Reborn in 08, a heretical cultivator starting a business

Chapter 167 Strategic Investment in RiRiShun Causes Panic Among Competitors!
"This..." Chairman Zhang remained silent for a long time before finally speaking:
"Mature and stable logistics companies are generally valued using the profit method. The logistics industry is usually calculated with a PE ratio of 8-15."

"Even at the lowest PE ratio of 8, with a profit of 8 million, Ririshun's valuation is still around 64 billion!"

Mr. Zhang's eyes lit up instantly!
Even RRS's valuation of 3 billion this year is considered too high.

If Future Technology invests, the company could reach 64 billion next year!
It's doubled!

This is truly frightening; the development is happening far too fast!

"Too low!" But Wang Junshan waved his hand dismissively:
"Future technology is the gold standard, and I, Wang Junshan, am the Warren Buffett of the East."

"With my investment, Ririshun's valuation will be at least 10 times PE, not 8 times. Add another 20 billion, and next year, a valuation of 80 billion will be no problem!"

"With this strategic investment, RRS has secured a large amount of financing, and its valuation of 100 billion next year is no problem!"

"This..." Chairman Zhang was stunned, but had no choice but to think about it seriously.

If someone tells him that he will make 3 million in profit this year and 8 million in profit next year, that's definitely nonsense.

Chairman Zhang didn't believe a single word of it.

But when Wang Junshan said that, Chairman Zhang had to believe him to some extent.

Wang Junshan never plays by the rules, but he always pulls off a winning hand.

If things continue as normal, RRS will make further progress next year. With the support of the rural appliance subsidy program, profits could increase by 30%, reaching 4 million yuan.

8 million in profit? I never even dared to dream of it.

With Wang Junshan's investment and Vipshop's huge order, it seems quite possible that the expected profit could surge from 4 million to 8 million!

This year, Ririshun's 3 million yuan profit mainly came from Haier's own business, which has a very simple structure.

However, with Wang Junshan's investment, many of the electrical appliances from various brands that Vipshop purchases can be stored in RRS's more than 50 warehouses across the country, and can be delivered by RRS Logistics, with installation and after-sales service provided by RRS!
Storage fees, logistics and distribution fees, installation fees, and after-sales service fees!

These are all profits!

More importantly, the order has shifted from a single Haier order to multi-brand orders.

It's entirely possible that Ririshun's revenue could reach 100 billion next year.

There is great hope that profits can increase from 3 million to 8 million.

At that time, RRS's valuation, based on a PE ratio of 8, could very well reach 64 billion.

Add to that Wang Junshan's influence, or rather, the influence of Future Technology, and the billions of yuan invested, a valuation of 100 billion yuan is truly possible!
More importantly, as Vipshop continues to develop, RRS will also benefit from its growth!

This will cause RRS's PE ratio to continue to increase!

They are all logistics companies, logistics companies with no future, with a PE ratio of only 8, which is eight times their annual net profit.

But the promising ones are 10 to 12 times higher.

If the prospects are very good, 13 to 15 times the return is not a problem!

SF Express isn't listed on the stock exchange, so where does its high valuation come from?

It's because investors are optimistic about it and give it a high PE ratio, basically around 15 times PE!

Ririshun relies too heavily on Haier's business, with 99% of its revenue coming from its parent company Haier. Its profit structure is too singular, and investors only give it a minimum PE ratio of 8.

15 times and 8 times, that's almost double the difference!
However, once it partners with Future Technology and receives orders from Vipshop, the most fatal problem of RRS's single profit structure will no longer exist.

Then the PE ratio will naturally skyrocket.

Even if it doesn't reach 15 times, there's still hope for it to reach 10-13 times!

Then Ririshun's valuation will soar again.

From a valuation of 30 billion this year, it has skyrocketed to a valuation of 100 billion next year!
It seems like there really is no problem!

Chairman Zhang was tempted!

I'm so tempted!

Seeing Zhang Dong's piercing gaze, Wang Junshan smiled faintly:
"So, Chairman Zhang, are you going to stick around here and fight me to the death over Ririshun's pre-investment valuation of 2 billion, then 3 billion, or are you going to join me in embracing Ririshun's 10 billion valuation next year?"

"I……"

Chairman Zhang took a deep breath and fully grasped the situation.

Is the valuation this year 20 billion or 30 billion?
Is it important?
Compared to its estimated value of tens of billions next year, it's nothing at all!
What is strategic investment?
Bringing in Wang Junshan is a strategic investment!

Even if we suffer a loss now, it's okay; we can earn more next year.

Just like the collaboration between JD.com and Tencent before JD.com's IPO in its previous life, the shares were sold to Tencent at a discount.

But Chairman Liu was not angry at all; on the contrary, he was very happy and couldn't have asked for it!
It's because Tencent can provide the resources and traffic that JD.com needs, which can help JD.com develop better and earn more!

Similarly, the orders and profits that future technologies can bring are exactly what Ririshun needs, enabling it to develop better, earn more, and see its valuation soar several times over!
Going public in the future is not a problem!
But as a veteran entrepreneur, Chairman Zhang has seen many ups and downs.

He wasn't the type to sign a contract on a whim; instead, he calmly and collectedly said:

"Chairman Wang, all of this is based on the premise that Vipshop can succeed in selling large home appliances."

"However, from a business perspective, although Vipshop is developing rapidly, can Vipshop's revenue from large appliances really take off?"

If possible, then all of this could be achieved.

Even if there's a significant amount of inflation, the so-called 10 billion valuation should actually be discounted by 30%, leaving only a 7 billion valuation.

That's double the amount from this year!

It's a good deal!
If it doesn't take off, Vipshop's revenue from large appliances won't be much, then the valuation is too inflated. If the valuation jumps from 10 billion to 5 billion, or even 4 billion, then it's meaningless.

Ririshun cannot be sold off cheaply!

In order to go public, Haier is no longer a traditional state-owned enterprise.

However, legally it is still a collectively owned enterprise, but in reality it is a mixed-ownership enterprise operated in a market-oriented manner.

However, the Binhai State-owned Assets Supervision and Administration Commission still holds a considerable share, just like Xiaoya Group.

If Wang Junshan's investment can cause Ririshun's valuation to skyrocket, then there's no problem at all; even if we lose some money now, it's fine.

If the valuation of Ririshun did not surge, and after deducting Wang Junshan's investment, the valuation did not change much, or even decreased, then it would be suspected of being a loss of state-owned assets.

This is a serious matter.

Chairman Zhang has to be cautious!
Wang Junshan waved his hand, and his assistant handed him a laptop.

"Chairman Zhang, the data you are about to see is top secret of future technology. I'm showing it to you because I trust you, but I hope you won't disclose it to anyone else."

"Don't worry, Chairman Wang, I can sign a confidentiality agreement!"

Chairman Zhang knew that Wang Junshan was about to flex his muscles!
Showcase Vipshop's strength!

This is data that everyone is curious about!

Since Future Technology has hidden all data, no one knows exactly what Vipshop's revenue and profit are now.

Previously, it was speculated that the monthly transaction volume would be only three or four hundred million.

Recently, there has been speculation that Vipshop is quietly making a fortune and is seriously undervalued, with its monthly transaction volume likely reaching 12 billion yuan!
But is it really 12 billion?

Nobody can say for sure!
Wang Junshan waved his hand: "No need for a confidentiality agreement. I have absolute trust in Chairman Zhang's character."

Wang Junshan still admires Chairman Zhang.

Unlike those comprador and foreign-worshipping factions who go on a buying spree, Lao Zhang is a pragmatic person who values ​​independent research and development!

From beginning to end, we must focus on making high-quality domestic products and selling Haier's products all over the world, and we have been very successful in doing so.

Casarte, for example, is definitely high-end; it has outperformed Samsung and Siemens.

This is the backbone that national enterprises should have. Capable companies should go and earn foreign investment and make money from foreigners.

Only incompetent companies become lackeys of foreign companies, working for them and reaping money from Chinese people on their behalf.

The assistant opened the revenue report and showed it to Chairman Zhang.

"From November 1st to 17th, Vipshop's transaction volume reached 11 billion yuan!"

"The transaction volume for that month was over 19 billion!"

"so much!"

Chairman Zhang was terrified.

He thought Vipshop's monthly transaction volume of 12 billion was high enough, but he underestimated it.

Their actual transaction volume is nearly 20 billion!
So next year, Vipshop's transaction volume will not be 150 billion, but 230 billion, or even 250 billion!
Such terrifying revenue and such rapid growth are truly unbelievable!

With the investment of future technologies, RRS, as Vipshop's designated warehousing and logistics company for large home appliances, truly has a bright future.

Ririshun can take advantage of Vipshop's rapid growth and expand its business!

Reaching a valuation of 10 billion next year is no problem at all.

In comparison, a current investment valuation of 30 billion or 20 billion is really insignificant.

Most importantly, in the logistics industry, if you don't grow big, you die.

It's possible to scale it up, but it's just too expensive!

If Ririshun wants to continue expanding and maintain its absolute advantage in large home appliances, it must raise further funds!
Whether for development and expansion or for the prospect of a valuation of tens of billions, investment in future technologies is essential.

"Okay, Chairman Wang, let's do it your way, a pre-investment valuation of 20 billion!"

Chairman Zhang gritted his teeth and agreed immediately.

20 billion, it's definitely going to lose money.

But suffering a loss can be a blessing in disguise!
Vipshop is developing too fast, Ririshun can't miss it, and Haier can't miss it either!

With Future Technology's investment and Vipshop's huge order, RRS can develop rapidly!
Compared to a valuation of tens of billions next year, a loss this year is no big deal!
Wang Junshan smiled and said, "I hope that by joining forces, we can help Ririshun reach a valuation of 10 billion next year and go public independently within five years!"

"Independent listing!" Chairman Zhang was stunned.

He had never dared to think of this before!
There's no way around it; 99% of Ririshun's business comes from Haier, so how can it go public independently?

The profit structure is too simplistic.

But now it seems quite possible.

With Future Technology's investment, RRS secured large appliance logistics, warehousing, and after-sales service orders from Vipshop, directly solving RRS's fatal problem of an overly singular profit structure.

So, the surge in revenue and profits is only natural.

Once the financial crisis is over, it would be only natural for Ririshun to grow bigger and stronger and go public within five years.

After further detailed discussions, Haier convened a board meeting and resolved the matter.

Upon hearing that with the investment from Future Technology, Ririshun's profits could double and its valuation could skyrocket.

All shareholders were in complete agreement.

In particular, the state-owned capital of Binhai City is happy to facilitate the cooperation.

After all, Haier is based in Binhai, and YouTuan Technology has also settled in Binhai City.

The Binhai State-owned Assets Supervision and Administration Commission is eager for the two parties to join forces, grow bigger and stronger, and strive for listing!

Furthermore, Wang Junshan made an exception and added an international warehouse for Binhai City, which made the Binhai City State-owned Assets Supervision and Administration Commission very happy.

The strategic investment decision to incorporate future technologies was undoubtedly approved.

Furthermore, the State-owned Assets Supervision and Administration Commission (SASAC) took the lead in expediting the process.

Just two days later, the two sides officially signed the contract.

Both parties signed a capital increase agreement, with Future Technology investing RMB 18 billion in Ririshun.

The funds were used to expand the logistics network and build warehouses, and went directly into Ririshun's account.

Since the transaction did not involve purchasing shares from Haier Electric, it did not trigger Hong Kong stock trading rules and therefore did not require disclosure.

RRS was valued at 20 billion before the investment and 38 billion after the investment. Future Technology holds 47.37% of the shares!

Future Technology has three board seats and a priority dividend policy.

Future Technology guarantees to provide Ririshun with a large number of orders, filling the gaps in third-party business.

Both parties agreed that the entire 18 billion yuan would be invested in warehousing and logistics expansion.

70% will be used for warehouse construction, adding 160 million square meters of self-built warehouses, at which time RRS's warehouse area will exceed 300 million square meters!

30% will be used to purchase 500 heavy trucks and sorting lines, among other equipment.

The funds will be injected in two batches. The first batch of 600 million yuan will be injected before December 1st and will be used for warehouse expansion.

The second batch, before May 1st, will inject another 12 billion yuan to be used for final payment settlement for expansion and equipment purchase.

Future Technology appointed a CFO to work at Ririshun to monitor the use of funds.

With this investment of 18 billion yuan, Future Technology has become the second largest shareholder of Ririshun, holding 47.37% of the shares!

The parent company, Haier Group, saw its shareholding diluted from 100% to 52.63%, but it remains the largest shareholder and retains controlling interest.

Furthermore, since the two investments were made separately, the first batch only required 6 million yuan, which put no pressure on Wang Junshan.

Following the signing of the agreement, Haier Group held a press conference to announce the news.

Future Technology has invested 18 billion yuan in Haier Electric's subsidiary, Ririshun, forming a powerful alliance that will add 160 million square meters of warehousing space over the next year, strengthening its nationwide coverage.

At the same time, Vipshop also held a press conference:
[Future Technology's 18 billion RMB strategic investment in RRS will significantly boost Vipshop's large appliance business. RRS Logistics and warehousing will be fully integrated into Vipshop's warehousing and logistics system, enabling two-day or even next-day delivery for Vipshop's large appliance business in many locations!]

Instantly, the whole country was in an uproar.

"First, they invested 50 billion yuan to build ten international warehouses, and then they invested 18 billion yuan in RRS Logistics. Future Technology is going all out in logistics and warehousing."

"Impressive. This is the style of a large enterprise. With 68 billion yuan invested in logistics and warehousing infrastructure, Vipshop's future development is limitless."

"Vipshop has SF Express for small items, with delivery speed leading the competition and ranking first in the country. For large appliances, there's RRS Logistics, which can deliver even to rural areas, and it's incredibly fast. It's truly unbeatable."

"With Vipshop doing this, how can its competitors compete? They can't."

"When it comes to buying home appliances, Vipshop is still the best choice. They deliver the next day or even the next day. It's so fast that I can't even get that fast delivery offline. The key is that offline stores don't have all the models, and there are few local brands."

"That's normal. Many home appliances sold offline are also delivered by SNSF Express, hahaha."

Looking at these news reports.

JD.com Chairman Liu is on high alert:

JD.com is in danger!

"Wang Junshan actually invested in Ririshun, and now they offer two-day or three-day delivery for large appliances. What a lack of sportsmanship!"

"JD.com's large appliances have a one-week delivery service, which is considered fast."

"How can we compete like this?"

"Why didn't JD.com think of this approach: partnering with RRS and leveraging RRS Logistics to build up our large appliance warehousing business?"

(End of this chapter)