Chapter 313: Five Small Goals, Unit Sword Music
Both sides took a step back and reached a compromise.
In the end, Shirakawa Electric's valuation was set at around 580 billion yen.
This valuation is about 7 times the profit of Shirakawa Electric for a whole year. To be honest, Shirakawa Feng is quite satisfied.
For the manufacturing industry, this valuation multiple is already high.
This is also because Dai-ichi Kangyo Bank and Nomura Securities are optimistic about the future of Shirakawa Electric, which is why they gave such a high valuation.
If it is a more traditional manufacturing industry, such as clothing, wood and other industries without high added value, the maximum valuation profit is 3 to 4 times.
Different industries and different product areas have different objects of reference.
For example, the valuation of Shirakawa Electric was partly based on Sony.
Because the two businesses have the highest degree of overlap, and even the market shares of some products are relatively close.
If Shirakawa Electric continues to grow in the future, Sony may become its realistic reflection.
Therefore, Ichiro Watanabe and Takashi Yanagitani both agree to use Sony as a reference for valuation.
As for why Nintendo is not used as a reference, it is because although its businesses seem to be extensive, they are actually all concentrated in the toy and entertainment industry.
From the perspective of product diversification and consumer target groups, its potential is not as great as Shirakawa Electric.
In addition, Nintendo still has a large amount of debt to repay, and its market value is generally underestimated.
If it is used as a reference for valuation, it would be underestimating Shirakawa Electric.
As for the fact that many new listed companies in later generations have valuations of 10 or 20 times, that is another kind of trick.
Especially for Internet companies, a 50-fold increase is very normal.
Some social Internet companies are even valued based on the number of registered users, with each user being worth a few dozen dollars, and their market value is calculated in this way.
Different industries and fields have very different methods for company valuation, and the process is complex and varied .
At present, Shirakawa Electric is valued at 580 billion yen, which is an acceptable figure for both parties.
But now that we have agreed on the valuation, let’s talk about financing.
"Mr. Shirakawa, according to the previous agreement, Dai-ichi Kangyo Bank will buy 10% of Shirakawa Electric's shares for 58.65 billion yen.
I'm sure you have no objection to this, right?" Watanabe Ichiro looked at Shirakawa Kaede with a meaningful look.
Hearing the other party's particularly emphatic tone, Baichuan Feng also raised his eyebrows.
This is not financing, this is an intention to directly spend money to buy 10% of Shirakawa Electric's shares.
As for Watanabe Ichiro's proposal, Shirakawa Kaede and Arai Yu looked at each other and confirmed it.
Shirakawa Feng also nodded in approval, "Okay, let's follow Watanabe-san's suggestion."
What is the difference between the shares financed and the shares purchased? First, the money used to persuade Yinhua is different.
If it is financing, Dai-ichi Kangyo Bank needs to invest a sum of money into the total share capital of 580 billion, and then calculate the share ratio based on the total.
At this time, if Dai-ichi Kangyo Bank wants to take a 10% stake, the investment amount will be 65.17 billion yen.
In simple terms, the financing money is included in the denominator of the total share capital, and then the share ratio is calculated.
But it’s different if you just spend money to buy shares: 5865*10%=58.65 billion yen, simple and crude.
Although both methods aim to acquire 10% of the shares, the investment amounts differ by about 7 billion.
Since it was clear that Baichuan Electric got less money, why did Baichuan Feng agree without much consideration?
Because the 65.17 billion yen in financing entered the account of Shirakawa Electric.
But that was already book funds, and at this time, the shareholders of Shirakawa Electric had become Shirakawa Holdings and Dai-ichi Kangyo Bank.
By this calculation, the financing money belongs to the common property of Shirakawa Holdings and Dai-ichi Kangyo Bank.
At that time, it would be unrealistic for Baichuan Feng to deal with it at will. If he accepted the financing, he had to abide by the rules.
But if Dai-ichi Kangyo Bank directly spends money to buy 10% of the shares, then the money will become the private property of Shirakawa Holdings.
This is legitimate income from the sale of shares, and Baichuan Feng can dispose of it at will.
To put it bluntly, Shirakawa Kaede cannot get the 65.17 billion yen in financing.
The 58.65 billion yuan from the sale of shares can all go into his pocket.
This is why, for the same 10% stake, Baichuan Feng chose to sell it at a relatively cheap price.
Dai-ichi Kangyo Bank spent less money to get 10% of the shares of Shirakawa Electric, and Shirakawa Kaede also earned a considerable income personally, so both parties were happy.
After all, Shirakawa Electric has sufficient cash flow and does not need to raise funds to maintain the company's operations.
If it is a newly established company, Dai-ichi Kangyo Bank would rather pay more money for financing rather than directly buy shares.
Because if the startup company does not rely on the financing money, how can it maintain its operations and continue to develop new technologies to gain more market share?
There are various financing methods for companies with different operating conditions.
After securing 58.65 billion yen, Shirakawa looked at the people from Nomura Securities again.
Yanagiya Xiao lowered his head and had a brief discussion with his team members, and wisely chose to purchase shares directly.
Nomura's goal here is to acquire at least 8% of Shirakawa Electric's shares, and Shirakawa Kaede also agreed to their request.
However, since Dai-ichi Kangyo Bank has already acquired 10%, the current 8% stake will be further divided by Shirakawa Holdings.
This means another 47 billion yen in revenue, plus the 58.65 billion yen from Dai-ichi Kangyo Bank, the total is 105.5 billion yen.
Damn, it's really a time to make a fortune when the company goes public.
Just from this pre-IPO financing, Shirakawa Feng earned more income than Shirakawa Electric made in the entire year last year.
105.5 billion yen, 420 million US dollars, a lot of money~
However, Shirakawa Feng doesn't feel bad at all about making money from Dai-ichi Kangyo Bank and Nomura Securities.
These two are absolute behemoths: one is the core bank of one of the six major chaebols, and the other is the largest securities company in Japan.
A few hundred billion yen is just a drop in the bucket for them.
Dai-ichi Kangyo Bank took 10%, Nomura Securities took 8%, and now Shirakawa Holdings still holds 82% of Shirakawa Electric's shares.
However, this was not the end of this financing. Kitato Bank, represented by Hiroshi Arai, once again invested 29.3 billion yen to acquire 5% of Shirakawa Electric's shares.
Why did Hokuto Bank participate in the financing of Shirakawa Electric? Investment is one aspect.
The most important thing is that Shirakawa Feng wants Kitato Bank to participate in the stock market and truly exercise the bank's financial powers.
Of course, the details are a matter for the future. For now, it only needs to become a shareholder of Shirakawa Electric.
Will Shirakawa Feng accept the money from Kitato Bank? Yes! Of course!
Kitato Bank is not owned by him alone, Shirakawa Holdings only holds about 67% of the shares.
This money was not transferred from one hand to the other, so of course he took it.
And although Kitato Bank's net assets are only over 90 billion yen, its depositors' deposits amount to 400 to 500 billion yen.
So there is no need to worry about its capital chain, this is a normal investment expenditure.
With the completion of the acquisition of Kitato Bank, today's financing and valuation meeting has finally achieved its goal.
In the end, Dai-ichi Kangyo Bank acquired 10% of Shirakawa Electric's shares for 58.65 billion yen, and Nomura Securities acquired 8% of the shares for 47 billion yen.
Hokuto Bank finally split about 5% of the shares for 29.3 billion yen, so Shirakawa Holdings still held 77% of Shirakawa Electric's shares.
In the end, the sale of these shares brought Shirakawa Kaede about 135 billion yen in revenue, or 540 million US dollars.
Well, five small goals, unit knife fun.
When Baichuan Feng signed the final signature on the contract, he felt so happy.
No wonder so many companies are trying their best to go public and raise funds. To be honest, the wealth expansion brought by financing is much higher than the company's annual profit.
Even after many companies raise a wave of money through listing, their founders simply cash out and run away as soon as the lock-up period is over.
There is no way to make money faster by making products than by playing with finance. Anyone who makes products is an idiot.
But now, Baichuan Holdings always holds its controlling rights tightly.
Are you kidding? Shirakawa Electric has just taken off. Is the annual profit of nearly 100 billion just for show?
"Okay, now that the contract has been signed, shouldn't we discuss the listing?"
As soon as he put down the pen, Ichiro Watanabe couldn't wait to start discussing the listing of Shirakawa Electric.
As for why so anxious? Nonsense.
Dai-ichi Kangyo Bank invested tens of billions of yen, wasn't it just for the listing of Shirakawa Electric?
If it is just for investment, then wait for profit dividends from Shirakawa Electric.
Then Dai-ichi Kangyo Bank would definitely not invest a huge amount of more than 58 billion yen, even if it would be profitable in the long run.
Because the rate of return is too low and the cost recovery is too slow.
What Dai-ichi Kangyo Bank really cares about is the appreciation of Shirakawa Electric after its listing and the income from underwriting stocks.
This is the most anticipated return on this investment and also the window period for recovering the investment cost the fastest.
"Watanabe-san is right. Let's talk about the company's listing process. Nomura is an absolute authority in this field."
Needless to say, Nomura had the same idea. After collecting the contract, Yanagitani Takashi immediately began to distribute his own listing operation plan.
Obviously, its preparations were more thorough than those of Dai-ichi Kangyo Bank, and it even had a contingency plan.
Looking at the plan in his hand, Baichuan Feng sighed inwardly.
These wealthy sponsors are generous, but a little too impatient.
But think about it, isn’t it the same in finance? High risk, high reward.
Putting down the plan in his hand, Shirakawa Kaede looked at Watanabe Ichiro and Yanagiya Takashi.
"Regarding the listing, do you have any suggestions?"
This is their area of expertise, and Baichuan Feng doesn't mind listening to their opinions.
"First of all, does Shirakawa-san intend to list Shirakawa Electric on the first section of the Tokyo Stock Exchange or the second section of the Tokyo Stock Exchange?"
"Of course, it will be listed on the first section of the Tokyo Stock Exchange."
In response to Watanabe Ichiro's question, Shirakawa Kaede answered without hesitation.
The First Section of the Tokyo Stock Exchange is Japan's main board market, representing the financing entities in the capital market, with a market value share of up to 96.4%.
The Second Section of the Tokyo Stock Exchange was only established in 1960. It is similar to China's SME Board and serves medium-sized enterprises, accounting for only 1.14% of the market capitalization.
Currently, Japan's large companies, such as Panasonic, Sharp, and Fujitsu, are all listed on the first section of the Tokyo Stock Exchange.
As an ambitious entrepreneur, Shirakawa Kaede would of course go to the first section of the Tokyo Stock Exchange for listing, which is the stage for big companies.
However, as a motherboard market, there are requirements for listing here.
So, with the current size of Shirakawa Electric, can it meet the listing requirements of the first section of the Tokyo Stock Exchange?
