HCB Chapter 215 Valuation
Chapter 215 Valuation
Chapter 249 Valuation
June 2nd.
morning.
Shanghai.
He Wentao finished reading the third round of financial headlines on his phone today.
"Reuters": STMicroelectronics shares plunged 11.4% in pre-market trading following yesterday's MEMS dynamics paper publication in Nature Materials.
According to the newspaper "Kings & Womens International," Italian-French Group's stock price plummeted in a single day, resulting in a market value loss of approximately 23 billion euros.
Nikkei: Murata, TDK and Kyocera, three Japanese MEMS suppliers, have been forced to lower their annual profit forecasts.
When He Wentao saw the last message, he realized it was a supply chain component that had never required prior warning. The Vilan Alliance was integrating its talent into the production line simulation system, and Japanese suppliers outside the alliance needed to consider whether to join or how to reposition themselves. The Japanese reacted the fastest.
He picked up his laptop and began writing today's main article.
Title: From Novice to Industry Expert: The MEMS Industry 35 Weeks Later
This is a retrospective article with a financial perspective.
He listed three data points in the article.
I. STMicroelectronics Group. On June 1st, the stock price plummeted by 11.4%, marking the group's largest single-day drop in nearly three years. The market reaction wasn't directed at the NM paper itself, but rather at the personnel information updated on STMicroelectronics' website that morning. The signal the capital market gleaned was that STMicroelectronics' chosen "robust questioning" strategy, selected several months prior, had been postponed by the group headquarters. This implies that STMicroelectronics needs to reconsider its approach to engaging in the Chinese MEMS industry chain.
II. Japanese Suppliers. After the Tokyo stock market closed on the afternoon of June 1st, the share prices of Murata, TDK, and Kyocera all fell by more than 3% in a single day. These three companies are not simulation software suppliers. They are suppliers of passive components, MEMS sensors, and ceramic products upstream of the production line. The share price decline reflects market expectations: if China's production line simulation systems allow the domestic MEMS supply chain to mature rapidly, then the position of Japanese companies in China's MEMS supply chain will be compressed.
III. Members of the Vilan Alliance. After the Shanghai Stock Exchange closed on June 1st, SMIC rose 6.2 points. JCET Group rose 5.3 points. CR Microelectronics rose 7.1 points. All 21 of the 27 alliance members, listed on the A-share market, saw their share prices rise. The signal gleaned from the stock market is that the production capacity of alliance companies will be driven by the production line simulation system.
He Wentao paused here.
There's a hidden signal among these three data points: the entire stock market is recalculating the variable of "production line simulation system." And it's not just the stock market; the primary market, academia, and industry alliances are all recalculating it.
He added:
"Six months ago, Vilan was a startup that 'might be dismantled by STMicroelectronics.' Now it's a company that can drive down the stock prices of three Japanese giants and prompt STMicroelectronics to proactively signal personnel changes. The capital market's valuation of it is independent of the Nature Materials paper itself."
He kept the draft.
He planned to publish it in the afternoon. This main article didn't need to be the first to be published. He needed to publish it in the afternoon so that readers could have a summary after reading the three rounds of headlines in the morning.
……
June 2nd. 4 PM.
Beijing.
Jiang Mingyuan checked the valuation emails for Vilan three times on his phone.
He received emails from five primary market investors, all asking the same question: would Vilan launch its Series C funding round soon?
He had previously postponed his Series C funding round twice. His last Series B+ round was in March, and the valuation in that round was 2.3 billion RMB.
Of these five investors, three are domestic Tier 1 funds, and two are Hong Kong funds. They all asked the same question: "Could you reserve a small allocation in the Series C round?"
Jiang Mingyuan replied with the same message: "The launch date for the Series C funding round is yet to be determined. Once launched, it will be open for subscription on a fair and open basis. Thank you for your attention."
But after the sixth email arrived, Jiang Mingyuan's eyes flickered.
That was from Goldman Sachs China's TMT team. In the email, Goldman Sachs clearly stated its willingness to participate in the Series C round as the lead investor, and attached a preliminary valuation range proposal: RMB 12 billion to 15 billion.
Three months ago, the valuation was 2.3 billion. Today, Goldman Sachs proactively raised the valuation to 12 billion to 15 billion.
Five to seven times.
Jiang Mingyuan picked up the phone and called Lin Wei.
"Mr. Lin, this is from Goldman Sachs China TMT team. It's not a preliminary assessment. It further clarifies the valuation range: 120 to 150 billion."
There was a few seconds of silence on Lin Wei's end.
The Series C funding meeting has been postponed.
"how long?"
"Push it until after the Bosch negotiations begin."
Jiang Mingyuan understood.
The Bosch negotiation launch meeting revealed a crucial fact: Wei Lan and Bosch had reached a cooperation framework that went beyond the usual licensing agreement. Once this fact was made public, the valuation in the Series C negotiations would rise to another level. Lin Wei couldn't accept the current valuation from Goldman Sachs. She wanted to wait.
"Understood. I told Goldman Sachs that the launch date is undetermined."
"Thanks."
Jiang Mingyuan hung up the phone.
He took out a piece of white paper and wrote a note on it.
"On June 2nd, Goldman Sachs, as the lead investor, proposed a valuation ceiling of $15 billion. They dominated the valuation."
He put the paper in the drawer.
……
June 3rd. Morning.
Shanghai.
Vilan Headquarters. First Floor Lobby.
The Infineon delegation arrived. The delegation consisted of seven people. Leading the delegation was Infineon's Chief Technology Officer, Weber. Accompanying them were the President of Infineon's Sensors Business Unit, three senior engineering executives, and two legal representatives.
Lin Wei, Jiang Mingyuan, Su Chen, and Zhou Zhiyuan personally received him. Dean Chen participated in the welcoming ceremony in the morning but needed to return to Beijing in the afternoon.
The talks began at 9 a.m.
Su Chen was in charge of the presentation. He spoke for three hours. What was sent to Infineon was the technical framework of the third-order model, experimental verification results, and the architecture description of the production line simulation system. He didn't mention commercial terms or licensing fees.
Weber listened very carefully. He asked six questions. Three were technical, and three were about project progress. He didn't ask about the price.
The meeting ended at 4 p.m.
Before Weber got up, he said something.
"This week, I came as a CTO. Two months from now, I expect to return as a buyer. With my legal team. Madame Lin—please be ready."
Lin Wei smiled.
"We will be ready, Dr. Weber."
They shook hands.
The delegation drove away.
Jiang Mingyuan watched them leave. He said to Lin Wei, "All three have come forward. Now it's not a question of 'who might come,' but 'which three will reach an agreement by the end of this year.'"
Lin Wei nodded. "Bosch will reach an agreement. Infineon will reach an agreement. Italy and France will also reach an agreement."
"The point of contention won't be the 'price'," Jiang Mingyuan added. "It will be 'who gets what exclusive terms'."
"Vilan does not accept any exclusive terms. However, Vilan can accept expressions such as 'priority access to a certain service rate'."
Jiang Mingyuan understood. He took out his phone and began drafting the terms for the next round of negotiations.
……
June 7th. Morning.
Beijing.
The Ministry of Industry and Information Technology's Electronic Information Department and the National Development and Reform Commission's High-Tech Department jointly issued an announcement.
Announcement Title: [Notice on the Launch of the "Advanced MEMS and Intelligent Production Line Project"].
Total special budget: RMB 50 billion.
Duration: Three years. Initial investment: 2.5 billion.
Key areas of support include: multi-scale MEMS dynamics models, production line design simulation systems, submicron node MEMS processes, and multi-material system expansion. Integration with upstream and downstream alliance companies and simulation systems is also supported.
The announcement did not mention Wei Lan by name. It did not mention Su Chen by name. It did not mention Zhou Zhiyuan by name.
However, the term "multi-scale MEMS dynamics model" is a third-order model. The term "production line design simulation system" is Weilan. The term "multi-material system extension" is the material extension protocol.
The announcement contained three statements that explicitly referred to the Vilan project, but the names were not prominently displayed.
After seeing the announcement, He Wentao published a second review.
Title: [Three directions in the 50 billion yuan special fund that were not named but were almost tailor-made for Vilan.]
Within three hours of the article being published, it was forwarded more than 80,000 times.
After seeing it, Jiang Mingyuan forwarded it to Lin Wei, adding the comment: "This is 'Weilan without naming her.' This is a signal that carries more weight than just naming her."
After reading it, Lin Wei only replied with three words: "Understood."
She understood what this special project meant. This wasn't a subsidy specifically for Vilan. It was a project "focusing on the next three years of China's MEMS industry chain." Vilan, the third-order model, and the material extension protocol were implicitly included within this "focus."
This is a signal that businesses cannot ignore. Vilan is not a company whose "commercial success is predictable." Vilan is a company whose success in the next three years will depend in part on how far it goes within the Chinese MEMS industry chain.
This change in positioning will allow Vilan's Series C valuation to reach a new level.
She took out a piece of paper from the drawer and added a line:
"June 7th. The special project is launched. The Series C valuation will not be less than 30 billion."
Three months ago it was 2.3 billion.
It's 30 billion now.
Thirteen times.