Chapter 951: Strategic Equity Investment

With the successful acquisition of Kowloon Motor Bus and China Motor Bus, and Liu Sanquan's proper handling of the dead and injured, Jiuding News no longer fanned the flames, and public opinion about Kowloon Motor Bus quickly subsided.

People are good at forgetting the past!

I believe that with the passage of time, this incident will gradually be forgotten and become just a memory.

Unless another accident occurs and someone with an interest in the matter picks it up and exposes it, people's memories will not be awakened.

...

'Knock, knock, knock!'

'Come in!'

Upon hearing the knock on the door, Xia Yu said without looking up, continuing to sign documents. When he felt someone come up to him, Xia Yu looked up and saw Huo Jianning.

Xia Yu smiled and motioned for Huo Jianning to sit down: 'Jianning, sit down!'

'Thank you, Chairman!'

'Chairman, this is the information you asked me to collect on the island's Pioneer Electronics Company. There are 28 pages in total. Please take a look!'

Huo Jianning said, and handed Xia Yu a document in his hand. After Xia Yu took it, he sat down properly.

Xia Yu weighed the document and said with a smile, 'It seems like there is a lot of information. You've put in a lot of effort.'

'You go ahead and attend to other matters. I should finish reading it in half an hour, so come back then.'

Huo Jianning was taken aback, and then got up and bowed slightly, saying, 'Okay, then Chairman, I'll go downstairs first.'

'Mm!'

Xia Yu ignored Huo Jianning, lowered his head and flipped through the information, quickly scanning it, only pausing for a moment when he came across key information.

More and more information about the island country's Pioneer Electronics company entered his mind.

Island Pioneer Electronics was founded in 1938 by the founder Nozomu Matsumoto, who started out by developing the A-8 moving coil loudspeaker. The company was originally called the Gospel Chamber of Commerce Electric Machinery Factory, and it was not until 1961 that it was renamed to its current name.

Pioneer's products have gone through four distinct phases.

The first phase was the launch of the world's first component stereo system in 1962, which sold well all over the world. Because of this product, Pioneer also successively established sales companies in Europe and the United States in the following years, which propelled Pioneer into the world and transformed it from an island company into a multinational corporation.

Pioneer took advantage of the booming market and was listed on the Tokyo Stock Exchange, Osaka Securities Exchange and the Amsterdam Stock Exchange in the Netherlands.

The second stage was in 1975, when Pioneer once again launched the first modular car stereo, which was again well received by the market. Pioneer's outstanding sales and performance led to its listing on the New York Stock Exchange in December 1976 in order to further develop the US market.

In this way, Pioneer became a well-known and established multinational company.

The third stage was 1977, when Pioneer Electronics broke out of the audio field and launched the world's first two-way addressable cable TV system in the US, entering the US cable TV market with the help of a partnership with Warner Bros.

The fourth stage was 1979 and 1980, when Pioneer Electronics acquired most of the rights to Philips' LD laser disc system and successively launched an industrial LD player and a home LD player, the VP-1000.

Apart from these more iconic products, Pioneer Electronics has other products and businesses that are not as prominent as the above products, but there are also many bright spots.

Overall, Pioneer Electronics is an outstanding electronics company and a top company in the world of audio.

Xia Yu vaguely remembers that when he visited the Rolls-Royce Motor Cars Group in the UK, he heard that its subsidiary Bentley Motors purchased Pioneer car audio...

According to data, Pioneer Electronics is listed on multiple exchanges, with the highest market value being the Tokyo Stock Exchange, currently worth 180.4 billion yen.

According to the current exchange rate of the US dollar to the Japanese yen, the market value is equivalent to about 820 million US dollars.

As for Xia Yu's concern about the equity structure of the island nation's Pioneer Electronics, it is quite characteristic of the island nation's initial post-World War II period to the present, with a highly dispersed individual shareholding and a mutually stable shareholding structure between relatively concentrated financial institutions and industrial legal persons.

I remember that it was only after the 1990s, when the island government relaxed a series of reform measures, that it brought about the second change in the shareholding structure, with the dissolution of cross-shareholding and the rise of pure market investment holdings.

So for now, there is no so-called largest shareholder in Pioneer Electronics.

The largest shareholder is Mitsubishi Electric Corporation, with a 5.9% stake.

The second largest shareholder is the founding Matsumoto family, with a 4.7% stake.

...

Then the top ten shareholders combined hold 31.7%!

The top 20 shareholders together hold 43.4%!

However, Fok Kin-ning has done his research diligently and has highlighted the backgrounds or related backgrounds of the top 10 and top 20 shareholders.

For example, Mitsubishi Electric, the largest shareholder, is undoubtedly one of the core companies of the Mitsubishi conglomerate.

Among the top 10 shareholders, in addition to Mitsubishi Electric, the Mitsubishi conglomerate also includes the fifth largest shareholder, the Bank of Tokyo-Mitsubishi, with a 3.2% stake, and the ninth largest shareholder, Mitsubishi Motors, with a 2.2% stake.

So counting up, the Mitsubishi consortium controls a total of 11.3% of Pioneer Electronics, the largest percentage.

Even though this cumulative shareholding percentage does not allow the Mitsubishi consortium to make decisions at Pioneer Electronics, considering the cooperative relationship with Mitsubishi Motors and other companies under the Mitsubishi consortium, the influence of the Mitsubishi consortium on Pioneer Electronics is still very large.

Therefore, Pioneer Electronics can be considered a peripheral enterprise of the Mitsubishi consortium.

However, Xia Yu also knew that the Mitsubishi Group didn't need many peripheral companies like Pioneer Electronics. If there was anything special about it, it was that Pioneer Electronics had a relatively high market value and was stronger!

Before he knew it, half an hour had passed in a flash, and Fok Kin-ning was once again in Xia Yu's office.

Xia Yu looked approvingly at him and praised him, 'Kin-ning, you've collected very detailed information, you've put your heart into it.'

Fok Kin-ning said modestly, 'Thank you, Chairman, I should do this.'

Xia Yu smiled and nodded, placed the information on the desk, and said to Huo Jianning, 'I've read the content as well. Although the shares of Pioneer Electronics are widely dispersed, it will be relatively difficult to acquire.'

'What is your opinion on this situation?'

Fok Kin-ning had obviously already considered this question. He organised his thoughts and said, 'Chairman, among the top twenty shareholders of Pioneer Electronics, fourteen have relatively deep business dealings, either with banks and insurance companies in capital lending relationships, or with business partners such as Mitsubishi Motors and Mitsubishi Electric.'

'Moreover, Pioneer Electronics also has cross-shareholding relationships with some of these companies. Although the shareholding ratios are not large, the corporate legal persons are shareholders and directors of each other.'

'This also shows that these equity interests mainly serve as cooperative links, not simply as investment, so the difficulty of acquisition will be very great.'

'Even if these shareholders' equity interests are really acquired, it will also bring hidden dangers to Pioneer Electronics, and the cooperative relationship with other companies will be unstable.'

'In addition, Pioneer Electronics is also listed on the Amsterdam Stock Exchange in the Netherlands and the New York Stock Exchange in the United States, and some European and American institutions also hold Pioneer Electronics' shares. These holdings are simply stock investments, but they will also make acquisitions cumbersome.'

'Of course there are pros and cons. Pioneer Electronics is listed on multiple exchanges, which will also facilitate our covert stock-buying and reduce the probability of being discovered.'

'If you don't want to acquire Pioneer Electronics entirely, then I suggest buying in the name of multiple companies from the secondary market in various places, unknowingly increasing your stake, and rushing into the top 20 and top 10 shareholders, and then acquiring the shares of those non-business shareholders among the top 20 shareholders.'

'Papatapa...'

After Fok Kin-ning finished speaking, Xia Yu's applause followed.

'The thinking is very clear and highly executable,'

Xia Yu said in admiration.

Fok Kin-ning smiled modestly and said, 'It's still thanks to your good training, Chairman. I just don't know if my ideas are in line with yours.'

Xia Yu smiled and said, 'Your ideas are exactly what I had in mind. I don't want to acquire Pioneer Electronics entirely.'

'The main reason is to play a role in improving the industrial chain,'

'Car audio systems like those from Pioneer Electronics are needed by car companies.'

'LD players and related patents are needed by Tiangong Electronics in the future.'

'Stereo audio systems and cable TV systems are also useful.'

As long as they have a stake in Pioneer Electronics and have significant say in the company, car companies, electronics companies, electrical appliance manufacturing companies, and American media companies will all have a solid supply chain for products and technology. They won't have to worry about being extorted by others in these fields in the future, or about other problems.

This is the significance of strategic investment!

The six major consortia in the island country rely on this model to invest in companies around the world, connecting the industrial chains of various industries. Many potential constraints are eliminated before they sprout because of a small number of shareholding relationships.

Xia Yu's Jiuding consortium has inevitably rubbed shoulders with the world's major consortia as it has grown to its current scale, so this model of strategic investment is undoubtedly the most suitable, as it costs little but can achieve results that are not too different.

Seeing that he had guessed the chairman's thoughts correctly, Fok Kin-ning became more and more confident. He smiled and asked, 'Chairman, so what are you going to do? Please give me your orders!'

Xia Yu pondered for a moment and said to Fok Kin-ning, 'It would have been more appropriate to have Wang Qi from Jiuding Securities handle this matter, but since you are handling it, you should deal with it. You should also take this opportunity to train yourself and deepen your understanding of the capital market. If a company wants to develop well, it must have a sufficient understanding of the capital market.'

Fok Kin-ning's eyes flashed with a thoughtful expression, and he nodded solemnly to indicate that he had heard it.

Xia Yu continued, 'The purpose of placing the acquired equity in the hands of Tiangong Electronics, Tiangong Electrical Appliances Manufacturing, Tiangong Machinery Group, Tiangong Automotive Group and Jiuding Securities is to deepen the influence on the board of directors of Pioneer Electronics. As for the extent to which this is achieved, it is up to you to decide according to the situation. Report back to me after you have completed it.'

'As for the funds, I will inject 100 million US dollars into Tiangong Group, with 25 million US dollars going to each of its four subsidiaries. You will have to find the rest yourself.'

'To facilitate your actions, I will appoint you as the acting chairman of Tiangong Group, and strive to remove the word 'acting' as soon as possible.'

Fok Kin-ning was overwhelmed with joy. He took a deep breath to suppress his excitement, nodded firmly and promised, 'Thank you, Chairman, for your trust. I will definitely not let you down!'

Xia Yu crossed his arms, leaned forward, and asked with a smile, 'Do you have any questions?'

Huo Jianing thought for a moment and shook his head, saying, "No!'

Xia Yu nodded slightly and said, "Okay, you go ahead!'

'Goodbye, Chairman!'

After saying this, Huo Jianing bowed slightly and exited the chairman's office.

Xia Yu smiled as he watched Huo Jianing go out in high spirits.

He had been watching Fok Kin-ning's performance closely, and whether it was assisting him with matters or running Tiangong Electronics, he had done an excellent job. The situation he had been worried about, of trying to force growth, had not happened.

That was why he had taken this opportunity to confidently give Fok Kin-ning more responsibilities and continue to help him grow.

He believed that in a few years, Fok Kin-ning would become a capable person he could fully trust and rely on!