Chapter 145 Annual Financial Report



Licensing of patents for lithium metal materials.

We only sell manufacturing equipment for graphene coatings; we do not license patents.

Hold onto the more technologically advanced technologies firmly, and license the less technologically advanced technologies to patents.

This operating method was conceived by the executives of Kechuang Biotechnology.

They believe this will maximize the company's profits while ensuring that the technology is not leaked.

You can see my graphene coating structure, but you can't guess our specific implementation path.

Just as everyone knows the underlying principles of lithography machines, replicating them requires a lot of manpower, resources, and time.

If graphene coatings can be further optimized in the future, and the technology forms a certain barrier, it will have an absolute monopoly advantage.

If it can achieve the same technological advantage as ASML, Kechuang Bio will have an even stronger competitive moat.

Therefore, Kechuang Biotechnology has purchased a plot of land in Suzhou and has already started recruiting people to serve as a production base for graphene coating equipment.

In 2022, the profit from endorphins alone exceeded 10 billion US dollars. Kechuang Bio had too much cash on its books, and having too much money and not knowing how to spend it was also a problem.

Just like miHoYo had too much money lying around in its accounts, and then invested in a company whose main business is controlled nuclear fusion, it was still the lead investor in the Series A round.

The company had too much liquid cash on hand, so much so that the higher-ups wanted Kechuang Bio to issue a private placement, but Kechuang Bio couldn't find a reason to do so at the moment.

Having worked in the industry for many years, Gao Minghuan quickly understood Kechuang Bio's plan. He thought to himself how impressive it was, as this separation strategy could guarantee Kechuang Bio's minimum performance for the next twenty years.

New energy is a major trend, and monopolizing a certain indispensable sub-sector can at least provide a continuous stream of cash flow.

Endorphins, brain-computer interfaces, and graphene-coated devices—after a quick mental calculation, Gao Minghuan realized that the other party actually monopolized quite a few areas.

He was inwardly shocked, but outwardly remained calm: "LG Chem is willing to pay a high price to secure your company's graphene coating equipment in advance."

Cheng Gang: "I'm sorry, we have already signed supply agreements with companies such as CATL and BYD. Even if we want to supply manufacturers such as LG Chem, we will have to wait until we have some spare capacity."

"I will inform your company as soon as I have any further news."

......

"Science and Technology Innovation Corporation's annual revenue is close to RMB 250 billion, of which brain-computer interface revenue accounts for more than that of biopharmaceutical business."

Its annual net profit excluding non-recurring items was around RMB 150 billion, averaging RMB 410 million per day. The net profit growth rate exceeded 300%, far exceeding expectations, ranking fifth among listed companies.

This marks the first time in nearly a decade that a non-financial company has entered the top ten of the list of Chinese listed companies by net profit.

After the release of Kechuang Bio's full-year financial report for 2022, the company, which had been consistently trading above RMB 2 trillion, hit its daily limit up again the day after the market opened.

It's worth noting that CATL, whose net profit is only one-tenth of that of Sci-Tech Biotech, has a market capitalization of 1.1 trillion RMB.

Kechuang Biotechnology has a higher level of technology than CATL.

Furthermore, recent news of Kechuang Bio's foray into the lithium battery industry has further fueled its stock price increase.

"This is amazing! This is the first time I've seen such a powerful tech company. Net profit of 150 billion. Monopolies are really too profitable."

A net profit of 150 billion yuan sounds exaggerated, but a set of data shows that it is not the most exaggerated one.

Huaguo Tobacco's net profit in 2021 was close to 1.3 trillion yuan, while Huaguo Investment's net profit for the whole of 2020 was close to 700 billion yuan.

"Actually, it's not that bad. Tencent's net profit for the whole year is RMB 196.4 billion, and its market value is only HKD 4 trillion. Kechuang Bio's market value is about RMB 2 to 3 trillion. Those who are shouting that the price per unit will break RMB 10,000 should just stop talking."

With a total share capital of 400 million shares and a price per share exceeding 10,000 yuan, the market capitalization of Kechuang Bio has exceeded four trillion yuan.

A single purchase costs 1 million; only institutional investors can afford that.

The target prices from Dongwu Securities, CICC, and CITIC Securities are all between 8,000 and 10,000 yuan.

The title of the Eastern Wu poem is: "Not afraid of the floating clouds obscuring the view, simply because I am at the highest level."

It's a bit over the top.

"Upstairs, the logic of Kechuang Bio is completely different from that of Tencent. They are not the same type of company. In terms of social traffic, ByteDance competes with Tencent, and in terms of cloud services, Ali, Huawei, and Baidu compete with Tencent."

In the gaming industry, the competition is even more intense, with countless rivals.

Does Kechuang Bio have any competitors in the fields of endorphins and brain-computer interfaces? Musk's Neuralink can only mediocrely compete in the mid-range mobile phone market, and its recognition rate is far inferior to that of Kechuang Bio.

Kechuang Bio's competitive advantage is far deeper than Tencent's. Not to mention, Kechuang Bio has two promising areas where production capacity for brain-computer interface VR and new lithium battery materials has yet to be fully realized.

In my opinion, a market capitalization of four trillion yuan is not the ceiling for the science and technology innovation and biotechnology sector at all; rather, it's just a starting point.

"That's enough. Kechuang Bio is indeed very impressive, but what does it have to do with us retail investors? Can you even afford to buy one lot?"

You painstakingly put together 500,000 yuan of working capital to play around with on the Science and Technology Innovation Board, but it's only enough to buy one lot of Science and Technology Innovation Biotechnology.

This company isn't there to make money for retail investors; it's only for institutional investors. You can only watch the price rise, but the daily trading volume is ridiculously low.

"When will Kechuang Bio be split up? If it's not split up soon, the individual shareholders won't be able to enjoy the benefits of the company's development. We also want to grow together with this great company!"

A stock split means a 1-for-10 stock split. This is done when the stock price is too high and it is not conducive to buying and selling.

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