Those Years When I Was Forced to Top the Forbes List

Chapter 213 Lightning Cooperation (Part 2)

"16 billion?"

Wang Dongsheng's gaze darted back and forth between the documents in his hand and Chen Xuebing's smile.

"You can accept equity financing?!"

He hadn't expected Hefei to be so easy to negotiate on this issue; he had thought it might be an agenda that would waste a lot of time.

The negotiations in Shenzhen have been stuck here. They are unwilling to accept the possibility of losses and only agree to support the company in the form of loans, loans and interest subsidies. They are also repeatedly arguing about the risks associated with collateral, such as the 20% annual depreciation provision for the factory buildings.

Chen Xuebing snapped out of his astonished gaze and returned to his thoughts of the early negotiations.

Equity financing is not something that every government can accept.

Listed companies face the risk of being designated as ST (Special Treatment) or even delisted.

When he first thought of BOE, he knew it was a giant in equity financing, with little capital of its own and relying entirely on government support, so equity financing was a natural choice.

Fortunately, Chongqing received a pilot fund for equity investment, so there was no dispute about investing in equity.

Later, Mayor Huang preferred to split the money and invest it in smaller manufacturers, probably because he thought that BOE was too large and needed too much matching funding from Chongqing.

Losing money from the fund is acceptable, but losing money from your pocket is not.

Later, he found Hefei, which happened to be a government with an investment banking mindset. On this issue, he persuaded Mayor Wu in just a few hours on the Gree bus that night.

In fact, this is a very difficult issue to discuss.

In its previous life, while most of the country was racking its brains over land revenue, Hefei forged a new path in equity-based finance.

Chen Xuebing had long considered whether he could capitalize on the investment in BOE and become a representative of "equity finance."

But this is all for later.

"Mr. Wang, since I've investigated you, I'm naturally aware of your predicament. That's why I came to Hefei. Their thinking is very open, and their sincerity in cooperation is unmatched nationwide. The first question I asked Secretary Sun in Hefei was, 'If Sharp came to Hefei to invest and demanded that BOE withdraw, what would Hefei do?' Secretary Sun's answer was 'Unwavering.' You won't get that answer even if you go to Shanghai next."

A thought flashed through Wang Dongsheng's mind: Holy crap!

Then, when they met Liu Xiaodong's gaze, a hint of fear appeared in both of their eyes.

The idea of ​​going to Shanghai was unknown even to the staff accompanying him.

He found out again!
The phrase "unwavering" that Chen Xuebing mentioned indeed carried increasing weight after their negotiations with Shenzhen and initial contact with Shanghai.

"Mr. Chen, when we talk, will the terms from Hefei be valid?" Wang Dongsheng had great doubts about where Chen Xuebing got his say.

“Plenipotentiary representative,” Chen Xuebing said calmly, “Take a good look at the contract. Half of that 16 billion comes from our Long March Capital.”

"Hmm," Wang Dongsheng looked at it again, and his respect for Chen Xuebing immediately increased.

They actually managed to come up with 800 million.

He always felt that the Long March Capital's ability to target them in the stock market was merely a clever trick with small amounts of money. If they could really come up with so much money, it meant that they weren't going all out against them.

The Long March is such a famous name; there must be some special background behind it.

"Mr. Chen, is it inappropriate to talk here? Is the meeting room ready?"

Chen Xuebing waved his hand: "I've already negotiated the terms with Hefei for you, and they're in the contract. I think you'll be satisfied. Let my men handle the rest of the details. I'll just discuss a few important issues with President Wang. We can talk about it in the room."

Wang Dongsheng glanced through the documents and found that the five-year subsidy was 3 million yuan, with the loan interest subsidy alone amounting to 3000 million yuan per year. The government covered a small portion of this, and there was also a 5000 million yuan subsidy from the management committee and a 55% VAT refund over three years.

The conditions are quite good, similar to when they built their factory in Beijing.

But they are controlled by the Beijing State-owned Assets Supervision and Administration Commission, which is located outside Beijing.

"According to your calculations, the investment to build the factory is 3 billion? How did you calculate that?" Wang Dongsheng asked.

"Three billion isn't enough?"

“So we did calculate it, it was about right…?” Wang Dongsheng glanced at Liu Xiaodong.

Liu Xiaodong nodded: "About right, an annual production of 36 mother glass units, worth around 31 billion."

Wang Dongsheng pondered for a moment, then gestured towards an open room and entered with Liu Xiaodong.

Chen Xuebing also went in with his hands in his pockets and closed the door.

"Mr. Chen, you've secured such favorable terms for us just for investment?" Wang Dongsheng asked, sitting down on the edge of the bed.

"Of course I can profit from this. I manage government funds and get a cut of the profits. In addition, we operate in the secondary market, helping you get on the right track. After a year, our funds will be withdrawn from the stock market."

"Withdrawing from the stock market... are you really that confident you can still make a profit?"

This is exactly what Chen Xuebing was waiting for.

"Given the current situation, we lack confidence, so we at Long March Capital want to participate in your financial management and research planning."

Upon hearing this, both Wang and Liu frowned.

To seize power?
"President Chen, we are under the jurisdiction of the Beijing State-owned Assets Supervision and Administration Commission. They won't agree to this."

Chen Xuebing smiled and shook his head: "We just need a seat on the board of directors to offer you some development suggestions. Our involvement in financial management is also about matters concerning the listed company. This is to help you. In our view, your financial statements are just a pile of garbage. Without our help, your stock price won't rise, and we won't be able to make a profit. So this is a reasonable request."

"Then... what does 'research planning' mean?"

"Increase investment in small-screen R&D, and shift the focus to OLED screen research."

OLED?

Liu Xiaodong, who rose through the ranks from technician to vice president, was well aware of the advantages of OLED. Upon hearing this, he immediately shook his head: "Why bother with OLED? For better display effects, we should be researching MicroLED! Pioneer of Japan and Samsung of South Korea have chosen the wrong direction! How can organic materials compare to inorganic materials? Lifespan is a natural disadvantage!"

Chen Xuebing had prepared some remarks, but he was stunned when he heard Liu Xiaodong mention MicroLED.

MicroLED, isn't that the new technology he was researching before his rebirth?

"MicroLED...what is that?"

Chen Xuebing wasn't testing him; he genuinely didn't know anything about this thing. He hadn't found any relevant information since his rebirth, only having heard the name in his previous life.

"This is a concept proposed 6 years ago. LEDs have three types of light-emitting diodes: red, green, and blue. If we can make LEDs into pixels and arrange them neatly on the screen, we can create countless colors by controlling the intensity of the three types of light. In this way, the screen will not have many colors; theoretically, it will have an infinite number of colors. Internationally, it is unanimously recognized as the ultimate solution for display. In contrast, OLEDs only use a multi-layer organic thin film structure to generate electroluminescence. The light-emitting principle is even simpler than that of LCDs, relying on the properties of organic materials. It is impossible to achieve perfection through fine-tuning!"

"According to you, you have the research capabilities? And you can make it?"

Chen Xuebing was somewhat excited when he heard the terms.

Making LEDs at the pixel level should be feasible.

The related control circuitry is also perfectly fine. Pixel-level? That's just micrometer-level technology, isn't it? Chip engraving is already at the nanometer level!
The first-generation Apple phone already led the world in mobile phone display performance with its 1677 million color screen. If they come up with MicroLED with infinite colors, that would be incredible!
Wang Dongsheng finally spoke.

"Among the breakthroughs in red, green, and blue LEDs, the blue LED was the most difficult. It was solved in 1993 by a Japanese team led by Shuji Nakamura, who won the Nobel Prize for it. It requires a low-resistance P-type gallium nitride. The ideal substrate for fabrication is a sapphire panel, but sapphire cannot be used for screens. This means that LEDs need to be fabricated on sapphire and then transferred to the driving circuit for neat arrangement. Just imagine how many LEDs there are? This requires a mass transfer technology. The simplest method is precise pickup and release. We tried many other methods, but none of them were economical. It would cost millions or even tens of millions to produce one. This mass transfer is bound to be extremely expensive, and the accuracy is not high. With LEDs, if the precision is not achieved, any pixel will have a problem and emit light randomly. You can imagine what it would be like to have many randomly emitting pixels on the screen."

"Forehead…"

Chen Xuebing had imagined it.

It must feel like it's about to explode.

It's easy to make, but picking up and precisely arranging them is difficult.

He immediately wanted to ask: Is it possible to create a substrate material that can be used to make screens and etch it directly onto the screen?
Oh...right, that's a Nobel Prize away.

No, just think about it. To discover something, you need to find the corresponding properties, which is much more difficult than winning the Nobel Prize.

As Chen Xuebing calmed down, he asked with some curiosity, "You all know the methods and processes for making these materials? Isn't there a knowledge barrier in your industry?"

Liu Xiaodong laughed and said, "LCD was proposed in the late 1960s, LED even earlier. Before World War II, TFT-LCD technology had been around for more than 20 years. In this process, this knowledge has long been popularized all over the world. We all know the principles of each link. The difficulty is how to manufacture it in a cost-effective way and how to manufacture it better. Each manufacturer has its own tricks. Everyone knows that a punch can kill. Aren't there hundreds of famous boxing techniques?"

Chen Xuebing suddenly realized.

The barriers are industrial, not based on fundamental principles of knowledge.

No wonder China has developed so rapidly in this area.

Investing early will likely be helpful for research and development.

The more he thought about it, the more confident he became.

“Since you can get your hands on OLED, I think we should continue to develop it,” Chen Xuebing said thoughtfully, stroking his chin.

"Why?" This time, Liu Xiaodong was confused.

"Because LCD is a rigid screen that cannot be bent, the driving circuit requires a lot of space, and a large bezel needs to be left at the bottom of the screen. OLED, on the other hand, is soft, thin, and lightweight, and is currently the only material that can be used to make full-screen displays."

Without OLED, mobile phones will always remain in the era of physical buttons, because there seems to be nothing else that can be done on the bottom bezel if there are no buttons.

Phones can't get any thinner either.

That's not all; LCD screens are opaque, so under-display fingerprint recognition is not possible.

But upon hearing this, Liu Xiaodong became a little agitated: "Full-screen? Why make a full-screen display??"

Chen Xuebing noticed that Liu Xiaodong looked like he wanted to argue, and he didn't really want to talk to him. Some things were indeed difficult to explain right now.

"Well then, it will take time for you to build the factory. We can discuss the OLED research and development issue after October."

After the phone is released in October, he can then bring the actual product to compete with them, and BOE will definitely be more willing to accept it.

But Chen Xuebing had already mentioned building a factory, looking very confident, which made Wang Dongsheng feel that the deal hadn't been reached.

"Mr. Chen, I admit the terms are good, but regarding your involvement in management, I still need to go back and discuss it with the board of directors."

“Mr. Wang, I haven’t finished speaking.” Chen Xuebing interrupted him: “Regarding this matter, we can sign a performance-based agreement. Within six months, I will raise your stock price to over 6 yuan and allow you to release the shares you bought back last time at a high price. If we meet these conditions, we will want three board seats and a vice president of finance position. Of course, before that, we will also intervene and revise your financial statements and financial management model.”

"Six yuan?" Wang Dongsheng was surprised.

Market value doubled?
"This is the capital for us to cooperate on the sixth generation line after the 4.5 generation line. The funds in Hefei will be relieved within six months. At that time, you will need a high market value to borrow from the bank and more of your own funds. So this time, I don't plan to let you spend money on the line construction. Next, we will do our best to help you improve the situation."

4.5 generation line, 6th generation line
Wang Dongsheng was somewhat tempted.

If the stock price really reaches six yuan, BOE A's market value will be close to 140 billion yuan. With the support of Hefei, it might be possible to operate two production lines at the same time.

By making breakthroughs at higher levels and exploring lower levels, BOE's predicament may indeed be resolved.

"A betting agreement. If it doesn't reach six dollars or more, then you..."

Chen Xuebing glanced at him and said, "I'll give you one yuan."

"this!"

"Mr. Wang, get this straight, you're the listed company. I'm doing your work for you without charging you, but why should I lose money when the stock price is below 6 yuan? What if you're deliberately trying to sabotage us?"

Chen Xuebing spoke with righteous indignation.

In reality, BOE can raise its price to 6 yuan without doing anything.

With the news of two major production lines coming online and the bull market in full swing, he would have to keep the stock price down if it only doubled.

BOE has no bottom line when it comes to financing. If it doesn't curb this, raising too much will easily lead to problems once the bull market ends.

"Uh ok!"

Wang Dongsheng finally succumbed to temptation.

Chen Xuebing smiled and said, "Have your team take the contract to the office for negotiations. I hope to sign the contract as soon as possible. There are still some things I need your cooperation on."

Over the next three days, BOE negotiated while simultaneously seeking instructions from higher authorities.

It was mainly a request for instructions.

They found there was really nothing left to talk about.

Long March Capital had already negotiated the landing conditions in advance.

The investment framework agreement has been finalized by Changzheng Capital.

The 20-square-meter plot of land was selected for them by Changzheng Capital. After reviewing it, they found it to be excellent.

The Hefei government readily agreed to provide a 110V substation, and even built it for them before the plant was even completed.

What BOE can do is issue a private placement announcement, take the funds back to negotiate loans.

An investment of 31 million yuan.

Just three days after BOE's establishment, the two parties finalized the agreement.

Blitzkrieg collaboration.

Behind these three days lies Chen Xuebing's more than three months of hard work.

This effort deserves flowers and applause.

(Later, there will be more in the middle of the night)

(End of this chapter)