As for why he had accepted this project proposal, one could only say that China is a society built on personal relationships. There were so favors he simply couldn’t refuse. But in truth, he just wanted to go through the motions, saving face for the other party without harming the company’s foundations. He never expected that this perfunctory project proposal would actually catch President Sun’s eye.
Now, what was he supposed to do?
From his professional perspective, the probability of this investnt project failing was close to 99%.
Why? Because before Xiaomi entered the fray, dostic automotive startups still had a glimr of hope. But once Xiaomi’s Rebus entered the arena, trying to jump in and compete for a slice of the pie at this juncture? That was just asking to starve.
Moreover, investnts in car manufacturing are astronomical, often in the hundreds of billions. If it failed, who could possibly bear such a massive loss?
"President Sun, this letter of intent in your hands is for a project that isn’t quite mature yet. Perhaps you’d consider so others?" Wang Hai suggested. "For example, the one on top, about a dia company specializing in AI-driven ani and animation, is quite good."
"Too small. The scope is too limited," Sun Dasheng said, waving his hand dismissively. "This animation and ani production company has a total market value of only tens of millions, and it only needs a few million in investnt. Is a sum that small really worth your personal attention, Wang Hai? You’re managing several billion in investnt funds. Putting it into a small case worth a few million... wouldn’t that make us a laughingstock among our peers?"
Alright, his words were logical and well-founded. Wang Hai couldn’t easily refute them. In fact, President Sun’s words were ant to elevate his status.
"Then there’s the second one," Wang Hai continued. "It’s a startup researching new high-energy batteries, focusing on automotive batteries. They have strong research capabilities and even have finished prototypes in their lab. Right now, they’re just missing the funding to move from the laboratory stage to large-scale mass production.
"But the amount of money they need is substantial, so they’re looking for investors everywhere. If we can provide tily assistance, it could very well turn into a highly profitable investnt."
Wang Hai’s words sparked so interest in Sun Dasheng. He picked up the second project proposal and began reading it carefully. It was filled with so much technical jargon that he had trouble understanding it.
He looked up and asked, "Isn’t CATL currently the strongest in car battery technology? Would they really let these upstarts catch up?"
Wang Hai explained with a smile, "Let use a simple analogy. Before smartphones ca out, who were the most dominant mobile phone manufacturers? And where are they now?"
Oh! That was an interesting point.
Sun Dasheng understood instantly. "Are you saying that CATL, as an established giant in car batteries, is now just resting on its laurels and has lost its ambition?"
"President Sun, you’ve misunderstood. That’s not what I ant at all."
"Then what was your example supposed to illustrate?" Sun Dasheng was now thoroughly confused.
"Actually, as the country’s most formidable car battery manufacturer, CATL’s cutting-edge research is still top-tier. However, they have no incentive to imdiately release their most advanced products with higher energy density.
"They already dominate the majority of the dostic and even international markets with their current products. If you were in their position, would you rush to release better battery technology?"
Hearing Wang Hai’s explanation, he finally understood.
They wanted to maintain the status quo for as long as possible before soone else ca out with a more impressive product. Maintaining the status quo ant maximizing their profits. Only when soone truly challenged their dominance would they respond. But by then, whether a new king would be enthroned or the old king would hold on to his crown... that would be another story entirely. Such stories were common after so many years of dostic and international market competition.
"So, in your opinion, should we invest in the battery factory or the car factory?"
"The battery factory, of course. Even if that investnt fails, it won’t cripple us. But if the investnt in the car factory fails, we’ll lose everything. Investing in a new energy vehicle startup right now... what’s the difference between that and joining the Nationalist Army in 1949?"
It was an intriguing analogy.
The battery manufacturer needed an investnt of five hundred million and was willing to offer 20% of its shares. The automotive startup, on the other hand, required a one-billion investnt and was offering 5% of its shares.
"Which major corporation is backing this automotive startup? Otherwise, where would they get the guts to enter the market at this point?" Sun Dasheng asked.
"The specifics are unclear, but it seems to have Japanese financial backing."
"Is that so?"
Could this be the Japanese testing the waters? Seeing the powerful rise of China’s dostic new energy sector, they couldn’t hold back any longer. Since it’s a Japanese-backed venture, we shouldn’t be helping them succeed.
"Then let’s invest in this battery company," Sun Dasheng decided, making the final call.
"Understood, President Sun."
Five hundred million was thrown into the water. In Sun Dasheng’s view, the difficulty of this company breaking through the encirclent of major established corporations was not much lower than that of the automotive startup.
The rest of the money couldn’t just sit idle in the company’s account, either. It needed to be spent, and spent on big-ticket items. He was no longer interested in the sort of small-fry companies with market values of only a few tens of millions.
On his subsequent acquisitions, accompanied by a team of professionals from the investnt departnt, he acquired the following: an average-performing five-star hotel for one billion and a comrcial tower with a 50% vacancy rate for 2.8 billion.
The 4.3 billion the investnt company had just secured was instantly wiped out.
The five-star hotel was a standard acquisition, so he didn’t even bother to visit it. Most of the staff were kept on, but the top executives, who were the forr owner’s confidants, had all left with him.
This made Sun Dasheng a little regretful; he hadn’t managed to retain a single one of the "masterminds" responsible for the hotel’s pathetic performance.
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