Rebirth 08: Rise from copycat phones

Chapter 467 Xu Shenxue brags again: Space Factory
The listing of Weiku Industrial was finalized two years ago, and what follows is some preparatory work before the listing.

These preparations include an in-depth review of the subsidiaries and assets of Weiku Industrial, and then producing a financial report that can be recognized by investment institutions.

At the same time, before going public, we must further deepen our relationships with major customers such as Zhiyun Group and Weiku Electronics, and also expand our relationships with customers such as Dami and OV!

It is worth noting that Weiku Industrial is currently the largest OEM company in the country and even the world. Its clients include Zhiyun Group and Weiku Electronics, as well as many domestic smart terminal manufacturers.

The OEM strategy of smart terminal manufacturers such as Dami and OV is actually the same as that of Zhiyun and Weiku Electronics. They will not put all their eggs in one basket, but will choose several OEM factories to work together to avoid problems.

Even within the Zhiyun Group, not all orders were given to Weiku Industrial. A large number of OEM orders were given to OEM companies such as BYD and Luxshare.

This is not a lack of trust in Weiku Industrial, but to avoid accidents...to allow companies to have more flexible business strategies and spread business risks.

For example, if one day the Ancheng production base of Wecoo Industrial is unlucky enough to be struck by lightning, resulting in a large-scale suspension of production, then other bases of Wecoo Industrial, as well as factories of OEM companies such as BYD and Luxshare will continue production.

Therefore, we can see that, under the promotion of Zhiyun Group, Weiku Industrial's production bases are spread all over the country, not just limited to its headquarters in Shenzhen.

Weiku Industry has large-scale factories in Shenzhen, Dongguan, Ancheng, Sichuan, Jiangcheng, Ningcheng and other places. These factories are super-large factories with more than 100,000 people.

There are even more small and medium-sized factories with less than tens of thousands of employees.

Weiku Industry has more than 40 production bases across the country, producing a variety of smart terminal products for major customers around the world. Typical products include four categories: smart phones, laptops, tablets, and smart robots.

This is a very large OEM manufacturer.

How do we determine the market value of the world's largest foundry manufacturer?

This is actually a very difficult thing!

First of all, although it is large in scale, it seems to have produced hundreds of millions of various smart terminal products and more than 70% of the world's smart robots, and its output value is very large.

However, these products do not belong to Wecoo Industrial, Wecoo Industrial is just doing OEM!

For example, the average selling price of a Zhiyun S17 mobile phone is about one thousand US dollars, but almost all of the money is taken away by Zhiyun Group, and a small part is taken away by supply chain manufacturers.

Weiku Industrial can only take a small fraction of the profit...about ten dollars as manufacturing fee!
Generally speaking, the OEM fee in the smartphone industry is between one and two percent, and the specific amount depends on the technical difficulty of the OEM and the number of orders.

For example, the OEM cost of S17 Max is higher, while the OEM cost of S17 standard version is slightly lower.

At the same time, the OEM orders for the S series are very large, so the OEM costs can be lowered... The price difference between the OEM costs of OEM for one million mobile phones and OEM for 10 million or even 100 million mobile phones will be very large.

This is also reflected in the purchase of parts and components. For the same mature parts, Zhiyun Group's purchase price is lower than that of other manufacturers. Even so, supply chain companies are more willing to do business with Zhiyun Group... because Zhiyun Group's orders are large. OEM manufacturers also invest in a factory and build a production line. Other companies only place orders for a few million units, and there will be no further orders for ten million units... but Zhiyun Group can continue to place orders for hundreds of millions of sets.

This means that the return on investment for OEM manufacturers in production line construction will be higher and more stable.

In addition, Zhiyun Group is quick to pay and will never delay payment. They will pay you when they say they will... Zhiyun Group, a large and powerful company, doesn't lack you for this!
If it is an innovative product that uses components with new technologies, then Zhiyun Group will be more generous... Zhiyun Group has always been encouraging supply chain manufacturers to increase investment in research and development, and for this reason, the prices given for the purchase of new technologies and innovative products will be very generous.

For example, for the same type of parts, the market price of mature parts is only one dollar a set, but for innovative products using new technologies, Zhiyun Group can give two dollars, or even three or four dollars... a direct premium of several times!
This is also the reason why a large number of supply chain companies in Zhiyun Group's supply chain system attach great importance to technological research and development, and invest huge amounts of money in research and development every year.

Because as long as you come up with something new, you can make a lot of money.

This is also one of the reasons why countless companies are trying their best to enter the Zhiyun supply chain. Zhiyun Group is really generous in paying money!
Of course, this is not easy!
If you want to enter Zhiyun Group's supply chain, apart from other things, first of all, you must be among the top five in China and at the world-class level in terms of technology, otherwise you will not be able to meet Zhiyun Group's stringent technical requirements for parts.

In addition, Zhiyun Group has a lot of additional requirements for supply chain companies... For example, there are a series of stringent requirements on factory workers' salaries, working environment, food standards, rest time, environmental emissions, etc. Companies that cannot meet these requirements will not be able to enter the Zhiyun supply chain, and even if they enter, they will be kicked out if they fail to meet the standards later.

In recent years, many companies have been kicked out of the supply chain because of these additional requirements!

Although Weiku Industrial is just a contract manufacturer, it is also a core supply chain enterprise in Zhiyun Group and is very important.

Given the special relationship between Weiku Industrial, Zhiyun Group and Weiku Electronics, this will also be of great benefit to Weiku Industrial in increasing its market value.

After all, they all have the same boss: Xu Shenxue!

This means that as long as Weiku Industrial does not make huge strategic mistakes in its operations in the future, it will be able to continue to obtain various OEM orders in a stable manner.

This is very important for a manufacturing company.

This is also an important reason why major strategic investors have shown interest in and invested in Weiku Industrial.

In order to meet the listing conditions, Weiku Industrial has introduced more than ten strategic investors in the past year.

This includes client companies such as Zhiyun Group, Wecoo Electronics, OV, and Dami, as well as some cooperative upstream companies, mainly some manufacturing equipment suppliers... Wecoo Industrial will involve a large number of special equipment, and then let the cooperative equipment suppliers carry out OEM manufacturing.

For a foundry manufacturer, its manufacturing equipment is their core lifeline.

Because of the opening up of strategic investment, it also attracted many major equipment suppliers to invest.

After completing the introduction of strategic investors, Weiku Industrial completed the last round of large-scale granting of options before listing. In addition to the company's senior executives and core technical personnel, the grantees also included a large number of middle-level managers and technical backbones.

Although the number of options these people can get is not large, once Weiku Industrial is successfully listed, they can still get considerable returns... This is to bind the company's management and technical personnel for a long time, allowing employees and companies to grow and work together.

How should I put it? OEM companies like Weiku Industrial often produce non-stop 7 hours a day, 24 days a week. Although they adopt a shift system, it is difficult for some management and technical backbones to carry out real shifts. Sometimes when there is a problem on the production line, they have to get up and rush to the scene as soon as possible even if they are sleeping. Even if they are on vacation, they have to fly back overnight!
If you want management and technical backbones to work willingly and passionately, you must pay them enough money and also give them the motivation to strive: share the dividends of the company's development!

Therefore, in addition to regular salaries, it is necessary to give options to middle-level management and technical backbones!
This is also a normalized means of modern enterprise management, which is to share the dividends of enterprise development with core employees... Of course, it is only limited to core employees, such as management and technical backbones.

Don’t count on ordinary employees, just do what you are supposed to do!

On the other hand, we can say: if ordinary employees receive regular wages and do their jobs well, and they don’t give you stock options as incentives, it means that you are not very important, so don’t be self-satisfied and treat the company as your home…

If the salary is not that good, there is no option incentive, and the other party requires you to treat the company as your home...you can consider resigning. Working in such a company generally has no future!

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In order to ensure the stable development of the company and further bind experienced management and technical backbones, Weiku Industry carried out a large-scale equity incentive plan before listing.

The number of people who received new option incentives reached over ten thousand.

This is a very rare large-scale option incentive plan in business history...it's not the amount that's large, but the number of people!
This is also a characteristic of super-large-scale OEM companies like Weiku Industrial: a lot of people!

After introducing strategic investors and large-scale option incentives, Weiku Industrial's preparations for listing are almost complete.

When Xu Shenxue inspected the headquarters of Wecoo Industrial, he held a closed-door meeting for more than three hours with more than a dozen senior managers of Wecoo Industrial, and finally formally approved the listing plan.

And the next step is to hold a formal meeting with various investment institutions that mainly focus on financial investment!

In fact, WeCool Industry has already started contacting various investment institutions a long time ago, and many investment institutions have been in contact with WeCool Industry for more than a year.

This final meeting is also to finalize the final market value!
Xu Shenxue personally participated in a meeting with major investors in early June
Xu Shenxue did not say much in the meeting. Most of the content of the meeting was handled by the CEO of Weiku Industrial, An Dayu.

When Xu Shenxue attended the meeting, he showed an attitude of importance. Even though Weicoo Industry was just a not-so-core OEM company under his umbrella, Xu Shenxue still attached great importance to it!
And this is the attitude that investors want!

Xu Shenxue attaches importance to it, and investors feel that Xu Shenxue also attaches importance to it, which has a good effect on the subsequent market value of Weku Industrial.

After the two sides had initial contact on the first day, they continued their contact on the second day.

On the third day, Xu Shenxue had dinner with representatives of several major investors. During the meal, Xu Shenxue briefly talked about his future plans for Weiku Industrial.

"In the future, Weiku Industry will become the core manufacturing base for various intelligent terminal products, robot products and even many future high-tech products of my subsidiaries. This is clear and will not change!"

"Because only Weiku Industrial can meet my manufacturing capabilities for many new products in the future!"

"Let's not talk about the future, let's talk about the present. The space industrial robot that is currently responsible for maintenance on my Centaur space station, well, you should know this."

"In order to reduce the maintenance cost of the Centaur space station, we use a large number of space industrial robots to carry out daily maintenance."

"We have already sent 16 space industrial robots to the Centaur space station. These 16 space industrial robots have taken on 85% of the daily maintenance tasks of the space station, greatly reducing the workload of astronauts and also greatly reducing costs!"

"In the future, I will definitely launch a larger-scale space exploration and try to build a larger space transfer port, a lunar base, or even a base on Mars. When setting up a base in space or on the moon or Mars, robots are an indispensable part. They are essential facilities whether they are used for production or maintenance!"

"And these space industrial robots are currently manufactured by Weiku Industrial!"

"And this is just a small plan I have for the future OEM business of Weiku Industry!" "More importantly, I will continue to promote Weiku Industry's progress towards intelligent manufacturing, making Weiku Industry a leading and even typical enterprise in the future manufacturing industry!"

“Therefore, Weiku Industry is not only a labor-intensive OEM manufacturer, but also a leader in a new industrial production model in the future!”

"Maybe in the future, I might even be able to build a Weiku Industrial factory in space, using robots to build factories in space or on the moon or Mars, and produce all kinds of products locally!"

"Think about it, isn't Weiku Industrial, which owns a space factory, also quite promising?"

Xu Shenxue's words left the representatives of several large investment institutions a little overwhelmed for a while... Is he still talking about WeCool Industrial?
Even if you, Xu Shenxue, are the world's boss and the most powerful technology tycoon in the world, you can't speak so exaggeratedly!
And a space factory...this is too ridiculous.

Now, these people can finally understand how those investors felt when they faced Xu Shenxue many years ago!

When Zhiyun Group attracted international investors and went public for the first time, it achieved an unprecedented valuation of 200 billion US dollars... At that time, many people expressed disbelief. Even if Zhiyun Group was so powerful, it would be impossible to give such a high valuation.

Although it was later proved that the decision of these investors was not wrong, it was actually very difficult to make such a decision under the circumstances at that time, and it even involved huge risks.

However, after listening to Xu Shenxue’s words, these domestic investors now understand their former counterparts to a certain extent…

This richest man Xu is really good at bragging!
Look... Others are talking about labor-intensive foundries, but what is Xu Shenxue talking about? He is talking about space factories!
However, although this sounds ridiculous instinctively, why do we feel a sense of anticipation and even excitement?

The man in front of me has never failed... not even once!

Many people know that Xu Shenxue likes to brag, but so far, Xu Shenxue has fulfilled all the boasts he made.

I can’t say that I have achieved all of it, but I have achieved more than half of it!
Semiconductors, smart terminals, artificial intelligence, smart robots, self-driving cars, low-altitude economic drones and many other things, Xu Shenxue has realized them one by one.

Now Xu Shenxue has come up with a new boast. Even if they don't believe it in their hearts, out of basic respect for Xu Shenxue, they have to give it more than half of its belief.

As I said, Xu Shenxue has never failed!

And this world is always very tolerant to those who continue to succeed!
Before Xu Shenxue suffers a major failure, capital will maintain 100% confidence in him!
A few days after this dinner, Weiku Industrial and major investors held a new round of talks.

The meeting went smoothly this time, and the major investors and Weiku Industrial reached a consensus on valuation.

Weiku Industrial Group Co., Ltd. will be listed on the domestic stock market with a market value of approximately 500 billion yuan. Seven large-scale domestic investment banks and securities firms will jointly undertake the listing underwriting work of Weiku Industrial.

It is expected to issue 15% of the public shares and raise 75 billion yuan.

The funds raised will mainly be used for the research and development and application of intelligent manufacturing technology and equipment, the upgrading of intelligent manufacturing technology and new investment, the expansion of intelligent manufacturing capacity, the research and development and construction of intelligent manufacturing network platforms, and the research and development of the theory and application of cutting-edge manufacturing technology.

The new investments in these four major areas will be very large and will have a profound impact on Weiku Industrial in the future.

This is the path of Weiku Industry, which is transforming from a traditional labor-intensive OEM factory to a high-tech manufacturing factory!

For example, the intelligent manufacturing network platform, according to the detailed explanation of Weiku Industry, is to build a fully automatic manufacturing system between factories and factories, machines and machines, robots and unmanned factories...

Once this system is completed, all factories under Weiku Industry will be connected into one. Each production base, each factory and even one of the automated equipment will be connected to this intelligent manufacturing network platform to achieve efficient unified production.

To achieve this, Weiku needs to build a huge industrial network, supporting cloud computing and computing power centers.

For the current manufacturing industry, these things sound very high-end just by hearing a few of the nouns... and in fact, they are indeed very high-end.

Before Weiku Industrial, no one would have thought of using OEM factories like this...

In the eyes of many people, OEM factories are labor-intensive industries with little technical content. However, Weiku Industrial is determined to turn this labor-intensive industry into a high-tech model.

There is also the theory and application research and development of cutting-edge manufacturing technology, and Weiku Industry also gave an example here: unmanned fully automated factory on the moon/Mars!

According to WeCool Industrial's vision, with the further development of the aerospace industry in the future, when humans build bases on the moon or Mars, it will not be possible to transport all materials from the earth. It is necessary to have self-sustaining production capabilities locally.

And nothing is more suitable than an unmanned fully automated factory with robots as the core!
Once this unmanned fully automated factory is built and put into operation on the moon or Mars, the local area will be able to continuously produce various equipment and raw materials, ultimately allowing the base to achieve rapid self-expansion!
These things sound very sci-fi just by sounding!

But considering that Xu Shenxue has built a commercial space station, and Nanmen Aerospace has also planned the so-called space port, lunar base and Mars base...it seems natural for Wecoo Industrial, which is responsible for the main manufacturing tasks under Xu Shenxue, to propose a space factory plan.

No matter what outsiders think, Weiku Industrial has officially announced its listing plan and started a roadshow, making the final sprint for the official listing in September!

Xu Shenxue will naturally not continue to participate in these follow-up work. He has already finalized the general direction and communicated with major investors. The next step is to follow the procedures.

After Weiku Industrial is officially listed, its market value will depend on the choices of subsequent investors.

However, judging from the domestic stock market's desire for high-tech giants, Weiku Industrial's market value should be relatively objective, and its price-to-earnings ratio may even exceed twenty times.

Of course, this does not mean that Weiku Industrial will really become that profitable...but it is related to the particularity of the domestic stock market.

The domestic stock market is very special... Conventional stock investment strategies will almost completely fail in this market, and things like value investing are all nonsense!

Because this market is filled with a large number of retail investors who know nothing about finance... No one will play value investing with you, all they play is emotional investing: chasing highs and selling lows!
Unlike many mature stock markets, where institutional investors dominate the market and institutions compete with each other, the domestic stock market is a fight between institutions and retail investors. No, it is a unilateral massacre of retail investors by institutions!

There is a saying: Don’t use your amateurism to challenge other people’s professions!

Many people read a few financial books, or believed some so-called content news, and after hearing the investment advice of experts, they foolishly entered the market, and in the end they either cut their losses and left or lost everything!
This is also the reason why many junk companies like to list in China: there are too many leeks, and you would be against your conscience if you don’t cut a handful!

In such a market, the stock prices of high-quality companies may plummet overnight, and the stock prices of junk companies may skyrocket overnight.

It’s quite interesting too!

In this environment, WeCool Industrial, relying on Xu Shenxue's reputation and its title as the world's number one, is likely to obtain a market value far exceeding the normal level!
In fact, Xu Shenxue doesn’t care much about these!
On the one hand, the listing of Weiku Industrial is to raise more funds for its subsequent development.

On the other hand, it is also to share the development dividends with domestic investors... You won’t go far if you eat alone!
When running a business, there is no future in going it alone. You have to bring a group of people together and form an alliance of interests to go long-term.

Therefore, Xu Shenxue not only wants to list Weiku Industrial, but will also list Hailan Automobile and Yihai Technology in the future.

At the same time, it is also preparing to spin off several subsidiaries within Zhiyun Group and then list them separately in China... The target has been chosen, and that is Zhiyun Microelectronics!

In the future, Zhiyun Microelectronics will need to make very large-scale follow-up investments to advance into the future equivalent of five-nanometer, three-nanometer, two-nanometer or even more advanced process technologies and develop more advanced packaging technologies.

These are all enormous investments. In the future, factories with equivalent three-nanometer technology will require huge investments of two or three hundred billion US dollars!

Although Zhiyun Group is large and powerful, it is difficult for it to support itself alone!

It’s not that it can’t be supported, but Zhiyun Group also has a lot of other businesses that require investment. It is impossible to use all the money to support Zhiyun Microelectronics. If all the money is used to build a semiconductor factory, will Zhiyun Group still be able to carry out other businesses?

Therefore, the best way is to use the money of the leeks... no, investors to invest in development.

Anyway, these people's money is either harvested by financial institutions or swallowed up by real estate, so it is better to take it from them and build semiconductor factories.

Of course, what we say to the outside world is to develop together and share the dividends of corporate development!

And in China, there is also a large enough amount of funds to accommodate such huge financing!
The amount of funds in the domestic financial market is actually very large, but most of the funds cannot find better ways to invest.

Take the stock market for example. Most of the companies listed on the domestic stock market are junk stocks. There are actually very few truly high-quality companies. Buying stocks in such a market is like panning for gold in shit, difficult and disgusting!
Otherwise, the listing of Wecoo Electronics and Wecoo Industrial would not have been so warmly welcomed... It is really hard to find good companies!

Now, Xu Shenxue wants to provide a brand new investment path for the huge amount of funds in the country that lack investment channels: Stop messing around and invest in my company!
And these companies under Xu Shenxue also have sufficient strength to absorb sufficient amount of funds!
The market value of Zhiyun Group alone is as high as 14 trillion yuan, while the amount of funds that are expected to flow into the domestic real estate market this year is only about 6 trillion yuan, which is not as huge as outsiders imagine.

To exaggerate a little, the market value of a Zhiyun Group can cover the national real estate market for at least two years!

If the domestic stock market is strong enough, even if it absorbs hundreds of billions of funds from the domestic financial market in a year, the leverage effect will play a huge role, which will lead to the cooling of the current hot real estate market and the entry into a smooth transition situation.

At the same time, these newly absorbed funds can also bring good returns to investors. What's more important is that if the money invested in the stock market can be invested in the real economy to stimulate economic growth, then the negative economic impact brought about by the cooling of the real estate market can be balanced.

Don’t think that Xu Shenxue is just a businessman and these macro data have nothing to do with him. In fact, they do have a lot to do with him!
After all, Xu Shenxue's companies are all rooted in the domestic industrial system and consumer market.

The domestic market plays a vital role for the companies under Xu Shenxue.

If everyone owes a lot of mortgages, where will they get the money to buy Zhiyun phones, smart robots, or Hailan cars?
If people don't get a pay rise, where will they get the money to consume various Internet services? How does Yihai Technology achieve revenue and profit growth?
How can Xu Shenxue’s companies develop when people have no money and no consumption?

Therefore, the domestic consumption capacity is closely related to the companies under Xu Shenxue.

(End of this chapter)