Chapter 140: Chapter 101: Breaking Surface
Hearing Zeppelin’s words, Yan Fei almost threw down the document in his hands, angered by the audacity of Green Pine Capital. His Weight Loss Cookies were generating a sales volume of at least 100 million yuan per day domestically, amounting to no less than 36.5 billion yuan a year.
Even though Yan Fei had Lu Pingping desperately inflate the cost of producing the Weight Loss Cookies, the gross profit margin announced was still a horrifying 50%. In other words, on paper, Yan Fei was netting at least 18.25 billion yuan a year, close to 3 billion US dollars when converted.
Moreover, the actual cost of the Weight Loss Cookies was nowhere near as high, and its core ingredient, the Slimming liquid, hardly counted as a cost. The only significant expenditure was the labor cost when Yan Fei was making the Slimming liquid. Thus, the pure profit margin of these cookies was at least 75%, which means that Yan Fei was making pure profits of at least 27.5 billion yuan a year, or more than 4 billion US dollars when converted. These were pure profits, after-tax income that, if made public, would shock everyone.
Yet Green Pine Capital aimed to secure a 40% stake in Dream Technology with just 2 billion US dollars, which was basically like trying to rob Yan Fei of his money. What’s more, this wasn’t even for an outright purchase of shares but a capital injection, meaning the money would go into Dream Technology’s registered capital, and Yan Fei couldn’t pocket it directly. Green Pine Capital would also have its own 40% claim on this money. So for an actual investment of 1.2 billion US dollars, Green Pine Capital was obtaining a 40% share of the golden goose that was Dream Technology.
It should be known that these data were only generated from the domestic market in China. The vast International Market was yet to be factored in. Once the Weight Loss Cookies were to start selling internationally, even if Yan Fei didn’t raise the prices, sales would increase to at least five times the domestic foundation, with all relevant figures quintupling. This meant annual pure profits could reach as high as 127.5 billion yuan, which converted to over 20 billion US dollars. Should Yan Fei increase his prices for overseas sales, his yearly profit would be even more tremendous.
Green Pine Capital was preying on Dream Technology because it was a domestic company, lacking the capability to operate in international markets and the experience in international trade. They moved in early, using their fame and the international market to tempt Yan Fei and aim to take a big slice of Dream Foods on the cheap, truly playing a clever game. However, they had underestimated Yan Fei’s resolve, and thus their attempt was destined to end in disappointment.
Yan Fei didn’t look at the document in his hands; he tossed it back to Zeppelin and said, “Mr. Zeppelin, I’m sorry, but as I’ve already said, your side represents an American investment bank. Given the current relations between the United States of America and our country, we will not accept any capital injections from America.”
Zeppelin gave a smile and said, “Mr. Yan, don’t be so absolute! We are all in business to make money. Given that we’re all here to profit, why can’t we cooperate? Your Weight Loss Cookies are great, they should belong to all Humankind. Why should we be confined by the barriers between China and the United States? Together we can bring the Weight Loss Cookies to the entire World, benefiting humanity while we profit in the process. It’s that simple, isn’t it?”
Suddenly, Yan Fei laughed out loud. Seeing everyone looking at him, he quickly said, “Excuse me, I just couldn’t help but laugh at the joke Mr. Zeppelin made. Don’t you find it funny?”
Seeing that everyone seemed puzzled, Yan Fei said seriously, “When China needed your chips, you wouldn’t sell them to us; when we needed your software, you discontinued service without notice. When did you ever consider that these products also belong to all Humankind? So when I heard Mr. Zeppelin remark that my Weight Loss Cookies belong to all Humankind, I thought it was funny, almost as if he were being ironic about America’s actions.”
Zeppelin, having been ridiculed by Yan Fei, turned red-faced but was unable to offer a rebuttal. After all, since the new President took office, American foreign policy had radically changed in the past few years, acting indecently without disguise, almost flaunting it, making it widely known. In essence, they were saying they could do certain things that others couldn’t, and if the others tried, they’d be punished. With the new American policies publicly exposing their hypocrisy, these sanctimonious American enterprises were no longer in a position to morally persuade others.
Forcing himself to remain calm, Zeppelin said, “Yan, we were talking about a business collaboration that’s mutually beneficial, so you shouldn’t make fun of me. I believe that pure business should not be overly mixed with politics; it’s not right.”
Yan Fei replied sternly, “Didn’t the US Government restrict China’s enterprises from investing in America in the name of national security? Didn’t they politicize what should have been a simple business cooperation? So why is it suddenly ‘not right’ when it comes out of your mouth? I’m sorry, but for our national security, Dream Foods will also refuse any investment from American enterprises.”
Zeppelin exclaimed loudly, “Yan, that’s unfair. When the US Government made that decision, Green Pine Capital actually opposed it strongly; we stood with China. But the President insisted, and we were helpless. So you can’t reject our investment; we are on the same side.”