My Age of Investment

  Chapter 863 Countercyclical Investment

  In fact, Huang Dongsheng can’t be blamed for thinking too much, because BOE’s A and B shares are added together, and the market value is less than 10 billion yuan.

  Xia Jingxing has to invest 10 billion yuan in them at one time. Isn’t that the equivalent of acquiring them?

   "Mr. Xia, let's open the skylight and talk brightly, do you want to take control of BOE?"

  Huang Dongsheng gradually digested the explosive news, but he didn't panic and expressed his stance, intending to ask more clearly before making a decision.

  Xia Jingxing smiled faintly: “Panels are a money-burning business. Samsung burned for 12 years to make a profit. Baywan manufacturers are better, but it took nearly 10 years to become profitable.

  In addition, I heard that Mr. Huang proposed a well-known Huang's law in the industry: at the same price, the performance of the display panel should be doubled every 36 months. "

  Huang Dongsheng waved his hand and said modestly: "What Huang's law is just a family talk.

  What I mean by these words is that production capacity must be continuously expanded! If you want to make money tomorrow, you must die to lose money today. "

  Xia Jingxing nodded slightly: “Samsung and LG did this in the semiconductor field, including the panel industry.

  The more the industry cycle is at a low point, the more we must accelerate expansion! Counter-cyclical investment!

  Because every downturn in the industry is a reshuffle, which is also a good opportunity for overtaking on a curve, and the cost of expansion is still very low. "

"good!"

  Huang Dongsheng said firmly in his eyes: “BOE took a detour before and learned a lot of blood and tears.

  Our 5th generation line came in at the peak of the cycle. When it was put into production, it happened to catch up with the valley, so the blood loss was two years.

  Before I persuaded my friends from the four color TV companies: Now it is Gu, hurry in and enter the market. After it is put into production, it will happen to be the peak, and you can pay back quickly!

  Alas, it’s a pity..."

  Zhang Xuebing’s expression was a little unnatural, why did he come up with this incident again, can’t I admit it wrong?

  Huang Dongsheng glanced at Zhang Xuebing and smiled slightly: "I just give an example. I don't mean to blame anyone. I won't mention the past!"

  Xia Jingxing interjected: "I heard that the foundation of BOE's LCD panel came from modern times?"

Huang Dongsheng nodded slightly: "Yes, at the end of the 1990s, we have become a leading company in the field of CRT (Cathode Ray Picture Tube), but once I went to Japan on a business trip, Sharp’s people gave me a color LCD screen. The electronic clock as a souvenir.

  The product is small in size, light in weight, and has clear imaging. At that time, I had a hunch that LCD liquid crystal display screens might replace CRT and become the next direction in the display industry.

  This matter is too important, it is related to the fate of the whole factory, and I dare not make a decision lightly.

  After returning to the factory, I gathered all the young people with high academic qualifications and set up an industry research team to ponder the development direction of the entire display industry, did countless inspections and demonstrations, and finally decided to bet on LCD. "

  Xia Jingxing nodded slightly. This decision sounds like a lighthearted, nothing great, but it is actually a turning point in the fate of BOE and the entire Chinese panel industry.

  At that time, CRT technology still dominated the market, major domestic manufacturers were still desperately launching new equipment and production lines, and even the global TV hegemon, Thomson Group, was still increasing its investment in CRT.

  There is no absolute wind direction. It is judged that LCD will become the master of the display industry.

  This decision of BOE took a great risk.

  You must know that BOE’s CRT was No. 1 in China at that time. It was tantamount to saying that the boss of the industry said that what he was doing had no future. This had too much influence on the company.

  Huang Dongsheng is out against the crowd, AllinLCD has struck out an industry's future.

  Huang Dongsheng looked reminiscenced: “At that time, Japanese and Korean companies had relatively mature technology on TNF-LCD and had entered the stage of mass production. We were several years behind, and entering this field would face a huge technological blockade.

  The display industry itself requires heavy investment. Doing research and development from scratch on your own is not cost-effective in terms of speed and cost.

  In fact, when drastic changes come, many companies do not have insight into the direction of the wind, but they no longer have the courage and ability to follow the wind.

  BOE was lucky. It happened to catch up with the Asian financial crisis or the Korean financial crisis. We put together a total of 380 million U.S. dollars, about 3.2 billion yuan at the time, and acquired Hyundai Group’s LCD business as a whole.

  At that time, our annual revenue was only 800 million yuan, and the net profit was only 70 million yuan, which is equivalent to a battle.

   It’s a good bet, otherwise BOE may not exist anymore. "

   Speaking of this incident, Huang Dongsheng smiled, unable to conceal the pride and pride in his heart, because this incident can be regarded as the most correct thing he has done in his life, second only to agreeing to take over BOE.

  Xia Jingxing smiled and praised: “Mr. Huang is very decisive! This kind of completely backward industry, if you want to break through the technological blockade, it is impossible not to take risks! Wisdom, courage, and ability are indispensable.”

   "Mr. Xia, you passed the award, I just don't want to wait to die!" Huang Dongsheng replied lightly.

  Xia Jingxing smiled: "Actually, it can be seen from this incident that the panel industry is an industry that requires long-term investment. How can we go to the battlefield if we have courage and no ammunition?

  Betting on new technologies, acquiring or building new production lines, impacting production capacity, hardening the industry cycle...Why don’t you need money? "

  Huang Dongsheng lowered his head in thought, Xia Jingxing was telling the truth, BOE needed money very much! According to common sense, he has no reason to refuse tens of billions of investment.

  Boss Kexia gave too much, and he was a little worried.

   "Mr. Xia, if you become a major shareholder of BOE, what do you want to do?" Huang Dongsheng suddenly raised his head and pointed out the matter directly.

   "As I just said, the current industry cycle is at a trough, which is suitable for rapid expansion.

  BOE, with the 10 billion we provided, can leverage financial leverage, build two production lines, and narrow the gap with Japanese, Korean, and Taiwanese manufacturers. "

  Speaking of this, Xia Jingxing sighed slightly and said with emotion: “After the panel price is hit, countless Chinese companies will benefit, including our Fuxing Industrial Group.

  Like you, I’m actually fed up with the traitors, widows, and sticks. I want them to get out soon! "

  Huang Dongsheng rolled his eyes and asked tentatively, "Mr. Xia, have you also heard of the "Crystal Meeting"?"

Xia Jingxing nodded slowly: "I heard a little bit! In the six years from 2001 to 2006, six companies, including Samsung, LG, Chi Mei, AUO, Chunghwa Picture Tubes, and HannStar, were operating in South Korea and the Bay Area. Convened 53 "crystal meetings".

  The meeting is basically once a month. The main content is to exchange information and negotiate prices. The most important one is that when LCD panels are sold in mainland China, several companies adjust prices together and jointly manipulate the market.

  These operations directly caused the price of domestic color TVs to remain high. LCD panels once accounted for two-thirds, or even 80 to 90%, of the total cost of TV sets! The cost ratio in developed countries is only 50%! "

  Speaking, Xia Jingxing suddenly remembered something.

  When the financial crisis broke out in the previous life, in line with the principle of saving one’s family first, the mainland twice organized nine color TV companies to purchase LCD panels in Bay Bay, with a total order of 3.3 billion U.S. dollars.

   Seeing the mainland to help Taiwanese enterprises, South Korea also found Taiwanese enterprises to place orders. Taiwanese enterprises wondered whether it was the mainland compatriots to negotiate, so they prioritized production capacity to South Korea and put the mainland orders aside.

  At this time, South Korean companies also found domestic TV factories and said they could replace Taiwanese companies with low-cost supplies. In this way, Taiwanese companies were cleverly mistaken and lost the mainland market.

  After receiving orders, South Korean companies began to deliberately reduce production capacity and constantly raise prices, and TV factories across the mainland were led by their noses into a bad cycle.

  Hearing these sorrows, Xia Jingxing didn't know what the people of Wanwan had in their minds, they were like single-celled organisms.

  In short, the panel industry is so fun. Japanese companies do not believe in their words, Taiwanese companies forget what they say, and South Korean companies jump repeatedly. Chinese people can only work hard and be self-reliant.

  Xia Jingxing pondered that investment to help BOE is one aspect. If you seize the opportunity in the future, you have to find an opportunity to teach these grandchildren a lesson.

  Looking at Huang Dongsheng, who has never expressed his opinion, Xia Jingxing decided to give the other party a bottom line: “We invest in BOE also from the perspective of ensuring the stability of our own industrial chain and reducing costs.

  When the investment is completed, Fuxing Industrial Group can establish a full range of cooperation with BOE. All of our panel orders for mobile phones, computers, automobiles, TVs and other products can be handed over to BOE. "

  The word "cooperation" immediately made Huang Dongsheng heard the overtones, his whole spirit was lifted, and he asked: "Mr. Xia, don't you plan to buy BOE?"

  Xia Jingxing shook his head: “Mr. Huang, don’t think too much about it. It’s just an investment. We plan to help you get started and give you a ride, so that you can develop faster and solve the pain of technically stuck necks as soon as possible.

  Although the amount of investment is large, it is also based on a practical perspective. BOE needs money very much now. If you spend more now, you can spend less in the future.

  Investment is too small to be useful at all! If debt financing is not carried out, 10 billion yuan will not be able to build a 6th generation production line. "

  "To be BOE's largest...financial investment shareholder?" Huang Dongsheng asked tentatively.

  Xia Jingxing smiled, still making financial investment, I am humanitarian relief!

   "Right! BOE will continue to be managed by you, I will not interfere, and you do not need to join the Fuxing Industry Group."

  Hearing this, Huang Dongsheng still didn’t understand. What is the picture? Figure BOE is losing money fiercely?

   Then he thought about it, maybe Mr. Xia was betting that BOE was rapidly rising with this 10 billion!

  More than two years have passed since the trough of the industry cycle, and it is almost time to get out of the trough.

  This is also a countercyclical investment! Counter-cyclical equity investment plus cash-saving investment!

  It must be so!

  Huang Dongsheng took a deep look at Xia Jingxing, and felt that the well-known richest man was more gambler than himself.

  But investing is a kind of gambling! Dare to bet is the real top investor!

  After understanding all of this by brainstorming, Huang Dongsheng replied: “This matter is too important. I need to communicate with the directors and shareholders, and I will give you an answer to Mr. Xia as soon as possible.”

   "What it should be!"

  Xia Jingxing smiled and nodded, and no longer explained more. His investment in BOE was really not purely for making money.

  However, it doesn’t matter how Huang Dongsheng understands it.

  (End of this chapter)