Chapter 517 – Heard of Self-assembled PC?
After Feng Yu left, Liu Chuanzhi spoke to Hong Kong Lenovo’s top management, including the fellow founders of Lenovo. He wants to know if Feng Yu had bribed any of them to get information about Hong Kong Lenovo’s plans of being listed on the stock exchange.
If Feng Yu knew about this, then he would surely offer a lower buying price and Lenovo would lose out in this deal.
But after Liu Chuanzhi’s investigation, he noticed that none of the senior management and the other founders had leaked this information. He felt that these senior management staffs will not accept Feng Yu’s bribes. If Feng Yu were to bribe someone in Lenovo, he should be bribing Liu Chuanzhi.
Liu Chuanzhi called Beijing and reported to his leader. The leader found out that Feng Yu owned Wind and Rain brand and was the major shareholder of Songjiang Motors.
That means Feng Yu had lots of money. Feng Yu had shown his eagerness in buying Lenovo’s shares. They should be able to sell the shares at a high price to Feng Yu.
Of course, the leaders told Liu Chuanzhi that the shares cannot be sold to Feng Yu. Feng Yu can only invest, and their shares will be diluted. But the shares value will not be lowered. If Feng Yu invested more, their share prices would increase.
But the leaders had not considered Liu Chuanzhi and the rest of the founders. Their shares will also be diluted. The senior management and founders were the ones who had built Lenovo.
Liu Chuanzhi and the rest had requested for the company to be restructured and wanted shares to be issued to the employees. CAS had agreed to this request. But the stocks that were given out were not a lot. Although, if the shares were based on the market value, it was considered a considerable amount. But there were still much senior management complaining to Liu Chuanzhi that the company had issued too little shares.
Look at those private companies’ bosses. They were not as capable compared to them, but they had taken loans to start their businesses. Now, they are earning more than the senior management staffs.
With the private companies as a comparison, the senior management staffs felt unbalanced. Once they started to have such thoughts, their attitude will change. This includes Liu Chuanzhi. He had wondered if he had requested for too little shares. His earnings were too small compared to the effort he put into this company!
But no matter what, Liu Chuanzhi will never leave Lenovo. This was the place where his dream started. He firmly believes that with his contribution to the company, he will be getting more shares in the future.
……
“Manager Feng, please take a seat. I had reported to my higher ups, and they said that you can invest in the company. However, they will not sell the shares of the company to you directly.” Liu Chuanzhi said.
Feng Yu has already thought of this. Someone who had confidence in the company would never sell his shares before the company was listed. But it was common for companies to look for investors before they listed their companies. This was why Feng Yu was not surprised when Liu Chuanzhi said this.
“Then Chairman Liu, how much can I invest and how many shares will I get?”
“50 million for 18% of the shares.” Liu Chuanzhi looked at Feng Yu.
“Chairman Liu, are you joking with me? The total worth of both Lenovo companies was not even 180 million RMB. I am investing 50 million RMB, and I should be getting at least 21.7% of the shares. How did you get this 18% stake from? How did you do the calculations?” Feng Yu asked.
Feng Yu knew that the other party will undoubtedly increase the prices and he must not agree to it immediately. Furthermore, 18% of shares of the company were too low. Since the other party was willing to let him own so many shares, there should not be a problem if he were to ask for more.
In Feng Yu’s past life, CAS was also not the controlling shareholder in Lenovo. CAS was only the biggest shareholder. That means CAS does not need control over Lenovo.
Feng Yu also wanted to test if he were to offer an extremely high amount, will CAS be willing to sell their shares to him.
Feng Yu also felt that it was impossible for him to own the controlling stake of Lenovo immediately. Liu Chuanzhi and the rest will never agree. But it should not be a problem if he were to be the second biggest shareholder of this company.
“Manager Feng, I know that both companies do not have such high market value now. But our companies still own lots of technology patents, and we have lots of talented staffs. Also, we still have an unevaluated project, which is our PC project. This is why we think that 50 million for 18% shares is reasonable.” Liu Chuanzhi slowly explained.
“Oh? Doesn’t Lenovo’s PC project had been in existence for quite some time? I had told you that I had bought a Lenovo computer back in China.” If Feng Yu were in the shoes of Liu Chuanzhi, he would felt that this price was too low. 50 million RMB should get at most, 10% shares of the company. This was because Lenovo’s PC businesses will be the company’s cash cow in the next few years.
But Liu Chuanzhi does not know that PC would be so profitable, and Feng Yu was not so stupid to tell him this. Instead, Feng Yu pretended that he could not accept such a low percentage.
“This is different. In the past, our focus was not on the PC business. But we will set up our PC division to focus on this aspect. This business will bring in lots of profits for the company and will also yield high dividends for the shareholders.”
“PC division? Do you have the related patents? Can you produce PC parts? I guess what you all are doing is to import some motherboards, chips, hard disk, etc. and then assemble it yourself. You will then add in a Chinese language card in it and call it your own products. Am I right?” Feng Yu smiled and asked.
In Feng Yu ‘s previous life, many people had mocked Lenovo for outsourcing 90% of the PC parts and then get a factory to assemble them. Only the exterior designs, configuration, and the software were done by them.
The Lenovo now was very poor, and it was impossible for them to produce these parts. That means the production cost of a PC will be outrageously high. Lenovo will also not be able to engage in price wars with the other companies, and it would be impossible for them to control the Chinese and Asia market.
Liu Chuanzhi heard what Feng Yu said and turned red with embarrassment. He did not expect Feng Yu to know about this. But when he thought about the business Feng Yu owns, and he had also used a computer before, it should be normal for him to have some knowledge about PC.
“We will look for factories to manufacture parts for us. As for the patents, we will purchase the rights to use them. This way, the cost will be lowered, and our products will be more competitive.” Liu Chuanzhi tried to argue.
Feng Yu smiled and asked: “Chairman Liu, have you heard of self-assembled PC?
After the year 2000, PCs will enter almost all households. At that time, the prices of the laptop were still very high, and desktop PC were the optimal choice for everyone.
During that time, other than the companies and government agencies, most of the students and families will go to the electronic retail complexes to get someone to assemble a PC for them. They just have to tell the shop owner the parts and specs they wanted, and the shop owner will charge them accordingly.
A self-assembled PC was cheaper than a branded PC by a few thousand RMB. Although the branded PC offers warranties, the shop also provides after-sales services. In fact, the self-assembly PC shops offered better customer services than branded PC companies.
But at this time, there were no self-assembled PC. This was because there were a lack of skilled technicians in the market and these computer parts were delicate. Now was different from the future where many university students and even secondary students knew how to assemble their own PC.
Liu Chuanzhi paused for a while: “What did you say? Self-assembled PC?”