1988: Back to the human world for a few years

Chapter 51 Oh my, who told us Qilu people to be straight? (4)

Anyone with a little financial knowledge should know what hedging means.

In fact, hedging can not only be used in the futures market in the conventional sense, but can also be used as a business model in the commercial and investment fields.

For ease of understanding, let’s take Yang Mo’s favorite watermelon as an example:

As a major watermelon-producing province, in later generations of Qi and Lu, as soon as the watermelon seedlings had just bloomed, villagers would start selling them cheaply - if the purchase price of watermelons when they were on the market in large quantities last year was 1 yuan per catty, now it is often only 5 cents per catty, and villagers will take the initiative to sell all the estimated 40 tons of watermelons in their fields to buyers in advance.

Are my fellow villagers stupid?

Do not!
Because in the next few months, the purchase price of watermelons will most likely become cheaper and cheaper - those who grow watermelons know this, and those who harvest watermelons also know this.

As the watermelons gradually matured and came on the market, the price buyers called out for the watermelons gradually dropped from 1.5 yuan per catty at the beginning to 1.2 yuan per catty, 1 yuan per catty, and finally to 0.5 yuan per catty, or even 0.4 yuan per catty - and they also required you to supply more than 20 tons at a time, otherwise they would not bother to buy from you.

Faced with this situation, some smart villagers banded together to reserve all the newly blooming watermelons at a price of 5 yuan per kilogram.
After one or two months, the watermelons have grown and can be picked. At this time, the terminal selling price of watermelons on the market may have dropped to 1 yuan per catty, and the purchase price called out by the vendors may have dropped to 0.4 yuan per catty.

At this time, these united villagers will try to go to the fruit wholesale market themselves and sell the watermelons produced in their own fields to the fruit stall owners at the price of 0.7 yuan per catty.

So how do we fulfill the contract that was signed with the melon vendor?
That's very simple. Just go to the neighboring village to buy watermelons at the current price of 0.4 yuan per catty. If all the watermelons in your own field are sold out, then go to the neighboring village to buy 10 tons. If only 30 tons are sold, then go to the neighboring village to buy tons. Anyway, you won't break the contract.

Here, did you find it?

After such a simple operation, unless an unpredictable black swan event occurs, even in the worst case scenario, even if the melon farmers in the neighboring village lose so much that they want to jump off the building, these fellow villagers will at most break even. But in most cases, they can make more money.

This is hedging, the simplest way of hedging risk, but the one that requires the most predictive ability.

Of course, since the Chinese people have always lacked sufficient knowledge in this area, even in later generations, not everyone knows this simplest operation, let alone in the country today?

Of course, if the subject matter in this model is not watermelon, but current private enterprises and some township enterprises, the effect will be the same.

………………

“Private enterprises and township enterprises?”

After a brief introduction, Section Chief Xiang, who roughly understood what the other party was going to do, stared at Yang Mo in amazement, as if he could not imagine that this guy had such a big appetite.

Yang Mo's smile remained unchanged: "When any company makes a business decision, it must consider its core advantages... As a central enterprise, our drilling company's biggest advantage in the business field is neither the relatively abundant working capital on the company's books nor the more than 10,000 employees with high consumption levels..."

"Our real core advantage is that the drilling company is a subsidiary of a central enterprise!"

"And it's a central enterprise with foreign exchange quotas!"

After adding a sentence with deep meaning, Yang Mo shrugged his shoulders and said, "The leaders of the country are more or less aware of the current domestic environment..."

"It can be said that it is extremely unfriendly to private enterprises and some township enterprises! Millions of private enterprises and township enterprises are crying and shouting to [hand over to the state]... In order to smoothly hand over to the state, they can even not ask for a penny... It can be said that as long as our company opens its arms, the private enterprise bosses who flock to it the next day will be able to completely squeeze out Xintai Management Company!"

"And to be fair, although private enterprises and township enterprises have sucked a lot of blood from state-owned enterprises in recent years, many of these enterprises themselves have value and good income-generating capabilities!"

"Therefore, as long as we select these excellent assets, in two years at most, these enterprises will create enough value for us, just like watermelons in the field... Even if there are operational problems and no income at that time, we can still carry out the next round of restructuring and divestiture of non-performing assets... According to Director Zhang's analysis of the cyclical fluctuations in the past decade, the overall environment will definitely change in a few years. What we regard as useless may not be necessarily regarded by the outside world~!"

“Let’s take a step back and say that even if we cannot divest only non-performing assets without any sense of social responsibility, we can package them with high-quality assets and sell them… China is now trying to catch up with the international standards. With the gradual implementation of the shareholding system, there will definitely be a market for this asset packaging method in three to five years at most!”

"Well, it's a very simple way to hedge risks, isn't it? It doesn't require a large amount of company funds, it can create and place a large number of jobs, it can solve the urgent needs of private enterprises and township enterprises, and it can also obtain a large amount of income in the form of equity investment... Where can you find such a good thing?"

"Of course, the best thing is that in this process, whether it is investigating and collecting information, selecting and evaluating, or daily supervision, a large number of people are needed... As for sending personnel to the other party's company to assist in production, even more people are needed. As the scale expands, let alone 160 people, even 4600 people may not be enough!"

At the end, Yang Mo sighed: "But we have to hurry up. There is a window period for such good things that fall from the sky... According to Director Zhang's judgment, the survival environment of private enterprises will improve by the end of next year or the beginning of the year after. By then, it will be impossible to expect them to voluntarily hand over their assets to the state."

Looking at Yang Mo's meaningful smile, everyone was moved, but their expressions were a little awkward.

The climate and environment in the late 80s were unpredictable. Even though the once-powerful th generation was worth millions, they could not even sleep well now.
Ever since a famous entrepreneur successfully nationalized his business some time ago, they seemed to have found a life-saving straw and wanted to find ways to nationalize their own businesses as well - but unfortunately, this kind of thing also has a cause and effect relationship, and even if you want to nationalize it, those state-owned enterprises may not be willing to accept it.

However, central enterprises are different from ordinary state-owned enterprises. They can naturally bear more consequences. Moreover, units like drilling companies are surrounded by walls on all sides, so it is naturally easier for them to let go. From this perspective, Yang Mo's audacious idea is actually very consistent with the company's actual situation. After all, if there are too many lice, there will be no problem. As long as the annual oil production task can be completed as planned, the rest of the problems will not be considered big problems.

However, as part of a central enterprise, no matter what the two section chiefs think in their hearts, they still have to maintain some posture.

He frowned heavily and said to the section chief unhappily, "We are a central enterprise. Even if those private enterprises are rats crossing the street, how can they use such trickery and robbery... Document 3# has always emphasized that the private economy should be encouraged to develop in an orderly and healthy manner."

This is the common practice in state-owned enterprises. Everything must be backed by the spirit of the documents and the position must be correct.

Yang Mo cooperated very well and gave a humble smile: "It's not about taking advantage of others, but about each taking what it needs... Those companies need our affiliation list to protect their wealth, and we need them to generate income and help solve the employment problems of their families... Document No. 72 also emphasizes that the leading role of key enterprises should be brought into play to guide private enterprises to develop in the right and healthy way... As a central enterprise, we need to carry forward the spirit of taking the lead, assist the competent authorities, and constrain, supervise and encourage local private economic entities to develop in the right direction."

He nodded in satisfaction to the section chief and then stopped talking.

Secretary Xie snorted when he saw this, "Isn't this just robbing people by trickery? We didn't do anything, but we just got a reputation, and they want to take advantage of us... If this gets out, how will others see us!?"

Yang Mo smiled and said, "First, we don't intend to take advantage of them. Instead, we intend to cooperate in the form of investment and shareholding, and the total shareholding ratio shall not exceed 33%...Internationally, this is called intangible asset investment, and spreading it abroad is also a way for us to learn from international advanced experience."

"Second, we are not doing nothing. We will provide insightful business guidance and allocate social resources as appropriate... This is also an intangible asset investment, and it is a resource that countless private and township enterprises dream of. As long as we earnestly fulfill our promises and do not conduct related operations, few people will dare to blame us... If you want to blame us for this, please take a look at your own butt first... hehe~"

Secretary Xie naturally knew what he hadn't finished saying, and snorted, "No matter what, it's still just plunder. Whether this form of intangible asset investment is to learn from foreign advanced experience or to use the tiger's skin to pull the banner, let's not talk about it for now... There are so many central enterprises in our country. Why do you want 33% of their shares just based on a name?"

These words inadvertently hit Yang Mo's sore spot. Although according to international practice, intangible assets can even account for 100% of a company's shares, that needs to be reflected in the company's articles of association from the beginning; in this case, where there is only a name but no patents, proprietary technologies, copyrights, or land ownership, if the share ratio is too high, the tax department can intervene in the investigation at any time.

After a moment of silence, Yang Mo looked at Secretary Xie, who seemed a little proud, and sighed, "Well, there is one thing I didn't say... Director Zhang, do you think this content needs to be discussed here?"

Seeing everyone's eyes focused on him, Zhang Wenshun, who was in a downtime state the whole time, blushed and finally gritted his teeth: "It's okay, there is nothing to hide. Besides, this is a big matter involving thousands of family members and idle employees of the company... Go ahead."

Seeing that this guy clearly knew nothing but still dared to let him speak freely, and even put a big hat on Secretary Xie, Yang Mo gave this fat guy a thumbs up in his heart, and then said a little shyly: "In fact, after thinking it over, Director Zhang decided to help these companies solve their funding problems in another way and convert them into shares... After all, everyone knows that domestic companies are in great need of money. It is not excessive to help them in this regard and take no more than 33% of the shares."

funds?

Everyone was shocked, and Secretary Xie almost jumped up: "This is impossible! The company has its own regulations and procedures for the use of funds on its books. It's okay to allocate it to tertiary industry projects for production and daily operations, but using it for other purposes? Do you think the Discipline Inspection Department is a decoration!?" This was said with confidence. The drilling company is a production unit, and its business scope does not cover finance - in fact, no central enterprise has a financial license these days.

It just so happens that the drilling company has had quite a few messy things happen over the years. As long as the Finance Department finds that there is something abnormal in the flow of special funds, they can immediately report it to the Discipline Inspection Department. No matter what, they will investigate it first. Everyone can see the Finance Department's position. If Director Zhang and others dare to do this, they will definitely jump out at the first opportunity.

To be honest, Secretary Xie really wanted to take advantage of the other party in this regard, but this matter involved too many things and he really didn't dare to make a decision on his own - who would have thought that a seemingly insignificant tertiary industry pilot project planning meeting would actually become such a huge issue involving the interests of almost all the company's employees and their families, which made his scalp tingle just thinking about it?

Accepting large amounts of funds from private enterprises!
This place is only 60 kilometers away from the two big cities of Jinan and Dezhou. If the news spreads, there will be tens of thousands of private enterprises rushing over from both sides! ?

Seeing his intense reaction, Yang Mo laughed: "Secretary Xie misunderstood. Even if Director Zhang is bold, he can't commit a crime against the wind... You know, several incidents have happened this year!"

Isn't it money taken from the company account?
At this point, not to mention Secretary Xie, even Chief Xiang of the Asset Management Department, who knew the most about this area, was confused.

Looking at the confused Section Chief Xiang, Yang Mo showed a sunny smile on his face: "Section Chief Xiang, if Director Zhang is right, a central enterprise like us is qualified to grant credit to other enterprises, right?"

! ! ! !
It took Section Chief Xiang a while to understand what was going on and an expression of disbelief appeared on his face, with shock mixed with indescribable surprise.

That’s right, many people may not be aware that state-owned enterprises are qualified to grant credit to private enterprises - although some procedures are required.

After obtaining credit, these companies can naturally apply for loans from banks!

You know, at present when banks have not yet operated independently, they would approve even ordinary large-scale enterprises' credit, not to mention the central enterprises in the oil industry such as drilling companies? In terms of gold content and compensation ability, the two are not on the same level.

It can be said that as long as those enterprises get the credit line from the drilling company, they will definitely be able to get a loan from the bank!

No wonder Yang Mo said before that "help these companies solve their funding problems in another form". From a practical perspective, this is almost equivalent to directly injecting funds - but this operation perfectly avoids the company's existing processes, and even the Finance Department cannot interfere.

That's right!

In this era, granting credit to other companies after asset appraisal and determining the amount of credit are the purview of the Asset Management Department, and the Finance Department is just a personal stamp in this regard.

Damn it, this is equivalent to putting the life and death of those early enterprises in your own hands!

I originally thought that Lao Zhang was more familiar with Lao He, and that Lao He's service team should be given priority when there was any good news. But now it seems...

Lao Zhang, you are really a righteous man!

Section Chief Xiang was so excited that he almost burst into tears. Everyone present was a smart person. No one could fail to see the huge value of this matter, and no one was unaware of the enormous potential of the Asset Management Section, which held the credit authority, under this model - this was a major event that concerned the families of thousands of employees. Given the atmosphere in the drilling company, it went without saying that pillow talk was extremely powerful for these henpecked people.

"Okay, for the sake of the thousands of family members of the drilling company, no matter how hard or tiring it is, our Asset Management Department will accept this job... Please ask Secretary Xie to tell Manager Wang that our Asset Management Department will definitely not use the public interest for personal gain in the subsequent credit assessment work... This is a guarantee from an old party member with 25 years of party membership!"

While everyone was still in shock, he took the lead in expressing his stance to the section chief, patting his chest and even using his status as a party member as a guarantee.

Secretary Xie's face turned very ugly when he saw this. If the section chief still didn't understand what he meant after saying so much to him, then his job as a secretary would be in vain.

He took a deep breath and said, "Okay, Chief Xiang, I will convey your words to President Wang, but... you also know that this matter has far exceeded expectations. For both public and private reasons, the company cannot open up all the gaps at once."

He grinned at the section chief and said, "Don't worry, I understand this. Everything can be done slowly... As long as Manager Wang can take the food and clothing of thousands of family members and idle employees into consideration... I will accept whatever the company's final decision is!"

Secretary Xie's face turned even uglier when he heard this. After hesitating for several times, he finally stood up and said goodbye.

………………

After half an hour.

After leaving the conference room, Director Zhang said goodbye to Section Chief He, whose expression was a little stiff. Then he turned around and stared at Yang Mo in front of him for a full minute before he sighed: "You kid... threw me a hot potato... No, it's a bomb that will explode if I'm not careful!"

Yang Mo looked at him with a submissive and innocent expression, with deep innocence in his eyes.

Director Zhang was hesitant to speak when he saw this, and finally took a deep breath and said, "Originally, I thought I would let you make additional comments after I had decided on the basic framework. After all, you have a smart mind and you are sure to come up with some useful ideas... But before I could even open my mouth, Secretary Xie came."

"Secretary Xie, you are here now. It was originally a great idea for you to step forward and break the deadlock. It was great for you to speak on my behalf. Seeing your cleverness in the past, I am relieved to let you speak;"

"But I didn't expect..."

At this point, Zhang Wenshun felt that he had sighed less than he had today in his entire life. With mixed emotions, he pointed at Yang Mo with his hand in the air: "You kid...why didn't I realize you were such a bold guy before?"

Yang Mo looked innocent: "Director Zhang, didn't you ask me to help you with some advice before? You also said at that time that since I am the [third party], I can speak freely. You can say anything. The more constructive, the better."

Director Zhang almost choked up: "I did say that you can speak freely, but that was when only a few of us were present. Didn't you see Secretary Xie come in later?"

Yang Mo blinked his eyes: "Huh? So you are so afraid of Secretary Xie?"

As he spoke, he seemed to have just come to his senses and tapped his head in annoyance: "Look at my brain, Secretary Xie is the imperial envoy who came here on behalf of Manager Wang... Oh, Director, I'm sorry... Who told us people from Qilu to be straightforward?"

Director Zhang almost laughed out of anger when he heard the hidden sarcasm in Yang Mo's words.

Do you think I can't see that the tactics you used today were to either keep the bandits at bay or to negotiate for the sake of peace?
You are the only one who has the nerve to say that you are straightforward! ?

Resisting the itch on his right hand, Zhang Wenshun took out a big Fuku and handed it to Yang Mo: "Hey, kid, let's be serious. What you just said does sound quite attractive, but the problem is that Manager Wang will definitely not let go all at once... Then we have to rely on results. So... when it comes to the actual stage... are you sure?"

Seeing that this fat guy had no intention of settling the score with him, Yang Mo looked at him deeply, but some doubts in his heart grew stronger and stronger.

He lit the cigarette in his hand and took a deep puff.

After a long while, he said softly: "Yes..."

------

PS: If you have any questions about some of the things mentioned in this chapter, it is recommended that you read the "Turbulent Thirty Years" series of books.

(End of this chapter)