Rebirth 08: Rise from copycat phones

Chapter 450 Xu Shenxue, the Trillion-Dollar Wealth
As 18 began, Xu Shenxue focused his work almost entirely on artificial intelligence-related businesses in early January.

On the one hand, we will continue to promote the progress of the intelligent robot business, and on the other hand, we will promote artificial intelligence terminal applications based on artificial intelligence technology, mainly open Yun AI or GTAI2.

These important applications based on artificial intelligence technology have become important sources of revenue and profit for Zhiyun Group even now, not to mention in the future.

Thanks to the continuous promotion and application of artificial intelligence in the past year, Zhiyun Group's revenue and profits have also increased significantly. Even though Zhiyun Group has not yet released its financial report, many third-party analysis agencies have unanimously raised Zhiyun Group's revenue and profit data last year.

These third-party analysis agencies also have their own information collection channels, coupled with professional analysts. The data they produce cannot be said to be completely accurate, but it is generally close.

According to an analysis report issued by a Wall Street analysis agency, they believe that Zhiyun Group's core smart terminal business has been steadily improving in the past year, thanks to the huge market competitive advantage brought by the release of the new S17 core mobile phone product. At the same time, with the upgrading of various smart terminals and the introduction of some new smart ecological products, Zhiyun Group's smart terminal business continued to maintain growth in both revenue and profits.

Although the growth rate of the smart terminal business is not large, for a huge core business with revenue exceeding 300 billion US dollars, even a few percentage points of growth is not easy.

Not to mention that the increase in average selling price brings higher gross profit!
As for the smart terminal business, the performance is stable and improving, with not too big changes, which are within the expectations of many investors. In fact, this part of the growth space has already been digested by the capital market... The rise in Zhiyun Group's stock price in August and September was due to the impact of these positive news, so the revenue and profit growth of this part have little impact on the stock price.

In the semiconductor business, the traditional semiconductor business did not see much growth. Zhiyun Group's foundry business in the traditional semiconductor field, smart terminal SOC chips, PC CPU and GPU chips, storage chip business, and some auxiliary chip business parts have grown in part and declined in part.

These traditional semiconductor businesses did not bring much revenue and profit growth to Zhiyun Group, but only maintained a basic growth rate.

Judging from the above two categories, it can actually be seen that in terms of smart terminals and traditional semiconductor businesses, Zhiyun Group’s development has reached its limit... The market is so big that it is no longer possible to achieve much growth.

However, the analysis agency is not focusing on these traditional semiconductor businesses. They are focusing on semiconductor businesses related to artificial intelligence and hardware businesses related to artificial intelligence.

In the artificial intelligence semiconductor business, thanks to artificial intelligence technology, the development of smart electric vehicles, and the continued explosion of the market, Zhiyun Group's APO series server GPUs, EYQ terminal general computing power platform, PX terminal general computing power platform, LC1 terminal general lightweight computing power platform, and EYEQ car assisted driving platform computing chip products have all seen huge increases.

These computing chips are expected to have brought at least $4500 billion in revenue to Zhiyun Group in the past year. Most importantly, the gross profit margins of these computing chips are extremely high, generally reaching over 4600%. The gross profit margins of the core computing chip products APO/ graphics cards can even reach over %.

This will bring extremely high profits to Zhiyun Group... Although the computing power chips only generated a total revenue of more than 30 billion US dollars, the outside world predicts that at least 25 billion US dollars of the 30 billion US dollars in computing power chip revenue will be net profit.

Its strong profitability and high gross profit margin are extremely rare in the world. Even the Mexican drug cartels would be silent after seeing this gross profit margin!

Therefore, this Wall Street analysis agency, as well as some other analysis agencies, are all paying close attention to Zhiyun Group's artificial intelligence semiconductor business, or computing chip business.

If the traditional semiconductor business is a high-risk, high-investment, labor-intensive industry that requires high-level talent, has extremely high requirements and risks, and in the end one can only earn hard-earned money, then Zhiyun Group's computing chip business is simply robbing money!

And it’s not Zhiyun Group itself that is robbing the money, but others are lining up to beg Zhiyun Group to rob their money!
The rapid growth of computing chips and super-high gross profit margins are also the core factors that drove Zhiyun Group's stock price to rise continuously last year, from less than one trillion US dollars to the current market value of one hundred and eighty million US dollars, and it is still rising.

Investors are all fantasizing that if this business continues to grow in the future and reaches $100 billion in revenue, wouldn't the gross profit be able to reach $800 billion or $900 billion?
My mouth is watering just thinking about it!

Of course, there are also some investors who are optimistic about the computing chip business while also betting on the future of intelligent robots, a new business of Zhiyun Group.

Although the current intelligent robot business is not very profitable and the gross profit margin is relatively low, the potential market is huge. Moreover, in just one year, it has achieved a revenue of more than 200 million US dollars. The future is promising!
According to an analysis by a domestic analysis agency, the sales volume of intelligent robots of Zhiyun Group reached 700,000 units last year, which is expected to bring Zhiyun Group a revenue of US$25 billion.

At the same time, based on the material costs of Zhiyun robots, the analysis agency estimated that the gross profit of Zhiyun Group's robot business last year was less than US$6 billion, but the R&D costs were huge. If the R&D costs were amortized, the net profit attributable to shareholders was predicted to be less than US$1 billion.

But they are still very optimistic about the future of Zhiyun Group's intelligent robot business!
The core factor that currently plagues Zhiyun Group's low net profit in its intelligent robot business is the high cost of hardware. For a C6 robot priced at RMB , its hardware cost exceeds RMB based on disassembly estimates, and its gross profit is quite low.

The B1 robot, which costs more than yuan, has a hardware cost of more than yuan.

This is just the pure hardware manufacturing cost estimated by the outside world, and it does not include a series of costs such as huge R&D investment, sales costs, administrative costs, tax costs, etc.

In the end, the net profit was only a few percentage points...

However, as production and sales volumes continue to increase, hardware manufacturing costs as well as diluted R&D, administrative and sales costs will all drop significantly.

No one can give an accurate figure as to what extent it can be reduced by then, but even if it is partially reduced, it will enable Zhiyun Group's intelligent robot business to rapidly expand the proportion of net profit.

Not to mention that the future market for smart robots is huge. Just imagine, if the smart robot business can bring in hundreds of billions of revenue in the future, even if the gross profit margin is not high, it can at least bring in tens of billions of dollars in net profit... It is impossible to make such a high-tech smart robot and make less money than selling mobile phones, right?
Therefore, many people are expecting that Zhiyun Group's intelligent robot business will grow into a core pillar business of Zhiyun Group in the future, just like its current smartphone business.

To this end, they are willing to place a bet in advance!
The above-mentioned smart terminals are steadily improving, the explosion in demand for computing chips brought about by the explosion of artificial intelligence, and the huge future potential of smart robots. These three reasons have become the main factors driving the rise in Zhiyun Group's stock price last year.

Of course, Zhiyun Group’s stock price can reach its current level, and it is also supported by some other businesses, but they are not highly noticed.

For example, the cloud computing business that sells computing power and storage space is actually averagely profitable and has no significant impact on the growth of market value. Industry insiders basically know that Zhiyun Group's cloud computing business is purely for supporting and digesting its own server CPUs.

There are also software and Internet businesses. Although Zhiyun Group is not an Internet company in the traditional sense, it still has huge software and Internet businesses. However, most of the software is supporting ecological development software, which is for developers and is free to use.

For example, the supporting development software developed for its own CPU, GPU and other chips are all free for developers around the world to use.

Then, it also co-led the Android open source project with Google, which was purely for the purpose of building an ecosystem and did not generate any revenue at all.

Then there is map software, which is also used to match the Zhiyun terminal. It is also free of charge. In order to maintain purity, there is very little commercial development and the revenue is almost zero... At most, it can bring some traffic to its own business or Yihai Technology, but not much.

The generative AI business, that is, Yun AI, is not profitable either. It has little revenue and even lower net profit. This part relies on some commercial API revenue and paid value-added service revenue from individual users. It is good enough if it can maintain no losses, but don't expect to make any money.

If we really want to talk about making money, then it is the Zhiyun APP Mall, which can contribute a lot of revenue... There are advertisements and channel sharing.

In addition, there is also a content value-added part. Although Zhiyun Group's Internet business does not produce content, Zhiyun mobile phones have built-in Yun Music, Yun Film and Television, and Yun Reading, three categories of basic software services, and provide genuine content.

These contents are provided by different content providers based on different countries or regions, and Zhiyun shares the content revenue with them.

This part of content revenue is naturally nothing to Zhiyun Group, not even a fraction of a fraction, but it is also in the tens of billions of dollars... After all, this is for the hundreds of millions of Zhiyun mobile phone users around the world, and they are all groups with relatively high consumption power.

In addition, the genuine consumer market of overseas users is also higher.

Qidian, the leading domestic novel reading site, has relied on its access to the Yun reading channel. It has not only gained a large number of users with purchasing power in China, but has also entered the overseas market. While occupying a large number of overseas Chinese consumers, it has also actively developed Chinese-English translations of novels and pushed a large number of domestic novels into overseas markets. This has led to its revenue growing year by year, and its achievements can be said to be quite outstanding.

Qidian is not the only domestic Internet company that has relied on Zhiyun Group to go global. There are many similar cases.

They are even more prominent in the mobile game industry. A large number of game companies that most people in China may not have heard of have developed games and made a lot of money in overseas markets.

Of course, relying on a large number of domestic software developers can also make the content ecology of Zhiyun Terminal more competitive.

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Smart terminals, smart robots, hardware accessories (keyboards, data cables, etc.) and after-sales maintenance services, traditional chips, computing chips, semiconductor manufacturing outsourcing, software and Internet services, and finally additional businesses such as investment income in the financial field.

A Wall Street analysis agency made a preliminary summary of Zhiyun Group's performance last year, estimating revenue to be US$470 billion, a year-on-year increase of 12%.

Net profit forecast is 88.4 billion US dollars, a 30% increase over last year. Its net profit growth has greatly exceeded the revenue growth, which means that Zhiyun Group's overall net profit ratio has further increased... This is mainly due to the ultra-high gross profit of the computing chip business and the smart terminal business, especially the further increase in gross profit brought about by the increase in the average selling price of mobile phones.

In addition, another very important reason is that Zhiyun Group's net profit has increased significantly this year. Although the investment in the semiconductor manufacturing industry is still huge, with the continuous leading technology, it has successively undertaken a large number of 14-nanometer and 12-nanometer process foundry orders at home and abroad, and its revenue and profit margin have increased significantly.

This means that the semiconductor manufacturing business has achieved self-sustaining capabilities, and the group no longer needs to spend large amounts of extra money for continued transfusions.

In the early years, Zhiyun Group's revenue was so high and the gross profit of its products was also very high, but its annual net profit was so low. A large part of the reason was that it was dragged down by the semiconductor manufacturing business.

Since its establishment, Zhiyun Microelectronics has been investing huge amounts of money every year to expand, build more advanced semiconductor factories, and increase production capacity. The investment in semiconductor factories is huge.

Today's factories with equivalent 7-nanometer process technology require investments of tens of billions of dollars, and those with slightly larger production capacity will cost more than 15 billion dollars.

At the same time, Zhiyun Microelectronics also needs to expand the 10-14 nanometer process nodes.

There is also research and development in preparation for the future equivalent of the five-nanometer process node.

Last year alone, in 17, Zhiyun Microelectronics' capital expenditure (factory construction, technology research and development) reached more than US$ billion. Not only is it the world's largest, but it is also higher than the combined capital expenditures of TSMC and Intel, and higher than the more than US$ billion capital expenditure of Four Star Semiconductor.

Of course, the reason why Zhiyun Microelectronics' capital expenditure is so high is also related to the fact that it is a comprehensive semiconductor manufacturing business with a relatively large scale.

TSMC and Intel, whether they are foundry or self-operated, both focus on manufacturing logic chips.

As for Sixin Semiconductor, it mainly deals with storage chips and has relatively less business in logic chips.

Zhiyun Microelectronics' storage chips are comparable to those of Sixin Semiconductor, and the scale of its logic chips is even larger than that of TSMC... Zhiyun Microelectronics is currently the semiconductor manufacturer with the largest production capacity and the most advanced technology.

And a large scale also means greater capital expenditure!

Building one more semiconductor factory with the equivalent of seven-nanometer process would require tens of billions of dollars in capital expenditure.

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Based on the estimated data from third-party analysis agencies and the release of Yun Robot B3 at the winter conference, robot orders grew rapidly.

In addition, the emergence of AI glasses has also led to an explosion in the development of the artificial intelligence terminal application market. Investors expect that Zhiyun Group's computing chip business will continue to see rapid growth in the future.

These factors ultimately drove Zhiyun Group's stock price to continue to grow, all the way towards the two trillion US dollar mark.

At the same time, the management of Zhiyun Group, headed by Xu Shenxue, was also happy to see the growth of its own company’s stock price, so it did not delay for too long and quickly released the 17Q4 and 17 full-year financial reports.

The financial report data it released was similar to the data previously estimated by many third-party institutions. Its full-year revenue data did not deviate much from external estimates, reaching US$478.6 billion, and its net profit was US$90.3 billion, several billion dollars more than external estimates.

As soon as this data came out, Zhiyun Group's stock price once again rose slightly, and its market value directly broke through the two trillion US dollar mark.

Zhiyun Group’s market value exceeded US$2 trillion, and this news quickly made headlines around the world.

The Wall Street Journal put Xu Shenxue's photo directly on the front page and conducted an in-depth report with the title "Xu Shenxue and His Business Empire".

It is worth noting that the Wall Street report not only reported the news of Zhiyun Group's 2 trillion market value, but also extended its digs and reports on a series of other companies under Xu Shenxue, and finally tried to estimate how much money Xu Shenxue actually had.

"As the world's richest man, perhaps the person with the most wealth in human history, Xu Shenxue not only owns a large number of shares in Zhiyun Group, but also a large number of shares in Vico Electronics Group, the world's fourth largest terminal company. According to some institutions' estimates, the combined value of Xu Shenxue's shares in these two listed companies is at least $700 billion."

"But in addition to holding a large number of shares in these two listed companies, Xu Shenxue also holds shares in a series of unlisted medium and large companies, including Yihai Technology Group, the largest emerging giant in the Chinese market and in the Internet field. The company currently competes with Google and Facebook on a global scale with its Douyin video and cross-border e-commerce model. It is reported that the company has conducted three strategic financings, but Xu Shenxue still holds at least 60% of the company's shares. The conservative valuation of this part of the shares is more than 50 billion US dollars."

"Xu Shenxue also owns a leading company in the smart electric vehicle industry, Hailan Automobile, the world's largest and only company with L4-level autonomous driving technology. Hailan Automobile's annual sales have exceeded one million, and its annual revenue is estimated to be more than billion US dollars. Once the company goes public, its market value will be at least billion US dollars or even higher, and Xu Shenxue holds at least % of the company's shares!"

"There are also the world's largest consumer electronics OEM company, Vicoo Industrial, a transnational channel trading giant, and Nanmen Aerospace, the world's first and only commercial aerospace company."

"In addition, according to secret information revealed by an anonymous senior person, we highly suspect that Xu Shenxue wholly owns the Fairy Mountain Holding Group, which is a non-listed company in China engaged in consumer electronic parts, semiconductor equipment and consumables, real estate business, finance and insurance business. It is involved in the entire industry chain of semiconductor equipment and consumables, and has large-scale real estate and financial businesses."

“The specific revenue and profit of Fairy Mountain Holding Group are unknown, but there is no doubt that this is a huge iceberg hidden under the water!”

"Finally, we must know that a considerable number of the above-mentioned companies under Xu Shenxue's name have a parent company: Liuhe Investment."

"Liuhe Investment is wholly owned by Xu Shenxue. It is also the core company that Xu Shenxue uses to control many of his companies. It holds shares in a large number of companies, including Zhiyun Group, Weiku Electronics Group and other companies founded by Xu Shenxue, as well as shares in a series of other third-party companies. It is reported that they are mainly concentrated in the Internet, high-tech and financial industries. Unfortunately, so far, we still have not been able to investigate how many shares the company holds!"

"So, we can't calculate how much assets Xu Shenxue has, but what is certain is that Xu Shenxue's personal assets will definitely not be less than one trillion US dollars, and one trillion US dollars in assets is a conservative figure!"

The Wall Street Journal, in order to fan the flames and attract traffic, was not afraid of the excitement and directly revealed a lot of Xu Shenxue's past... Although only part of it was revealed, it was still shocking.

Xu Shenxue, who is worth one trillion dollars...this is too scary!

Everyone in the world knows that Xu Shenxue is rich and is the world's richest man... Since Zhiyun Group went public, Xu Shenxue's title as the world's richest man has never been taken off.

At least on the surface, Xu Shenxue is the world's richest man in the absolute sense. No one else, including Xu Shenxue's competitors, the deeply rooted consortiums in the United States and Europe, have as much apparent assets as Xu Shenxue.

There is nothing that can be done about it. Xu Shenxue is a nouveau riche, and his wealth cannot be hidden at all. Professionals can investigate his history of making a fortune and basically estimate his approximate net worth.

In fact, Xu Shenxue has been hiding and transferring his wealth through Liuhe Investment, Xiannvshan Holdings, overseas Liuhe Holdings and other investment companies over the years to avoid exposing his wealth directly to the public.

But this takes time!
As for other consortiums, they have transferred their wealth for hundreds of years or even longer, and after hiding it, they have gradually disappeared from the public eye. However, in fact their wealth has not decreased, and may even increase.

The form in which their wealth exists has long since changed and is managed through various funds and investment companies. They rarely hold shares in a company directly, but mainly hold them indirectly.

For example, an asset management company jointly launched by these consortiums may look inconspicuous. In terms of revenue and profit, it is not even ranked among the world's top 500 companies. However, the assets managed by this inconspicuous asset management company have reached 8 trillion US dollars... God knows how much of that money belongs to the consortium.

In comparison, Liuhe Investment, owned by Xu Shenxue, actually manages assets of just over 2 trillion US dollars. Fairy Mountain Holdings and several other investment companies manage assets of around 700 to 800 billion US dollars.

The assets managed by the various investment companies and fund companies under Xu Shenxue, added together, are at most US$3 trillion... Note that this money is not all Xu Shenxue's, a considerable portion of it is the assets of other wealthy people, and there are even a large amount of institutional assets among them.

The asset size of these three trillion US dollars is actually quite different from that of several old financial groups in the United States...

The scale of managed assets is very important for the consortium!
As for the consortium, the key point is not how much assets it has, but how many assets it can mobilize. Many leaders of old consortiums may only have tens of billions or hundreds of billions of assets in their hands, but they can mobilize trillions of dollars of assets. This is their voice.

Otherwise, assets worth only a few hundred billion dollars would mean nothing in the top circles on earth!

Therefore, consortium and wealthy people are two different concepts!
(End of this chapter)