I asked you to save a bankrupt factory and you became the richest man in the world.

Chapter 382 065-066: Listing details finalized! (5000 words today)
Since the Industrial Revolution, humanity's timeline has been accelerating and the Earth has been getting smaller in relative terms.

And now, the entire human world is about to usher in the second timeline acceleration since the Industrial Revolution. Fortunately, the acceleration of this third technological revolution is driven by China.

This acceleration will leave behind most of the human beings on Earth, and those who are left behind will have almost no value in survival.

in the hereafter.

When the Mate 60 came out, the direction was actually very clear.

When Biyadi's Qin L came out, there was no need to discuss the issue anymore.

In the future, China will consume all high-end manufacturing industries, build new high-tech industries, and create a brand new track.

In 2014, all the big Western companies that are now doing well will be crushed by Chinese companies and exit the market in rounds of track changes.

Those countries that attempt to compete with China's manufacturing industry with cheap labor and raw materials will suffer a double blow from high technology and geography.

The production efficiency and production costs of robots and automated production lines are higher and lower than those of humans, and this is an irreversible state.

In the future, in the face of intelligent automation of AI+robots, even cheap labor like that in Bangladesh will not have any advantage.

Countries that seek to protect themselves, are full of nationalism, and attempt to compete with China will be infiltrated by information technology. Comparative economics will destroy the beliefs of countries that are ambitious in developing industry to become regional hegemons, and the door to free trade can be opened without the use of naval guns.

Starch and sugar can be synthesized from carbon dioxide. In the future, there will be practical protein artificial synthesis technology. Agriculture will reappear in a new industrial look.

With the development of energy technology, you can even rely on basic substances to create all kinds of raw materials you need.

Colonization will lose its meaning, and the people in the colonies will have no meaning to exist.

2000 years ago, the Han Dynasty used war horses to expand its frontiers.

200 years ago, the West occupied the New World with ships.

And in the future, there will be only one "China" in the world!
Therefore, at a time when the third technological revolution is arriving ahead of schedule as Gao Huaijun has pressed the accelerator, Hillhouse Technology’s listing must not only be quick, but also sufficient funds must be raised to allow his company to reap enough dividends in this era of great change!

"Tell me, what is the PE valuation of Hillhouse Technology given by China Construction Bank now?" Gao Huaijun leaned to the back seat and said lightly.

Although China Construction Bank has the priority right to list Hillhouse Technology, it is only a priority right.

As the major shareholder of Hillhouse Technologies, Gao Huaijun owns about 70% of the shares, which puts him in an absolutely strong position to have the final say.

In other words, Hillhouse's current valuation has a rough number, but China Construction Bank's offering price must be above this to split its equity.

If the price is too low and you want to play around, you can buy shares for arbitrage.

That’s what dreaming is!
Hillhouse Technology is not one of those junk companies that cannot even go public and needs to falsify accounts to force its way into the SME Board.

There are a lot of people in the market who want to be the main contractor of Hillhouse Technology, so it doesn't need China Construction Investment to be the operator.

Of course, the premium rate cannot be too high, otherwise it will scare the market.

If the stock price falls below the IPO price on the same day after listing, the one that will be embarrassed will not be China Construction Bank Investment but Hillhouse Capital.

For a company that goes public and breaks its IPO price, do you still have to absorb short interest in the financial market later?
That's impossible!
It is estimated that it will become a junk bond and be taken away by the prototype of the male protagonist played by Leonardo DiCaprio in "The Wolf of Wall Street".

"Hillhouse Technology achieved sales of 12 billion within 610 months!"

"In 2013, it also made a profit of nearly 164 billion yuan, which is three times more than the 2012 billion yuan in 54."

"Therefore, our company also believes that Hillhouse Technology has the ability to obtain a main board listing in the Freeport market!"

Hearing this, Gao Huaijun nodded with satisfaction.

There are three core conditions for listing on the Hong Kong Stock Exchange:
One is: the profit in the most recent three fiscal years is not less than HK$5000 million (the profit in the most recent year is not less than HK$2000 million, and the cumulative profit in the previous two years is not less than HK$3000 million), and the profit in market value at the time of listing is not less than HK$2 million.

The second is: when the market capitalization reaches at least HK$20 billion at the time of listing, the revenue for the most recent audited financial year is at least HK$5 million, and the total cash inflow from operating business in the previous three financial years is at least HK$1 million.

The three are: when the market capitalisation reaches at least HK$40 billion at the time of listing, and revenue for the most recent audited financial year is at least HK$5 million.

These three conditions are easy to meet for Hillhouse Technology.

But the difficulty lies in two places.

First, public shareholding must account for at least 25% of the issuer's issued share capital.

Second, there must be at least 300 public shareholders holding the relevant securities, and the maximum shareholding ratio of three public shareholders must not exceed 50% of the public shareholding ratio when the securities are listed.

In other words, if Gao Huaijun is only willing to release 10% of the equity, it means that according to the principle of releasing in equal proportion, the equity released by Hillhouse Technology is about 13%, which is far lower than 25%.

This is also difficult as there are at least 300 public shareholders holding the relevant securities.

Now Gao Huaijun has turned part of the equity into virtual shares and placed them in the hands of the trade union. They only enjoy dividends but do not control the equity. Does this count as the 300 public shareholders holding relevant securities?
All of these contents require negotiation between China Construction Bank and the Hong Kong Stock Exchange.

If there are no difficulties, what is the purpose of being the lead underwriter for a listing?
Isn't it just to do the odd jobs that are inconvenient for Gao Huaijun to do personally?

This is also the core reason why Gao Huaijun does not want to be listed on the A-share market.

It will take you who knows when to complete these two conditions!

Big A doesn’t care whether you are the leader of Shanghai or not. They have their own logic.

"Has the Hong Kong Stock Exchange spoken now? What did it say?" Gao Huaijun asked.

"The Freeport government said it is open to discussion and suggested that we should move towards the listing standards." Hua Tianyi replied on the side.

Gao Huaijun couldn't help but frown when he heard this.

Why is the Hong Kong Stock Exchange playing such a big shot?
Isn’t this exactly the same as Alibaba’s IPO?

The main reason why Alibaba is not listed in China is that its special equity structure and corporate governance model do not meet domestic listing requirements.

Specifically, Alibaba adopts a partnership system, whereby the founder Ma Yun and her team hold actual control over the company, rather than distributing decision-making power according to the traditional equity ratio.

This system is not recognized in domestic listing rules, so Alibaba cannot meet the conditions for domestic listing.

The A-share market had no choice but to do so, but are you also trying to cheat the Hong Kong Stock Exchange?
If I am willing to give up 25% of the equity, do I still need to do this?
Wouldn’t it be more comfortable to go directly to Nasdaq for listing?
Equity returns are higher, liquidity is stronger, and margin trading is more friendly.

Moreover, the expectations for the listing of Chinese stocks in 2014 were very good, and the rising trend of stock prices after listing was also very good.

I can follow the rules well, why not go to Nasdaq?

"How about this? I will give up 5% of the shares, and Huajian Investment will withdraw completely. Other shareholders will not need to make investment decisions. What do you think?" Gao Huaijun said calmly, looking at Wang Ji from Jiahe Investment who was attending the meeting nearby with a forced smile.

Wang Ji couldn't help sweating profusely.

Gao Huaijun is putting him on the fire!

What kind of institution is Huajiantou?

That’s a long-established company that couldn’t be more popular!

Who does Wang Ji think he is?
Dare to compete with China Construction Investment!

Gao Huaijun, you are so awesome, but please don’t take me with you!
"Look at what you said, am I not discussing this with you?" Hua Tianyi said awkwardly on the side.

"Mr. Wang, what do you think?" Gao Huaijun did not answer, but asked Wang Ji who was standing beside him.

"We, Jiahe Investment and Hillhouse Capital, are joint actors and we will obey Hillhouse Capital completely," Wang Ji said immediately.

"What about Merlin Bank?" Gao Huaijun asked the Merlin Bank representative, Dennis, the executive president of the Asia-Pacific region, who was standing nearby.

As one of the five major forces on Wall Street, Merlin Bank has always wanted to seize the dominance of Hillhouse Technology's IPO from China Construction Investment. This time they did not send a small minion, but the executive president of the Asia-Pacific region was in person, hoping to bring some new variables.

This is a situation of four parties competing against each other: Gao Huaijun, Hong Kong Stock Exchange, Merrill Lynch Bank, and China Construction Investment.

To Tang Ying, who was watching from the sidelines, things were becoming more and more interesting.

"The conditions of the Hong Kong Stock Exchange are too harsh. To be honest, if Mr. Gao still considers Nasdaq, I am willing to persuade the Nasdaq Stock Exchange to accept that public shareholding must account for at least 15% of the issuer's issued share capital. As for the 300 public shareholders holding relevant securities, these can be left to Merlin Securities. We can handle it!" Dennis said slowly on the side.

Hua Tianyi, who was standing aside, slowly let out a breath of cool air.

This Merlin Bank has not given up yet! And they are trying to steal his business right in front of him, right?

No shame!
And he knew very well what this condition meant.

The United States is a country that is deeply rooted in the brokerage business.

However, every business has a price.

Including allowing you to directly become the president of the United States!

If Hillhouse Capital can enter Nasdaq with such favorable conditions, the price that Merlin Bank will have to pay will definitely be sky-high!
This price is much more cost-effective than following China Construction Bank and sharing Hillhouse's profits.

Then why would a veteran and savvy Western capital like Bank of Merlin be willing to do business at a loss?

There is only one answer, they can earn more profits!
Where do the benefits come from?
Hua Tianyi's mind was racing, and he soon came up with an answer in his mind, which was that they were looking for the more tempting Hillhouse vehicle behind!
If Hillhouse Vehicles goes public in the future, the amount of the IPO will definitely be no less than that of Hillhouse Technology now.

When going public, there will be channel dependence. If Hillhouse Technology wants to be listed on Nasdaq, then Hillhouse Vehicle will naturally be unlikely to be listed on the Hong Kong Stock Exchange.

This involves fees, relationships, and future financing!
Good guy!
You, Merlin Bank, are doing the wolfish thing, right?
So, Hua Tianyi took a deep breath, made up his mind, and continued, "Since Merlin Bank said so, as one of Hillhouse's investors, China Construction Investment has to show some of our sincerity."

"For the equity part, we at China Construction Investment will give one more point. The comprehensive public shareholding accounts for 14.12% of the issuer's issued share capital. I will communicate with the Hong Kong Stock Exchange and the Freeport Government!"

Having said that, Hua Tianyi looked at Dennis in a decisive tone.

Dennis couldn't help but shrug when he saw this.

In Hillhouse Technology's equity, it is too obvious that Gao Huaijun is the dominant shareholder, and they are unable to leverage their capital advantage as they did in controlling Sansang.

Everyone couldn't help but look at Gao Huaijun at this moment.

"As for the listing location, Hua Zong will communicate with the Hong Kong Stock Exchange first, and then we will meet again later to decide directly."

"Let's continue to talk about the general direction."

"What's the listing price?"

Gao Huaijun took a sip of the tea on the table and continued to ask.

When Dennis heard Gao Huaijun say this, he couldn't help but sigh.

Hillhouse's development has far exceeded the expectations of many Wall Street bosses.

Their unintentional action a few years ago actually made them the only small foreign shareholder of this Chinese-owned company, which made Morgan Stanley and Gaosheng, two big bosses on China Street, envious.

You know, when this company had a scale of 600 billion, its performance could still double year after year.

This scale has the growth speed of tens of millions of small companies.

Then his future achievements will definitely not be less than Pingguo's!

Therefore, even if it means sacrificing some of their own interests, they must help them to go public in the United States. This is one of the few consensuses reached by the bosses of several companies after they met each other intentionally or unintentionally at a cocktail party.

Not to mention 15%, even if it is 10% of the public shareholding, the bigwigs on Wall Street will give it the green light!

In this world, rules are dead, but people are alive.

What does it matter if we open the door to scarce high-quality assets like Hillhouse?
Aren’t the Iraqi-Kuwait War, the Afghan War, the Syrian-Asian War, and other small wars all serving the interests and serving the gentlemen on Wall Street?
Hua Tianyi, who was standing aside, ignored Dennis's worried look and continued, "The annual profit of nearly 164 billion has tripled compared to 2012 billion in 54. With such a growth rate, I think we can give a PE value of 22 times the listing price, which means... the total market value of Hillhouse Technology is estimated to be 3600 ​​billion yuan!"

Although everyone present was mentally prepared, they all gasped.

There was shock on their faces!

Generally speaking, different valuation methods are suitable for different business types and different growth stages.

When consumer technology companies enter a stable profit phase, such as Apple after 2006, PE or PEG valuation methods can better value the company. However, for Apple from 1993 to 2006, which was in its historical growth stage, PE fluctuated violently and traditional valuation methods were not applicable.

Therefore, around 2014, most investment banks used a new valuation model, namely the market value-earnings before research and development (PER) valuation method, to reflect the value of R&D, as the PEG method had shortcomings in its valuation of technology companies with high R&D investments.

This method works well in the United States. Among the S&P 500 stocks, PER is basically between 10 and 30 times, with an average of 15 times. The corresponding PERG mainstream is between 0.8 and 1.5, with an average of 1.2%.

Among them, companies with better growth prospects, such as Facebook, Applied Materials, Microchip Technology and other semiconductor chip companies, have relatively high PERs, about 15 to 25 times.

The PER of more mature and established technology stocks is relatively low, with valuations within 15 times, such as Intel and IBM.

Therefore, Hillhouse's valuation is obviously at a high PER level, and 22 times is close to 25.

Will it break even?
This is the question that immediately comes to mind of the investors present.

“Is 22 times too high?”

“I have never seen a technology company listed on the Hong Kong Stock Exchange with a PE ratio of 22 times!”

"The Hong Kong Stock Exchange is not Nasdaq. The main traders here are basically brokerage firms and some retail investors. Are they sure they can keep it up?"

Wang Ji, who was standing by, couldn't help but ask.

"It won't be a problem to hold up the stock price on the day of listing."

"In the long run, the key lies in the future development of Hillhouse Technology!"

"If the development speed is fast, then there is no problem at all. In fact, the estimated PER is a bit low. There is no problem setting it at 30 times."

"But the pre-set ratio is too low, less than 15 times. This level is normal for ordinary technology companies, but it is not the case for Hillhouse Technology. The market will think that we do not have much confidence in the development of Hillhouse Technology."

“So at the beginning, we can’t set the price too low, because it will be bad for the stock price!”

Hua Tianyi on the side said patiently.

To put it bluntly, the act of listing belongs to the uncooperative game in advanced microeconomics, that is, the behavior of agents when there is no binding agreement.

However, non-cooperative games do not mean that cooperative behavior cannot be studied, but rather that cooperation between agents can be studied without a binding agreement.

At this point, we can speculate that although individuals make rational and optimal decisions in non-cooperative games, they are not necessarily efficient.

"22 times is too low. It seems that you have no confidence in Hillhouse Technology!"

"It will take a few months for Hillhouse Technology to go public."

“The listing price should be set at 25 times, and then we will report it to the Hong Kong Stock Exchange!”

Gao Huaijun said lightly.

25 times PER! ! !

All the investors present were stunned by Gao Huaijun’s boldness.

One of the participants originally wanted to pick up the coffee in his hand and have a drink, but after hearing what Gao Huaijun said, he just froze there.

It was as if this world was stuck with a bug.

At this price, it belongs to the top among the top companies!
Even for Facebook, when it went public, they only dared to give it a PE ratio of 20.

You know, they are a phenomenal company!

Boss Gao is so brave!

Tang Ying, who was standing by, couldn't help but pull Gao Huaijun's pants.

They discussed it before coming, and Gao Huaijun agreed with the price of 22 times.

Now I suddenly regret it...

This. . .

Gao Huaijun smiled slightly and didn't say anything else.

(End of this chapter)