Reborn, back to a small county town to become a wealthy family

Chapter 831 Everyone has something to gain
Lü Lin could easily act as a go-between.

Moreover, he had valid reasons for stepping in to coordinate, since Edifier Technology was registered in Minhang District and belonged to the high-tech industries under his jurisdiction.

It's reasonable to lend a helping hand.

Moreover, Luo Yang also showed his sincerity.

"With the continuous expansion of the domestic civilian drone market, Kunpeng Technology's existing production capacity is already somewhat stretched, so the company has been considering adding production lines."

"This is a good thing."

Lu Lin immediately understood the meaning behind Luo Yang's words and suggested with a smile, "It would be even better if the new production line could be located in Minhang."

"That's the plan."

Luo Yang immediately chimed in, "However, after participating in the Berlin Air Show in October, we'll be immediately expanding into the European market. The funding required might be even higher than when we expanded into the North American market. After all, the European market isn't completely monolithic yet. So, building a factory in Minhang, where investment costs are higher, might leave us with some funding gaps, and we'll need to coordinate with the banks."

"President Luo is making two birds with one stone!"

After listening to this complaint, Lü Lin immediately laughed: "Forget about interest-free loans. There's no precedent for repeating support policies. At most, I can help you apply for a low-interest loan, and it's impossible to get several hundred million yuan. At most, it'll be around thirty to fifty million yuan."

"It's just a matter of building a few production lines; three to five thousand yuan is enough."

Luo Yang then offered a professional explanation: "The bulk of the cost is in the land. Using a large-span steel structure to build the factory not only shortens the construction period compared to conventional civil engineering structures, but also reduces the cost."

"Labor costs are relatively high in Shanghai."

Lu Lin was also quite pragmatic: "Will this affect your upcoming competition with DJI?"

"There might be a little, but not much."

After thinking for a moment, Luo Yang replied, "After all, drones are high-tech products. The basic costs such as materials and labor do not account for a large proportion of the overall sales price. You can compare them to smartphones. Of course, our brand premium is not high yet, which is something we should learn from and catch up with."

"I believe you can do it."

Lu Lin didn't think Luo Yang was exaggerating, after all, the two best companies in the world making civilian drone products are Kunpeng and DJI.

"Whether from a personal perspective or from the perspective of local interests, I hope you can gain the upper hand in the upcoming competition."

He smiled and said to Luo Yang, "I will explain the low-interest loan to the High-tech Industrial Development Zone. You can send someone to contact them later. The Development Zone will explain the specific application process to you."

Luo Yang immediately summoned his chief financial officer, Pan Su, and asked him to give him a toast while he handed over the details.

"Speaking of which, have you considered investing in a bicycle manufacturing factory in Minhang?"

After a few rounds of drinks, everyone relaxed and became more relaxed at the table.

“I’ve done the math for you. Just in the Yangtze River Delta region alone, even if you only deploy shared bikes to third-tier cities, the number of bicycles you’ll need to purchase in the next year or two will reach the millions.”

Lu Lin directly suggested to Luo Yang, "The technology required to produce bicycles is not high. From the perspective of reducing costs, why don't you invest in building your own factory?"

He was unaware that Luo Yang had already partnered with Jiang Yuanshan to establish a bicycle manufacturing factory in Yang City.

However, there is nothing wrong with the suggestion itself.

The Yangtze River Delta region includes one super-first-tier city, Shanghai; two first-tier cities, Nanjing and Hangzhou; strong second-tier cities, Suzhou and Feicheng; second-tier cities, Wuxi, Changzhou and Ningbo, and Wenzhou; plus five other third-tier cities. These 14 major cities have a total population of over 150 million.

Lu Lin said that Edifier Technology plans to deploy millions of bicycles in the Yangtze River Delta region, but that number is still conservative.

According to Luo Yang and Song Wan's estimates, these 14 cities alone will need to prepare 200 million shared bicycles.

In fact, the scope of the Yangtze River Delta region can be expanded geographically, encompassing far more than 14 cities. If cities in Anhui Province, northern Jiangsu, and southern Zhejiang are included, the number of third-tier and above cities would reach 24.

As for the fourth and fifth-tier cities under its jurisdiction, the number is even greater, certainly exceeding 100 in total.

"To be honest with the boss, I have already invested in a bicycle factory back in my hometown."

Luo Yang said frankly, "Of course, the designed production capacity has only reached a medium scale, with an annual output of only about 100 million vehicles. It is mainly to increase some jobs and tax revenue in my hometown, and we do not expect to produce and sell them ourselves."

In fact, in 2012, my country's total bicycle production was just over 2000 million units, more than half of which were exported overseas.

In recent years, a medium-sized bicycle factory has only produced about 200 to 400 bicycles per day. If they rely solely on investing in and building their own factories to expand into the market, they would need to operate at full capacity for half a year in just one urban area of ​​Shanghai.

In terms of market expansion speed, procurement is definitely more efficient.

"That's true. Once you expand to a full scale, it's definitely not enough for just one factory to produce it."

After a moment's thought, Lü Lin understood the reasoning behind it and stopped insisting that Luo Yang invest in a bicycle factory in Minhang.

In this matter, not only Lü Lin, but even Luo Yang made a mistake.

The lifespan of shared bicycles is actually not long because they are affected by a variety of factors during their use, including frequency of use, maintenance, and vandalism.

Under normal circumstances, taking into account weather factors, corrosive environments, mechanical wear and tear, the lifespan of a shared bicycle is at least two years.

However, shared bicycles are used far more frequently than privately owned bicycles, and their average annual travel distance is ten or even dozens of times that of civilian bicycles, which greatly shortens their lifespan.

In addition, shared bicycles are frequently vandalized, which also seriously affects their lifespan.

Therefore, it is hard to imagine that in the next ten years or so, the number of private cars sold in China will steadily increase year by year, once exceeding 3000 million vehicles, but the number of bicycles produced will also experience explosive growth, with an annual output of more than 1 million vehicles in 2020.

This demonstrates the significant impact that bike-sharing has had on the domestic bicycle industry.

"But then again, Shanghai can be considered your second hometown, right?"

Lu Lin joked, "If you have good stuff, you can't just think about your hometown; you have to consider Shanghai too."

"My career focus is definitely in Shanghai."

Luo Yang revealed more important information: "In fact, I have already planned to talk to Zhaohe Real Estate about the acquisition in the near future. Their Shanghai branch has invested in a building at the junction of Minhang and Xuhui districts, but construction is currently suspended due to funding issues. We plan to buy it, complete the construction, and turn it into the group's headquarters building."

"The border between Minhang and Xuhui?"

Lu Lin was taken aback for a moment, then immediately asked, "Didn't you run off to Xuhui?"

"Huajing is still within the Minhang district."

Luo Yang smiled and said, "Furthermore, we've recently made some plans for the group's future development direction, intending to enter the smartphone and new energy vehicle industries in the next year or two, especially the smartphone industry. I plan to locate the headquarters in Shanghai." "You want to make smartphones?"

Lu Lin put down the chopsticks he was about to pick up and looked at Luo Yang in surprise: "Your existing industries have nothing to do with the smartphone industry chain. It will be quite difficult to create a phone out of thin air!"

"When Lei Jun founded Xiaomi, he didn't have the technology either."

Luo Yang smiled and said, "We don't have the core technologies in our hands. The only company in China with some technical capabilities is Huawei in the south. We can't throw the baby out with the bathwater. Besides, there is such a large market in China. Apple and Samsung occupy the high-end market, but someone has to take over the mid-to-low-end market."

"I didn't mean to look down on assembled machines."

Lu Lin immediately offered an explanation, then added with concern, "Even so, the investment won't be small."

"I know what I'm doing, and I'm already preparing the funds."

Luo Yang didn't give a full answer, simply saying, "Initially, we plan to invest around 10 billion yuan. If that's not enough, we'll raise funds from external sources. Actually, I estimate it won't take 10 billion yuan."

"10 billion might not be enough."

At this point, Lü Lin displayed his professionalism: "As far as I know, Xiaomi has gone through three rounds of financing from its inception to the first half of this year, with a total financing amount of 1.81 million Mi Yuan, which is about 13 billion RMB."

13 million?

Luo Yang smiled and said, "Boss, a shortfall of two or three hundred million is not a big problem. We can even solve it internally without financing."

"I haven't finished speaking yet."

Lu Lin looked at Luo Yang with a smile and said, "The key is that they completed a Series C financing at the end of June this year, raising 2.16 million US dollars, which is another sum of 13 to 14 billion yuan."

"It seems that even Xiaomi has invested a lot of money in research and development."

Since the leader had already said so, Luo Yang certainly couldn't refute the fact that Xiaomi's first phone was launched in August 2011. He could only go along with his words and reply, "It seems that we need to start considering financing in the early stages. Relying solely on self-raised funds will put a lot of pressure on us."

"If that's how you think, then you're right."

Lu Lin smiled and patted Luo Yang on the shoulder, saying, "When it comes to developing smartphones, financing isn't just about easing financial pressure; it's more about facilitating your procurement of key technology products, especially from well-known venture capital firms, which have investments in companies across the semiconductor industry chain."

Upon hearing this, Luo Yang felt ashamed.

A leader is still a leader; their perspective on issues is different from others.

In fact, Luo Yang is also trapped in a state of limited understanding. For example, when the shared bicycle company was about to conduct its Series B financing, he strongly advocated bringing in Tencent and Han Dongming, just for their relationship with the south and the capital.

When it comes to smartphones, they seem to have forgotten their usual win-win strategy.

Because of this incident, in the following conversations, Luo Yang began to learn to be a listener more often, only offering his own opinions when Lu Lin asked questions.

His change made the atmosphere of the conversation more harmonious.

In the latter part of the meal, the two moved beyond discussing work and business matters and started talking about more personal topics.

The dinner ended a little after nine o'clock.

"Boss, should we go to Xuhui or Pudong?"

Luo Yang drank quite a bit tonight, and was already five or six points drunk after the party ended. As his assistant, Wen Wan would definitely accompany him home.

"Is it safe to live in the Hongqiao Villa area now?"

"Checking in is no problem, but there's still a bit of a smell inside."

Wen Wan replied truthfully: "I have already had various green plants placed in the villa to absorb the formaldehyde smell. Normally, after leaving it empty for another 2 to 3 months, there should be no smell. Your itinerary for tomorrow morning is to go to Gray Rhino, and the appointment is after 10 o'clock. I suggest you stay in Pudong tonight."

The suggestion sounded reasonable, but Assistant Wen conveniently overlooked Jiang Wen from Xuhui.

Luo Yang was already somewhat drunk, so he didn't think much of it and agreed to spend the night in Pudong.

Wen Wan, sitting in the front passenger seat, quietly clenched her fist.

No one's competing with me for the boss tonight.
Because of his good sleep, Luo Yang got up very early the next day and even had time to exercise on the treadmill at the gym for more than half an hour before leaving home at a little after 8:30.

First, he dropped Wen Wan off at the company building, and then picked up Chu Jing to go to Gray Rhino Capital together.

This time, Gray Rhino Capital's newly rented office space has been renovated, and the number of employees has increased significantly.

Amidst a chorus of "Hello, Chairman!" from the chairman, Luo Yang walked into his office.

"Let's talk about crude oil futures first."

As soon as Luo Yang sat down, before Chu Jing could even brew the tea, he asked about the price of US crude oil futures: "I just saw the numbers on the display screen outside. Last night, the closing price was $93.37 per barrel. Was it because the price of crude oil was approaching the warning line of $100 per barrel a few days ago?"

"Yes, Chairman."

Zhao Pengcheng glanced at the display screen outside the glass wall before sitting down and saying, "Last Friday, crude oil futures prices rose to 97.58 US dollars per barrel. Although they quickly fell back, I think this is a signal."

"Do you think this signal means there are forces behind the scenes pushing crude oil prices above the $100 mark?"

After lighting a cigarette, Luo Yang pondered for a moment: "What was the highest price these past few days? How long did the market's positive candlestick stay around 95 yuan/barrel these past few days?"

"The highest price reached once in the past few days was 96.11 yuan per barrel."

Zhao Pengcheng replied without hesitation: "Last night, the price of the barrel fluctuated around 95 US dollars, and it only started to fall about an hour before the close, eventually closing at 93.37 US dollars per barrel. I think it will definitely not be able to hold the 95 US dollar mark tonight."

"It seems like it will happen in the next few days."

Luo Yang nodded and said, "Once it breaks through the 95 mark, it may consolidate in the 95-100 range for a few days, or it may break through the 100 mark in one go and then consolidate around 100 for a few days."

There are still two weeks until the highest price this year, which means the price will rise by 1 yuan per day on average.

If we exclude the time spent in the sideways consolidation, there will definitely be moments of sudden surge.

So I'll be staying up late again these next few days to keep an eye on the market.

(End of this chapter)