This strategic positioning, no matter how high-end, ultimately isn’t as solid as real gold and silver!
"Chairman Gao, rest assured, the revival of our factory is all thanks to the support from both Chairman Gao and President Hu. Now everyone in the company is united in purpose, ready to follow you two and work hard to achieve great things!" Mr. Bao said excitedly.
Gao Yuan nodded and smiled, "Hmm! Very good! Then next, let’s discuss Idol New Energy’s developnt plan for the next step...
Um... how much money can we still draw from the company’s accounts right now?"
"Uh..." Mr. Bao was startled.
At first, he thought Gao Yuan’s question was directed at Hu Yifei, but when he realized they were both looking at him, he understood that he was the one being asked.
But... wasn’t the plan to increase our investnt in us?
Why ask how much money I have instead of asking President Hu? What kind of move is this?
Nevertheless, he still answered truthfully.
"This... The inco from early sales will take so ti to collect, and most of it has already been allocated to repay suppliers and banks.
However, thanks to the huge advertising effect of ’Bajie,’ most of the company’s planned advertising spending has been canceled, saving about 50 million in advertising costs.
Plus, sales are warming up, and after the business condition improved, the banks have also resud lending, and our cash flow has returned to health.
After deducting back pay and daily operating expenses...
the company’s accounts currently have about 30 million available for use..."
Idol Company is a typical "trade-industry-technology" enterprise, with advertising investnts accounting for over 10% of total revenue, requiring tens of millions of dollars in advertising costs each year.
Of course, Mr. Bao also once had grand ambitions to transition and increase investnt in technological research and developnt.
The result was maintaining high input in both R&D and sales expenses, with fixed costs squeezing profits, which also accounted for one of the reasons Idol struggled to continue once subsidies were withdrawn.
In fact, excessive advertising investnts, squeezing the profit margin of companies, are a common issue among dostic car manufacturers caught in severe competition.
Why can Tesla achieve such high gross profit margins? Not only because of its high brand premium but also because its annual advertising expenses... are almost zero!
That’s right, you read that correctly, not a penny spared!
However, the confidence behind their stinginess cos from a whopping 2,900 US dollars per vehicle in R&D costs, almost three tis the industry average of 1,000 US dollars per vehicle R&D expenditure!
This is the massive advantage of a technology-driven enterprise, where "the difficult cos before the easy."
And the recent "new release" of ’Bajie’ let Mr. Bao, a traditional car manufacturer, also taste the special dividends of a monopoly technology enterprise.
"30 million..."
Gao Yuan nodded, the number was close to her estimates.
If it had been when she first started her business, 30 million in working capital would definitely be a huge amount.
But for so reason, as ti went by, ng Lang’s appetite grew bigger and bigger, with financing and acquisition amounts easily reaching dozens of modest goals...
As if he wished to break the "financial leverage" entirely...
Nowadays, 30 million isn’t even enough for the petty cash of the next "Idol Upgrade Plan"...
"As far as I know, the foundation of Idol New Energy is still solid, not to ntion the existing brand, factory, production lines, and other fixed assets, but also the pure electric passenger vehicle production qualification of Idol.
Even the Europa E-Mark certification has considerable market value..." Gao Yuan analyzed.
Speaking of which, among the niche brands of 2017, Idol was indeed a fresh and popular stream.
It was able to stand out from the crowd, not only because of its high sales volu and reputation but also because of what many dostic new energy vehicle companies have yet to achieve...
And that is expanding to overseas markets and gaining international recognition!
Due to license restrictions, even before 2017, Idol New Energy didn’t have the production qualification for new energy passenger vehicles in China; the cars produced could only be sold to countries like Italy and other European nations.
You have to admit, as one of the most seasoned "new energy pioneers," Mr. Bao really had a knack for market developnt.
After toiling in Europa for over a year, he actually managed to secure the Europa E-Mark standard certification, which also raised Idol’s overseas profile.
Although sales were only a few thousand a year, just the export to Europa alone was enough to draw envy.
Thinking of this, Gao Yuan couldn’t help but admire ng Lang’s precise judgnt.
Although Idol seed a ss, once sorted out, the potential for developnt was indeed very promising.
"Uh... Chairman Gao, you an..."
Mr. Bao, having listened for a while, was still perplexed, with more questions than answers.
Weren’t we talking about increasing investnt? Why does it seem more like asset liquidation the more I listen...
My Idol Company isn’t about to change hands again, is it?
"What I an is, now with Idol’s booming production and sales, and a vast market prospect, it absolutely qualifies as a ’quality asset’ in the eyes of the banks and fully ets the conditions for mortgage financing."
"Financing?" Mr. Bao’s eyes widened.
Only then did he understand why Gao Yuan wanted to "liquidate assets."
Hu Yifei, on the other hand, wore an unsurprised expression, looking at Mr. Bao with a slight sympathy.
Heh, as expected, still a newbie, not familiar with our Chairman Gao’s usual investnt style of "increasing investnt"...
Reviews
All reviews (0)