Reborn in 08, a heretical cultivator starting a business

Chapter 162 Mobile Internet: The Battle for Ecosystems!
It's difficult for a regular washing machine manufacturer to outperform brands like Midea, Haier, and Little Swan.

But if you make high-end two-zone or three-zone washing machines, and switch tracks directly, you'll be invincible.

This type of partitioned washing machine has limited research and development difficulty, but it is currently a completely untapped market opportunity!

With the high-quality assets and talent of the Little Duck Group, producing a zoned washing machine is no problem at all.

Even so, Wang Junshan did not want to acquire the entire Little Duck Group.

With the current economic crisis, Little Duck is on the verge of bankruptcy. The group's net assets consist only of land, industrial parks, old production lines, and other equipment, with a total value of only 200 million.

Even the most valuable shell company of ST Xiaoya was restructured and given to Sinotruk Group in 2003.

At that time, the listed company ST Xiaoya was suffering heavy losses and was on the verge of delisting. Once delisted, its shell resources would be worthless.

Sinotruk's acquisition was also intended to be a backdoor listing.

So the two sides engaged in a resource exchange.

ST Xiaoya sold its washing machine business, assets, and liabilities to Xiaoya Group, leaving only the ST Xiaoya listed company shell, and issued shares to Sinotruk through a private placement.

Sinotruk, on the other hand, injected all of its assets into the shell of ST Xiaoya.

Subsequently, ST Xiaoya changed its name to Sinotruk, went public through a reverse merger, successfully raised funds, and achieved qualitative development.

ST Xiaoya also used this opportunity to divest its loss-making washing machine business and retain its listing status.

As a result of this move, although the original shares were diluted, the company became more valuable because its main business changed from washing machines to heavy trucks.

After the lock-up period ended, Little Duck Group sold all its shares, and everyone was happy.

If that's the case, that's it.

However, the washing machine business still suffered significant losses.

In an effort to revitalize the Little Duck washing machine business, Jeju Island has brought in the Namdo Sweet Group, hoping to revitalize the Little Duck washing machine business through this investment.

In 2005, the two parties reached an agreement that Sweet Group would acquire Little Duck Washing Machine's main business with zero assets, and planned to invest 2 million yuan to restart production, with an annual output of one million washing machines in 2005, and assume about 7 million yuan of debt.

With just 7 million yuan in debt, they could acquire Little Duck washing machine's main business, as well as numerous industrial park assets and the market. Sweet was very excited.

Unexpectedly, Sweet took too big a step, coupled with the recent acquisition of companies such as Little Swan, which ultimately led to the failure to fulfill debt obligations and the failure to invest 200 million to restart production, making the Little Swan Group's debt crisis even more serious.

The annual production of Little Duck washing machines has been declining, with only about 200,000 units produced throughout 2008, generating annual revenue of around 100 million yuan.

They have few assets but liabilities of 7 million yuan, or even more.

There are also issues related to employee resettlement.

For employees who were restructured from state-owned enterprises, the buyout of their seniority and the resettlement fees alone would amount to more than 100 million yuan.

Restarting production and upgrading the production line will cost more than 100 million.

All things considered, it would be difficult for Wang Junshan to acquire Xiaoya Group without at least 10 billion yuan!
There's no need for Wang Junshan to make a meal of dumplings just for a plate of vinegar.

Moreover, the problems of the Little Duck Group are very serious, and its major shareholder is the Jeju State-owned Assets Supervision and Administration Commission, making the relationship complex.

The entire group is a mess; without a complete acquisition, reform is unlikely.

A 100% acquisition is possible, but in addition to the above expenses, an additional 100 million yuan will be needed to buy out the shares held by the State-owned Assets Supervision and Administration Commission and other shareholders!

And there's the mess left by the reorganization with Sweet; I wonder if it's been cleaned up yet.

It's very difficult.

Instead, acquiring only a few core industrial parks of the Little Duck Group located in the High-tech Zone would be the best option.

For example, a mold production center has precision machining capabilities and can be used to produce core components for partitioned washing machines.

There's also a nationally certified home appliance testing laboratory!

Building such a testing laboratory in the future and applying for national certification would take three years, so acquiring it directly would be the easiest option.

Research and development centers can also be acquired.

We can acquire one or two of the final assembly workshops in the industrial park, depending on the situation.

Little Duck Group has multiple industrial parks throughout Jeju Island.

This way, you only need to acquire what you need, spend some money, avoid debt issues, and it's enough to build a future smart home washing machine industrial park.

As for whether the other party will sell?

Shouldn't be a problem.

The reason is simple: Little Duck's washing machine business is currently suffering severe losses and simply cannot compete with Haier and Midea's Little Swan.

They basically gave up on everything.

The annual production capacity of Little Duck washing machines has dropped from a peak of 1.4 million units to just over 200,000 units, and it will be halved again next year.

It's safe to say that Little Duck's consumer washing machine business is basically finished!

Instead, it began to transform into the industrial equipment sector, developing the washing industry chain, including commercial washing equipment and industrial washing machines, as well as the automotive equipment industry chain (automotive molds, wheel equipment, etc.).

In its previous life, Little Duck went through a difficult transformation period and suffered continuous losses. After 2015, it turned a profit and subsequently expanded into commercial washing and industrial washing machines, achieving annual revenue of tens of billions.

Since Little Duck is giving up its consumer washing machine business, these assets are of little significance.

Wang Junshan's move to buy at the bottom suggests there's still hope, provided the price is right.

R&D center, Little Duck Lab CNAS certified, precision mold center, and part of the final assembly workshop!

And Little Duck's top R&D engineers!

Wang Junshan is very rare.

Once we secure this, we'll have the industrial foundation for the future of washing machines.

After signing the contract, the production line was upgraded and adjusted.

While simultaneously conducting intensive research and development on dual-zone and triple-zone washing machines!

Subsequently, they produced partitioned washing machines, which sold well domestically through Vipshop.

You can also leverage U-Tuan International to achieve great sales overseas!

This year is the first year, and YouTuan International only imports.

If we expand significantly next year, export trade will become indispensable.

The future of partitioned washing machines will be the key product for opening up the international market!
Of course, resources could also be used to produce some ordinary washing machines to take advantage of the 2008 rural appliance subsidy program.

Alternatively, the washing machine could be made into two separate components and sold separately to meet the price limit of 1999 yuan for rural appliance subsidies, thus also taking advantage of the rural appliance subsidy program.

More importantly, the industrial parks of Xiaoya Group, which Wang Junshan acquired, are all located in the High-tech Zone.

Now it looks like the eastern suburbs, very remote, but in ten years, it will be the city center of Jeju and become a science and technology city area!
The CBD and financial center are nearby.

Buying these industrial parks at rock-bottom prices would only cost around 200 million yuan, but when they are demolished in 2017, the compensation will be over 1 billion yuan!

During those nine years, the production of partitioned washing machines generated an annual output value of several billion yuan.

It's safe to say that it's incredibly profitable!
Totally doable!

Wang Junshan had made up his mind, so he quickly summoned Cui Qian and explained in detail:

"Manager Cui, please arrange for your team to conduct a comprehensive inspection of Xiaoya Group, especially their core industrial parks in the High-tech Zone, to examine their production lines, equipment, and assets..."

"Okay, boss." Cui Qian quickly arranged for someone to handle it.

Shen Huaijin was puzzled by this: "Boss, the rural appliance subsidy program is an opportunity, but can't it save Little Duck washing machines?"

Wang Junshan shook his head: "It's beyond saving. Sales these days mainly rely on offline channels. At its peak, Little Duck Group had stores all over the country, and now 80% of those channels are closed." "That's true. With the channels gone, even if there's a rural appliance sales program, not many stores will sell it, so it's pointless," Shen Huaijin said with deep emotion.

Unfortunately, Little Duck washing machines are no longer able to compete with Haier, Midea, and Little Swan.

Year after year of losses forced Little Duck to abandon its residential washing machines and switch to commercial washing.

Now that Wang Junshan has stepped in to make a partial acquisition, Xiaoya Group will naturally not refuse.

Of course, whether it will ultimately succeed depends on the Jeju State-owned Assets Supervision and Administration Commission, the major shareholder of the Little Duck Group.

For companies like this, there's no problem as long as the State-owned Assets Supervision and Administration Commission approves.

Similarly, if the State-owned Assets Supervision and Administration Commission (SASAC) doesn't agree, then there's no chance.

"Boss, I have another question," Shen Huaijin said. "Why are we making washing machines? It doesn't seem to fit our previous business."

Wang Junshan smiled faintly: "The competition in the current traditional Internet era is all about land grabbing; it's a competition between portal websites and BAT giants."

"But the competition in the mobile internet era will be about the Internet of Everything, a battle of ecosystems!"

This is the major development trend for the next two or three decades!
Whether it's Huawei or Xiaomi, they're both building ecosystems!
Once the ecosystem is established, chips, operating systems, mobile phones, tablets, computers, cars, and smart homes can all be quickly developed.

Giants that fail to build an ecosystem will decline, becoming the cornerstone of ecosystem giants.

At the very least, most HarmonyOS-enabled car owners use Huawei phones, Huawei tablets, Huawei laptops, Huawei watches, and Huawei smart home devices...

The owners of Xiaomi cars are mostly Xiaomi phone users, Xiaomi tablet users, Xiaomi laptop users, Xiaomi watch users, and Xiaomi smart home users...

If it's a cross-brand issue, the experience will be very, very bad.

For example, wearing an Apple Watch with a Huawei phone.

Or conversely, using an iPhone and wearing a Huawei watch both result in a poor user experience and poor battery life.

Competition within the same brand and its ecosystem will be the future trend.

Similarly, if we want to avoid falling behind in future technologies, we must plan ahead.

The future smart home, the future mobile phone next year, the future OS system... are all very important components.

The acquisition of some of Little Shrimp's core assets and the creation of future-oriented zoned washing machines mark the beginning of the future smart home!
"I don't quite understand..."

Shen Huaijin was about to ask another question when Wang Junshan interrupted him: "Notify all senior executives to hold a meeting."

"it is good."

The meeting began soon after.

"With the news reports, major cities must be vying for our top ten international warehouses."

Everyone nodded and began to speak:
"In each region, multiple cities are vying for the opportunity, and the policies and incentives they offer are all very attractive."

"Yes, it's land given away for free again, often 400 mu, 500 mu, or even 600 mu, without paying a single penny."

"They also provide loan guarantees. I calculated that after deducting the 20% subsidy for large-scale infrastructure projects, it basically covers our construction costs."

"With local subsidies, the interest rate is not high, so we basically don't need to invest any money. The interest and principal, once operational, will be covered by profits."

"The tax incentives are also quite generous."

“The boss had said before that the local government would give its full support, providing money and land, but I didn’t believe it. I didn’t expect it to actually be true.”

Wang Junshan smiled faintly: "There's no other way. Under the economic crisis, we must stimulate consumption. The large-scale infrastructure project and the four trillion yuan plan are specifically designed to subsidize these."

At other times, these policies are very difficult to apply for and are simply not approved.

Forget about giving money, land, interest subsidies, and tax refunds; you'd be lucky to get even one or two of those things.

However, amid the global financial crisis, a series of measures were implemented.

This is the benefit of choosing the right time.

"We must cherish this opportunity and move forward quickly."

Wang Junshan remembers that next year will be the best time, and also the most exciting time.

In 2010, the brakes were applied and the restrictions were gradually tightened.

After 2011, they were basically all stopped.

Unfortunately, the stimulus was too excessive, causing housing prices to rise too sharply, necessitating a reverse cooling measure.

If the future warehouse is completed next year, there will be no problem with subsidies.

It's expected to be completed the year after next, and there's hope for that too.

But it's hard to say about projects that will be completed the year after next.

Always stay with me.

“List all the cities that are recruiting international warehouses in each region, along with their policies, and make a table of them. Study it in detail, and then determine the location,” Wang Junshan said.

"Boss, it's ready."

Chen Jiamu, the future logistics manager, opened the spreadsheet and projected it onto the large screen:
"These are the policies that the cities that have contacted us with so far have offered."

Wang Junshan glanced at it and nodded: "Very good. Study it carefully. If there are any problems, contact the local authorities. Try to discuss things in a positive direction."

"Our initial plan for the first batch was ten international warehouses, and we currently have eleven, but there may be a second and third batch later. We'll take it one step at a time."

"Okay." Chen Jiamu understood what Wang Junshan meant.

With the continuous development of e-commerce, the demand for warehousing will continue to grow.

Eleven international warehouses will be enough next year, but in three years, they may not be enough.

In its previous life, JD.com, more than a decade later, had 21 million square meters of its own warehousing, 25 Asia No. 1 warehouses, and countless other regional hubs, forward warehouses, and cloud warehouses.

In the future, e-commerce business will have a wider scope and may even develop faster than JD.com's warehousing.

For this reason, Shandong Province alone has been allocated two major international warehouses: Jeju Island and Binhai.

The Jeju International Warehouse covers western and central Shandong and can also alleviate the pressure on the North China International Warehouse.

Binhai International Warehouse covers the Jiaodong Peninsula and is an import and export bonded warehouse.

"In addition, we placed orders with companies such as Baosteel and Jinan Iron and Steel in advance to order steel. According to the regional distribution, we ordered all the structural steel and other steel needed by eleven international warehouses at once to lower the price and sign contracts as soon as possible."

Wang Junshan gave instructions.

Jiang Fan, who was in the video conference, instantly understood what Wang Junshan meant:
"Due to the economic crisis, steel prices are currently at a low point, but with the announcement of the four trillion yuan stimulus package and the start of large-scale infrastructure construction, steel prices are expected to soar next month. It's the best time for us to place our orders in advance and target low prices!"

When the financial crisis broke out, infrastructure construction came to a standstill, and the price of structural steel needed for warehousing centers dropped rapidly from 3800-4000 yuan/ton to 3200-3500 yuan/ton.

But Wang Junshan knew very well that this was the lowest price.

With the introduction of the four trillion yuan stimulus package, the price of structural steel will rise again to 3600-3800 yuan per ton by the end of the month.

It will rise to over 4000 in the early Ming Dynasty!

It kept getting higher and higher.

Future Technology's move at this time, leveraging a massive order to drive down prices and secure the lowest possible price, is undoubtedly the wisest course of action.

Subsequently, all departments acted swiftly and performed their respective duties.

The purchasing department, in particular, is the most efficient.

On the same day, they placed huge orders with major steel mills.

(End of this chapter)