Chapter 614: Generous, Countercyclical Investment

"Of course we can handle it! If we can't even handle the new round of price war, Charming Semiconductor will really be defeated by others.

Now I will talk about the second idea, which is countercyclical investment.”

Countercyclical investment is familiar to everyone here. The most typical one is that S star, who relied on his deep pockets to use price wars to force his opponents into a corner, while at the same time quietly expanding his production scale.

When the dust of this round of price war has settled, the price of memory chips has also fallen to the floor. Just when the next round of business cycle arrives, S Star can unleash its production capacity to its fullest, while other competitors can only look back and sigh.

Why can’t others make countercyclical investments?

This is partly due to technical strength. If you don’t have leading technology, you won’t have leading products. If you can’t lead the consumer trend, what can you do with such a large production capacity?

There is another aspect. Countercyclical investment requires sufficient funding. However, most manufacturers that have gone through price wars are considered good if they have not gone bankrupt. Where can the huge funds be invested in building factories? This is the difference between thinking and doing it.

"Mr. Hu, I am confident in technology, especially in the field of flash memory. We can definitely lead the world. However, if we follow this plan, our financial pressure will be too great."

Yan Hanzhang is very aware of the strength of Charming Research Institute. Under the leadership of Yang Chenglin and Sakamoto Takuya, it has embarked on a unique research and development path in both mobile device memory and flash memory.

At this point, Yan Hanzhang is not worried, he is worried about financial issues.

Charming Semiconductor is now under pressure from North America, and its shipments have dropped significantly. It is already facing pressure to survive. If it wants to make countercyclical investment, the funds required will be in tens of billions, which is very huge.

"Yes, Mr. Hu, even if Charming Semiconductor carries out a new round of capital increase and share expansion, the funds we can come up with will not meet the requirements.

We all know that you, Mr. Hu, are very wealthy, and it is not a problem to spend tens of billions. But if you really have to pay for it alone, won’t it be difficult to deal with the equity? "

Chen Hao immediately picked up the conversation. It was not that he was stingy, but that it involved changes in the company's equity. No one would be insensitive.

Yes, Charming Semiconductor is currently encountering great difficulties, but the difficulties will eventually pass. If they were not optimistic about this company at that time, no one would invest. Now that they have invested, under normal circumstances, no one would want the company

There have been too many changes in the equity.

Because the amount of financing this time must be large, large enough to change the status quo.

Gao Mingkang said nothing, but hoped that Hu Yang could give an explanation.

"Who said I have to invest alone? No, Manager Liang is still here. I'm considering letting Hi-tech Venture Capital come forward.

At the beginning, my original intention of establishing this fund was to support the development of the domestic semiconductor industry. Now that Charming Semiconductor is in urgent need of funds, Hi-tech Venture Capital will naturally not stand idly by.

As for the financing method, it is safer to issue corporate bonds. Other financing methods will either dilute your equity or be difficult to obtain approval, so they are not suitable."

Hu Yang will not cause internal discord at this time. He has no idea about the current equity situation, so he will not consider ways to increase capital and expand shares.

He has a better way.

When Liang Yu heard this, his mouth moved, but in the end he remained silent.

"Manager Liang, you have heard Mr. Hu's suggestion. Do you have any problems over there?"

Chen Hao noticed Liang Yu's expression and asked.

Liang Yu thought for a while and said:

"Mr. Hu, the fund currently has sufficient funds. However, I have recently received a lot of applications, all of which are rising stars in the semiconductor industry, and some of them have passed the evaluation."

This statement was very euphemistic, but the meaning was very clear, that is, if all the funds were given to the Huijia Department, then Liang Yu would not have any spare energy to support other companies with potential.

"Mr. Hu, it seems that Hi-tech Venture Capital does not have sufficient funds, which is a bit difficult to deal with. In addition, even if it can come up with this funds, if the debt ratio is too high, it may be difficult for the company to bear it."

Gao Mingkang thought of other aspects, that is, the issue of corporate debt ratio.

When running a business, you must consider costs. Needless to say, the benefits of operating with debt are obvious, but the disadvantages are also obvious, that is, the costs are very high.

If Charming Semiconductor's current profitability is very strong, then it won't be a big problem. But in the face of pressure from North America, corporate efficiency has declined, and it is indeed unaffordable to increase excessive costs.

"Haha, you are talking one by one. It's like a machine gun speaking one sentence after another. I can't even hear you clearly."

Hu Yang laughed and made a joke.

"Let's take it one step at a time. First, let's talk about the funding issue. Manager Liang, you don't have to worry about funding. I have decided to invest another 20 billion yuan in the Hi-tech Venture Capital Fund in the name of Huijia International Investment.

."

At present, the funds on Huijia International Investment's account are divided into two parts. One part is in Hong Kong, with 3 billion Hong Kong dollars. The other part is in the mainland. After paying Shenzhen Jinko 100 million yuan, there is still 64.184 billion yuan left.

If Hu Yang invests another 20 billion yuan in the Hi-tech Venture Capital Fund, Huijia International Investment will still have 44.184 billion yuan and 3 billion Hong Kong dollars left on its account, which is still very abundant.

"Mr. Hu, don't you think about this? After all, the rate of return you invest in high-tech venture capital funds will not be very high, it is not cost-effective."

Everyone was getting along well, so Chen Hao quickly reminded them.

"It doesn't matter, it's better than leaving it in my account all the time."

Hu Yang nodded towards Chen Hao, and then said nonchalantly.

For him, money is valuable only when it flows, and there is no point in keeping it in the account.

The funding issue has been resolved, and a stone has been lifted from everyone's mind.

However, the cost of financing is still quite stressful.

"Next, let me talk about financing costs. Everyone must be aware of the current stock price of Charming Semiconductor. As of the last trading day, the stock price has fallen to near the issue price, closing at 3.99 yuan."

When Charming Semiconductor was listed, the issue price was 3.80 yuan. Now, isn’t the price about to fall below the issue price?

Even those people who didn't usually care much about the company's stock price didn't look very good after hearing this.

Unexpectedly, Hu Yang paused for a moment and then continued: "I estimate that it will soon fall below the issue price in the next two days, and even the integer mark of 3 yuan will be broken sooner or later."

In other words, is it possible that Charming Semiconductor’s share price may fall to 2 yuan or lower?

"Then our losses will be huge! Mr. Hu, do you think we should support the market later?"

Chen Hao calculated this carefully. If it continues to fall, the company's market value will be very ugly.

"I was about to talk about this issue. This time it is because the company's fundamentals have undergone fundamental changes, so the stock price has completely gone bearish. I estimate that the company's stock price will gradually stabilize after falling below 2 yuan.

Everyone, if the company's stock price falls below 2 yuan, I hope to carry out stock buybacks. I am confident that as the company's fundamentals improve, the company's stock price will return to the upward channel. If we buy stocks at a very low position

Buying back is equivalent to locking in the premium of the next financing in advance.”

By repurchasing shares and then canceling them, the value of each share will naturally increase.

This is not the point. The point is that as the company's fundamentals improve in the future, the premium for financing will also increase.

On the basis of not affecting the interests of major shareholders, the surplus obtained through this operation is enough to offset the financial expenses in the next three years.

This is Populus euphratica’s plan!

"Hiss... This idea is very bold, but it may succeed."

Yan Hanzhang and others are not engaged in finance, but after spending a few minutes, they can still understand what Hu Yang means.

To put it bluntly, it means reducing shares when the stock price is very low, and then issuing additional shares at a premium when the stock price rises.

After reduction and expansion, the shares held by major shareholders remain basically unchanged.

"Have you figured it all out? If you have no objection, just do it. Manager Liang, when you go back, get a charter and discuss it with Mr. Yan. What I mean is that the financing amount provided to Charming Semiconductor this time is 30 billion yuan.

.

Hi-tech Venture Capital can purchase 20 billion yuan of bonds from Charming Semiconductor, and there are still 10 billion yuan. Mr. Yan, you can find a way to get a loan from the bank. The province and city have agreed to the loan, so it should not be a big problem."

Even if I have contributed 20 billion yuan, the support promises promised by the province and city should be fulfilled.

Based on Hu Yang's understanding of Qi Xiangmin, there really won't be any changes in this matter.

"Okay, Mr. Hu, I remember, I will give the highest priority to the financing of Charming Semiconductor."

Liang Yu didn't say much. Hu Yang had already used his own money to replenish the fund, so he just had to follow the instructions.

Yan Hanzhang also said:

"Mr. Hu, I will implement the issuance of corporate bonds and loans as soon as possible. In addition, I will come up with a plan within a week to strengthen research and development and build new factories."

Having a huge amount of money is not just to keep it in a bank account and earn interest. The money must be spent, and good steel must be used on the blade.

Hu Yang nodded, everyone added some details, and today's meeting ended.

Speaking of which, whether Gao Mingkang or Chen Hao, they have cooperated with Hu Yang for so long and have a tacit understanding. Otherwise, how could a bill involving tens of billions of yuan be passed so quickly?

"Mr. Hu, Mr. Gao, let's have dinner together. Look, it's getting dark."

Yan Hanzhang and Liang Yu had to work overtime at night, and as soon as the meeting was over, they ran faster than a rabbit.

Hu Yang and Gao Mingkang walked at the end calmly. As soon as they arrived downstairs, they saw Chen Hao standing there and not leaving.

"Eating? Okay, let Director Chen spend the money once."

Hu Yang hesitated for a moment. If there was no need, he really wanted to go home and spend more time with the little guy.

But Chen Hao has to give him face, so why should he be Chen Jialin’s father?

Gao Mingkang did not refuse, so the three of them came to a seafood restaurant.

"Mr. Hu, I think it's better not to keep an eye on the fruit company too closely. I know your primary target now is Wesley, and fighting on two fronts is a taboo."

The food and wine were served, and the three of them ate, drank, and chatted.

Chen Hao was chatting and gossiping when suddenly he said this sentence.

"Dr. Chen, it's not that we are keeping a close eye on Charming Electronics, but the fruit company is keeping an eye on Charming Electronics. Nowadays, it is very difficult for Charming Electronics' products to enter North America unless they give up cooperation with Charming Semiconductor.
To be continued...