The twenty-seven projects invested by Ruixiang Industrial Investment Fund in the first phase are currently all leaders in their respective fields.
The total value of the equity held by the fund reached US$2.977 billion. Compared with the initial investment of US$299 million, the return on investment was nearly 10 times.
However, Zhang Yida knows that the value has not yet reached a high level.
Many projects have to wait until 2018 or even 19 years before the projects truly mature and their valuations reach their peak.
Take Bitmain, for example, which ranks first in global mining machine share and has just entered the ranks of unicorns with a valuation of US$1 billion.
Zhang Yida knew that the company's highest valuation reached more than 10 billion U.S. dollars, nearly 20 billion U.S. dollars.
The projects invested in the second phase of Ruixiang Industrial Fund are much inferior to those in the first phase.
Because the fund was established later, the investment time is later. At this time, there are no good choices on the market. We can only choose some mid- to late-stage projects to invest.
For example: Byju’s, India’s TAL investment company, invested with a post-money valuation of US$200 million. After receiving Penguin investment this year, its valuation rose to US$800 million.
In one year, the valuation has quadrupled, and it still looks good.
All the investors in the audience nodded repeatedly, their eyes full of approval, thinking that Ruixiang's Phase II Industrial Investment Fund was also operating very well.
The second-phase industrial investment fund totals US$500 million and has invested in 8 Internet companies in South Korea and India.
Among them, Mobikwik, the predecessor of BBPay in India, has successfully exited.
As a core subsidiary, Zhang Yida does not allow this company to remain under the control of Ruixiang Industry Phase II Fund.
A few months after the acquisition, the project improved, and Zhang Yida used Ruixiang's own funds to repurchase all the shares held by Ruixiang Industry Phase II Fund for US$150 million.
Currently, Ruixiang Industry Phase II Fund also holds shares in 7 Internet companies, 2 in South Korea and 5 in India.
The equity value reached US$1.5 billion. Compared with the investment of US$395 million, the return on investment was nearly four times.
As for the shares of several Southeast Asian Internet companies such as Grab, GoJek, and Sea, they are directly held by Ruixiang Group.
Originally, Zhang Yida planned to invest in the second phase of the industrial investment fund, but found that the scale of the fund was not enough, and Ruixiang also had a lot of its own funds, so he simply let Ruixiang Group directly hold this part of the equity.
Ruixiang Phase III Industrial Investment Fund is the fund with a scale of US$2.5 billion.
It spent US$300.5 million to acquire Bilibili, US$198 million to launch the Cultural Revitalization Fund, invested US$500 million in DouShi, and Pate Holdings US$150 million...
“Has the value of the US$500 million invested in DouShi increased to US$2.4048 billion?”
Some investors in the audience looked at the PPT released by Zhang Yida and were surprised.
"Yes!"
Zhang Yida nodded with a smile, "It has increased nearly five times in one year! This one project alone has recovered the cost of the third phase of the fund."
Robert asked: "I see that Ruixiang Phase III Industrial Fund only holds 3.006% of the shares of Zhonghe Group. Based on this calculation, Zhonghe Group is valued at US$80 billion?"
"That's right!"
Zhang Yida was very calm and did not blush at all when he said these words.
Robert frowned. Zhonghe Group was only valued at US$40 billion a few months ago. How could it have doubled?
Thinking about his qualifications as an underwriter, he felt that there was no need to get to the bottom of it so as not to make Zhang Yida angry.
When Mansour saw that Robert had stopped talking, he thought that the other party also recognized Zhonghe Group's valuation of US$80 billion.
I made up my mind to pay a visit to Zhonghe Group when Ruixiang’s financing is completed.
If appropriate, you can also invest another amount.
Seeing the performance of the third phase industrial investment fund shown by Ruixiang, he now has no doubts about Zhang Yida's vision.
This Chinese must be blessed by God. Otherwise, how could it be possible that none of the dozens of projects he invested in died? How to explain this? Those well-known investors in Silicon Valley are just like this!
Even Emperor Masayoshi Son, people only remember that he invested in Yahoo and Ali, but forget about a lot of other failed projects.
Indeed, none of the dozens of projects invested by Ruixiang has died, and they have also undergone several rounds of financing, with each one developing better than the last.
The investors present also recognized the equity value of these companies. One investor asked: "How much of the equity of these companies belongs to Ruixiang Group?"
Zhang Yida pressed the controller in his hand again and turned the PPT page.
What appeared on the large electronic screen was a table that clearly recorded the equity value of each company.
"The equity value of the third phase industrial fund belonging to Ruixiang is US$3.25 billion, and it also holds Xingwang Bank, Hantai Fund, Hanzhou Securities, Jincheng Consumer Finance, Yi'an Insurance, Le Fenqi, Sea Group, GoJek
, Grab and a dozen other companies have a combined equity value of US$1.75 billion, a total of US$5 billion.”
It turned out to be only US$5 billion. Many investors breathed a sigh of relief and thought it was worth tens of billions of US dollars!
But when they thought about it carefully, US$5 billion was actually quite a lot. The actual investment from Ruixiang Group was only a few hundred million US dollars, and the rest was earned from investments.
If all of these companies were invested with their own funds, their equity value would surely reach tens of billions of dollars.
But Zhang Yida could only think about this. Ruixiang simply couldn't afford so much money at that time.
If I had waited until now, I would have been able to get the money, but the opportunity has been missed!
So there is no other way but to borrow other people's money to make money.
Of course, LPs like Black Shirt Capital are not losing money either, and none of the projects selected by Zhang Yida are bad.
Shen Beipeng has been inquiring about the fourth phase fund a long time ago, which shows his enthusiasm.
In fact, getting investment income is incidental.
The most important thing is that through investments in South Korea, Southeast Asia, and India, Ruixiang has formed a network of local relationships.
In addition, it has also attracted many local Internet companies that provide life services to invest in local e-wallets, which is also very beneficial to the promotion of mobile payment in the local area.
In fact, if there were no industrial investment funds to pave the way, Mobao Pay would not be able to achieve its current results if it wanted to go it alone locally, and it might even be difficult for it to even gain a foothold.
There is a very useful saying passed down by our ancestors: A strong dragon will not overwhelm a local snake!
The investors communicated for a while and basically recognized Ruixiang’s equity assets worth US$5 billion.
This thing cannot be faked and will be reviewed again during due diligence.
Therefore, the investors present no longer delayed and began to ask Zhang Yida about the valuation of Ruixiang's main business.
Compared with Ruixiang's mobile payment and financial technology businesses, investment business is indeed not its main business.
"$100 billion!"
Zhang Yida's lion's big mouth really surprised the investors present.
"Mr. Zhang, how did you get this number?"
The investor who asked the question smiled and added: "You know, last year, Leech Financial's financing was only valued at US$60 billion."
“Ant Financial is Ant Financial and Ruixiang is Ruixiang. We are two companies and cannot be confused.
And that was all a year and a half ago, do you know what the current valuation of Leech Financial Services is?"
The investor spread his hands and said, "It's amazing. It's the number you mentioned, Mr. Zhang, 100 billion U.S. dollars?"
Zhang Yida remembers that in his previous life, Leech Financial Services completed a huge financing of US$14 billion in the middle of next year, with a post-money valuation of US$155.5 billion.
However, in this life, due to the existence of Ruixiang, the domestic market of Leech Financial Services has been eroded a lot. I don’t know if it can still achieve such brilliant achievements.
"The number of registered users of Ruixiang is no less than that of Leech Financial. In the Korean, Japanese, and Southeast Asian markets, we even have more registered users than Leech Financial."
"Mr. Zhang, you have ignored the most important mainland China market. In mobile payment, the market share gap between you and Leech Financial is nearly 2.5 times!"
"Yes, Mr. Zhang, the mainland Chinese market is the foundation of everything, and it is also the main source of revenue and profit for Ruixiang."
…
Each investment representative expressed his or her own opinion.
They all have the same opinion, that is, they think Ruixiang is not worth US$100 billion.
“If we strip off digital technology and enterprise services, our annual net profit can reach 20 billion yuan, which is 3 billion yuan when converted into U.S. dollars.
This net profit figure is fully double that of PayPal.
PayPal only has a little over 200 million users, and its net profit is only half of ours.
It can reach a market capitalization of nearly US$100 billion, and Ruixiang will certainly not be worse than it."
Investors shook their heads one after another, not agreeing with these remarks.
An investor who spoke more directly said: "Paypal can reach that market value because it is a Western company with users and companies in Europe and the United States, while Ruixiang is not.
Mr. Zhang, you will know by comparing the price-to-earnings ratios of Ali and Amazon, Qiandu and Google."
The words are a bit irritating, but that's the truth.
Zhang Yida had no choice but to talk about cloud services again. Although Ruixiang's cloud services lag behind Ali, Penguin, and Huawei in China, they have been catching up.
Moreover, Ali Cloud and Penguin Cloud are both included in the listed company system.
Leech Financial Services has one less cloud service than Ruixiang!
Investors obviously didn't buy it, because Rui Xiangyun was still too weak and could only pick up scraps and small orders.
All big orders have been taken away by Penguin and Ahri, and Ruixiang Cloud’s market share is not even among the top five in the country.
"At most, Ruixiang's main business can only be valued at US$50 billion, plus the US$5 billion in equity assets, for a total of US$55 billion."
The proposal of the General Atlantic investment representative was unanimously recognized by other investors.
“The pre-money valuation of US$55 billion is no worse than last year’s Leech Financial Services Group.”
“Ruixiang’s valuation two years ago was US$27.5 billion, and now it has doubled, which is not bad!”
"Ruixiang has only been established for four years, right? It's very rare to reach a valuation of US$55 billion in such a short period of time."
…
Zhang Yida looked calmly at this group of investors who were pretending to be stupid and were all kinds of drama queens.
After Didi merged with Huimin Travel, they all shouted the slogan that the valuation exceeds 60 billion US dollars.
55 billion U.S. dollars, isn’t it even worse than a small fortune?
"Based on a price-to-earnings ratio of 30 times, the main business part of Ruixiangguang should be valued at US$90 billion, plus the equity investment part. The valuation should be at least US$95 billion!"
Some investors refuted Zhang Yida: "It is unreasonable for Ruixiang to calculate net profits by stripping off R&D investment.
I admit that Ruixiang’s annual R&D investment is indeed a bit exaggerated, even a bit outrageous.
Assuming that the annual normal R&D investment is US$1 billion, Ruixiang’s net profit is only US$2 billion, which is US$50 billion based on a price-to-earnings ratio of 25 times.”
Mansour became a little impatient, waved his hand and said: "Stop arguing, 30 times price-earnings ratio, pre-money valuation of US$60 billion."
He looked at Zhang Yida again and said with a smile: "My friend, this valuation is more sincere!"
Zhang Yida looked very embarrassed. After struggling for a long time, he sighed and said, "Okay! Who said we are friends?"
Other investors looked at Mansour, who looked like a rich man, with great helplessness.
They all know Mansour and know that he is the brother of the Sheikh of the United Arab Emirates and the owner of Manchester City. His family has money and he does not regard money as money at all.
The valuation of US$60 billion is not outrageous! Anyway, they were just participating in the investment, and they agreed after some discussion.
In the end, the Abu Dhabi Investment Authority led the investment with US$3.3333 billion, and 17 other investment institutions divided up the remaining US$3.3333 billion.
Based on the pre-investment valuation of US$60 billion, 18 investment institutions invested a total of US$6.6666 billion in Ruixiang.