Chapter 166: Replacing the Old with the New

Li Dongling, having returned to Pingyang from the provincial capital of Hanxi, received the sales statistics from Zhang Ao, the manager of the Marketing Department, along with the financial reports submitted by Financial Manager Hu Zixian.

Shenzhou Telephone had ascended to become the world's number one manufacturer of digital cordless phones. The emergence of the "Sirius" chip had made Dongling Gao Ke one of the most renowned companies in the domestic technology industry. Even companies like the Chrysanthemum Factory, Zhongxing, and Changhong were several notches behind Dongling Gao Ke, with lower revenues to boot. Furthermore, Dongling Gao Ke was earning foreign currency.

The hot sales of digital cordless phones in America, combined with the devices from Shenzhou, Coolpad, and Simon, pushed the first-quarter shipment volume to over 7.5 million units, with total revenue exceeding 517.5 million USD.

Over 85% of this revenue came from overseas markets, especially the developed nations of Europe and America, where the demand for digital cordless phones was extremely robust. In other words, the money earned in these regions was all foreign currency!

Li Dongling looked at the report in his hands. Although the sales volume of digital cordless phones was rising, the profit margins were slipping somewhat. The war with Ximen had indeed impacted Dongling Gao Ke's profits; this was an unavoidable reality. Even if you slap someone, your own hand will hurt—how could there possibly be any action in this world without consequences?

In order to topple Ximen, Coolpad and Simon had continuously lowered their prices. While sales volume had picked up, profits were indeed steadily declining, especially for Simon, which was truly only earning assembly fees and meager wages. However, because they were earning foreign currency, the Simon brand could secure significant export tax rebates and subsidies for Dongling Gao Ke domestically. Many companies currently exporting at a loss relied on earning foreign currency and combining it with tax rebates or even subsidies to make money. But for Dongling Gao Ke, they certainly hoped to produce high-yield products.

Currently, the highest profit margins still came from the high-end Shenzhou Telephone brand. In the first quarter, the Shenzhou brand accounted for 1.2 million units in shipments, yet it captured about 35% of the total revenue for the entire telephone project, which showed just how massive the profits of high-end brands were.

Compared to Shenzhou, Coolpad and Simon seemed to have high sales volumes, especially Simon, which reached over 3.8 million units in the first quarter. However, their revenue and profits were still lower than Coolpad's, let alone Shenzhou's.

"Currently, in the digital cordless phone industry, although Shenzhou, combined with Coolpad and Simon, occupies over 86% of the market share, as digital cordless phones from brands like Panasonic, Philips, and General Electric hit the market, our market share might drop slightly. Ultimately, it will likely stabilize around 70%. Competition in the mid-range brand market may be extremely brutal!"

Zhang Ao said to Li Dongling. Although everyone knew they might not be able to compete with Shenzhou, other brands were still gritting their teeth and charging into this industry. After all, with a market worth billions of dollars, how could such a large piece of fat not be tempting?

Li Dongling nodded upon hearing Zhang Ao's words. "This year, as long as we ensure the shipment volume of the Shenzhou series of phones reaches 25 million units and stabilizes, that will be enough!"

An annual shipment volume of 25 million units meant that this single project, the Shenzhou series of phones, could contribute about 1.7 billion USD in revenue to Dongling Gao Ke this year. Of course, the final profit certainly couldn't be that high, but it would definitely push Dongling Gao Ke's annual sales volume past 10 billion RMB this year. How many companies in the country currently had annual sales exceeding 10 billion?

Changhong, by relying on price wars and frenzied shipments among television competitors this year, might see its annual sales exceed 10 billion. Other famous companies in various domestic industries, such as Sitong, could earn over 7 billion RMB.

Others, like Jianlibao, had reached nearly their peak period, with annual revenue of over 6 billion. The air conditioning hegemon, Chunlan, by relying on its Chunlan Tiger and Chunlan Leopard motorcycle models, raked in 1 billion RMB, and its annual revenue this year would also reach over 6 billion. Haier was similar to Jianlibao and Chunlan.

Meanwhile, the companies Li Dongling was familiar with from his past life were still in the development stage. Midea's revenue was around 2 billion, while Kelon, Vanke, and the Chrysanthemum Factory had revenues around 1.5 billion. By relying on the digital cordless phone project, Dongling Gao Ke's revenue had already become the leader in the domestic technology industry!

"Aside from digital cordless phones, the only product currently sold by Dongling Gao Ke is the Silver Mink mouse!"

Zhang Ao said to Li Dongling, his tone somewhat anxious. Influenced by the world's largest company, General Electric, not only domestic companies but companies worldwide were obsessed with diversification and globalization, desperately trying to enter more industries.

Since its establishment, Dongling Gao Ke had entered three industries: mice, electronic pet machines, and digital cordless phones. It seemed like a lot, but it depended on who you compared them to.

General Electric spanned dozens or hundreds of industries. Chunlan had entered air conditioning, refrigerators, televisions, washing machines, motorcycles, and automobiles. Other companies like Sitong, Haier, Giant, and Vanke played even wilder games, dabbling in home appliances, real estate, computers, logistics, and securities. Some of them didn't even know how many industries they had; they just kept acquiring, recruiting, and launching new products. The management chaos at Sitong was the best proof of this...

Now that Dongling Gao Ke had sold off the electronic pet machine project, only two projects remained: digital cordless phones and mice. This made Zhang Ao inevitably anxious. This was also the state of domestic companies at the moment; it seemed that if you entered fewer industries, you were losing money!

"But we have quite a few new projects!"

Hu Zixian couldn't help but glare at Zhang Ao. If you don't manage the household, you don't know the price of firewood. Hu Zixian, who held Dongling Gao Ke's purse strings, was under immense pressure.

"The new generation of Silver Mink optical mice, the Xiaolingtong mobile phone project, the U-disk project, and the mini radio from Feiyan Technology—all of these must be launched within the next year or two.

Additionally, the Wanjia Home Appliance City is still opening stores in Europe, Southeast Asia, Yanjing, and other places. This is a huge investment. Plus, projects like Dongxin Semiconductor and Oriental Optoelectronics are all waiting for Dongling Gao Ke to invest money. Dongling Gao Ke's product projects are already quite numerous!"

Zhang Ao, having been rebuked by Hu Zixian, felt a slight embarrassment, but it flashed by. Your position determines your perspective; Zhang Ao was the Marketing Department manager, and he had a large group of sales personnel under him, both domestic and abroad, all waiting to sell goods and earn commissions. Naturally, he hoped Dongling Gao Ke's product line would be as extensive as possible!

"That also depends on who you compare us to. Compared to companies like Sitong, Giant, and Haier, Dongling Gao Ke's current products are indeed not many; they are even on the sparse side." Zhang Ao muttered.

"The more you eat, the more you'll have to spit out later!"

Hu Zixian looked at Zhang Ao and sneered. After experiencing that game of "passing the parcel" in Yazhou, where the numbers in the account soared exponentially only to return to zero overnight, that experience, which felt like life and death, had almost reshaped his worldview and vision.

Since joining Dongling Gao Ke, Hu Zixian could be said to have given his all, especially regarding Dongling Gao Ke's cash flow. He was extremely stubborn, always keeping enough cash flow in Dongling Gao Ke's account to maintain operations for over half a year. Recently, he was preparing to increase this cash flow to one year, or even longer!

This meant that even if all of Dongling Gao Ke's business lines stopped making money, the company could still survive for over a year relying on the cash flow in the account.

This could be said to be a lingering symptom from the Yazhou real estate days. Not only did Hu Zixian have it, but Boss Wang of Vanke was the same. After returning from Yazhou, Boss Wang of Vanke continuously shrank his product line and hoarded large amounts of cash flow. This allowed Vanke to remain standing through decades of storms, while peer companies, even if they had been infinitely glorious, eventually vanished into thin air.

Li Dongling stopped Zhang Ao and Hu Zixian from continuing their argument. "In the short term, Dongling Gao Ke should still focus on our current projects. By the second half of the year, the Sales Department will have plenty to keep them busy!"

Li Dongling was also inclined to support Hu Zixian. His hoarding of cash flow had been approved by Li Dongling. No one knew whether tomorrow or death would arrive first.

Moreover, Li Dongling clearly remembered that in two years, Soros from America would stir up a massive storm in Asia, causing the economies of the Bangzi, Siam, Jiaozhi, Malaysia, and other regions to collapse. Many domestic companies would also be deeply affected, especially those exporting to Southeast Asia, which would be almost completely wiped out.

If there wasn't enough cash flow, Li Dongling felt that Dongling Gao Ke might also stumble at that time!

However, the saying goes that a crisis is also an opportunity. As long as they hoarded enough cash flow, Dongling Gao Ke might be able to earn profits during that storm, such as patents and production lines for Bangzi liquid crystal panels. The leeks that needed to be harvested would certainly still be harvested...

After finishing his talk with Zhang Ao and Hu Zixian, Ren Yuefeng, Chen Tao, Gao Peng, and others came to Li Dongling's office one after another. Even with Ren Yuefeng as the General Manager and various department managers handling affairs, there were still many documents that required Li Dongling's personal attention.

After Li Dongling signed them, Dongling Gao Ke began a new round of recruitment, announcing the introduction of a new batch of talent. Now that Shenzhou Telephone and Dongxin Semiconductor were at the peak of their fame, they certainly had to take the opportunity to recruit talent to join!

Many media outlets were still reporting on Shenzhou Telephone, Sirius, and the like, and the news was still hot. However, Dongling Gao Ke was once again plunged into busyness. The personnel in each project and department were working not only for Dongling Gao Ke but also for their own wallets and pockets.

Dongling Gao Ke didn't have a dedicated "Lenovo Newspaper" or anything like that to promote itself, but after a project team or individual at Dongling Gao Ke made a contribution, Dongling Gao Ke would announce it to everyone within the company.

This announcement wasn't some "chicken soup for the soul" or spirit-learning nonsense; it was a reward—a naked, tangible reward. For example, the members of the R&D team led by Ni Guangnan received a reward last year due to the successful development of the Sirius chip. After Li Dongling went there, he issued another bonus. Adding the two together, the bonuses alone exceeded 50,000!

This meant that each of the dozens of R&D team members following Ni Guangnan could take home this money. Additionally, there were rewards such as priority in applying for employee housing.

Once this announcement was made, it was enough to stimulate all the major departments at Dongling Gao Ke, especially the R&D side. If they really produced something, they could truly receive rewards!

(End of chapter) ===== CHAPTER 167 =====