Author: quiet thoughts

Although Hongchuan Interactive Entertainment's profits next year will be unexpectedly large, the manufacturing industry is still not mainstream at the current stage.

Is this affected by the economic development model of that era? Even if they are not the protagonists of Wall Street, they are mainly manufacturing companies represented by high-tech.

As mentioned before, Hongchuan Keyuan's profit is more than 4 billion, and the LCD factory's profit is about 15 billion.

Another semi-independent optical disc factory will also have a financial surplus for the first time next year due to the booming development of CD records.

The main source of profits for optical disc factories comes from OEM services for other record companies and part of the royalties from CD-ROMs.

Since the advent of the CD player more than a year ago, the entire neon market has produced approximately 45 million CD records.

In its heyday, the output of LP, that is, vinyl, was more than 100 million. The current scale of CD records is about 50% less than that.

Although the scale of CD records is currently smaller than that of vinyl records, Hongchuan Electric is relatively optimistic in Dongdu that CD will overtake it in at most two years.

Its portability and cheapness are destined to be far more popular than vinyl in the future.

As for Neon's 45 million CD records next year, at least 20 million of them will come from Hongchuan Electric's optical disc factory.

The OEM fee for a CD is about 200 yuan per month, and after deducting various costs of 30 yuan per CD, the initial profit per CD is outside the range of 150 to 170 yuan per month.

The total of 20 million sheets is equivalent to a monthly profit of 3.2 billion yuan. As a newly built factory for one year, the profit is actually very good.

Compact discs are also a mass-market product. In the future, with the popularity of CDs and the continuous improvement of production processes, its profits will continue to grow for at least 10 more years.

As for CD-ROM production, due to its popularity, it is currently only a few million pieces. Including patent fees, all profits combined are only two to three billion yuan per month.

With the birth of rewritable optical discs next year, it will surely be more widely used.

Another product that is used with CD-ROMs - optical drives. Its sales in Neon are generally more than 50,000 sets, and most of them are 2x speed versions.

Just like the TV series, Beimi has more than 300,000 units of the business version alone.

The regular version for individual users has also sold more than 60,000 sets. Because the profits of optical drives are very generous, the cumulative returns from those sales are also amazing.

The profit for each unit of the regular version is around US$150, the 2x speed version of the business version is US$450 per unit, and the profit for the 4x speed version is more than US$1,000 per unit.

Cumulative sales of 410,000 optical drives have brought Hongchuan Electric a profit of US$275 million.

So regardless of the average sales volume of optical drives, the revenue generated is much twice that of LCD, battery factories, and optical disc factories combined.

In addition, patent fees are the same as optical discs. The income next year will be very small, but there will definitely be a big explosion next year.

Hongchuan Electric's other products, Walkmans and headphones, have increased by about 20% compared with last year, totaling about 200 billion.

CD players and speakers have made the most obvious progress compared to last year. After all, the sales volume in a whole year is much higher than the sales volume in 2 months last year.

Especially for the North American market, a portable CD and active speaker combination is a must-have.

The complete set of combined products from China and North America has sold more than 3 million units. Counting the individual sales as well as desktop CD players, car CD players, and VCD players, the profit is more than 220 billion yuan per month.

In the audio-visual field, Hongchuan Electric's total profit is 420 billion yuan per month, which is equivalent to US$1.68 billion.

Next year, due to the addition of CD players, speakers and other products, Hongchuan Electric's profits will increase significantly.

In addition to handheld consoles, FES game consoles and game cartridge processing fees, Hongchuan Electric also has a monthly profit of 57 billion yuan.

The game console hardware part is 57 billion yuan, and the audio-visual business is 420 billion yuan, totaling 477 billion yuan per month.

That means Hongchuan Electric's net income for the entire year of 2083, converted into U.S. dollars, would be 1.9 billion.

The amount has more than doubled from last year's more than 800 million US dollars. The main reason is whether there are successive new product launches.

Facts have proved that continuous investment in R&D, although costly, has greater returns.

Now that the company is making money, is it right to pay dividends?

Isn't that the common way of playing that era, especially the neon light of the golden age of manufacturing.

As for many companies in later generations, even if they are profitable, they will not pay dividends for several years.

Then they consider the value of the stock. Not paying dividends means that the company's net assets have increased, so is it natural for the stock price to rise?

When the scale is large enough, a slight increase in the stock price will bring about ten times or a hundred times the income.

Then after a few years, when the stock price rises to a certain level, the major shareholders will then reduce their holdings in the shares, and the money earned from the transfer will be divided into multiple dividends.

This is the reason why many companies make profits but do not pay dividends. In the final analysis, what is harvested is not money from the stock market.

Another reason why companies don't pay dividends is that they are in a period of rising development.

It needs to invest its profits into the development of the company and then continue to expand its scale to create more profits.

Neither of these two methods is applicable to Hongchuan Electric, because the shares of Hongchuan Electric currently held by Hongchuan Holdings no longer meet the minimum requirements for controlling rights.

Even if there is no dividend now and the stock has soared in market value, Hongchuan Holdings has no way to reduce its holdings of stocks.

Because once the stock is sold, the shares in the leg will be reduced, which will threaten one's absolute control.

As for selling it and then buying it back, the left leg will be the right leg. So why bother? A lot of tax has been paid.

In addition, regarding the development of Dongfang in the past year, Hongchuan Electric's revenue is as high as 1.9 billion US dollars.

In this case, why not pay dividends?

Therefore, after retaining 10% of the profits for next year's R&D expenses and other project funds, the rest will be chosen as dividends.

Of course, there are many forms of dividends, and cash dividends and bonus share distributions will be used as components of dividends.

If Hongchuan Holdings takes cash, it will earn US$870 million.

As for retail investors, cash dividends or bonus shares can be distributed. Of course, as the total number of stocks increases, the stock price may fall.

The total equity of the company has not increased, but for retail investors, this can be regarded as an increase in the number of stocks in their possession.

And in terms of whether it can guarantee its controlling rights, there are many handbag companies in front of Hongchuan Control.

The shares they have repurchased from the stock market are enough to guarantee their controlling rights.

This may affect Hongchuan Electric's operating conditions next year and the rights and interests that Hongchuan Holdings can obtain.

Of course, the specific operations will have to wait until the financial settlement in March next year.

"As for Hongchuan Electric's products next year, you might as well try electronic dictionaries, projectors, and monitors."

Hongchuan Feng's main consideration for the future development route is whether it should be diversified.

An enriched product line will not only bring additional profits, but it will also increase the club's ability to resist risks.

"Eh, electronic dictionary, monitor?" Hasegawa and Yasuda both looked surprised.

Hongchuan Electric has really not been involved in that aspect, and it sounds like the market is full of uncertainty.

Whether it is a Walkman or a CD player, Hongchuan Electrical Appliances has been able to capture the market quickly.

What does the Lord need to rely on? No one has it, no one else has it!

In layman's terms, before the launch of Hongchuan Electric, those products were either not available on the market, or they had just appeared.

Because we had the upper hand, we would still be on the same starting line as everyone else no matter what, so Hongchuan Electric was able to rise so quickly.

But when it comes to products like electronic dictionaries, projectors, and monitors, the former are quite novel, while the latter two are nothing rare.

If we enter that field, the market competition will be fierce, and we don’t know whether we can gain a firm foothold and make a profit.

Bu Nao was different from their doubts. Hongchuan Feng nodded firmly, "Yes, they are Hongchuan Electric's key projects next year.

Of course, the products he mentioned are somewhat different from what everyone commonly sees."

"Eh?" Hasegawa and the others were not the only ones there, others were also surprised.

Are there any tricks to play with with projectors and monitors?

"The technical focus of the products he mentioned is on the application of LCD. Can the STN and TFT newly developed by SIC be something really great?"

After hearing what he said, everyone became more curious because they had never seen projectors and monitors using LCD technology.

“Think about it, wouldn’t it be very impactful to turn a big-ass CTR monitor into a thin flat panel?

If we are bolder, the TV sets of the future will become like that. They no longer occupy a huge space and can be picked up by simply carrying them with your legs. What will happen then?"

Well, the more Hong Chuanfeng talks about it, the more excited everyone gets. Isn’t that more science fiction than a science fiction movie?

Is such technology really achievable? Everyone looked at each other with some doubts.

Seemingly sensing their suspicions, Hongchuan Feng smiled easily.

"Try it, start with the simple one, the electronic dictionary is the easiest to do.

As for high-definition LCD projectors and monitors, take your time with those two.

But they will definitely become one of Hongchuan Electric’s flagship products in the future. Please let your imagination run wild, as unscrupulous thinking limits our creativity.”

"Hai!" Those words of advice shocked everyone's hearts again.

No, the reason why Hongchuan Electric has been leading the way is that it relies on being one step ahead of others every time and being a little newer than them?

"In addition to those, they can also try the pager. Now young people like it, and the future prospects cannot be ignored."

What Hong Chuanfeng really wants to do is not a pager, so that can be considered a transition.

What he wants is the accumulation of communication technology, so that it will shine brightly in the future.
To be continued...