Chapter 823: Chapter 295: Sword Pointed at the Nation, New Era’s Super Headquarters Plan!
A few days later, the three giants of New Era got together and made an important decision—aim for the whole country!
The market in the Zhejiang Province–Jiangsu–Shanghai region had already been developed very well; they couldn’t afford to stop moving.
In fact, the plan to move into the national market was supposed to roll out next year, but before that, they had to plan ahead and get a lot of prep work done.
The first task, and also the most important one, was of course funding.
New Era currently already had more than two hundred directly operated stores, each with a very strong ability to suck in cash. Add in the supply channels for hundreds of franchise stores, and the monthly profits were downright shocking.
However, breaking into the national market was not something that could be done with just a couple hundred million.
In 2004, there were a total of 333 prefecture-level administrative units in the country, including 283 prefecture-level cities and 17 regions. County-level units reached as many as 2,852. Putting aside the Zhejiang Province–Jiangsu–Shanghai region where their market plan was basically complete, there were still more than two hundred prefecture-level units left in other provinces and autonomous regions.
Even if they only opened a few directly operated stores in each prefecture-level city, the number of new stores would blow past a thousand.
If each directly operated store took an investment of over one million, that alone meant over a billion in total; you could imagine how massive the investment would be.
As for directly operated stores in county-level cities, that would have to wait a bit. They’d invest again after these prefecture-level "old hens" started laying eggs.
For such a huge funding need, there were a few possible avenues.
The first was financing, meaning capital increase and share expansion—raising funds by bringing in direct investment.
There had always been many venture capital firms interested in New Era, and big capital often came knocking to ask whether they had any financing plans. But they had all been politely turned down, because Su Zelin had no intention of diluting the equity. Yang Fen’s view was the same as his.
It was obvious that New Era was in a rocket-like ascent phase, and Brother Xiao Yang felt that handing out shares at this stage would be a real loss.
The second option was going public.
That June, Tencent went public on the Hong Kong stock market with an opening price of 4.37 Hong Kong dollars, a total share capital of 1.68 billion shares, and a total market cap of 7.2 billion Hong Kong dollars.
To be honest, in 2004 Tencent wasn’t that badass yet; it had just started to gain fame. Its market cap being so impressive was mainly because everyone could see its huge potential.
New Era’s situation was similar to Tencent’s—it was also a company growing at a crazy speed with terrifying potential. The sky was its only limit. If it went public, its market cap wouldn’t necessarily be below that of Tencent in 2004; it might even be higher, because in this era, real-economy companies that operated well were still more favored by retail investors, and stock prices weren’t as inflated.
But Su Zelin also had no intention of going public. From the very beginning, he’d decided to turn New Era into a company like those blue-and-green behemoths in later generations—no financing, no listing, just focusing on business and refusing to play the numbers game.
The last remaining path was the old one—loans.
Previously, whenever New Era was short of funds, they went to the banks for loans, and the banks had always been very cooperative.
Given the company’s current situation, casually borrowing two billion wouldn’t be a problem; they just had to go talk to the banks.
However, this time Su Zelin planned to borrow a bit more.
For this, he, Brother Xiao Yang, and Kang Baohong had a meal with the big bosses of a few banks from Zheng Province, Zheng City, and Lin’an.
New Era was now already one of the province’s gold-medal enterprises and a key supported enterprise; if something important came up, they could directly approach the top leaders.
Although Zhejiang Province had plenty of enterprises whose market caps and market valuations matched or even exceeded New Era’s size, the top leaders still treated this company with special importance.
Why?
Because it ran fast.
With the same market cap, one company moves forward like a slow snail, another dashes ahead like a rabbit—can their ceilings be the same? So of course the treatment wouldn’t be the same either.
Brother Xiao Yang first laid out New Era’s plan to enter the national market. Zheng Province’s leaders and the bank bosses weren’t surprised when they heard it. The ambition of this company was obvious to any clear-eyed person. It was sprinting at a hundred-meter dash pace; breaking out of the Zhejiang Province–Jiangsu–Shanghai region was only a matter of time.
But they liked such ambitious players. The top leaders naturally hoped that Zhejiang Province could produce a few more nationwide giants that would significantly boost fiscal tax revenues, while the banks could get bigger business.
As per tradition, Brother Xiao Yang started by crying poor a bit—after all, the kid who cries gets the milk.
For example: entering the national market meant they’d have to massively expand headcount; opening just a few directly operated stores in each prefecture-level city would cost at least over a billion; advertising and marketing would also have to keep up. After all, New Era had only been founded for four years; they couldn’t suddenly produce that much money, so they needed strong support from the leaders and the banks, etc.
The frequency of this "crying poor" act had to be managed. If they cried all day long and annoyed the leaders, the milk wouldn’t be much. So doing it once a year was relatively reasonable.
Then Zheng Province’s top leader spoke: he said New Era was full of ambition and striving to be the pride of Zhejiang Province, so they must support it. The other bank bosses also spoke up in turn, saying loans were no problem, interest rates were negotiable, and they’d try to give as favorable terms as possible.
Then someone asked how much they wanted to borrow, and everyone was dumbfounded.
Four billion!
This was completely opening the lion’s mouth wide!
Although New Era’s market valuation was very high, it still hadn’t broken the ten-billion mark yet.
You open your mouth and ask for four billion—obviously that’s a bit much.
One bank boss said with difficulty, "President Yang, based on the national expansion plan you just proposed—opening a few directly operated stores in each prefecture-level city, plus staff expansion and marketing and all that—at most a bit over two billion would be enough. Isn’t four billion a bit too much?"
Another bank boss chimed in, "It’s not that we don’t trust New Era’s credit and repayment ability, but based on your company’s market valuation, the loan ratio would be too high. We can’t make a special exception just for you!"