Chapter 335: billion valuation, Jiahe's new shareholder

"Mr. Liu, this is the investment agreement we have agreed with JD.com. You can take a look at it first."

Then Zhong Lifang handed a document to Liu Zhou.

Liu Zhou took the document and skipped the previous clauses. What he cared most about was how many shares he could get.

After just two pages, Liu Zhou found what he wanted to read.

According to the agreement between the two parties, JD.com was valued at US$1.5 million, and Zhoushan Capital invested million yuan to acquire % of the shares.

Seeing that he had obtained 20% of the shares, Liu Zhou nodded with satisfaction.

Although compared to JD.com's first round of investment, when Capital Today paid 10 million for 22% of the shares, Zhoushan Capital's investment this time is several times more expensive.

But this is the last chance to acquire so many JD.com shares. After this financial crisis, JD.com will usher in rapid development.

In future financing, Dong Ge’s shares will not exceed 10%, and will be divided among several investment institutions.

What's more, compared with JD.com's future market value, 30 million US dollars in exchange for 20% of the shares is not expensive at all.

Even if other investment institutions are introduced and the company goes public, Zhoushan Capital should still have at least 10% of the shares after dilution.

Ten percent of the shares will be worth at least tens of billions of dollars in ten years.

"How much additional investment did Today Capital make?"

"US$750 million for % of the shares."

"so little?"

“Capital Today is not an investment company with strong financial resources. In fact, in addition to the additional investment, Xu Xin is also preparing to introduce other investment institutions to Liu Qiangdong.

But because of our participation, Liu Qiangdong was also willing to accept our investment, so only the two of us participated in the investment in JD.com.”

Historically, it was Xu Xin who helped JD.com overcome this difficulty, and this time it can be said that Liu Zhou intercepted the opportunity.

In fact, Liu Zhou was somewhat famous in the investment industry, but his reputation was slightly affected by his later acquisition of Sina.

No matter what the original reason was, Liu Zhou's driving Duan Yongji away was like a cuckoo occupying the magpie's nest.

This is the most taboo for company founders. No one wants the company they have worked so hard to build to be taken away by others.

But after that, Liu Zhou has been concentrating on running Sina Group and Golden Harvest Group, and has never made any moves in the investment field again.

As several companies under Liu Zhou began to slowly move together, some people outside had a rough idea of ​​Liu Zhou's plans and were less averse to his taking over Sina.

Liu Zhou is also a major shareholder of Penguin, but he has always lived in peace with the founder and has a good relationship with him, and has always entrusted his voting rights to the founding team.

This is also the favorite investor of company founders.

So when he met Liu Qiangdong this time, he did not feel averse to Zhoushan Capital because of Liu Zhou's previous acquisition of Sina.

Liu Qiangdong is also a relatively strong person. After seeing that Zhong Lifang agreed to hand over absolute control of the company to the management team, he happily began to discuss investment matters with Zhong Lifang.

In fact, this is also one of the reasons why Liu Qiangdong has not been able to attract investment.

At this stage, investment institutions have always been the more powerful party. After investing in a company, they often interfere in the company's operations.

There are many benefits for a company to introduce investment, including obtaining development funds and some companies can even obtain a more standardized company operating model, but it is also often accompanied by a battle of wits and courage with investment institutions.

It is very rare for a company to entrust voting rights to a founding team like Liu Zhou did.

In the current financial crisis, when all investment institutions are being extra cautious, you still demand absolute control of the company. Coupled with various other factors, JD.com is not popular in the eyes of capital.

So when Liu Qiangdong saw that Zhong Lifang was willing to accept his conditions, he was also very enthusiastic about Zhoushan Capital.

Moreover, Dong Ge, who was already short of money, was afraid that Xu Xin's 750 million US dollars would not last long, so he was willing to let Zhoushan Capital acquire 3000% of the shares for 20 million US dollars.

In fact, Zhoushan Capital was sincere enough this time. In addition to not interfering in the management of JD.com, its valuation of JD.com was also quite decent.

The industry estimates that JD.com's valuation is around US$1 million to US$2 million, but then again, valuation is just valuation, and the actual value still depends on the investors' own views.

Moreover, Ali Taobao has been very popular in the past two years, and the c2c e-commerce model has been recognized by everyone. JD’s development strategy has always been controversial, especially its logistics strategy, which has been criticized by many people.

In addition, at this time of financial crisis, even if Zhoushan Capital insisted on valuing JD.com at US$100 million, it would not be too much.

This time, both parties agreed to value JD.com at 1.5 million yuan, which is considered to be a great respect for Brother Dong.

Brother Dong is an entrepreneur that Liu Zhou admires very much. He doesn't want to ruin his relationship with him, and a few million more is nothing to Liu Zhou.

What's more, compared with the future returns that JD.com will bring, Liu Zhou did not ask for an exorbitant amount.

"In that case, we, Zhoushan Capital, will hold 21.5%, and after the dilution of Capital Today's previous shares, plus the additional 58.5%, we will hold %, and Liu Qiangdong's team will still hold %.

This shareholding ratio is also relatively healthy, so I think Liu Qiangdong should be more relieved."

"Yes, you can see that he has relaxed a lot, and he wants to meet you in person. He is particularly interested in you because you both started from scratch and are about the same age."

"That's easy to say. You can arrange it. I actually want to meet him, too."

"Mr. Liu, why don't we do it during the signing period? This will save us from having to arrange time later. You two may both be quite busy later on."

"Okay, when will the signing ceremony for the investment agreement be held?"

"Liu Qiangdong is in a hurry and has set the date a week later, on the Lantern Festival."

"Life is pretty good." Liu Zhou said with a smile.

Since there was no problem with investing in JD.com, Liu Zhou couldn't help but ask another question:

"By the way, how is the repurchase of Penguin shares going?"

"We are still acquiring shares and we now own 8.6% of Penguin shares, which is just short of our previous 9.375%.

But Penguin's stock price has rebounded, and its market value has once again exceeded $10 billion."

"It doesn't matter. We will continue to acquire. Even if it exceeds 10 billion, it will be halved compared to our previous cash-out. This time, we will directly acquire 10%."

Liu Zhou cashed out his Penguin shares for $400 million in cash, and then reduced his shareholding to 6%.

Of the $2.2 million, Liu Zhou spent $1.2 million to acquire the Golden State Warriors and loaned $ million to Golden Harvest Group twice.

With 60 million US dollars left, when Penguin's stock price fell to the bottom, Liu Zhou arranged for Zhong Lifang to start buying back shares.

But even if Penguin's stock price falls to the bottom, its market value is still 80 to 90 billion US dollars, and 60 million US dollars can repurchase less than 1% of the shares.

So Liu Zhou used part of Sina Group's shares as collateral to borrow $2.6 million from the bank. This total of $ million, in addition to the $ million invested in JD.com, Liu Zhou planned to use the rest to buy back Penguin shares.

Taking into account the rise in Penguin's stock price, this money should probably be enough to increase Liu Zhou's stake in Penguin to 10%.

This will be the last chance to buy Penguin at a bargain price. Starting from the second half of 2009, Penguin Group will begin to develop in great strides and its stock price will continue to rise.

"Okay Mr. Liu."

After dealing with the investment in JD.com, Liu Zhou then focused on the investment in Jiahe.

Liu Zhou has contacted many investment institutions and finally decided on three.

Originally, Liu Zhou wanted to choose two of the three companies, but later Han Shanping expressed his hope that China Film could invest and take a small stake. The stake didn't need to be too much, just two or three points would be enough.

China Film Group is not here to take advantage. They will invest according to the agreed valuation. Most importantly, this is also to strengthen the relationship between China Film Group and Golden Harvest.

From now on, whether Golden Harvest is cooperating or needs help from China Film, it will be more legitimate.

In fact, to be honest, Golden Harvest took some advantage.

So Liu Zhou certainly had no objection to this. At the same time, he finally decided to choose only one from these three investment institutions, and now he is making the final contact with these three institutions.

Because the company was preparing to go public in China, Liu Zhou chose domestic investment companies as investment institutions.

Currently, Golden Harvest Group is on the rise and has acquired a Hollywood film company. Last year, its movie “The Martian” directly set off the market.

Therefore, investment institutions are very interested in Golden Harvest Group.

However, Liu Zhou's valuation of Golden Harvest was relatively high, which scared off some investment companies.

Finally, these three companies are all relatively strong, and they also recognize Golden Harvest’s valuation and are very interested in investing in Golden Harvest.

Compared to Liu Qiangdong's miserable situation, Liu Zhou's situation is much better. He is begging the investment company, while the investment company is begging him.

Those investment companies actually knew that if it were not for the need to go public, Jiahe would not need to introduce foreign capital at all.

Moreover, as the first film and television stock, Golden Harvest Group is still quite popular.

Liu Zhou, together with his negotiation team including Zhang Zhao and Yu Zhengjun, formally selected CITIC Holdings as the investor of Golden Harvest after negotiating with three investment institutions for several days.

Although CITIC Group will not complete its restructuring and become a wholly state-owned enterprise until next year, there is actually not much difference now.

CITIC Group started out as a financial company, and now its financial sector covers industries such as trust, insurance, banking, securities, equity financing, funds, and asset management.

A well-deserved financial giant.

The financial sector is just one of CITIC Group's business segments, and its industrial sector also involves real estate, engineering contracting, resources and energy, infrastructure, machinery manufacturing, and information industry.

CITIC, like China Resources, China Merchants and Poly, is a domestic giant, and its market capitalization has consistently ranked among the top 20 in the country.

Finally, after consultation with CITIC and China Film, Golden Harvest was valued at RMB 10.8 billion.

China Film invested 2.16 million yuan to acquire 2% of the shares, and CITIC invested 8.64 million yuan to acquire 8% of Golden Harvest's shares.

In other words, in this round of financing, Jiahe took out 10% of its shares for financing.

But in fact it can’t be considered as financing. This time Liu Zhou took out his own shares for the transaction.

If it is financing, the shares of the company's executives will also be diluted, and Liu Zhou doesn't want them to feel that they are taking advantage.

Therefore, the total amount of 10.8 billion yuan belongs to Liu Zhou personally and will not enter the company account.

The reason why CITIC and Golden Harvest negotiated for so long and agreed to such a high valuation for Golden Harvest and only took such a small number of shares.

This is because in addition to introducing strategic investment from CITIC Holdings, CITIC Securities will also be responsible for the underwriting of Jiahe Group's IPO stocks.

This time, Jiahe will put 25% of the company's shares into circulation on the market.

And these shares need to be diluted in equal proportions by all shareholders.

As for the number of shares and the stock issuance price, they have not yet been determined. After all, it will take some time to complete the listing process.

However, now that CITIC Group has been introduced to help, the time required to complete the process should be greatly shortened.

Jiahe Group was originally solely owned by Liu Zhou, but now a lot of shares have been distributed.

The executive team includes Zhang Zhao 5%, Zhong Lifang 5%, Gao Jun 3%, Zou Chongyan 2.5%, Chen Guofu 2%, and Zeng Jia 1.5%, totaling 19%.

Then Zeng Li owns 10%, Zhang Tong owns 10%, and now CITIC and China Film Group own 10% together, leaving Liu Zhou with exactly 51%.

The final listing requires a 38.75% dilution, so Liu Zhou will hold % of Jiahe’s shares after the listing, and will have absolute controlling rights.

If the shares held by Zeng Li and Zhang Tong are added, they still account for more than half.

Although Liu Zhou gave the shares to the two of them, the power to exercise the shares was still held by Liu Zhou on their behalf.

Therefore, Liu Zhou was not worried at all that the control of Jiahe would fall into the hands of others.

What's more, CITIC Group is only making a financial investment. It has been agreed that after the stock lock-up period, they will sell the stocks to less than 5%, or even sell all of them slowly.

Unlike Poly Group, they are not very interested in the entertainment industry, so Liu Zhou does not have to worry about inviting a wolf into the house.

In fact, it is already a lot to still hold nearly 40% of the shares after the listing. It is very rare to have someone like Ding Lei who has a strong desire for control and holds more than half of the shares of NetEase.

After most companies go public, the founders hold less than 20% of the shares. Those that exceed 20% are relatively rare, and those that exceed 30% are even rarer.

Like the two giants Penguin and Ali in the original time and space, Jack Ma and Pony Ma hold less than 10% of the shares. The reason why they can still be the richest people is because the market value of these two giants is too high.

What’s more, what Liu Zhou values ​​most is the controlling rights of Jiahe Group. Even with the current shareholding ratio, this controlling rights will not fall into the hands of others.

As for the wealth that Jiahe Group brought to Liu Zhou, he really didn't care.

Compared with Sina Group and Zhoushan Literature in the future, Golden Harvest Group will have the lowest market value.

In addition to holding 10% of Penguin shares and 10% of JD.com shares, Liu Zhou may become the richest man in the world in no time.

Even ten years later, Liu Zhou will still be a strong contender for the richest man.

With the investment in Golden Harvest officially settled, the fact that Golden Harvest Group is about to go public could no longer be concealed.

First some financial media broke the news, and then other media quickly followed suit.

This immediately caused a huge sensation in the country.

(End of this chapter)