding in ASML will at least rank among the top three.

Zhao Chang'an then said to Mina, "The reason I brought you in is that I hope you can maintain friendly and frequent contact with this place as the head of the OneNan North American office. I even think we could move the office here."

"Move the office here?"

Mina looked surprised: "I think even moving to Stockholm would be better than here."