Chapter 568 How to Charge Without a License
After seeing off her newly appointed partner Chen Minxing, Liu Shishi returned to her office.
Just as she sat down at her desk, Jiang Yuanyuan excitedly pushed open the door and entered, her face beaming with joy.
"Shishi, congratulations!" Her voice was filled with excitement as she held up her phone and waved it vigorously in front of Sister Yi.
Liu Shishi gracefully tossed her long hair, her face showing curiosity: "What happy event has made you so happy?"
"Quick, check Weibo!" Jiang Yuanyuan rushed forward and turned her phone screen towards the top influencer.
"The 29th Golden Rooster Awards have just announced their nominations, and you have been nominated for Best Supporting Actress for your role in 'Caught in the Web'!"
"Oh?" Liu Shishi's eyes lit up with joy, and she quickly picked up her phone and swiped across the screen.
As a top actress in the television drama field, most of her previous awards were limited to the television industry. This is her first time receiving a nomination for a prestigious film award, which is of great significance.
As Liu Shishi's executive agent who has accompanied her throughout her growth, Jiang Yuanyuan felt honored at this moment, her voice filled with joy:
"Shishi, regardless of whether you win the award or not, just being nominated means that you have been recognized by the most core and demanding judges in the film industry."
She carefully analyzed the nomination list, her tone becoming increasingly confident, "I've looked at the other three nominees, and their abilities are all quite average. You have a very high chance of winning."
From this day forward, you are a true superstar in both film and television, a complete game-changer for the other actresses born in the 1980s.
Jiang Yuanyuan has always been quite resentful that several actresses born in the 1980s could be compared to Liu Shishi. In her mind, these women were all inferior to Liu Shishi.
After carefully reading the related reports on Weibo, Liu Shishi was filled with emotion.
Her previous starring role in "Goodbye Mr. Loser" proved her popularity and box office appeal, as it was the first Chinese film to gross over 1 billion yuan.
However, her success is largely attributed to the comedy genre and the script, and her individual acting skills actually had limited room to shine.
On the contrary, in the realistic film "Caught in the Web," where she played a supporting role with few scenes, she unexpectedly won the favor of the judges.
Thinking back to director Chen Kaige's guidance on her acting during filming, I can't help but admire the extraordinary artistic talent of this great director.
"The landscape of the '85 Flowers' is changing," "The TV Queen finally gains recognition in the film industry"...
Looking at the series of trending topics about her nomination and the joyful comments from her fans on Weibo, Liu Shishi smiled slightly, but then a faint trace of regret crossed her face.
Unfortunately, this nomination came at a somewhat "untimely" time, as she is about to temporarily leave the entertainment industry to focus on her pregnancy, making this award "not very meaningful."
However, if she can ultimately win an award, it would be a perfect ending to her nearly ten-year acting career.
Subconsciously, she gently stroked her still-flat stomach, a warm feeling welling up inside her.
Love, family, legacy, career, honor—these are the beautiful things that women pursue throughout their lives, and they are perfectly unified in her at this moment.
Just as Liu Shishi was carefully browsing the nomination list for Best Actor and Best Actress at the 29th Golden Rooster Awards, Jiang Yuanyuan spoke up again: "Oh, right, there's some good news too."
"And what else? What's the good news?"
"The magazine 'China Philanthropist' sent a letter inviting you to shoot a cover story as the cover figure for the first China Philanthropy Celebrity List."
"A list of charitable celebrities?" Liu Shishi looked puzzled.
She had only heard of the Forbes China Philanthropy List, in which her husband, Song Ci, topped the list for three consecutive years, donating more than one billion yuan in total over three years, making him the number one philanthropist in China.
Jiang Yuanyuan explained in detail: "This year, the China News Agency launched the magazine 'China Philanthropist'."
This annual charity celebrity list is designed to evaluate the performance of public figures such as entertainers, athletes, hosts, and writers in the fields of charity and public welfare.
Shishi, you're at the top of the list! Number one celebrity philanthropist!
Liu Shishi asked with great interest, "How was this list compiled?"
"The overall score is based on four dimensions: personal donations account for 10 points, indirect fundraising accounts for 15 points, public welfare actions account for 40 points, and public welfare influence accounts for 35 points."
Shishi, you didn't score in the indirect fundraising category, but you got full marks in the other three categories, for a total score of 85, ranking first.
Liu Shishi immediately understood.
She has never stopped doing charity and public welfare work, donating to school after school, but she has never been involved in fundraising.
She comes from a wealthy family and has always donated directly by herself.
Thinking of this, Liu Shishi smiled and said with a look of satisfaction, "It's a good thing to be able to top the charity list."
Philanthropy is indeed a brand new and higher-level stage. Wouldn't it be great to become an entrepreneur or a social activist in the future?
"Of course!" Jiang Yuanyuan nodded repeatedly. "Big names in the industry, once they reach a certain level, will all devote themselves to charity and public welfare."
This was certainly out of good intentions, but it was also to build social prestige.
"I replied that I have time to shoot the cover this week."
As evening fell, Liu Shishi returned to her home in Jingyuan, where the afterglow of the setting sun cast warm light and shadows in the living room.
To my surprise, my husband came home early from get off work today and was sitting on the living room sofa, intently reading a document.
The servants moved about quietly, afraid of making the slightest noise that might disturb the master of the house.
"Honey, what are you looking at so intently?" Liu Shishi asked softly, breaking the quiet atmosphere in the room.
Upon hearing his wife's voice, Song Ci looked up from the documents, a gentle smile immediately spreading across his face.
He reached out and pulled Liu Shishi to sit down beside him: "I'm looking at some materials prepared for Tengda Group's listing."
Liu Shishi leaned obediently on her husband's shoulder, her gaze falling on the document in his hand, and softly read aloud the striking words on it:
"Zhongbao Group? What kind of company is that?"
"This is Tenda Technology's holding platform set up in Hong Kong to prepare for its listing in the United States."
As Song Ci explained, he tilted his head slightly and gently kissed his wife's delicate cheek.
A hint of curiosity arose in Liu Shishi's heart: "A shareholding platform? Why would Tengda need to specifically establish a Zhongbao Group for its IPO?"
After a moment's thought, Song Ci explained in the simplest language possible:
"Because Tenda Technology's mobile payment, film and television cinema and other businesses fall under the negative list for foreign investment access."
If Tenda Technology were to directly list in the US, the regulatory authorities would reject the application outright.
Therefore, it is necessary to adopt the 'red-chip structure + VIE agreement' model for overseas listing.
Upon hearing this, Liu Shishi became even more confused: "Red-chip structure? VIE agreement? These terms sound so technical."
"Let me explain the process to you in detail, and you'll understand." Song Ci put down the documents, pulled his wife into his arms, and began to explain.
"First, Tenda needs to register a listing entity in the Cayman Islands, Tenda Holdings Cayman Ltd., and the equity structure of this offshore company is completely consistent with that of Tenda Technology in China."
Then, the Cayman company established Xiangjiang Zhongbao Group as a wholly-owned subsidiary.
Next, Yong Ge, Jing Jie, and I, along with other founding team members, will establish a BVI shareholding platform.
Together with Shanhai Capital, Zhongxin Investment, and shareholders such as Google and Goldman Sachs, it holds equity in the Cayman entity.
Subsequently, Zhongbao Group established Tengda Technology (Huaguo) Co., Ltd. in mainland China, which is a wholly foreign-owned enterprise and serves as the vehicle for VIE contractual control.
Finally, the domestic operating entity, Tenda Technology Group, is required to pay all profits to Tenda Technology (China) Co., Ltd.
All of its shares were pledged to Zhongbao Group as collateral for the performance of the agreement.
This entire design is what's known as the red-chip listing structure.
Liu Shishi frowned, unconsciously leaning closer to her husband, her voice tinged with worry:
"Yi-yi, won't there be any problems with designing such a complex listing structure?"
Song Ci gently patted her shoulder and comforted her, "Don't worry, this is standard procedure in the industry."
Registering a listed entity in the Cayman Islands makes overseas mergers and acquisitions easier, and large companies aiming for globalization all operate in this way.
Baidu and Tencent both used this structure when they went public, and even large state-owned enterprises like China Mobile, China Unicom, and China Petrochemical Corporation used it when they went public in the US.
JD.com and Alibaba, which are about to list on Nasdaq like Tenda, are doing the same thing.
Liu Shishi was relieved to hear her husband say that this is how Chinese companies listing in the US operate.
When will Tengda Technology be able to go public?
Song Ci mentally calculated the time: "The establishment of a red-chip structure is very complicated, and Tenda will not be able to go public until June next year at the earliest."
In a while, Yong Ge, Jing Jie, and I, as individual shareholders, will need to go to the State Administration of Foreign Exchange to complete our individual overseas investment registration and submit documents from overseas institutions and proof of the source of funds.
Shanhai Capital and Zhongxin Investment, as BVI companies under my actual control, also need to complete the Overseas Direct Investment (ODI) filing and pass the review of the Ministry of Commerce and the National Development and Reform Commission.
In addition, the telecommunications value-added service license and the network audio-visual license held by Tenda Technology need to be subject to a thorough review of foreign investment composition to confirm that there is no substantial foreign investment involved.
In summary, the establishment of a red-chip structure is extremely complex, involving multiple aspects such as capital flow and tax audit.
Even with a smooth approval process, it would take at least six months to complete all the necessary procedures. Tenda won't be able to go public until at least June next year.
Liu Shishi gently held her husband's hand and softly comforted him, "No rush, let's take it one step at a time."
Song Ci snorted lightly: "I'm not in a hurry, but investment banks like Goldman Sachs and Morgan Stanley can't wait to get a piece of the pie from Tengda's IPO."
In truth, he was very reluctant to let the greedy investment banks make a fortune, but the reality is that the United States has not yet opened up direct listing and financing.
Without an underwriter, Tenda would not receive a single penny if it went public directly. He also hoped to use the funds raised through the IPO to inject more capital into the company's technological research and development.
After a moment of tenderness between the couple, Liu Shishi, recalling Chen Minxing's words from that morning, softly asked:
"Honey, my business partner told me today that Tenda is now making saturated investments in the internet sector, which has created a powerful dominance."
Isn't this too domineering? Won't it cause some problems?
Song Ci nodded knowingly, sighed softly, and his words revealed a profound understanding of the essence of the industry:
"This is also a last resort. For internet entrepreneurs, accepting Tenda's investment has become inevitable."
Even if Tengda doesn't want to invest, they will proactively approach us and ask us to invest.
Liu Shishi was stunned and asked in surprise, "Huh? Why is that?"
Song Ci shrugged and explained: "First of all, internet companies must have a third-party payment license if they want to charge fees through their websites or apps."
The central bank has issued only 100 licenses so far, with some going to state-owned enterprises such as State Grid and telecommunications operators, and a portion to financial institutions.
In the entire internet industry, only a handful of companies, such as Tenda, Alibaba, and Baidu, possess payment licenses.
Startups that want to charge fees can only do so by integrating with WeChat Pay, Alipay, or Baidu Pay; otherwise, they are operating illegally.
Hearing this, Liu Shishi finally understood.
The internet industry's choice of Tenda is a helpless reality, an inevitable path to commercialization, a vicious cycle with no solution.
New companies cannot obtain payment licenses unless they develop into industry giants; however, to obtain a license, they must first monetize their services through fees.
In the field of mobile payment, there are only two national-level applications: WeChat Pay and Alipay.
Once a new company connects to any of them, it will be contributing to the financial ecosystem of Tenda or Alibaba from the very first day it generates revenue.
Since we can't avoid it, we might as well just accept Tenda's investment.
This would not only secure financial support but also grant access to the ecosystem of the leading domestic tech giant, providing preferential treatment in areas such as payment rates and API permissions.
Seeing Liu Shishi's expression of sudden realization, Song Ci knew she understood the reasoning and chuckled:
"I have clear requirements for the investment department: only monitor the financial situation and do not interfere with the founder's business decisions."
Alibaba's reach is too far-reaching, and its reputation isn't as good as Tencent's. Therefore, internet entrepreneurs really don't have a choice.
Liu Shishi smiled gently; she could imagine the helplessness of those entrepreneurs.
Two giants, one to choose from, but Alibaba likes to seize power, so it can only join the arms of Tenda.
Song Ci added: "For a startup, building its own server is a huge expense."
However, if they receive investment from Tengda, they can use Baofeng Engine for a year at a low price or even for free, saving valuable funds.
At the same time, it also gains traffic support from WeChat and Weibo, so why not?
A single nine-grid recommendation on WeChat Moments can acquire initial users that would take six months to accumulate on other platforms.
This difference in starting point—from survival to development—is a fatal temptation for startups.
Liu Shishi nodded in agreement: "So, this is both a necessity driven by reality and a testament to the power of Tengda's empowerment."
In short, a virtuous cycle has formed. Tengda is moving towards a positive cycle of continuous self-reinforcement.
“That’s right.” Song Ci gazed at her tenderly. “So, the dominance you’re talking about, my wife, isn’t simply about the crushing power of capital, but rather an inevitable ecological consequence of the times.”
This is true for the global internet industry as a whole. It is a form that will inevitably emerge as the internet develops to its current stage, with resources highly concentrated and the effects of basic applications becoming more prominent.
Tenda was simply the pioneer who first saw and successfully built this model.
Upon hearing this, Liu Shishi gave her husband a charmingly glare: "Isn't it all because you, Song Yiyi, foresaw this first and then went around praising yourself in various ways?"
Song Ci laughed heartily and hugged his beloved wife even tighter.
(End of this chapter)
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