Chapter 284: Swallowing The Four Seas
Investment requires absolute rationality, which is determined by the nature of the matter itself.
Once you bring personal likes and dislikes into it, you might invest in good projects, but you might also miss good projects.
Zhu Xiaohu, who invested in Ele.me and Didi and a bunch of internet companies, has his biggest regret as missing ByteDance; his reason was that meeting Boss Zhang made him feel the other party lacked wolf nature.
Zhu Xiaohu felt ByteDance’s business model was fine, its development was fine, and its future prospects were also bright, but he missed ByteDance just because of his feeling about the person.
Even today, when he accepts interviews and talks about this matter, he still regrets it so much that he slaps his thigh.
Similarly, back then, why did investment institutions flock to commercial aerospace? Because SpaceX succeeded, everyone underestimated the difficulty of reusable rockets, thinking it was simple to achieve.
Thinking it was just a matter of money.
In 2014, Yanjing authorities issued the “Guiding Opinions on Investment and Financing Mechanisms for Innovative Key Areas to Encourage Social Investment,” explicitly proposing for the first time to encourage private capital to participate in commercial aerospace.
Thus, 2015 became the first year of commercial aerospace, with a total of 10 investment and financing deals in the commercial aerospace field that year, raising 60 million in funds.
Let me add here, why the guiding opinions came first and then the first year arrived: because for aerospace, you need a license and permission; without a license, you can’t launch rockets even if there’s no place to issue one to you.
Plus, from testing to launch to manufacturing, all these require cooperation with China Aerospace and national-level support.
Additionally, the country’s support is not just policy; at the end of 2014, China built a commercial aerospace launch site in Hainan, filling the gap in commercial aerospace.
Therefore, starting from 2015, with policies in place, America having success cases, and the entire market sounding enticing enough, commercial aerospace began to develop vigorously.
In the same year, Yanjing issued the “National Medium- and Long-Term Development Plan for Civil Space Infrastructure (2015-2025),” again proposing to encourage social capital to enter the aerospace field.
But obviously, all institutions greatly underestimated the difficulty of this matter.
In recent years, venture capital has gradually withdrawn, while government funds and local industrial capital have entered, because everyone discovered this is not something that can be solved with a few million or tens of millions, nor is it a project that can profit in a short time.
Plus geopolitical risk; compared to the internet, aerospace faces a much higher possibility of geopolitical risk.
Therefore, venture capital slowly withdrew, accompanied by investment amounts rising from millions and tens of millions to tens of millions or even over 100 million.
(2015-2023 China commercial aerospace investment and financing development trend)
Simply put, now with super players like Apollo Technology, state-owned capital wants to exit, feeling they can’t continue; the other party has mastered reusable rockets and shown ambition to take over the entire launch market, and everyone can’t hold out.
In recent years, it has been government funds and industrial capital—these state-owned capitals—entering the commercial aerospace field and dominating market investment; if they just go bankrupt like this, the books would face huge losses, so everyone hopes someone can take over.
Apollo Technology is the best candidate to take over.
This matter can even turn bad into good, converting shares of commercial aerospace agencies that clearly can’t continue financing into shares of Apollo Technology, directly making a huge profit.
Didn’t you see that the wool Apollo Technology sheared from Huawei that year was 4 billion, almost matching the total financing amount of the entire commercial aerospace field last year.
It also sheared over 1 billion from Bilibili and Tencent; this is cash flow that everyone can’t catch up with no matter how many years of development.
Everyone is state-owned capital; Shanghai authorities can’t just stand by and watch!
Share swap is a beautiful dream, but cash acquisition can still be negotiated.
This led to Song Nanping’s visit.
“Nanping, unified acquisition?” Lin Ran asked.
Song Nanping nodded: “Of course, what they hope most is that we can swap shares.
But for us, this is completely unnecessary; their shares have no value, and share swap would harm our interests.”
Here, “us” refers to Lin Ran and Shanghai state-owned capital.
“So Shanghai state-owned capital wants cash acquisition, to uniformly acquire private aerospace agencies related to rocket launches, using their employee numbers, technical content, and organizational structure as standards for price negotiation.
Professor, our consideration on this is that our current expansion recruitment is mainly campus recruitment, which is still a bit too slow.
If we directly acquire all the engineers from these companies, they can play a role in rapid expansion.
After all, unlike Apollo Technology, which recruits fresh graduates without experience, the engineers they gather are all experienced engineers.
Their joining can most quickly enrich our employee structure, allowing the proportion of internal campus-recruited new employees and socially-recruited experienced employees to reach a suitable level again.”
Song Nanping explained in detail.
Lin Ran pondered, because this was indeed a good method.
As for directly poaching, it requires higher salaries, whereas with takeover, salary structures can follow their current company salaries and offer similar compensation.
Secondly, if there are non-compete agreements, it’s hard to poach them.
Finally, if you poach, without the original company’s evaluation, it’s hard to confirm if the person is truly suitable.
After all, Lin Ran doesn’t have the energy to interview every engineer one by one.
“If the price is right, I think it’s feasible,” Lin Ran said.
A sly smile appeared on Song Nanping’s dry face, somewhat similar to Old Farmer’s: “We’ll definitely slaughter them without mercy, and chop the price to the bone.”
As mentioned earlier, state-owned capital is the main force, and among state-owned capital main forces, Pengcheng’s state-owned capital is the main force, including institutions like Shenzhen Capital Group that shone brightly in state-owned industry investments in the past.
How could Shanghai not slash Pengcheng hard?
You raised 100 million back then; now deduct the cash on the books, say 20 million in liquid funds, meaning you actually burned 80 million in cash.
Shanghai wants at most a 10% discount, taking it for 8 million, and even that’s considering everyone is brothers, so going easy.
“Will they agree?” Lin Ran asked. “Including those founders, are they willing to accept defeat and exit?
Like in America, with SpaceX’s Falcon ahead, aren’t agencies like Blue Origin and Rocket Lab also struggling?”
Song Nanping explained: “Professor, they might have wanted to struggle a bit originally.
The Burning One Modified tests, from suborbital to orbital, had no failures; they have no confidence to compete with us anymore.
Think about it: from funding, they can’t match us; from R&D efficiency, they can’t; from brand recognition, even less.
What do they have to compete with?”
Shanghai local is simply overjoyed; this is equivalent to biting off the commercial aerospace industry chunk from Pengcheng out of thin air.
Originally, Pengcheng shouted the loudest and invested the most.
In the end, Shanghai reaps the harvest.
“Good, you go negotiate; I agree,” Lin Ran finally said.
The negotiation progressed very quickly; in the end, it cost over 200 million to package and buy all these rocket-making commercial aerospace agencies on the market.
These companies are mainly in Yanjing and Pengcheng; their employees felt like pie from the sky when the company was acquired and they were going to work at Apollo Technology.
“Wife, let me tell you some good news!” Qiu Jinyu is a senior engineer at LandSpace; that evening when he got home, he said excitedly.
His wife was sitting on the sofa watching television and asked without looking up: “What? Your company is going bankrupt and settling, giving you N+ several months’ layoff compensation?”
Although his wife is family, she was also aware that because of Apollo Technology’s emergence, everyone was having a hard time.
LandSpace was one of the earliest domestic commercial aerospace agencies; they raised a total of 1.8 billion from 2019-2020.
In short, no shortage of money.
But now, under the pressure of Burning One Modified, “morale in panic” describes it perfectly.
“What are you thinking? Our company was acquired by Apollo Technology!” Qiu Jinyu said. “That means I’ll soon be working in Shanghai.”
“Did the salary increase?” His wife still didn’t look up.
“Not clear yet; the boss just notified today,” Qiu Jinyu murmured.
His wife complained: “Salary increase is good news; just being acquired is good news for your boss, what the hell good news is it for you!
You, a wage earner, how are you empathizing with the boss? He got out of trouble and sold you all as assets to Apollo Technology.”
Qiu Jinyu said with a bitter smile: “No, going to Apollo Technology is like being a civil servant in Zhili before, now transferred to be a civil servant in Yanjing.
Though both civil servants, it’s worlds apart; when Apollo Technology did the moon landing, didn’t we watch the live broadcast together at home? That’s the company; did you forget?
Working at Apollo Technology, damn, the holy land of aerospace; now globally, it’s the only agency that can send astronauts to the moon!”
Qiu Jinyu started a bit down at first, but got excited as he spoke; just thinking about it made him feel great inside.
Previously thought the company would dissolve, and at over 30, he’d have to find work on the market again; now directly seamless to Apollo Technology, what top treatment.
Admin, HR, finance were laid off after settlement and handover; only engineers, workers, and R&D personnel can go to Apollo Technology.
LandSpace has workers; they have rocket manufacturing and assembly factories in Huzhou.
Forgot to say, LandSpace has self-developed engines, Tianque liquid oxygen methane engine, vacuum thrust 80 tons, even a bit larger than the YF-102 used in Burning One Modified.
So LandSpace is the most expensive in this round of Apollo Technology mergers and acquisitions; just integrating LandSpace cost over 100 million.
His wife sneered: “They did moon landing, but you going to work is another matter.
Back when we graduated university, you went to the aerospace institute full of excitement; what did you end up doing? All the work was yours, honors and rewards all went to your leader, leader’s leader, and institute leader; could you even get your name on it?
Otherwise, why would you quit central state-owned enterprise work to go to LandSpace?
From LandSpace to Apollo, you’re not their direct line; you’re defeated troops incorporated; what good work will they throw to you? You’re happy too early.”
His wife had been with him from university, supporting each other; what she said hit Qiu Jinyu hard.
“No no no, Apollo Technology is different from the aerospace institute; I believe Ran Shen isn’t that style,” Qiu Jinyu said helplessly. “Compared to the aerospace institute, Apollo Technology is at least a private agency, plus with Ran Shen there.”
His wife rolled her eyes: “Ran Shen Ran Shen; is Ran Shen personally commanding you? Apollo Technology has a two-layer management structure; does he directly lead you?
You still have small leaders above you; you’re at least four layers away from him? Let’s assume he’s a good leader; after all, young, not beaten down by society, always smooth sailing, so probably has ivory tower naivety; the problem is you’re not facing him.”
Qiu Jinyu said seriously: “Wife, you’re right, but if a company is one that gets things done, and has a lot to do, it inevitably can’t have infighting and office politics.
Like Apollo Technology, if its goal is to build a moon base and use it as a springboard to Mars, it will have a ton of work to do.
Plus the upper management’s style is pragmatic and efficient; for engineers, that’s a sufficiently good environment.”
“Talk after you go; do you have to go to Shanghai?” his wife asked.
Qiu Jinyu said cautiously: “Yes, that’s why I’m discussing with you.”
His wife stood up; he asked: “Where are you going?”
“Get the computer, revise the resume, see what suitable positions are in Shanghai for me!” his wife replied.
The proportion of engineers and employees from these commercial aerospace agencies accepting Apollo Technology offers exceeds 80%.
For those like Qiu Jinyu, married but no kids, it’s the whole family relocating.
If they have kids or the other half has fixed work in Yanjing, they choose temporary separation in two places.
In short, Apollo Technology’s appeal is sufficient.
But soon, a piece of news swept through the entire China.
Pony steps down as Tencent CEO, and Chairman of the Board temporarily taken over by Liu Chiping.
Since joining Tencent, Liu Chiping has always been Tencent Holdings’ CEO and Investment Committee Chairman.
At this time, the veteran takes a new position.
And Pony’s movements sparked guesses across China.
Because unlike Jack Ma, who after explosive remarks was attacked by the crowd and then vanished from the public opinion arena.
Pony didn’t do anything; recently he even created good reputation in the investment circle, investing in Apollo Technology, the unicorn of unicorns.
Outsiders generally feel Pony’s resignation is too sudden.
At this moment, Bilibili’s Apollo Technology official account released an interview video: “Burning: Internet Veteran, Aerospace Newcomer”
