My Age of Investment

  Chapter 973 Cloud Computing and Smart City (two in one)

  "In 2000, Conscience Company was divided into two, and the department selling assembled computers continued to be called Conscience Company. The split-out China Digital was committed to the IT service field, started a second venture, and was listed on the main board of the Hong Kong Stock Exchange the following year.

  Developed to this day, China Digital’s business has involved IT planning and consulting, IT infrastructure system integration, solution design and implementation, application software design and development, IT system operation and maintenance outsourcing and other sectors.

   Especially in the field of manufacturing ERP, China Digital surpassed UFIDA and Kingdee with a user share of 24.5% last year, ranking first in the market and serving more than 2,000 companies.

  In addition, due to strong shareholder relationships, IT services in many industries such as government, finance, telecommunications, and public utilities are also provided by China Digital.

  China Digital’s English name is DigitalChina, which translates to “digital China”, and its corporate mission is also to digitize China to unleash the power of information technology and promote the process of information civilization in China’s society. "

  In the meeting room on the 36th floor of the Beijing China Merchants Building, Li Yaqian, wearing a well-cut white lady's professional suit, stood in front of the projection screen, speaking quickly and steadily introducing relevant materials of China Digital.

Sitting in the audience, Xia Jingxing smiled slightly. The slogan of Digital China is quite loud, but I didn’t see any R&D products with independent intellectual property rights, and took the products of foreigners to spread all over China. This is called Digitize China.

  It’s not that he is ignorantly criticizing China Digital, but that the other party’s development ideas are in the same line as the conscience company, adhering to the spirit of making is better than buying, and will always be at the low end of the industry chain.

  The era is advancing and the industry is upgrading. If China Digital continues to do this, it will basically be abolished.

  In the previous life, it had nearly 100 billion in revenue, but its net profit was as thin as paper, only five or six billion a year. This reflects only one problem-the technology is not good.

Li Yaozu, who was sitting next to Xia Jingxing, put down the information in his hand and looked up at Li Yaqian, who was dressed up on the stage. He spoke in standard Hong Kong-style Putonghua and asked: "Miss Li, I noticed that China Digital was shouting this year. A big slogan came out, to fully transform to IT services, to be China's IBM?"

  Li Yaqian chuckled, “Yes, the conscience company said to be China’s IBM, which generally refers to the PC business; and China Digital also said to be China’s IBM, which generally refers to IT services."

  "This is also a talent for the parent and subsidiary companies, and all kinds of IBM brands."

Xia Jingxing leaned on the chair, folded his hands behind his head, and said lightly: "The reason why IBM sold the personal PC business in the past was to get rid of the burden and to focus on high-end servers, management software, system solutions and other businesses. Maintain its high-end brand image.

  Conscientious company bought a business that people think has no technical content and no prospects, and can’t wait to shout all over the world, just like how cheap it is. "

Lin Bing on the side of    answered: "Conscience companies want to achieve the market share that IBM once created in the personal PC field. There is still hope, but China Digital wants to reach IBM's scale in the IT service field. The difficulty is hell-level."

   "Dreams still have to be made, what if they come true?"

  Xia Jingxing said with a smile, he remembered that China Digital had really learned a lot from IBM.

  IBM is the first company in the world to put forward the concept of "Smart Earth".

What does   Smart Earth mean?

  A global system composed of countless systems-including 6 billion people, thousands of applications, 1 trillion devices, and 100 trillion interactions between them every day.

   is essentially the Internet of Everything.

  Later, IBM found that this matter was a bit difficult, so together with the Oguanhai government, invested in the construction of the first smart city in the United States in Dubuque, Iowa, and planned to complete this big business little by little.

  Huaxia Digital looked at it, good guys, it’s pretty tall, and there is something going on in this matter, so after IBM, it also put forward a similar slogan in China: Be a smart city.

  Smart cities are the technological crystallization of countless cutting-edge technologies such as the Internet of Things, artificial intelligence, cloud computing, etc. Can an outsourcing + IT agency distribution company do well?

  Xia Jingxing deeply doubted this.

  The business direction of smart city is very good, but don’t take this job if you don’t have strong technology.

   "Jingxing, did you acquire China Digital to build that smart city?"

  Because he did not ask clearly at home last time, Chen Hong decided to ask again.

  Xia Jingxing nodded slightly and introduced: “Smart city is only one of the future businesses of the newly established software business group that Fuxing Industrial Group intends to do in the future. Other business scenarios for smart transportation, smart policing, and digital government can be expanded.

   Although the company's own technology is not very good, Huaxia Digital has been doing outsourcing business and agency business for so many years, and it has accumulated a lot of government, enterprise and industry customer resources.

  Fuxing Industry Group has a wide layout in the hardware field, but the software field has always been one of our shortcomings.

  There is a Renaissance IoT company under the innovative business group, and the research and development of IoT-related technologies has been slow.

  No matter how bad the technology of Huaxia Digital is, it is almost one of the best software system manufacturers in China. The acquisition and the absorption of some senior engineers can strengthen the research and development strength of the revival of the Internet of Things. "

  Xia Jingxing spread his hands to Chen Hong, “This is also no way. I can only collect the tatters and select some talents from it. I can never buy IBM’s software and system solutions department, right? That would be done once and for all.”

  Chen Hong grinned, "You can try, maybe the Americans will let the acquisition deal go."

Xia Jingxing ignored Chen Hong’s ridicule and continued self-consciously: “At present, each business segment of Fuxing Industry Group is in its own right, and there is no cross-departmental structured process. Each department has its own process, but the departmental processes are dependent on each other. Manual connection, the operation process is severely fragmented, and it is impossible to maximize the full strength of the group.

  We need a complete, convenient, and efficient system solution to connect the various business departments, so that we can command more easily and our combat effectiveness can be doubled. "

  Lin Bing nodded, and then said: “Since ten years ago, Huawei has spent 4 billion yuan to hire IBM twice to conduct management consulting for the company.

  The content of the first consultation is IPD (Integrated Product Development), ISC (Integrated Supply Chain), IT system reorganization, and four financial unifications, including eight management changes.

  The content of the second consultation is the company's highest decision-making and authority, financial supervision and so on.

   President Ren said that these 4 billion flowers are very worthwhile and solved 9 out of 10 corporate problems diagnosed by Huawei.

When I visited Huawei a few days ago, I also talked to their executives. The scale of Huawei is too big, with a full 84,000 employees. Let alone doing business, how to manage various departments and how to optimize the organization is just a matter. Big problem.

  Take our revival of mobile phones as an example. We are now in urgent need of an integrated system that connects front-end sales channels, back-end supply chains, and middle- and Taiwanese mobile phone companies.

  Only by digitizing all business processes, can supply chain management be done well, thereby creating greater economic benefits for the company.

In addition to the urgent need for management technology changes in our consumer electronics business group, the most urgent need is the smart home appliance business group. Their staff size is the largest among the six business groups. All of the several home appliance brands add up. There are tens of thousands of employees, and it is a high probability that it will reach one to two hundred thousand in the future.

  Although more than 80% of the employees are production workers on the assembly line, there is still a need for digital systems for the connection between R&D, production, and sales departments. "

  Xia Jingxing nodded slightly and smiled: "I agree with most of what you said, but I disagree with the number of employees in the home appliance business group rising to one or two hundred thousand.

  In the company's application plan for the Internet of Things technology, the Industrial Internet of Things is also one of the directions, and one of the application scenarios is intelligent fully automated equipment and industrial robots.

  In the future, simple production operations will replace manual labor with smart equipment and robots, eliminating the need for so many workers, reducing production costs, increasing industrial added value, and upgrading to advanced manufacturing. "

  Lin Bing smiled and nodded: “Yes, I almost forgot, but the Internet of Things technology is still under development and will not be available for a while, but the demand for digital management systems already exists.”

  Chen Hong is also a shareholder of Fuxing Industrial Group. He is more concerned about the development of the company and asked: "Cloud computing, artificial intelligence, Internet of Things, smart cities, industrial robots, internal system integration within enterprises...

  Hearing you talk about so many high-end technologies and applications, I only have one question, is the technical foundation of China Digital Qualified? "

  Xia Jingxing smiled and said, “That’s definitely not enough. My initial plan is to absorb some of China Digital’s R&D engineers and form a software business group to lay a foundation. At the same time, we will vigorously introduce foreign talents to strengthen R&D capabilities.

  Rome was not built in a day, and development needs to be done step by step.

After the spin-off of the R&D department, isn't China Digital also selling servers and operation and maintenance services?

  Get qualified operation and maintenance engineers to train and learn to see if they can do cloud computing operation and maintenance.

  We want to engage in cloud computing. It is not enough to have top R&D personnel. Basic work also needs people to do.

After completing these divestiture steps, the remaining IT distribution business and outsourcing business can continue to retain the brand and listed company status, maintain industry customer resources, government and enterprise resources, and transform in the future to help us sell cloud computing services, artificial intelligence services, and systems High-end technology products such as integrated services and smart cities. "

  While speaking, Xia Jingxing laughed himself, because this is the business direction of China Digital in the future, and he has returned to his old business.

The company shouted the slogan of comprehensive transformation to IT services for more than ten years, and in the end it was still helping many domestic and foreign cloud service providers such as Microsoft Cloud, Ariyun, AWS, and Penguin to sell products. The management platform provides customers with diversified choices.

  Xia Jingxing remembered that the other party seemed to have become Ariyun's national distributor and diamond-level partner...

  It sounds high-end and high-end, but the essence is still doing IT distribution work, but the goods distributed are a little high-end.

   "It doesn't matter what it sells, it is not a sales company? What is the future without its own technology?"

  Chen Hong said and shook his head, “I have already inquired clearly, this time the major shareholder Conscience Company of China Digital is the major shareholder of China Digital.

  Conscience currently holds 47.43% of China Digital’s shares, and they intend to sell 29.6% of the shares to three funds: Saifu Investment, Hony Capital and IDG.

  China Digital’s other shareholder, GA Pan Atlantic Investment Group, sold 13.34% of its shares to China Digital’s President Guo Wei and SAIF Investment Fund.

  In this transaction, three funds such as SAIF and Guo Wei’s bid price was 3.5 Hong Kong dollars per share, which was a 2.78% discount to the company’s 3.6 Hong Kong dollars per share before the company’s suspension, and involved a total of 1.318 billion Hong Kong dollars.

  Since the majority shareholder of Conscience is the Huaxia Academy of Sciences, this transaction needs to be reviewed by the SASAC.

  I have asked someone to send a message to the relevant leaders of the State-owned Assets Supervision and Administration Commission and the China President of the Pan Atlantic Investment Group. Both companies welcome Renaissance Industrial Group and Envision Capital to participate in this transaction. "

  Xia Jingxing nodded and said: "The price of 42.94% of the equity of 1.3 billion Hong Kong dollars is not high. On the contrary, it underestimates the true value of China Digital."

  Chen Hong scratched his head, “I don’t know whether to underestimate or not. Anyway, the trend of revenue and net profit has slowed down in recent quarters.”

  Xia Jingxing heard the overtones all at once, what does this mean?

  Don’t think about it, it is estimated that after the completion of the acquisition, the suppressed revenue and profit growth will completely explode.

  This is also the usual operation of MBO state-owned enterprises. It is not stable. As soon as the MBO is completed, the stock price plummets. Then the professional manager is no longer a successor, how can I repay the bank loan?

"I heard that Guo Wei raised several hundred million yuan in acquisition funds this time. Three old friends, IDG, Hony Capital, and Saifu Investment, will first advance the funds. I can repay the three bridge loans."

  Speaking of this, Chen Hong said with a smile: "It's still easy for these guys to make money! There is no business!"

Xia Jingxing is too lazy to comment too much. The taste of this year is already pretty good, because there are also restrictions on the management rules of listed companies and stock prices. In the early years, many companies that were MBOs were unlisted companies, and asset evaluations depended on brainstorming. , There are many unspeakable things inside.

   "Once we publicly acquire China Digital, the management of Conscience Company will most likely not agree?" Xia Jingxing gave Chen Hong a glance.

   "It's not a high probability, it certainly won't!"

  Chen Hong said with a sneer, “You’re making a move at this time, which is equivalent to ruining a good deed of others. It’s not an exaggeration to describe it as being unfair.”

  Xia Jingxing smiled and said, "Can you bypass them and talk to the top character directly?"

  "Pan Atlantic Investment Group is a foreign investment group. It recognizes money but does not recognize people. There is not so much trouble. As long as the money is given, it should not be a big problem."

Chen Hong stared at Xia Jingxing, "The real difficulty is the Conscience Company. They hold more than 40 points of equity and are the largest shareholder. Moreover, Guo Wei is Mu Zhixin’s apprentice. Both the master and the apprentice wear a pair of trousers. .

  If the management of the two companies, Huaxia Digital and Conscience, strongly oppose our acquisition, then the Chinese Academy of Sciences will definitely have some scruples. "

  Xia Jingxing nodded and asked, “Is it possible to persuade the Chinese Academy of Sciences to agree to the transaction through other directions, such as throwing a cloud computing project?

  Google published cloud computing papers two years ago, and Amazon launched AWS with many problems last year. There is still a gap in this area in China.

  If we come up with cloud computing, it can be considered to be equal to the international leading technology. "

  Chen Hong thought for a moment, then replied: "You can try it, but it may not work well.

  Although this is a big science and technology project that benefits the country and the people, one code is one code, and cloud computing has not really been verified by the market, hasn’t it? "

  Xia Jingxing nodded lightly, and her thoughts drifted far away.

  After the development of cloud computing, what needs to be considered is to market, because only profitable products are good products, and only after making money, can we continue to promote technological upgrades and enhance product market competitiveness.

   Therefore, two types of enterprises have the most advantages when doing cloud computing.

  One category is e-commerce platforms such as Amazon and Ari. The business is pushing for technological upgrades. It is the most urgent enterprise to develop cloud computing servers to handle hundreds of millions of order processing. At the same time, there are a large number of small and medium-sized enterprises resources on the platform.

  Another type of corporate representative is Microsoft. With the software ecosystem and corporate and government resources accumulated by Office software, business development is relatively easy.

  This is also an important reason why Microsoft Cloud came from behind.

  The domestic holding group has no corporate resources, and Fuxing Industry has no ToB business.

After thinking about it, Xia Jingxing felt that to truly make a competitive cloud computing service in China, he could only buy enterprise-level software and system service providers.

  The domestic software sector is still relatively backward, and there are few companies that are truly competitive.

  China Digital is not their only acquisition option. Kingdee, Yonyou, and Inspur are all well-developed B-end software and system service providers.

  It’s just that China Digital is the first to have a suitable acquisition opportunity, and the price is relatively cheap. Spin-off the remaining business can also make a lot of money with the operation of PE investment.

  As for putting eye drops on Mu Zhixin and several venture capital institutions, it was only incidental.

  Of course, from the perspective of the other party, you will definitely feel that you are deliberately targeting them and will do everything possible to block the joint acquisition of Fuxing Industrial Group and Envision Capital.

   "Mr. Xia, do you think this can happen? Will the resistance and cost of acquiring China Digital in the name of Hanergy be relatively small?"

After listening for a long time, Li Yaqian couldn't help but interject.

Before Xia Jingxing could speak, Chen Hong shook his head first and said, "We are so obvious, and we are an investment bank. In the eyes of the Chinese Academy of Sciences, industrial capital is undoubtedly more attractive.

   is in our hands. Most of them are worried that we will dismantle and sell China Digital, leading to the loss of a potential IT service company in China. "

Xia Jingxing nodded slightly. Chen Hong's words are not unreasonable. Due to the influence of Fuxing Mobile, Fuxing Industry Group's face is undoubtedly greater. It is not feasible to entrust other institutions to purchase. Afterwards, the Chinese Academy of Sciences may be tricked. Feel good.

   “No need to discuss, please quote directly to the Chinese Academy of Sciences and the Pan Atlantic Investment Group. Let’s participate in this acquisition dignifiedly. If we can achieve it, we will make things worse. Don’t make it easier.”

  Chen Hongyi glanced at Xia Jingxing, who looked serious, not like joking.

  Thinking about it, the other party has too deep a grievance with his conscience, and reconciliation is impossible. It must fall before this matter can be completely ended.

  (End of this chapter)