Those Years When I Was Forced to Top the Forbes List

Chapter 202 Running a State-Owned Enterprise

The love you need is not just dependence.
"Be like a big boy, braving the wind and sun."
"Life is so free and easy~"

1 month 25 day.

As mid-January turned into the latter part of the month, Shenzhen was still bathed in sunshine.

The stock market made a final surge that day, reaching 1260 during the session.

Starting tomorrow, it will be a ten-day holiday.

It’s time to celebrate the New Year.

Yang Qingyue hummed a little tune as she tidied up her little house.

Wash and air out the sheets and duvet covers in both rooms, and when you come back, the beds will smell of sunshine.

Chen Xuebing leaned back lazily on the sofa.

Although Yang Qingyue hadn't engaged in any intimate actions with Xin Mengzhen these past few days, they had gotten along very comfortably. When she was busy, Yang Qingyue would do her own thing, and when she was free, she would chat with him, watch TV, or energetically take him out for a stroll.

He enjoys this caring and considerate companionship.

At that moment, he received a phone call from Ohio, USA, at 9 p.m.

The time difference on the other side was exactly 12 hours, and it was still the evening of January 24th, with a hint of fatigue that contrasted with Chen Xuebing's energetic demeanor.

“IDIAP (Dalmore Institute for Perceptual Artificial Intelligence) is far more powerful than we imagined. Their headquarters are in Switzerland, and their main research focuses on image analysis in the field of public safety. They have cooperation with the EU JRC (Joint Research Centre). Their technology does overlap with the perception technology of Microsoft and Apple, but this small research institute in the United States is just an academic branch of them and does not master this technology.”

"Is there no other way?"

"I have to go to Switzerland again." Lin Bin sighed. "I had a hard time finding out all this. I shouldn't have taken this job."

The task of contacting the professor at IDIAP who had developed the multi-touch digital service desk in his early years was originally assigned to Taiwanese engineer Hsu Wen-feng. Later, Lin Bin, an American, joined the project and was also going to the United States to find Marvell, so the task naturally fell to him.

"If you're short-staffed, I'll send you more people. We absolutely must master multi-touch technology."

"Hehe, no need. If I can help you solve this problem, how much are you willing to pay?"

Lin Bin's tone suddenly became relaxed.

Chen Xuebing frowned: "You have a way?"

"Answer my question first."

"Hiss... Mr. Lin, you're our company's vice president, the kind who owns shares! You're talking about money here?"

"Ha, that's not what you said in the company meeting last week."

"Tsk, let me explain!" Chen Xuebing remained completely unfazed: "So many senior executives have recently joined the company. If everyone could access core technologies, how would we maintain secrecy? I'm just using you as a shield! If you can't touch it, then no one else can!"

Lin Bin paused for a moment.

"Mr. Chen, you must understand that my American citizenship is currently of absolute benefit to the company."

Chen Xuebing sighed: "I know."

"This money isn't mine, it's Marvell's." Lin Bin finally offered a solution:

"Multi-touch requires the simultaneous detection and processing of input signals from multiple touch points. The core is the sensor layout and signal processing algorithm. Real-time processing of multiple signals requires the support of a high-performance processor, and the algorithm must be continuously simplified to achieve stability."

"Simply put, the key lies in two points: technology is one aspect, and reducing power consumption is the other aspect."

"Marvell had some experience with this technology in their research on reducing the power consumption of embedded systems. I made a request to them, and they said they could help us develop a touch chip and integrate it into our system-on-a-chip, but they would not agree to transfer the technology and could only sell it to us for $13-$15 per chip."

"Fuck you."

Chen Xuebing sat up when he heard the price.

That's fucking expensive.

Although he didn't know the price of the touch chip, he knew the cost of a functional chip.

A few cents.

This thing has no marginal cost; once it's developed, it can be produced indefinitely.

You want to sell me for over a hundred yuan.

Technology should command a premium, but these premiums are outrageously high. With the high costs of drug research and development, no one dares to make that much profit.

"This technology isn't anything cutting-edge. Apple acquired that soft keyboard company, and the two founders developed the technology. How difficult could it be? Can we talk about it some more?"

"Be grateful that you can buy it. Without this, your interactive ecosystem has no foundation at all. And if your guess is true, Apple is also going to release a phone and use this technology. They must have big ambitions. Once our products become homogenized with Apple's... Marvell's headquarters are in Silicon Valley, and so is Apple's. According to Apple's competitive acquisition habits, we may not be able to buy this technology for our next generation of products."

Lin Bin had seen it all before, so his attitude was rather indifferent.

Chen Xuebing touched his forehead, a surge of anger welling up inside him with nowhere to vent.

"Agree to Marvell's conditions first, let them get involved in research and development, and we also need to go to Switzerland; we need to take a two-pronged approach."

Lin Bin's voice sounded tired again: "That's what I meant too. The itinerary is already arranged. We'll go next week... You're very lucky. Marvell entered the Chinese market relatively early, so they can accept RMB. Otherwise, you would have to prepare an astronomical sum of US dollars for this chip import."

"Hmph, they were just lucky, they caught a good time."

The RMB is currently appreciating. Last year it was 1:8.3, and now it's 8.1. This year it might even break 8, allowing them to make a profit from the exchange rate.

However, foreign businessmen have the privilege of returning their currency to their home countries at zero fees, but Chen Xuebing, who needed US dollars, could only exchange them at high prices in the Hong Kong market.

What's the situation at TSMC? Are they able to achieve high-yield mass production?

"They started secret trial production last year, and now that the news has been released in the United States, it should no longer be a problem. However, they need to secure TSMC's production capacity. Marvell's previous partner has always been Nikon of Japan, and they have no dealings with TSMC."

"65nm, only TSMC?"

"Only TSMC. You should have heard that ASML's immersion lithography machine was TSMC's Lin Benjian's idea. The water medium is the fundamental reason why Nikon's mature technology of 157 nanometers wavelength was shortened to 132 nanometers. After multiple exposures, half of 157 nanometers is the current 80 nanometers, and half of 132 nanometers is TSMC's 65 nanometers. ASML's 132 nanometer immersion lithography machine, which prioritizes cooperation with TSMC, is the only solution for 65 nanometers."

"Let Marvell figure it out. We need 65 nanometers, which is a prerequisite for high-priced touch chips. Silicon Valley is so powerful, they must have a way."

Lin Bin laughed: "It's no use talking sarcastic things to me, they won't hear you anyway."

Chen Xuebing grinned: "They'll hear it. As far as I know, Wall Street still calls the shots in America."

"I sincerely hope that Wall Street will listen to you, even if it's just a single word."

"Riding a donkey while reading a script."

The two exchanged a few boastful words, each unwilling to concede, and then hung up the phone.

Since his rebirth, Chen Xuebing has rarely been so angry with anyone, especially his subordinates.

However, his anger was not directed at Lin Bin.

A functional chip, it costs over a hundred bucks.

If we conservatively estimate that the first generation sold 200,000 to 300,000 units, how much would that cost?
At the last meeting, he asked Lu Weibing to reduce supply chain costs, but unexpectedly, he ended up being stabbed in the back.

And this is just the first step; there will be more to come. The terms "Dao" and "Qilin"—these Chinese-style descriptions represent his expectations for the product. However, without getting rid of the exorbitantly priced foreign chips used internally, he won't make much money; the high prices will be filled with profits flowing overseas.

No matter how well it's designed or how high-end it's made, it's still operating in the low-end industrial chain, earning the money of someone who just tightens screws.

It's better to just make pirated goods.

Chen Xuebing patted his legs as he stood up, his determination to develop domestic alternatives stronger than ever before.

"I'm going to Anhui now, I'll be leaving soon, so I won't see you off at the border."

Yang Qingyue turned around with a slight look of surprise.

Chen Xuebing received a phone call yesterday, seemingly inviting him to discuss an investment project. He had originally planned to leave in two days, but since the discussions wouldn't be finished before the Lunar New Year, he wanted to stay in Shenzhen for a couple more days before going.

She was quite happy and even planned to tidy up the house today and have dinner together in the afternoon, as an early way to celebrate the New Year.

Suddenly, I was in a great hurry.

"Okay! Go ahead! I'm going to Hong Kong in a bit too."

Happy New Year in advance!

After saying this, Chen Xuebing went back into his room and took out the New Year's gift he had prepared long ago.

A digital camera.

Yang Qingyue was happy for only two seconds when she suddenly exclaimed:
"I haven't bought it for you yet!"

Chen Xuebing smiled.

"No need to buy it, this is your New Year's gift and mine too. Just take a picture of the New Year's fireworks in Hong Kong and show it to me, that will be my New Year's gift."

The charm of an older man lies in his thoughtfulness.

Yang Qingyue finally let go of her reserve, hugged Chen Xuebing, and pecked him on the cheek.

"Okay, I'll definitely take the most beautiful pictures of Hong Kong for you!"

At noon, Chen Xuebing gathered his men and hurriedly flew to Hefei.

On the plane, Chen Xuebing, Cai Zhijian, Wei Zhixing, Xiao Haidong, and Ren Ying each held a copy of internal documents sent from Hefei and carefully reviewed them.

Hefei notified them to come over for discussions yesterday afternoon.

Chen Xuebing originally planned to go directly, but Cai Zhijian suggested that since Hefei had already contacted BOE during this period, why not ask Hefei to ask BOE to send over its financial reports from the past few years so as to understand the internal situation of the invested company?

This morning, an unreleased 05 financial report and previous financial reports were sent to my email, which indirectly proves that Hefei and BOE are having good talks and BOE is also quite proactive.

Today is actually the time that Chen Xuebing has set aside for Cai Zhijian to review the annual report.

However, since the trip has been rushed, everyone can only observe as they go.

Xiao Haidong is the group's chief financial officer and a senior accountant. Wei Zhixing was previously a financial lawyer in the asset department of Taikang Insurance. Both of them have a keen sense of financial statements and financial work in their respective fields.

He Yue was previously the director of the administrative office of the special steel company. She is very familiar with the state-owned enterprise system and can at least help with the details of reception.

This is why Chen Xuebing brought them along when he came out.

Needless to say, Tsai Chih-chien is another example.

PricewaterhouseCoopers (PwC) is one of the world’s most professional financial reporting firms.

He has returned to Hong Kong in the past few days to complete his resignation procedures and has begun to devote himself to his work as the group's president. He has also informed his team to meet him in Hefei after his resignation.

Demonstrating professionalism is of paramount importance for investment brokers to avoid being left behind by their partners. Chen Xuebing's team of assistants was very well-equipped for this trip to Hefei.

However, at this moment, everyone looking at BOE's annual report is worried about another issue.

If this financial report is released, how will we get loans?
The company's main business revenue was 134.6 billion yuan, while its net profit excluding non-recurring items was a loss of 1.56999 billion yuan.

Net assets: 3.37785 billion.

Total assets: 2.09225 billion.

The cash ratio is less than 10%.

Negative cash flow.

Last year, the company's main business revenue was 124 billion yuan and its profit was 1.6 million yuan. The year before last, the company's main business revenue was 111 billion yuan and its profit was 4000 million yuan.

Xiao Haidong kept looking at Chen Xuebing, wondering why he had so much confidence in this company.

With a total share capital of 2.915 billion shares, a pre-holiday A-share price of 3.03 yuan, a B-share price of 1.53 Hong Kong dollars, and a total market capitalization of 78 billion, even without considering the losses caused by the decline in market profits, the stock price is far from proportional in terms of both asset value and business growth, and is seriously overvalued.

If he were the CFO of this company, he wouldn't choose to release the accounting books even if he burned them.

In fact, BOE also intends to try every means to postpone the release of this annual report. If they do not go through internal channels, the annual report will not be available until the end of April.

Chen Xuebing could only marvel at their good fortune; they happened to encounter a major bull market during a downturn, when the prevailing sentiment was one of rampant overvaluation. In a bear market, earnings reports would be a mixed bag.

The evaporation of market value is accompanied by increased difficulty in financing, rising financial costs, and even regulatory measures to prevent them from expanding and to avoid financing failures.

Companies with good cash flow can disregard stock prices, just like Gree's CEO Dong Mingzhu, who always walks with his head held high. But companies like BOE, which rely on borrowing to grow, will see their stock prices plummet once they fall. They'll go from being the Monkey King to a monkey, and the banks will not only take away their golden cudgel, but also strip them bare.

"What do you think of their financial report?" Chen Xuebing picked up the documents and waved them at Cai Zhijian.

“They’re too honest.” Cai Zhijian shook his head. “It’s clear they’re not financially mature, and post-investment management will be quite troublesome. We’ll have to send a professional team to help them.”

"You're thinking too far ahead. Take this financial report for example, could you help them optimize it? It looks terrible when it's released."

Cai Zhijian paused for a moment.

"Yes, expenses can be capitalized, construction in progress can be kept from being transferred to fixed assets, inventory levels can be increased, and the classification of financial assets can be redefined... fictitious fixed asset sales contracts can be used to artificially inflate abnormal gains and losses. If their situation is similar to my estimate, at least their negative assets can be reduced by 30%, and some operating losses can be attributed to the abnormal portion."

"For state-owned enterprises, it's better to be more subtle. If you go too far, people will have concerns. Just consider it within the scope of reasonable beautification."

"20%."

Chen Xuebing nodded slightly at the answer.

He had read too many reports about BOE Technology Group in his previous life, and he had also paid attention to them in the stock market.

Industry researchers praise it as a standard-bearer for China's LCD panel industry to participate in international competition. On the other hand, its past of "burning money" with huge losses for years, raising funds everywhere, and never distributing dividends has led the public and even mainstream media to criticize it as a cheat and a miser.

If it weren't for the government's favor, the management's unwavering determination, and their persistence in research and development, which allowed them to weather the storm and achieve success, they would likely have been buried amidst a chorus of criticism and a mountain of responsibilities.

The process of rising to prominence was extremely difficult.

With this thought in mind, an idea came to him.

Indirect management.

Running a state-owned enterprise.

(End of this chapter)