Revisiting Future Path

The 222th economic crisis is not terrible

The four trillion plan brewed by the cabinet has its advantages and disadvantages.

The financial turmoil has swept the world, and China, which prides itself as the world’s factory, cannot stand alone. In September 2007, the manufacturing PMI index was 56.1; in October 2007, the manufacturing PMI index was 53.2; in November 2007, the manufacturing PMI index was 55.4. By 2008, in September 2008, the manufacturing PMI index was 51.2; in October 2008, the manufacturing PMI index was 44.6; in November 2008, the manufacturing PMI index was 38.8.

The PMI index 50 is the score of prosperity and decline. When the PMI index is greater than 50, it indicates that the economy is developing; when the PMI index is less than 50, it indicates that the economy is in recession. In the future, the PMI index will hover in the range of 49 to 50, and the manufacturing industry will be full of mourning and crying that the Chinese manufacturing industry has no future, let alone the more terrifying 38.8?

The impact of the 2008 financial crisis was far greater than the prelude of the 2007 subprime mortgage crisis. If you don't take a heart-saving pill, Huaguo's manufacturing industry will be over immediately. At this critical juncture, all countries have successively introduced loose fiscal policies, and maintaining stability is the unanimous choice of all countries.

Compared with the Fed's rush to cram hundreds of billions of dollars into financial institutions, Wei Dongsheng is more inclined to accept investment in infrastructure.

At least, this is the worst option.

Therefore, although the memory of 30 years has proved that the quick effect of the 4 trillion plan can only save the emergency but not cure the root cause, Wei Dongsheng still supports the 4 trillion plan. It would be even better if it could catch the four trillion express train and speed up the progress of infrastructure construction in Panyang City and the research and development of quantum wave circle front technology.

Aoyu Bridge walked north to Aoyu Bridge south, Aoyu Bridge walked south to Aoyu Bridge north, Wei Dongsheng witnessed the completion of the four trillion plan up close.

On October 30, 2008, Forbes released the 2008 China Rich List. Wei Dongsheng was the fourth time the richest man in China with a net worth of 11.25 billion US dollars.

In November 2007, Wei Dongsheng held the top position of the richest in China with a net worth of US$17.25 billion; in the global rich list in March 2008, Wei Dongsheng’s net worth fell to US$13.59 billion; now, Wei Dongsheng’s net worth continues to shrink to 11.25 billion Dollars, net assets are getting less and less.

This is not because of Wei Dongsheng's special circumstances, but the general environment. Yang Huiyan, the runner-up of the 2007 China Rich List, is even more exaggerated. Forbes valued her at 121.15 billion yuan last year, and this year Forbes valued her at 15.1 billion yuan, only ranking fifth in China.

Re-examining the ranking of the richest in China in 2008, Wei Dongsheng re-elected the top spot; Gong Qiuqiu suddenly emerged, ranking second with 5.69 billion U.S. dollars; and Liu Yonghao of Oriental Hope Group ranked third with 2.98 billion U.S. dollars. Except for the famous Gong Qiuqiu who borrowed from the Rose Fund, the wealth of the rich in China has shrunk to varying degrees.

However, this is not the bottom.

The economy is still going down.

The financial crisis is still fermenting.

Take Merrill Lynch as an example.

After the acquisition of Bank of America, Merrill Lynch’s sales and trading departments continued to lose money, and the fourth quarter net loss is expected to be as high as $17 billion. Faced with such exaggerated losses, the shareholders of Bank of America were shocked. It turned out that the acquisition of Merrill Lynch was not over, but just plunged into a deep pit. Under internal pressure from Bank of America shareholders, Bank of America Chairman and Chief Operating Officer Kenneth Lewis (Kenneth_Lewis) flew to Washington urgently and decided to use "significant adverse change clauses" to overturn the merger. Secretary of the Treasury Paulson and Chairman of the Federal Reserve Committee Bernanke sternly rejected Lewis’s application and threatened Bank of America: “If Bank of America dared to withdraw its acquisition of Merrill Lynch, don’t even think about the government’s offer to Bank of America. Relief funds."

Lewis realized that Bank of America could not get out of Merrill Lynch’s pit, and instead asked for other compensation. The federal government represented by Paulson and Bernanke promised in good faith that they agreed to provide Bank of America with an additional $20 billion in rescue funds and provide guarantees for losses caused by Bank of America's $118 billion in bad assets.

Lehman Brothers is no better than Merrill Lynch.

Excluding the considerable profits from the Rose Fund’s short contract, Lehman Brothers’ net loss in the fourth quarter of 2008 will be as high as US$19 billion. In other words, if the joint acquisition of Rose Fund, China Investment and CITIC is a pure financing of US$20 billion, it will be completely wiped out by Lehman Brothers like a bottomless pit in just two months. Acquisitions are just a pit. How to fill the pit caused by the financial crisis is the real trouble. It is precisely because of this that Bank of America and Barclays Bank of the United Kingdom dare not buy Lehman Brothers without government guarantees; without Wei Dongsheng's guarantees from Zhiyu and Zhixing, Jin Zongxian dare not allow CIC to invest heavily in Lehman Brothers.

With the help of the short contract of Rose Fund, coupled with the strong accounting ability of Lehman Brothers, the performance of Lehman Brothers suddenly appeared to be more moderate. Lehman Brothers did not have a huge loss in performance like Merrill Lynch, nor did it stand out from the rest, but struggled through the financial crisis like other financial institutions.

One was the drag of Lehman Brothers, and the other was the overall decline of the US stock market. The market value of Spring Search also dropped again and again. When the time came to mid-November, the market value of Chunqiu Search had dropped from USD 25.66 billion at the end of September to USD 11 billion. Chunqiu Search's affiliated company Chunqiu Network is even more miserable. The market value plummeted from US$11.4 billion before the financial crisis to US$3.4 billion. It can be said that there is no worst but worse.

However, this is not a bad thing.

Before that, Wei Dongsheng used the U.S. stock market as a cash machine and took advantage of the stock price rise between 2007 and 2008 to cash in a large amount. Taking Chunqiu Search as an example, Zhuwei Group cashed out 20% of Ant's equity in the range of US$28 billion to US$30 billion in market value and received approximately US$5.8 billion in cash.

The market value of Chunqiu Network is not as high as Chunqiu, but because it is Wei Dongsheng's first ATM, the equity cash-out ratio is even more exaggerated. Today, Wei Dongsheng only controls about 30% of the shares, relying on the AB-share dual equity system to continue to control the Spring and Autumn Network.

Wei Dongsheng believes in the future of Chunqiu Network and Chunqiu Search. That being the case, the decline in the market and the downturn in stock prices have become the best time for Wei Dongsheng to buy back shares. Considering the cumbersome self-repurchase procedures of Chunqiu Search and Chunqiu Network, Wei Dongsheng sacrificed the vests of Shuoguang Group and Pacific Win-Win Group, and methodically attracted the shares of Chunqiu Search and Chunqiu Network. Taking Chunqiu Search as an example, Zhuwei Group cashed out 20% of its shares at a high position for US$5.8 billion, while Pacific Win-Win Group repurchased 10% of its shares for US$1.2 billion.

Sell ​​high and buy low.

The simple transfer of equity from Zhuwei Group to Shuoguang Group and Pacific Win-Win Group brought Wei Dongsheng more than US$3 billion in pre-tax profits.

Wei Dongsheng's buying low and selling high indirectly drove the stock prices of Chunqiu Search and Chunqiu.com to rise, especially Chunqiu Search, whose market value climbed back to $18 billion at the end of January 2009. Unfortunately, the economic situation has not yet improved, and Wei Dongsheng's net assets continue to shrink. In March 2009, Forbes launched the 2009 Global Rich List, which valued Wei Dongsheng at only US$10.67 billion.

However, shrinking wealth is a global phenomenon. In the Greater China region, Wei Dongsheng’s Sun Hung Kai Kuo family with a net worth of slightly more than US$10.5 billion, and Li Ka-shing, who has a net worth of less than US$16.2 billion, ranks second; on a global scale, Wei Dongsheng’s net worth is slightly higher than that of the Guo family. And Paul_Allen, slightly lower than the tied Steven_Ballmer, George_Soros, and the Grosvenor family, Duke of Westminster, ranked 32nd.

Wei Dongsheng’s net worth decreased by US$10.67 billion from US$13.59 billion in 2008, but his global ranking has increased from 55th in 2008 to 32nd.

Everyone’s wealth is shrinking, and the impact of the financial storm is evident.

However, the economic crisis is not terrible.

Just like Wei Dongsheng’s rise in the ranking of the global rich list, and Wei Dongsheng’s bargain-hunting to buy back shares in Chunqiu Search and Chunqiu.com, the economic crisis is the best opportunity for the powerful to expand their power.

For example, Zhiyu’s fatal short-board chip manufacturing fab was trapped by a lack of relevant talent reserves and hesitated for many years. At the time of the financial turmoil, SMIC was trapped in the disputes between offshore companies and TSMC, and it urgently needed state-owned capital to relieve pressure from all aspects. In order to ensure his influence on SMIC, Datang Telecom, upon hearing that Wei Dongsheng wandered south of Aoyu Bridge, immediately invited Zhiyu Telecom to buy a 25% stake in SMIC.

Looking back in 2008, Zhiyu shipped 21.32 million Sapientia series smartphones, and Zhixing shipped 8.5 million stars series low-end smartphones. As ZTE, Huawei, Meizu and other manufacturers hesitate to hOS mobile phone operating systems, and because Lenovo, Coolpad and other manufacturers try to develop their own mobile phone operating systems, Zhiyu and Zhixing once again monopolized the Chinese smartphone market. Looking at the broader global smartphone market, Zhiyu and Zhixing also dominate the global smartphone market by 20.6% with a total shipment of 29.85 million units.

At the same time, Nokia's market share in the field of smartphones dropped from 39.8% in 2007 to 31%. Zhiyu's zOS system and Zhixing's hOS system are collectively called the smart system, which has in fact become the second largest manufacturer in the global smart phone field after Nokia.

Zhiyu and Zhixing not only have excellent prospects, the current 30 million chip orders per year are also orders actively sought by foundries such as SMIC and TSMC. Together, Datang Telecom and Zhiyu Telecom can completely contain the opposition forces within SMIC through terminal market regulation. If SMIC can be controlled by equity, Zhiyu IC Design Company will be able to design Leader series chips more conveniently.

Wei Dongsheng will not pin his hopes on SMIC.

In addition to Datang Telecom, Zhiyu Telecom also cooperated with Hua Hong, who was disappointed by SMIC, and negotiated to register a joint venture company in Panyang City to establish a 12-inch production line.

In all this, through capital operation and strong alliances, Zhiyu Group quickly realized the progress of the fab from nothing. After several years of operating with mobile phone chips as a breakthrough point, after the "superhumans" cultivated by the mind control came to catch up, the short board of the fab may be able to gradually make up.

The expansion of Chunqiu, Zhiyu, Zhixing, and Zhuwei is not limited to fabs. Last year, the Rose China Fund was long in the income of the Chinese stock market, and the Rose Fund was short in the income of the United States. We wish to cash out the cash reserves of Chunqiu Search Equity, and the cash flow of Zhiyu and Zhixing's mobile phone business, which were all acquired by Wei Dongsheng.

The seemingly terrible economic crisis has turned Wei Dongsheng's propeller to expand his territory.

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