Those Years When I Was Forced to Top the Forbes List

Chapter 350 Bombarding Sharp
The bargaining process between the two parties was relatively restrained.

There was no reason given; they just insisted on paying it back.

There's really no need to give any reasons, because the positions of the two parties will be reversed in three months. According to the original investment agreement, BOE will repurchase 2.5% of Changzheng and Hefei at 90% of the market price after one year. Then, Changzheng and Hefei will sell a portion of their shares on the secondary market. According to the consultation between Chen Xuebing and the State-owned Assets Supervision and Administration Commission (SASAC), SASAC will also buy a portion of the shares at the issuance price to avoid too many shares being sold on the stock market and causing a collapse.

After the lock-up period expires, non-tradable shareholders can only sell 5% of their shares on the secondary market within one year, while there are no restrictions on internal trading among shareholders.

长征和合肥各有3.26亿股，各占比11.4%，所以解禁日2007年3月20日（2006年2月20日签合同，约定3月20日打款生效）以后，长征和合肥各卖给股市5%，京东方2.5%，剩下的就是BJ国资委的。

How much can be sold in the stock market depends on the operation. BOE's takeover price is 90% of the real-time stock price in March, while Beijing State-owned Assets Supervision and Administration Commission's takeover price is 90% of the average stock price of the month before the specific transaction date.

Although the State-owned Assets Supervision and Administration Commission of Beijing (SASAC) was willing to take over and further maintain control over BOE, it also took precautions and agreed that the transaction date would be within three months of the lifting of the lock-up period, with the specific date to be determined by them.

Everyone had their own perspective and also had to consider the subsequent buying and selling, so the bargaining process was quite restrained.

After half a day of negotiations, the transaction was settled at a price of 7.5 yuan per share.

Hefei invested 3 billion yuan and accepted 30 million new shares; Changzheng 10G Industry Fund invested 40 billion yuan and accepted 1.33 million new shares; Beijing State-owned Assets Supervision and Administration Commission invested 4 billion yuan and accepted 5.33 million new shares.

With this, BOE's total share capital has expanded to 39.26 billion.

Hefei holds 7.26 million shares, accounting for 18.49%.

The two funds of Changzheng held 4.59 million shares, accounting for 11.69%.

Beijing State-owned Assets Supervision and Administration Commission holds 14.2 billion shares, accounting for 36.17%.

The formal signing took place two days later at the Daoxianglou restaurant in the Anhui State Guesthouse.

The cooperation intention for the sixth-generation production line had already been signed last time, so the level of the provincial leaders' attendance this time was not as high as last time. Only one deputy leader attended, and the meeting was held in the form of a press conference.

The spotlight shone even brighter, and reporters flocked to the scene.

No one expected that this mega-factory would actually be able to land. The Sharp advanced production line that had been the subject of much discussion in Hefei was abandoned just like that. The Sharp representative did not appear on the stage, but instead became a guest with a dark face, sitting in the audience.

On the contrary, a young Mr. Chen, who has received much attention in the past six months, sat next to the city leaders and answered questions.

Amidst the clicking of camera shutters, questions came one after another.

"The last investment hasn't even gone into production yet, and now another 170 billion yuan has been invested. How much of this investment did Hefei actually contribute? Did it use any funds from the subway construction?"

Sitting among the provincial leaders, Secretary Sun smiled and said, “Our investment has been very effective. We already have 62 supporting companies in Hefei, including those specializing in glass substrates, backlight modules, driver chips, touch modules, and optical films. With the establishment of the 6.5-generation line, more and more supporting companies and home appliance manufacturers are contacting us. In this investment, we adhered to the principle of risk-sharing with BOE in our equity investment, and we also received support from the Beijing State-owned Assets Supervision and Administration Commission and Changzheng Capital. They brought 50 billion yuan in funding, while Hefei only contributed 30 billion yuan. I can say definitively that our municipal finances are very healthy. We not only need to build the subway, but also the new district! In the next three years, Hefei will usher in a brand-new urban landscape and a wealth of industrial development!”

"Furthermore," Mayor Wu continued, "during this investment negotiation process, we reached a second cooperation agreement with Gu'an Group, the parent company of Changzheng Capital. Gu'an will undertake the development of a 750-mu commercial complex on the Swan Lake plot in the Administrative New District. We believe that with the sincere cooperation of both parties, the commercial sector in the Administrative New District will see substantial progress. Hefei will fully support strategic partners like Gu'an Group and needs more such strategic partners!"

Mayor Wu's words put Chen Xuebing in a difficult position.

He knew that Chen Xuebing would soon have a large sum of money in his account, and of course he hoped that Chen Xuebing would invest this money in the development of Hefei.

Chen Xuebing has no plans for short-term development. Although he has a huge sum of 28 billion yuan in his account, there are many things that need to be spent in the future. The commercial properties developed in Hefei are also fixed assets, and the funds cannot be recovered quickly. Even if they can be used to enhance credit, the development pace must be synchronized with the development of the area in Hefei to ensure a certain property valuation.

But facing countless cameras, he still smiled and nodded.

He also needs to build momentum.

Only by letting more people know about his strength and strategic ambitions can he attract more suppliers to provide him with advance funding.

Expanding his three wallets is his main task this year.

The first wallet is his net worth, including valuation.

His second credit wallet includes financing confidence, bank credit lines, and private lending capacity, which combined exceed his second wallet.

The third factor is how much money the outside world believes he has. This directly affects his willingness to provide advance financing and his ability to create room for contract payment cycles. The so-called contract payment cycle is like this piece of land. Hefei fully believes that he has money to acquire the land and even more money to develop it, which is why they are willing to give him extra consideration in terms of the land purchase payment cycle.

The real super leverage he wanted was to pass the money down from the first to the third wallet.

"What about Sharp's 7.5 generation line? I heard they've already invested a lot in Hefei, are they not going to build the production line?"

Suddenly, someone in the press section asked a question.

After BOE signed the agreement in February last year, Sharp rushed to Hefei in May to sign an agreement for a 7.5-generation production line. Many media outlets also reported that a number of supporting small factories flocked to Hefei to sign investment agreements, which was also related to this event.

When the topic came up, Mayor Wu smiled and looked at the Sharp representatives below the stage, saying, "We still have the willingness to cooperate with Sharp. We have also provided the land for the factory. If Sharp continues to build the line, we will wholeheartedly support it."

Sharp signed an exclusive agreement for this matter, and Hefei also acted in accordance with the contract, waiting for them for half a year before introducing BOE's 6th generation line. He was very confident and believed that Sharp had no reason to cause trouble.

But at that moment, Sharp's representative suddenly stood up.

He straightened his suit and said aggressively at the top of his lungs, "Excuse me, Mayor Wu, but we at Sharp don't feel any sincerity from Hefei. When we signed the contract, we agreed that if we started construction within six months, no other TV panel manufacturers would be allowed to be introduced. Did you keep that promise?"

The atmosphere was stagnant.

All the cameras were pointed at the Sharp representative.

Mayor Wu was slightly surprised, but still smiled and asked in return, "Didn't we do it? Sharp has only brought a construction team of less than 20 people and a few machines to symbolically dig on the land approved by the High-tech Zone. We still haven't received your project bidding plan and the specific time for equipment procurement. This does not meet the construction standards we agreed on."

The problem was suddenly exposed to the media, and all the reporters became alert.

A multi-billion dollar investment dispute!
The Sharp representative, however, seemed to have been prepared. He sneered and took out several documents from his briefcase, waving them into the air.

"I have several reply letters here that we received from the municipal government."

"The municipal government has not been proactive in providing the support we requested, such as electricity supply and reasonable land allocation. Compared to the support BOE received during the same period for the construction of its 4.5-generation factory, we are in a completely disadvantaged position!"

How can we successfully complete the construction?

"And just over a month after our exclusivity agreement was finalized, Hefei attracted a 17 billion yuan investment in a 6th generation production line! According to our investigation, your government began raising funds for this investment as early as September last year, and the fund that Changzheng Capital used for the investment was also completed in November last year."

"This is sufficient proof that you had a subjective and intentional intent to violate the contract during the contract period!"

"We now demand a refund of 200 million yuan for the land, compensation of 30 million yuan for land leveling costs, and 200 million yuan in compensation for our commercial losses!"

"As overseas investors, we are receiving a completely unfair business environment! We are going to sue!"

Wow! With the Olympics just around the corner, this lawsuit is going to be a major scandal!
The leaders on the stage all tensed up.

When Sharp first came to Hefei, no one really took it seriously. How could it possibly be treated the same as BOE's 4.5-generation line?
If they don't even plan to build factories, wouldn't it be a waste to provide them with electricity?
Do we need to expand the land area further?

This wasteland was specifically allocated to Sharp to slack off, and there are also farmers' land around it. Can't the land be expanded by expropriation? What if they don't want it after it's expropriated?
Sharp's current use of these reasons is nothing more than sophistry.

They just couldn't openly express everyone's underlying feelings.

A smug look appeared on the Sharp representative's face. They had seized this opportunity to create public opinion and force Hefei to make concessions.

Governments care about these things; even if they are unreasonable, they still have to care about their international image.

"Dong dong dong."

On stage, Chen Xuebing slammed his knuckles on the table and then picked up the microphone.

"Please be quiet."

All eyes turned to them again.

When Mayor Wu saw Chen Xuebing speak up, he immediately coughed and gave him a meaningful look, reminding him to mind his image.

He knew that Chen Xuebing was young and impetuous and couldn't hold back, but this was not a matter of pride.

At this critical juncture, some statements are easily truncated and used as weapons of international public opinion.

Chen Xuebing smiled slightly and spoke in a very gentle manner.

“Representative of Sharp, you keep claiming there were commercial losses? From a business perspective, I think we should congratulate you. You made a fortune on this deal.”

The entire venue fell completely silent.

"Why do you say we made a profit?" Chen Xuebing raised his finger. "In 2006, my country imported 4650 million LCD TV panels alone, with a total import value of US$112 billion. The average price per panel was 1926 yuan."

"This is still because of the global overcapacity last year, which led to a price reduction of nearly 40%."

He looked at everyone and said, “To this day, their gross profit margin is still around 40%, and in the higher-end panel market, it is still above 80%.”

"If China's panel production capacity covers 40 inches, the gross profit margin of manufacturers like Sharp will be halved."

"Sharp representative, your exports to China last year were around 6 million units, right? Nearly 10 billion RMB. If the profit margin is reduced by 20%, how much would that be?"

“A year and a half ago, BOE was planning to put its 6th generation line into production in Shenzhen. You cut the deal in Shenzhen and then chased it to Hefei. You delayed BOE’s 6th generation line for a full year and a half. You only spent 200 million yuan and made billions more. It must have been a very profitable deal, right?”

"So congratulations to you. You have succeeded in this investment. The Chinese people have paid billions for you. Your selfless act has also allowed your peers to earn an extra one or two hundred billion."

He immediately started talking about economics; Chen Xuebing's wolfish heart was calculated down to every pore.

The Sharp representative was stunned and speechless for a moment.

The other party was talking about data, and he wasn't prepared!
The reporters were also surprised to find that there were such huge profits behind this!

Originally, we were reporting on BOE, but now we have material for a feature article on panels!
The Sharp representative suddenly felt the surrounding flashes of light become blinding and quickly shouted:

"The panel sales are a business transaction and have nothing to do with this investment default! We are discussing the contract!"

“That’s right.” Chen Xuebing’s smile became even more relaxed: “Let’s talk about the contract. Why talk about identity and credibility? With your reputation, it’s only natural that any local government or company would be wary of you. If you want to sue based on the contract, then go ahead and sue. I can assure you that you have no chance of winning under either Chinese or Japanese law. I’m making a public promise now: if you win this lawsuit, our Gu’an Group will pay you back!”

The clear, resonant voice echoed throughout the hall via the sound system.

A few seconds later, applause broke out.

The leaders on the stage gradually smiled, and although they did not say a word, they applauded.

The applause grew even louder.

The Sharp representative had sat down at some point. He wanted to say something more forceful, but he didn't know if headquarters would still pursue the lawsuit.

The following day, media reports were everywhere.

—A multi-billion dollar panel project becomes shrouded in mystery, with Sharp's representative accusing Hefei of setting a trap! A young entrepreneur calculated on the spot that Sharp earns billions annually from the exorbitant profits of Chinese panels.

— Behind the 4650 million imported panels, Chen Xuebing reveals the truth about Sharp's investment.

"You've made enough money off the Chinese!" Chen Xuebing angrily confronted Sharp at the signing ceremony for BOE's 6th generation production line!
— "Chinese entrepreneur invests a whopping 4.2 million yuan to bet on a Japanese panel manufacturer!"

Technological bottlenecks coupled with Sino-Japanese confrontation have heightened public sentiment.

The comments such as "It should have been a long time ago to break off relations," "President Chen is awesome," and "Well done, Hefei" are rampant online.

"Beware of Sharp's propaganda war! They used the same tactics to force Shanghai Broadcasting Network's NEC project to fall through in 2005!"

Hefei: Hahaha! Refund? Refund is impossible!

"This 4.2 million will boost our national prestige! I'll contribute some for President Chen! Once the Kirin phone is launched, every employee in the company will receive one!"

"Holy crap! It's actually President Chen! President Chen of Kirin Mobile!"

On January 7th, Mayor Wu personally went to the airport to see Chen Xuebing off.

"Mr. Chen, that's brilliant! Now, even if Sharp has to fight this lawsuit, the public will focus more on the outcome than the process! We're sure to win! The only problem is that they might use the lawsuit to stir up public opinion!"

"Hehe, since I've come up with this idea for Hefei, I'll definitely take full responsibility for it."

"But I heard that you have a collaboration with Sharp? Your phones use their screens?"

"LG is still the main player! Sharp is just a backup! Don't worry, our global supply chain is being established, and sales volume is the key to negotiation! In the past two days, many people have called the company to ask when our phones will be available for sale. I think after this, our sales will be much higher! We can finally make a living from the patriotic market!"

"Hahaha, this bowl of rice is yours to eat!"

(End of this chapter)