Chapter 168 - Completion of the first step
The money earned from selling the light industries machinery and technologies, the profits from this period of humidifier sales and even the profits from Tai Hua Food Processing Factory were taken out by Feng Yu to pay for the motorcycle production lines and technologies.
These things had cost Feng Yu a few million Rubles. However, Feng Yu was not at a losing end. When converting to shares, he was able to get almost 10 million Rubles with of shares. In the end, Feng Yu still made some profits.
Feng Yu and Li Mingde signed a preliminary letter of intent. When the production lines arrive at Bing City, they will sign the formal contract. Fu Guangzheng heard the news and rush over to Bing City. If the Machinery Company starts the production of the motorcycles, there will be more profits. How could he allow his shares to be diluted?
It’s only Feng Yu contributing some machines and technologies and the Bing City Government providing a plot of land and factory. The Fu family have money, and he could use cash to prevent his shares from being diluted!
Sitting in Feng Yu’s new office, Fu Guangzheng relaxing and drinking tea.
“Brother Feng, you are too smart. If it wasn’t for your news last time, my 2nd uncle might be suffering a great loss. He managed to sell off his properties in Japan. If not, he might be stuck with those properties.”
The bursting of Japan’s property market bubble was brought forward. It should happen at the end of the year and its only October now.
The stock market was the same and had taken a plunged. Japanese Yen was as what Feng Yu predicted. It continued to rise.
Feng Yu’s forecast of Japan’s economic situation had shocked the Fu family. They really believed that Feng Yu had relationships with some senior leaders. Feng Yu’s small trading company does not have any analyst and how could he be so accurate with the market predictions?
At the same time, Fu Rongjin provided more funds for Fu Guangzheng to buy China shares. He chose to believe in Feng Yu. China will have its own stock exchange soon and the value of the first few listed stocks would sky-rocket!
“Brother Fu, this is a win-win situation for the both of us. If it wasn’t the help from your family, I could not get a big loan from the banks. This time, you also invested a lot right? Don’t worry. You will get back profits a few times of your capital within a year!”
Feng Yu was calm. He had analyzed China’s economic situation. Although his investments in the stocks were in a significant amount, it was nothing compared to the vast market. There should not be much effect on the trend. Even if it did, it was also a good thing.
“Hahaha, I believed you. Knowing you were the best thing in my life. My status in my family is raising and now even if my father were to pass on his business to me, I would not take it. I want to be in China. This is a gold mine.”
Since Fu Guangzheng bought the used luxury cars from Feng Yu and then invest in Bing City’s Machinery Company, followed by the humidifier sales, his status in his family had changed, and his earnings were increasing.
Last year his brother’s company was listed and was worth 100 million. At that time, his assets were only worth less than 10 million. Now, his shares in that Hong Kong’s sales company and Bing City’s Machinery Company were worth the same value as his brother!
He could easily overtake his brother in 1 to 2 years’ time. He had considered taking over his father’s company, but after some considerations, he felt that he was not suitable. His elder brother was a better candidate to take over his father. The jealousy he had in the past was gone when his own business got better.
Hong Kong is a small place. If it weren’t for its location and the help of the British, it would not have its success now. How big is China? Fu Guangzheng had just invested 10 million, and he could get back his capital in a short period of time, and he will continue to gain profits in future.
China under the Great One, was developing its economy and increasing its people and country’s income. There will be lots of opportunities to earn money. As such, he was not interested in his family’s business.
Furthermore, after he expressed that he would not fight with his brother to take over their father’s business, his relationship with his brother improved. His father also treated him better and even gave him a sum of money privately to buy China’s stocks.
His father even offered to give him more money when he knew that Fu Guangzheng was going to increase his investment in the Machinery Company.
This trip, Fu Guangzheng still had another task. The humidifiers were manufactured in Bing City and then transported via trains to Shenzhen and then transported to Hong Kong.
This route was too long and time-consuming. The transportation charges were not low also. The Fu family wanted to ask if Feng Yu had any intentions to set up a branch factory somewhere nearer to Hong Kong solely to manufacture humidifiers!
Feng Yu did consider this idea before. But it was not the time yet. He was waiting for the development of the bladeless fans. Once the bladeless fan was successful, he would set up a branch factory in the south since the manufacturing facilities were cheap. If the Motor Factory and the Aviation Factory disagree with this, Feng Yu could also use this as an excuse to break up their partnership!
Fu Guangzheng was asked by Feng Yu, and Feng Yu’s reply was to wait. Wait for 1 more year. He will set up a branch factory in Guangdong. He will also take back the distribution rights for Eastern Europe. The Motor Factory and the Aviation Factory would most likely agree to this as it was a matured market.
Fu Guangzheng nodded. The Fu family was worried that Feng Yu would take back the distribution rights. Although they had signed a 10-year contract, the contract states that Tai Hua Trading had the final say. The penalty for breaking the contract was not a considerable amount. Feng Yu could ditch the Fu family anything he wants, and there will be lots of other businessmen queuing up to partner with Feng Yu. These businessmen would not even mind helping Feng Yu pay the penalty.
Feng Yu only wants to take back the distribution rights to Eastern Europe. The Fu family would not object to this. Base on location, transporting the humidifiers from Bing City to Eastern Europe was more cost-effective.
The City had wanted to publicize this motorcycle project during the contract signing ceremony, but they suddenly found out that the person that would be signing the contract was not Feng Xingtai but Feng Yu. They could only let the reporters from the TV stations to take a few shots.
Feng Yu’s excuse was that these machines and technologies belong to his family and his father was willing to put these shares under his name. Furthermore, Feng Yu was authorized to act on behalf of his father and the Machinery Company’s higher management were all used to this.
However, Fu Guangzheng was deep in thoughts. Could this be as simple as what Feng Yu said?
After some adjustment, the Machinery Company's shares are reclassified. The main shareholder was still the Bing City’s government. But their shares had become 40% now from 70%. Feng Yu owns 20%, Feng Xingtai owns 10%, Fu Guangzheng owns 16%, and the Aviation Factory owns 14%.
The Aviation Factory was under the management of Bing City’s government. However, it was complicated. The military, provincial government and some ministries had influences in it. Due to this, the Aviation Factory was not controlled by the City’s government.
The most important thing was that the Aviation Factory does not need the approval of the City’s Government when selling the shares!
Finally, the first step of Feng Yu’s plan was completed!