Chapter 692: Chapter 500: The Road to Going Public
The next day.
Chen Pingsheng drove his Volkswagen Phideon to the group headquarters.
There wasn’t much to do this ti; the main purpose was to discuss the IPO process of Tengyou dia.
With the IPO slots allocated from Guangzhou, the path to listing would definitely be smooth; their main task was to find suitable IPO financing partners.
These could also be referred to as strategic investnt partners.
Currently, Tengyou dia is valued at 45 billion, calculated based on the valuation at the ti when Guo Ziyi invested.
The IPO valuation is expected to be around 60 billion, rising slightly to provide early investors with a more favorable exit.
Achieving this valuation wouldn’t be easy.
After all, even Xin Teng Live Streaming hasn’t reached a market value of 60 billion to date; Chen Pingsheng arranged a eting with Shen Nanpeng and Tong Zelan, entrusting them to scout for investnt opportunities in capital markets.
The dilution from this stock issuance wouldn’t be as significant as 60% again, but rather 40%.
The IPO financing target is 24 billion.
Given the booming TikTok and the short video economy, this target is still achievable.
It will just take so ti.
If this round of financing is successful, and considering he still holds 35% of the shares, cashing out 40% would be 14%.
That would bring about 8.4 billion RMB, undoubtedly a substantial inco.
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Then by applying the Golden Finger boost, the funding required for Tengfei New Energy’s research and developnt in 2019 could essentially be secured.
Shen Nanpeng suggested integrating so physical enterprises into Tengyou dia.
If relying solely on the current internet celebrities and guild livestreaming without the solid support of physical businesses, the capital market would hardly believe in its 60 billion valuation.
Tong Zelan also supported this approach, expressing that involving physical businesses could aid in narrating a more compelling story in the capital market through a mixture of virtual and real assets.
Relying solely on internet celebrities indeed isn’t sufficient to support a 60 billion valuation.
Chen Pingsheng considered this and saw the logic; rging a few physical enterprises wouldn’t be an issue with his diverse portfolio.
Which businesses to integrate to enhance Tengyou dia’s storability was crucial, however.
Chen Pingsheng said, “A couple of years ago, I invested 1.2 billion in Clothes Warehouse No. 9, intending to support its fashion sector livestreaming sales once Tengyou dia got off the ground. Currently, Clothes Warehouse No. 9 has direct stores in major cities; it makes sense to integrate it into Tengyou dia first.”
“That’s no problem.”
Shen Nanpeng was clearly aware of Clothes Warehouse No. 9. In the present market, investing over a billion in physical clothing stores was highly unusual.
Chen Pingsheng knew when he made this investnt that it was preparation for livestreaming sales.
And now, it seed he was right.
To inflate Tengyou dia’s valuation to over 60 billion, bundling so physical businesses was essential.
“It’s just that if Clothes Warehouse No. 9 is priced too high, investors might not accept it.”
“I invested 1.2 billion but plan to integrate it at 1.5 billion; that’s not excessive, right?”
“Not at all, quite reasonable.”
Shen Nanpeng added, “Besides Clothes Warehouse No. 9, it would be best if you also integrated so departnt stores to complete the future retail sector. Once that step is done, the 60 billion valuation for Tengyou dia would be attainable.”
Departnt stores, Chen Pingsheng naturally had plenty.
He owned one of the earliest Tenghui Departnt Stores, but now, Tengyou dia would need to purchase a substantial number of stores from Tenghui Departnt Store, no fewer than a hundred.
This was fundantally different from holding stocks in Tenghui Departnt Store, which is a cooperative relationship.
Purchasing a number of stores outright ant carving out part of the outlets.
Allowing Tengyou dia to own its independent supermarket brand would clearly give it a greater advantage in future livestream sales.
Tenghui Departnt Store is currently valued around 20 billion, besides maintaining all its premises in Beijing-Shanghai-Guangzhou-Shenzhen and Xiangjiang.
Other cities’ premises are mostly rented.
It is no exaggeration to say that the market value of these top-tier city stores alone was nearly sufficient.
Chen Pingsheng decisively decided to sell all city stores of Tenghui Departnt Store, except for those in Beijing-Shanghai-Guangzhou-Shenzhen and Xiangjiang, to Tengyou dia.
A specific pricing would still require financial data calculations.
An accurate figure couldn’t be provided at the mont.
For Shen Nanpeng and Tong Zelan, spending a few extra billions to purchase supermarkets from Tenghui Departnt Store was trivial.
After all, they were early investors in Tengyou dia, and once it achieved a valuation of 60 billion, that investnt would pay off handsoly.
It’s rather common business practice to acquire so core assets before a company goes public to elevate its valuation.
Only after going public would they consider selling non-essential assets.
Of course, there’s another scenario where, in order to spruce up financial reports and boost investor confidence before listing, so mislead by selling off core assets. Companies like these are generally fraudulent.
Teng You dia clearly does not belong to this category, as it has no assets to sell.
Its only option is to increase tangible assets.
On November 18, 2018, Teng You dia announced news to the public.
It acquired Clothes Warehouse No. 9 for 1.5 billion RMB in a total acquisition.
When the news ca out, the capital market remained quite calm, as both Tong Zelan and Shen Nanpeng are top players in the capital market.
They were collaborating to promote the IPO of Teng You dia, aiming for a valuation of 60 billion.
This inevitably required the inclusion of so tangible assets.
On the day the news was released, Zhang Wanyi held a press conference in Guangzhou to explain the significance of this acquisition.
The acquisition for 1.5 billion RMB, with 1.2 billion RMB as the investnt cost.
With only 300 million RMB in profits, it’s still aningful no matter how small.
Chen Pingsheng used a random amplifier once, fortunately yielding a fivefold return.
Adding up to the 1.5 billion RMB principal, he instantly had 3 billion RMB.
Although he was the sole investor in Clothes Warehouse No. 9, it was also Yao Anni and a group of people who helped to grow the business together.
All these early founders were given certain stakes, and could only cash out after the IPO.
Now that Clothes Warehouse No. 9 couldn’t go public anymore, it was rged into Teng You dia.
This ant that the dream of going public for all those senior managers holding stakes in Clothes Warehouse No. 9 was utterly shattered.
Chen Pingsheng also didn’t want to let down those who believed in him, so he released 300 million RMB as bonuses to Yao Anni and the corporate executives she led.
Many of whom were directly transferred from Tengying Group.
Yao Anni personally received a reward of 80 million RMB, while the remaining 24 executives shared 160 million RMB.
An additional 60 million RMB went to nearly a hundred mid-level managers.
Each roughly receiving a cash reward of 600,000 RMB.
Thus, everyone was happy; as for the grassroots employees, their situation remained as before.
They were not significantly affected.
After rging into Teng You dia, all store managers and upper managent had to start following the path of internet celebrity fashion bloggers as per Teng You dia’s requirents.
That is, full-scale live-streaming sales.
Teng You dia thereby directly gained 1,200 directly operated clothing stores, as well as over a thousand professional fashion hosts.
Thus, the corporate valuation soared.
On November 21, 2018.
Tenghui Departnt Store announced that it would sell all 138 Tenghui Departnt Store supermarkets located outside Beijing-Shanghai-Guangzhou-Shenzhen and Xiangjiang.
They set the price at 6 billion RMB, all packaged and sold to Teng You dia.
Realistically speaking, the supermarket business hadn’t been doing too well over the years, aside from the storefronts in top-tier cities, the performance of Tenghui Departnt Stores in other cities varied.
Selling these 138 supermarkets ant that Tenghui Departnt Store would henceforth focus developnt only in top-tier cities.
It also ant no more burdens too big to fail; upon the announcent, the stock price of Tenghui Departnt Stores listed in Xiangjiang soared.
Unfortunately, this money could not be multiplied through random amplifiers.
Mainly because he didn’t hold much stock in Tenghui Departnt Store anymore, only 5%.
The 6 billion RMB inco calculated into Tenghui Group, the future usage still needed to be determined.
With these two investnts, Teng You dia now owned over a thousand physical clothing stores, as well as more than a hundred super-large departnt supermarkets.
After completing these two investnts, the narrative strength of Teng You dia beca increasingly strong.
Of course, these two amounts of money didn’t just appear out of nowhere.
Teng You dia conducted internal financing, completed by the current shareholders together, totaling 80 billion RMB.
Chen Pingsheng still owned 35% of the shares, naturally contributing 28 billion RMB himself.
A typical example of moving funds from one hand to another.
Ultimately, everyone agreed that the 600 billion valuation of Teng You dia was too low.
It must be raised to 800 billion.
Otherwise, it wouldn’t justify the 75 billion spent on the acquisition.
Fine then… Chen Pingsheng reluctantly agreed to this suggestion.
He wouldn’t have objections even if it rose to 800 billion, as long as there were still fools willing to take over.
If no one took over, then they themselves would be the fools.
After Teng You dia completed these asset acquisitions, digestion would evidently take so ti.
Fortunately, these were all industries under Chen Pingsheng’s Tengying Group, projects born from the sa parent.
Integration wouldn’t be too difficult.
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