Chapter 239: Li Dong’s Net Worth

Resolving internal issues within Yuanfang does not mean that Li Dong can relax now.

Yuanfang still faces many problems.

First and foremost is the industry competition!

The major supermarkets in Pingchuan are determined to fight Li Dong to the end. For nearly ten days, the price-cutting storm has yet to subside.

After ten days, Yuanfang's losses have exceeded five million!

But at this moment, Li Dong cannot retreat. Retreating would mean losing a significant portion of the Pingchuan market.

Yuanfang has established so many branches in Pingchuan. If a significant portion of the market is lost, the subsequent troubles might lead Yuanfang to ruin.

This is the first issue Yuanfang currently faces.

Second, there is the distribution center.

If it cannot be secured before the end of the year, negotiations might drag into the early part of next year.

If the delay is too long, the construction of the distribution center might be pushed back to the year after next.

By then, Yuanfang's number of stores will surely exceed one hundred, or even two hundred.

With fewer than seventy stores now, Yuanfang's logistics system is already struggling, and most of the logistics channels rely on other logistics companies. This is another hidden danger for Yuanfang.

Aside from these two issues, the headquarters building cannot be delayed any longer.

Li Dong is not clear on the exact number of employees at Yuanfang, but he has a rough idea.

With over three thousand employees across various branches, this is no small number.

Previously, recruiting dozens or hundreds of people could be managed at the Global Building, and training could be conducted at different branches.

However, during the last large-scale recruitment of seven to eight hundred people, there was no place for training.

In the end, they had to use a large warehouse in the suburbs of Yuanfang to solve the training problem. This made Li Dong realize that not having a headquarters would weaken employees' sense of belonging and diminish the confidence of the higher-ups.

Now, with so many people crammed into the Global Building, the leaders' office spaces are getting smaller.

Apart from the highest levels like Li Dong, other department heads have to share offices, which is a significant blow to morale.

There are many things to address, but there is no rush.

Li Dong methodically prepares to handle each issue, aiming to resolve them all by the end of the year.

When 2006 begins, Yuanfang will enter a new chapter.

...

Among the three major issues, industry competition needs time, so Li Dong remains inactive on that front for now.

However, the other two issues can be addressed.

In mid-December, Li Dong initiated the third round of negotiations with the Nanjiao government.

This negotiation is urgent for both Yuanfang and Nanjiao.

Yuanfang hopes to secure the land as soon as possible, start construction in early spring next year, and complete it by October, making it operational by the end of the year.

The Nanjiao side is even more anxious.

The further negotiations with South Lake have indeed made the Nanjiao government nervous. They initially suspected Yuanfang was just putting pressure on them.

But when news came from South Lake that Yuanfang's Vice President Wang Yue had begun on-site inspections, Nanjiao's officials could no longer wait.

Both sides were keen to finalize this negotiation.

The preliminary talks had already been completed. Now, the only remaining issue was the land's designation: should it be classified as commercial or industrial?

Since they had reached this stage, the Nanjiao government was willing to negotiate actively, which indicated many things.

This time, the city government did not interfere but allowed the Nanjiao government to negotiate directly with Yuanfang.

The third round of talks did not last long. In just three days, an agreement was reached.

The most crucial point in the agreement was the land. The Nanjiao government made a concession.

The land would be classified as industrial, but Yuanfang would have to purchase it at a price 20% above the market rate.

This was essentially giving the government a way to save face. If classified as commercial land, the value would be nearly 200 million.

But now, as industrial land, it could be acquired for 50 million.

With a 20% increase, it would be 60 million. For 100,000 square meters of land, 60 million is reasonable.

However, government discounts are not easily come by. The Nanjiao government's willingness to invest heavily in Yuanfang's distribution center was motivated by political achievements and economic benefits.

If Yuanfang fails to meet the Nanjiao government's requirements, the government reserves the right to repurchase the land.

Li Dong quickly agreed to this. He was confident about the distribution center.

Just think about the Maqun distribution center in Nanjing. A single Maqun distribution center supports many people.

Suguo has benefited immensely from the Maqun distribution center.

If Yuanfang had not suddenly emerged in Jiangbei, Suguo might have already been planning to expand into Jiangbei. The influence of the Maqun distribution center was substantial.

After the negotiations, Li Dong did not need to handle the follow-up.

Just as Li Dong prepared to focus on the headquarters, Financial Director Liu Hongmei came to him with troubling news: the company was out of money!

Li Dong could hardly believe it. How could they be out of money?

Not long ago, Shen Qian had borrowed 50 million from the bank using the Huafu land as collateral. Fifty million is not a small amount. Additionally, Yuanfang's cash flow was very strong, and there should be no risk of a funding shortage.

Li Dong's face darkened as he asked, "How much money does Yuanfang have now?"

"Less than one hundred million."

Li Dong frowned and said, "How could it be so little?"

This wasn't a show; it was the truth. For Yuanfang at present, one hundred million in reserves was indeed not much.

In Li Dong's memory, just the funds for goods and vouchers alone exceeded two hundred million.

That means Yuanfang not only owed the bank 90 million in loans but had also diverted over one hundred million in funds.

Over two hundred million in liabilities was unexpected.

Liu Hongmei had anticipated that Li Dong might be unaware of the specific expenditure and immediately said, "Mr. Li, let me calculate the accounts for you."

"We'll start from the beginning of the year. At the start of the year, Yuanfang had no assets apart from the funds for goods and vouchers, which means, except for the Qingyang stores and the Longhua store, we had zero assets."

"Let me update you on this year's income."

"The six Qingyang stores and the Longhua store have been operating for ten months, with a total profit of 88 million."

"The seven Fucheng stores opened in July and have been operating for five months, with a total profit of 46 million."

"The twelve Tongshan stores opened in September and have been operating for three months, with a total profit of 26 million."

"The five Pingchuan convenience stores have been operating for two months, with a profit of around 4 million."

"The other ten newly opened stores are not yet profitable, totaling a profit of 164 million."

"Now let's calculate the expenses: The Fucheng and Tongshan stores cost 40 million; Baidu stock funds were 75 million; Huafu land was 80 million; the 39 stores in Pingchuan cost nearly 200 million; and other expenses including vehicles, building rent, and donations totaled 25 million. The total expenditure is 440 million."

"While our income is 164 million, loans are 90 million, and expenditures are 440 million, the overdrawn funds amount to 186 million!"

Li Dong was stunned by these figures.

Spent over four hundred million this year?

And this doesn't include the distribution center's land. If added, it means he spent a whole five hundred million this year.

With an overdrawn amount of over one hundred million, plus loans, it's almost two hundred eighty million.

Li Dong was overwhelmed by this.

No wonder they were out of money. He hadn't expected that over one hundred million of the funds for goods and vouchers had been diverted, leaving only one hundred million.

But this money could not be used any further. Yuanfang's expansion was so large that Li Dong wouldn't feel secure without a reserve of one hundred million.

Where would the funds for the distribution center come from?

The Baidu stock would not be available until March next year, meaning that any plans would have to wait.

After thinking for a moment, Li Dong asked, "Are there any other expenditures this year?"

"None for now. The money for Pingchuan's stores has already been allocated, and that should be sufficient for the construction."

"As for the distribution center, it's not very urgent. We can delay with the government. Yuanfang now has over thirty stores, generating nearly 30 million in monthly profit. In two months, we should have enough for the land."

Li Dong rubbed his temples. Yuanfang now relied almost entirely on these thirty stores.

The huge investment in Pingchuan had yet to yield results.

One reason is that the stores are not fully operational, and the other is the price war with several supermarkets, which is mutually damaging.

Otherwise, once the more than thirty stores in Pingchuan are up and running, each month should contribute at least 20 million.

In that case, if all the stores are profitable, each month should generate around 50 million in revenue.

With a yearly profit of around 600 million, there would be enough money to do anything.

Unfortunately, these are just fantasies. Pingchuan's stores are becoming money-eating machines, and no amount of money seems enough.

Especially the distribution center, with an investment of nearly two hundred million

, and Huafu's land costing at least one hundred million, totaling three hundred million.

Even if Li Dong sold the stocks, the remaining funds might just barely meet his requirements.

After calculating everything, Li Dong realized he would end up with nothing by the end of the year, even counting the stocks.

But according to his calculations, this year he has acquired a headquarters, a distribution center, and over sixty new stores.

This is his entire gain and all the capital he has.

Li Dong idly calculated. Seventy stores could be worth around 350 million.

The Huafu land and building could be valued at 250 million, which is not a problem.

The distribution center could be valued at around 200 million, bringing his total assets to 800 million.

Of course, Li Dong has not counted some things.

For instance, the appreciation of the stores and Yuanfang's brand are intangible assets with significant value.

If counted, it might not be far from ten billion.

Li Dong took a deep breath, surprised that he actually had so much money.

Previously, when people said he was a billionaire, Li Dong wanted to refute them. Now it seems they had foresight.

Unfortunately, as a billionaire, Li Dong couldn't even afford a piece of land.

Sixty million is no small amount.

It looks like he won't be able to start any new projects this year. With the cold weather, he will have to delay until next year.

Moreover, the troublesome supermarkets need to be dealt with as soon as possible. He has suffered too much loss because of them.

If it weren't for these supermarkets causing trouble, by the end of the year, when all the Pingchuan stores are open,

Each month would at least bring in 20 million in revenue, and possibly more if business is good.

Li Dong initially wanted to delay, but now he realizes there is no time to wait.

He has no money for the headquarters and distribution center, so the only thing he can focus on this year is dealing with those supermarkets.

There is just over a month until the New Year, and the peak season is approaching.

If price wars continue, he will really suffer huge losses.

One month, at most one month, he must resolve these issues!

Li Dong gritted his teeth. He couldn't believe these supermarkets could fight him with just a single store!