Chapter 218: My Upper Limit Is $124, Huawei and 360

Cheng Congwu and Leiyi Army are fellow townspeople, both rising from small-town exam-takers to positions of power.

After graduating with his master's degree, he joined a state-owned enterprise, went into business in 1994, and after more than a decade of struggle, finally secured his footing in the digital mapping field.

In reality, Gaode has three founders; before Cheng Congwu became CEO, the company was led by former CEO Hou Jun, but before the IPO, infighting among the three intensified.

To ensure the company's smooth listing, Hou Jun voluntarily stepped down from the CEO position.

Cheng Congwu successfully rose to power and hired a batch of professional executives, sidelining the other founder.

With his exceptionally tough tactics and interpersonal skills, he firmly secured the position of Gaode's CEO.

But during the transition from PC internet to mobile internet, Gaode's development fell short—like a herder thrust into the age of oceans, possessing decent ability but no place to use it.

From 2011 to 2012, Gaode Map's stock price hovered around $12 for the entire period, and after the New Year, it dropped to $11. per share.

In short, Cheng Congwu was originally a financial investor with limited ability in business expansion.

At least, he couldn't meet Gaode Map's current developmental needs.

So when Liu Zhiping told him that Chen Yansen of Senlian Capital planned a strategic investment or full acquisition of Gaode, Cheng Congwu immediately agreed.

As he sized up Chen Yansen, Chen Yansen was quietly observing Cheng Congwu's expressions and subtle physical movements.

"Don't just stand there—sit down and chat properly."

Zhang Zhaoyang pulled Cheng Congwu and Chen Yansen to sit down.

His assistant, perceptive as ever, stepped out of the private room and signaled the waiters to serve the dishes.

As an internet pioneer, he could truthfully say: "I know every CEO among China's top 500 companies."

And it was true!

Though he had little direct interaction with Cheng Congwu on stage, they both moved in Beijing's business circles and often went out drinking privately.

That's precisely why Liu Zhiping brought him along.

"Mr. Cheng, please sit!" Chen Yansen said with a smile.

Cheng Congwu smiled faintly, sat down, and nodded a greeting to Liu Zhiping.

Investment and acquisition may sound prestigious, but the core process is no different from buying vegetables.

Chen Yansen wants to buy low; Cheng Congwu wants to sell high.

As long as both sides find a mutually acceptable balance, the deal is done.

Gao Linwei and Song Yuncheng sat on either side of Chen Yansen, smiling throughout, silent whenever their input wasn't needed.

Soon, a series of delicate cold dishes were served.

As the intermediary, Liu Zhiping took off his coat, picked up a bottle of wine, and poured for everyone.

"Mr. Cheng, you surely understand Senlian Capital's purpose here. Regarding Gaode's sale, I'd like to hear your thoughts."

After three rounds of drinks, Chen Yansen set down his cup and got straight to the point.

Currently, Gaode's three major shareholders are Hou Jun, Cheng Congwu, and Xiao Jun; if Cheng Congwu is too greedy, he'll bypass him and negotiate directly with Hou Jun and Xiao Jun.

After all, the three have long been at odds, and by shareholding ratio, Hou Jun is the largest shareholder.

Here we go!

Cheng Congwu snapped alert, realizing the real discussion had finally begun—he'd always intended to sell, otherwise he wouldn't have shown up.

"I have no objections. If Mr. Chen's offer convinces me, Gaode can immediately initiate privatization and delisting to become a subsidiary of Senlian Capital."

Cheng Congwu shrugged, indifferent.

Before mobile internet entered its golden phase, many entrepreneurs sensed PC internet would eventually fade, but no one knew whether the decline and transition would take five, ten, or twenty years.

From Cheng Congwu's perspective, B2B services (in-car navigation) were growing increasingly competitive, while B2C services remained stagnant; better to cash out early than waste time.

In 2012, electronic maps and navigation software were separate: the map itself was free, but navigation required payment.

Gaode charged 50 yuan, Baidu charged 30 yuan, and Kailide charged as much as 108 yuan.

But what is the core of the internet business model?

Free!

Thus, both Baidu Map and Gaode Map's B2C performance was dismal.

Most drivers preferred physical maps over paying for electronic navigation services.

"What price are you asking for, Mr. Cheng?"

Chen Yansen smiled faintly, tossing the question back.

After selling FoxTao to Ali and cashing out 12 billion yuan, he hadn't spent much beyond acquiring JD. om equity, investing in Orange Phone Factory No. 3, and KuaiPao.

Orange Tech raised $1. 5 billion from DST Capital, Pinduoduo raised $300 million from Tencent—no need for Senlian Capital to inject more funds.

So for Chen Yansen, the cash on hand was more than enough to acquire Gaode.

Cheng Congwu narrowed his eyes, glanced at Liu Zhiping and Zhang Zhaoyang, thought for a moment, then named a figure: "$14."

This number was both his ideal price and a figure he could justify to U. . investors.

Although major shareholders hold greater influence during privatization, the final outcome isn't entirely decided by them.

If minority shareholders and retail investors deem the privatization unfair, unreasonable, or damaging to their interests, they can still file complaints with regulatory bodies.

Take Meilu Youpin, for example: listed at $20 per share, it offered only $7 for delisting; its first privatization application was rejected.

The second time, it dropped from $7 to $2—and succeeded.

It wasn't that U. . investors suddenly became reasonable; rather, Meilu Youpin's stock had collapsed so severely—its market cap shrank by 96%—that if they didn't accept, their shares would become worthless.

Chen Yansen frowned slightly; the price was a 22. % premium over the current market.

His own target was under $13—Cheng Congwu's demand exceeded his upper limit.

"I'm sorry, Mr. Cheng. Senlian's finance department conducted a comprehensive evaluation based on Gaode's revenue, profit, cash flow, market share, user data, and technology patents over the past three years. The most reasonable price is $12, but to show goodwill, I'm willing to raise it to $12. per share."

Chen Yansen shook his head, outright rejecting Cheng Congwu's offer.

"Mr. Chen, Gaode Map has enormous market potential—it deserves a $14-per-share premium. Five years ago, Nokia paid $8. billion to acquire Navteq. Though Gaode's coverage and user base are smaller than Navteq's, its future market value won't be less than $5 billion."

Cheng Congwu frowned, his smile fading, and replied seriously.

He cited Nokia's acquisition of Navteq to persuade Chen Yansen.

"But after Navteq merged into Here Maps, its current market cap is only $1. 7 billion—just 17% of the original acquisition price. Here Maps covers 174 countries and over 46 million kilometers of road. What about Gaode?"

Chen Yansen asked casually.

Cheng Congwu fell silent—he hadn't expected Chen Yansen to know so much about overseas competitors' valuations.

The very argument meant to convince Chen Yansen had turned and stabbed him in the back.

"Whether it's financing or acquisition, price is the easiest issue to resolve—as long as both Senlian and Gaode have mutual interest."

Liu Zhiping, fearing Cheng Congwu would lose face, laughed and smoothed things over.

The remark also reminded him: go back, reconsider, and offer a more reasonable price to reach an agreement.

$12. ?

A dollar above market price!

Cheng Congwu mulled it over, sighed, quickly adjusted his mindset, raised his glass, and said: "Mr. Chen, to be honest, $12. per share is below my expectations—I'm not sure I can convince the other two shareholders with this number."

"$12. isn't low, Mr. Cheng. You might consider lowering your expectations."

Chen Yansen clinked his glass with his and smiled lightly.

He knew that if he waited until late 2013, when 3G networks began widespread speed increases and price cuts, and both Baidu and Gaode announced free strategies for low-end users, any chance of low-price acquisition would vanish.

But he still had a year and a half—he wasn't in a rush.

Cheng Congwu's face tightened, downed his drink, then changed the subject, bringing up gossip about Leiyi Army and Zhou Hongyi.

Clearly, he decided that if no price agreement could be reached quickly, he'd move negotiations to tomorrow's formal meeting.

"Didn't get it done. Before I came, I had the driver circle around Chaoyang Park—plenty of reporters spotted us."

Zhang Zhaoyang grinned.

"Mr. Zhang, you don't know this—they were at the East Gate 5 intersection of Chaoyang Park. When the police inspectors arrived, the two headed straight to a boxing gym."

Liu Zhiping burst out laughing, paused, then asked: "Guess who won?"

"Definitely Zhou Hongyi—he's small but fiery, and he fights dirty." Zhang Zhaoyang thought for a moment, offering a serious evaluation.

Cheng Congwu had thought their duel was absurd enough, but now Zhang Zhaoyang and Liu Zhiping were betting on it.

"Probably Leiyi Army—Zhou Hongyi's nearsighted. Break his glasses first, then old Zhou can only take punches."

Chen Yansen smirked.

"You were there?" Liu Zhiping blinked, then asked instinctively.

The actual situation was nearly identical to what Chen Yansen described.

Zhou Hongyi had trained in Tai Chi and Judo; Leiyi Army, with his long limbs, gave him a brutal physical lesson.

Gao Linwei and Song Yuncheng exchanged glances, barely suppressing laughter. Even Liu Zhiping and Zhang Zhaoyang's assistants couldn't hold back—each covered their mouths, smiling faintly.

This meal lasted from afternoon.

Liu Zhiping turned to Chen Yansen, seeking his opinion.

Chen Yansen nodded, not refusing.

He understood Liu Zhiping's intention; since the man wanted to go, he'd grant him the courtesy.

Meanwhile.

As soon as Leiyi Army entered his home, he rushed to the fridge, grabbed ice, and pressed it to his face.

"Fucking bastard hit hard!"

Leiyi Army stared at his reflection—his right cheek swollen and red, like mumps, his face puffed up a full circle. He cursed silently.

At that moment, the phone on the table rang suddenly.

Chen Yansen?

Lei Yijun glanced at the caller ID but didn't think much of it; he pressed answer and said, "Comrade Chen, what's up?"

"I've arrived in Yancheng. I've arranged to meet Liu Zhiping, Zhang Zhaoyang, and Cheng Congwu from Gao De at a bar to unwind. Comrade Lei, are you free to join us?"

Chen Yansen invited.

With how I look now, wouldn't I just get mocked if I showed up?

Lei Yijun gave a bitter laugh and politely declined.

"Comrade Lei, then I'll visit your company tomorrow," Chen Yansen said with a smile.

Lei Yijun really wanted to say they could meet another time, but when he heard Chen Yansen mention a potential collaboration, he immediately nodded in agreement.

With that, Chen Yansen hung up the call.

He wasn't trying to laugh at Lei Yijun—he genuinely wanted to discuss a partnership with Xiaomi.

The Orange Phone Factory No. 3 will begin production next week; once operational, the combined monthly output of Factories 1 through 3 will reach six million units.

But the total online sales of the Orange C1, C2, and D1 models, after nearly twenty days on the market, have dropped to an average of 130, 00 units per day—a decline of over seventy percent compared to their first-week sales pace.

Meanwhile, Factory No. 4, the super-factory in Luzhou, is also under intense preparation; once production begins, its monthly capacity will exceed ten million units.

Orange Phone alone cannot possibly absorb such massive output!

Therefore, Chen Yansen sought to speak with Lei Yijun, aiming to wrest Xiaomi's contract manufacturing business away from Yinghua Da.

Lei Yijun put down his phone and pondered Chen Yansen's intentions.

Until now, Xiaomi and Orange Tech had only one collaboration: a patent license for a memory-cleaning algorithm. But shortly after the Orange C2 launched, he learned something crucial.

The patents licensed by Orange Tech to Xiaomi, Meizu, and OPPO were version 1. ; the more advanced algorithmic cleaning technology had not been opened to other competitors.

Had Chen Yansen finally come around and decided to license patents to third-party phone manufacturers?

On the other side.

Zhou Hongyi returned to a villa inside the Second Ring Road, his face bruised; he decided he wouldn't return to the office until his injuries healed.

Tai Chi was useless, and judo was no better!

As soon as they started in the afternoon, both men swung wild monkey fists.

Zhou Hongyi's glasses were shattered instantly; all he could see was a blurred figure of Lei Yijun, but he landed a punch on the other man, so he didn't come out worse off.

The feud between them was now fully sealed.

Sitting on the sofa for a long while, Zhou Hongyi suddenly stood up. He realized Lei Yijun had been right about one thing—he shouldn't have approached Haier; he should have gone to Huawei or ZTE, the established telecom brands.

Thinking this, he dialed Yu Chendong's personal number.

After understanding Zhou Hongyi's intent, Yu Chendong didn't hesitate—he agreed to the 360 exclusive model collaboration.

Although Huawei was in a critical transition phase, an exclusive model was still feasible; they could simply use a sub-brand name. That way, they'd make money without damaging Huawei's brand image.

They reached an immediate agreement, and Zhou Hongyi seized the chance to request a visit to Huawei.

Since he'd already burned bridges with Lei Yijun, Zhou Hongyi thought: if he was making an exclusive model, he'd also build his own 360 phone!

(End of Chapter)