Translator: Nyoi-Bo Studio Editor: Nyoi-Bo Studio
For the past few days, the extravagant manner that Xing Hai Technologies had been spending its money caused netizens to become greatly excited. However, there were also many who thought, Where did such a large amount of money come from?
Could Xing Hai Technologies really take out tens of trillions in cash? Apologies, but the company really could afford to take out that amount of cash. A famous national consultancy organization, Zero Consultations, analyzed the business operations of Xing Hai Technologies in detail and published a rather credible report. “The three physical products created by Xing Hai Technologies up to the present date had brought considerable profit to the company. The total sales volume of the Wa-wah robot has reached 48 million units. The average net profit per unit is $1,443. The total sales volume of the Little Star learning machine has reached 56 million units. Half of those are Educational Machines with a net profit of $180 per unit; half were direct sales from the company which brought in a net profit of $6,600 per unit. The total sales volume of the Bang Bang robot has reached 2.8 million units. The average net profit per unit is $15,000. As most users have chosen to pay in installations, the current average net profit is estimated to be $5,000. By combining all the above profits, the total profits of Xing Hai Technologies generated from its three products since its establishment to the present date is 27.31 billion.”
The report continued, “In addition, Xing Hai Technologies had also licensed a basic version of the technology in their cleaning robots for use in Da Mi Company’s Love Mi robot. Xing Hai Technologies has collected an estimated licensing fee of 8 billion. Besides this, its subsidiary company, Xing Hai Investments, holds a 50% stake in the shares of Youying Motors and Bi Long Technologies. It also holds a stake of 25%, 36%, and 10.5% in the shares in the listed companies, Ling Feng Jing Mi, Zhongxin International, and Purple Ray respectively. Xing Hai Technologies is a shareholder in more than 20 companies. Its investments have brought profits of billions to Xing Hai Technologies. There are other investments, but overall, the money sunk into those investments exceed the income generated from them. The cash flow expenditure exceeds 6 billion. What costs the most for the company is its various development projects and the scattered manner that they are carried out. Xing Hai Technologies has 28 development plants in the country and has entered into 11 major sectors. Currently, all its development plants have been constructed and are ready for use. It has invested more than 5 billion into each development plant on average. More than 140 billion has been sunk into its development projects! Including the current construction of its headquarters building, labor costs, administrative and office equipment costs, their expenditure has exceeded 30 billion. The company has also purchased three supercomputers at 500 million each!”
The report went on, “Despite such reckless spending, the company has not spent all their profits! Excluding all expenditures, Xing Hai Technologies is still left with an estimated cash flow of 51.1 billion. Moreover, their commercial bank has approved a 50 billion credit limit for the company. Thus, the total amount of cash that it can take out is in the hundreds of billions. This sum of money is certainly enough to sustain the ‘Star Alliance’ initiated by Xing Hai Technologies to allow the company to proceed full steam ahead with their ‘Star Cloud Operating System.’ Our analysis ends here. Lastly, we offer our felicitations to Mr. Chen: Wishing you a long and prosperous journey as you proceed in your headstrong manner.”
From this, one could see that Zero Consultations was beyond speechless with Xing Hai Technologies’ business development plan.
…
In the office, after reading this analytical article specially written by Zero Consultation, Chen Jin requested the Finance Manager Zhu Yuefang to come over. Chen Jin asked her, “Manager Zhu, according to this article, the company is left with a cash amount of about 50 billion. Is their analysis accurate?” He typically made infrequent trips to the company and did not ask about the company’s financial state every day. He simply had an estimated range in his mind.
“I’ve seen that article too. Compared to others, it is more accurate.” Zhu Yuefang nodded. “The funds that we have left, according to our accounts, is 56.36 billion. I will inform you immediately if it drops below the safety line of 50 billion. And also,” She added, “The leader of the commercial bank just gave me a call. He said that the bank has increased the credit limit of our company from 50 billion to 100 billion. We are free to withdraw this amount any time to use it for our business growth.”
“100 billion?” His mouth dropped open. “This is not the same as increasing the limit of a personal credit card from $30,000 to $50,000. It’s a direct increase of 50 billion! And it’s simply done with a phonecall to notify us?”
“We would definitely have to sign a new contract to put the new credit limit into effect. The question is whether we need the new limit.” Zhu Yuefang explained, “The introduction of the Little Star learning machine in the market had brought about huge cash flows for the company. The worry that we had about our insufficient funds was quickly put to rest. Hence, we’ve never really touched the 50 billion credit given by the commercial bank. The most that we have withdrawn at any point in time is only 500 million. So the leader of the bank has called to remind us of this. They hope that our company can expand at a faster rate and start creating more big projects. This means that we might draw on a larger credit amount. It would put great pressure on him in terms of his business performance if the money is not moving.”
Chen Jin was exasperated. Pressure in terms of business performance? The leader of the commercial bank was faced with this kind of pressure too? After some thought, he said, “I predict that the company is about to spend a large amount of funds. How about this, if the cash reflected in our accounts dips below 50 billion, we’ll draw on our credit limit with the commercial bank. We’ll use as much of the credit as we can. We can repay the principal when we have replenished our cash funds.” The interest was not too high anyway.
Zhu Yuefang nodded. “Yes, President Chen.”
…
After getting a clear explanation of the company’s financial state, Chen Jin received some phone calls in succession.
One of those was from his aunt, He Jia. She asked in a gentle and reasonable tone, “Little Chen, your company seems to have taken some big actions? You must have spent money in many areas. Do you have sufficient funds? I can lend you more money for investment to ease your financial pressure.”
“How much are you talking about?”
“1 billion.”
Chen Jin staggered back in shock. He asked, “Will you be putting it in Xing Hai Investments or taking a 10% annual income?”
He Jia smiled, “Put it in your investment company. I believe in the skills of your traders as well as the future of Xing Hai Technologies.”
“Ok.”
After a few moments, Chen Jin received a call from Brother Ze. That was right. It was that Brother Ze whom he had been acquainted with for only a short time. “Brother Chen, your company must be in need of a great amount of funds recently… My father really wants to invest in your company. He wants me to ask if your company would welcome his investment?”
“What kind of investment?”
“Investment as a shareholder, is that ok?”
“Then, I would have to pass. I offer two alternative investment pathways. One is a 10% annual income on the investment principal and the other is to put the funds into Xing Hai Investments… Your father can choose of them.”
“I understand.”
After two hours, Wang Zeyu called again. “Brother Chen, my father chooses both options. 3 billion for the annual income option and another 2 billion to put in the trust of Xing Hai Investments… A total investment of 5 billion, is that ok?”
Pffft!
Chen Jin almost spit out water in surprise. “Ok!”
For the next few days, hearing that Xing Hai Technologies had opened up two investment pathways, tons of people called Chen Jin with their desire to invest. This was despite the certain investment risk that existed in addition to the rate of annual income which was not particularly high. He received a combined 20 billion in personal loans and 30 billion in investment funds. A total sum of 50 billion.
Then, he switched off his mobile and took out the SIM card to block all phone harassment. Regarding this matter, Chen Jin could only sigh. “You create opportunities as a person of success. Countless investors will come crashing towards you likes the waves of an ocean, and countless idiots will hope that you lift them up to the skies. This is the trendsetter.”