Chapter 222 Investing in Wal-Mart

Chapter 222 Investing in Wal-Mart

Chapter 222 Investing in Wal-Mart

"20 US dollars?" Yang Wendong didn't care about the money, but the normal process would not allow him to agree immediately, so he asked: "Do you mean this store, or all your previous stores?"

"Of course, all the previous stores." Sam Walton said: "The total investment for this store is only $50."

Yang Wendong asked again: "Are these 16 stores all rented?"

"Yes, we rent them all," Sam Walton replied. "I know it would be convenient to own a store, but it would cost too much money. The most important thing right now is to expand the number and scale of supermarkets and then find ways to reduce costs."

"Yeah, that's right." Yang Wendong nodded and said, "I'm happy to invest, but I need to check the financial status of the entire Walmart in detail."

Knowing the future is one thing, but investing in a company without even checking its financials is simply unreasonable.

Sam smiled and said, "Okay, I have already prepared the information."

"Then let's wait until the financial information is reviewed before discussing the specific details of the investment?" Yang Wendong said again.

"Okay." Walton nodded and said, "It's almost lunchtime. If you don't mind, I'll take you to a small restaurant nearby for a meal. This place is a bit far from the nearest big hotel."

"No problem, I'm fine." Yang Wendong naturally didn't mind having to eat in a big hotel. In fact, many times, local delicacies are found in the countryside.

The process of Walmart's founding is to surround the city from the countryside. In the early days, due to limited funds, it could only open stores in towns and avoid big cities with fierce competition.

Afterwards, Walton took everyone to a nearby fried chicken shop with a very ordinary name, called "John's Fried Chicken".

Yang Wendong asked with a smile: "This fried chicken shop is very common in the United States."

"Yes, I like it very much." Sam said, "Eric, do you like it?"

"I like it too. There are not many stores like this in Hong Kong." Yang Wendong nodded.

Given Hong Kong's economic conditions, it is unlikely that fried chicken will appear, as oil is relatively expensive. This will only appear when the economy improves.

As for the United States, fried chicken restaurants have only been around for a few decades, and chain stores like KFC have only just begun to develop.

This is because the United States itself is a major agricultural country.

……

After lunch, Walton took Yang Wendong to an office above the Walmart supermarket.

After pouring a cup of coffee, Walton asked, "Eric, you are from Hong Kong, thousands of miles away. Why do you want to invest in the U.S. retail industry?"

"You also know my company's products, right?" Yang Wendong asked back.

"I know." Walton nodded and said, "Post-it notes, hooks, and trolley suitcases are all very good. I also have them in my supermarket."

Yang Wendong said: "My products mainly rely on terminals such as supermarkets or department stores to be sold more conveniently, so I want to invest in some of the US retail industry."

Walton was puzzled and said, "But there are too many retail businesses in the United States. I'm afraid it's not an exaggeration to describe the scale as hundreds of billions of dollars. How could you possibly invest in more than that?"

Yang Wendong said: "So, I will choose some companies that I am optimistic about. As early as two years ago, I asked people to investigate the information of many retail companies in the United States."

"Then why do you think highly of me?" Sam Walton asked curiously.

In those days, in order to attract investment, he would take the initiative to find banks or investors, but today, Hong Kong capital came to him on its own initiative, which made him feel strange.

Yang Wendong said: "In fact, it is because of your previous business logic, which focuses on discounts, I believe that this model will definitely make your scale bigger and bigger.

This is also in my interest, both in terms of the end market for my product and the investment itself.”

“Hahaha, thank you very much.” Walton said with a smile: “As long as I have the funds, I will definitely expand as quickly as possible.”

Yang Wendong nodded. He naturally believed in Walton's ability, and then said, "Sam, there is one more thing. I want to ask you to do me a favor."

"What's the matter? Please tell me." Walton was also polite to Yang Wendong, because he was the most talkative investor he had ever received.

Yang Wendong said: "I want to build a supermarket in Hong Kong, but I have no experience in this area, so I want to bring a few people from your company to Hong Kong."

Is it difficult to run a retail supermarket? Not difficult. Many people who want to start a business first think of opening a small store.

But it is also the most difficult business in the world, precisely because anyone can enter, and if you want to become the strongest, you need to compete with too many people.

Currently, the global retail of daily necessities is still mainly based on department stores, plus small grocery stores.

Although supermarkets have been around for a long time, they have not been able to grow big because it is difficult to reduce costs.

"You want to poach my people to run a supermarket in Hong Kong?" Walton asked in surprise.

"Yes, I came to invest in you because I am optimistic about this industry." Yang Wendong smiled and asked, "Sam, are you worried that I will become your competitor in the future?"

"That's not the case." Sam Walton shook his head and said, "Even if you invest in supermarkets in the United States, I don't care as long as they are not within 3 miles of my existing stores.

The market is so large that competition is virtually impossible.”

"I haven't thought about coming to the United States to run the business myself. It's enough for me to invest in a company like yours." Yang Wendong nodded and said.

Even in the 21st century with advanced technology and smooth information flow, it is extremely risky for an Asian company to do business in the United States, especially in the local service industry.

In the supermarket industry of the past, giants from various countries would suffer from severe acclimatization problems once they went to other countries.

Therefore, this industry is still mainly based on investment, and you only need to run your own supermarket within your own sphere of influence.

Sam Walton thought for a moment and said, “Eric, although these supermarkets look similar, they are actually absolutely different in different places;

Not to mention overseas, even in the United States, the business models in different places are different.”

“I know that.” Yang Wendong said, “We will make adjustments based on the needs of local Hong Kong people, but your retail business has been developing well over the years, so it must have its strengths.

There is no such business in Hong Kong, and I am not familiar with it, so bringing a few people back from you can at least avoid many problems in the early stages."

Because there is an investment relationship, it is necessary to inform the other party of the poaching incident as it is considered as a courtesy, because there is no need to create misunderstandings due to such a small matter.

"Okay, that's not a problem." Walton nodded and said, "But it's better to wait until we finalize the cooperation."

"Okay, no problem." Yang Wendong continued, "Then starting tomorrow, I will invite a third party to check your company's accounts. Once we've reached an agreement, we can discuss the price and share ratio. How about that?"

"Okay." Walton agreed and said, "If you want to poach someone, you are free to do so. I will not interfere, but you need to tell me who it is."

"Okay." Yang Wendong nodded.

In fact, the reason for poaching people from Walmart is that the supermarket industry itself is not very large in the United States, and Walmart is now considered to be quite large;
In theory, those who followed Walton earliest were at least a little better than those who randomly poached people from other companies, and they might understand some of the reasons for Walton's success.

After returning to the hotel, Yang Wendong read the latest American newspapers while Bai Yushan was brewing tea beside him. "Take a sip." Bai Yushan brought over a cup of tea and said, "I've been learning the tea ceremony recently."

"That's good. Many wealthy people in Hong Kong still like to drink tea." Yang Wendong took the teacup, took a sip, and praised, "It tastes good."

"I think you are lying to me." Bai Yushan felt so-so after she finished drinking it.

Yang Wendong smiled and said, "That's just a nice thing to say."

"Okay!" Bai Yushan smiled, then put down the teacup and said, "I found a problem when I was at Walmart this morning."

"Tell me about it." Yang Wendong asked.

Bai Yushan said: "Many customers of this Walmart drive here, and there are many parking spaces and open spaces in front of their supermarket.

But such conditions are impossible to replicate in Hong Kong, as most people don’t have cars and our shopping malls don’t have that many parking spaces.”

"That's right." Yang Wendong nodded and said, "So even in the supermarket business, we need to adapt to local conditions.

The United States has a low population density, cheap automobile fuel, and a strong economy, so most people travel by car.

In Hong Kong and many cities in Asian countries, it is the opposite. Most people in Asia like to gather together, which reduces travel costs.

In this case, opening a supermarket is different. In the United States, it is best to open it in the suburbs, but in Hong Kong, it should be opened in the city center. "

"Build it in the city? That's quite suitable for you since you have a lot of properties anyway." Bai Yushan nodded and said.

Yang Wendong added: "There is also transportation. Don't forget that I am the actual controller of China-Pakistan Bus. It is not a problem to coordinate the China-Pakistan bus routes."

Through a share expansion financing, Yang Wendong now controls 49.9% of China-Pakistan's shares, becoming the absolute controller of China-Pakistan.

Even if the others joined forces, they could not do anything to him, but he kept his promise to Huang Yaonan and handed over full responsibility to the Huang family.

Bai Yushan asked in surprise: "Have you thought about this day a long time ago?"

"I guess so." Yang Wendong said, "I knew early on that China Bus would play a big role and could complement my service industry."

"That's true." Bai Yushan nodded and said, "Then next, we just have to wait for the results of the financial review."

Yang Wendong said: "Well, it will be done very quickly, in just a few days. Walmart is not very big right now."

In fact, even if the other party’s accounts are very bad now, he will only be happier, because this will give him an advantage in this investment.

Bai Yushan asked again: "Have you considered other supermarkets? Is this the only one?"

"Let's consider other things later." Yang Wendong paused and said.

Theoretically, there are several other good supermarkets, but he only knows the names of the supermarkets and has no idea about the information of the founders.

We can only wait until they reach a certain scale and are discovered after Lin Youqiang's people organize the information and send it to Yang Wendong, and then we can consider whether to invest.

"Yeah." Bai Yushan said again: "I heard there will be a circus performance here tonight, let's go and see it tonight."

"Okay." Yang Wendong agreed.

Investing is important, but so is enjoying life.

Life, after all, is just over 30,000 days.

……

After staying in the town for 5 days, the third party and the international finance team that followed from Hong Kong jointly audited Walmart’s 15 existing supermarkets.

Yang Wendong came to Walton's office again and said, "Sam, I think you also know the evaluation of Wal-Mart by the third-party company. They think your 15 supermarkets are worth only $70."

"No, I don't agree." Walton shook his head and said, "This is because of the economic crisis last year, which made many people reluctant to spend money, but the economic crisis will eventually pass."

Yang Wendong said: "The economic crisis will indeed pass, but during this period, when I buy stocks of listed companies, I am buying them for their current value, not for the future.

Any investment is made now. You can’t say it will be worth $300 million in the future, so it’s worth that much, right? ”

"Eric, you have a point," said Sam Walton. "But I still firmly believe that my business is worth more. We just need to survive this period."

"If you have confidence, I like it very much." Yang Wendong said again: "If it is priced at one million US dollars, I can agree, but I want 15% of the shares, Sam, what do you think?"

"$15?" Sam frowned. "I don't need that much money."

Yang Wendong shook his head and said, "No, you need it. Although you have 15 supermarkets, the first 14 are small-scale, and there is only one Wal-Mart supermarket like this.

If you want to reduce costs by increasing scale, you need more Wal-Marts to succeed.”

Sam Walton said: "That makes sense, but if that's the case, then $15 isn't enough, right?"

Yang Wendong added: "I can lend you an additional sum of money. As for the amount, we can negotiate, but three or four hundred thousand dollars is not a problem."

In the past two years, Changxing Industrial's products have been exported to the United States, and a lot of US dollars have been earned. These funds have not been transferred back to Hong Kong in full, but have been placed in overseas tax haven accounts. The purpose is to be able to invest in high-quality overseas companies when there is demand.

Knowing the future, the investment returns of some future companies in their infancy will far exceed those of the buildings in Central, such as Walmart.

"A separate loan? What about mortgage and interest?" asked Sam.

Yang Wendong said, "The interest rate is the same as that of normal banks in the United States. If you want to mortgage it, you can use the stocks you have. How about that?"

"Okay, I need to think about it." Sam hesitated.

Taking the money will indeed enable him to develop rapidly, but if the economy does not recover and he becomes too heavily indebted, he may lose management rights of the company.

Yang Wendong added: "I am a Hong Konger and it is unlikely that I will run a large local service industry company in the United States. So no matter how many shares I have in the future, I will not compete with you for the management rights of the company."

This is a promise, and it is also a reality. Even if Walton gave Walmart to him for free and he hired professional managers to manage it, it is estimated that even if he survived in the end, his performance would be mediocre.

The most important thing is Sam Walton himself.

After listening to this, Sam nodded and said, "Okay, if there is no problem, I think this kind of cooperation is not a bad idea."

……

PS: Please vote for me.

(End of this chapter)