Chapter 407: Finding a Different Way
Although Baichuan Interactive Entertainment's profits this year are unexpectedly high, manufacturing is still the mainstream at the current stage.
This is influenced by the economic development model of this era. Even the protagonists on Wall Street are mainly manufacturing companies represented by high-tech.
As mentioned earlier, Shirakawa Energy made a profit of more than 4 billion and the LCD factory made a profit of about 15 billion.
Another semi-independent CD factory also achieved financial surplus for the first time this year as the CD record market boomed.
The CD factory's profits mainly come from OEM for other record companies and part of the CD-ROM patent fees.
In the little over a year since the advent of the CD player, the entire Japanese market has produced approximately 45 million CDs.
In its heyday, the production of LPs (vinyl records) was more than 100 million. The current scale of CD records is about 50% of that.
Although the scale of CD records cannot match that of vinyl records for the time being, everyone at Shirakawa Electric is optimistic that CDs will .
Its portability and cheapness mean that CDs will be far more popular than vinyl records in the future.
Of the 45 million CDs sold in Japan this year, at least 20 million came from Shirakawa Electric's CD factory.
The manufacturing fee for a CD is about 200 yen, and after deducting various costs of 30 yen, the final profit for each CD is between 150 and 170 yen.
The total profit of 20 million sheets is 3.2 billion yen. For a factory that has only been built for one year, this profit is actually very good.
Optical discs are also high-volume products. With the popularization of CDs and the continuous improvement of production technology, their profits will continue to grow for at least another 10 years.
As for the production of CD-ROM, due to its popularity, it is only a few million at present. Including the patent fee, all the profits added up are only 200 to 300 million yen.
However, with the advent of rewritable optical discs next year, it will probably be more widely used.
Another product that is used in conjunction with the CD-ROM is the optical drive. Its sales in Japan are very average, with only more than 50,000 sets, and most of them are the 2x speed version.
However, just like TV watches, the popularity is great outside the country. North America has sold more than 300,000 sets of the business version alone.
The regular version for individual users also sold more than 60,000 copies. Because the profit of optical drives is very lucrative, the accumulated returns of these sales are also amazing.
The profit of each regular version is about US$150, the business version 2x speed version is US$450, and the 4x speed version is more than US$1,000.
The cumulative sales of 410,000 optical drives brought Shirakawa Electric a profit of US$275 million.
So even though the sales volume of optical drives is average, their ability to make money is more than twice that of LCD, battery factories, and CD factories combined.
In addition, patent fees, like CDs, have very little revenue this year, but will definitely see a big explosion next year.
Sales of Shirakawa Electric's other products, such as walkmans and headphones, grew by about 20% compared to last year, totaling around 200 billion.
The CD players and speakers have made the most obvious progress compared to last year. After all, they have been sold for a whole year, so of course the sales volume is much higher than the two months of last year.
Especially in the North American market, the combination of portable CD and active speakers is a must-have for parties.
More than 3 million sets of the complete set of products were sold in Japan and North America. Including the single-piece sales as well as desktop CD players, car CD players, and VCD players, the profit from this part was more than 220 billion yen.
In the audio-visual field, Shirakawa Electric's total profit was 420 billion yen, or US$1.68 billion.
This year, Shirakawa Electric's profits have increased significantly due to the addition of products such as CD players and speakers.
In addition to the processing fees for handheld game consoles, FES game consoles and game cartridges, Shirakawa Electric also made a profit of 57 billion yen.
The game console hardware segment is worth 57 billion yen, and the audio-visual business is worth 420 billion yen, for a total of 477 billion yen.
This is Shirakawa Electric's net income for the whole year of 1984, which is equivalent to 1.9 billion US dollars.
Compared with last year's more than 800 million US dollars, it has more than doubled, mainly due to the continuous launch of new products.
Facts have proved that although continuous investment in research and development is costly, it brings greater returns.
However, since the company is making money, dividends are justified.
This is a common practice in this era, especially in Japan where manufacturing is entering its golden age.
As for later generations, many companies did not distribute dividends for several years even if they were profitable.
That's because they are considering the value of the stock. Not distributing dividends means an increase in the company's net assets, so it's natural for the stock price to rise.
When the scale is large enough, a slight increase in stock price can bring ten or a hundred times the revenue.
Then after a few years, when the stock price rises to a certain level, the major shareholder will sell off his shares, and the money earned from the resale will be several times the dividend.
This is the reason why many companies do not distribute dividends despite their profits. Ultimately, they are still reaping the money from the stock market.
Another reason why companies do not distribute dividends is that they are mostly in a growth phase.
It needs to invest its profits into next year's development and then continue to expand to create more profits.
However, neither of these two methods is applicable to Shirakawa Electric, because the shares of Shirakawa Electric currently held by Shirakawa Holdings are already the minimum requirement for controlling rights.
Even if there is no dividend now, the stock price and market value have soared, but Shirakawa Holdings has no way to reduce its holdings of the stocks.
Because once the stocks are sold, the number of shares in hand will decrease, which will threaten one's absolute control.
As for selling and then buying back, transferring money from one hand to the other, why bother? You will also have to pay an extra tax.
In addition, regarding the development of next year, Shirakawa Electric will not need as much as US$1.9 billion anyway.
In that case, why not distribute dividends?
Therefore, after retaining 10% of the profits for next year's R&D expenses and other project funds, the rest will be distributed as dividends.
Of course, there are many forms of dividends, and cash dividends and bonus stock distributions can both be used as means of dividends.
If Shirakawa Holdings takes the money in cash, it will receive $870 million.
As for retail investors, they can receive dividends in cash or bonus shares. Of course, due to the increase in the total number of shares, the stock price may fall.
However, the total share capital is still increasing, which means that for retail investors, this means that they have more stocks in their hands.
In order to ensure its controlling rights, Shirakawa Holdings has many shell companies under it.
The shares they repurchase from the stock market are enough to ensure their controlling rights.
This is roughly the operating situation of Shirakawa Electric this year and the rights and interests that Shirakawa Holdings can obtain.
Of course, the specific operations will have to wait until after the financial settlement in March next year.
"As for Shirakawa Electric's products for next year, you might also want to try electronic dictionaries, projectors, and monitors."
For future development, the main direction that Shirakawa Kaede considers is diversification.
The enrichment of product lines will not only bring additional profits, but also increase the company's ability to resist risks.
"Eh, electronic dictionary and monitor?" Hasegawa and Yasuda both looked rather surprised.
Shirakawa Electric has not really been involved in this regard, and it sounds like the market is full of uncertainty.
Whether it is a Walkman or a CD player, Shirakawa Electric was able to quickly capture the market.
What do I rely on the most? I have what others don’t!
In simple terms, these products were not available on the market or had just appeared before Shirakawa Electric launched them.
Because it had the first-mover advantage and at the very least was on the same starting line as everyone else, Shirakawa Electric was able to rise so quickly.
However, among products such as electronic dictionaries, projectors, and monitors, the former are still relatively new, but the latter two are not rare.
If you enter this field, not only will the market competition be fierce, you won’t even know if you can gain a foothold and make a profit.
However, unlike their doubts, Baichuan Feng nodded affirmatively, "Yes, they are the key projects of Baichuan Electric next year.
Of course, the products I mentioned are somewhat different from the ones you usually see.”
"Huh?" Now not only Hasegawa and his friends were surprised, but everyone else also looked surprised.
What else can you do with projectors and monitors?
"For the products I mentioned, the technical focus should be on LCD applications. SIC's newly developed STN and TFT are really amazing things."
After hearing what he said, everyone became even more curious because no one had ever seen a projector or monitor using LCD technology.
“Just think about it, if we make a big CTR display into a thin tablet, wouldn’t it be very impactful?
Let’s be bolder and imagine that televisions in the future will also be like this. They will no longer take up a large space and can be easily picked up. What will that look like? ”
This... the more Baichuan Feng talked, the more excited everyone became. Isn't this more sci-fi than a sci-fi movie?
But can such technology really be realized? Everyone looked at each other in disbelief.
As if he saw their doubt, Baichuan Feng smiled easily.
"Let's try it. Start with something simple. An electronic dictionary is the easiest to use.
As for high-definition LCD projectors and monitors, take your time with these two.
But they will definitely be one of Shirakawa Electric's main products in the future. Please let go of your imagination and don't let your creativity be limited by inertial thinking."
"Ha!" This advice shocked everyone's hearts again.
Yes, the reason why Shirakawa Electric has been leading the way is that it relies on being one step ahead of others and being a little newer than others.
"In addition to these, we can also try it on pagers. Young people like it now, and its future prospects cannot be ignored."
What Baichuan Feng really wants is not a pager, this can only be considered a transition.
What he wants is the accumulation of communication technology, which will shine in the future.
"In short, the application of LCD technology is of utmost importance, and our ultimate goal is - laptop computers!"
"Laptop?" Everyone was confused again.
Because they have never heard of this word, let alone what a laptop is.
Shirakawa Feng waved his hand and said, "It's just a portable computer with an LCD display.
Just like the difference between a desktop CD player and a portable CD player, this is of course a future goal, and there is no need to rush for it now.”
Oh, I see. After he said that, everyone understood.
This is another product that aims to be improved by miniaturization, but this time it is a computer.
This is also one of the goals for the next few years. The world's first laptop computer came out in 1985, and Shirakawa Electric also needs to work hard.
Chips, circuit design, and other hardware are not technically difficult for Shirakawa Electric.
What takes time is putting these things together and adapting them into a laptop that can run smoothly.
Shirakawa Kaede is ready to skip the desktop and move directly to the laptop.
He couldn't compete with the three major companies in the desktop market: NEC, Fujitsu, and Sharp, so he had to find another way.
As for communications... let's accumulate technology first.
After the case of Shirakawa Electric, the next one left is another big money-maker, SIC.
As the only chip design company in Japan with independent intellectual property rights, SIC has become increasingly famous.
